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Daily Maverick reports that in a watershed judgment last week, the Supreme Court of Appeal (SCA) clarified the Municipal Finance Management Act (MFMA) and ruled that municipal officials could be held personally liable for intentionally or negligently incurring unauthorised, irregular, fruitless and wasteful expenditure.
In respect of the multibillion Integrated Public Transport System (IPTS) in the Nelson Mandela Bay Municipality, this ruling has opened the door for multimillion-rand claims to be recovered from seven senior former municipal officials. Lawyers had previously argued that the municipalities can only act against officials if it can be proven that the entity itself had suffered damages. But that, SCA Judge Ashton Schippers ruled last week, was not what the law intended. In dismissing an appeal by the officials, Schippers ruled that Section 32 of the MFMA made it clear that the law was intended to create personal liability on the part of municipal officials in particular circumstances. “The meaning conveyed by the wording of Section 32 is clear and unambiguous. Liability arises as soon as an official intentionally or negligently incurs unauthorised, irregular, and fruitless and wasteful expenditure: [It] is not conditional upon a municipality sustaining loss or damage,” Schippers explained. He said this interpretation of the law gives effect to the intention of Parliament: to secure sound and sustainable management of the fiscal and financial affairs of municipalities, by holding political office bearers and municipal officials personally liable for the intentional or negligent incurrence of the defined expenditure. Schippers partially dismissed the appeal by the officials before the court, bringing to an end litigation that was brought against senior city officials by the Nelson Mandela Bay Metro in 2016.
- Read the full original of the report in the above regard by Estelle Ellis at Daily Maverick
- Read too, Pay back the money, court orders Nelson Mandela Bay ex-managers, at Cape Times
Get other news reports at the SA Labour News home page