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2014
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[2014] ZAGPPHC 191
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Afrisake NPC and Others v City of Tshwane Metropolitan Municipality and Others (74192/2013) [2014] ZAGPPHC 191 (14 March 2014)
IN THE HIGH COURT
OF SOUTH AFRICA
(GAUTENG HIGH
COURT, PRETORIA)
Case
Number: 74192/2013
DATE:
14 MARCH 2014
In the matter
between:
AFRISAKE
NPC
.................................................................................
FIRST
APPLICANT
AFRIFORUM
NPC
.......................................................................
SECOND
APPLICANT
CORNELIUS JANSEN
VAN RENSBURG
....................................
THIRD
APPLICANT
And
THE CITY OF
TSHWANE
METROPOLITAN
MUNICIPALITY
..........................................
FIRST
RESPONDENT
THE MUNICIPAL
MANAGER
OF THE CITY OF
TSHWANE
.................................................
SECOND
RESPONDENT
THE EXECUTIVE
DIRECTOR: SUPPLY CHAIN
MANAGEMENT OF THE
CITY OF TSHWANE
METROPOLITAN
MUNICIPALITY
.......................................
THIRD
RESPONDENT
THE CHAIRPERSON
OF THE BID ADJUDICATION
COMMITTEE OF THE
CITY OF THSWANE
......................
FOURTH
RESPONDENT
THE CHAIRPERSON
OF THE BID EVALUATION
COMMITTEE OF THE
CITY OF THSWANE
...........................
FIFTH
RESPONDENT
THE CHAIRPERSON
OF THE BID SPECIFICATION
COMMITTEE OF THE
CITY OF THSWANE
...........................
SIXTH
RESPONDENT
THE CHAIRPERSON
OF THE EXECUTIVE ACQUISITION
COMMITTEE OF THE
CITY OF THSWANE
....................
SEVENTH
RESPONDENT
THE SPEAKER OF
THE CITY COUNCIL OF TSHWANE
OF THE CITY OF
THSWANE
..................................................
EIGHTH
RESPONDENT
THE EXECUTIVE
MAYOR
OF THE CITY OF
THSWANE
....................................................
NINTH
RESPONDENT
PEU CAPITAL
PARTNERS (PTY) LTD
...................................
TENTH
RESPONDENT
TSHWANE UTILITY
MANAGEMENT
SERVICES (PTY)
LTD
......................................................
ELEVENTH
RESPONDENT
JUDGMENT
Fabricius J,
In this urgent
application which was allocated to me after an arrangement with the
learned Deputy Judge President, the Applicants
seek an interim
interdict against the first, the second, ninth, tenth and eleventh
Respondents that they:
“Discontinue
the installation of equipment in respect of the smart metering
project of first Respondent, and;
Discontinue in
general the execution of the services agreement entered into between
the City of Tshwane and the tenth Respondent
following upon the
authorisation to enter into such services agreement dated 30 May
2013, pending adjudication of the B –
Part of the notice of
motion.”
The Applicants
further seek an order that the mentioned Respondents are interdicted
from effecting expenditure of whatever nature
in respect of the smart
metering project of the first Respondent pending adjudication of the
said B – Part of the Notice
of Motion. They also seek an order
that costs be reserved in these proceedings pending the envisaged
review. The crux of the Part
B application, the intended review
proceedings, is that an order is sought that “the decisions of
the first Respondent to
enter into the agreement which is dated 2
October 2012 and the agreement that was entered into following upon
the authorisation
at a meeting of the City Council of the City of
Tshwane Metropolitan Municipality on 30 May 2013 and are annexed to
the founding
papers (sic) are declared to be illegal and invalid and
are reviewed and set aside.” The further order that would be
sought
on review would be that the mentioned agreements are declared
to be illegal and invalid and in consequence null and void and of
no
force and effect.
There was only a
tentative debate about urgency in the proceedings before me, but
having regard to the nature of the application,
and the interests of
the consumers in these proceedings, I am of the view that the
application is indeed urgent. It is obviously
in the interest of all
the parties that this application and the intended review be heard
and decided upon as soon as possible.
