THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Reportable
Case no: 338/2022
In the matter between:
GOLDEN CORE TRADE
AND INVEST (PTY) LTD APPELLANT
and
MERAFONG CITY
LOCAL MUNICIPALITY FIRST RESPONDENT
MINISTER OF WATER AND SANITATION
(Originally the Minister of Water Affairs
and Forestry) SECOND RESPONDENT
Neutral Citation: Golden Core Trade and Invest (Pty) Ltd v Merafong City
Local Municipality and Another (338/2022) [2023] ZASCA
126 (29 September 2023)
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Coram: CARELSE, MEYER, MATOJANE and WEINER JJA and
UNTERHALTER AJA
Heard: 8 May 2023
Delivered: 29 September 2023
Summary: Administrative law – delay – legality review– reactive challenge
– s 8(9) of the Water Services Act 108 of 1977 – whether the high court erred
in overlooking the first respondent’s long delay in reviewing the Minister’s
decision in terms of s 8(9) of the Water Services Act – whether the Minister’s
decision should be enforced – the reactive challenge and review as to whether
s 8(9) of the Water Services Act provides the Minister with authority to interfere
with the Municipality’s imposition of surcharges in respect of the supply of water
for industrial and domestic use.
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________________________________________________________________
ORDER
________________________________________________________________
On appeal from: Gauteng Division of the High Court, Pretoria (Strydom J ,
sitting as a court of first instance):
1 The appeal is upheld with costs, including the costs of two counsel.
2 The judgment of the high court is set aside and replaced with the following:
2.1 The first respondent’s review application is dismissed with costs,
including the costs of two counsel.
2.2 It is declared that:
2.2.1 The tariff imposed by the first respondent for the supply of water to the
appellant for industrial use, in the period 1 July 2004 until the promulgation and
imposition of a new tariff of application to such supply, was unlawful.
2.2.2 The tariff imposed by the first respondent for the supply of water to the
appellant for domestic use, in the period 1 July 2004 until the promulgation and
imposition of a new tariff of application to such supply, was unlawful.
2.3 The first respondent is ordered to pay the appellant’s costs, including the
costs:
2.3.1 in the proceedings of the High Court in 2013 and in 2021 under case
number: 23558/2011, including the costs of two counsel;
2.3.2 in the proceedings of the Supreme Court of Appeal under case number:
20265/14 in 2015, including the costs of two counsel; and
2.3.3 in the proceedings of the Constitutional Court under case number:
106/2015 in 2019, including the costs of two counsel.
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________________________________________________________________
JUDGMENT
________________________________________________________________
Meyer JA and Unterhalter AJA (Carelse, Matojane and Weiner JJA
concurring):
Introduction
[1] This appeal challenges the judgment and order of the Gauteng Division of
the High Court, Pretoria , per Strydom J, delivered on 22 November 2021 (the
high court redux). It: (a) dismissed with costs, including those of two counsel, an
application for a declarator brought by the appellant, AngloGold Ashanti Limited,
substituted by Golden Core Trade and Invest (Pty) Ltd on 1 April 2020 in terms
of r 15(2) of the Uniform Rules of Court (AngloGold), against the first
respondent, Merafong City Local Municipality (the Municipality); (b) condoned
the Municipality’s late filing of its counter-application for the review of a decision
of the second respondent, the Minister of Water and Sanitation (the Minister);
(c) upheld with costs, including those of two counsel, the Municipality’s counter-
application for the review and setting aside of t he Minister’s ruling made on
18 July 2005 (the Minister’s decision); and (d) made no order as to costs against
the Minister. The appeal is with leave of the high court redux.
[2] The Minister’s decision set aside the Municipality’s tariffs imposed upon
AngloGold for the supply of water for industrial and domestic use. The questions
on appeal are whether the high court redux erred in: (a) overlooking the delay of
the Municipality in the initiation of its review of the Minister’s decision taken in
terms s 8(9) of the Water Services A ct 108 of 1997 (the Act) ; (b) upholding the
Municipality’s review; and in (c) dismissing AngloGold ’s application for
declaratory relief.
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Factual background
[3] Since 1958, the Tautona, Mponeng, and Savuka mines of AngloGold in
Carletonville have produced gold. Rand Water (formerly Rand Water Board)1 has
always provided it with potable water in bulk. AngloGold uses water for drilling,
rock handling, cooling, transport ation, and as a solvent in their metallurgical
process. It provides domesti c water to four hostels accommodating 10,202
migrant workers and 171 dwellings in the mine village , which are occupied by
mine workers and their families. It purchases 502,600 kl of potable water every
month, 35% of which is used for industrial and 65% for domestic purposes.
Rand Water’s reservoirs, pipes, and other equipment supply its water. AngloGold
built and maintained infrastructure for water distribution and sewage treatment
facilities. Therefore, it considers itself a water supplier.
[4] Parliament passed the Act in December 1997. It recognises the
constitutional authority of local government to provide water and sanitation.
Municipalities become water services authorities and gradually guarantee that
consumers within their jurisdictions have access to water services. The Act makes
a distinction between a ‘water services authority’ and a ‘water services provider’
of ‘water services ’. Section 1 defines a ‘water services authority ’ as ‘any
municipality, including a district or rural council as defined in the Local
Government Transition Act 209 of 1993, responsible for ensuring access to water
services’. A ‘water services provider ’ is defined as ‘any person who provides
water services to consumers or to another water services institution, but does not
include a water services intermediary’. ‘[W]ater services’ means ‘water supply
services and sanitation services’. ‘[W]ater supply services ’ means ‘the
abstraction, conveyance, treatment, and distribution of potable water, water
1 Rand Water is a water board established under Chapter VI (ss 28 -50) of the Water Board Statutes (Private) Act
17 of 1950. In terms of s 29 of the Act ‘the primary activity of a water board is to provide water services to ot her
water services institutions within its service area’.
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intended to be converted to potable water for commercial use but not water or
industrial use’. ‘[S]anitation services’ is defined to mean ‘the collection, removal,
disposal or purification of human excreta, domestic wastewater, sewage and
effluent resulting from the use of water for commercial purposes’.
[5] Section 4 mandates that ‘[w]ater services must be provided under the
conditions of the water services provider.’2 Section 6(1) stipulates that ‘. . . no
person may use water services from a source other than a water services provider
nominated by the water services authority having jurisdiction in the area in
question, without the approval of that water services authority.’3 Section 7(1)
2 Section 4 reads:
‘4(1) Water services must be provided in terms of conditions set by the water services provider.
(2) These conditions must—
(a) be accessible to the public;
(b) accord with conditions for the provision of water services contained in bylaws made by the
water services authority having jurisdiction in the area in question; and
(c) provide for-
(i) the technical conditions of existing or proposed extensions of supply;
(ii) the determination and structure of tariffs;
(iii) the conditions for payment;
(iv) the circumstances under which water services may be limited or discontinued;
(v) procedures for limiting or discontinuing water services; and
(vi)measures to promote water conservation and demand management.
(3) Procedures for the limitation or discontinuation of water services must—
(a) be fair and equitable;
(b) provide for reasonable notice of intention to limit or discontinue water services and for an
opportunity to make representations, unless—
(i) other consumers would be prejudiced;
(ii) there is an emergency situation; or
(iii) the consumer has interfered with a limited or discontinued service; and
(c) not result in a person being denied access to basic water services for nonpayment, where that
person proves, to the satisfaction of the relevant water services authority, that he or she is unable
to pay for basic services.
(4) Every person who uses water services provided by a water services provider does so subject to any
applicable condition set by that water services provider.
(5) Where one water services institution provides water services to another water services institution, it
may not limit or discontinue those services for reasons of nonpayment, unless it has given at least 30
days’ notice in wri ting of its intention to limit water services or 60 days’ notice in writing of its
intention to discontinue those water services to—
(a) the other water services institution;
(b) the relevant Province; and
(c) the Minister.’
