Golden Core Trade and Invest (Pty) Ltd v Merafong City Local Municipality and Another (CCT 296/23) [2025] ZACC 27 (15 December 2025)

CONSTITUTIONAL COURT OF SOUTH AFRICA


Case CCT 296/23

In the matter between:


GOLDEN CORE TRADE AND INVEST (PTY) LIMITED Applicant

and

MERAFONG CITY LOCAL MUNICIPALITY First Respondent

MINISTER OF WATER AFFAIRS
AND SANITATION Second Respondent



Neutral citation: Golden Core Trade and Invest (Pty) Ltd v Merafong City Local
Municipality and Another [2025] ZACC 27

Coram: Maya CJ, Madlanga ADCJ, Kollapen J, Majiedt J, Mhlantla J,
Seegobin AJ, Theron J, Tolmay AJ and Tshiqi J


Judgment: Tolmay AJ (unanimous)

Heard on: 7 November 2024

Decided on: 15 December 2025

Summary: Water Services Act 108 of 1997 — constitutionality of section 8(9)
— administrative law review — delay — municipal water tariffs
— reasonableness — time-restricted order — applicability of just
and equitable remedy — constitutional law

ORDER



On application for leave to appeal and cross-appeal from the Supreme Court of Appeal
(hearing an appeal from the High Court of South Africa, Gauteng Division, Pretoria):
1. The applications for leave to appeal and cross-appeal are granted.
2. The appeal is upheld with costs, including the costs of three counsel.
3. The first respondent’s cross-appeal is dismissed with costs, including the
costs of three counsel.
4. The order of the Supreme Court of Appeal in Case No . 338/2022 is set
aside and substituted with the following:
“(a) The first respondent’s review application is dismissed with costs,
including the costs of two counsel.
(b) It is declared that:
(i) The surcharge charged by the first respondent on the supply
of water to the applicant for industrial use from the period
1 July 2004, and all subsequent surcharges in excess of the
tariff charged to th e first respondent by Rand Water from
time to time and in contravention of the decision of the
Minister of Water Affairs and Sanitation dated
18 July 2005, is unlawful.
(ii) The surcharge charged by the first respondent on the supply
of water to the applic ant for domestic use from the period
1 July 2004, in excess of the tariff charged to the first
respondent by Rand Water from time to time and in
contravention of the decision of the Minister of Water
Affairs and Sanitation dated 18 July 2005, is unlawful.
(iii) The first respondent and the applicant are ordered to
negotiate reasonable surcharges, if any, for water for
domestic use and method of repayment or set -off within a

period of six months from the date of this judgment of th e
difference between:
(1) the tariffs so levied by Rand Water from time to
time, plus any agreed surcharge and the amount
charged by the first respondent on the supply of
water to the applicant for industrial use, from
1 July 2004.
(2) the tariffs so levied by Rand Water from time to
time, plus any agreed surcharge and the amount
charged by the first respondent on the supply of
water to the applicant for domestic use, from
1 July 2004.
(iv) The first respondent is ordered to pay interest on the
respective amounts at the prescribed rate from 1 July 2004
to the date of payment.
(v) If the parties fail to come to an agreement within the six -
month period, they must refer the matter to mediation
before an independent, duly qualified mediator. If
mediation fails, the mediator wi ll report in writing t o the
parties that mediation is terminated.
(vi) The parties are in the event of failure of mediation ordered
to file, within two months from the date of the mediator’s
report of termination of the mediation, with the High Court
of South Africa, Gauteng Division, Pretoria (High Court)
their respective repayment proposals together with a
motivation thereof.
(vii) The High Court must consider the proposals and motivation
and issue an order.
(viii) The first respondent is ordered to pay the applicant’s costs
including the costs of two counsel, in respect of the
proceedings of the High Court in 2013 and in 2021 under

4
Case No. 23558/2011, in the Supreme Court of Appeal
under Case No. 20265/14 in 2015 and Case No. 338/2022
in 2023.’



JUDGMENT




TOLMAY AJ (Maya CJ, Madlanga ADCJ, Kollapen J, Majiedt J, Mhlantla J,
Seegobin J, Theron J and Tshiqi J concurring):


Introduction
[1] The applicant is Golden Core Trade and Invest (Pty) Limited, which was
substituted for AngloGold Ashanti Limited (AngloGold) on 7 April 2021. The
respondents are Merafong City Local Municipality (Merafong or the municipality) and
the Minister of Water Affairs and Sanitation (the Minister). Two applications for leave
to appeal against different aspects of the judgment and order of the
Supreme Court of Appeal are before this Court. The main application by AngloGold is
against the Supreme Court of Appeal’s judgment and order , insofar as that Court
restricted its declaration of unlawfulness to one financial year. The application to cross-
appeal, by Merafong, is against the Supreme Court of Appeal’s refusal to consider a
constitutional challenge to section 8(9) of the Water Services Act1 (WSA). Both
AngloGold and the Minister oppose the cross-appeal.

Factual background
[2] The Tautona, Mponeng and Savuka mines of AngloGold, which are within the
jurisdiction of Merafong, have produced gold since 1958 . Rand Water 2 has always

1 108 of 1997.
2 Rand Water is a water services provider, as defined below.

TOLMAY AJ
5
provided it with potable water in bulk which is used for mining.3 AngloGold built and
maintained infrastructure for water distribution and sewage treatment facilities.

[3] The WSA came into operation on 19 December 1997. At the time, it was the
primary legislative instrument for giving effect to the division of authority for water
supply and services between the national and local governments established by the
Constitution. It accordingly provided for the transfer of the authority to administer the
supply of potable water from the Minister to municipalities. The WSA recognised the
role of local government ,4 and municipalities became water services authorities who
must ensure that consumers within their jurisdictions have access to water services. The
WSA distinguishes between a “water services authority ”, insofar as it provides that it
“means any municipality, including a district or rural council as defined in the Local
Government Transition Act 5 responsible for ensuring acc ess to water services” , and a
“water services provider” insofar as it provides that it “means any person who provides
water services to consumers or to another water services institution, but does not include
a water services intermediary ”.6 The WSA introduced a significant feature for the
purposes of this application for leave to appeal. It requires all users of water services
who received water from a source other than one named by a water services authority
to apply for approval to continue receiv ing the supply. 7 On 11 February 2004,
AngloGold and other mines were informed by Merafong that, as of 1 July 2003, it had
become a water services authority. It also requested that they apply for approval to be
provided with water for industrial use in te rms of section 7 of the WSA. 8 On

3 Potable water is water of such quality that it is fit for human consumption.

3 Potable water is water of such quality that it is fit for human consumption.
4 Part B of Schedule 4, read with sections 155(6)(a) and (7) of the Constitution.
5 209 of 1993.
6 Section 1.
7 Section 6 read with section 7.
8 Section 7 provides:
“(1) Subject to subsection (3), no person may obtain water for industrial use from any
source other than the distribution system of a water services provider nominated by the
water services authority having jurisdiction in the area in question, without the
approval of that water services authority.

TOLMAY AJ
6
6 April 2004, AngloGold applied to Merafong, requesting permission to continue
receiving water from Rand Water for both industrial and domestic purposes at the then
current Rand Water tariffs. This was the standard practice, as AngloGold had
consistently obtained its water through Rand Water ’s reticulation infrastructure of
pipelines and reservoirs.

[4] On 31 May 2004, Merafong gave permission that Rand Water may supply water
directly to the mines, charge and collect water sales revenue, and manage water quality
and other technical issues. Certain tariffs were announced for water used for domestic
and industrial use. It also set significantly higher tariffs than those of Rand Water for
water provided to the mines. It approved AngloGold’s water supply application, with
effect from 1 July 2004, under these conditions. Merafong also advised AngloGold of
its right to appeal its decision to the Minister.


(2) Subject to subsection (3), no person ma y dispose of industrial effluent in any manner
other than that approved by the water services provider nominated by the water
services authority having jurisdiction in the area in question.
(3) A person who, at the commencement of this Act, obtains water f or industrial use or
disposes of industrial effluent from a source or in a manner requiring the approval of a
water services authority under subsection (1) or (2), may continue to do so —
(a) for a period of 60 days after the relevant water services authori ty has
requested the person to apply for approval; and
(b) if the person complies with a request in terms of paragraph (a) within the
60 day period, until—
(i) the application for approval is granted, after which the conditions of
the approval will apply; or
(ii) the expiry of a reasonable period determined by the water services
authority, if the application for approval is refused.
(4) No approval given by a water services authority under this section relieves anyone

(4) No approval given by a water services authority under this section relieves anyone
from complying with any other law relating to—
(a) the use and conservation of water and water resources; or
(b) the disposal of effluent.”

TOLMAY AJ
7
[5] Aggrieved by Merafong’s tariffs, AngloGold lodged an appeal against
Merafong’s decision to the Minister, in accordance with section 8(4) of the WSA.9 Its
main complaints were that—
(a) Merafong’s tariff was excessively higher than Rand Water’s while it was
not adding any value to, or assuming any responsibility for, any aspect of
the water supply; and
(b) Merafong failed to recognise AngloGold’s role as a water service s
provider or make any attempt to understand its economic situation.

[6] The Minister, in accordance with s ection 8(9) of the WSA,10 upheld the appeal
on 18 July 2005 and overturned Merafong’s decision. The Minister concluded that, in
respect of the tariff for industrial use, the premium for water for that use was
unreasonable, because Merafong provided no value for the services given to AngloGold
by Rand Water, and water for industrial use is not classified as a water supply service
under section 1 of the WSA.11 For the tariff for domestic use, the Minister directed the
parties to negotiate a reasonable tariff.

[7] In September 2005, Merafong, through its attorney, informed the Minister of its
view that she could not set rates or interfere with municipal tariff -setting, and such
interference was void in law. Merafong’s attorney requested the Minister to reverse her
decision. Merafong made multiple unsuccessful attempts to meet with the Minister. In
accordance with the Minister ’s 2005 appeal decision , Merafong conducted meetings
with AngloGold and Rand Water during the period September 2005 to October 2007,
regarding the tariffs for both industrial and domestic use, but no agreement was reached.


9 Section 8(4) reads: “[a] person who has made an application in terms of section 6 or 7 may appeal to the Minister
against any decision, including an y condition imposed, by that water services authority in respect of the
application”.

application”.
10 Section 8(9) reads: “[t]he Minister may on appeal confirm, vary or overturn any decision of the water services
authority concerned”.
11 Section 1 reads: “[m]eans the abs traction, conveyance, treatment and distribution of potable water , water
intended to be converted to potable water or water for commercial use but not water for industrial use ”.

