Ekapa Minerals (Pty) Ltd and Another v Sol Plaatje Local Municipality and Others

Case summary and citation

• Ekapa Minerals (Pty) Ltd and Another v Sol Plaatje Local Municipality and Others [2025] ZACC 1; 2025 (5) BCLR 505 (CC); 2025 (6) SA 1 (CC) 

Court name and bench

• Court: Constitutional Court of South Africa
• Bench: Chief Justice Zondo CJ; Deputy Chief Justice Maya DCJ; Judges Bilchitz AJ, Gamble AJ, Madlanga J, Mathopo J, Mhlantla J, Tshiqi J
• Bench type: Full Constitutional Bench (unanimous judgment delivered by Gamble AJ)

Date of Judgement

• Judgement delivered: 24 March 2025
• Hearing date: 6 May 2024

Parties involved

Applicants/Appellants:

• First Applicant: Ekapa Minerals (Pty) Ltd – A private company conducting diamond mining operations in Kimberley, Northern Cape
• Second Applicant: Ekapa Resources (Pty) Ltd – A private company also involved in mining operations

Respondents/Defendants:

• First Respondent: Sol Plaatje Local Municipality (responsible for Kimberley’s municipal property rates)
• Second Respondent: Minister of Cooperative Governance and Traditional Affairs (not actively participating)
• Third Respondent: Minister of Finance (not actively participating)
• Fourth Respondent: Member of the Executive Council for Local Development, Northern Cape (not actively participating)

Facts of the case

• Eight real estate properties in the Sol Plaatje Local Municipality were acquired by Ekapa Minerals (Pty) Ltd from De Beers Consolidated Mines (Pty) Ltd on November 30, 2015. After obtaining ownership, Ekapa was accountable for paying any municipal fees and rates that the municipality imposed on those properties. In order to harvest diamonds that had not been found during the initial mining operations, Ekapa’s business operations required repurposing old mine dumps with contemporary technology. For municipal rating purposes, the properties were classified as “mining property” due to the nature of these activities.
• According to the Local Government: Municipal Property Rates Act 6 of 2004 (also known as “the Rates Act”), municipalities have to establish a rates policy that distinguishes between different types of property and specifies the appropriate rate ratios. Residential property was given a base ratio of 1 under the Sol Plaatje Local Municipality’s adopted policy. The municipality established the rate ratio for mining properties at 1:22 for five consecutive fiscal years, from 2015/2016 to 2019/2020. As a result, the rating for mining properties was twenty-two times higher than that of residential properties. In contrast, the majority of other non-residential property classifications, such as commercial and business properties, were subject to a rates ratio of roughly 1:3.
• Ekapa argued that the substantially higher rates ratio that applied to mining assets was too costly for its marginal mining operations. Ekapa paid municipal rates computed using the 1:3 ratio that applies to business and commercial premises during the pertinent five-year period. About R30 million was the gap between the amount of money required by the municipality at the 1:22 ratio and the amounts paid by Ekapa at the 1:3 ratio.
• Ekapa filed review proceedings at the High Court of South Africa, Northern Cape Division, Kimberley, on April 14, 2021. Ekapa contested the municipality’s decision to impose the 1:22 rate ratio on mining sites in each of the relevant fiscal years. On September 2, 2022, the High Court ruled that the municipality’s decisions were illegal under section 172(1)(a) of the Constitution. Nonetheless, exercising its discretion under Section 172(1)(b) of the Constitution, the High Court limited the pronouncement of invalidity’s retrospective impact.
• The municipality was able to retrieve nearly R30 million in unpaid rates because the ruling was only given prospective effect. The High Court defended this restriction by citing Ekapa’s alleged excessive delay in establishing the appeal process and the possible negative effects that retrospective relief would have on the municipality’s financial situation.
• The High Court denied Ekapa’s request for permission to appeal on January 13, 2023. On April 12, 2023, a follow-up plea to the Supreme Court of Appeal was denied and after that, Ekapa filed for relief from the Constitutional Court.

Issues raised

The following crucial matters had to be decided by the Constitutional Court: 

• Whether permission to appeal should be granted, including whether or not the case brought up sufficiently important constitutional problems for the Court to get involved?
• Whether the High Court reasonably limited the declaration of invalidity’s retrospective impact in accordance with section 172(1)(b) of the Constitution?
• Whether and under what conditions the Constitutional Court may obstruct a lower court’s use of “true discretion”?
• What qualifies as “just and equitable” relief under section 172(1)(b) in cases where municipal actions are considered illegal? 
• If unlawful rates have been imposed, is it necessary for remedy to be applied retroactively under the legality principle?

Arguments of the parties

Ekapas arguments (appellant)

Ekapa argued that the High Court had not used its judicial discretion in accordance with section 172(1)(b) of the Constitution. Specifically, Ekapa maintained that: 

• The High Court neglected the essential balancing process by concentrating primarily on the municipality’s financial interests and not sufficiently taking Ekapa’s interests into account.
• It was improper to conclude that there had been a “extensive and unreasonable delay.” Ekapa claimed that it didn’t realize the disproportionate 1:22 ratio up until 2019. After that, it held sincere talks with the municipality until filing a lawsuit in April 2021. Therefore, rather than five years, the effective delay was only 18 months.
• Speculative claims about possible financial loss to the municipality were accepted by the High Court without supporting documentation. 
• It was improbable that the contested sum of about R30 million, or roughly R5 million annually over five years, would have the devastating financial repercussions that the High Court had in mind.
• Offering prospective-only relief enabled the municipality to profit from actions that had been ruled illegal, undermining the legality premise. 
• The major difference between the rates applied to mining properties and those charged to other non-residential properties was not explained by the municipality.
• In order to show its reasonableness and good faith, Ekapa highlighted its promise not to pursue recovery of sums already paid at the 1:3 ratio.

