South Africa: City Of Johannesburg Metropolitan Municipality v Blue Moonlight Properties 39 (Pty) Ltd And Another (CCT 37/11) [2011] ZACC 33 (1 December 2011): A Practitioner’s Note

Last Updated: 23 July 2012
Article by Reghana Tulk

Introduction

1. On 1 December 2011 the Constitutional Court (the Court) handed down judgment in City of Johannesburg Metropolitan Municipality v Blue Moonlight Properties39 (Pty) Ltd and Another ("Blue Moonlight").1 In it the Court defines the obligations of local government (municipalities) in the provision of emergency temporary accommodation in reference to section 26 of the Constitution, the Housing Act and Chapter 12 of the Housing Code. Importantly it locates these obligations in a system of cooperative governance and the broader framework of Chapter 7 of the Constitution and the Municipal Systems Act. Blue Moonlight is instructive on what the constitution obliges municipalities to do in the exercise of their functions as local government authorities, although only in the context of emergency temporary accommodation.

Background

2. Blue Moonlight concerned the fate of 86 vulnerable and poor people in unlawful occupation of a property called Saratoga Avenue in Berea in the City of Johannesburg (the City). The Court was called to pronounce on the ownership rights of Blue Moonlight, the owner of the building, under section 25 of the Constitution and the rights of the occupiers to have access to adequate housing in terms of section 26 of the Constitution. The Court also ruled on the obligations of the City in relation to these rights. The judgment in Blue Moonlight is a treatise on the relationship between sections 25 and 26 of the Constitution. It is authority for the principle that evictions which result in homelessness are unlawful and in case there was ever any doubt an affirmation that it is the state that bears the constitutional obligation to facilitate access to housing and to provide it on an emergency basis where occupiers face homelessness on eviction. This the Court establishes by limiting section 25 rights, and by linking the eviction of the occupiers to the ability of the City to alternatively house them.

3. In Blue Moonlight, most of the occupiers did not have formal employment. Some were employed in the informal sector. Several resided on the property for many years and all submitted that on their eviction from Saratoga Avenue they would be homeless. They lived at the property with the permission of the owner until 1999 and paid rent to at least two different letting firms until 2004, when the property was purchased by Blue Moonlight with the intention to redevelop it. Blue Moonlight sought their eviction as early as June 2005 and in 2006 commenced eviction proceedings in the High Court under the Prevention of Illegal Eviction and Unlawful Occupation of Land Act, 19 of 1998 (PIE).

4. The High Court ordered their eviction and found the City's housing policy unconstitutional to the extent that it could not accommodate the occupiers since they were being evicted by a private landlord. The City was ordered to remedy the defect by providing the occupiers with temporary emergency alternate accommodation and also ordered to report to court on the steps it was taking to house the occupiers. The High Court also ordered the City to pay rental to Blue Moonlight for the continued occupation of its building, since Blue Moonlight had no obligation in law to continue housing the occupiers rent free.

5. The City appealed to the Supreme Court of Appeal (SCA) that part of the High Court order declaring its housing policy unconstitutional and the ruling that it pay rent to Blue Moonlight. The SCA upheld the eviction, set aside the rent order but in similar vein as the High Court found the City's housing policy unconstitutional for excluding the occupiers from consideration for temporary housing.

The Constitutional Court's Ruling

6. On appeal to the Constitutional Court the City appealed the ruling that its housing policy was unconstitutional and that it provide alternate accommodation to the occupiers. The occupiers in turn cross-appealed seeking that any order for their eviction be linked to the provision of suitable alternate accommodation by the City. Blue Moonlight filed a notice to abide the decisions of the Court on these questions.

7. The Court held that the practical questions raised by the submissions are whether the occupiers must be evicted to allow the owner to fully exercise its rights regarding its property, and, if so, whether their eviction must be linked to an order that the City provide them with accommodation. The City's position was that it is neither obliged nor able to provide accommodation to the occupiers, and Blue Moonlight submitted that it simply wished to exercise its right to develop its property and wanted no part in the dispute about the City's responsibilities or the plight of the occupiers. The occupiers simply did not want to be homeless.

8. Since the eviction took place at the instance of a private landlord, Blue Moonlight, the Court observed that the dispute raised the questions of "the rights of the owner in a constitutional and PIE era", which touched on the legality of an eviction order where indigent occupiers who enter into private lease agreements are in consequence of the eviction rendered homeless. Although the Court was sympathetic to the plight of the owner by acknowledging that the indefinite and continued unlawful occupation of its building would amount to an arbitrary deprivation of its property (since PIE does not allow for expropriation of land) it rules that PIE as a law of general application, which is not arbitrary, is a justifiable limitation on this right.

9. The Court finds further that an owner's constitutional right not to be deprived of property, must be interpreted in a social and historical context and be balanced against the right of access to adequate housing and not to be evicted arbitrarily from one's home.2 The answer, rules the Court is that although unlawful occupation results in a deprivation of property under section 25(1), the violation is constitutional since section 25(1) is limited by a law of general application (PIE), which was not arbitrary. Thus, even though housing unlawful occupiers indefinitely suspends an owner's right to use and enjoy property, evictions can only be carried out in terms o of PIE, and are only permissible where just and equitable.