TOLMAY AJ
8
[8] Merafong continued to enforce the tariffs it had set on AngloGold for the supply
of water for industrial and domestic use. AngloGold responded by withholding the
contested portion of the tariffs. In September 2007, Merafong demanded that
AngloGold pay the arrears or face water supply cuts, which would affect mining
operations severely. As a result, AngloGold complied with the demand and paid the
disputed surcharge and arrears under protest and without prejudice to its rights.

[9] This matter has a long litigation history and this marks the second time these
parties have come before this Court; the first was in Merafong CC.12 Thus, it is
necessary to examine the litigation history leading up to the current application in this
Court.

Litigation history
High Court I
[10] During July 2011, AngloGold initiated motion proceedings in the High Court of
South Africa, Gauteng Division, Pretoria (High Court I).13 It sought relief that would
require Merafong to comply with the Minister’s 2005 appeal decision. Merafong filed
its opposition and conditional counter -application. In the counter -application
Merafong’s contention was that the WSA does not confer authority on the Minister to
interfere with a tariff set and implemented by Meraf ong for water services provided in
its area of jurisdiction. In the event of it being found that the WSA did confer power to
the Minister in terms of section 8(9), Merafong sought an order that the provisions of
section 8(9) of the WSA are to that extent unconstitutional and invalid. 14 The High
Court in High Court I granted AngloGold ’s application and dismissed Merafong’s
counter-application. The Court found that AngloGold legitimately applied to Merafong
under sections 6 and 7 of the WSA and that the Minister lawfully exercised her appellate

12 Merafong City Local Municipality v AngloGold Ashanti [2016] ZACC 35; 2017 (2 ) SA 211 (CC) ; 2017 (2)
BCLR 182 (CC).

BCLR 182 (CC).
13 AngloGold Ashanti Ltd v Merafong City Local Municipality [2014] ZAGPPHC 85.
14 Merafong City Local Municipality v AngloGold Ashanti [2015] ZASCA 85, 2016 (2) SA 176 (SCA) (SCA I) at
paras 16-18.

TOLMAY AJ
9
power under section 8 of the WSA. Even if the Minister ’s decision was impugnable,
the Court said, it remained binding until overturned by a court.

Supreme Court of Appeal I
[11] The Supreme Court of Appeal upheld the decision of High Court I on appeal. It
held that Merafong was required to seek judicial review of the Minister ’s decision and
held that Merafong violated the principle of legality by simply ignoring it . The
Supreme Court of Appeal further held that its failure to challenge the Minister ’s
decision in judicial review proceedings, rather than attacking the empowering statutory
provision, posed an insurmountable difficulty for it , and that a collateral challenge to
the validity of an administrative act was not available to Merafong.

Constitutional Court I
[12] The majority of th is Court disagreed with the Supreme Court of Appeal on the
point that a collateral challenge to the validity of an administrative act was not available
to Merafong and held that Merafong c ould bring a reactive challenge. This Court
characterised the reactive challenge as Merafong’s right to challenge the administrative
act of the Minister ’s decision through a form of collateral challenge. This Court held
that Merafong should either have accepted the Minister’s decision as valid or challenged
it in court by way of a review. By deciding not to comply with the Minister’s decision,
Merafong was engaged in self -help. This Court remitted the matter to the High Court
to det ermine “the lawfulness of the Minister’s decision of 18 July 2005, and, if
necessary, what remedy is to be granted”.15

High Court II
[13] By the time the matter was remitted to the High Court, AngloGold had sold its
mining operations to Golden Core and AngloGold was substituted as a party in this

15 Merafong CC above n 12 at para 84.

TOLMAY AJ
10
matter.16 Ahead of the High Court hearing, in July 2017, Merafong added a prayer for
the review and setting aside of the Minister’s 2005 appeal decision. Days before the
hearing,17 in July 2021, Merafong further amended its papers to include a challenge to
the constitutionality of section 8(9) of the WSA. The High Court considered three
issues: first, Merafong’s review application of the Minister’s 2005 appeal decision and
condonation for the delay in launching the review. Second, Merafong’s constitutional
challenge to section 8(9) of the WSA. Third, AngloGold’s review of Merafong’s rates
decisions.

[14] On the first issue, the High Court dealt with Merafong’s review application under
the principle of legality.18 Accordingly, it considered Merafong’s almost 13-year delay
(2005–2017) in instituting the review using the Khumalo19 two-leg condonation test,
asking—
(a) whether the delay is unreasonable; and
(b) whether the court should exercise its discretion to overlook the delay and
entertain the application.20

[15] On the first leg, the High Court split Merafong’s 13-year delay into the six year
period before it launched its counter -application and the seven year period after this,
but before it added its review prayer.21 On the first period, despite “wrong legal
advice”22 that Merafong could ignore the Minister’s decision and failed attempts to
engage with the Minister before litigating,23 the High Court found that Merafong knew

16 Merafong City Local Municipality v Golden Core Trade and Invest (Pty) Ltd [2021] ZAGPPHC 805 (High
Court II) at para 4.
17 Id at para 150.
18 Id at para 45.
19 Khumalo v Member of the Executive Council for Education: KwaZulu Natal [2013] ZACC 49; 2014 (3) BCLR
333 (CC); 2014 (5) SA 579 (CC) at para 44.
20 Id at para 47.
21 High Court II above n 16 at para 74.
22 Id at para 75.
23 Id at para 81.

TOLMAY AJ
11
from 2006 that the Minister’s 2005 appeal decision could be set aside,24 and its delay in
launching its counter -application was “undue and unreasonable”. 25 The High Court
found Merafong’s delay in the second period “acceptable”26 as “the rights of the parties
were in the hands of the courts” a nd Merafong could not be expected to amend its
counter-application to include a review application at that stage.27

[16] In considering the second leg of the condonation test, the High Court decided the
merits of Merafong’s review of the Minister’s 2005 appeal decision. Merafong’s review
grounds included that the Minister ignored Merafong’s section 229(1) constitutional
power to impose surcharges on services provided, and thereby incorrectly found that
Merafong was not entitled to levy a surcharge on water for industrial use ; that by
interfering with the surcharge the Minister acted ultra vires (beyond its powers) in terms
of section 8(9) of the WSA, and was materially influenced by an error of law; and that
the Minister misconstrued the factual circumstances that she was required to consider.28

[17] The High Court interpreted the Minister’s section 8(9) power, which provides
that “[t]he Minister may on appeal confirm, vary or overturn any decision of the water
services authority concerned”, in the context of section 8 of the WSA. This section is
clear that appeals concern municipalities’ approval of water use from sources other than
a water services provider nominated by a municipality, including any conditions a
municipality imposes as part of this approval, under sections 6 and 7 of the WSA.29

[18] The High Court held that the appeal that AngloGold lodged with the Minister
was about the “ excessively higher ” tariffs that Merafong imposed compared to
Rand Water’s tariffs, but it had nothing to do with sections 6 and 7 of t he WSA, as

24 Id at para 75.
25 Id at para 84.
26 Id.
27 Id at para 80.
28 Id at para 90.

24 Id at para 75.
25 Id at para 84.
26 Id.
27 Id at para 80.
28 Id at para 90.
29 Id at paras 95-101.

TOLMAY AJ
12
AngloGold was not going to use water or obtain water from a source other than a water
service provider nominated by Merafong. 30 Accordingly, the Minister’s 2005 appeal
decision was beyond what section 8(9) empowered her to do, and the High Court
declared the decision unlawful, invalid and reviewable.

[19] The High Court further held that the Minister’s decision was unconstitutional, as
section 229 of the Constitution read with the WSA entitles municipalities to levy
surcharges on water services it provides, whether the water is for industrial or domestic
use.31 Sections 155(7) and 229(2)(b) of the Constitution provide that national
government has authority to regulate municipalities’ exercise of their executive
authority, and that municipalities’ powe rs to impose surcharges on services provided
may be regulated by national legislation. The High Court found that the Minister’s 2005
appeal decision went beyond “mere ‘monitoring’ of the decisions of Merafong”, as the
Minister “effectively took over the authority of the municipality and replaced it with
her own decision”.32 The High Court found that , properly interpreted, section 8(9) of
the WSA did not allow for this watering down of municipalities’ constitutio nally
derived powers, and that the Minister’s 2005 appeal decision was unconstitutional and
invalid.33

[20] Having largely found for Merafong on the merits of its review application, the
High Court finally considered the condonation application for the delay of Merafong’s
application. It concluded that AngloGold would suffer no prejudice “ apart from
financial prejudice” if Merafong’s delay was condoned. If Merafong had not delayed,
AngloGold would anyway have had to pay Merafong’s surcharges on water, whereas
Merafong and its residents would suffer enormous prejudice and financial stress if

30 Id at paras 107-8.
31 Id at paras 113-15.
32 Id at para 138.
33 Id at paras 139-40.

TOLMAY AJ
13
condonation was not granted. 34 The High Court exercised its discretion to overlook
Merafong’s delay, granted condonation, reviewed and set aside the Minister’s
2005 appeal decision, and declared it constitutionally invalid under section 172(1)(a) of
the Constitution.35 The Court found no reason to limit the retrospective effect of the
declaration of invalidity.36

[21] On Merafong’s constitutional challenge to section 8(9) of the WSA, the
High Court held that, in the light of its finding on the limited application of section 8(9),
the constitutional challenge was unnecessary.37 Further, that such a challenge would
have had to “ be raised pertinently, with full and proper motivation and demonstrating
clearly why a declaration of unconstitutionality should be made”, and that an applicant
must “satisfy the court that the subsection cannot sensibly be interpreted in a manner
consistent with the Constitution but must ineluctably be declar ed to be
unconstitutional”.38

[22] Lastly, the High Court dismissed AngloGold’s review application of Merafong’s
surcharge decisions since 2004/2005 , holding that the municipality’s decision to set
rates could not be administrative action under the Promotion of Administrative Justice
Act39 (PAJA),40 and that on the principle of legality, AngloGold did not explain its six
or seven -year delay in launching the review .41 The Court held that, in any event ,
section 156(1) of the Constitution and section 11 of the Local Government: Municipal

34 Id at para 143.
35 Id at para 146.
36 Id at paras 147-8.
37 Id at para 149.
38 Id at para 150.
39 3 of 2000.
40 High Court II above n 16 at paras 154-5. See Fedsure Life Assurance Ltd v Greater Johannesburg Transitional
Metropolitan Council [1998] ZACC 17; 1998 (12) BCLR 1458 (CC); 1999 (1) SA 374 (CC) at para 58 and section
1 of the PAJA.
41 High Court II above n 16 at para 156.