3 Section 6 reads:
‘6. Access to water services through nominated water services provider. —
(1) Subject to subsection (2) , no person may use water services from a source other than a water services
provider nominated by the water services authority having jurisdiction in the area in question, without the
approval of that water services authority.
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provides that ‘. . . no person may obtain water for industrial use from any source
other than the distribution system of a water services provider nominated by the
water services authority with jurisdiction in the area in question, without the
approval of that water services authority.’4 Section 8 prescribes the procedure for
the approval by a water services authority of applications submitted in accordance
with ss 6 and 7, which may not be denied unreasonably and may be granted with
reasonable conditions. A person who has made an application pursuant to ss 6 or
7 may appeal any decision, including any condition imposed by the water services
authority in relation to the application, under s 8(4). On appeal, s 8(9) empowers
the Minister to ‘confirm, vary, or overturn’ any water services authority decision.5
(2) A person who, at the commencement of this Act, was using water services from a source other than one
nominated by the relevant water services authority, may continue to do so —
(a) for a period of 60 days after the relevant water services authority has requested the person to apply
for approval; and
(b) if the person complies with a request in terms of paragraph (a) within the 60 day period, until—
(i) the application for approval is granted, after which the conditions of the approval will apply; or
(ii) the expiry of a reasonable period determined by the water services authority, if the application for
approval is refused.'
4 Section 7 reads:
‘(1) Subject to subsection (3), no person may obtain water for industrial use from any source other than the
distribution system of a water services provider nominated by the water services authority having
jurisdiction in the area in question, without the approval of that water services authority.
(2) Subject to subsection (3), no person may dispose of industrial effluent in any manner other than that
approved by the water services provider nominated by the water services authority having jurisdiction i n
the area in question.
(3) A person who, at the commencement of this Act, obtains water for industrial use or disposes of industrial
effluent from a source or in a manner requiring the approval of a water services authority under subsection
(1) or (2), may continue to do so—
(a) for a period of 60 days after the relevant water services authority has requested the person to apply f or
approval; or
(b) if the person complies with a request in terms of paragraph (a) within the 60 day period, until —
(i) the application for approval is granted, after which the conditions of the approval will apply; or
(ii) the expiry of a reasonable period determined by the water services authority, if the application for
approval is refused.
(4) No approval given by a wat er services authority under this section relieves anyone from complying with
any other law relating to-
(a) the use and conservation of water and water resources; or
(b) the disposal of effluent.’
5 Section 8 reads:
‘(I) A water services authority whose approval is required in terms of section 6 or 7—
(a) may not unreasonably withhold the approval; and
(b) may give the approval subject to reasonable conditions.
(2) A water services authority may require a person seeking approval to provide water services to others on
reasonable terms, including terms relating to—
(a) payment for the services; and
(b) compensation for the cost of reticulation and any other costs incurred in providing the water service.
(3) In determining what is reasonable under subsections (I)(a), (1)(b) and (2), a water services authority —
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[6] In July 2003, the Department of Water Affairs and Forestry a ccepted the
Strategic Framework paper, thereby constituting municipalities as water services
authorities. On 11 February 2004, AngloGold and other mines received written
notification from the Municipality. It informed them that, as of 1 July 2003, it
became a water services authority. It also requested that they apply for approval
to be provided with water for industrial use, per s 7 of the Act.
[7] On 8 April 2004, AngloGold requested permission from the Municipality
to continue purchasing water from Rand Water for its mining and domestic use
on the basis of Rand Water’s tariff s and conditions. On 31 May 2004, t he
Municipality responded in writing. It said that Rand Water may supply water
directly to the mines, charge and collect water sales revenue, and manage water
quality and other technical issues. It also set significantly higher tariffs than those
of Rand Water for water provided to the mines. It approved AngloGold’s water
(a) must consider the following factors, to the extent that the water services authority considers them to be
relevant:
(i) The cost of providing;
(ii) the practicability of providing;
(iii) the quality of;
(iv) the reliability of;
(v) the financial, technological and managerial advisability of providing;
(vi) the economic and financial efficiency of; and
(vii) the socio-economic and conservation benefits that may be achieved by providing the water services
in question; and
(b) may consider any other relevant factor.
(4) A person who has made an application in terms of section 6 or 7 may appeal to the Minister against any
decision, including any condition imposed, by that water services authority in respect of the application.
(5) An appellant, under subsection (4), must note an appeal by lodging a written notice of appeal with—
(a) the Minister; and
(b) the person against whose decision the appeal is made,
within 21 days of the appellant becoming aware of the decision.
(6) A person who has made an application in terms of section 6 or 7 may appeal to the Minister if the water services
authority in question fails to take a decision on the application within a reasonable time.
(7) An appeal under subsection (6)—
(a) must be conducted as if the application had been refused; and
(b) must he noted by lodging a written notice of appeal with the Minister and the water services authority in
question.
(8) A relevant Province may intervene as a party in an appeal under subsection (4) or (6).
(9) The Minister may on appeal confirm, vary or overturn any decision of the water services authority concerned.
(10) The Minister may prescribe the procedure for conducting an appeal under this section. ’
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supply application, with effect from 1 July 2004 , under these conditions. It
concluded by advising AngloGold of its right to a ministerial appeal.
[8] On 11 June 2004, AngloGold filed an appeal in terms of s 8(4) appeal with
the Minister. Its main complaints were that : (a) the Municipality’s tariff was
excessively higher than the equivalent Rand Water tariff (R498 599 per month),
while the Municipality was not adding any value to, or assuming any
responsibility for any aspect of the water supply; and (b) the Municipality failed
to recognise AngloGold’s role as a water services provider or make any attempt,
other than requesting information on its mines’ consumption, to unde rstand its
economic situation.
[9] On 18 July 2005, the Minister upheld the appeal and ruled that the premium
established in respect of the water price for industrial usage was unreasonable,
because the Municipality provided no value for the services given to AngloGold
by Rand Water. She concluded that a surcharge could only be assessed on the
share of water used by the mines for domestic purposes and not for industrial
ones, ‘[s]ince water for industrial use is not designated as a municipal service in
terms of section 1(xxv) of the [Act]’. The Minister overturned ‘the surcharge on
water for industrial use ’. She also directed AngloGo ld and Rand Water to
negotiate a reasonable tariff for AngloGold’s domestic water use.
[10] The Municipality’s attorney provided a detailed legal opinion on
5 September 2005. The Municipality was advised that the Minister could not set
rates or interfere with municipal tariff-setting and such interference was void in
law. He recommended that the Minister be requested to reverse her decision. The
Municipality sent the opinion to the Minister on 31 October 2005 . It again
brought the opinion to her atten tion on 3 March 2006 , as well as on
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24 October 2007. Multiple attempts were made to meet with the Minister. Those
she called, in response, were postponed or cancelled at her request and never held.
[11] In accordance with the directive of the Minister, the Municipality
interacted with the mining houses, including AngloGold. From September 2005
to October 2007, it conducted meetings with them and Rand Water. In the end, no
agreement was reached. The Municipality declare d a formal dispute with the
Minister concerning her decision of 30 March 2006 . Section 41(3) of the
Constitution stipulates that a state entity involved in an intergovernmental dispute
must exhaust all reasonable efforts to resolve it before going to court. Section
40(1) of the Intergovernmental Relations Framework Act 13 of 2005 (the IGRF
Act), requires organs of state to attempt to resolve their disputes by cooperation
before resorting to legal action.
