IN THE IDGH COURT OF SOUTH AFRICA
FREE STATE DIVISION, BLOEMFONTEIN
In the matter between:
MATJHABENG LOCAL MUNICIPALITY
and
JOHANNESHERMANUSVANDERHEEVER
Reportable
Case no: 4194/2022
Applicant
Respondent
Neutral Citation: Matjhabeng Local Municipality v Van der Heever (4194/2022)
[2025] ZAFSHC 218 (18 July 2025)
Coram:
Heard:
Daffue et Opperman JJ
14 April 2025
Delivered: This judgment was handed down electronically by circulation to
the parties' representatives by email and released to SA FLil. The date and time for
hand down is deemed to be 18 July 2025 at 15h00.
2
Summary: 'Self review' based on principle of legality - authority of municipal
manager to conclude settl~ment agreement in terms of debt collection and debt
control policy - crucial distinction between reduction of fixed rates in terms of
prevailing legislation (rebate) and authority to effect debt management and
collection on the fixed rates - case for the applicant to be made in founding affidavit;
not heads of argument - manner of litigation and delayed litigation by applicant
detrimental to the administration of justice.
3
ORDER
I The application is dismissed.
2 The applicant to pay the costs of the application on an attorney and client
scale, such costs to include the costs of the employment of two counsel taxed on
scale B.
JUDGMENT
Opperman J (Daffue J concurring)
Introduction
[l] The applicant seeks an order1 declaring a settlement agreement2 (the
agreement) between the Matjhabeng Local Municipality and Various Account
Holders/Consumers, unlawful and to be set aside. The core of the application for
review lies in the applicant's reliance on s 15 of the Municipal Property Rates Act 6
of 2004 (the MPRA) and its subm ission that only its council has the power to exempt
or grant a rebate or reduction in property rates and that the municipal manager had
1 T he notice of motion dated I September 2022 m oves for an order that:
• 1. It is declared that the decision to enter into the agreement listed as annexure Tl to the notice of m otion ("the agreement'").
ostensibly concluded on or about 29 July 202 1, was and is unlaw ful;
2. The agreem ent is reviewed and set aside:
3. The R espondent is ordered to pay the costs of the application. only in the event of opposing the application.'
2 P 14-35, Ann exure Tl: 'Matjhabeng Local Munic ipality (Represented by the Municipal Mana ger) Z K Tindleni and
Various Ac count H olders/Consumers (as mor e fully set out in Ann exure "A " hereto) Represented by Andries
Frederick Kno etze, N eumann van R ooyen A ttorneys'. (See p14).
4
no authority to enter into the settlement agreement.3 Contrary thereto, its counsel
submitted in the supplementary heads of argument the following:
'7. The central issue upon which the review turns is this: does the Municipal Property Rates
Act, 6 of 2004, alternatively the Municipal Systems Act 3 of 2000 and Matjhabeng Local
Municipality: Credit Control and Debt Collection Policy 2020 /2021, permit the Municipal
Manager to enter into a settlement agreement the effect whereof is to give rate payers a rebate of
40% without the requisite authorisation and delegation from the Municipal Council.'4
He incorrectly referred to the Systems Act, the correct description being the Local
Government: Municipal Systems Act 32 of 2000. The existence of a Credit Control
and Debt Collection Policy of 2020/2021 relied upon will be dealt with in detail
hereunder.
The parties and factual background of the case
[2] The identity and legal character of the applicant (herein later referred to as the
municipality) is one of a local municipality in terms of the Constitution and the Local
Government: Municipal Structures Act 117 of 1998. The respondent is the owner of
a farm in the municipal area under the municipality's jurisdiction and liable for the
payment of property rates to the municipality in terms of the MPRA.
[3] Although only one respondent, Mr JH Van Der Reever, has been cited in this
application, it is apparent from the settlement agreement that numerous other
account holders/consumers are parties to the settlement agreement. Although a total
of 115 accounts is reflected in annexure A to the settlement agreement, many of the
consumers are the holders of more than one account. The legal representatives of the
parties have agreed that this application will be dealt with as a 'test case' in the sense
3 Founding affidavit: paras 9.12, 9.14 & 9.16 on pp 9-11 of the record.
4 S upplementary heads of argum ent for applicant filed on 4 April 2025.
5
that all the other matters will be kept in abeyance. The municipality's case against
the other account holders/consumers is apparently based on the same factual basis. 5
[4] The respondent states in his opposing affidavit that, as a farmer who owns a
farm within the municipality's jurisdiction, he was obliged, from a certain date
which he cannot call to mind, to pay property rates to the municipality. The
municipality never sent any notifications to reflect the rates due for payment. He
came to know about the obligation from his legal representative, who, by
coincidence, came upon the situation of the rates' liabilities that also involved other
farmers. The respondent is clear on the fact that he acknowledges his obligation
towards the municipality and has no gripe with it.