Although each Judge must decide
the question of urgency on the merits of the case before her or him,
it is important to keep in
mind what was said in this context in
Millennium Waste Management vs Chairperson, Tender Board
2008 (2) SA
481
SCA at 493 par. 34: “… it appears that in some cases
Applicants for review approach the High Court promptly for relief
but
the cases are not expeditiously heard and as a result by the time the
matter is finally determined, practical problems militating
against
the setting-aside of the challenged decision would have arisen.
Consequently the scope of granting an effective relief
to vindicate
the infringed rights becomes drastically reduced. It may help if the
High Court, to the extent possible, gives priority
to these matters.”
The notice of motion
is dated 5 December 2013 and voluminous documentation was introduced
thereafter, and accordingly no one could
reasonably complain that
this Court has not dealt with this application as expeditiously as
possible.
It is common cause
that not all relevant documents are before me at this stage, and it
is also reasonable to assume therefore that
further supplementary
affidavits and heads of argument will be filed in due course for
purposes of the review application. I have
little doubt that once the
full record of all relevant documents has been compiled, and all
further affidavits have been completed,
that the learned Deputy Judge
President will again accommodate the parties by allocating a
preferential date for the actual review.
For present purposes
the locus standi of the Applicants is not an issue before me. The
issue before me was whether or not the Applicants
had shown that the
requirements for an interim interdict had been established. Before
dealing with the parties’ respective
arguments in that context
(and I intend doing that only fairly briefly, so as not to pre-empt
any decision of the Court hearing
the review) I must add that Counsel
for Applicants Mr Q. Pelser SC and Counsel for the first to the ninth
Respondents were not
even ad idem as to which legislation applied to
the relevant decision of the City. Applicants’ contention was
that obviously
s. 217 of the Constitution of the Republic of South
Africa applied, with which Mr W. Mokhare SC agreed, but the last
mentioned
disagreed that any of the legislation applying to a
Municipality in the context of procurement management having any
bearing at
all. Mr Mokhare SC however did concede that the Municipal
Finance Management Act no. 56 of 2003 applied, as did the
Promotion
of Administrative Justice Act 3 of 2000
. Mr J. P. Daniels SC on
behalf of the tenth and eleventh Respondents in turn, was of the view
that the Administrative Justice Act
did not apply, and with reference
to Mazibuku and Others vs City of Johannesburg and Others
2010 (4) SA
1
CC contended that where a decision is taken by a Municipal Council
in pursuance of legislative and executive functions, such decision
would not ordinarily be administrative in character. In my view that
is an issue or a debate that the Court hearing the review
application
will have to decide once all relevant documentation is properly
before it. At this stage the parties were only in agreement
for
obvious reasons that, whatever the City did, it had to act lawfully.
See: Fedsure Life
Insurance Ltd and Others vs Greater Johannesburg Transitional
Metropolitan Council and Others
[1998] ZACC 17
;
1999 (1) SA 374
CC at 394 par. 40.
The principle of legality lies at the heart of our Constitution and
there need be no debate about that at the
very least.
Background facts:
Mr Pelser SC dealt
with the background facts and the relevant documentation that formed
part of the record before me in very great
detail pointing out, with
reference to each stage of the proceedings, which legislative or
regulatory provision the City did not
apply. That is why he then
submitted that the principle of legality was pivotal to this
application. What had actually occurred
was (in extreme brevity) the
following: the City of Tshwane and the tenth Respondent (“PEU”)
entered into a Master
Services Agreement (“MSA”) on 6
June 2013. This agreement required PEU to install, maintain and
operate a pre-paid
smart metering system in order to provide the City
with a method of collecting revenue for the supply of electricity.
The services
are to be performed by the eleventh Respondent (“TUMS”),
the cessionary and delegatee of PEU’s obligations under
MSA, in
exchange for the payment of a services fee. Mr Daniels SC submitted
that this decision to conclude the MSA was made by
a resolution of
the Municipal Council of the City in terms of s.33 of the Municipal
Finance Management Act 56 of 2003. The cession
was not before me,
and, there is no contract between the City and the cessionary. As I
have said, Mr Daniels SC submitted that
this decision was a
legislative, alternative executive decision of the Municipal Council,
and was accordingly not subject to the
provisions of the
Promotion of
Administrative Justice Act. Mr
Mokhare SC in turn, submitted that the
case dealt with an ill-founded attempt to “stop dead” a
policy implementation
of the Local Government, something a Court
would do only in the most clear-cut cases.
