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[2024] ZAFSHC 127
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Eskom Holdings SOC Limited v Matjhabeng Local Municipality (3040/2023) [2024] ZAFSHC 127 (6 May 2024)
IN
THE HIGH COURT OF SOUTH AFRICA,
FREE
STATE DIVISION, BLOEMFONTEIN
Case Number: 3040/2023
REPORTABLE:
NO
OF
INTEREST
TO OTHER
JUDGES:
NO
REVISED.
NO
In
the matter between:
ESKOM
HOLDINGS SOC LIMITED
Plaintiff/Applicant
And
MATJHABENG
LOCAL MUNICIPALITY
Defendant/Respondent
HEARD
ON:
30 November 2023
CORAM:
JORDAAN,AJ
DELIVERED
ON:
06 May 2024
INTRODUCTION
[1]
This
is
an opposed
application
for
summary
judgment
brought
in
terms of Rule 32 of the Uniform Rules of Court
[1]
,
as
amended. The Applicant in this summary judgment application, is Eskom
Holdings Soc Limited, the Plaintiff in the action instituted
against
the Matjhabeng Local Municipality, the Defendant, who
in
turn is the Respondent
in
this
application.
For
ease of reference,
the
Parties will be refered to as the Applicant and the Respondent
throughout.
BACKGROUND
[2]
The
Applicant is a state-owned company duly incorporated in terms of the
company laws of the Republic of South Africa, which on
the 16
th
of February 2004, entered into a written Electricity Supply
Agreement
[2]
(ESA) which came
into effect on the 26
th
of March 2000
[3]
,
with
the Respondent,
an
organ of state.
[3]
In
terms of ESA the Applicant would supply bulk electricity to the
Respondent who would receive the electricity and pay the Applicant
for the supply of same, based on the schedule of standard prices, as
amended from time to time.
[4]
[4]
According
to the terms of ESA, the Applicant would prepare and send
accounts
for all charges payable by the Respondent to the Applicant after the
end of each meter reading month currently being the
20
th
of the month and each account will be due and payable within 10days
of receipt of the invoice, after which interest would be compounded
monthly.
[5]
The Applicant in
paragraph 8 of its Particulars of claim refered to the a9th of
February 2015 order by Daffue J directing the Respondent
to make
payment of all future monthly accounts for electricity supply in full
on due date.
[5]
On
the
15
th
of
June
2023,
the
Applicant
instituted
action
for
payment
of
R2 505 338 496.00 together with interest
thereon calculated at the prime rate levied by FNB plus 2.5% points
interest, compounded
monthly and calculated a
tempore
morae
to date of final payment. The
claim arose from a breach of ESA due to non-payment of electricity
supplied by the Applicant to the
Respondent. The Respondent defended
the action.
[6]
Having received the Respondent's plea, the
Applicant was provoked to in accordance with rule 32, file an
application for summary
judgment.
LEGAL
PRINCIPLES FINDING APPLICATION
[7]
Summary judgement enables a plaintiff to
obtain judgment against a
defendant
without resorting to trial when a defendant has no defence to a
claim based on a liquid document, for a
liquidated amount of money, for delivery of movable property, and for
ejectment. The instant
application for summary judgment is for
delivery of movable property.
[8]
With effect from the 01
st
of July 2019 an application for summary judgment can only be brought
after a defendant has filed its plea, and in doing so the
plaintiff
must not only verify the cause of action and the amount claimed but
must, in addition, also identify any point of law
which it relies
upon and the facts upon which its claim is based, and must also
briefly explain why the defence which has been
pleaded by the
defendant does not 'raise any issue' for trial.
[9]
The
Defendant opposing summary judgment is required to set out a
bona
fide
defence
by affidavit disclosing fully the nature and grounds of the defence
and the material facts relied upon. The Defendant need
not deal
exhaustively with all the facts
and
evidence
relied
on
to substantiate
a
defence,
but
the essential material facts on which the defence is based must be
disclosed with sufficient completeness, particularly to enable
the
court to decide whether or not the affidavit discloses a
bona
fide
defence.
[6]
However a
bona
fide
defence
is not scrutinised according to the strict standards of pleadings. In
summary judgment it is the material and factual defence
and not the
Defendant which must be
bona
fide.
[10]
The
rationale and requirements for the grant or refusal of summary
judgment are
trite
and
are
summarised
in
the
Supreme
Court
of
Appeal
judgment
of Joob Joob lnvestments
[7]
as
follows:
"The
rationale
for
summary
judgment
proceedings
is
impeccable.
The
procedure
is
not intended
to
deprive
a
defendant
with
a triable
issue
or a sustainable
defence
of
her/his day in court. After almost a century of
successful application in our courts, summary
judgment
proceedings
can
hardly
continue
to
be
described
as
extraordinary. Our
courts,
both
of
first
instance
and
at
appellate
level,
have
during
that time rightly been trusted to ensure that a defendant with a
triable issue is not shut out. In the
Maharaj
case at 425G-426E, Corbett JA was keen
to ensure, first, an examination of whether there has been sufficient
disclosure by a defendant
of the nature
and
grounds
of
his
defence
and
the
facts
upon
which
it
is
founded.
The second consideration
is that the defence so disclosed must be
both bona fide and good in law. A court which is satisfied that this
threshold has been
crossed is then bound to refuse summary judgment.
Corbett JA also warned against requiring of a defendant
the precision apposite to pleadings.