[5] It is trite that the municipality was and is compelled to have provided him with
regular billing to reflect the amount(s) payable. They failed to do so. He
subsequently fell in arrears. The result was that substantial amounts were
immediately payable due to the municipality's negligence who failed to have a
lawful and effective billing system in place.
[6] It is common cause that there was a valid dispute by the various account
holders/consumers (including respondent) who disputed that the rates had been
imposed and levied according to a correct tariff.
[7] This caused an unfair conundrum for the farmers and they requested that the
parties' legal representatives engage in negotiations to endeavour to agree to
accurate and financially manageable payments. It is apparent from para 9.2 of the
5 Para 6 of the founding affidavit.
6
founding affidavit that the municipality was aware that a number of ratepayers and
farmers in particular lodged disputes regarding their rates and tax tariffs.
[8] The municipality at the time was running debt collection processes instituted
by the municipality's legal representatives, Bokwa Attorneys. Said processes were
headed by an attorney, one Mr. Jan Gysbert (Bertus) Maritz (Maritz). Maritz had a
mandate from the municipality to negotiate and conclude settlement agreements
with account holder/consumers, particularly farmers, who owed municipal rates,
taxes and/or service charges. This is trite.
[9] The facts proven are that the negotiations were never for any exemptions,
reductions or rebates on the fixed taxes. The municipality did not make any case to
counter this anywhere in the application. The municipality also got stuck in its choice
of litigation by application in terms of rule 6 and not rule 53 of the Uniform Rules
of Court and the Plascon-Evans-dictum6 prevails. Section 157 of the MPRA fell to
6 Plascon-Evans Paints Ltd v Van Riebeeck Paints (Pry) Ltd 1984 (3) SA 623 (AD) at 634F-635C.
7 '15. Exemptions, reductions and rebates.-
(!) A municipality ma y in terms of criteria set out in its rates policy-
(a) exempt a specific category of owners of properties, or the owners of a specific category of properties,
from payment of a rate levied on their property; or
(b) grant to a specific category of owners of properties, or to the ow ners of a specific category of
properties, a rebate on or a reduction in the rates payable in respect of their properties.
(2) When granting in terms of subsection (I) exemptions, rebates or reductions in respect of owne rs of categories
of properties, a municipality may determine such categories in accordance with section 8 (2) and subsection
(2A), and when granting exemptions, rebates or reductions in respect of categories of ow ners of properties,
such categories may include-
(a) indigent owners;
such categories may include-
(a) indigent owners;
(b) owners dependent on pensions or social grants for their livelihood;
(c) owners temporarily without income;
(cl) owners of property situated within an area affected by
(i) a disaster within the meaning of the Disaster Management Act, 2002 (Act No . 57 of2002);
or
(ii) any other serious adverse social or econom ic conditions;
(e) owners of residential properties with a market value lower than an amount determined by the
municipality; or
(/) owners of agricultural properties who are bona fide farmers.
[Sub-s. (2) amended by s. 11 (a) of Act No. 29 of2014.)
7
the wayward. Section 16 of the Matjhabeng Local Municipal Council Credit Control
and Debt Collection By-Law 1 of20088 (the By-Law) promulgated in the Provincial
Gazette of 21 May 2010 came to the fore.
[1 0] After deliberations between the parties, the municipality offered to accept and
enter into a settlement agreement in terms of which the respondent, among others,
was obliged to make a payment of 60% of all of the outstanding rates' liabilities as
a so-called 'once off'. The attorney, Mr. Knoetze, was mandated on behalf of all of
the account holders/consumers, including the respondent, to sign the settlement
agreement with the municipality. Maritz similarly signed the settlement agreement
and he had the agreement signed by the municipal manager at that time, Z.K.
Tindleni. She is now the deponent to the municipality's founding affidavit. Their
signatures are evident from the last page of annexure 'Tl'.