TOLMAY AJ
14
Systems Act 42 (Systems Act) empower municipalities to impose surcharges. 43 The
Court awarded Merafong its costs, made no costs order against the Minister, and made
no costs order for the proceedings in the first High Court, the Supreme Court of Appeal
and this Court.44

Supreme Court of Appeal II
[23] AngloGold appealed to the Supreme Court of Appeal. The questions on appeal
were whether the High Court erred in—
(a) overlooking Merafong’s delay in its review application;
(b) upholding Merafong’s review; and
(c) dismissing AngloGold’s application for declaratory relief that
Merafong’s rates decisions were unlawful.45

The Supreme Court of Appeal accepted the High Court’s rejection of Merafong’s last-
minute constitutional challenge of section 8(9) of the WSA.

[24] On Merafong’s review, the Supreme Court of Appeal noted Merafong’s
13-year delay. It noted that Merafong was required to explain its extended delay and to
justify a court exercising its review powers in terms of the delay. It observed further
that Merafong laboured under no misapprehension that it could, based on a legal
opinion, merely ignore the Minister’s decision. It would have to go to court to overturn
the Minister’s decision, and it would have to do so because an adm inistrative action,
once taken, is binding until it is set aside.46


42 32 of 2000.
43 High Court II above n 16 at para 157.
44 Id at para 164.
45 Golden Core Trade and Invest (Pty) Ltd v Merafong City Local Municipality [2023] ZASCA 126; [2023] 4 All
SA 589 (SCA) (Supreme Court of Appeal II) at para 2.
46 Id at para 39.

TOLMAY AJ
15
[25] The Court explained that instead of Merafong launching review proceedings, it
imposed the same tariffs on water for industrial and domestic use that the Minister had
ruled upon in her decision on AngloGold , and that Merafong moved beyond this by
threatening to disconnect AngloGold’s water supply if it failed to pay the tariffs that the
municipality had established. 47 The Supreme Court of Appeal held that Merafong
abused its authority to demand payment following the Minister’s decision. It held that
in respect of the first period, there was no proper explanation for the failure by Merafong
to review the Minister’s decision.48

[26] The Supreme Court of Appeal noted that Merafong’s 2011 counter -application
challenged the Minister’s decision during the second period of delay. However, it stated
that it did not do this as a recognition of its unconscionable actions before 2011. It did
so to oppose the declaratory relief that AngloGold sought. Its lack of review of the
Minister’s decision was a calculated approach. 49 The Court stated that Merafong did
not explain why it thought it could impose tariffs despite the Minister ’s decision that
was not overturned. It noted that Merafong’s case rested o n the invalidity of the
Minister’s decision , but Merafong knew that it needed to overturn th at decision.
Merafong’s delay was deemed unreasonable by the Supreme Court of Appeal, not
solely due to the length of the delay, but also because Merafong failed t o initiate the
review when it was clearly aware that it was required to do so and subsequently resorted
to self-help in response to the Minister’s decision.50

[27] The Supreme Court of Appeal then turned to whether the delay should have been
overlooked, as the High Court did.51 It stated that the High Court interpreted the
Khumalo52 two-stage condonation test as an invitation to determine the merits of

47 Id at para 41.
48 Id at para 43.
49 Id at para 46.

47 Id at para 41.
48 Id at para 43.
49 Id at para 46.
50 Id at para 48.
51 Id at para 49.
52 Khumalo above n 19 at para 44.

TOLMAY AJ
16
Merafong’s review.53 The Court further noted that the High Court then revisited the
prejudice to AngloGold and d etermined that the Minister ’s decision was made
ultra vires, and that AngloGold had paid the tariffs Merafong was entitled to levy,
demonstrating that it had not suffered any prejudice. 54 The Supreme Court of Appeal
ruled that the High Court’s reasoning was flawed and held that whether a delay should
be overlooked does not entail a determination of the merits of the review.55

[28] The Supreme Court of Appeal held further that this approach inevitably skewed the
weighing of factors that Khumalo required.56 It approached the merits differently, by
considering the nature of the Minister’s 2005 appeal decision, finding that the decision
was restricted to the tariffs of a limited period, namely from 2004/2005 until Merafong
imposed a new tariff in the subsequent year. The Minister’s decision could not affect
tariffs imposed after the appeal decision, as the Minister is not a precedent-setting “court
of law”.57 The Court held that the Minister’s decision was taken in the “distant past” as
it set as ide tariff charges for a limited time.58 On this basis, the
Supreme Court of Appeal dismissed t he review with costs .59 On this same , limited
interpretation of the Minister’s decision, the Supreme Court of Appeal only declared
unlawful Merafong’s imposed rates for water for domestic and industrial use for one
financial year, being 2004/2005.

[29] The Supreme Court of Appeal thus upheld AngloGold’s appeal with costs,
including the costs of two counsel , and set aside the High Court’s judgment. It also
ordered the Municipality to pay AngloGold’s costs for all previous proceedings.60


53 Supreme Court of Appeal II above n 45 at para 24.
54 Id at para 50.
55 Id at para 51.
56 Id.
57 Id at para 60.
58 Id at para 59.
59 Id at para 65.
60 Id at para 80.

TOLMAY AJ
17
In this Court
Applicant’s submissions
Condonation
[30] The Supreme Court of Appeal’s judgment was delivered on 29 September 2023,
and the application for leave to appeal was due on 20 October 2023. AngloGold filed
its application on 27 October 2023. The explanation for the delay is that it only received
proof of service from the state attorney on 26 October 2023 as the relevant state attorney
was on sick leave. It submits that no prejudice to the respondents or the administration
of justice results from this short delay.

Jurisdiction and leave to appeal
[31] Before this Court, AngloGold challenges the Supreme Court of Appeal’s
declaratory finding that Merafong’s tariff for the domestic and industrial use of water
was unlawful for only one financial year, from 1 July 2004 until it imposed a new tariff
for the 2005/2006 financial year. AngloGold submits that this finding was based on the
Supreme Court of Appeal’s unsustainable interpretation of AngloGold’s appeal and the
Minister’s 2005 appeal decision. AngloGold submits that t he Supreme Court of
Appeal’s interpretation engages this Court’s constitutional jurisdiction, as it goes
against the WSA’s purpose, particu larly read in the context of the Constitution’s
section 151(3) powers of national legislation to regulate a municipality’s right to govern
its community ’s local government affairs. Further, the order of the
Supreme Court of Appeal fails to effectively vindicate the section 33 just administrative
action right. There are reasonable prospects of success, and the nature of the
constitutional issues raised in its appeal warrant the attention of this Court in the
interests of justice.

Merits
[32] AngloGold seeks an order that the S upreme Court of Appeal’s declaration of
unlawfulness should not be restricted to one financial year . A supplementary order is

TOLMAY AJ
18
required declaring unlawful all subsequent tariffs Merafong imposed on it after the
2004/2005 year for water supply, for both industrial and domestic use.

[33] AngloGold submits that t he Supreme Court of Appeal incorrectly characterised
the scope of the Minister’s 2005 appeal decision, which it argues determined not only
the S upreme Court of Appeal’s dismissal of Merafo ng’s delayed review application,
but also the declarations of unlawfulness against Merafong’s conduct that it sought. It
argues that it s appeal to the Minister under section 8 of the WSA was not targeted at
Merafong’s 2004/2005 tariffs, but at “the conditions that Merafong sought to impose
on the supply of water”, which conditions “are not a specific tariff but the factors
considered applicable to the determination of that tariff” . The conditions entailed the
fact that Merafong imposed a surcharge above Rand Water’s tariff when Merafong
“played no role in the supply of water to the mines”.

[34] The WSA’s norms and standards provisions empower the Minister to prescribe
norms and standards for tariffs for water services, 61 which municipalities and other
water services institutions must comply with. Municipalities may not use a tariff which
is substantially different from any prescribed norms and standards .62 The Minister
prescribed norms and standards in 2001,63 which require the differentiation of tariffs for
water supplied to households and for industrial use.64 AngloGold submits that contrary
to the norms and standards , from July 2007 onwards Merafong introduced a uniform
tariff rate to the water supply to AngloGold for both domestic and industrial use.

[35] AngloGold argues that t he Minister’s 2005 appeal decision entailed that it was
unreasonable for Merafong to impose a surcharge on services provided where it added
no value. In terms of section 1 of the WSA, a surcharge could not be imposed on water

61 Sections 9(3) and 10(1) of the WSA.
62 Sections 9(4) and 10(4) of the WSA.
63 Norms and Standards in Respect of Tariffs for Water Services in terms of Section 10(1) of the Water Services
Act (Act No. 108 of 1997), GN R652 GG 22472, 20 July 2001.
64 Id at Item 4(1).

TOLMAY AJ
19
for industrial use. AngloGold contends that since all tariffs must comply with the norms
and standards, all the tariffs after the 2004/2005 financial year were equally non -
compliant. As the original decision was set aside, no valid decisions could subsequently
have been taken. The effect of the Supreme Court of Appeal’s restriction on its
declaration of unlawfulness, says AngloGold, is that despite being “victorious in its
long battle to enforce the Minister ’s decision”, it is left with empty relief. AngloGold
submits that it allows Merafong to benefit from its continued breach of its statutory and
constitutional duties by keeping the proceeds of tariffs unlawfully imposed after the
2004/2005 financial year.

[36] Relying on section 33 of the Constitution and the PAJA, AngloGold contends
that section 38 of the Constitution’s appropriate relief provision must be construed
purposively considering section 172(1)(b) of the Constitution and section 8(1) of the
PAJA. These sections empower the Court to make any order that is just and equitable,
including the payment of compensation . AngloGold submits that i n terms of these
sections, the Court is entitled to make a retrospective order that Merafong repays the
unlawfully imposed surcharges of R126 million that it has paid. During argument, it
was conceded on behalf of AngloGold that in granting a just and equitable remedy, this
Court is empowered to consider the financial impact an order may have on Merafong’s
finances and its ability to deliver services to the community.

[37] AngloGold seems to accept that its interpretation of the scope of the
Minister’s 2005 appeal decision re -opens the question whether condonation should be
granted for Merafong’s delay in bring ing its review application, and its reactive
declaratory challenge on that decision. It, however, submits that Merafong’s excessive
delay, inadequate explanation and “bullying tactics” count against the granting of

delay, inadequate explanation and “bullying tactics” count against the granting of
condonation. AngloGold further submits that Merafong’s review application is in any
event meritless, as the Minister’s 2005 appeal decision was taken within the four corners
of the WSA.