[12] The Municipality continued to enforce the tariffs imposed by it upon
AngloGold for the supply of water for industrial and domestic use . AngloGold
responded by withholding the contested portion of the tariffs. In September 2007,
the Municipality demanded that AngloGold pay the arrears or face measures to
curtail water supply to its mining operations. If its water supply had been
drastically curtailed, the mining operations would suffer severely. As a result,
AngloGold complied with the demand and paid the disputed surcharge and
arrears under protest and without prejudice to its legal rights.
Litigation background
(i) The court of first instance
[13] On 19 April 2011, AngloGold initiated motion proceedings in the Gauteng
Division of the High Court, Pretoria (the court of first instance). It sought relief
that would require the Municipality to comply with the Minister’s decision.
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AngloGold maintained that the Minister’s decision existed in fact, had legal
consequences and the Municipality could not treat it as though it did not exist.6
[14] On 3 August 2011, the Municipality filed its opposition and conditional
counter-application. It sought declaratory relief, asserting that: (a) it has exclusive
executive authority to set, adopt and implement tariffs for the provision of water
services within its area of jurisdiction, including surcharges; and (b) the Act does
not give the Minister authority ‘to interfere with a tariff set and implemented’ by
it for the provision of water services. Alternatively, it argued that s 8(9) of the
Act, which governs ministerial appeals, is unconstitutional and invalid.
[15] The court of first instance (Kubushi J) granted AngloGold’s application on
26 February 2014, and dismissed the Municipality’s counter-application. It found
that Anglo-Gold legitimately applied to the Municipality under ss 6 and 7 of the
Act and that the Minister lawfully exercised her appellate power under s 8. Even
if the Minister’s decision was impugnable, the court of first instance said , it
remained binding on the Minister until overturned by the court.
(ii) The Supreme Court of Appeal
[16] This Court upheld the court of first-instance’s decision on appeal.7 It held
that: (a) the municipality was required to seek judicial review of the Minister’s
decision; (b) it violated the principle of legality by simply ignoring it; (c) its
failure to challenge the Minister’s decision in judicial review proceedings, rather
than attack ing the empowering statutory provision, posed an insurmountable
difficulty for it; and (d) a collateral challenge to the validity of an administrative
act is a remedy available only to an individual.
6 It relied on Oudekraal Estates (Pt y) Ltd v City of Cape Town & Others [2004] ZASCA 48; 2004 (6) SA 222
(SCA) para 40.
7 Merafong City Local Municipality v AngloGold Ashanti Limited [2015] ZASCA 85; 2016 (2) 176 (SCA)
(Merafong SCA).
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(iii) The Constitutional Court
[17] In a subsequent app eal to the Constitutional Court, 8 the Municipality’s
primary argument was that there is a fundamental distinction between
administrative decisions that: (a) belong within the scope of powers with which
a public official is vested but are merely erroneously taken; and (b) appear to be
outside the decision-maker’s authority. It argued that a person or entity subject to
a decision in the second category can disregard it until it is enforced against them,
at which point it can use the decision’s invalidity as a defence.
[18] The majority of the Constitutional Court disagreed with this Court ’s
position as to who can bring a reactive challenge. Cameron J, writing for the
majority, held that the Constitution, logic, and our case law provides insufficient
support for a doctrinal limitation as to who can bring a reactive challenge. The
Constitutional Court ultimately concluded that this Court erred in holding that a
municipality could not raise a reactive challenge. The Constitutional Court
nevertheless recognised that the Municipality should either have accepted the
Minister’s decision as valid or challenge it in court by way of a review . By
deciding not to comply with the Minister’s decision, the Municipality was
engaged in self -help. The Constitutional Court remitted the Municipality’s
reactive challenge and review to the high court.
High court redux proceedings
[19] As a result of the Constitutional Court ’s remittal order, the record of the
Minister’s decision was filed. The Municipality amended its notice of motion in
which it sought, inter alia , condonation for the late institution of its reactive
challenge and its review and setting aside the Minister’s decision . In the
8 Merafong City Local Municipality v AngloGold Ashanti Li mited [2016] ZACC 35; 2017 (2) BCLR 182 (CC);
2017 (2) SA 211 (CC) (Merafong CC).
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introductory section of its supplementary affidavit , the Municipality stated
unequivocally that its challenge to the Minister’s decision was b rought under
PAJA and, alternatively, under the principle of legality. Its PAJA review was
founded on the grounds that the Minister’s decision was: (a) based on and
informed by a material error of law in respect of her functions and authority to
intervene in an exclusive municipal competence; and (b) irrational and/or
constituted a material error of law, in that she ruled that the Municipality could
not levy a surcharge, ignoring the legally competent authority of a Municipality
to effect cross-subsidisation across its tax base. The basis for its legality review
was that the Minister’s decision interfered with the Municipality’s exclusive
constitutional authority, under s 156(1) of the Constitution , to i mplement
municipal property rates, municipal tariffs and levy surcharges.
High court redux judgment
[20] In a judgment delivered on 22 November 2021, 9 the high court redux
evaluated the question of delay, including the merits, in the context of a legality
review. Regarding the approximately 13 -year period of delay, the high court
redux distinguished between the initial six-year period - between the date of the
Minister’s decision on 18 July 2005 and the filing of the Municipality’s
answering affidavit and counter -application in response to AngloGold ’s
application on 11 August 2011 - and the subsequent seven-year period before the
municipality amended its counter-application on 12 July 2017, by adding a prayer
for judicial review. It held that the delay in the first period was unreasonable or
undue, but not the delay in the second period.
[21] The high court redux then considered whether it should exercise its
discretion to overlook the delay and entertain the review. In doing so, it examined
9 Merafong City Local Municipality v Golden Core Trade Investments (Pty) Ltd and Another [2021] ZAGPPHC
805 (Merafong HC).
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the nature of the Minister’s decision, the merits of the legal challenge brought
against it, the potential prejudice to affected parties and the repercussions of
setting it aside, as well as the Municipality’s conduct. It considered the merits of
the legal challenge to be decisive and concluded that the Municipality’s delay in
filing the review application should be condoned.
[22] The high court redux found that the Minister, in taking the impugned
decision, exceeded the limits of the authority vested in her under s 8(9) of the Act,
and that her decision must be reviewed and set aside as unlawful and invalid on
the basis of the principle of legality. It also found the Minister’s act in making the
contested decision, to be unconstitutional and, as such, that it should be deemed
null and void in accordance with s 172(1)(a) of the Constitution.
Constitutional challenge against s 8(9) of the Act
[23] Concerning the municipality ’s argument that s 8(9) of the Act is
constitutionally invalid, the majority judgment of the Constitutional Court states:
‘I should add that it is also inapposite for this Court to determine Merafong ’s constitutional
challenge. Merafong avowedly did not persist in this before the SCA. Befor e us, it did not
mention the issue in its written argument, nor did it allude to it in oral argument. When counsel
for Merafong was asked about it, he averred simply “it’s alive on the papers ”. This Court
invited submissions from the Minister, who had not appeared in the High Court and SCA. The
Court itself here inquired about the constitutional point. The Minister urged that the point not
be decided. But Merafong now seized the opportunity to assert that it could be decided. That is
belated opportunism the Court should not countenance. Since Merafong had in effect let the
point lie, so far as not even to make written or oral submissions on it, it is not in the interests
of justice to allow it to now try to resuscitate it. In any event, counsel for Merafong submitted
in oral argument that the constitutional point was “conditional on this Court finding that the
Minister’s decision was lawful - that she had jurisdiction in terms of the Act to make the
decision”. Since, for the reasons I have set out we relay th at very question to the High Court,
15
it follows that, even on Merafong ’s approach, the constitutional point should be decided only
later.’10
[24] On the court day preceding the further high court hearing, the Municipality
included a prayer in its counter-application for a declaration of constitutional
invalidity of s 8(9) . In the light of its finding that s 8(9) did not empower the
Minister to interfere with the Municipality’s authority to determine the tariffs,
including surcharges, for AngloGold’s water supply, the high court deemed it
superfluous to examine the constitutionality of s 8(9). Nonetheless, the high court
made the following observation:
‘I am in agreement with the submission on behalf of AngloGold that if a serious challenge to
the constitutionality of an act of Parliament is to be made, then this must be raised pertinently,
with full and proper motivation and demonstrating clearly why a declaration of
unconstitutionality should be made. The constitutional challenge raised by Merafong was more
in the context of a legality challenge aimed against the decision of the Minister which was
made in conflict of the Constitution. The burden of an applicant who wants to attack the
constitutionality of an Act of Parliament will include satisfying the court that the subsection
cannot sensibly be interpreted in a manner consistent with the Constitution but must ineluctably
be declared to be unconstitutional. Moreover, a prayer for a declaration of constitutional
invalidity of section 8(9) was only inserted before this application was heard by this court.’11
[25] We cannot fault the high court’s position: The Municipality’s last-minute
attempt to introduce a claim for a declaration of constitutional invalidity of s 8(9)
