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[2022] ZANCHC 34
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MEC: Northern Cape Provincial Government: Department of Cooperative Governance and Traditional Affairs and Another v Renosterberg Local Municipality and Another (803/2021) [2022] ZANCHC 34 (31 May 2022)
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IN
THE HIGH COURT OF SOUTH AFRICA
NORTHERN
CAPE DIVISION, KIMBERLEY
CASE
NO: 803/2021
Reportable:
YES/NO
Circulate
to Judges: YES/NO
Circulate
to Magistrates: YES/NO
Circulate
to Regional Magistrates: YES/NO
In
the matter between:
THE
MEC: NORTHERN CAPE PROVINCIAL
GOVERNMENT:
DEPARTMENT OF COOPERATIVE
GOVERNANCE
AND TRADITIONAL AFFAIRS
First
Applicant
SOUTH
AFRICAN MUNICIPAL WORKERS UNION
Second Applicant
and
THE
RENOSTERBERG LOCAL MUNICIPALITY
First
Respondent
ESKOM
HOLDINGS SOC LIMITED
Second Respondent
JUDGMENT
CHWARO
AJ
:
Introduction
[1] This is an urgent
application launched by the Member of the Executive Council for
Cooperative Governance and Traditional Affairs
in the Northern Cape
province, (“
the MEC”
) seeking an interim relief to
stay the execution of the judgment obtained by Eskom Holdings SOC
Limited (”
Eskom
”) against the Renosterberg Local
Municipality (“
the municipality
”) pending the
finalisation of the main application launched by the MEC to compel
the municipality to declare a formal dispute
with Eskom as envisaged
in sections 41 and 42 of the Intergovernmental Relations Framework
Act, 13 of 2005, (“the IGRFA”).
[2] On 20 May 2022, the
South African Municipal Workers Union (“
SAMWU
”)
launched an urgent application to intervene as an interested party
and to be joined as the second applicant in the present
application
and in the pending main application issued out of this Division of
the High Court under case number 603/2022.
[3] Eskom opposed the
intervention application. At the hearing of this application and
following arguments, this Court granted SAMWU
leave to intervene as
sought, hence its citation as the second applicant herein.
[4] The main protagonist
of the underlying dispute involved in this application , the
municipality, opted not to participate in
the present application.
The relief sought by the MEC and SAMWU is opposed by Eskom.
Brief factual matrix
[5] On 25 June 2021,
Eskom obtained judgment against the municipality for payment of an
amount of R93 278 478-00 (ninety-three
million two hundred
and seventy-eight thousand four hundred and seventy-eight rand) in
respect of outstanding payments for the
supply of bulk electricity to
the municipality.
[6]
Prior to Eskom obtaining judgment, the municipality’s debt
towards Eskom became a serious concern to the community, comprising
of the towns of Petrusville, Philipstown and Vanderkloof , as a
result of the measures taken by the latter entity to implement
scheduled interruptions of electricity supply within the
municipality.
[7] The community acted
through the Vanderkloof Ratepayers Association and launched an
application out of this Division of the High
Court seeking, amongst
others, an order compelling the municipality to honour its
constitutional obligations towards the residents
and Eskom by paying
its debt. Eskom was cited as a party in that application.
[8] Eskom launched a
counter-application seeking various relief against the municipality,
including an order for payment of the
amount of R93 278 478-00.
Despite numerous opportunities given to the municipality, Eskom’s
counter-application
was not opposed by the municipality. It is not in
dispute that the MEC, who was also cited as a respondent in the
counter-application
brought by Eskom, decided to abide.
[9] The municipality did
not honour the judgment and Eskom proceeded to obtain a Writ of
Execution against movable property of the
municipality, which writ
was issued by the Registrar on 29 September 2021.
[10] Armed with the writ
of execution, Eskom attached the bank account of the municipality
held at Standardbank and proceeded to
secure payment to itself from
the said bank account.
The launching of the
main and urgent applications
[11] The MEC was not
content with the manner in which Eskom dealt with the municipality’s
bank account. In the view of the
MEC, Eskom was dealing with the
municipality’s banking account as if it was its own account,
resulting a massive disruption
in the financial administration of the
municipality.
