Although the property owners failed to prove arbitrary deprivation in this matter it does raise important issues relating to property.  The case concerned a constitutional challenge to s 118(1) of the Local Government: Municipal Systems Act 32 of 2000. The Registrar of Deeds is precluded from effecting transfer of any property without a clearance certificate issued by the municipality.  In other words consumption charges must have been paid.  But property owners have a right not to be deprived of property except in terms of law of general application coupled with a guarantee against arbitrary deprivation in terms of s25(1) of the Constitution.  The Constitutional Court decided that as a general rule a deprivation of property is ‘arbitrary’ as meant by s 25 when the ‘law’ referred to in s 25(1)

  • does not provide sufficient reason for the particular deprivation in question; or
  • is procedurally unfair.

Mkontwana v Nelson Mandela Metropolitan Municipality (CCT 57/03) [2004] ZACC 9; 2005 (1) SA 530 (CC); 2005 (2) BCLR 150 (CC) (6 October 2004) coram: A Chaskalson, Chief Justice; PN Langa, Deputy Chief Justice; ZM Yacoob, C O’Regan, AL Sachs, TH Madala, ED Moseneke, S Ngcobo, TL Skweyiya, J van der Westhuizen and Y Mokgoro, Justices

Excerpts from judgment of O’Regan J [footnotes omitted and emphasis added]

Is the deprivation arbitrary?

“[92]      The question of what constitutes an arbitrary deprivation was also considered in the First National Bank case. [First National Bank of SA Ltd t/a Wesbank v Commissioner, SARS; First National Bank of SA Ltd t/a Wesbank v Minister of Finance 2002 (4) SA 768 (CC); 2002 (7) BCLR 702 (CC)].  In that case, the Court identified the following considerations relevant to determining whether a deprivation is arbitrary:

“Having regard to what has gone before, it is concluded that a deprivation of property is ‘arbitrary’ as meant by s 25 when the ‘law’ referred to in s 25(1) does not provide sufficient reason for the particular deprivation in question or is procedurally unfair.  Sufficient reason is to be established as follows:

(a)        It is to be determined by evaluating the relationship between means employed, namely the deprivation in question and ends sought to be achieved, namely the purpose of the law in question.

(b)        A complexity of relationships has to be considered.

(c)        In evaluating the deprivation in question, regard must be had to the relationship between the purpose for the deprivation and the person whose property is affected.

(d)        In addition, regard must be had to the relationship between the purpose of the deprivation and the nature of the property as well as the extent of the deprivation in respect of such property.

(e)        Generally speaking, where the property in question is ownership of land or a corporeal moveable, a more compelling purpose will have to be established in order for the depriving law to constitute sufficient reason for the deprivation than in the case when the property is something different and the property right something less extensive.  This judgment is not concerned at all with incorporeal property.

(f )       Generally speaking, when the deprivation in question embraces all the incidents of ownership, the purpose for the deprivation will have to be more compelling than when the deprivation embraces only some incidents of ownership and those incidents only partially.

(g)        Depending on such interplay between variable means and ends, the nature of the property in question and the extent of its deprivation, there may be circumstances when sufficient reason is established by, in effect, no more than a mere rational relationship between means and ends; in others this might only be established by a proportionality evaluation closer to that required by s 36(1) of the Constitution.

(h)        Whether there is sufficient reason to warrant the deprivation is a matter to be decided on all the relevant facts of each particular case, always bearing in mind that the enquiry is concerned with ‘arbitrary’ in relation to the deprivation of property under s 25.”

[93]      A deprivation will be arbitrary if it is either without “sufficient reason” or procedurally unfair.  There can be no doubt that the requirement of procedural fairness is an important one in evaluating whether a deprivation is arbitrary or not.  I agree with the reasoning and conclusion of Yacoob J that section 118(1) must be understood to require a municipality to furnish statements of account when requested to do so in writing by an owner.  I need say no more about procedural unfairness in this judgment.

[94]      The other issue is whether there is sufficient reason for the deprivation.  The approach established in the First National Bank case (supra) requires a court to consider the extent of the deprivation, on the one hand, and evaluate it in the light of the purpose of the legislation that occasions the deprivation.

What will constitute sufficient reason will depend, as we said in the First National Bank case, on the

  • extent of the deprivation,
  • the nature of the property concerned
  • and all the relevant facts of the particular case, one of which would be the relationship between the purpose for the deprivation and the person whose property has been affected.

In my view, the test established by First National Bank is one of “sufficient reason” in each case which must be determined in the light of all the facts of the case.

I turn now to consider first the extent of the deprivation caused by section 118(1) and then to evaluate that deprivation in the light of the purpose of section 118(1).”