Articles

Placing a Municipality under Administration: Judicial guidance from the Let’s Talk Komani Judgment 

Introduction

The growing financial and governance crises affecting municipalities in South Africa have renewed scrutiny on the constitutional mechanisms available to place municipalities under administration. Municipalities seem to be increasingly marred with challenges in basic service delivery and complying with their constitutional mandates. Section 139 of the Constitution provides a structured framework for intervention, yet recent jurisprudence has clarified that the existence of these powers does not always equate to judicially enforceable remedies.

The Eastern Cape High Court’s judgment in Let’s Talk Komani and the Independents v Premier of the Eastern Cape & Others (1102/2023) (“Let’s Talk Komani Judgment”), concerning the Enoch Mgijima Local Municipality, provides critical guidance on both the requirements for intervention and the limits of judicial authority in compelling such action.

The case arose from the prolonged collapse of the Enoch Mgijima Local Municipality, marked by:

• Persistent failure to provide basic services such as water, electricity, and refuse removal;
• Severe financial mismanagement and escalating debt, and
• Ongoing governance dysfunction and administrative instability.

Public Benefit organisation Let’s Talk Komani and the political party, the Independents approached the Eastern Cape High Court seeking an order effectively directing the National Executive to dissolve the Municipal Council and place the Municipality under administration.

The central legal question was whether a court can compel the provincial or national executive to invoke section 139 powers and place a municipality under administration.

The High Court acknowledged the extent of municipal failure but held that:

1. Section 139 confers discretionary powers with the provincial (or national) executive, not the judiciary.
2. Courts are reluctant to substitute itself for the Provincial or National Executive as this would amount to the court usurping executive functions, in breach of the separation of powers doctrine.
3. Judicial roles are limited to review the lawfulness of interventions already taken and grant supervisory, declaratory or mandatory relief but cannot force the executive to act in the first instance, especially in circumstances where there is an ongoing Financial Recovery Plan being implemented under intervention.

The application was accordingly dismissed, despite the Municipality’s evident dysfunction.

Following the dismissal of the application, the matter was referred to the Supreme Court of Appeal and thereafter the Constitutional Court. Leave to appeal was refused. As a result, the High Court’s judgment stands as the final determination of the issues raised in that litigation.

This article also considers the implications of Let’s Talk Komani Judgment within the broader municipal collapse, with particular reference to the Makana Municipality litigation.

Legal Framework: Placing a Municipality under Administration

1. Section 139 of the Constitution

Although the Administration of a Municipality is often treated as a broad remedy, different constitutional sections have different degrees of executive discretion.

Section 139(1) permits discretionary provincial intervention where a municipality: “cannot or does not fulfil an executive obligation.”

Intervention may include taking appropriate steps to ensure fulfilment of the obligation including:

• Issuing directives to the Municipal Council;
• Assuming responsibility for obligations;
• Dissolving the Municipal Council in exceptional circumstances.

Section 139(5) specifically governs financial crises, requiring mandatory intervention where a municipality:

• Faces serious financial problems; and
• Cannot meet its obligations to provide services or honour financial commitments

Such intervention must include the implementation of a financial recovery plan.

Section 139(7) provides for national intervention where a provincial executive cannot or does not adequately exercise the powers or perform the functions referred to in 139(4) or (5).

Lastly, and although this was not a section dealt with in the Let’s Talk Komani Judgment, Section 154 requires national and provincial to support and strengthen the capacity of municipalities to manage their own affairs, exercise their powers and perform their functions. Reactive interventions and “take overs” of municipalities rarely have the desired effect.

2. Municipal Finance Management Act 56 of 2003 (“MFMA”)

The MFMA sets the standards for municipal financial governance, which include:

• Sound budgeting and fiscal discipline
• Prevention of irregular, fruitless, and wasteful expenditure
• Maintenance of liquidity and creditor payments

Persistent failure to comply is often the clearest indicator justifying intervention under section 139(5).