I will deal with the
various arguments of the parties when I deal with the requirements
for an interim interdict. At this stage
I must however emphasize that
this case is not concerned with an attack on the “policy
decision” of the City to introduce
smart pre-paid electricity
meters as a way of contributing to the City’s Revenue
Optimisation Program. The parties before
me in fact have supported
this decision, but the Applicants case was that in the absence of a
proper, transparent, cost-effective,
and fair process in the context
of the provisions of s.217 of the Constitution, the “policy
decision” was simply unlawful
and the decision of the
Constitutional Court in National Treasury and Others vs Opposition to
Urban Tolling Alliance and Others
2012 (6) SA 223
at 231 par. 26
therefore has to be distinguished on that basis. Mr Pelser SC argued
with reference to the relevant facts and the
legislation that he
deemed applicable, that there could be no mention of any process,
either prior to the relevant decision of
the City, or thereafter,
that was in any manner whatsoever competitive and cost-effective. The
City did not even conduct a feasibility
study for instance, and also
no competitive process was conducted, all of which would be to the
detriment of the consumers. It
is of course true that any contract
that flows from the constitutional and statutory procurement
framework is concluded not on
the State’s entity behalf (Local
Authorities’ behalf), but on the public’s behalf.
See: Allpay
Consolidated vs Chief Executive Officer, SASSA
2014 (1) SA 604
CC at
626 par. 56. The interest of those most closely associated with the
benefits of the contract must be given due weight.
See: Verstappen vs
Port Edward Town Board and Others
1994 (3) SA 567
D and CLD at 576 H.
I will return to
this consideration when I deal with the requirements for an interim
interdict. Before doing so I must however emphasize
that the
Applicants herein have made no allegation whatsoever that either the
decision of the Council, or the process that was
followed prior to
such, or thereafter, was tainted with any mala fides, fraud or
corruption. Had these allegations been made and
substantiated I would
have given the utmost weight to them, and would not have hesitated to
have made an appropriate order.
The requirements
for an interim interdict:
These requirements,
which are often referred to as being “trite”,
conveniently appear in the Law of South Africa, Second
Edition, Vol
11 at 411, the author being the respected former Judge of Appeal, L.
T. C. Harms. They are also dealt with, and their
history, in the Law
and Practice of Interdicts, C. B. Prest SC, JUTA and Company 1996. As
I have said, these requirements are often
regarded as being “trite”,
but a careful reading of the Case Law will lead one to the conclusion
that they are often
misunderstood, and, as in the case before me, not
applied to the facts correctly. I am not dealing with the
requirements for a
final interdict. One of the most important
considerations is that an interim interdict must be concerned with
the future only.
It is not meant to affect decisions already made.
See: National
Treasury vs Opposition to Urban Tolling Alliance supra par. 50
I say that this is
of the utmost importance because it is interrelated to the second
requirement, and it is in this context in particular
where the
misapprehension occurs as to what must actually be shown. The
requisites for the right to claim an interim interdict
are:
a) A prima facie
right, though open to some doubt;
b) A well-grounded
apprehension of irreparable harm if the interim relief is not granted
and the ultimate relief is eventually granted;
c) That the balance
of convenience favours the granting of an interim interdict; and
d) That the
applicant has no other satisfactory remedy.
None of these
requisites must be judged in isolation.
See: Olympic
Passenger Service (Pty) Ltd vs Ramlagan
1957 (2) SA 382
D at 383.