TOLMAY AJ
20
Merafong’s submissions
[38] Merafong conceded that this Court’s jurisdiction is engaged. This makes sense
in the light of the cross-appeal that challenges the constitutionality of section 8(9) of the
WSA.

[39] It submits that the Suprem e Court of Appeal correctly limited the impugned
decision to the 2004/2005 financial year. The argument is that every successive
financial year’s budget approval constitutes an independent executive and/or legislative
act and it is common cause that AngloGold has not challenged either the section 8(9)
appeals or other High Court review challenges. If Merafong does not prevail in its
cross-appeal in this Court, it asks that the Supreme Court of Appeal’s finding that the
Minister’s decision could only have set aside the water tariffs imposed by Merafong for
the 2004/2005 financial year should stand.

[40] Merafong submits that AngloGold’s argument ignores the statutory obligations
imposed on a municipality in terms of the Constitution, the Systems Act and in
particular the Local Government: Municipal Finance Management Act 65 (MFMA).
The latter requires the annual approval, valid for one finan cial year of its capital and
operational budget. This includes a formal council resolution determining any
municipal tax imposed for the budget year, the setting of any municipal tariff for the
budget year, the approval of measurable performance objectives for revenue, the
approval of any changes to the municipality ’s Integrated Development Plan and the
approval of any changes to the municipality’s budget-related policies.66

Cross-appeal: Merafong’s submissions
[41] Merafong applies for a declaration of constitutional invalidity of section 8(9) of
the WSA. Merafong contends that , when AngloGold sought enforcement of the

65 56 of 2003.
66 Section 24(1) of the MFMA determines that the municipal council must at least 30 days before the start of the

budget year consider approval of the annual budget. Section 24(2) determines that an annual budget must be
approved before the start of the budget year is approved by the adoption by the council of a resolution referred to
in section 17(3)(a)(i).

TOLMAY AJ
21
Minister’s decision at the Court of first instance , it had already , albeit conditionally,
raised the constitutional challenge. Merafong relies on the judgments of Merafong CC,
stating that there the majority granted it an opportunity to raise the reactive challenge.
It notes that the majority judgment held that the constitutional point should be decided
only later. The minority judgment held that the enforcement of the Minister’s decision
was the core issue in the matter.

[42] The minority judgment determined that section 8(9) of the WSA impermissibly
grants the Minister the authority to exercise a municipal power, in contravention of the
Constitution. Consequently, Merafong submits that this Court is obliged to declare the
section un constitutional and invalid . Merafong c ontends that t he Supreme Court of
Appeal refused to entertain its constitutional challenge, while this relief was captured
in the notice of motion before the High Court . In this reg ard, Merafong submits that
the Supreme Court of Appeal erred in not entertaining the constitutional challenge.

[43] Merafong submits that the Minister has never made an issue of the way the
constitutional point has been raised in any of the previous courts. If section 8(9) of the
WSA is declared constitutionally invalid, Merafong contends that the declaration will
have retrospective effect. The effect thereof will be as though the Minister ’s decision
never existed and would consequently invalidate her 2005 appeal decision.

[44] Merafong notes that t he demand for payment of the tariff s from AngloGold
threatening water cuts was only sent in September 2007. It submits that t his does not
amount to unconscionable conduct, as the Supreme Court of Appeal ha d determined
that the Minister only set aside the 2004/2005 water tariff, while the 2 005/2006 and
2006/2007 water tariffs were raised lawfully. Hence, AngloGold was in arrears and

2006/2007 water tariffs were raised lawfully. Hence, AngloGold was in arrears and
Merafong was not only entitled , but statutorily obliged, to recover arrear water tariff
charges. Merafong submits that t he value thereof could have been challenged but not
the fact that AngloGold was in arrears.

TOLMAY AJ
22
[45] If the constitutional challenge fails, Merafong contends that the
Supreme Court of Appeal judgment was correct in limiting AngloGold’s relief to the
2004/2005 financial year. It notes that the Supreme Court of Appeal’s description of
the water tariff as a “time bound tariff regime” is apposite. It contends that it has always
sought an order declaring that the Minister ’s decision, in the event of it not being set
aside, applies only to the water tariffs levied for the 2004/2005 financial year.

[46] AngloGold sought in both the High Court and the Supreme Court of Appeal
relief that the Minister’s decision applies to all subsequent years to date . Merafong
submits that the practical implication that the Supreme Court of Appeal’s order would
have is the setting aside of water tariffs of approximately R500 000 per month, thus
approximately R6 million per annum. The value of the water tariffs between
1 July 2005 and 2023 eq uates to not less than R108 million and this excludes all the
subsequent annual tariff increases. Bearing in mind that Merafong has been
substantially successful, it submits that it should not have been saddled with the costs
order made by the Supreme Court of Appeal.

Cross-appeal: AngloGold’s submissions
[47] AngloGold opposes Merafong’s cross-appeal, submitting that the constitutional
challenge was not properly raised in the High Court, and that Merafong has failed to
deal with the impact on the remaining provisions of the WSA consequent to this
declaration of invalidity of section 8(9). It takes issue with Merafong’s interpretation
of Merafong CC as requiring that its constitutional challenge is dealt with, and its
reliance on the minority in Merafong CC. AngloGold contests Merafong’s submission
that its constitutional challenge is contained in its founding papers in the High Court
and submits that this is not a case that Merafong can make on appeal. If Merafong were

and submits that this is not a case that Merafong can make on appeal. If Merafong were
to succeed in its constitutional challenge, AngloGold submits it would create an internal
tension within the WSA as there would be no statutory recourse for a consumer that
suffers the imposition of an unreasonable tariff . AngloGold contends that Merafong
“fails to explain how the impact of this striking down upon remaining provisions of the
WSA is to be managed”.

TOLMAY AJ
23

Cross-appeal: Minister’s submissions
[48] The Minister does not align herself with any of the parties’ contentions, but she
submits that the Minister’s 2005 appeal decision is constitutionally valid . In the
Minister’s affidavit before the High Court, she explained the nature of her decision and
the powers that were exercised under the WSA in making the decision. The Minister
explained, among others, that:
(a) It is acknowledged that section s 8(7), 8(9) and 8(10) of the WSA , read
together, may conflict with Merafong ’s exclusive powers under the
Constitution.
(b) Under section 156 and Schedule 4 Part B of the Constitution,
municipalities have exclusive powers to provide “water and sanitation
services limited to water supply systems and domestic waste — water and
sewage disposal systems”.
(c) This case does not raise a constitutional issue because the Minister ’s
ruling concerns clear, drinkable water for domestic use, not industrial use.
(d) She only directed Merafong and AngloGold to negotiate a reasonable
domestic water tariff ; she did not overturn Merafong ’s decision to levy
the surcharge under section 8(9) of the WSA.
(e) She only ordered Merafong to negotiate, which could have led to an
agreement to cancel, amend, or continue charging the surcharge for
domestic use. The results were beyond her control.
(f) Her ruling acknowledges that municipalities are solely responsible for
providing domestic water and setting tariffs and surcharges.

[49] If her ruling is understood not to overturn Merafong’s decision to levy surcharges
in respect of water for domestic use, but to recommend that the parties should negotiate
a reasonable tariff to be imposed, the Ministe r submits that the conclusion by the
High Court that Merafong could not continue levying surcharge s until the Minister’s
decision was set aside, was incorrect.

TOLMAY AJ
24
[50] The Minister submits that Merafong’s constitutional challenge is confined to the powers
of the Minister to overturn the decision taken by Merafong in the exercise of its fiscal
powers. The Minister refers to Habitat,67 where this Court confirmed that the power of
regulating, as set out in section 155(7) of the Constitution , means creating norms and
guidelines for the exercise of a power or the performance of a function. The Minister
submits that i t does not mean the usurpation of the power or the performance of the
function itself.

[51] The Minister contends that t he provisions of section 8(9) of the WSA read on
their own, and in the context of section 8 and the WSA as a whole, do not offend the
principles established by the Constitution. Instead, she contends, the provision fulfils
the purpose of section 155(7) of the Constitution, providing the national executive with
the authority to ensure municipalities effectively perform Schedule 4 functions. 68 The
Minister argues that s ection 8(9) of the WSA cannot be unconstitutional in respect of
any power accorded to the Minister for water utilised for industrial or mining purposes.
Schedule 4 Part B only grants exclusive authority to municipalities in respect of potable
water supply systems. She submits that Merafong’s constitutional attack is overbroad.
She contends that in the absence of exclusive authority accorded to municipalities, the
right of appeal to the Minister in respect of any decision on these aspects cannot be said
to be in contravention of the Constitution.

Issues to be determined
[52] The following issues need to be determined:
(a) whether condonation for the late filing of the application for leave to
appeal should be granted;

67 Minister of Local Government, Environmental Affai rs and Development Planning, Western Cape v Habitat
Council [2014] ZACC 9; 2014 (4) SA 437 (CC); 2014 (5) BCLR 591 (CC) at para 22.
68 Section 155(7) reads:

68 Section 155(7) reads:
“The national government, subject to section 44, and the provincial governments have the
legislative and executive authority to see to the effective performance by municipalities of their
functions in respect of matters listed in Schedules 4 and 5, by regulating the exercise by
municipalities of their executive authority referred to in section 156 (1).”

TOLMAY AJ
25
(b) whether this Court’s jurisdiction is engaged;
(c) whether leave to appeal and cross-appeal should be granted;
(d) whether Merafong’s delay in bringing the revie w application was
unreasonable;
(e) whether the time-restricted order granted by the Supreme Court of Appeal
should be upheld; and
(f) whether the constitutional issue in relation to s ection 8(9) of the WSA
should be determined and if so whether section 8(9) is unconstitutional.

Analysis
Condonation
[53] The opposition to the application for condonation for the late filing of the
application for leave to appeal was not persisted with in argument. In any event, the
delay was negligible and a reasonable explanation was provided. As a result,
condonation is granted.