should not be countenanced, also due to the unambiguous formulation of the
Municipality’s cause of action in its supplementary affidavit as a reactive
challenge against the Minister’s decision based on the provisions of PAJA
alternatively legality.12
10 Merafong CC para 82.
11 Merafong HC para 150.
12 Pursuant to the Constitutional Court ’s remittal order, a supplementary affidavit on behalf of the Minister was
filed in accordance with that order. Therein it is made clear that she abided the decision of the court. She refrained
from entering the controversy regarding condonation and Merafong’s counter-application for review. Submissions
were only made on her behalf in the event of the court reaching the constitutional issue.
16
Delay
[26] The majority of the Constitutional Court in Merafong CC held that while
the Municipality was not precluded from bringing a reactive challenge, the
Municipality was required to show that its challenge should be entertained,
notwithstanding its delay.13 So too, Merafong CC decided that the Municipality
was obliged to institute proceedings to review the Minister’s decision, whether
under PAJA or by way of legality review. Whether that review is precluded by
reason of the Municipality’s delay is also a threshold question for determination.14
Merafong CC remitted the matter to the high court. The high court redux to which
the matter was remitted held that although the Municipality’s explanation for its
delay was wanting, the delay should nevertheless be overlooked, and its review
entertained. What weighed most strongly with the high court redux was its
conclusion that the Municipality’s review had merit, and that the delay in bringing
the review should not stand in the way of deciding the review.
[27] Whether the high court redux was correct to do so, is the first question
before us. The appellant contended that the high court redux was in error, the
Municipality submi tted it was not. The Municipality, however, raises a
preliminary point. It submitted that the high court redux exercised a discretion to
decide the review, and overlook the delay. This Court, it contended, cannot
interfere with the exercise of that discretion, even if we should consider that the
high court redux came to the wrong conclusion, unless we find that the discretion
was not properly exercised, and there is no basis to do so.
[28] The preliminary point is unavailing. Appellate courts, including the
Constitutional Court, many times over, have considered whether the high court
13 Merafong CC para 72.
14 Ibid para 73.
17
reached the correct conclusion on the question of delay.15 That position is entirely
principled. Whether a court should entertain a review is a question of jurisdiction.
A court is required to find that t he delay is not unreasonable or that it may
nevertheless be overlooked to permit the review to be decided . That is not the
exercise of a discretion requiring special deference by an appellate court. On the
contrary, the appellate court must be satisfied th at the court’s powers of judicial
review can be exercised. Hence, the question of delay is a threshold issue, as to
which this court must be satisfied that the high court redux came to the correct
conclusion. It is to this issue that we now turn.
[29] The Municipality, following the decision of Merafong CC, amended its
conditional counter-application and sought to review and set aside the Minister’s
decision. It also applied for condonation. It brought a legality review, as also a
review under PAJA. There are certain differences in the approach to delay under
legality review and in a PAJA review ,16 but the two -step test laid down in
Khumalo and Another v Member of the Executive Council for Education:
KwaZulu Natal (Khumalo)17 was rightly adopted by the high court redux to decide
whether to entertain the Municipality’s legality review. The fixed period of 180
days does not apply to a legality review, and so the two -step test is somewhat
more favourable to the Municipality.
[30] The two-step test requires a court to answer two questions. Is the delay
unreasonable or undue? If it is, should the court overlook the delay? The high
court redux found the delay of the Municipality to be undue, though the
Municipality’s explanation of its delay fell only ‘just short’ of a reasonable
15 See for example Department of Transpo rt & Others v Tasima (Pty) Ltd [2016] ZACC 39; 2017 (1) BCLR 1
(CC); 2017 (2) SA 622 (CC) paras 160 – 171.
16 Buffalo City Metropolitan Municipality v Asla Construction (Pty) Ltd 2019 (4) SA 331 (CC) at paragraphs 46-
51
17 Khumalo and Another v Member of the Executive Council for Education: KwaZulu Natal [2013] ZACC 49;
2014 (3) BCLR 333 (CC); (2014) 35 ILJ 613 (CC); 2014 (5) SA 579 (CC) paras 49 - 52.
18
explanation. However, other considerations, and, in particular, the merits of the
Municipality’s review, led the high court redux to overlook the delay, decide the
review, and uphold it.
[31] On 18 July 2005, the Minister upheld the appeal that AngloGold had
lodged with her. The Municipality brought its review on 12 July 2017, just shy of
13 years later. That is a very long time. It places a burden upon the Municipality
to explain its lengthy delay and justify why a court should be moved to exercise
its powers of judicial review, when the challenged decision was in place and
binding upon the Municipality for so long a period of time.
[32] The Municipality divides the period into two. The f irst period is the six
years from the Minister’s decision to the launch of its conditional counter -
application brought in August 2011, in response to AngloGold’s application of
April 2011 to enforce the Minister’s decision. The counter-application did not
seek to review the Minister’s decision. I will refer to this as the first period. The
Municipality then defines a second period, after August 2011, until it amended
its counter-application on 12 July 2017 to review the Minister’s decision. I will
refer to this as the second period.
[33] Central to the explanation offered by the Municipality, as to why it did not
seek to review the decision of the Minister in the first period , is the reliance it
placed upon the advice given to it by its attorney, Mr Nalane. His advice, the
Municipality explained, was that the Minister’s decision was invalid, and may be
ignored. And hence there was no need to move a court to set the Minister’s
decision aside.
[34] After the Minister gave her decision on 18 July 2005, Mr Nalane on
8 September 2005 furnished the Municipality with an opinion. He opined that the
19
Minister did not enjoy the power to set aside, review or challenge any tariff set
by the Municipality. Mr Nalane recommended to his client that the Municipality
engage the Minister because ‘both Merafong and the Minister have misconstrued
their positions in law as regards the setting of water tariffs’. Mr Nalane then
directed correspondence to the Minister on behalf of the municipality, on
23 September 2005, enclosing the opinion, seeking a meeting, and affirming the
position that the Municipality and the Minister had ‘misconstrued their positions
in law’.
[35] In anticipation of a meeting that was meant to take place with the Minister
in February 2006, Mr Nalane composed some introduc tory remarks. Although
the meeting did not take place, the remarks indicate the stance then taken by the
Municipality. Mr Nalane concluded that since the position taken by the Minister
(that an appeal to the Minister was competent) was wrong in law, the Mi nister’s
letter (that is, her decision) ought to be revoked. And, absent agreement on this,
the Minister and the Municipality, as organs of state, ‘ . . . . are obliged to seek
consensus, before resorting to legal action’. (Our emphasis.).
[36] There can be little doubt that Mr Nalane recognized that if the Minister
would not agree to revoke her decision, legal action would be required to achieve
that result. That is, to set aside the Minister’s decision, which Mr Nalane
considered to be invalid because the Minister lacked the power to make it.