These requisites
have their origin, so it is often said, in Setlogelo vs Setlogelo
1914 AD 221
at 227. It is however clear from that judgment that the
appeal before the Court concerned the granting of a final interdict,
where
the requirements are different. It was in the context of
whether or not an interim interdict could be obtained even though a
clear
right was not shown, that Innes JA dealt with the need to show
irreparable harm as set out by Van der Linden, Institutes, (3, 1,
4,
7). Van der Linden mentioned this only in the case of where the right
relied upon was not clear, but was only prima facie established,
if
open to some doubt. In that instance the question would be whether
the continuance of the thing against which an interdict is
sought,
would cause irreparable injury to the applicant. The better course
would be, so it was said, to grant the relief if the
discontinuance
of the act complained of would not involve irreparable injury to the
other party. The whole topic was again debated
by Clayden J in
Webster vs Mitchell
1948 (1) SA 1186
W at 1189. The right can be
prima facie established even if it is open to some doubt. Mere
acceptance of the applicant’s
allegations is insufficient, but
the weighing-up of the probabilities of conflicting versions is not
required. The proper approach
is to consider the facts as set out by
the applicant together with any facts set out by the respondent which
the applicant cannot
dispute, and to decide whether, with regard to
the inherent probabilities and the ultimate onus, the applicant
should on those
facts obtain final relief at the trial. The facts set
up in contradiction by the respondent, should then be considered, and
if
they throw serious doubt on the applicant’s case, the latter
cannot succeed. In Webster vs Mitchell supra the test was actually
whether the applicant could obtain final relief on those facts. The
mentioned qualification was introduced by Gool vs Minister
of Justice
1955 (2) SA 682
(C) at 687 to 688. The Full Bench of the Cape
Provincial Division agreed with the relevant analysis of the
requirements in Webster
vs Mitchell supra, subject to the
qualification that the Court must decide, having applied the proper
approach to the facts that
I have mentioned, whether the applicant
should (not could) obtain final relief at the trial on those facts. I
may add at this stage,
because I will return to that topic hereafter,
that it was also held in that decision (at 689) that where an
interdict was sought
against the exercising of statutory powers, it
will only be exercised in exceptional circumstances, and when a
strong case is made
out for relief. The mentioned qualification to
the Setlogelo-test, if I can call it that, as subsequently adapted by
Webster vs
Mitchell, was held to be “a handy and ready guide to
the bench and practitioners alike in the grants of interdicts in busy
magistrates’ courts and high courts.” The qualification
in Gool was given approval, and it was also said that the
Setlogelo-test had now to be applied cognisant of the normative
scheme and democratic principles that underpin our Constitution.
This
means in effect that when a Court considers whether to grant an
interim interdict it must do so in a way that promotes the
objects,
spirit and purport of the Constitution. For instance, if the right
asserted in the claim for an interim interdict is sourced
from the
Constitution it would be redundant to inquire whether that right
exists. As another example, the principle of the separation
of powers
must be applied in appropriate circumstances.
See: National
Treasury vs Opposition to Urban Tolling Alliance supra at 236 par.
44.
I have said that the
mentioned requisites are not to be judged in isolation and that they
interact. It is no doubt that for this
reason Moseneke, DCJ in the
National Treasury decision supra held at 237 par. 50 that “under
the Setlogelo-test the prima
facie right a claimant must establish is
not merely a right to approach a Court and order to review an
administrative decision.
It is a right to which, if not protected by
an interdict, irreparable harm would ensue. An interdict is meant to
prevent future
conduct and not decisions already made. Quite apart
from the right to review and to set aside impugned decisions, the
applicant
must demonstrate a prima facie right that is threatened by
an impending or imminent irreparable harm. The right to review the
impugned
decisions does not require any preservation pendente lite.”
The second requisite of irreparable harm, must be looked at
objectively,
and the question is whether a reasonable person,
confronted by the facts, would apprehend the probability of harm;
actual harm
need not be established upon a balance of probabilities.
This requisite in turn is closely related to the question of the
balance
of convenience. This is the third requisite and it must be
shown that the balance of convenience favours the grant of the order.
In this context the Court must way the prejudice the applicant will
suffer if the interim interdict is not granted, against the
prejudice
the respondent will suffer if it is.
See: Harms supra
par. 406 and Prest supra at 73, where the learned author said, in my
view quite correctly, that a consideration
of the balance of
convenience is often the decisive factor in an application for an
interim interdict. He states that even where
all the requirements for
a temporary interdict appear to be present, it remains a
discretionary remedy and the exercise of the
discretion ordinarily
turns on a balance of convenience. I agree with that approach and the
view of Harms, JA in this context (at
par. 406), as well as the
dictum in Olympic Passenger Service (Pty) Ltd supra at 383. The
fourth requisite for the granting of
an interim interdict is the
absence of another adequate remedy. This element is also a factor in
the exercise of the Court’s
general discretion to grant or
refuse an interim interdict. Before turning to the relevant facts and
submissions made by the parties,
it is said (see Harms supra par.