Jurisdiction and applications for leave to appeal and cross-appeal
[54] This Court’s constitutional and general jurisdiction is engaged in terms of
sections 167(3)(b)(i) and (ii) of the Constitution. This matter deals with the important
interface between the powers of national and local government and the constitutionality
of section 8(9) of the WSA, which engages this Court’s constitutional jurisdiction. It
also raises arguable points of law of general public importance, which ought to be
considered by this Court in relation to the powers of the different spheres of government
when setting tariffs for water use . The appeal and cross-appeal have reasonable
prospects of success and it is in the interests of justice to grant leave. In addition, the
nature of the constitutional issues raised concerning the remediation of unlawful
conduct by an organ of state are of public importance and warrants the attention of this
Court in the interests of justice. Therefore, this Court’s jurisdiction is engaged and the
applications for leave to appeal and cross-appeal should be granted.

TOLMAY AJ
26
Merits
The delay in launching the review
[55] Although the question about the delay may have been reopened by this appeal,
the Supreme Court of Appeal cannot be faulted in its analysis and conclusion regarding
the delay. It correctly held that t he delay was unreasonable, not only by reason of the
length of the delay, but also because Merafong failed to bring the review when it
understood that it was required to do so. The Supreme Court of Appeal was also correct
in finding that the High Court incorrectly interpreted the Khumalo two-stage
condonation test as an invitation to determine the merits of Merafong’s review .69 The
Supreme Court of Appeal was thus correct in refusing condonation for the delay in
bringing the review application and dismissing the review on this basis.

[56] The delay in bringing the review was inordinate. Merafong launched its review
application on 26 July 2017 when it delivered its supplementary affidavit and notice of
motion pursuant to this Court’s remittal order. That is slightly short of 13 years from
the date of the Minister’s decision. Based on the legal advice of its attorney, Merafong
was told as far back as 5 April 2006 that it had a case to ask the court to overturn the
Minister’s decision, but it failed to approach the court to have it set aside . The
Supreme Court of Appeal rightly characterised the delay as “unreasonable, and
egregiously so”.70 It cannot be faulted for holding that what further weighed heavily
against Merafong was that “[Merafong] failed to bring the review, when it clearly
understood that it was required to do so. And then resorted to self -help in the face of
the Minister’s decision”.71

The time-restricted order
[57] The Supreme Court of Appeal’s time -restricted order was premised on an
interpretation of the scope of the appeal power of the Minister in the WSA and the ambit

69 Supreme Court of Appeal II above n 45 at para 24.
70 Id at para 48.

69 Supreme Court of Appeal II above n 45 at para 24.
70 Id at para 48.
71 Id.

TOLMAY AJ
27
of the Minister’s appeal decision , which is the basis for its declaration of invalidity.
AngloGold seeks leave to appeal only against the parts of the judgment of the
Supreme Court of Appeal that limi t the se tting aside of the unlawful surcharges to
(effectively) one financial year. The Supreme Court of Appeal held that the original
tariff setting for the 2004/2005 financial year sought to extract surcharges for water for
industrial use in excess of the charg es made by Rand Water , and that the Minister’s
decision had rendered such excess unlawful. 72 A similar conclusion was reached in
respect of water for domestic use.73

[58] The Minister’s directive in her letter of 18 July 2005 was that no surcharges
could be imposed on the supply of water for industrial use. She did not rule that
Merafong was not entitled to impose a reasonable tariff, which would include a
surcharge, on the supply of water for domestic use. She dire cted that Merafong ,
AngloGold and Rand Water should negotiate a reasonable tariff on the water for
domestic use. The Supreme Court of Appeal correctly concluded that the Minister’s
decision rendered the tariffs for water for industrial use unlawful and th at a similar
conclusion is warranted regarding water for domestic use, even though she did not
expressly set it aside. This was indeed the necessary implication of the requirement for
negotiations.74

[59] The Minister’s 2005 appeal decision entailed that it wa s unreasonable for
Merafong to impose a surcharge on services provided where it added no value. In terms
of the definition of “water supply services” in section 1 of the Act, a surcharge could in
any event not be imposed on water for industrial use. Because she determined that the
charges levied on water for domestic use were unreasonable, given that Merafong added
no value, she decided that the parties should negotiate a reasonable tariff for a surcharge

no value, she decided that the parties should negotiate a reasonable tariff for a surcharge
for domestic use. The Minister’s decision was disregarded and Merafong continued to
levy surcharges in exactly the same way in subsequent years. The only logical

72 Supreme Court of Appeal II above n 45 at para 73.
73 Id at para 74.
74 Id at paras 74-5.

TOLMAY AJ
28
conclusion is that the tariffs , after the 2004/2005 financial year, were equally non -
compliant. As the original decision was set aside, no valid decisions could subsequently
have been taken by Merafong until the Minister’s decision was reviewed and set aside.
This does not detract from Merafong’s constitutional entitlement to levy surcharges in
subsequent years, but on the evidence before us, there is no indication whatsoever that
in subsequent years Merafong added any value or that the surcharges were reasonable.
The effect of the Supreme Court of Appeal’s restriction on its declaration of
unlawfulness is that Merafong is allowed to benefit from its continued breach of its
statutory and constitutional duties by keeping the proceeds of tariffs unlawfully
imposed after the 2004/2005 financial year.

[60] What happened in this matter is comparable with what occurred in Lombardy
Development,75 where the Supreme Court of Appeal considered the consequences of
municipal property rates levied on the market value of immovable property in
accordance with the Local Government: Municipal Property Rates Act76 (MPRA). The
MPRA requires that a municipality must prepare a valuation roll reflecting the
valuations containing the market value of the individual properties, limited to the time
for which it is valid.77 The Court found that the regulatory procedures for compilation
of a valuation roll are prerequisites for the power to collect rates. If the procedures were
not followed, each consequent collection of rates premised on the valuation roll was
invalid.78

[61] The same reasoning should be followed here. The Minister’s decision found that
the surcharges levied were unreasonable because Merafong did not add any value. After
all, AngloGold provided and maintained the infrastructure. The levies charged on
industrial use fell outside the powers of Merafong and the levies charged on water for

75 City of Tshwane Metropolitan Municipality v Lombardy Development (Pty) Ltd [2018] ZASCA 77; [2018] 3
All SA 605 (SCA).
76 6 of 2004.
77 Id at section 3, as read with sections 32 and 48.
78 Id at sections 21-3.

TOLMAY AJ
29
domestic use w ere unreasonable, therefore the Minister requested the parties to
re-negotiate it. These negotiations came to naught, but that did not render the charges
reasonable and it did not negate the decision of the Minister that they were unreasonable
to begin with.

[62] A review and setting aside of the Minister’s decision was still required by the
municipality. The subsequent tariffs owed their existence to the original decision
because each following year builds on the base of the original tariff setting . Merafong
could not merely proceed to levy surcharges on the same basi s in subsequent years
considering the Minister’s decision that it was unreasonable to do so. To first review
and set aside the decision is in accordance with the principle established in Oudekraal79
that if a party wishes to nullify or avert consequences that owe, or would owe, their
existence to an initial unlawful administrative act, that initial act must be set aside.80
On that principle, absent the setting aside of the administrative act (the Minister’s appeal
decision), it is inconceivable that Merafong could proceed to enforce substantially the
same decision in consecutive years. The Supreme Court of Appeal did not consistently
apply this principle in its judgment. Although it was acknowledged that an
administrative act was valid until set aside, the principle was not applied to consecutive
years.81

[63] The Oudekraal principle does not only apply to instances where there is a
consequent act whose existence depends on an earlier unlawful act. It applies to any
situation where an extant administrative act is being disregarded without first being set
aside. In Magnificent Mile , this Court, quoting the statement of the majority in
Kirland82 explained:

79 Oudekraal Estates (Pty) Ltd v City of Cape Town [2004] ZASCA 48; [2004] 3 All SA 1 (SCA) ; 2004 (6) SA
222 (SCA).

222 (SCA).
80 Magnificent Mile Trading 30 (Pty) Ltd v Celliers N.O. [2019] ZACC 36; 2020 (1) BCLR 41 (CC); 2020 (4) SA
375 (CC) (Magnificent Mile) at para 43.
81 Supreme Court of Appeal II above n 45 at para 146.
82 Member of the Executive Council for Health, Eastern Cape v Kirland Investments (Pty) Ltd t/a Eye & Lazer
Institute [2014] ZACC 6; 2014 (3) SA 481 (CC); 2014 (5) BCLR 547 (CC).

TOLMAY AJ
30

“The fundamental notion – that official conduct is vulnerable to challenge may have
legal consequences and may not be ignored until properly set aside – springs deeply
from the rule of law. The courts alon e, and not public officials, are the arbiters of
legality. As Khampepe J stated in Welkom—
‘[t]he rule of law does not permit an organ of state to reach what may
turn out to be a correct outcome by any means. On the contrary, the
rule of law obliges an organ of state to use the correct legal process.’
For a public official to ignore irregular administrative action on the basis that it is a
nullity amounts to self-help.”83

[64] The Supreme Court of Appeal held that when the Minister set aside the tariffs
that Merafong decided upon in 2004, her appeal jurisdiction could not and did not
extend beyond the life of those tariffs.84 And when Merafong introduced new tariffs in
the 2005/2006 financial year, that decision was beyond the reach of the Minister ’s
appellate decision-making, because it was not be fore her. 85 The problem with this
approach is that it allows Merafong, even though it has been determined that the manner
in which surcharges were levied is unlawful, to continue to impose the surcharges on
exactly the same basis. The underlying reasoning that supported the Minister’s decision
was that given the fact that Merafong did not add any value, the surcharges levied were
unreasonable. In the following years this did not change; therefore the basis of the
Minister’s decision extended to subsequent years. To allow Merafong to continue with
unlawful conduct, contrary to the established principles set out in all the authorities
referred to above, would not be legally sound. There is a further unintended
consequence that would result if this is allowed. Merafong could in the same manner
levy surcharges each year. It would lead to uncertainty and continuous litigation, which

levy surcharges each year. It would lead to uncertainty and continuous litigation, which
would not be in the interests of justice, especially in circumstances where the litigation

83 Magnificent Mile above n 80 at para 51, quoting Kirland id at para 103. See also Head of Department,
Department of Education, Free State Province v Welkom High School; Head of Department, Department of
Education, Free State Province v Harmony High School [2013] ZACC 25; 2014 (2) SA 228 (CC); 2013 (9) BCLR
989 (CC); at para 86.
84 Supreme Court of Appeal II above n 45 at para 56.
85 Id.

TOLMAY AJ
31
between the parties has already spanned over a period of more than 14 years.
AngloGold is correct that the effect of restricting to a single year the consequence of
Merafong’s sustained failure to comply w ith the Minister’s decision is that Merafong
continues to enjoy a substantial benefit from unlawful conduct. The
Supreme Court of Appeal thus erred when it held that the time restriction should apply
to the tariffs.