[37] This was not simply the position of Mr Nalane. It was the position of the
Municipality. In a letter from the executive mayor of the Municipality to the
Minister, dated 5 April 2006, the following is stated:
‘It has become imperative for us to resolve this matter decisively. As a result we have obtained
an opinion to the effect that we have a case to make in court to overturn your decision.’
(Our emphasis.)
20
[38] Although the Municipality sought to resolve its challenge to the validity of
the Minister’s decision by way of agreement, and through a process of
constitutionally obligatory engagement, absent such resolution, the Municipality
understood, full well, that it would have to go to court to overturn the Minister’s
decision. And it would have to do so because an administrative decision, once
taken, is binding until it is set aside.
[39] The Municipality thus laboured under no misapprehension that it could
simply ignore the Minister’s decision on the basis that it had obtained a legal
opinion that the decision was invalid. The Minister’s decision had to be
overturned because, until that was done, the decision was binding.
[40] The Municipality made further efforts to meet with the Minister. It declared
a dispute with the Minister under the provisions of the Inter -Governmental
Relations Framework Act 13 of 2005 (IFRA). No resolution was achieved. And
by August or so of 2006, the Municipality could not reasonably have thought that
resolution of the dispute with the Minister could be achieved without recourse to
the courts.
[41] The Municipality did not launch review proceedings. It imposed upon
AngloGold the very surcharges on water for industrial and domestic use that the
Minister had ruled upon in her decision. The Municipality went further. It
threatened that it would cut off AngloGold’s water supply if it did not pay the
tariffs that the Municipality had determined. As the judgment in Merifong CC
makes plain , this was unconscionable conduct. The Municipality abused its
power to exact payment, in the face of an adverse decision of the Minister, which
it chose not to review, but rather disobey. And it persisted in this conduct for
many years.
21
[42] Of this, the Municipality submits that Mr Nalane’s advice was not to
review the decision of the Minister but to ignore it, to the extent of its invalidity.
That submission cannot hold. The Municipality’s own correspondence shows that
it understood tha t the Minister’s decision had to be overturned, either by
agreement, and if not, by recourse to the courts.
[43] In the first period, there is no proper explanation for the failure by the
Municipality to review the Minister’s decision. But worse, the Municipality
flouted the law, and used coercive means to secure payment by AngloGold of its
tariffs for the supply of water.
[44] On 19 April 2011, AngloGold brought an application in the high court to
enforce the Minister’s decision. The Municipality brought a conditional counter-
application on 3 August 2011. The municipality sought a declarator that it has
exclusive authority to set, adopt and implement tariffs for the provision of water
services. It also sought a declarator that s 8 of the Act did not confer authority on
the Minister to interfere with a tariff set and implemented by the Municipality.
Alternatively, it sought to strike down as unconstitutional s 8(9) of the Act in
terms of which an appeal lies to the Minister. What the Municipality did not do
was to bring proceedings to review and set aside the Minister’s decision.
[45] What followed, as we have set out above, was a lengthy progress through
the courts, ending up in the Constitutional Court, the decision in Merafong CC,
and, finally, on 12 July 2017, the municipality amended its notice of motion in its
counter-application to review the Minister’s decision. Of this second period, the
high court redux took a more benign view of the Municipality’s conduct. It had
at least raised the invalidity of the Minister’ s decision, and sought relief
predicated upon such invalidity. And, the high court redux observe d, there
22
remained a minority position in the Constitutional Court that Oudekraal is not
authority for the proposition that an invalid administrative act is binding as long
as it is not set aside by a competent court. Hence, on this minority view, an
administrative action that is ultra vires is void from the outset, and it is not
necessary to have a court set aside an action that is a nullity. This minority
position, at the very least, according to the high court redux, created uncertainty
as to the correct position in our law. Indeed, the minority judgment ( per Jafta J)
in Merafong CC maintained that an illegal or ultra vires administrative act that is
void ab initio, had no legal force, and could not be complied with.
[46] True enough the Municipality did in its counter-application, in 2011, raise
the invalidity of the Minister’s decision. However, it did not do so out of any
acknowledgement that its conduct prior to 2011 was unconscionable. It did so
because it wished to oppose the declaratory relief sought by AngloGold. Its
failure to review the Minister’s decision was a calculated strategy. In its affidavit
in support of the counter-application, the Municipality offers a lengthy account
of its efforts to resolve its dispute with the Minister, and its negotiations with the
mining houses. What it does not explain is why it considered that it could impose
tariffs that were the subject of the Minister’s decision, when that decision had not
been set aside. Its case rested on the invalidity of the Minister’s decision. But that
does not explain its clear understanding, set out in its correspondence, that it
needed to overturn the Minister’s decisio n. Nor does it claim that this
understanding was later dislodged by a newfound adherence to the minority
position taken in the Constitutional Court as to the meaning and consequence of
Oudekraal.
[47] Having chosen not to review the Minister’s decision in 2006, and to impose
the tariffs in the first period, we do not consider that the Municipality’s conduct
is more susceptible of reasonable explanation in the second period. The
23
Municipality was simply required to defend its position in court. It raised
invalidity in its counter-application to do so, without in any way recogni sing or
ackowledging that it had conducted itself, knowingly, by taking the law into its
own hands.
[48] We find that the delay of the Municipality is unreasonable, and egregiously
so. Not simply by reason of the length of the delay, but because the Municipality
failed to bring the review, when it clearly understood that it was required to do
so. And then resorted to self-help in the face of the Minister’s decision.
[49] We turn then to the second question that requires an answer: should the
delay have been overlooked, as the high court redux considered it should?
[50] The high court redux cited Khumalo18 and Buffalo City19 in support of the
proposition that in deciding whether to overlook the delay of the applicant who
brings its review out of time, the nature of the impugned decision and the merits
of the challenge should be taken into account. That is so. However, the high court
redux considered this an invitation to decide the merits of the Municipality’s
challenge to the Minister’s decision. It decided that the challenge was good. And,
having done so, the high court redux then considered the prejudice to AngloGold,
and found, unsurprisingly, given this line of reasoning, that since the Minister’s
decision was taken ultra vires, AngloGold had paid the tariffs the Municipality
was entitled to levy, and hence suffered no prejudice.
18 Khumalo and Another v Member of the Executive Council for Education: KwaZulu Natal [2013] ZACC 49;
2014 (3) BCLR 333 (CC); (2014) 35 ILJ 613 (CC); 2014 (5) SA 579 (CC) para 57.
19 Buffalo City Metropolitan Municipality v Asla Construction (Pty) Limited [2019] ZACC 15; 2019 (6) BCLR
661 (CC); 2019 (4) SA 331 (CC) para 56.
24
[51] This reasoning is faulty. Whether a delay should be overlooked d oes not
and should not entail a determination of the merits of the review or collateral
challenge. The merits of the challenge are to be weighed on the following basis:
if the delay is to be overlooked, is there a challenge that warrants the attention of
the court. In other words, whether there is a serious question to be decided. To
decide the merits assumes the very jurisdiction that is yet to be determined. And
more, it inevitably skews the weighing of factors that Khumalo requires. On the
approach taken by the high court redux, if the merits of the challenge is decided
against the applicant, the question of whether to overlook the delay is redundant.
If the merits are good, in the sense that the applicant is entitled to succeed and
enjoy a remedy, it is vanishingly difficult then to decide not to overlook the delay,
and engage in ex post reasoning of the kind to which the high court redux had
recourse: the Minister had no power to interfere with the setting of tariffs by the
Municipality, AngloGold was obliged to pay what it did, and hence suffered no
prejudice.
[52] The proper starting point is to consider the nature of the impugned decision.