408) that the Court always has a wide discretion to refuse an interim
interdict even if the requisites
have been established. This means
that the Court is entitled to have regard to a number of disparate
and incommensurable features
in coming to a decision, and not that
the Court has a free and unfettered discretion. The discretion is a
judicial one, which must
be exercised according to law and upon
established facts. I therefore do not agree with Mr Pelser SC that I
have a so called “overriding”
discretion.
See: Knox D’Arcy
Ltd vs Jamieson
[1996] ZASCA 58
;
1996 (4) SA 348
(A) at 361 to 362
and Hix Networking
Technologies CC vs System Publishers (Pty) Ltd
[1996] ZASCA 107
;
1997 (1) SA 391
(A) at
401. The exercise of the discretion must therefore be related to the
requisites for the interim order sought, and not to
any unrelated
features.
Facts and
submissions:
Prima facie
righ
t:
In Applicants’
founding affidavit they say that they intend dealing with the
requisites for interim interdict under separate
headings. It is then
said that Applicants’ have a prima facie case in that the
agreements entered into by the City were illegal
and invalid. They
then give details of how and why the required procurement processes
were not followed. It was stated to which
extent other legislation
relevant to the topic, was not complied with. They also rely on the
failure to comply with provisions
in the Municipal Finance Management
Act relating to public private partnership provisions. The service
contract was then analysed
and details were given of which documents
had been requested, but not yet provided. At the end of that
extensive exercise Applicants
say in conclusion, and in the absence
of any specific heading dealing with the first requisite, ‘that
they have made out
a very strong case and that there have been
serious irregularities in terms of various Statutes in the awarding
of the contract
in question to the tenth Respondent.’ In
addition to the prima facie case which they say they have presented,
they point
out that the financial consequences of the irregular
contract are enormous, and will result in the consumers of
electricity within
the area of jurisdiction of the City paying huge
amounts of money to private individuals, through the tenth
Respondent, which expenditure
could have been averted. According to
Applicants it was therefore imperative that the City be interdicted
to proceed with the project
until such time as there has been a
process of competitive bidding. With reference to the National
Treasury decision supra, they
say that they are aware thereof and
that they will argue that the A-Part of the notice of motion presents
an exceptional case.
They further point out that the agreement with
the tenth Respondent is a contract that is due to run for a minimum
of 10 years
from the effective date. It may be extended for a further
period of three years. This will impact also on the rights of, and
obligations
of, the next generation of consumers living in this City,
so it was stated. On behalf of the first to ninth Respondents, it was
said that one searches in vain in the founding affidavit, for any
clear articulation of Applicants’ prima facie rights. What
one
finds, it was submitted, was a “rag-bag of supposed grounds of
review” which the Applicants say will be upheld
in due course
in the review proceedings. It was submitted that the supposed grounds
were so convoluted and argumentative, that
it was an impossible task
for me to deduce from them whether they disclose a prima facie right
or not. With such grounds, it was
not possible to deal with them,
without in effect arguing Part-B of the case itself. On behalf of the
tenth and eleventh Respondents
it was argued that Applicants have not
established a prima facie case within the context of the dictum in
the National Treasury
decision par. 49, that I have referred to.
Applicants are indeed able to have the relevant decision and the
contract reviewed.
They point out that Applicants themselves have
said that the project is in the very early stages of the initial
roll-out. An interim
interdict would therefore stop the project even
before it has begun properly. According to the tenth and eleventh
Respondents this
was actually the essence of Applicants’ case
for interim relief: little has been done so far, and nothing further
should
be done in the interim or the project would become a fait
accompli and, even if declared invalid, the situation would not be
able
to be remedied. It was submitted therefore by Mr Daniels SC that
Applicants’ entire case rested on two faulty premises. The
first one was that the factual premise that the smart metering
project has barely gotten off the ground was speculative, and based
on hear-say and incomplete allegations. They were also inaccurate
inasmuch as the project has already reached a stage where it could
not be switched off or dismantled
without having serious
repercussions for the City’s revenue collection and for its
largest electricity consumers. The second
faulty premise was that
unless an interim interdict was granted, “nothing could be
done”. There was a fallacy in this
argument as the reviewing
Court could make such order that was just and equitable on the facts,
taking into account all relevant
rights, obligations and
consequences. Granting relief now, would pre-empt consideration of
all relevant facts and interests and
accordingly, it was said,
Applicants had failed to meet the most basic threshold for an award
of interim relief, namely a prima
facie right and a reasonable
apprehension of irreparable and imminent harm to the right if an
interdict is not granted.