(2A) Ln addition to the categories of rateable property determined in terms of section 8 (2), a municipality may ,
subject to any ratio determined in terms of section 19, for the purposes of granting exemptions, rebates and
reductions, determine such property categories based on-
(a) properties used for public service purposes; and
(b) properties to wh ich the provisions of the Na tional Heritage Resources Act, 1999 (Act No. 25 of 1999),
apply, or an institution that has been declared to be subject to the Cu ltural Institutions Act, 1998 (Act
No. 119 of 1998).
[Sub-s. (2A) inserted bys. 11 (b) of Act No. 29of2014.)
(3) The municipal mana ger mu st annually table in the council of the municipality a-
(a) list of all exemptions, rebates and reductions granted by the municipality in terms of subsection (I)
during the previous financial year; and
(b) statement reflecting the income for the municipality foregone during the previous financial year by
wayof-
(i) such exemptions, rebates and reductions;
(ii)
[Sub-para. (ii) deleted bys. 11 (c) of Act No. 29 of2014.)
(iii)
(ii)
[Sub-para. (ii) deleted bys. 11 (c) of Act No. 29 of2014.)
(iii)
[Sub-para. (iii) deleted bys. 11 (c) of Act No. 29of20 14.]
(4) Projections regarding revenue to be forgone for a financial year in relation to subsection (3) (b) must be
reflected in the municipality's annual budget for that year as-
(a) income on the revenue side; and
(b) expenditure on the expenditure side.
[Sub-s. (4) amended bys. 28 of Act No. 19 of2008.]'
8 Provincial Gazette 25 of Friday 21 May 20 IO; pp 124 to 162 of the bundle indexed and paginated on 16 January
2025.
8
[ 11] The application was not launched directly after the settlement agreement was
concluded. It only followed when the respondent and other parties endeavoured to
claim compliance with the agreement. There was a delay of more than a year before
litigation was initiated.
The delay in the bringing of the application
[12] The respondent, in limine, contends that this court should refuse the
application as being an application for review after an inordinate delay. During oral
argument, counsel for the respondent indicated that the court may as well deal with
the merits in conjunction with the issue of the delay to comply with the test for
reasonableness in delays to bring cases for review to court.
[13] The settlement agreement was concluded on 29 July 2021. The municipality
remained silent on the agreement although it ultimately received the respondent and
other account holders' payment of the settlement sum. In compliance with the terms
of the settlement agreement, the municipality was obliged to reflect a zero balance
in respect of the respondent's municipal property rates account as from July 2021,
which it failed to do.
[14] The respondent informed the municipality that he would apply for the
settlement agreement to be made an order of court in terms of the agreement. This
moved the municipality to, unexpectedly, engage in the current application to
renounce the settlement. The municipality instituted a self-review application
against the respondent under this case number during September 2022. The opposed
application was eventually heard on 14 April 2025.
9
[15] The respondent opposed the application, and the parties filed their respective
affidavits. The municipality's former attorney, Maritz, filed and delivered to the
parties, a 'supplementary confirmatory affidavit' signed by him on 10 October 2023.
By then the municipality had terminated his mandate. The municipality objected to
the filing of the supplementary affidavit ofMaritz by issuing an application in terms
of Uniform Rule 30, seeking an order that the supplementary affidavit be declared
irregular. The respondent opposed the application and filed a counter-application for
Maritz's affidavit to be allowed. This court dismissed the municipality's application
with costs and ordered that the supplementary affidavit ofMaritz be allowed in terms
of Uniform Rule 6(5)(e) as further evidence in the determination of the merits in this
(the main) application. The municipality failed to file a supplementary replying
affidavit as afforded by the court to deal with the new evidence.
[16] Organs of state, including the municipality, can initiate self-review
applications based on the principle of legality. Their actions and decisions are not
subject to review under the Promotion of Administrative Justice Act 3 of 2002
(PAJA). The 180-day period for instituting a PAJA review does not apply to legality
reviews; these reviews must be initiated within a reasonable time:
'Legality review, on the other hand, has no similar fixed period. This Court in Khumalo endorsed
the test enunciated by the Supreme Court of Appeal in Gqwetha for assessing undue delay in
bringing a legality review application (Khumalo test). Firstly, it must be determined whether the
delay is unreasonable or undue. This is a factual enquiry upon which a value judgment is made,
having regard to the circumstances of the matter. Secondly, if the delay is unreasonable, the
question becomes whether the Co urt's discretion should nevertheless be exercised to overlook the
delay to entertain the application. The standard to be applied in assessing delay under both PAJA
and legality is thus whether the delay was unreasonable. More over, in both assessments the
10
proverbial clock starts running from the date that the applicant became aware or reasonably ought
to have become aware of the action taken. '9
[17] Cameron J explained the importance of an inquiry into the delay by the court
hearing the matter, and might I add, a self-review that may impact the rights of
numerous account holders/consumers who are parties to the settlement agreement:
'[73] ... The rule against delay in instituting review exists for good reason: to curb the potential
prejudice that would ensue if the lawfulness of the decision remains uncertain. Protracted delays
could give rise to calamitous effects. Not just for those who rely upon the decision but also for the
efficient functioning of the decision-making body itself ....