AngloGold in April 2004 had sought the approval of the Municipality, in terms
of s 7 of the Act, to continue obtaining water from Rand Water for its mining
operations and associated domestic applications at the tariff set, and under the
conditions imposed, by Rand Water. In May 2004, the Municipality wrote to
AngloGold. It notified AngloGold that it was the water services authority, in
terms of the Act, with jurisdiction over the area in which AngloGold operated
certain of its mines. The Municipality appointed Rand Water as a water services
provider. The Municipality specified particular tariffs as a condition, in terms of
s 7 of the Act, for the supply of water to AngloGold, with effect from 1 July 2004.
The Municipality also notified AngloGold of its right to appeal the decision of
the Municipality to the Minister. On 11 June 2004, AngloGold did so in terms of
s 8(4) of the Act. On 18 July 2005, the Minister decided the appeal, and
25
overturned the decision of the Municipality to impose specified tariffs as a
condition of supply.
[53] What was the decision of the Municipality that AngloGold appealed to the
Minister? It was not the appointment of Rand Water as a water service provider
to supply water to AngloGold. That appointment had been sought by AngloGold
and was granted. AngloGold had, in addition, sought approv al, under s 7, for
Rand Water to continue to supply water for its mining operations and associated
domestic applications, ‘at the tariff set by, and under the conditions imposed by
Rand Water.’ The decision taken by the Municipality was, in terms of s 7, to
approve the supply of water with effect from 1 July 2004 by Rand Water, on the
specified condition of particular tariff charges. These charges were as follows:
‘water supplied for operational use will be charged at R4.18 per kilolitre’ and
‘water supplie d for domestic use will be charged at 3.91 per kilolitre’. The
Municipality explained that ‘[t]hese tariff charges must be seen in the context of
the overall municipal tariff structure for the supply of water’ the details of which
were then set out.
[54] The c ondition imposed by the Municipality as to tariffs was materially
higher than those applied by Rand Water. Hence the appeal of AngloGold and its
description in its notice of appeal of the tariffs ‘announced’ by the Municipality
as ‘excessively higher than the equivalent Rand Water tariff’. Thus, at the heart
of the appeal was the decision of the Municipality to impose specific tariffs for
the supply of water to AngloGold by Rand Water.
[55] Those tariffs, as the decision of the Municipality made clear, were
determined by reference to the Municipality’s overall municipal tariff structure.
They were tariffs of application in 2004/2005. The affidavits of the parties explain
however that after the decision of the Municipality in May o f 2004, and the
26
Minister’s decision in the appeal in July of 2005, the Municipality and AngloGold
held further negotiations. In addition, the Municipality, in line with its annual
budget, adopted revised tariffs for the financial year 2005/2006. These tari ffs
were reflected in higher tariffs charged to AngloGold for the supply of water.
Later, and from July 2007, the Municipality introduced a uniform tariff for all
water consumed. The flat rate included surcharges on water for both domestic
and industrial use. Since that time, the tariffs have continued to change by way of
further decisions of the Municipality, in successive annual budget cycles.
[56] What then did the Minister’s decision in the appeal before her overturn ?
Whatever the reasons for her decision, the Minister’s decision could never do
more than that which s 9 of the Act permits. That is, on appeal to ‘confirm, vary
or overturn any decision of the water services authority concerned’ . (Our
emphasis.) The only decision before the Minister on appeal wa s the decision of
the Municipality to impose a condition as to specified tariffs for the supply of
water. However, those tariffs were only of application, until replaced by new
tariffs imposed by the Municipality. New tariffs were introduced for the
2005/2006 financial year. It follows that when the Minister set aside the specific
tariffs that the municipality had decided upon in 2004, her appeal jurisdiction
could not and did not extend beyond the life of these tariffs. When the
Municipality introduced new tariffs of application in the 2005/2006 financial
year, that decision was beyond the reach of the Minister’s appellate decision -
making because it was not before her on appeal, and could not have been.
[57] There are important consequences which flow from this finding. The
belated review of the Municipality would set aside the decision of the Minister.
Such an order would do no more than effect the tariffs charged to AngloGold
from 1 July 2004 until the new t ariffs were imposed by the Municipality in the
next financial year.
27
[58] The question that then arises is this: should the delay of the Municipality
have been overlooked by the high court redux so as to entertain the review of the
Minister’s decision taken in 2005? In our view, there are considerations that count
against doing so.
[59] First, the decision of the Minister was taken in the distant past. It set aside
tariff charges of application to AngloGold for a limited time. The Municipality
failed, culpably, to comply with the Minister’s decision. In these circumstances,
there is little reason to reward the Municipality for its willingness to flout its duty
to comply with the Minister’s decision by, many years later, entertaining its
review. All the more so, when the Municipality could have reviewed the
Minister’s decision timeously, should have done so, and chose not to.
[60] Second, both AngloGold and the Municipality, perhaps by reason of the
duration of their dispute, have inflated the significance of the issues at stake, and
their consequences. True enough, the reasons that the Minister gave for setting
aside the tariffs that the Municipality had decided to impose in 2004 appear to
have some far-reaching consequences. The Minister reasoned that the supply of
water for industrial use is not a municipal service under the Act, and therefore no
surcharge can be levied on water for industrial use. She also said of the tariff for
water supplied for domestic use that AngloGold and Rand Water should negotiate
a reasonable t ariff. The Minister is not a court of law. Her reasons are not
precedent. What matters is what decision she took. That was restricted to setting
aside specific tariffs of application for a limited time. When the Municipality
imposed the next set of tariffs, in the 2005/2006 budget cycle, AngloGold was at
liberty to appeal them. And the Municipality was at liberty to persuade the
Minister of the errors of her reasoning.
28
[61] Third, there is little question that the review and reactive challenge that the
Municipality would pursue raise important questions of law. What powers did the
Minister enjoy under s 8 of the Act to decide the appeal before her, and did her
decision fall within these powers? How is the regulatory scheme set out in ss 4,
6, 7 and 8 of the Act to be reconciled with the power of the Municipality deriving
from s 229 of the Constitution to impose surcharges on fees for services? More
generally, how does the regulatory scheme of the Act, at issue in this case, fit into
the constitutional framework that recognises a municipality’s right to govern,
subject to national and provincial legislation, as provided for in the Constitution.
(s 151(3) of the Constitution)? And if s 8 of the Act should be found to trespass
upon the municipality’s right to impose a surcharge beyond what the Constitution
permits, what of the Municipality’s challenge to the validity of s 8(9) of the Act?
[62] Did these questions warrant the attention of the high court redux? They are,
without doubt serious questions. And in the right case, they should be considered
by a court. But is this such a case? We think not. True enough, the dispute
between AngloGold and the Municipality endured beyond the period in which
the Minister’s decision was of application. But that does not alter the scope of the
order sought by the Municipality’s review: to set aside the Minister’s decision of
18 July 2005. That decision had no ongoing effect, as we have explained, after
the imposition of the 2005/2006 tariffs. There is no warrant to decide important
legal questions to resolve a long expired ministerial decision. That is so,
moreover, since the Minister was not called upon to exercise her appellate power
in the dispute between the parties since 2005.
[63] This consideration is bolstered by the following. The constitutional
challenge brought by the Municipality to s 8(9) of the Act was in essence
abandoned before the Constitutional Court, and then revived, shortly before the
matter was heard before the high court redux. The challenge is not properly
29
formulated and justified on the papers, as the high court redux correctly found. It
has figured as an afterthought, and at other stages of the litigation only notionally
kept alive. And yet if the legal questions to which we have referred are to be
engaged, it would be important that the constitutional challenge is properly
formulated and justified, in the event that the issue of the constitutional validity
of s 8(9) of the Act is reached.