I agree that it is
extremely difficult to establish what Applicants’ right exactly
is, except insofar in stating that it must
obviously be, according to
them, that a number of statutes that were applicable to the decision
and the process, were not complied
with. As I have said, that is not
what a prima facie right is all about having regard to the
authorities that I have mentioned.
The prima facie right must be a
right which, if not protected by an interdict now, would result in
irreparable harm. In my view
the Applicants have not shown this. On
the one hand they say in the founding affidavit, after analysis of
the agreement, that “the
system did not go live on 1 October
2013 as envisaged by clause 2.1.41”, and that “if
anything the present status is
that the roll-out is in the very, very
early stages of initial roll-out”, and that “to the
extent that there may have
been a number of meters installed, such
meters certainly are not operational”, and “one cannot
buy pre-paid electricity
on any website”, and “that the
large power users are loathed to switch to pre-paid electricity,
simply by reason of
the fact that they cannot trust the reliability
of such new system and cannot risk their enterprise” and “that
the
operation phase commencement date within the ambit of such phrase
in clause 2.1.64 has not arrived”. They then say that they
had
serious difficulty in obtaining information regarding the present
state of affairs. They also accept that it will take time
to get the
process moving, as it was put, and that this was the very point of
asking now that it be stalled sooner than later.
They then say that
they are not against the implementation of the pre-paid system per
se. On the contrary, it is said in the founding
affidavit, they are
of the opinion that it may potentially serve to assist the city in
recovering income. It was however the illegality
that concerned them,
and even then they say it is not necessary for the City of Thswane to
discontinue the pre-paid system to the
limited extent that it has
been installed. If it is up and running, it may continue to run
parallel to post-paid system until such
time as this Court has
pronounced on final relief. Ultimately it becomes clear that it was
Applicants’ case that “it
is of utmost importance that
interim relief should be granted in order to afford an opportunity to
have the review application
adjudicated before the project becomes a
fait accompli.” Having regard to what was said in the National
Treasury decision
supra in the context of the requisites for an
interim interdict, it is clear that the Applicants have shot
themselves in both feet,
proverbially speaking. On their own version,
the project is certainly not steaming ahead to the extent that they
will be presented
with a fait accompli at the review hearing. On
their own version the opposite is in fact the case. That is their
version and they
must stand in for by it, and it certainly does not
disclose that they will suffer irreparable harm. Similarly, on that
very same
basis, the balance of convenience cannot be in their
favour. It is true that I cannot decide on these papers whether or
not there
is any merit in the allegation that the service fee paid by
the City to PEU could be less or not. As I have said, the purpose of
an interim interdict is not to address any harm suffered in the past.
On the Applicants’ own version I cannot find that they
will
suffer irreparable harm between now and the hearing of the actual
review application. It is merely generalised speculative
harm, if
any. In reply, Mr Pelser SC even substantially watered down the
prayers sought in the notice of motion, much to the chagrin
of
Counsel for the tenth to eleventh Respondents, who quite rightly
suggested that I should ignore such tender. If it had been
made at
the proper stage, it would most likely have resulted in a different
approach to the litigation before me. It is in any event clear from
the National Treasury
decision supra that if the good citizens and
customers of the City will pay more than they were lawfully obliged
to do, that they
will have a claim for the repayment of the money.
See: National
Treasury supra at par. 54
There is therefore
in my view no sustainable allegation that irreparable harm has been
caused to the Applicants or to the effected
customers of the City, or
to the general public. I have weighed up the consequences that follow
if I grant the order as against
the consequences that would follow if
I refuse it. In my view the balance of convenience tilts against the
Applicants herein on
their own version. On behalf of the tenth and
eleventh Respondents, I was referred to the relevant allegations in
the answering
affidavit. They say that the smart metering
infrastructure consists of a “front-end” and “back-end”.
The
“front-end” is the smart metering equipment and the
“back-end” consists of the hardware and software capable
of running this equipment. In particular, the “back-end”
system consists of a meter data management system and a vending
platform. The vending platform communicates with the meter data
management system via a communications platform connecting the
“front-end” systems to the “back end”
systems.
