CoJ Housing: Parliamentary Portfolio Committee 23July 2013 Newtown Eviction Matter

Introduction Newtown Project Legal process that led to liquidation Post Liquidation CoJ Approach 11

Newtown Project Project known as the Newtown Urban Village Housing complex consisting of 340 units First ownership by the Newtown Housing Co-operative – project developed as a housing co-operative with international funding from Norwegian government Project financed and managed through housing co-operative process Project liquidated 22

Liquidation Due to mismanagement, fraud, and corruption entire housing scheme collapsed Project was liquidated by South Gauteng High Court with provisional order granted in May 2004 that project is liquidated. Final winding up order granted on 7 August 2009 Property was subsequently placed on public auction and purchased by Johannesburg Housing Company for R29 million on 26 November 2009 Application for leave to appeal winding up order was dismissed in South Gauteng High Court on 20 October 2009 Co-ops petition to the Supreme Court of Appeals also dismissed Court found that project also failed due to housing scheme having been hijacked by Mr. Zachariah Matsela Mr. Matsela employed his own security and collected rent from the occupants 33

Post Liquidation Occupants of Newtown Project in two camps, the Matsela camp and the Khumalo camp The Matsela camp applied to court to dispute ownership by JHC and have the liquidation and sale set aside Matter dismissed by South Gauteng High Court on 17 October 2009 Occupiers (Matsela Camp) applied to for joinder application of the CoJ to proceedings in June 2012 Matter was heard and dismissed by the South Gauteng High Court on 4 October 2012 Khumalo Camp applied for joinder of The President, The National Government, the Provincial Government, this application was heard by Judge AJ Mlonzi and dismissed on 25 April 2012 On 4 June 2012, 10 months after application for eviction order by JHC the Khumalo Camp applied for joinder application of CoJ, was denied as the did not join the CoJ at time of June

Post Liquidation In dismissing the joinder application the judge established that, “In the present matter the applicants have failed to set out facts to show that they are indigent. They have failed to show that an emergency situation will arise. They have failed to show that the applicants are persons who are entitled to assistance for accommodation by the second respondent. There is no attempt to show that the applicants will be homeless, should they be evicted. Indeed, there are indiciae to the contrary, i.e. that the occupiers are persons who can afford to pay monthly levies, rent and the cost of security guards”. court papers filed indicated that there were rental payments of R 2000 per month 55

CoJ Approach CoJ reviewed legal judgment and noted process followed was legally correct Neither CoJ, nor the President, nor the National Government nor the Provincial government despite application for joinder were joined and thereby no relief was sought against the state in anyway CoJ engaged with occupiers’ representative and proposed ways forward that included: New tenant arrangement with JHC as JHC is the legal owner - refused Mediation process with occupiers and JHC- refused Acceptance of alternative options provided by JHC- only accepted by a few occupiers CoJ has several impending matters with occupiers if far more severe circumstances and that are truly indigent requiring assistance from the CoJ Legal matters pending in the CoJ have cited the Executive Mayor and the City manager personally liable therefore CoJ could not ignore a court order and intervene in the Newtown matter compromise the Mayor and the CoJ 66

CoJ Approach It is evident that the State (CoJ) and the JHC attempted to resolve the matter and reach amicable solution given the lengthy process involved but that no resolution was attainable due to the circumstances. Legal process indicated that the state was not obligated herein 77

CoJ Status of Evictions Post Blue Moonlight ConCourt decision the CoJ had to comply with the court order by providing access to Temporary Alternative Accommodation The CoJ obliged by developing a model that can be used across the spectrum of the city utilizing a managed care model The occupiers in Blue Moonlight numbered approximately 130 wherein an assessment was done on the occupiers to determine the exact need whether all occupiers qualified for temporary alternative accommodation Based on the assessment the CoJ provided 2 options – social housing and temporary alternative accommodation 36 occupiers were placed in the first facility in the CoJ At present 15 occupiers remain as the matter is tangled in impending litigation centered on the nature of the accommodation provided, the definition of temporary and the managed care model being used The CoJ has sourced a second facility that can accommodate 230 occupiers 88

CoJ Status of Evictions The second facility Linatex, was tendered in the Tikwelo House matter to accommodate approximately 200 occupiers At the time of relocation to the facility only 13 occupiers have taken up occupation The balance of the available space has been tendered in the Chang Hua matter to accommodate 203 occupiers in the matter. This is yet to be finalized The total number of accommodation required across the CoJ is estimated to be individuals annually at a cost of R 146 million per annum The CoJ currently has approximately 32 impending legal matters across the CoJ with 3 matters holding the Executive Mayor personally liable This excludes matters that are dormant or have yet to be heard in court or have any judgments issued Existing requirement for Temporary Alternative Accommodation noting most urgent matters is approximately 8000 individuals – excluding the Newtown matter 99

CoJ Status of Evictions The CoJ has developed a policy to address the matters at hand – Special process for the Relocation of Evictees (SPRE) Embarked on exercise to acquire additional sites and facilities to provide access to temporary alternative accommodation Critical importance evictions matters not only in the inner city – include Marlboro, Kew and Wynberg with ConCourt implications if not addressed on an urgent basis New eviction matters extend across the CoJ Approximately 300 eviction applications received by CoJ monthly with approximately 20 to 30 requiring legal instruction for possible impact on CoJ administration. 10

Thank You 11