A just and equitable remedy
[65] Just and equitable relief granted to a party which succeeds in the setting aside of
unlawful administrative action must equally and axiomatically apply to a party that has
succeeded in upholding a decision which constitutes administrative action. Factors that
bear consideration in determining appropriate relief envisaged in section 172 of the
Constitution include: what is fair and just in the circumstances of a particular case; the
weighing up of the various interests that might be affected by the remedy, guided by the
objective to address the wrong occasioned by the infringement; deterring future
violations; the making of an order which can be complied with and which is fair to all
those who might be affected by the relief; and the nature of the infringement which will
provide guidance as to the appropriate relief.86

[66] Courts must ensure that the remedy is appropriate and effective. Thus, in
Steenkamp,87 this Court held:

“The purpose of a public-law remedy is to pre-empt or correct or reverse an improper
administrative function. In some instances the remedy takes the form of an order to
make or not to make a particular decision or an order declaring rights or an injunction
to furnish reasons for an adverse decision. Ultimately the purpose of a public remedy
is to afford the prejudiced party administrative justice, to advance efficient and

86 Minister of Defence and Military Veterans v Motau [2014] ZACC 18; 2014 (5) SA 69 (CC); 2014 (8) BCLR
930 (CC) at para 85.

930 (CC) at para 85.
87 Steenkamp N.O. v Provincial Tender Board, Eastern Cape [2006] ZACC 16; 2007 (3) SA 121 (CC); 2007 (3)
BCLR 300 (CC).

TOLMAY AJ
32
effective public administration compelled by constitutional precepts and at a broader
level, to entrench the rule of law.”88

[67] The prejudi ce that AngloGold has suffered, directly consequent upon
Merafong’s refusal to comply with the Minister’s decision, is financial. AngloGold
says that for the period from January 2009 to August 2017, the amount overpaid
(excluding interest) is the undisputed sum of R126 462 558. This amount will have
increased by now. AngloGold submitted that just and equitable relief requires
Merafong to repay amounts unlawfully exacted, but during argument conceded that the
financial implicati on of ordering such repayment may have calamitous financial
implications for Merafong, which is constitutionally obliged to deliver services to the
public. The remedy must furthermore provide for the fact that Merafong is entitled to
have levied surcharges in subsequent years, but should have done so on ly after the
decision of the Minister h ad been set aside and sh ould have met the requirements for
lawful administrative action as set out in the PAJA.

[68] Although repayment was not sought at the outset of the matter, AngloGold has
brought such a claim in a later action. After delivery of the judgment in the High Court,
AngloGold instituted an action on 26 June 2014 for the recovery of the surcharges
unlawfully levied upon it and paid by it contrary to the Minister’s ruling, which at that
stage amounted to R91 327 196.89, plus interest at the statutory rate. By agreement,
the action was stayed pending the resolution of the appeal th at had been brought by
Merafong.89

[69] AngloGold has always den ied its liability for additional charges imposed by
Merafong on the supply of water . When it withheld certain payments, Merafong
threatened to limit the supply of water. This would have had highly detrimental
consequences for AngloGold. Thus, AngloGold notified Merafong that it would

consequences for AngloGold. Thus, AngloGold notified Merafong that it would
resume payments under protest, without prejudice to its rights and without making any

88 Id at para 29.
89 High Court I above n 13.

TOLMAY AJ
33
concessions or admissions. AngloGold followed a time -honoured and recognised
remedy of payment under protest. This approach avoided the risks inherent in litigation,
whilst ensuring that its business could continue without interruption and the financial
damage that could follow from that.

[70] In Thaba Chweu Rural Forum ,90 the municipality had for an extended period
failed to differentiate rates for different categories of property and in accordance with
the use of that property. On appeal to the Supreme Court of Appeal, the Court
considered the request for a declaration of invalidity and a just and equitable order in
terms of section 172(1)(b).91 It was held that the municipality’s contraventions of the
law were not once -off events, “such as the unlawful awarding of a tender, but [the
respondents] were engaged in unlawful conduct repeatedly in every financial year from
2009 to 2017 ”.92 The unlawful conduct continued despite the appellant’s vociferous
questioning of the illegality of the municipality’s conduct.93 The Court found that “the
municipality cannot seriously argue that it is entitled to claim the spoils of unlawfully
overcharging the ratepayers ”.94 The Court set aside the rate notices , including
resolutions of the municipal council on which all such rate notices were based, to the
extent that they related to certain agricultural properties , and directed the municipality
to credit the accounts of the appellants ’ members to the extent that the amounts were
more than the legally permissible limit.95 In my view, this approach is the only legally
sound one that could be followed in this matter, but the financial implications that it
will have for Merafong must be taken into account when crafting an appropriate
remedy.


90 Thaba Chweu Rural Forum v The Thaba Chweu Local Municipality [2023] ZASCA 25.
91 Id at paras 17-18.
92 Id at paras 30-3.
93 Id at para 30(b).
94 Id at para 34.
95 Id at para 40.

TOLMAY AJ
34
[71] The need for flexibility in providing a remedy in terms of section 172(1)(b) is
illustrated in Casino Association.96 The applicants challenged the constitutional validity
of various provisions of the North West Gambling Act.97 It was held that:

“Just and equitable relief should generally be aimed at correcting or reversing the
consequences of unconstitutional action. In Allpay II, this Court articulated what it
referred to as the ‘corrective principle’ as follows: ‘Logic, general legal principle, the
Constitution, and the binding authority of this Court all point to a default position that
requires the consequences of invalidity to be corrected or reversed’.”98

This Court can and should address the issue of repayment; not doing so will defeat the
whole purpose of the litigation between the parties.

[72] The protracted litigation between the parties should ideally reach finality. But
this Court cannot ignor e the impact that a repayment order will have on the financial
position of Merafong and its ability to provide services to the public. The remedy must
also acknowledge the statutory entitlement of a municipality to level surcharges. An
order will have to be structured in a way that ensures repayment but also ensures
sustainable service delivery by Merafong to the public. Nothing has been placed before
us to assist in the determination of reasonable surcharges in subsequent years or a viable
repayment schedule by Merafong. During argument, the possibility of awarding credit
to AngloGold was discussed, but no solution was proffered.

[73] Under these circumstances , the only viable option is to order negotiation of
reasonable surcharges and repayment, but to give the parties the opportunity to agree
on a repayment schedule within a period of six months, from date of this order. Failing
which, they must resort to mediation by an independent mediator with the necessary

which, they must resort to mediation by an independent mediator with the necessary
financial background to consider viable repayment options. Rule 41A of the Uniform

96 Casino Association of South Africa v Member of the Executive Council for Economic Development ,
Environment, Conservation and Tourism [2023] ZACC 39; 2024 (5) BCLR 611 (CC).
97 2 of 2001.
98 Casino Association above n 96 at para 68.

TOLMAY AJ
35
Rules of Court, which envisages voluntary mediation , does not find application here ,
but nothing prevents this Court, when formulating a just and equitable remedy, to direct
parties to participate in mediation in an attempt to prevent further litigation. This will
serve the interests of justice and will be just and equitable. The right of access to a court
of law envisaged in section 34 of the Constitution will not be encroached on because
the parties may, if mediation fails, approac h the High Court with their respective
proposals for repayment, supported by their motivations for such proposals in writing.
The High Court will then hear argument , consider the proposals and make an
appropriate order.

The constitutional challenge
[74] Merafong’s constitutional challenge to section 8(9), read with section 8(7) of the
WSA, progressed as follows through the courts : Merafong’s answering affidavit filed
in AngloGold’s enforcement application in the High Court attached a notice of
conditional counter-application. The primary relief sought was based upon a proper
interpretation of section 8(9), read with section 8(7) of the WSA, read with Chapter 7
of the Constitution and sections 4 and 11 of the Systems Act. Merafong’s contention
was that the WSA does not confer authority on the Minister to interfere with a tariff set
and implemented by Merafong for water services provided in its area of jurisdiction. In
the event of it being found that the WSA did confer power to the Minister in terms of
section 8(9), Merafong sought an order that the provisions of section 8(9) of the WSA
are to that extent unconstitutional and invalid. 99 The High Court dismissed the
conditional counter-application for the reasons set out above.100
[75] Merafong sought and was granted leave to appeal to the
Supreme Court of Appeal against the whole judgment and order. The
counter-application was not raised in argument before the Supreme Court of Appeal.

counter-application was not raised in argument before the Supreme Court of Appeal.
Merafong’s contention was that it was excused from taking the steps because of an
entitlement to raise a collateral challenge to the validity of the administrative action .

99 SCA I above n 14 at para 14.
100 Above at [18].

TOLMAY AJ
36
The Court held that such a challenge was not available and dismissed the appea l,
reasoning that Merafong’s challenge was expressly limited to an administrative law
challenge.

[76] The judgment of this Court in Merafong CC accorded the Municipality an
opportunity to raise the constitutional point on remittal to the High Court, should it so
desire. When the review was filed by Merafong , it sought no relief relating to the
constitutionality of section 8(9) of the WSA, or any other section. One court day before
the hearing commenced, Merafong gave notice that it intends to apply at the hearing for
an order declaring section 8(9) of the W SA to be inconsistent with the Constitution,
invalid and that it be set aside. This was not countenanced by the High Court and the
finding was approved by the Supreme Court of Appeal.

[77] However, one thing is clear from the litigation, and that is at the he art of the
litigation between the parties, there has always been tension between the functions and
role of municipalities on the one hand, and, on the other hand, the authority of national
government in terms of the WSA and the Constitution. It will be to put form over
substance not to address this issue once and for all.

[78] The point of departure in the analysis of the constitutional challenge to
section 8(9) of the WSA must be the role and function of local government in relation
specifically to the supply of water services. The jurisprudence of this Court bears
testimony to the important balancing act that is re quired to do justice to th e role and
function of each sphere of government.