3. Municipal Systems Act 32 of 2000

This Act governs:

• Service delivery obligations
• Performance management systems
• Accountability to communities

Non-compliance reflects a municipality’s inability to meet its constitutional mandate.

What the Let’s Talk Komani Judgment does – and does not – decide

The Judgment emphasises the separation of powers; warns against courts assuming executive functions and limits the ability of litigants to a direct order dissolving a Municipal Council.

It does however not necessarily exclude judicial remedies available to litigants where the executive has failed to comply with its mandatory constitutional and statutory obligations. It also does not prohibit review proceedings or preclude the judiciary from granting declaratory, supervisory or relief in instances where there is executive inaction.

Requirements for a Municipality to be placed under Administration

Drawing from the Constitution, legislation, and the Let’s Talk Komani Judgment, the following requirements must be met:

1. The municipality must be unable or unwilling to fulfil executive obligations.
2. Objective Financial or Governance crisis which includes liquidity crises, service delivery collapse, or systemic maladministration.
3. The response must be proportionate, escalating from directives to dissolution where necessary.
4. Intervention must comply with notice and oversight requirements involving the National Council of Provinces and relevant authorities.
5. Even where all factual requirements are met, intervention remains a discretionary executive decision which discretion is not unfettered (Critical insight from Let’s Talk Komani).

A critical limitation for a Municipality to be placed under Administration: Courts Cannot Compel Administration

The most important contribution of the Let’s Talk Komani judgment to the debate is its clear articulation of a constitutional limitation, Courts cannot compel a municipality to be placed under administration, even where the factual threshold is satisfied.

This means:

• Section 139 creates a power, not a duty enforceable by courts.
• The decision to intervene is political and policy-laden.
• The judiciary cannot substitute its own decision for that of the executive.
• Courts may still respond to executive failure through constitutional remedies.

This significantly narrows the role of litigation in addressing municipal collapse.

Comparison of the Let’s Talk Komani Judgment with The Unemployed Peoples Movement v The Premier for the Province of the Eastern Cape and Others (553/2019) [2020] ZAECGHC 47 (21 May 2020) (“the Makana Judgment”)

In the Makana matter, the court had to determine whether the Makana Municipality had breached its constitutional duties under section 152 (basic service delivery, safe and healthy environment), and section 153 (proper administration, budgeting, and prioritisation of community needs); the jurisdictional requirements for provincial intervention under section 139 were met, and whether a court can compel the provincial executive to dissolve a municipal council and take specific steps (separation of powers concerns).

The Court found persistent, systemic failure in governance and service delivery, with no credible evidence of remedial action, and that the municipality’s failures violated constitutional obligations to provide basic services and maintain a healthy environment. Furthermore, that the provincial government had failed to act adequately, despite earlier interventions and clear statutory duties.

On the issues of separation of power, the Court held that it may grant effective relief where constitutional obligations are breached, and that judicial intervention was justified because other accountability mechanisms had failed and relying on section 172 (1) of the Constitution it was obliged to also craft just and equitable relief beyond the pleaded case.

In comparing the Let’s Talk Komani Judgment with the Makana Judgment, the latter illustrates that the judicial restraint under Section 139 is not tantamount to the surrender of judicial authority. It demonstrates that courts may intervene in incidents of municipal collapse by enforcing constitutional obligations, scrutinising executive inaction, and structuring remedies that promote accountability without usurping executive authority. The Let’s Talk Komani Judgment in contrast cautions against courts compelling executive intervention.

Although contrasting, the cases read together reflect a balanced approach to municipal failures and collapse.  Let’s Talk Komani reaffirms the separation of powers on executive action where the Makana Judgment illustrates constitutionally permissible judicial remedies where other remedies fail. The resulting legal doctrine reflects proactive intervention and systemic correction, rather than judicial helplessness.

Conclusion

Courts are not powerless in the face of municipal collapse, but lessons learned from both Let’s Talk Komani Judgment and Makana Litigation are that litigants must frame their relief carefully and consider the executive nature of Section 139 as well as constitutional governance.