[12] This prompted the
MEC to launch an application on 23 March 2022 against the
municipality and Eskom, seeking , amongst others,
an order directing
the municipality to declare a formal intergovernmental dispute with
Eskom and convene a meeting as envisaged
in sections 41(1) and
42(1) of the IGRFA to deal with the dispute relating to the payment
of the judgment debt and take all
necessary steps, including
arbitration, to bring finality to the dispute.
[13] In the meantime, the
initial writ of execution lapsed. The MEC sought an undertaking from
Eskom to the effect that it will
not re-issue a writ of execution for
the attachment of the municipality’s bank account. Eskom did
not heed such a call and
proceeded to issue a second writ of
execution.
[14]
On 25 March 2022, payment of a grant from the Department of Sport and
Libraries in the amount of R500 000-00 was made
into the bank
account of the municipality. A further deposit of R5 608 000-00
from National Treasury was made into the bank
account of the
municipality on 30 March 2022.
[15] On 12 April 2022 and
acting on the strength of the second writ of execution and attachment
of the municipality’s bank
account , Eskom withdrew an amount
of R6 891 525-11 from the municipality’s bank account
in part payment of the
judgment debt.
[16] This latest conduct
by Eskom led the MEC to launch the present application on 20 April
2022 to seek an interim interdict to
stay the execution of the writ
pending the finalisation of the main application.
[17] This application was
initially set down for hearing on an urgent roll of 29 April 2022 but
was subsequently postponed to 13
May 2022 by agreement between the
parties to allow Eskom to file its opposing papers.
Issues for
determination
[18] Except for the
determination of urgency, this Court is therefore called upon to
determine whether the MEC and SAMWU have made
out a case for the
granting of an interim relief pending the determination of the main
application launched under Case Number 603/2022.
Urgency
[19] The MEC contends
that the manner in which Eskom acted in withdrawing money deposited
into the banking account of the municipality
after having re-issued
the writ of execution was only intended to render the operations of
the municipality moribund with severe
consequences for the community.
[20] Eskom argues that
the urgency is self-created as the judgment, which is the subject
matter of the execution, was granted in
June 2021 and the MEC failed
to do anything until the belated application that was launched on 23
March 2022, followed by the present
urgent application.
[21]
In the often-quoted case of
Luna
Meubels Vervaardigers (Edms) Bpk v Markin and another
[1]
the court recognised the fact that there are varying “
degrees
of urgency”
in certain instances and the learned judge went on to hold that:
“
Practitioners
should carefully analyse the facts of each case to determine, for the
purposes of setting the case down for hearing,
whether a greater or
lesser degree of relaxation of the rules and of the ordinary practice
of the court is required. The degree
of relaxation should not be
greater than the exigency of the case demands. It must be
commensurate with therewith.”
[22] On the totality of
the facts of this case, I am of the view that the MEC was justified
in launching this application on an
urgent basis. The apprehension of
further attachment and removal of all deposits made into the banking
account of the municipality
was, in my view, well founded as there
was a great possibility of greater chaos emanating from the
municipality’s inability
to transact on its own banking
account.
[23] The prejudice which
Eskom would have suffered by the abridgment of periods of filing
opposing affidavit and be heard was ameliorated
by the postponement
of the matter by agreement to enable it to file its opposing papers.
[24] The attachment and
removal of all deposits made into the banking account of a
municipality is a matter that cannot await a
hearing in due course
and having regard to the nature of the issues involved between the
parties, their importance and the potential
impact on the community,
it is my conclusion that the application was properly enrolled for
consideration on an urgent basis.
.
Principles relating to
interim interdicts
[25] In assessing the
case of the applicants, one need not, at this stage, traverse the
merits of the main application nor make
any conclusive views in
relation thereto. The primary issue for adjudication herein is to
determine whether the applicants have
made out a case for urgency and
for an interdictory relief pending the finalisation of the main
application.
[26]
The well-established requirements for an interim interdict are (a)
the existence of a
prima
facie
right, even if it is open to some doubt; (b) a reasonable
apprehension of imminent and irreparable harm to such right; (c) the
balance of convenience tilting in favour of the granting of the
relief; and (d) absence of an adequate and/or effective remedy
[2]
.