10. On the question of access to housing as a function of local government, the Court ruled that housing is a functional area of concurrent national and provincial legislative competence. The role of local government in facilitating access to housing is thus not expressly defined in the Constitution. It is not given specific authority in the Schedules to legislate and create policy independent of national and provincial government in addressing the housing needs of its population. The position adopted by the City was thus that to do so would be in violation of the principle of legality, since it is also not the primary organ responsible for the fulfilment of the right of access to adequate housing.

11. The City argued that it is only in terms of the national Housing Act, the point of delivery and is entirely dependent on the national and provincial governments, and confined to acting within the parameters set in the national and provincial policies. Grootboom, submitted counsel for the City, does not place the primary responsibility to fulfil the right of access to adequate housing on local government, but rather requires local government to respect protect and promote this right".3 Thus the approach adopted by the City is that there was no positive obligation on its part to provide the occupiers with emergency housing under Chapter 12 of the Housing Code, thus its contention that it was neither empowered nor obliged to assist. "The City argues that the Supreme Court of Appeal's finding that the City was empowered to act outside of the national housing policy in the absence of a statutory prohibition violates the principle of legality. Relying on Fesdure, it submits that an organ of state is not authorised to take action not prohibited by law; it is prohibited from taking action not so authorised. The City would have acted ultra vires if it met the occupiers' circumstances, as the Supreme Court of Appeal found it should have done, so the City argues".4 It goes on to say that Chapter 12 is clear that local government's capacity to provide emergency accommodation is directly dependent on funding from the provincial government and on submission of such an application to province it has complied with its constitutional housing obligations.5

12. The occupiers' case was that "the City is entitled and obliged to use its own resources to fund emergency housing under Chapter 12. Application to the province for funds is a measure of last resort to be taken when the City lacks the resources to address the situation. The Occupiers are supported by the amicus, submitting that the City can fund housing under Chapter 12 because of its duties to prioritise basic needs under section 153(a) of the Constitution, and sections 1, 4(2) and 73(1) of the Municipal Systems Act. It submits further that cooperative government failed in this case, but the obligations of provincial and national government under principles of cooperative governance and equitable allocation of revenue do not exonerate local government from predicting and planning for basic services, including under Chapter 12".6

13. Thus, the question of how a municipality structures and manages its administration, budgeting and planning processes, to give priority to the basic needs of the community to promote its social and economic development, in reference to its duty under section 4 of the Municipal Systems Act to govern at its own initiative the local government affairs of the local community, fell to be considered.

14. The Court held that relevant to this enquiry too was section 11(3) of the Municipal Structures Act, which provided for the exercise of legislative and executive authority through a number of mechanisms such as the development and adoption of policies, plans, strategies and programmes, including setting targets for delivery; promoting and undertaking development; implementing applicable national and provincial legislation and its by-laws; preparing, approving and implementing its budgets; and doing anything else within its legislative and executive competence.7

15. "Finally section 23(1) places an obligation on municipalities to undertake "developmentally-oriented planning" in order to ensure that they achieve the objects of local government in section 152 of the Constitution, give effect to their developmental duties in section 153 of the Constitution and "together with other organs of state contribute to the progressive realisation of the fundamental rights contained in sections 25 and 26 of the Constitution"

16. The Court held that the legal framework demonstrated that the City had an important role to play in the provision of housing and it could not be said that this role was secondary, limited and dependent on funding received from provincial government. It was common cause that on eviction from Saratoga Avenue the occupiers would be homeless, unless the City provided them with accommodation and that their situation constituted an emergency. The City for its part contended that its ability to do so was dependent on receiving funding from province. This was based on its view that local government was not primarily responsible for the achievement of access to housing, which was incorrect. The court held "There is no unequivocal indication in the wording of Chapter 12 that local government's capacity to provide emergency accommodation is dependent solely on funding by provincial government" and that "there was a legislative purpose that the City ought to plan proactively and to budget for emergency situations in its yearly applications for funds".8

Effect of Blue Moonlight

17. The effect of Blue Moonlight is first that it stands for unequivocal authority that, at least where the tenants are indigent and face the prospect of homelessness on eviction, the relevant local municipality must be joined as a necessary party to the proceedings. Where this was not necessarily clear in Occupiers of Shulana Court, the principle now seems to be that where an eviction has the potential to render occupiers homeless, local government is a necessary party to the proceedings. The municipality is further required to actively participate in proceedings by submitting a report on the steps that it will take to house occupiers who face homelessness.

