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  • City of Ekurhuleni Metropolitan Municipality In re- Unlawful Occupiers 1 Argyl Street and Others v Rohlandt Holdings CC and Others [2024] ZACC 10 (31 May 2024)

City of Ekurhuleni Metropolitan Municipality In re- Unlawful Occupiers 1 Argyl Street and Others v Rohlandt Holdings CC and Others [2024] ZACC 10 (31 May 2024)

A consent order, which is intended to resolve a legal dispute, must be granted in compliance with the relevant legal requirements, including the authority of the parties involved and adherence to constitutional and statutory provisions.

The legal action before the Constitutional Court of South Africa arises from a dispute involving the City of Ekurhuleni Metropolitan Municipality and various property owners regarding a consent order that was granted on 12 February 2020. This consent order required the City to purchase several properties that were unlawfully occupied. The City contends that the consent order was improperly granted because its attorney lacked the authority to consent to such an order, and that the order did not comply with the necessary legal requirements.

The nature of the action is an application for leave to appeal against a decision of the High Court, which had refused to rescind the consent order. The City argues that the consent order was not valid due to the attorney's lack of authority and because it did not meet the requirements established by the Constitutional Court in the case of Eke v Parsons. Specifically, the City claims that the consent order did not relate to the underlying dispute, was inconsistent with the Constitution and relevant legislation, and did not provide any practical or legitimate advantage.

"The consent order does not resolve the position of the occupiers. They remain subject to the eviction orders. Their stay application remains undecided. Their housing rights under section 26 of the Constitution have therefore not been addressed."

Dodson AJ (Zondo CJ, Chaskalson AJ, Kollapen J, Mathopo J, Rogers J, Schippers AJ and Tshiqi J)

The remedy being sought by the City includes the rescission of the consent order, which would effectively nullify the obligation imposed on the City to purchase the properties. The City also seeks to have the matter remitted to the High Court for further proceedings regarding the stay application related to the eviction orders against the unlawful occupiers. Additionally, the City is not seeking costs against the property owners, indicating a desire for a resolution that focuses on the legal issues rather than financial penalties.

The legal issues stem from a consent order that required the City of Ekurhuleni to purchase properties unlawfully occupied by individuals, which the City argues was granted without proper authority from its attorney, Mr. Maluleke. The City contends that the consent order did not address the primary dispute regarding the eviction of the unlawful occupiers and failed to comply with statutory requirements, including those outlined in the Local Government Ordinance and the Constitution. Furthermore, the City asserts that the consent order introduced unresolved disputes over rates and service charges, leading to further litigation rather than resolving the matter. The High Court had previously ruled against the City's application for rescission, prompting the City to seek leave to appeal in the Constitutional Court.

Did the High Court err in refusing to rescind the consent order that required the City of Ekurhuleni Metropolitan Municipality to purchase unlawfully occupied properties, given the alleged lack of authority of the City's attorney and the failure to comply with the necessary legal requirements?

The case illustrates the principle that a consent order, which is intended to resolve a legal dispute, must be granted in compliance with the relevant legal requirements, including the authority of the parties involved and adherence to constitutional and statutory provisions. Furthermore, a consent order should directly relate to the underlying issues in dispute and provide practical or legitimate advantages to the parties; otherwise, it may be subject to rescission.

The court applied the general principle of law regarding consent orders by examining whether the requirements established in Eke v Parsons were met. It assessed whether the consent order related to the underlying dispute, whether it complied with constitutional and statutory provisions, and whether it provided any practical or legitimate advantage. The court found that the consent order did not adequately address the primary issues of eviction and did not comply with the necessary legal requirements, particularly regarding the authority of the City's attorney and the lack of a council resolution for the property acquisition. Ultimately, the Constitutional Court upheld the appeal, rescinded the consent order, and remitted the matter to the High Court for further proceedings, indicating that the consent order was invalid due to significant legal deficiencies.

In its reasoning process, the court relied on the principles established in Eke v Parsons [2015] ZACC 30, which outlines the requirements for a court to make a settlement agreement an order of court. The court also referenced the case of Coppermoon Trading 203 (Pty) Ltd v The persons whose identities are to the Applicant unknown and who unlawfully occupy remainder Erf 149, Phillippi, Cape Town 2020 JDR 0553 (SCA), which involved similar issues regarding consent orders and the obligations of municipalities in the context of unlawful occupation. Additionally, the court considered the Supreme Court of Appeal's decision in Moraitis Investments (Pty) Ltd v Montic Dairy (Pty) Ltd [2017] ZASCA 54, which addressed the lack of authority of a legal representative to consent to an order.