[79] In Outdoor Media ,101 the relationship between the different spheres of
government was explained as follows:


101 Cape Town City v Independent Outdoor Media (Pty) Ltd [2023] ZACC 17; 2024 (1) SA 309 (CC); 2024 (4)
BCLR 483 (CC).

TOLMAY AJ
37
“A municipality enjoys constitutionally entrenched powers in a co -operative
government in terms of section 151(4) of the Constitution. The national and provincial
spheres of government may not intrude on its terrain. This Court affirmed this position
in Robertson:
‘The Constitution has moved away from a hierarchical division of
governmental power and has ushered in a new vision of government
in which the sphere of local government is interdependent, “inviolable
and possesses the constitutional latitude within which to define and
express its unique character” subject to constraints permissible under
our Constitution. A municipality under the Constitution is not a mere
creature of statute otherwise moribund save if imbu ed with power by
provincial or national legislation. A municipality enjoys “original”
and constitutionally entrenched powers, functions, rights and duties
that may be qualified or constrained by law and only to the extent the
Constitution permits. Now the conduct of a municipality is not always
invalid only for the reason that no legislation authorises it. Its power
may derive from the Constitution or from legislation of a competent
authority or from its own laws.’”102

[80] However, the powers conferred by the Constitution on local government are
neither unlimited, nor unconstrained; they are subject to the constraints permissible
under the Constitution. 103 The purpose of Schedules 4 and 5 to the Constitution is to
itemise powers and functions allocated to each sphere of government, with some degree
of autonomy for each sphere as contemplated by the Constitution. In Outa,104 it was
held:

“It is clear from the jurisprudence of this court as reflected in the cases discussed above
that, in order to determine whether a piece of legislation falls within a particular
functional area in either schedule 4 or schedule 5 of the Constitution, a court is required

102 Id at para 52, citing City of Cape Town v Robertson [2004] ZACC 21; 2005 (2) SA 323 (CC); 2005 (3) BCLR
199 (CC).
103 Robertson id at para 60.
104 Organisation Undoing Tax Abuse v Minister of Transport [2023] ZACC 24; 2023 (10) BCLR 1189 (CC); 2024
(1) SA 21 (CC) at para 82.

TOLMAY AJ
38
to determine the subject-matter of that legislation and then see within which sphere of
government’s functional ar ea it falls. Determining the subject -matter of legislation
entails considering its substance, purpose and effects. It entails determining what the
legislation is about or determining its character.”105

The functional areas allocated to the various spheres of government are not contained
in hermetically sealed compartments that remain distinct from one another.

[81] A municipality has the right to govern on its own initiative the local government
affairs of its community, subject to national and provincial legislation, as provided for
in the Constitution .106 The national government has, subject to section 155(7),107 the
legislative and executive authority to see to the effective performance by municipalities
of their functions in respect of the matters listed in Schedules 4 and 5 . This is
accomplished by regulating the exercise by municipalities of their executive authority
referred to in section 156(1).108 A municipality has executive authority in respect of,
and has the right to administer , among others, the local government matters listed in

105 Id at para 87.
106 Section 151 of the Constitution reads as follows:
“(1) The local sphere of government consists of municipalities, which must be established
for the whole of the territory of the Republic.
(2) The executive and legislative authority of a municipality is vested in its Municipal
Council.
(3) A municipality has the right to govern, on its own initiative, the local government
affairs of its community, subject to national and provincial legislation, as provided for
in the Constitution.
(4) The national or a provincial government may not compromise or impede a
municipality’s ability or right to exercise its powers or perform its functions.”
107 Section 155(7) reads as follows:

107 Section 155(7) reads as follows:
“The nationa l government, subject to section 44, and the provincial governments have the
legislative and executive authority to see to the effective performance by municipalities of their
functions in respect of matters listed in Schedules 4 and 5, by regulating the e xercise by
municipalities of their executive authority referred to in section 156 (1). ”
108 Section 156(1) provides:
“(1) A municipality has executive authority in respect of, and has the right to administer—
(a) the local government matters listed in Part B of Schedule 4 and Part B of
Schedule 5; and
(b) any other matter assigned to it by national or provincial legislation.”

TOLMAY AJ
39
Part B of Schedule 4 . There is concurrent national and provincial legislative
competence over the functional areas set out in Schedule 4 of the Constitution. In Part
B, this competence extends to the matters set out in sections 155(6)(a) and (7), and this
includes water and sanitation services limited to potable water supply systems and
domestic waste-water and sewerage disposal systems.109 The power of a municipality
to impose, among others, surcharges on fees for services provided by or on its behalf,
or other taxes, levies or duties may be regulated by national legislation.110

109 Schedule 4 Part B provides:
“The following local government matters to the extent set out in section 155(6)(a) and (7):
• Air pollution
• Building regulations
• Child care facilities
• Electricity and gas reticulation
• Firefighting services
• Local tourism
• Municipal airports
• Municipal planning
• Municipal health services
• Municipal public transport
• Municipal public works only in respect of the needs of municipalities in the discharge
of their responsibilities to administer functions specifically assigned to them under this
Constitution or any other law
• Pontoons, ferries, jetties, piers and harbours, excluding the regulation of international
and national shipping and matters related thereto
• Stormwater management systems in built-up areas
• Trading regulations
• Water and sanitation services limited to potable water suppl y systems and domestic
waste-water and sewage disposal systems”
110 Section 229 of the Constitution reads as follows:
“(1) Subject to subsections (2), (3) and (4), a municipality may impose—
(a) rates on property and surcharges on fees for services provided by or on behalf
of the municipality; and
(b) if authorised by national legislation, other taxes, levies and duties appropriate
to local government or to the category of local government into which that

to local government or to the category of local government into which that
municipality falls, but no municipality may impose inc ome tax, value-added
tax, general sales tax or customs duty.
(2) The power of a municipality to impose rates on property, surcharges on fees for
services provided by or on behalf of the municipality, or other taxes, levies or duties—

TOLMAY AJ
40

[82] Habitat111 dealt with the constitutionality of section 44 of the Land Use Planning
Ordinance,112 where it was held that all municipal planning decisions that encompass

(a) may not be exercised in a way that materially and unreasonably prejudices
national economic policies, economic activities across municipal boundaries,
or the national mobility of goods, services, capital or labour; and
(b) may be regulated by national legislation.”
See Independent Outdoor Media above n 101 at paras 45-6.
111 Habitat above n 67 at para 49.
112 15 of 1985. The Land Use Planning Ordinance ( LUPO) is old-order provincial legislation enacted by the
former Cape Province. Responsibility for its administration was assigned by presidential proclamation to the
Western Cape provincial government (and to the Eastern Cape and Northern Cape governments, to the extent that
it applies within those provinces) in June 1994. Section 44 of LUPO is headed “Appeal to Administrator” and
provides:
“(1) (a) An applicant in respect of an application to a council in terms of this
Ordinance, and a person who has objected to the granting of such application
in terms of this Ordinance, may appeal to the Administrator, in such manner
and within such period as may be prescribed by regulation, against the refusal
or granting or conditional granting of such application.
(b) A person aggrieved by a decision of a council in terms of section 14(1), (2),
(3), (4) (d) or (5) or section 16(2) (b) or 40(4) (c) may appeal to the
Administrator in such manner and within such period as may be prescribed
by regulation, against such decision.
(c) A person aggrieved by a decision of a council in the application of section 18
may similarly appeal to the Administrator against such decision.
(d) For the purposes of sections 15(3), 17(3) and 24(3) provision may be made
by regulation therein referred to for a right of appeal to the Administrator in

by regulation therein referred to for a right of appeal to the Administrator in
the manner prescribed by such regulation.
(2) The Administrator may, after consultation with the council concerned, in his discretion
dismiss an appeal contemplated in subsection (1)(a), (b), (c) or (d) or uphold it wholly
or in part or make a decision in relation thereto which the council concerned could
have made.
(3) For the purposes of this Ordinance—
(a) an application referred to in subsection (1) (a) shall be deemed to have been
granted or conditionally granted or refused by the council concerned in
accordance with action taken by the Administrator under the provisions of
subsection (2);
(b) a decision referred to in subsection (1) (b) or (c) shall be deemed to be a
decision of the council concerned in accordance with action taken by the
Administrator under the provisions of subsection (2); and
(c) a decision made by the Admin istrator under the provisions of subsection (2)
shall be deemed to have been made by the council concerned.”
In terms of section 2 of LUPO “Administrator” means the competent authority to which the administration of
LUPO has been assigned by the Premier of the Western Cape, namely the applicant provincial minister.

TOLMAY AJ
41
zoning and subdivision, lie within the competence of municipalities. 113 The
Constitution expressly envisages that national and provincial governments have
legislative and executive authority to see to the effective performance by municipalities
of their planning functions.114 This Court explained in Habitat:

“That constitutional vision of robust municipal powers has been expande d in the
jurisprudence of this Court, and succinctly summarised by Mhlantla AJ in Lagoonbay:
‘This Court’s jurisprudence quite clearly establishes that: (a) barring
exceptional circumstances, national and provincial spheres are not
entitled to usurp the functions of local government; (b) the
constitutional vision of autonomous spheres of government must be
preserved; (c) while the Constitution confers planning responsibilities
on each of the spheres of government, those are different planning
responsibilities, based on “what is appropriate to each sphere ”;
(d) “‘planning’ in the context of municipal affairs is a term which has
assumed a particular, well -established meaning which includes the
zoning of land and the establishment of townships ”; and (e) the
provincial competence for “urban and rural development” is not wide
enough to include powers that form part of “municipal planning”.’” 115
(Emphasis added.)

[83] There can be no doubt about the constitutionally entrenched powers of
municipalities, but it is also important to acknowledge that certain constraints to the ir
powers are permissible and even imperative as long as they are in line with the
Constitution, and the limitations do not unjustifiably interfere with the role and function
of local government. So, due deference must be paid to the roles of municipalities, but
when tension arises between different spheres of government, the proper approach is to
consider the relevant issue and the legislation involved within the broader context of
the constitutional vision.

the constitutional vision.

113 Habitat above n 67 at para 19.
114 Id at paras 19-20.
115 Id at para 19.

TOLMAY AJ
42

[84] The point of departure is to d etermine what the legislation envisages and that
requires a determination of its character. 116 The enquiry should be directed at the
purpose for which the legislative instrument was enacted. 117 The purpose of the WSA
can be gleaned from its provisions. These are, amongst others, the duty on all spheres
of government to—
(a) ensure that water supply services and sanitation services are provided in
a manner which is efficient, equitable and sustainable;118
(b) strive to provide water supply services sufficient for subsistence and
sustainable economic activity;119
(c) recognise that the provision of water supply services must be undertaken
in a manner consistent with the broader goals of water resource
management, and that the interests of consumers and the broader goals of
public policy must be promoted;120
(d) confirm the National Government’s role as custodian of the nation’s water
resources;121
(e) set national standards, and norms and standards for tariffs in respect of
water services;122 and
(f) provide a regulatory framework for water services institutions and water
services intermediaries.123
[85] National government’s role as custodian of the country’s water resources takes centre
stage in the determination of the constitutional issue raised by Merafong. National
government and the Minister’s role s in that capacity run like a golden thread through

116 Outa above n 104 at para 87.
117 Id at para 49, quoting Western Cape Provincial Government In Re: DVB Behuising (Pty) Limited v North West
Provincial Government [2000] ZACC 2; 2000 (4) BCLR 347 (CC); (1) SA 500 CC at para 37.
118 Preamble of the WSA.
119 Id.
120 Id.
121 Id.
122 Section 2(b) of the WSA.
123 Section 2(d) of the WSA.