[27]
In
South
African Informal Traders Forum & Others v City of Johannesburg &
Others
[3]
the
Constitutional Court stated the following regarding establishing a
prima
facie
right which entitles an applicant to an interim relief:
“
Once
we grant leave to appeal our immediate concern becomes whether we
should grant temporary relief. Foremost is whether the applicant
has
shown a prima facie right that is likely to lead to the relief sought
in the main dispute. This requirement is weighed up along
with the
irreparable and imminent harm to the right if an interdict is not
granted and whether the balance of convenience favours
the granting
of the interdict. Lastly, the applicant must have no other effective
remedy."
[28] In
National
Treasury and Others v Opposition to Urban Tolling Alliance and
Others
[4]
the
requirement of a
prima
facie
right was explained to mean that a particular applicant must
establish not merely that he has a right to approach a court in order
to challenge a particular decision, or as in this case, to compel the
municipality to take a particular decision, but such applicant
must
demonstrate that if not protected by an interdict, irreparable harm
would ensue to such a right.
[29] Put otherwise,
separate from the right to launch an application which is pending for
the relief sought against the municipality
to declare a formal
intergovernmental dispute with Eskom, the MEC and SAMWU ought to
demonstrate a
prima facie
right that is threatened by
impending or imminent irreparable harm.
Discussion
[30] It was contended on
behalf of the first applicant that its
prima facie
right is
rooted within the constitutional supervisory role entrusted on the
MEC and legislative provisions regulating how municipalities
are
expected to deal with disputes that they have with other organs of
state.
[31] During argument,
Mr
Grobler SC
, counsel for the MEC, submitted that the municipality
has refused to heed the call from the MEC to declare a dispute
earlier or
even after judgment was obtained. This led the MEC to
launch the main application. On the face of it, this is suggestive of
a recalcitrant
municipality which is failing to properly execute its
constitutional and statutory duties amidst a dispute having the
potential
to affect its operations.
[32] The MEC further
admits that Eskom needs to be paid and therefore it would be improper
to seek rescission of judgment as so
provided in rule 42 of the
Uniform Rules of Court.
[33]
Mr Shangisa SC
,
counsel for Eskom, submitted that Eskom has obtained judgment against
the municipality and an attempt to further subject the dispute
underlying the judgment to dispute resolution mechanisms envisaged in
IGRFA would be an attack on the authority of our courts and
the
hallowed principle established since the dawn of our constitutional
democracy which calls on all concerned to respect and honour
court
judgments.
[34] It was further
contended on behalf of Eskom that if the MEC or SAMWU were not
content with the judgment granted on 25 June
2021, they had available
avenues provided for in terms of rule 42 to either apply for
rescission or variation of the judgment.
[35]
It is trite that local government is an autonomous and distinct
sphere of government which is guaranteed by the Constitution.
[5]
However, the same Constitution places certain responsibilities and
obligations upon both national and provincial spheres of government
to adopt measures aimed at supporting and strengthening
municipalities in the performance of their duties.
[6]
[36]
The above delineation of the respective powers and duties of
different spheres of government were properly set out in the matter
of
Johannesburg
Municipality v Gauteng Development Tribunal
[7]
where
the Constitutional Court confirmed the fact that though both the
national and provincial spheres of government have concurrent
legislative authority on certain matters affecting local government,
neither of these two spheres can by legislation accord to
itself the
power to exercise executive municipal powers or the right to
administer municipal affairs, except in exceptional circumstances
and
for a limited period and in full compliance with strict procedures.
[37]
The need for a province to monitor and support municipalities was
recognized and elaborated upon in the matter of
Mogalakwena
Local Municipality v Provincial Executive Council, Limpopo and
others
[8]
where
the court stated the following:
“
T
he
Constitution
establishes
a relationship between the organs in these three spheres based on
co-operation, aimed at the advancement of inter-governmental
participation and support. Provincial governments are under a
constitutional duty to support municipalities within their provinces
and promote their developmental capacities. National and provincial
governments must support and strengthen the capacity of
municipalities
to perform their functions and exercise their
powers………
Provinces
may not, however, stand supinely by when there is performance by a
municipality which is less than effective. The Constitution provides
that provincial governments must not only support but also monitor
municipalities and see to the effective performance of their
functions. A provincial executive is fully entitled, if not obliged,
to ensure that the Constitution and applicable legislation
is adhered to by municipalities”.
[38] Distilled to their
purposive nature, these constitutional obligations are tools that are
designed to ensure that the provincial
government does not remain
supine amidst deteriorating administrative functions at municipal
level.
