Mkontwana v Nelson Mandela Metropolitan Municipality and Others; Bissett v Buffalo City Municipality and Others; Transfer Rights Action Campaign v Member of the Executive Council for Local Government and Housing, Gauteng and Others

Three consolidated cases challenged section 118(1) of the Local Government: Municipal Systems Act 32 of 2000 and section 50(1)(a) of the Gauteng Local Government Ordinance 17 of 1939. These provisions prevent transfer of immovable property unless all municipal consumption charges (water, electricity) incurred in connection with the property for the preceding 2-3 years have been paid, regardless of who consumed the services. The High Court had declared section 118(1) unconstitutional. Factual circumstances: Ms Mkontwana bought a house for R24,560 but was told consumption charges of over R10,000 (later revised to R2,500) from previous occupiers had to be paid. In Bissett, property sold for R110,000 had outstanding charges of R14,479. The WLD application involved landlords facing large accumulated debts from tenant consumption. Municipalities had been inefficient in debt collection and issuing certificates, with confusing and contradictory statements of amounts owing.

• Whether section 118(1) of the Act and section 50(1)(a) of the Ordinance could be interpreted to apply only to consumption charges due by the owner
• Whether these provisions constituted deprivation of property under section 25(1) of the Constitution
• Whether any such deprivation was arbitrary within the meaning of section 25(1)
• Whether the provisions violated sections 9(1) (equality), 26 (housing) or 34 (access to courts) of the Constitution
• Whether direct access should be granted to the Constitutional Court

Appeals succeeded. High Court order declaring section 118(1) unconstitutional was set aside. Direct access granted only in respect of sections 118(1) and 50(1)(a), refused for other provisions. No order as to costs. Declaration made that municipalities must provide copies of monthly statements to property owners upon written request.

A deprivation of property under section 25(1) is not arbitrary if there is "sufficient reason" for it and it is procedurally fair. Sufficient reason requires an appropriate relationship between the means employed (the deprivation) and the ends sought (the legislative purpose), evaluated in light of: (a) the connection between the purpose and the property/owner; (b) the nature of the property; (c) the extent of the deprivation; and (d) all relevant circumstances. Section 118(1) does not constitute arbitrary deprivation because: (1) consumption charges are closely connected to the property (supplied to and consumed on it, enhancing its value and use); (2) there is a connection between the owner and the charges through ownership of the property where services are consumed; (3) the deprivation is limited (affects only right to transfer for a maximum period, not ownership itself); (4) the purpose is important and legitimate (ensuring municipal financial viability to perform constitutional service delivery obligations); (5) owners can take reasonable steps to minimize the risk; and (6) the provision encourages responsible property ownership and creates a culture of payment. The same analysis applies to section 50(1)(a) of the Ordinance.

Yacoob J made several important observations: 1) On municipal responsibilities: Municipalities have a duty to act diligently in debt collection, send regular accounts, develop a culture of payment, disconnect supply when appropriate, and keep accurate records. If municipal negligence causes damage to property owners, delictual claims may lie. 2) On owner responsibilities: Owners have a duty to safeguard property, ensure it is not unlawfully occupied, select tenants carefully, monitor consumption charges, and take timeous steps to address accumulating debt. 3) On procedural matters: Where disputes arise about certificates, owners may be able to obtain interim relief compelling certificate issuance pending final determination if they can show a clear right, a dispute, and that balance of convenience favors such relief. All parties should negotiate meaningfully and in good faith. 4) On direct access: Direct access is granted only in exceptional circumstances. The importance and complexity of issues generally weighs against this Court being court of first and last instance. Saving of time/costs and conflicting judgments alone do not justify direct access. 5) On new evidence: This Court will receive additional evidence on appeal only if there is compelling reason. O'Regan J's concurring judgment added that: - Section 25 must balance protection of private property with ensuring property serves the public interest, understood in light of South Africa's history of dispossession - The test is whether there is "sufficient reason" evaluated contextually - Property is valued because of awareness of damage inflicted by past dispossession - The right to property is not absolute in the constitutional order

This is a leading case on the interpretation of section 25(1) of the Constitution, particularly the concept of "arbitrary deprivation". It applies and develops the test established in First National Bank v CSARS for determining arbitrariness - whether there is "sufficient reason" for the deprivation considering the relationship between means and ends, the nature of the property, the extent of deprivation, and all relevant circumstances. The case is significant for: - Clarifying that deprivation includes substantial interference with incidents of ownership, not just complete loss of ownership - Establishing that property owners can be burdened with consumption charges incurred by occupiers without violating section 25(1) - Balancing property rights against the constitutional obligations of municipalities to provide sustainable services - Recognizing the importance of municipal financial viability in post-apartheid South Africa - Defining the respective responsibilities of municipalities and property owners in managing municipal debt - Clarifying when direct access to the Constitutional Court is appropriate The case shows the Constitution's commitment to balancing individual property rights with social transformation and the public interest, particularly in the context of local government service delivery.