[64] Nor do we apprehend that there is prejudice to the Municipality. The effect
of the Minister’s decision has long expired. The tariffs for the water that was
supplied to AngloGold were paid to the Municipality, under protest. If the
Minister’s decision is not reviewed and set aside, the Municipality will remain
liable for the consequences of the Minister’s decision in setting aside the tariffs
that were of application from 1 July 2004 for a short period of time. That has been
the status quo for 19 years. Whatever liability attach es to the Municipality is a
deserved consequence of its deliberate failure to adhere to the law. We see
insufficient basis now to disturb the status quo. Finality must prevail. And the
correct order that the high court redux should have made was to refuse to entertain
the Municipality’s review, and dismiss it.20
[65] We conclude that the high court redux was incorrect to overlook the delay
of the Municipality in bringing its review. That delay was both unreasonable and
should not have been overlooked. The review therefore must be dismissed.
[66] What then of the Municipality’s reactive challenge? This challenge, as
Merafong CC has made clear, is also subject to a regime that must consider the
question of delay . However, the reactive challenge of the Municipality was
20 Khumalo and Another v Member of the Executive Council for Education: Kwa-Zulu Natal [2013] ZACC 49; 2014
(3) BCLR 333 (CC); (2014) 35 ILJ 613 (CC); 2014 (5) SA 579 (CC) para 44, Associated Institutions Pension Fund
and Others v van Zyl and Others [2004] ZASCA 78; [2004] 4 All SA 133 (SCA); 2005(2) SA 302 SCA.
30
offered as a defence to the relief sought by AngloGold. Whether the Municipality
is put to its defence, and, if it is, whether the Municipality’s defence should be
entertained are the issues to which we now turn.
AngloGold’s relief and the Municipality’s reactive challenge
[67] In April 2011, Anglogold launched proceedings in the high court to compel
the Municipality to comply with the Minister’s decision. This application
prompted the M unicipality to bring its reactive challenge in the form of a
conditional counter -application for declaratory relief. The declarator it sought
was that the Municipality enjoyed exclusive authority to set, adopt and implement
tariffs for the provision of water services in its jurisdiction; and that the Minister
did not have the power to interfere with a tariff set and implemented by it.
[68] The court of first instance that first heard the matter granted AngloGold’s
application and dismissed the Municipality’s co unter-application. This court
sustained that order on appeal. As we have recounted, when the matter went on
appeal to the Constitutional Court, Merafong CC decided the question of whether
the Municipality could raise its reactive challenge, but did not decide the merits
of the appeal. Rather, it set aside the orders of the court of first instance and of
this court, and remitted the matter back to the high c ourt to determine the
lawfulness of the Minister’s decision. The high court redux, having upheld the
Municipality’s review, logically, dismissed the declaratory relief that AngloGold
had sought. Plainly, if the Minister’s decision had to be set aside, as the high court
redux held, then AngloGold could not enforce such a decision.
[69] We however have come to a different conclusion. The Municipality’s
review cannot be entertained. We must then decide whether AngloGold was
entitled to the relief it sought in 2011. That relief was widely framed, as follows:
31
‘1. declaring that the municipality may not levy surcharge on water for industrial and
domestic use;
2. for the municipality to comply with the minister’s ruling of 18 July 2005, the municipality
may not levy surcharge on water for industrial use;
3. interdicting the municipality from charging water for industrial use at a price greater than
the unit cost of water charged by Rand Water.
4. interdicting and restraining the municipality from charging more than the unit cost of water
charged by Rand Water pending an agreement being reached as a reasonable tariff for
domestic use.
5. for the municipality to commence negotiations with AngloGold within 21 days of the
order;
6. granting leave to AngloGold to approach the court on these papers duly supplemented in
the event of no agreement being reached on domestic water, within 90 days from the date of
the order for further direction.
7. alternatively reviewing and setting aside in terms of PAJA and/or principle of legality the
decisions of the municipality made on 31 May 2004 together with the resolution to amend the
tariff of charges.
8. the municipality to pay costs.’
The relief granted by the high court was as follows:
‘a. the first respondent must comply with the minister’s ruling of 18 July 2005, in that:
(i) the first respondent may not levy surcharge on water for industrial use;
(ii) the first respondent may not levy surcharge on water for domestic use pending an
agreement being reached by the first respondent, the applicant and the second
respondent for a reasonable tariff; and
(iii) the first respondent must commence negotiations with the applicant and the
second respondent within 21 days of the order.
b. The applicant is granted leave to approach the court on these papers duly
supplemented in the event of no agreement being reached on domestic water, within 90 days
from the date of the order for further direction.
c. The first respondent must pay costs of litigation in the main application including
costs of two counsel.
d. The first respondent’s conditional counter application is dismissed with costs which
costs shall include costs of two counsel.’
32
[70] Before us, AngloGold submitted that what it had sought before the high
court in 2011 was relief to compel the Municipality to comply with the Minister’s
decision. The relief it now seeks from this court is formulated as follows:
‘1 The appeal is upheld with costs, including the costs of two counsel.
2 The judgment of the court a quo is set aside and replaced with the following:
2.1. Merafong’s review application is dismissed with costs, including the costs of
two counsel.
2.2. Merafong is directed forthwith to comply the Minister’s decision of 18 July
2005 as follows:
2.2.1. to render monthly charges to Golden Core for w ater supplied to it for
industrial use at no more than the rate charged by Rand Water to
Merafong in respect of water for industrial use, from time to time;
2.2.2. to render monthly charges to Golden Core for water supplied to it for
domestic use at no more than rate charged by Rand Water to Merafong
in respect of water for domestic use, from time to time.
2.3. It is declared that the current rates promulgated and/or imposed by Merafong
relating to its supply of water to Golden Core for both domestic and industrial
use, shall not be enforceable against Golden Core.
2.4. Merafong is directed to negotiate with Golden Core to reach agreement on a
reasonable tariff for the supply of water for domestic use, after which the agreed
tariff will be charged for this water in place of the order in 2.2.2.
2.5. Merafong is directed to credit the account of Golden Core in respect of all tariffs
paid to and recovered by Merafong for the supply of water for both domestic
and industrial use to AngloGold Ashanti/Golden Core in respect of excess of the
rate charged by Rand Water to Merafong in respect of water for domestic and
industrial use, from time to time. This will apply from the date of the Minister’s
decision on 18 July 2005 to date of this Order.
2.6. Merafong is ordered to pay Golden Core ’s costs, including previous costs
incurred by AngloGold Shanti Ltd:
2.6.1. in the proceedings of the High Court in 2013 and in 2021 under case
number: 23558/2011, including the costs of two counsel;
33
2.6.2. in the proceedings in the SCA under case number: 20265/14, including
the costs of two counsel; and
2.6.3. in the proceedings in the Constitutional Court under case number:
106/2015, including the costs of two counsel.’
[71] AngloGold had sought alternative relief before the high court redux to
review and set aside the Municipality’s tariff charges for water in 2004, and in
subsequent years, to the extent that it imposed tariffs or surcharges on the supply
of water used by AngloGold for industrial and domestic purposes. That relief is
not persisted in before us. However, it is relief that the high court redux dismissed
on the basis it was brought out of time and would be contrary to the powers of the
Municipality to impose and recover tariffs and surcharges of the very kind
AngloGold sought to review.
[72] The primary issue, then, before us, is whether AngloGold was entitled to
relief to enforce the Minister’s decision, and if so, what relief should that have
been. Although declaratory relief is not subject to jurisdictional questions of delay
that are of application to the exercise by courts of their powers of judicial review,
declaratory relief is a discretionary remedy that must be justified to resolve a live
issue. In 2011, what was the live issue that subsisted between AngloGold and the
Municipality?