[39] The provincial
government, through the MEC, is thus entitled and indeed has a
prima
facie
right, derived from these constitutional obligations, to
see to it that the municipality is assisted in embarking on all
available
avenues provided by law to ensure the attainment of an
amicable solution towards the liquidation of the debt owed to Eskom.
[40] The MEC’s
prima facie
right is also informed by the obligations placed
on the provincial government to ensure the delivery of basic services
to communities
through municipalities in a sustainable and most
effective manner.
[41] It is equally trite
that organised labour at any level of employment has an interest in
the well-functioning and appropriately
managed labour place.
Employees of the municipality, represented by SAMWU in this
application, have an interest
qua
employees.
[42] SAMWU has a
responsibility to ensure that its members’ employer avails
itself to all legally cognisable dispute resolution
mechanisms that
would cushion against a municipality being rendered unable to have
the financial means to perform basic municipal
services as a result
of its banking account being subjected to an attachment that is not
subjected to a process of engagement between
the municipality as
judgment debtor and Eskom as judgment creditor.
[43] In my view, the
debate as to whether there is a basis upon which the execution of a
judgment can be subjected to the processes
envisaged in IGRFA is not
to be determined by this Court at this stage. The only consideration
is whether the
prima facie
right of the MEC and SAMWU, are
established and if so, whether they are worthy of protection pending
the finalisation of the main
application.
[44] As indicated
supra
,
it is my considered view that the constitutional obligations placed
on the provincial government , and executed through the MEC,
as well
as the direct interest that organised labour have in the affairs of
the municipality as an employer, constitute sufficient
prima
facie
right which must be protected through the granting of an
interim order pending the finalisation of the main application.
[45] Given the
prima
facie
rights of the applicants as alluded to above, it follows
that the reasonable apprehension of harm and balance of convenience
considerations
must also be decided in their favour.
[46] The MEC contends
that Eskom has failed to heed a call to desist from re-issuing a writ
of execution after the initial one lapsed.
The experiences of how the
initial writ of execution was implemented, especially in relation to
the attachment of the banking account
of the municipality, is
evidence enough entitling the MEC to have a reasonable apprehension
that similar conduct would occur,
where Eskom will attach and take
monies , other than the municipality’s own revenue, that are
earmarked for other infrastructural
projects.
[47] This experience, in
the MEC and SAMWU’s view, might also include the attachment and
removal of money earmarked for payment
of salaries and related
service delivery initiatives in future.
[48] Though Eskom has
demonstrated that it made attempts at engaging the municipality and
various stakeholders, including the MEC,
in discussions to find a
solution on the payment of the judgment debt some period after the
judgment was granted, it insists that
as a judgment creditor, sans
any lawful impediment to its right, it has every right to employ
execution methods, including attachment
of a bank account, to satisfy
the judgment debt.
[49] The contention by
Eskom is not without merit. However, seen against the overwhelming
public interests brought about by the
nature of the services rendered
by the municipality, the balance of convenience should tilt in the
MEC’s favour.
[50] This is buttressed
by the fact that Eskom has an order which none of the applicants seek
to assail, and regardless of the outcome
of the main application, the
municipality will still be obliged to pay the debt as reflected
in the court order of June 2021.
[51] An alternative
remedy available to the MEC and SAMWU would have been an application
to rescind or vary the court order granted
against the municipality.
[52] However, these
parties are of the view that they do not, for any moment, deny or
contest the liability of the municipality
towards Eskom. They only
seek an alternative method , through IGRFA, which may be agreed upon
to deal with the modalities of ensuring
that the municipality pays
its debt towards Eskom.
[53] On the conspectus of
the submissions made on behalf of the applicants, seen against those
made on behalf of Eskom, it is my
considered view that a case has
been made out to stay the execution of the judgment debt, only
limited to the attachment of the
municipality’s banking
account, so as to minimise the extent of a temporary encroachment
into the right of Eskom , as a judgment
creditor, to employ all
lawful means of execution.
[54]
It is settled law that execution is part of the Court process and as
such, the Court has inherent powers to control its process,
including
suspending such execution under certain circumstances, mainly where
there is real and substantive justice that will be
served by such
suspension.
[9]
[55]
Mr
Du Preez
,
for SAMWU, submitted that on the authority of
Gois
t/a Shakespeare’s Pub v Van Zyl
[10]
this Court should be inclined to grant an order suspending the
execution of the writ , relating to the attachment of the bank
account, in that a court the requirements for the granting of
an interim interdict apply with the same force and effect in
determining this aspect.