Municipality’s arguments (respondent)

The Sol Plaatje Local Municipality argued that:

• Leave to appeal should be denied since the issue was fact-specific and of minimal importance beyond the immediate parties. 
• The Constitutional Court has no right to interfere with the High Court’s exercise of “true discretion,” particularly since Ekapa’s allegations involved factual findings.
• Ekapa failed to demonstrate that the High Court based its decision on faulty legal principles or materially misguided itself on the facts. 
• The High Court appropriately limited retrospective remedies due to the potential threat to the municipality’s financial stability. 
• Municipal rate-setting choices are policy-laden, and therefore warrant judicial deference.
• Ekapa’s delay in appealing the rates prejudiced the municipality, which had budgeted for revenue obtained from the 1:22 ratio.
• Requiring the municipality to forfeit nearly R30 million in projected revenue would cause significant financial harm. 
• The application should be dismissed together with its costs.

Judgement/ final decision

The Constitutional Court affirmed the appeal in a unanimous ruling after granting permission to appeal.

The Court ordered that:

• The right to appeal was granted. 
• The appeal was approved. 
• The Sol Plaatje Local Municipality’s decisions to impose a 1:22 rates ratio on mining assets for the 2015–2016 to 2019–2020 fiscal years were declared illegal and set aside, replacing the High Court’s judgement.
• According to clause 172(1)(b)(i) of the Constitution, the declaration of invalidity was given full retrospective effect on July 1, 2015. 
• The court issued an order requiring Ekapa to refrain from requesting compensation for charges that were willingly paid at the 1:3 ratio.
• Ekapa’s expenses, including the fees of two solicitors who were hired, were mandated to be covered by the municipality.

Legal reasoning/ Ratio decidendi

According to the Constitutional Court, the case highlighted significant constitutional questions about how judicial discretion should be used in accordance with section 172(1)(b) of the Constitution. Although a “true discretion” is granted by section 172(1)(b), this discretion must be used judicially and is subject to appellate review. 

The Court reiterated, citing Central Energy Fund SOC Ltd v. Venus Rays Trade (Pty) Ltd, that an appellate court may step in when a lower court:

• failed to use its judicial discretion; 
• used the wrong legal precepts; or 
• substantially misrepresented the facts.
• The Court concluded that the High Court overemphasized speculative budgetary repercussions and failed to appropriately weigh the conflicting interests of the parties. It further found that the High Court refused to give the legality principle enough weight and misrepresented the length of Ekapa’s delay. The rule of law would be compromised if the municipality were allowed to recover rates imposed in accordance with illegal decisions. 
• The Court determined that complete retrospective redress was a just and equitable remedy. The asserted financial disadvantage was unsupported, the municipality was aware of Ekapa’s complaints, and the parties’ interests were fairly balanced by Ekapa’s promise not to reclaim money that had already been paid.

Conclusion

The ruling in Ekapa Minerals (Pty) Ltd v. Sol Plaatje Local Municipality highlights the importance of the legality concept in constitutional remedies. It affirms that when restricting the retroactive effect of findings of invalidity under section 172(1)(b), courts must perform a thorough and open balancing exercise. The ruling strengthens municipal accountability, upholds ratepayers’ rights to contest unreasonable rate disparities, and clarifies when appellate courts may interfere with remedial orders that are discretionary.

Reference(S):

Primary Sources

Statutes

Constitution of the Republic of South Africa, 1996 § 172

Constitution of the Republic of South Africa, 1996 § 229

Local Government: Municipal Property Rates Act 6 of 2004 § 3

Local Government: Municipal Property Rates Act 6 of 2004 § 19

Cases

Ekapa Minerals (Pty) Ltd v Sol Plaatje Local Municipality [2025] ZACC 1; 2025 (5) BCLR 505 (CC)

Ekapa Minerals (Pty) Ltd v Sol Plaatje Local Municipality (680/21) [2022] ZANCHC 47 (2 Sept 2022)

Central Energy Fund SOC Ltd v Venus Rays Trade (Pty) Ltd [2022] ZASCA 54; 2022 (5) SA 56 (SCA)

Head of Department: Mpumalanga Department of Education v Hoërskool Ermelo [2009] ZACC 32; 2010 (2) SA 415 (CC); 2010 (3) BCLR 177 (CC)

Millennium Waste Management (Pty) Ltd v Chairperson of the Tender Board: Limpopo Province [2007] ZASCA 165; 2008 (2) SA 481 (SCA)

Khumalo v Member of the Executive Council for Education: KwaZulu-Natal [2013] ZACC 49; 2014 (3) BCLR 333 (CC)

Nokeng Tsa Taemane Local Municipality v Dinokeng Property Owners Association [2010] ZASCA 128; 2011 (1) SA 359 (SCA)

South African Property Owners Association v Johannesburg Metropolitan Municipality [2012] ZASCA 157; 2013 (1) SA 420 (SCA); 2013 (1) BCLR 87 (SCA)

Secondary Sources

Online Legal Databases

‘Ekapa Minerals (Pty) Ltd and Another v Sol Plaatje Local Municipality and Others (CCT 119/23) [2025] ZACC 1; 2025 (5) BCLR 505 (CC) (24 March 2025)’ Southern African Legal Information Institute https://www.saflii.org/za/cases/ZACC/2025/1.html accessed 20 December 2025

‘Constitutional Court of South Africa Case Archive’ Southern African Legal Information Institute https://www.saflii.org/za/cases/ZACC/ accessed 20 December 2025