Accountability, Estoppel and Bypassing of the Municipal Finance Management Act: A Note on Merifon (Pty) Ltd v Greater Letaba Municipality Trilogy
DOI:
https://doi.org/10.25159/2522-6800/13240Keywords:
Accountability, corruption, estoppel, legality, malfeasance in public office, ostensible authority, representation and capacityAbstract
Accountability and transparency reinforce the constitutional principles of governance, which constitute equality before the law, separation of powers, legality and the rule of law, which are central to the conception of modern constitutional order. The trilogy of Merifon (Pty) Ltd v Greater Letaba Municipality Limpopo Division, Case No 01/2014 (18 July 2019), Merifon (Pty) Ltd v Greater Letaba Municipality [2021] ZASCA 50 and Merifon (Pty) Ltd v Greater Letaba Municipality [2022] ZACC 25 poses fundamental questions regarding the failure of a municipal manager and incompetent council to comply with statutory prescripts. Although the narrow issue for determination concerned the seller’s reliance on estoppel and the Turquand Rule to hold a municipality to the unlawful and inflated sale of land agreement, the Merifon litigation invites consideration of the practical reality of malfeasance in the local government sphere. In this note the litigation history and the analytical framework as well as the Municipal Finance Management Act 56 of 2003 (MFMA) are examined. The critical aspects of the three judgments regarding the problematic reliance on estoppel and the Turquand Rule in the face of peremptory prescripts of MFMA are subsequently examined.
Metrics
References
Cassim FHI ‘Corporate Capacity, Agency and the Turquand Rule’ in Cassim FHI and others (eds), The Law of Business Structures (Juta 2012).
Christie RH and Bradfield G, ‘Christie’s The Law of Contract in South Africa’ (6th edn, LexisNexis 2011).
Daily Maverick ‘Here you go: The final State Capture Report Recommendations – at last’ <https://www.dailymaverick.co.za/article/2022-06-22-here-you-go-the-final-state-capture-report-recommendations-at-last/> (accessed 22 June 2022).
De Ville JR, Judicial Review of Administrative Action in South Africa (Butterworth Publishers (Pty.) Ltd, South Africa 2005).
Frink D and Klimoski R, ‘Advancing Accountability Theory and Practice: Introduction to the Human Resource Management’ (2004 special edition) Human Resource Management Review <https://doi.org/10.1016/j.hrmr.2004.02.001> DOI: https://doi.org/10.1016/j.hrmr.2004.02.001
Haidt J, The Righteous Mind: Why Good People are Divided by Politics and Religion (UK, Penguin 2012).
Halsbury’s Laws of England (2nd edn) cited in Morris.
Judicial Commission of Inquiry Report (2021) Part 1, Vol 1 – procurement 715. <https://www.gov.za/sites/default/files/gcis_document/202201/judicial-commission-inquiry-state-capture-reportpart-1.pdf> accessed 22 June 2022.
Maloka TC, ‘Biowatch shield, Costs Liability for Abuse of Process and Crossfire Litigation’ (2020) 41 Obiter <https://doi.org/10.17159/obiter.v41i1.10561> DOI: https://doi.org/10.17159/obiter.v41i1.10561
Maloka TC, ‘Recent Developments Regarding Costs Awards in Constitutional and Public Interest Litigation’ (2019) 34 SAPL <https://doi.org/10.25159/2522-6800/6201> DOI: https://doi.org/10.25159/2522-6800/6201
Maloka TC, ‘The Turquand Rule, Irregular Appointments and Bypassing the Disciplinary Process’ (2017) SA Merc LJ.
Maloka TC and Jili N, ‘The Role of the Judiciary in Promoting Accountability, Responsiveness and Openness: Lessons from Life Esidimeni Arbitration and Black Sash/SASSA Litigation’ (2019) 54 Journal of Public Administration.
Mhango M and Dyani-Mhango N, ‘The Powers of the Public Protector: A Note on the Economic Freedom Fighters v Speaker of the National Assembly’ 2020 AJLS <https://doi.org/10.1163/17087384-12340060> DOI: https://doi.org/10.1163/17087384-12340060
National Treasury <http://mfma.treasury.gov.za/> accessed 19 October 2022.
Okpaluba C, ‘Constitutionality of legislation relating to the distribution of governmental powers in Namibia: A comparative approach’ in The Constitution at Work: Ten Years of Namibian Nationhood Hinz M, Amoo, S & Van Wyk D, (eds) (VerLoren van Themaat Centre for Public Law Studies, University of South Africa (Unisa/Unam) publication 2003).