[74] In Khumalo , this Co urt held that slate functionaries must act without delay in setting right
their ow n legal missteps ... .'10 (Accentuation added.)
[ 18] The municipality has indicated that the delay was due to queries raised by the
account holders/consumers listed in the settlement agreement regarding the
municipality's failure to implement said agreement. Subsequently, the municipality
sought legal counsel to initiate the application within a reasonable time.
[19] The municipality's explanation does not address substantial key facts. T hese
are:
a) receiving payment from the various account holders, including the
respondent, under the settlement agreement over the period from 26 May 2021 until
1 August 2021;
b) retaining these funds despite knowing the agreement was allegedly unlawful;
9 Buffalo C ity Metropolitan M unicipality v Asia Co nstruction (Pty) limited (CCT9 1/17) [20 19] ZACC 15; 2019 (6)
B C LR 66 1 (CC); 20 19 ( 4) SA 33 1 (CC) (16 April 20 19) paras 48-49.
to Merafong C ity Local Municipality v AngloGold Ashanti limited (CCT I 06/15) [2016] ZACC 35; 20 17 (2) BCLR
182 (CC); 20 17 (2) SA 2 11 (CC) (24 October 20 16).
11
c) failing to reflect zero balances for the settled property rates accounts
according to the agreement;
d) the municipality's lack of response to the request for compliance smce
September 2021; and
e) ignoring further correspondence from September 2021 until the application
was filed more than a year later.
[20] The prejudice to the respondent and other parties to the agreement is clear.
There has now been a delay since 2021 to deal with and resolve the matter that was
anticipated by all signatories to the settlement agreement.
[21] The explanation presented by the municipality does not carry much veracity.
As will be shown hereunder, the merits and law that form the basis of the case that
they brought to court lack legal accuracy and the prejudice to the administration of
justice is obvious. There is also a certain degree of impropriety in law. The
municipality did not clearly withdraw from the settlement agreement after the
respondent had performed in terms thereof. Instead, the municipality apparently
acquiesced by receiving the respondent and other account holders' settlement funds
and simply retained same. The municipality requests a review to set aside the
decision to receive funds from the respondent as a settlement, but does not offer to
refund the amount. The same applies to the other account holders and parties to the
agreement. On the one hand the municipality's behaviour is to adhere to the
settlement terms. On the other, it applies for it to be reviewed and set aside. A party
in litigation cannot adopt two conflicting positions.
[22] Setting aside applications through review must, in the least, also demonstrate
a bona fide case on the merits which has a prospect of success. This conjures the
12
legal nature of the settlement agreement and the confusion of the municipality
between a rebate and debt collection management.
The nature of the settlement agreement - the legislative framework and the
difference in law between debt collection management and rebates
[23] The agreement in question does not concern rebates. The MPRA defines a
rebate in s 1 as follows:
"'rebate", in relation to a rate payable on a property, means a discount granted in terms of section
15 on the amount of the rate payable on the property;'
[24] Section 15 is clear on exemptions, reductions and rebates. It is not applicable
to a settlement agreement on existing debt. Only the municipality, in this instance
the municipal council, may act in terms of s 15.
[25] The distinction between the municipal council's authority to cause
exemptions, reductions and rebates in respect of property situated in the
municipality's jurisdiction and the authority of the municipal manager to engage in
agreements and contracts to manage debt is important. It is not the same. It stands to
reason and beyond doubt here that the settlement agreement did not contain any
rebate on fixed tax rates.