[73] The Minister’s decision, as we have found, pertained to the imposition
upon AngloGold of tariffs for the supply of water for domestic and industrial use
from 1 July 2004 on the basis of tariffs of application for the financial year 2004/5
(the supply tariffs). The Municipality took its decision to impose the supply
tariffs on 31 May 2004 , with effect from 1 July 2004. The Minister’s decision
was taken on 18 July 2005. The Minister expressly set aside the surcharge that
the Munici pality had imposed upon A ngloGold for the supply of water for
34
industrial use. The Municipality had exacted payment from AngloGold on the
basis of this surcharge. AngloGold was entitled to a declarator that the
Municipality must comply with the Minister’s decision. However, the onl y live
issue that remained in 2011 , in respect of the supply tariffs, was the excess
payment that the Municipality had exacted from AngloGold over the rate
Rand Water would have charged AngloGold to supply water for industrial use.
That period commenced on 1 July 2004 and extend ed no further than the
promulgation by the Municipality of tariffs for the supply of water of application
in the financial year 2005/2006. The effect of setting aside the supply tariff for
water for industrial use was that such tarif f was not of application . The supply
tariffs formed part of the Municipality’s decision of 31 May 2004 to approve the
supply of water by Rand Water to AngloGold. The supply tariffs were to
commence on 1 July 2004. In so far as the Municipality exacted tariffs for water
for industrial use from that date in excess of the charges made by Rand Water,
the Minister’s decision rendered such excess unlawful, and AngloGold was
entitled to a declarator that the tariff imposed by the Municipality for the supply
of wat er to AngloGold for industrial use, in the period 1 July 2004 until the
promulgation and imposition of a new tariff of application to such supply, was
unlawful.
[74] The position in respect of water supplied for domestic use is somewhat less
clear. But a similar conclusion is warranted. The Minister decided that there
should be negotiat ions between AngloGold and Rand Water (she must have
meant the Municipality) for a reasonable tariff in respect of water for domestic
use. The Minister did not expressly set aside the tariff of application to the supply
of water to AngloGold for domestic use. But this is a necessary implication of the
negotiations she required. What the Minister required was the negotiation of a
reasonable tariff for the supply of water for domestic use, and thus the existing
tariff could not remain in place . The Minister’s decision must be interpreted in
35
the light of what she had to say about the imposition of a surcharge absent any
value added by the Municipality. At best then for AngloGold, without agreement
with the Municipality, the Minister’s decision m ust be taken, by necessary
implication, to have required that the tariff of application to the supply of water
for domestic use to be the charge applied by Rand Water over the relevant period.
That is the period from 1 July 2004 until the promulgation and application by the
Municipality of a new tariff for the supply of water to AngloGold for domestic
use.
[75] It is certainly the case that, in the aftermath of the Minister’s decision, the
parties were, and remain, at odds as to the powers of the Municipality to impose
tariffs for the supply of water to AngloGold and the powers of the Minister under
the Act to interfere with the exercise by the Municipality of its powers. But the
application brought in 2011 was to enforce a decision made in 2005. That decision
was of limited scope. It set aside the imposition of a time-bound tariff regime on
water supplied to AngloGold for industrial use, and by implication, for domestic
use. The Municipali ty, after 2005, made successive decisions, in its annual
budgetary process, to impose revised tariffs for the supply of water . These were
not the subject of any appeal to the Minister . As a result, we cannot, and should
not make declaratory orders that ran ge beyond what could be said to be a live
issue when enforcement was sought in 2011 of the Minister’s decision.
[76] Compliance with the Minister’s decision, in 2011, cannot then go beyond
the financial year to which the supply tariffs taken on appeal to the Minister were
of application. There was no point to be served in 2011 to order negotiations to
take place. These had occurred and run aground. All that could be ordered was to
declare that the Municipality was entitled to impose tariffs at the rate charged by
Rand Water for the supply of water to AngloGold for industrial and domestic use
36
in the period from 1 July 2004 until the coming into force of the tariffs of
application to such supply for the financial year 2005/2006.
[77] What then of the Municipality’s reactive challenge, put up as a defence to
the declaratory relief sought by AngloGold. For the reasons we have traversed
above, the Municipality raised its reactive challenge only when AngloGold
resorted to the courts to enforce compliance with the Minister’s decision . It did
so then, when the Municipality had been under an obligation for some five years
either to comply with th e Minister’s decision or bring proceedings to review it.
The Municipality chose rather to impose ta riffs and coerce payment from
AngloGold in violation of the Minister’s decision. Once that is so, it cannot be
permitted to rely on the same issues it should have raised by way of review, in a
reactive challenge to the relief that was sought by AngloGold. The delay in raising
these issues, for so long a period of time, until 2011, and its conduct in this period,
does not permit of its delay being overlooked. Accordingly, we decline to
entertain the reactive challenge.
Relief and costs
[78] We find therefore that the high court redux should not have entertained the
Municipality’s review or reactive challenge. The Municipality’s review must be
dismissed. AngloGold had a right to secure compliance with the Minister’s
decision. But in 2011, compliance was of limited scope, as we have found, and
we intend to make a declarator in conformity with this finding. The other relief
sought by AngloGold cannot be granted. The alternative relief sought by
AngloGold by way of review does not arise for our consideration because s uch
relief only arises, as set out in its notice of motion, if AngloGold failed to secure
declaratory relief. It has not so failed.
37
[79] As to costs, AngloGold has been substantially successful. It has vindicated
its claim that it was entitled to enforce the Minister’s decision, albeit on a
narrower basis than it had sought. But it had to go to court to secure th at relief.
Although the high court and this court, when the case was first heard, ruled that
the Municipality could not bring a reactive challenge, an d in this Merafong CC
decided otherwise, nevertheless the essential principle that was vindicated is that
the Municipality could not ignore the Minister’s decision, without bringing a
review. On this score also, AngloGold has prevailed. The municipality’s review
and reactive challenge fall to be dismissed. The order given in Merafong CC was
to reserve the question of costs. Since AngloGold has been substantially
successful, we have decided that AngloGold is entitled to its costs, including the
costs of two counsel, in respect of the original high court proceedings, the original
appeal before this Court, the appeal to the Constitutional Court, the proceedings
before the high court redux, and the appeal now before this Court.
[80] In the result the following order is made:
1 The appeal is upheld with costs, including the costs of two counsel.
2 The judgment of the high court is set aside and replaced with the following:
2.1 The first respondent’s review application is dismissed with costs,
including the costs of two counsel.
2.2 It is declared that:
2.2.1 The tariff imposed by the first respondent for the supply of water to the
appellant for industrial use, in the period 1 July 2004 until the promulgation and
imposition of a new tariff of application to such supply, was unlawful.
2.2.2 The tariff imposed by the first respondent for the supply of wat er to the
appellant for domestic use, in the period 1 July 2004 until the promulgation and
imposition of a new tariff of application to such supply, was unlawful.
2.3 The first respondent is ordered to pay the appellant ’s costs, including the
costs:
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2.3.1 in the proceedings of the High Court in 2013 and in 2021 under case
number: 23558/2011, including the costs of two counsel;
2.3.2 in the proceedings of the Supreme Court of Appeal under case number:
20265/14 in 2015, including the costs of two counsel; and
2.3.3 in the proceedings of the Constitutional Court under case number:
106/2015 in 2019, including the costs of two counsel.
_________________
P MEYER
JUDGE OF APPEAL
_______________________
D N UNTERHALTER
ACTING JUDGE OF APPEAL
39
Appearances
For appellant: N G Graves SC (with him I B Currie)
Instructed by: Knowles Husain Lindsay Inc, Johannesburg
McIntyre van der Post, Bloemfontein
For first respondent: A D de Swardt
Instructed by: De Swardt Myabo Attorneys, Pretoria
Symington de Kok Attorneys, Bloemfontein
For second respondent: M C Erasmus SC (with him H A Mpshe)
Instructed by: The State Attorney, Pretoria
The State Attorney, Bloemfontein