Accountability, estoppel and bypassing of the municipal finance Management Act : a note on Merifon (Pty) Ltd v Greater Letaba municipality trilogy

Abstract

Accountability and transparency reinforce the constitutional principles of governance, which constitute equality before the law, separation of powers, legality and the rule of law, which are central to the conception of modern constitutional order. The trilogy of Merifon (Pty) Ltd v Greater Letaba Municipality Limpopo Division, Case No 01/2014 (18 July 2019), Merifon (Pty) Ltd v Greater Letaba Municipality [2021] ZASCA 50 and Merifon (Pty) Ltd v Greater Letaba Municipality [2022] ZACC 25 poses fundamental questions regarding the failure of a municipal manager and incompetent council to comply with statutory prescripts. Although the narrow issue for determination concerned the seller’s reliance on estoppel and the Turquand Rule to hold a municipality to the unlawful and inflated sale of land agreement, the Merifon litigation invites consideration of the practical reality of malfeasance in the local government sphere. In this note the litigation history and the analytical framework as well as the Municipal Finance Management Act 56 of 2003 (MFMA) are examined. The critical aspects of the three judgments regarding the problematic reliance on estoppel and the Turquand Rule in the face of peremptory prescripts of MFMA are subsequently examined.