[26] The oral arguments, documents filed in this application and the law in casu
show that it is common cause that unlike rebates, settlement agreements aim to
resolve existing debts rather than reducing future charges. The future charges and
rates remain legislatively compelled and unaffected; the debt is affected. The core
differences are that while both rebates on municipal rates and debt management
settlements on fixed rates offer financial solutions, their purposes, applications, and
13
impacts are fundamentally distinct. Rebates aim to reduce future costs for qualifying
groups, while debt settlements focus on resolving existing debts. Rebates are usually
need-based and require proof of qualification, whereas debt settlements are relevant
for individuals with overdue payments. Rebates lessen the financial burden of
municipal rates, while debt settlements ensure structured repayment of fixed-rate
debts. Rebates apply to rates and services going forward, whereas settlements help
clear past financial obligations.
[27] I reiterate; the legislatively authorised entity that may fix rates and taxes and
the appropriate authority in law that may legally enter into settlement agreements on
debt management is not the same entity in casu. Respectively, they are the municipal
council and the municipal manager.
The legislative authority of the municipal manager and the authority of the
municipal manager to conclude the 60% /40%-agreement
[28] The municipal manager had legal authority to sign and legally formalise the
settlement agreement. Section 16 of the By -Law endows a municipal manager with
the following authority:
'Full and Final Settlement of an Amount
16 Where an account is not settled in full, any lesser amount tendered to, and accepted by, the
municipality shall not be a full and final settlement of such account despite the fact that the
payment was tendered, in full and final settlement, unless the municipal manager or the manager
of the municipality's authorised agent, expressly accepts it in writing as being in full and final
settlement of the account in question.'
[29] The municipal manager had the authority to settle on the 60% /40% concession
in terms whereof the various account holders paid the total amount ofR2 777 365.92.
14
The 40% concession amounted to RI 851 577.28.11 The By-Law in force is silent on
any limit to concessions during debt collection and management. The concession is
not factually unreasonable, excessive and unconstitutional in the circumstances.
[30] The municipality argued through its counsel at the hearing for the first time
that if the municipal manager had the authority to conclude the settlement
agreement, she did not have the authority to do it on the 60% /40% basis. They base
their argument on the 'Matjhabeng Local Municipality: Credit Control and Debt
C ollection Policy 2020/2021' that was attached to the municipality's supplementary
heads of argument filed on 4 April 2025. It prescribes that only 25% of the
outstanding debt may be written off. This was never the municipality's case in either
the founding or replying affidavit. This is procedurally illegal. The legal status of
the document is unknown to this court.12
[31] The municipality's contentions about its policy are simply w rong and
untenable. T he excerpt from the municipality's delegation policy which it appended,
does not support their contentions. Furthermore, the municipality chose not to
disclose to the court that the municipality's By -Law provides ins 16 thereof for the
municipal manager to accept lesser amounts in full and final settlement of arrear
11 Para 9.8 of the founding affidavit.
12 T he date of approval an d council resolution number is not know n to the court. Du e consideration was had to the
dictum in City ofTshwane Me tropolitan Mu nicipality v Clo.furn (Pty) ltd (136/2023) [2024] ZASCA IO I (19 June
2024) w herein the S uprem e Co urt of Ap peal ruled that:
·[27] I return to the question of law raised by the City before us, being, whether it was compe tent for the high court to have
made a finding that the policy adopted by the City was a nullity. T here is no me rit in the question of law raised. The high court's
comments related to the argum ent that the policy was unenforceable because it had not been promu lgated into a By-law, as
required in terms of s 98(1) of the Systems Act. The finding did not relate to the validity of the policy. It was common cause that
the City did not adopt a By -law to provide for the 'impleme ntation and enforcement' of its Credit Co ntrol Policy and in terms ofs
98(1) the policy was consequently unenforceable by operation of law. Glofurn was fully entitled to raise that issue by way ofa
point of law without assailing the validity of the policy. Th e principles enunciated in Oudekraal Estates (Pty) Ltd v City of Cape
Town and Others (Oudekraal) and MEC for Health, Eastern Cape v Kirland Investm ents, (Kirkland) nan1ely that administrative
decisions remain valid and effectual until set aside by a competent court, can therefore not avail the City .... '
15
municipal debt, including property rates. During oral argument the municipality's
counsel graciously conceded to s 16 and the effect thereof on the case.
[32] It is trite that the municipality made the offer for the settlement agreement.
The settlement was unrelated to the valuation roll approval, which occurs every five
years along with tariff approvals for rebates, reductions, and exemptions. The
council grants these when they approve the municipality's annual budget in May.
[33] The onus is on the municipality to prove the unlawfulness of the agreement.
