In a landmark decision, the Johannesburg High Court has ordered the City of Johannesburg to pay more than R12 million to a property company because it failed to comply with a court order to provide temporary accommodation to 249 unlawful occupiers of a “hijacked” building in the inner city.
The ruling, by Acting Judge Dephny Mahosi, has significant ramifications for evictions across the country.
The story goes back to 2012 when Changing Tides, a property company, approached the high court to evict 249 men, women and children from an 11-storey building known as Chung Hua Mansions – one of many “hijacked” buildings in Johannesburg’s inner city.
The court granted the eviction but ordered the City of Johannesburg to secure temporary accommodation for the families by 30 January 2013.
Under South Africa’s eviction laws, a municipality is always joined as a party to any proceedings where a person might become homeless as a result. The court might then order the municipality to provide suitable temporary accommodation for the affected persons, which is what happened in this case.
However, the City of Johannesburg failed to comply with the order, and the matter was the subject of numerous court proceedings in the following years, none of which resulted in the dispute being resolved.
Only after the residents launched an application to hold the City of Johannesburg in contempt of court were they finally provided temporary accommodation in January 2016.
Changing Tides then approached the high court in 2020 to sue the city for financial damages. The hearing began in September 2024.
The company argued that by failing to comply with the previous court orders, the city had unlawfully deprived it of its constitutional right to property because it was unable to renovate the buildings and rent them out to students.
The company also argued that the city had infringed upon the occupiers’ constitutional right to adequate housing.
The court had to decide whether the city had failed to comply with the order to provide temporary accommodation to the occupiers and, if so, whether it was liable for Changing Tides’ financial loss. In law, this type of financial loss is referred to as “pure economic loss”.
When a company sues someone for pure economic loss, it has to prove that the wrongdoer’s conduct was negligent or wrongful and caused the loss in question.
The court first had to determine whether the city had failed to comply with the order to provide temporary accommodation by 30 January 2013.
The municipality argued that it had made various attempts to do so, but the Socio-Economics Rights Institute (SERI), which acted as attorneys for the residents, had taken issue with several of the offers for accommodation, arguing that they were unsuitable for families with children, that partners or spouses were required to live separately in single rooms, and that residents could only stay there at night.
The ruling
In her ruling on 14 March 2025, Acting Judge Mahosi found that the municipality only managed to provide the accommodation in January 2016 – three years after the original deadline.
She agreed with Changing Tides’ argument that it had been unlawfully deprived of its property because the municipality took three years to comply with the order, thus denying the company the use of the property.
Had the municipality acted more swiftly, Changing Tides could have renovated the building and rented it out.
Moreover, Judge Mahosi found that the residents’ right to adequate housing had been violated because they had no choice but to reside in the building despite its deteriorating and unsafe condition. She also suggested that the municipality’s conduct undermined the rule of law because it had a constitutional obligation to comply with court orders.
Finally, the court had to determine whether the city had been negligent and caused financial loss to Changing Tides. Judge Mahosi found that the city had not only been negligent but reckless because it took action only when the mayor, municipal manager, and director of housing were facing contempt of court proceedings.
In the court’s view, the municipality foresaw or ought reasonably to have foreseen that its failure to comply with the January deadline would prevent Changing Tides from renovating, renting out, and generating income from the property. This caused Changing Tides financial loss for three years.
With growing calls for spatial justice and affordable housing and important decisions on this pending before the Constitutional Court, this ruling has wide implications for municipalities across the country.
© 2025 GroundUp. This article was first published here. – moneyweb.co.za