However, the learned judge was
equally
astute to ensure that recalcitrant debtors pay what is due to a
creditor.
Having regard to its
purpose and its proper application, summary judgment proceedings only
hold terrors and are drastic for a defendant
who has no defence.
Perhaps the time has come to discard these labels and to concentrate
rather on the proper application of the
rule, as set out with
customary clarity and elegance by Corbett JA in the
Maharaj
case
at 425G-426E."
[11]
The
test for the granting
of
a
summary
judgment
is
whether
the
Defendant has satisfied the Court that he has a
bona
fide
defence
to the action.
[8]
What this
entails is whether the facts put up by the Defendant raised a triable
issue and a sustainable defence in law deserving
of their day in
court. The defense must not be bald, vague, or sketchy.
ISSUE
FOR
DETERMINATION
[12]
Having regard to the test for summary
judgment, the issue for determination
by
this Court, is whether the Respondent
has
set out a bona fide defense to the Applicant's claim.
APPLICATION
OF
LEGAL
PRINCIPLES
[13]
The Applicant submits that their claim is
contractual in nature and based on ESA in terms of which the
Respondent is indebted to
the Applicant and submits that the
Respondent pleaded defences are not bona fide nor do they raise an
issue for trial.
[14]
The Applicant
further submitted that their end user
supply of electricity exists
in
terms of agreements which came into existence prior to promulgation
of the Municipal Systems Act, prior to the Respondent coming
into
existence and in terms of licence which authorises the Applicant to
provide end-user electricity.
[15]
The Respondent
does not deny the indebtedness,
it is the extent thereof
that is being questioned and the main
defence of the Respondent is based on its submission that the
Applicant failed to comply with
the
Intergovernmental Relations
Framework Act 13 of 2005
before instituting court proceedings no
government or
organ of state
may institute judicial proceedings in order to settle an
intergovernmental dispute unless it has been declared a formal
internal
governmental dispute in terms of
section 41.
[16]
The Applicant in their Particulars of Claim
in paragraph 3 thereof, describe
themselves
as an organ of state as defined in section 239 of the Constitution
of the Republic of South Africa Act, Act
108 of 1996, in the national sphere of government, enjoined by
section 24 of the Constitution
to ensure that
everyone enjoys the right to an environment
that's not harmful to their health and obligated
by section 27 of the Constitution
to ensure that everyone has the right to
have access to electricity.
[17]
Section 239 of the Constitution defines an
organ of state as follows:
" 'organ of state'
means-
(a)
any
department
of
state
or
administration
in
the
national,
provincial
or
local sphere of government; or
(b)
any other functionary or institution-
(i)
exercising
a
power
or
performing
a
function
in
terms
of
the
Constitution
or
provincial constitution; or
(ii)
exercising
a
public
power
or
performing
a
public
function
in
terms
of
any
legislation, but does not include a court or a judicial officer;"
[18]
The
Applicant seems to rely on the 9th of February 2015 Court Order by
Daffue J directing the Respondent to make payment of all
future
monthly accounts
for
electricity
supply
in
full
on
due
date,
which
order
refers
to
the
Applicant then being entitled to terminate its electricity supply
[9]
to show there was a dispute before there is even a court order which
is being violated.
[19]
I find that the 09 February 2015 order was
in regard termination of electricity supply for failing to pay future
amounts due timeously,
while in this case a monetary payment is
sought for this debt which arose in 2020.
[20]
The Applicant is clearly on their own
version an organ of state and as such, I find that they are indeed
obligated to adhere to
the prescripts of the
Intergovernmental
Relations Framework Act 13 of 2005
before instituting the current
court proceedings, having regard to the aim of the Act in
circumstances where, in the submissions of
the Respondent, it was submitted that it will have an effect on the
debt or the extent
of the debt.
[21]
In the circumstances
I find that a triable issue has been
raised.
[22]
In the result the following order is made:
ORDER
[23]
1.
Application for summary judgment is refused;
2.
Leave to defend the
action is granted to Respondent;
3.
Costs in the cause.
M.T. JORDAAN
ACTING JUDGE OF THE HIGH
COURT, BLOEMFONTEIN
Counsel
for Applicant:
Adv.
LT Sibeko SC
c/o
Phatshoane Henney Attorneys
Instructed
by
Le
Companie/E Ward
Email:
Jeanine@Phinc.Co.Za
Counsel
for Respondent:
Adv
Sunday Ogunronbi
Instructed
by
BMH
Attorneys
c/o
Pieter Skein Attorneys
Email:
Pieter@Skein.Org.Za
[1]
Rules
regulating
the
conduct
of
proceedings
of
the
provincial
and
local
divisions
of
the Supreme Court of South Africa
[2]
Paginated
Bundle: Electricity Supply Agreement (ESA) pages 45-70 Annexure
"ESK1"
[3]
Paginated
Bundle:
ESA
clause 6 page 47 Annexure "ESK1"
[4]
Paginated
Bundle:
ESA
clauses
2.1;
3
and 12 on pages45
to
46
and
pages
53 to
54
[5]
Paginated
Bundle:
ESA
clause 9.1
and
9.2
on
pages 50 to
52
[6]
Maharaj
v Barclays
National
Bank
Ltd
1976
(1)
SA
418
(A)
at
426C-E
[7]
2009
(5)
1
(SCA)
at
11G-12D
[8]
Rule
32(3)
of
the Uniform
Rules
of
Court
[9]
Paginated
Bundle:
Annexure
"ESK2"