The explanation tendered by Maritz regarding the conclusion of the settlement
agreement confirms the municipality's intention to recover debt when it concluded
the settlement agreement and the authority of the municipal manager and himself. 13
The Plascon-Evans-dicturn is the nail in the coffin of the case for the municipality.
The case made for the respondent overshadows the unsound and legally unfounded
application by the municipality. As such, the settlement agreement is legal. The
municipality must be held accountable to that except if it is constitutionally unsound.
[34] The municipality's application is factually and legally unreasonable and
illogical. In Afriforum NPC v Ngwathe Local Municipality and 14 Others14 it was
noted, based on a 2024-report by the Free State Provincial Office of the South
African Human Rights Commission (SAHRC), that the people of the Free State
deserve better, and might I add, the people of the Free State deserve better than to
be burdened with litigation of this nature and to expect the same people to
recompense the costs of the frivolous litigation with their hard earned tax
13 Page 42, para 17.2, supplementary affidavit ofMa ritz.
14 Afriforum N P C v Ngwa the Local Municipality and I 4 Others (2264/2024) [2025) ZAFSHC 184 (20 June 2025)
para 4.
16
contributions. I am obliged to remind the municipality of its constitutional and other
legislative duties.
The legislative duties of the municipality and the sanctity of contracts
[35] The case of Body Corporate of Willow and Aloe Grove v City of Johannesburg
andAnother 15 gives conclusive direction pertaining to the legislative scheme relating
to the credit control, collection and dispute resolution processes of municipalities.
It, inter alia, comprises the Systems Act. It was ruled here that the legislative scheme
relating to credit control and dispute resolution in municipalities creates a
contractual relationship. I quote from the judgment as it is; it is unnecessary to
paraphrase or summarise because it is clear and direct to the point:
'Legislative scheme
[7] According to the Constitution "the objects of local government" are, inter alia, "to provide
democratic and accountable government for local communities" and "to ensure the provision of
services to communities in a sustainable manner."
[8] Obviously, the fulfilment of these objects requires services to be charged for and for the
payment of such charges to be regulated. The duty to levy and collect payment is a constitutional
imperative.
[9] The Local Government: Municipal Systems Act is enacted for the purposes of providing
municipalities with a centralised and consistent approach in relation to the creation and managing
of systems for credit control and debt collection.
The Local Government: Municipal Systems Act (the Act)
[ I OJ The preamble to the Act states, inter alia, that its purpose is:
"[T)o empower the poor and ensure that municipalities put in place service tariffs and credit control
policies that take their needs into account by providing a framework for the provision of services,
15 Body Corporate of Willow and Aloe Grove v City of Johannesburg and Another (41604/2020; 1354 1/2022)
[2023] ZAGPJHC 1451 {11 December 2023).
17
service delivery agreements and municipal service districts; to provide for credit control and debt
collection."
[ 11] Section 5( I) of the Act provides a broad overview of the rights and duties of the
community . It provides that m embers of the community ma y submit written or oral
recommendations, representations and complaints to the municipality. It provides furthermore that
this must be done in terms of the processes and procedures of the legislative scheme which is
created in terms of the Act.
[ 12] In terms of section 5(2) such community member s have a concomitant duty when
exercising their rights to observe the mechanisms , processes and procedures of the municipality.
[ 13] Section 96 of the Act provides that a municipality must collect all mon ey due and payable
to it and that for this purpose it is obliged to adopt, maintain and implem ent a credit control and
debt collection policy which is consistent with its rates and tariff policies and complies with the
provisions of the Act. To this end it mu st adopt by-laws.
[ 14] Section 95 of the Act provides that a municipality must take reasonable steps to ensure that
the consumption by individual users of services is mea sured through accurate and verifiable
metering systems. It must • ensure also that persons liable for payments receive regular and
accurate accounts. Such accounts must indicate the basis for calculating the amounts due.
[ 15] A municipality is to provide accessible mechanisms for persons to query or verify accounts
and metered consumption. There mu st be appeal procedures w hich allow for persons liable for
payments to receive prompt redress for inaccurate accounts. There must also be accessible
mechanisms for dealing with comp laints. It is required of a municipality that it issue prompt rep/ ies
and corrective action.
[ 16] In terms of section I 02(I)(c), a municipality may implement any of the debt collection and
credit control measures provided for in the Act in relation to any arrears, including the termination
of services.
[ 17] r n terms of section I 02(2), the muni cipality may not implement such mea sures, including
termination, where there is "a dispute between the municipality and [its customer] concerning any
specific amount claimed by the municipality from that person." (Em phasis added.)
