Glencore will battle it out with two Mpumalanga municipalities at the Constitutional Court in November, challenging local councils’ authority to regulate the transfer of properties.

A Business Day report says the outcome of the case will have an impact on the property market, municipal planning and the mining industry.

Glencore will tell the  court that the by-laws enacted by the Govan Mbeki and Emalahleni municipalities that impose an embargo on the registration of transfer of immovable property until the municipalities certify that their requirements have been met are not in the purview of local government.

The two municipalities promulgated by-laws obliging a transferer of land to first obtain a certificate from the municipality confirming that all funds due by the transferer in respect of the land have been paid and that the land use and buildings constructed on the land comply with the requirements of their respective land use schemes.

Without this certificate, the transferer may not approach the registrar of deeds for the transfer of that property.

The municipalities have blocked the transfer of 55 multimillion rand properties between Glencore and other entities after they failed to comply.

‘In this case, the by-laws place restrictions on the owner of immovable property to transfer ownership of that property to another person. Quite clearly, therefore, one of the incidents of ownership – the right to transfer – is affected. This is property worthy of constitutional protection,’ Glencore said in its court papers.

‘Municipalities do not have unlimited plenary powers. Their legislative powers have to be sourced in the Constitution. It is clear that the two land-use bylaws in question deal generally with municipal planning.’

The matter is to be heard on 14 November when the Emalahleni Local Municipality will tell the court that the embargo is a sensible way of ensuring compliance with the planning requirements of a municipality.

‘The enforcement of zoning legislation and land use management schemes falls squarely within the competence of a municipality. It forms part of the executive authority and the administration of the municipality in respect of its planning functions,’ the municipality said in its papers.

The Business Day report notes this view will also be advanced by the Govan Mbeki Municipality, which argues that municipalities have constitutionally entrenched powers to manage municipal planning.

The City of Cape Town has asked to intervene in the matter, an application which Glencore is opposing.

Geordin Hill-Lewis, the mayor of Cape Town, said in his affidavit his administration has a ‘direct and substantial’ interest in the case’s outcome.

Full Business Day report