18. As illustrated in a later decision of the Court, Occupiers of Portion R25 of the Farm Mooiplaats 355JR v Golden Thread Limited and Another CCT 25/11, ("Mooiplaats") in the absence of such report any court called upon to rule on whether an eviction is just and equitable will not be able to do so. In order to make this determination (i.e. whether the eviction is just and equitable), the court will have to consider the circumstances of the occupiers and, critically, the issue of whether the City is able to provide alternative accommodation. For this purpose, the City must place the relevant information before the court before it can make a determination on whether or not there should be an eviction. Blue Moonlight isclear that the City has the obligation to provide alternative accommodation within its available resources and this in itself will require the City to place relevant information before the court. Therefore in Mooiplaats the Court held that it was impossible for the High Court to determine whether an eviction of the occupiers would be just and equitable without investigating the aspect of whether the City was reasonably capable of providing alternative accommodation. It therefore set aside the order of eviction and remitted the matter back to the High Court and it ordered the City to file a report in the High Court, confirmed by affidavit, covering various issues including the steps it has taken, is able to take and intends to take to provide alternative land or housing as emergency accommodation for the occupiers if they are evicted.

19. Blue Moonlight expressly provides that PIE as a law of general application, limits the right not be unlawfully deprived of property under section 25(1) of the Constitution. Although is acknowledges that since PIE does not make provision for expropriation and that an owner is not obliged in law to provide free lodging for indigent occupiers, PIE does sanction the limitation of an owner's right to use and enjoy property until a court of law has pronounced on whether it is just and equitable for the occupiers to be evicted. In the case of indigent occupiers, the case law is unanimous and Blue Moonlight a confirmation of the fact that courts will be reluctant to order the eviction of occupiers that face homelessness. Blue Moonlight applies this principle by linking the eviction of the occupiers to an order that the City provide them with alternate accommodation. Although it sets timelines for the provision of such accommodation the wording of the judgment is supportive of the conclusion that Blue Moonlight would simply have to endure the deprivation of its right to use and enjoy, until 15 April 2011, when the eviction is to be effected subject to alternative accommodation being furnished by the City.

20. Blue Moonlight stops short of operationally enforcing section 26 rights through the prism of commercial contracts giving effect to access to residential property. It places squarely on local government the obligation to alternatively house vulnerable occupiers on an emergency basis, where on eviction they will be rendered homeless. The court's order in Blue Moonlight is mindful of the landlord's ownership rights, hence the court rules that Blue Moonlight is entitled to its eviction order. However, in an effort to create some form of legal security of tenure for the occupiers, the eviction order is linked to a ruling compelling the City to alternatively house the occupiers and to make such accommodation available well before their scheduled date of departure from Saratoga Court.

Conclusion

21. Blue Moonlight in the context of eviction proceedings that have the potential to leave vulnerable people homeless, drives home the point that these cases will almost always be based on balancing ownership with housing rights. The Constitutional Court has also in response to South Africa's unique housing crisis unequivocally established the relationship between these rights by confirming that the obligation to facilitate access to housing is with the state, but private owners may have to endure an interim lawful deprivation of the use of their property until such time as the state is able alternatively house vulnerable occupiers on an emergency basis.

22. The judgment does not leave private owners and occupiers without tools in ensuring that the state gives effect to section 26. They are entitled to probe into local government's ability to comply with section 26, as a primary function of local governance, not as a secondary function exercised it in its capacity as an implementing agent. Further where local government's understanding of its role in this process and any consequent submissions made on resources are at odds with its constitutional obligations, this will be examined not by probing into the state's available resources, but whether those resources have been allocated in accordance with a proper understanding of its constitutional obligations. If not, the court will not hesitate to rule on the legality of submissions made on available resources.

23. Municipalities, it is clear must be joined to eviction applications and must temporarily house occupiers who on eviction face certain homelessness. They must also prepare reports on their ability to alternatively house the occupiers, where they will be housed, the socio economic impact of the relocation and how this will be addressed, the availability of infrastructure, and the attitude of the receiving community where occupiers will be relocated to. In the light of these findings, Blue Moonlight in time to come could serve as authority to stay pending eviction applications until such time that local government engages meaningfully with unlawful occupiers on their eviction, its consequences and future temporary housing solutions. Should the state's failure to carry out its constitutional obligations may well serve the basis of an application to compel either the furnishing of a report or alternative accommodation.

24. Lastly, the Court's balancing exercise in Blue Moonlight makes sense in a country where countless people live under insecure tenure arrangements and have no access to many basic services, including housing. Blue Moonlight is a treatise on the constitutional framework in which the right of access to adequate housing has come to be interpreted. It has come to displace the notion that lease agreements and other commercial contracts facilitating access to a home will be regulated in a manner that does not have regard to what the DG of Land Affairs has referred to as the "hopes, aspirations, dreams and prayers of many South Africans living under insecure tenure" and in so doing our courts will develop the common law in a manner that gives effect to the spirit, purport and objects of the Bill of Rights as mandated by section 39(2) of the Constitution.

Footnotes

1 Case Number CCT 37/11 [2011] ZACC 33

2 Id para 34

3 Id at para 51

4 Id para 58 (footnotes excluded)

5 Id para 61

6 Id para 51

7 Id at para 25

8 Id para

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