[ 18] In terms of section 102(1 )(a), a municipality m ay consolidate separate accounts of persons
liable for payments to the municipality. Ln this way arrears m ay be raised and measures taken
across the range of services provided. Put differently, the fact that one is up to date w ith one's
18
electricity account but in arrears in respect of charges for other services does not prevent the
disconnection of the electricity services ..
[ 19] Thus, in sum, the Act requires that disputes in relation to specific charges on a municipal
account must be dealt with through a co-operative structure which places obligations on both the
customer and the municipality and which affords to the customer procedural fairness. This
includes an internal appeal mechanism.
[20] It must be noted that there is no provision for resorting to court for the resolution of disputes
in the context of this structure.
[21] As I have said, the Act provides for the creation by municipalities of a mor e granular credit
control and debt collection policy by way of the power and obligation to pass by-laws.'
(Accentuation added.)
[36] The core of this case also turns on the doctrine of pacta sunt servanda: legal
and moral compliance with contracts in the constitutional realm. It was noted in
Beadica 2 31 CC and Others v Trustees for the time being of the Oregon Trust and
Others16 (Beadica) that in our new constitutional era,pacta sunt servanda is not the
only, nor the most important principle informing the judicial control of contracts.
The requirements of public policy are informed by a wide range of constitutional
values. A careful balancing exercise is required to determine whether enforcement
of the contractual terms would be contrary to public policy in the circumstances.
Perceptive restraint by courts is important. Still, when approaching the task of
invalidating, or refusing to enforce contractual terms, a court will use the power to
invalidate a contract, or not to enforce it sparingly, and only in the clearest of cases.
16 Beadica 231 CC and O thers v Trustees for the lime being of the Oregon Trust and O thers (C CTI09 /l 9) (2020)
ZA C C 13; 2020 (5) SA 247 {CC); 2020 (9) BCLR I 098 (CC) (17 June 2020) paras 87-90.
19
[3 7] There is not a constitutionally lawful and just basis in this application to
invalidate the agreement; it is not a clear case as required per Beadica. The evidence
presented and the law directs to this.
The pertinence of s 172 of the Constitution of the Republic of South Africa, 1996 (the
Constitution) in casu.
[38] When deciding on constitutional matters, the court may make orders under
s 172 to cause a just and equitable outcome. The municipality did not make out a
case for the review to be granted. There is not any divergence from public policy or
legislation in the agreement.
[39] The basis for constitutionality in the application is, inter alia, founded on the
argument by the municipality that the agreement 'is of course untenable because the
Municipality has literally thousands of other ratepayers (approximately 119 000
ratepayers which is inclusive of still 3 000 farmers who are excluded from this
"agreement"), who would most certainly want to be treated in the same way by also
demanding a rebate or discount of 40% of their liability towards the Municipality.
'
They would have a legitimate expectation to be treated as such, as precedent would
have been created.' 17
[ 40] The municipality has a discretion in future agreements and debt management.
The agreement with the respondent and the other parties thereto will not force
unconstitutional action or harm public interest. The municipality must fulfil its
constitutional obligations with integrity and diligence towards the people it serves,
as is stated in the By-Law 18 and the law I quoted above.
17 Para 9.9 of the founding affidavit.
18 As published in the Provincial Gazette 25 of2 I May 20 I 0.
20
Conclusion and costs
[ 41] The delay in the bringing of the review and the manner in whlch the prevailing
law was not regarded when the litigation was embarked upon might be sufficient to
dismiss the application. The prejudice to the administration of justice is clear.
[42] There is no doubt that the settlement agreement was concluded in terms of the
law and is valid and enforceable. The respondent's argument in their supplementary
heads of argument filed on 28 March 2025, 19 namely that the municipality's conduct
in failing to disclose some critical provisions of its By-Law , is indicative of the fact
that the municipality willingly chose to hide these facts from the court, alternatively
that it chose to mislead the court, is convincing. It is of concern to thls court.
[43] The allegation above is substantiated by the reality that the very municipal
manager that deposed of the founding affidavit, instructed Maritz to resolve the
disputes and limit the claims made regarding the incorrect tariff whlch did not
comply with the rate ratio regulations applicable to agricultural property applied by
the municipality. The municipal manager possessed delegated authority to enter into
a debt settlement agreement. The agreement was concluded within the context of the
municipality's By-Law which differs from issues related to rebates on rates.