[56] On the basis of my
findings and conclusions hereinabove, I am inclined to agree with the
submission made on behalf of SAMWU
on the suspension of the writ of
execution. The first applicant has satisfied the requirements of an
interim interdict and it follows
that there is a proper case
following therefrom, for the suspension of the writ of execution, on
the limited grounds as more fully
appears below.
Costs
[57] It is trite that the
determination of costs is a discretionary matter based on the facts
of each case. The MEC and SAMWU have
succeeded in securing an interim
order to the extent detailed below, however, theirs is not an
outright victory.
[58] Eskom’s right
to execute as a judgment creditor has been limited to a certain
extent and for a temporary period pending
the finalisation of the
main application. This does not in any way dilute the essence of the
existing judgment in Eskom’s
favour.
[59] In my view, the
opposition mounted by Eskom in this application was not malicious or
in bad faith. Eskom was entitled to protect
its right as a judgment
creditor to enable it to render its service to the public.
[60] Eskom, acting in
full appreciation of its role in society and as a partner with
relevant stakeholders, made several attempts
at reaching out the
municipality and the MEC with a view to resolve the dispute relating
to how best its judgment was to
be implemented. These attempts were
shunned at by the municipality and the MEC.
[61] Similarly, the MEC
acts in the public interests and in upholding his/her constitutional
obligations towards the municipality
and the community it serves. I
am inclined to adopt a more benevolent approach to the determination
of costs given that the temporary
interdict , relating to a limited
stay of execution, is a reprieve done in the interests of justice and
in the interests of the
community served by the municipality.
[62] On consideration of
the above facts, justice will be served by an order directing that
each of the parties in this application
should bear its own costs,
including costs occasioned by the previous postponements of the
matter, in the event that there was
no appropriate order relating to
costs in those instances.
Order
[63] The following order
is made:
1.
This application is heard as an urgent
application in accordance with Rule 6(12) of the Uniform Rules of
Court and the first applicant’s
non-adherence to the forms and
services provided for in the Rules is condoned.
2.
Pending the finalisation of the application
issued in this Division of the High Court under Case Number 603/2022,
Eskom Holdings
SOC Limited , the second respondent, is
interdicted and restrained from in any way attaching and securing for
itself any
funds from the bank account of the Renosterberg Local
Municipality, the first respondent, held at Standardbank, account
number
[….].
3.
Each party is ordered to bear its own
costs, inclusive of costs occasioned by postponement/s of this
application in previous occasions,
except where an appropriate costs
order was then made.
___________________________________
O.K.CHWARO
ACTING
JUDGE OF THE HIGH COURT
DATE
OF HEARING: 27 May 2022
DATE
OF JUDGMENT: 31 May 2022
REPRESENTATIONS:
Counsel
for the first applicant:
Adv S Grobler SC
Instructed
by:
Kruger
Venter Inc, Bloemfontein
c/o
Haarhoffs Attorneys Inc, Kimberley
Counsel
for the second applicant:
Adv C Du Preez
Instructed
by:
Kramer
Weihmann Inc, Bloemfontein
c/o
Van De Wall Inc, Kimberley
Counsel
for the second respondent: Adv. SL Shangisa SC
With Adv L Rakgwale
Instructed by:
Raynard &
Associates Inc, Bloemfontein
c/o
Towell & Groenewaldt Attorneys, Kimberley
[1]
1977 (4) SA 135
(W) at 137A-F
[2]
See Setlogelo v Setlogelo
1914 AD 221
at 227, Eriksen Motors
(Welkom) Ltd v Protea Motors Warrenton and Another 1973 (3) SA 685
(A)
[3]
2014 (4) SA 371
(CC) at para 24
[4]
2012 (6) SA 223 (CC)
[5]
In
terms of section 151 of the Constitution of the Republic of South
Africa, 1996
[6]
Sections
154(1), 155(6) and (7) of the Constitution
[7]
2010
(6) SA 182 (CC)
[8]
[2014]
4 All SA 67
(GP) at paras 28 - 30
[9]
Le Roux v Yskor Landgoed ( Edms ) Bpk en Andere
1984 (4) SA 252
(T)
at 260A-I
[10]
2011 (1) SA 148
(LC)