Okpaluba C, Contemporary Perspectives on Constitutionalism and the Rule of Law: Reflections on South Africa’s Contributions to Commonwealth Constitutional Jurisprudence’ in Osode P and Glover G, Law & Transformative Justice in Post-Apartheid South Africa (2010).
Okpaluba C, ‘The Constitutional Principle of Accountability: A Study of Contemporary South African Case Law’ (2018) SAPL <https://doi.org/10.25159/2522-6800/2955> DOI: https://doi.org/10.25159/2522-6800/2955
Rashid F, Mutual Accountability and its Influence on Team Performance (PhD thesis, Harvard University 2015)
Sonnekus JC, The Law of Estoppel in South Africa, 3rd ed (Lexis Nexis 2012).
Tetlock, P, The impact of accountability on judgment and choice. Toward a social contingency model. In M Zanna (ed), Advances in Experimental Social Psychology (New York, Academic Press 1992) <https://doi.org/10.1016/S0065-2601(08)60287-7> DOI: https://doi.org/10.1016/S0065-2601(08)60287-7
Van der Merwe SWJ, Contract: General Principles (4th edn Juta 2012).
Cases
Affordable Medicines Trust v Minister of Health 2006 (3) SA 247 (CC).
Blue IQ Investment Holdings Ltd v Southgate (2014) 35 ILJ 3326 (LAC).
Captick-Dale v Fibre Solutions (Pty) Ltd (2013) 34 ILJ 129 (LC) para 17.
City of Tshwane Metropolitan Municipality v RPM Bricks (Pty) Ltd 2008 (3) SA 1 (SCA).
Department of Transport v Tasima (Pty) Ltd 2017 (2) SA 622 (CC).
Durban Add-Ventures Ltd v Premier of the Province of KwaZulu-Natal 2000 (3) All 492 (N) 510G-H.
East Asia Co Ltd v PT Satria Tirtata Energindo (Bermuda) [2019] UKPC 30.
Fedsure Life Assurance Ltd and Others v Greater Johannesburg Transitional Metropolitan Council and Others 1999 (1) SA 374 (CC).
HNR Properties CC v Standard Bank of SA Ltd 2004 (4) SA 471 (SCA).
Hudson v SA Airways (2015) 36 ILJ 2574 (LAC).
Makate v Vodacom (Pty) Ltd 2016 (4) SA 121 CC).
MEC Responsible for Local Government, Western Cape v Mtazikama Local Municipality [2022] ZASCA 167.
Merafong City v AngloGold Ashanti Ltd 2017 (2) SA 211 (CC).
Merifon (Pty) Ltd v Greater Letaba Municipality [2021] ZASCA 50.
Merifon (Pty) Ltd v Greater Letaba Municipality [2022] ZACC 25.
Merifon (Pty) Ltd v Greater Letaba Municipality Limpopo Division, Case No 01/2014 (18 July 2019).
Minister of Health v New Clicks SA (Pty) Ltd 2006 (2) SA 311 (CC).
Municipal Manager Qaukeni Local Municipality v FV General Trading CC 2010 (1) SA 356 (SCA).
National Director of Public Prosecutions v Zuma 2009 (2) SA 277 (SCA).
NEHAWU v Minister of Public Service and Administration (2022) 43 ILJ 1032 (CC).
Nyathi v MEC: Department of Health Gauteng 2008 (5) SA 94 (CC).
One Stop Services (Pty) Ltd v Neffesaan Ontwikkelings (Pty) Ltd 2015 (4) SA 623 (WCC).
Pharmaceutical Manufacturers Association of SA: In Re Ex Parte President of the RSA 2000 (2) SA 674 (CC).
Premier, Gauteng v DA 2022 (1) SA 16 (CC).
Royal British Bank v Turquand (1856) 6 E & B 327 <https://doi.org/10.1007/BF02060424>
Sekoko Mametja Incorporated Attorneys v Fetakgomo Tubatse Local Municipality [2022] ZASCA 28.
Tesven CC v SA Bank of Athens 2000 (1) SA 268 (SCA).
Voltex (Pty) Ltd v First Strut (RF) Ltd [2021] ZGPJHC 630 (5 October 2021).
Legislation
Companies Act 71 of 2008.
Municipal Finance Management Act 56 of 2003.
Downloads
Published
How to Cite
Issue
Section
Accepted 2023-05-01
Published 2023-05-12