[ 44] Crucial is that various farmers could have legally refused to pay due to the
municipality's non-compliance with the legal prescripts. The core issue was and
remains that if these illegalities became public knowledge, it would seriously impact
the enforcement of outstanding debt.
19 Paras 52 to 56.
21
[ 45] Maritz provided advice to the accow1ting officer regarding the enforcement
of the municipality's claim via correspondence before concluding the settlement
agreement. Maritz's evidence supports the respondent's averment that the
municipality misrepresented facts to this court in several respects, and this averment
is supported by the following contentions:
a) firstly, there was a valid dispute by the various account holders/consumers
(farmers, including the respondent) because the rates had been imposed and levied
according to an incorrect tariff; thus, the levying of rates would have been unlawful
and problematic;
b) the municipality's attorney was instructed to negotiate with the farmers
regarding their claims and was eventually mandated to settle with them in respect of
their arrears per the By-Law which authorises the municipality to compromise
and/or grant disco~ts when settling, thereby granting power to the accounting
officer; and
c) the conclusion of the settlement agreement did not involve approval or the
setting of a rebate, reduction, or exemption, which are council-reserved matters
relating to establishing such rebates, reductions, and exemptions within the
municipality's rates policy context.
[ 46] The reliance on the delegation of powers manual, which solely deals with the
power to decide or determine a rebate, reduction or exemption, is misplaced and
does not demonstrate that concluding the settlement agreement was unlawful. Debt
collection and credit control processes to recover property rates are not illegal, nor
do they constitute an unlawful reduction in or rebate of property rates contrary to s
15 of the MPRA.
22
[ 4 7] The te1ms of the settlement agreement confirmed that the parties never
intended to agree on a rebate, but rather to address debt collection:
a) the settlement agreement refers to 'account holders/consumer' and not
ratepayers;
b) the recordal confirms that the account holders' /consumers' municipal
accounts were in arrears and an agreement was reached to settle these arrears; and
c) the reduction of or rebate in respect of property rates is not mentioned in the
settlement agreement.
[48] Arrear rates are included as 'debt' owed to a municipality. Section 118(1) of
the Act stipulates that the registrar of deeds cannot register property transfer without
a prescribed clearance certificate confirming that municipal service fees, surcharges,
property rates, and other municipal debts owed during the two years preceding the
• I
application date have been paid in full. Arrear rates are thus included as 'debt' ow ed
to a municipality. This confirms that municipalities are authorised to accept
settlements concerning the payment of municipal debt, including property rates.
[ 49] The above brings me to the costs of the application. Where an unsuccessful
litigant has sued an organ of state in the public interest with a view to vindicate a
protection afforded by the Constitution, the litigant should not ordinarily be ordered
to pay costs. This however is not an inflexible rule. A court may depart from this
general rule if it is just and equitable to do so. It may be the case that the unsuccessful
litigant is shown to have acted with improper motive or has abused court process,
has conducted the case in a vexatious manner, has not properly adhered to the rules
23
of court, has made sustained unwarranied attacks on other litigants or witnesses or
judicial officers concerned or has not pursued the claim in good faith.20
(50] This is not a case that promo tes a constitutional right or interest. It has been
brought under the guise thereof and is a perfect example of how this precious avenue,
the right to access to justice in terms of s 34 of the Constitution, can be abused. It
has been brought by an organ of state without proper consideration of the law. The
behaviour of the municipality must be m et with a punitive costs order. It is
unfortunate that the taxpayer is most often the victim of such a costs order. I was
tempted to order a de bonis propriis costs order against the individual persons that
brought this application, but this was not addressed in the case.
Order
[51] In the result the following order is made:
1 The application is dismissed.
2 The applicant to pay the costs of the application on an attorney and client
scale, such costs to include the costs of the em ployment of two counsel taxed on
scale B.
I concur
20 De Lacy and Another v South African Post Office (CCT 24/10) [20 I I] ZACC 17; 2011 (9) B CL R 905 (CC) (24
May 201 I) paras 115-123.
Appearances
For applicant:
Instructed by:
For respondent:
Instructed by:
L Mfazi
L Tshigomana
Kemi Akinbohun Attorneys
Welkom
c/o Tshangana Associates Inc.
Bloemfontein
MCLouw
JS Rautenbach
Neumann van Rooyen Attorneys
Welkom
c/o Phatshoane Henney Inc.
Bloemfontein
24