TOLMAY AJ
43
the legislation. This is also illustrated by the power to monitor water services and
intervention by the Minister or by the relevant province. However, the power of the
Minister to monitor envisaged in s ection 62 should be approached with some
circumspection.124 In Habitat, this Court said the following in relation to this power:

“[T]he powers in s ection 155(7), this court has held, are ‘hands-off’. In the First
Certification case the court described those powers thus:
‘In its various textual forms “monitor” corresponds to “observe”,
“keep under review” and the like. In this sense it does not represent a
substantial power in itself, certainly not a power to control [local
government] affairs, but has reference to other, broader powers of
supervision and control. . . . We do not interpret the monitoring power
as bestowing additional or residual powers of provincial intrusion on
the domain of [local government], beyond perhaps the power to
measure or tes t at intervals [local government] compliance with
national and provincial legislative directives or with the [Constitution]
itself. What the [Constitution] seeks hereby to realise is a structure for
[local government] that, on the one hand, reveals a conc ern for the
autonomy and integrity of [local government] and prescribes a hands-
off relationship between [local government] and other levels of
government and, on the other, acknowledges the requirement that
higher levels of government monitor [local gover nment] functioning
and intervene where such functioning is deficient or defective in a
manner that compromises this autonomy.’

124 Section 62(1)(b) of the WSA provides:
“(1) The Minister and any relevant Province must monitor the performance of every water
services institution in order to ensure-
(a) compliance with all applicable national standards prescribed under this Act;

(a) compliance with all applicable national standards prescribed under this Act;
(b) compliance with all norms and standards for tariffs prescribed under this Act; and
(c) compliance with every applicable development plan, policy statement or business plan
adopted in terms of this Act.
(2) Every water services institution must-
(a) furnish such information as may be required by the Minister after consultation with the
Minister for Provincial Affairs and Constitutional Development; and
(b) allow the Minister access to its books, records and physical assets to the extent necessary
for the Minister to carry out the monitoring functions contemplated in subsection (1).”

TOLMAY AJ
44

It follows that ‘regulating’ in section 155(7) means creating norms and guidelines for
the exercise of a power or the performance of a function. It does not mean the
usurpation of the power or the performance of the function itself. This is because the
power of regulation is afforded to national and provincial governments in order ‘to see
to the effective performance by municipalities of their functions ’. The constitutional
scheme does not envisage the province employing appellate power over municipalities’
exercise of their planning functions. This is so, even where the zoning, subdivision or
land-use permission has province-wide implications.”125

[86] In this instance we are dealing with national government’s role as custodian of
water services, and this finds expression in the WSA which creates a system of
regulation and oversight of conditions for water supply. This system includes the
creation of norms and standards for tariffs relating to water supply services. This system
includes a regulatory mechanism that imposes a duty on the Minister to monitor tariffs
and to intervene on appeal at the instance of a consumer.126

[87] In Sembcorp,127 this Court considered a review decision of the Minister of Water
and Sanitation to confirm a tariff imposed by a water board in respect of a bulk water
consumer.128 On the Minister’s role under the WSA, the majority of the Court referred
to the national norms and standards in terms of section 9 of the WSA. It was concluded
that different considerations may be considered by the Minister for differentiation on
an equitable basis between different water users , and she may place limitations on
surplus or profit. Reference was also made to section 10(4) of the WSA , which
prohibits a water services institution using a tariff which is substantially different to any
of the prescribed norms and standards. 129 In its analysis, this Court found no power

125 Habitat above n 67 at paras 21-2.
126 Sections 8(4) and (9) and 62(1)(b) of the WSA.
127 Minister of Water and Sanitation v Sembcorp Siza Water (Pty) Ltd [2021] ZACC 21; 2021 (10) BCLR 1152
(CC); 2023 (1) SA 1 (CC).
128 Id at para 3.
129 Id at paras 74-5.

TOLMAY AJ
45
within the WSA by which the Minister had to approve tariff increases, whether on an
equal or differential basis, or at all. 130 This Court noted that the powers granted to the
Minister in terms of the WSA are aimed at developing and implementing matters of
national interest.131

[88] In this instance, the Minister was not required to, nor did she attempt to, approve
the tariff increases. She was approached on appeal in terms of section 8(4) of the WSA
to consider the reasonableness of the surcharges levied by Merafong . The Minister’s
2005 appeal decision was that it was unreasonable for Merafong to impose a surcharge
on services provided where it added no value. She concluded that in terms of section 1
of the Act, a surcharge could not be imposed on water for industrial use and she decided
that the parties should negotiate reasonable tariffs for a surcharge for water for domestic
use. The Minister’s powers in terms of section 8(9) are in harmony with the WSA and
the provisions of the Constitution, as contemplated in sections 155(7) and 229(2)(b).

[89] There is a further reason why striking down section 8(9) is not appropriate .
Doing so would render the WSA ambiguous and would leave water consumers in an
anomalous position . National government and the Minister’s role are repeatedly
referred to, starting with the long title where provision is specifically made for the
monitoring, intervention and general powers of the Minister . The interconnectedness
of all spheres of government in relation to the supply and management of water is
repeatedly referred to in the preamble, where national government’s role as custodian
of water resources is emphasised. Section 8(4) grants a right of appeal to the Minister
and that right then comes to fruition in section 8(9), where the Minister is given powers
on appeal to confirm, vary or overturn any decision of the water authority. The right of
appeal would be rather hollow without the accompanying powers to act on appeal.

appeal would be rather hollow without the accompanying powers to act on appeal.


130 Id at paras 77-80.
131 Id at para 82.

TOLMAY AJ
46
[90] The role of the Minister continues to be defined in other sections of the WSA.
Chapter II deals with standards and tariffs . Section 9 deals with standards and
empowers the Minister to prescribe compulsory national standards. Section 10 gives
the Minister the power to, with the concurrence of the Minister of Finance, prescribe
norms and standards in respect of water services. Section 10(4) specifically states that
no water services institution may use a tariff which is substantially different fro m any
prescribed norms and standards.

[91] Chapter VIII deals with monitoring and intervention and s ection 62 empowers
the Minister and the Provincial Government to monitor every water services institution
and ensure, specifically in section 62(1)(c), compliance with the norms and standards
for tariffs under the WSA.

[92] The whole scheme of the WSA is clearly drafted to provide national government,
as custodian of water resources, with the powers oversee the management and provision
of water services in the country. The powers of municipalities should be exercised in
the context of the Constitution read with the WSA.

[93] From a consumer’s perspective, the norms and standards imposed by the
Minister for the regulation of water tariffs would continue to apply, but without any
mechanism for its regulation. This would mean that the right of a consumer to pay no
more than reas onable tariffs for the supply of water would depend solely on the
optimistic hope that the municipality will closely comply with the norms and standards.
The consumer is left with the Hobson’s choice of either accepting a tariff contrary to
the norms and standards or being cut-off from supply. For all these reasons, section 8(9)
is not unconstitutional and the cross-appeal should be dismissed.

Order
The following order is made:
1. The applications for leave to appeal and cross-appeal are granted.
2. The appeal is upheld with costs, including the costs of three counsel.

TOLMAY AJ
47
3. The first respondent’s cross-appeal is dismissed with costs, including the
costs of three counsel.
4. The order of the Supreme Court of Appeal in Case No . 338/2022 is set
aside and substituted with the following:
“(a) The first respondent’s review application is dismissed with costs,
including the costs of two counsel.
(b) It is declared that:
(i) The surcharge charged by the first respondent on the supply
of water to the applicant for in dustrial use from the period
1 July 2004, and all subsequent surcharges in excess of the
tariff charged to the first respondent by Rand Water from
time to time and in contravention of the decision of the
Minister of Water Affairs and Sanitation dated
18 July 2005, is unlawful.
(ii) The surcharge charged by the first respondent on the supply
of water to the applicant for domestic use from the period
1 July 2004, in excess of the tariff charged to the first
respondent by Rand Water from time to time and in
contravention of the decision of the Minister of Water
Affairs and Sanitation dated 18 July 2005, is unlawful.
(iii) The first respondent and the applicant are ordered to
negotiate reasonable surcharges, if any, for water for
domestic use and method of repayment or set -off within a
period of six months from the date of this judgment of the
difference between:
(1) the tariffs so levied by Rand Water from time to
time, plus any agreed surcharge and the amount
charged by the first respondent on the supply of
water to the applicant for industrial use, from
1 July 2004.

TOLMAY AJ
48
(2) the tariffs so levied by Rand Water from time to
time, plus any agreed surcharge and the amount
charged by the first respondent on the supply of
water to the applicant for domes tic use, from
1 July 2004.
(iv) The first respondent is ordered to pay interest on the
respective amounts at the prescribed rate from 1 July 2004
to the date of payment.
(v) If the parties fail to come to an agreement within the six -
month period, they must refer the matter to mediation
before an independent duly qualified mediator. If
mediation fails, the mediator will report in writing to the
parties that mediation is terminated.
(vi) The parties are in the event of failure of mediation ordered
to file, within two months from the date of the mediator’s
report of termination of the mediation, with the High Court
of South Africa, Gauteng Division, Pretoria (High Court)
their re spective repayment proposals together with a
motivation thereof.
(vii) The High Court must consider the proposals and motivation
and issue an order.
(viii) The first respondent is ordered to pay the applicant’s costs
including the costs of two counsel, in respect of the
proceedings of the High Court in 2013 and in 2021 under
Case No. 23558/2011, in the Supreme Court of Appeal
under Case No. 20265/14 in 2015 and Case No. 338/2022
in 2023.”

For the Applicant:



For the First Respondent:



For the Second Respondent:



N J Graves SC , I B Currie and P Sila
instructed by Knowles Husain Lindsay
Incorporated

J A Motepe SC and A D de Swardt
instructed by De Swardt Myambo
Hlahla

M C Erasmus SC and H A Mpshe
instructed by Office of the State
Attorney