The “back-end”
system has been procured, installed and configured and is currently
operational. The roll-out of the
“front-end” system has
commenced at the premises of some 300 of the City’s large power
users. The meters installed
at large power users and the “back-end”
system are fully operational and close to R300 million worth of
electricity
has already been bought by the City’s customers
using the system since October 2013. TUMS has almost completed the
procurement
process for the appointment supplies and installers of
the “front-end” pre-paid meters and other equipment. In
reaching
this point, PEU and TUMS have spent R89.5 million and have
committed further R107.6 million into service providers. In other
words,
the first phase of the roll-out of the project to large power
users is complete and the “back-end” system is
functional.
The degree of completion that has been reached has the
effect that the system, now functioning, cannot be switched off
without
deleterious consequences. The effect of my order would be
that the eleventh Respondent would be unable to do further work on
the
project. It could not maintain the “back-end” system
that it has already established and installed without an income
stream to pay for the running cost of doing so, and to service the
debt already incurred in acquiring the system. The system would
have
to be shut down. The project is funded by private-sector risk capital
on the strength of the anticipated revenue flows. Should
those flows
cease, the funding will be placed on hold or maybe cancelled. In the
absence of funding to continue the roll-out or
to maintain the
existing infrastructure, the project’s demise is a matter of
certainty. On this basis, which the Applicants
to a very large extent
could not dispute in reply, the balance of convenience certainly does
not favour them. On their own version,
they have shown no irreparable
harm to them and weighing up all the relevant considerations, it is
my view that the Applicants
have also not established the second and
third requisites for an interim interdict. The facts in any event
show that the Applicants
do not require an interim interdict to
preserve and prosecute their rights in the review proceedings.
Interim harm has not been
shown and harm in the past is irrelevant
for present purposes. Therefore, as far as the second and third
requirements are concerned,
which are largely inter-related on the
present facts, I exercise my discretion against the Applicants in any
event. I must also
point out that the tenth and eleventh Respondents
say that the Applicants have misconceived the costs to the consumers
at large.
They say that no additional cost is levied on the consumers
as a result of the agreement. The services fee is based on a
percentage
of the rand value of the electricity tariff. The cost of
electricity to the consumers is not impacted by the project:
consumers
will continue to pay only the tariffs set by the City and
approved by the Regulatory Authority. The relevant project is an
off-balance
sheet transaction. It can therefore have no impact on the
City’s balance sheet by entailing additional costs to the City.
The agreement provides that the City pays a fee for the services
provided by TUMS calculated as a percentage of the electricity
revenue collected. This fee is lower than the current costs that are
being incurred by the City as a result of its current metering
system
such as interest, debt collection costs, meter reading costs,
impairment costs etc. As I have said, I am not in a position
on the
documentation before me to arrive at the accurate calculation but
this is in any event not necessary at this stage. I agree
with Mr
Daniels SC that the issues raised are of considerable complexity. Not
all the relevant documentation is before me at this
stage. Whether or
not certain legislation and regulations apply to the whole process or
not will have to be fully ventilated in the review proceedings.
I must add that in
the context of the principle of separation of powers, Applicants have
not made out a strong case at all. A Court
is fortunately not a
legislator and should be loath to interfere with legislative or
executive decisions, unless clear illegality
has been shown.
It is my view
therefore that the Applicants have failed to establish the necessary
requisites for an interim interdict largely on
their own version and
certainly not on Respondents’ version. Applicants have not
sought a cost order against the Respondents
at this stage of the
proceedings. Respondents in turn say that they are entitled to a cost
order albeit only on the basis of the
fees related to the appearances
in Court for two days, inasmuch as the affidavits will remain to be
considered by the Court hearing
the review. Tenth and eleventh
Respondents in turn say that they are not organs of State and ought
to be entitled the cost if the
application does not succeed. I have
considered all the arguments, the facts and the submissions. In my
view the Court hearing
the review application will be in a better and
proper position to decide the question of costs, be it in their
totality or be it
on the basis of whether or not the proceedings
before me had been justifiably and reasonably been brought.
The following order
is therefore made:
1. The application
is dismissed;
2. Costs are
reserved.
JUDGE H.J
FABRICIUS
JUDGE OF THE
GAUTENG HIGH COURT, PRETORIA