IN THE HIGH COURT OF SOUTH AFRICA
NORTH WEST DIVISION, MAHlKENG
In the matter between:
ZELSKE ONTWIKKELING CC
and
RUSTENBURG LOCAL
MUNICIPALITY
ADV ASHMAR KHUDUGE
(ACTING MUNICIPAL
MANAGER)
Coram: WESSELS AJ
Date of hearing: 12 February 2026
Not reportable
Case no:1337/2025
APPLICANT
FIRST RESPONDENT
SECOND RESPONDENT
2
Delivered: This judgment was handed down electronically by circulat ion to the
parties' representatives via email. The date and time for hand-down of the
judgment is deemed to be 10h00 on 26 March 2026.
Summary: Municipal law - Dispute resolution - Sections 95(f), 102 and 62
of Local Government: Municipal Systems Act 32 of 2000 - Consumer
lodging dispute over municipal account - Municipal ity responding to dispute
and informing consume r of right to internal appeal - Consumer failing to
lodge internal appeal under s 62 - Effect - Consumer cannot rely on s 1 02(2)
to prevent debt collectio n measures indefinitely - Duty to exhaust internal
remedies before approaching court - Applicat ion for declaratory relief
dismissed.
Practice - Urgent applicat ion - Reconsideration under Uniform Rule 6(12)(c)
- Order granted after respondents' attorney appeared in court and had
previously requested indulgence to file answering papers - Respondents not
absent - Reconsideration dismissed.
Practice - Locus standi - Conve rsion of close corporation to private company
during litigation - Juristic person continues to exist - Point conceded.
Costs - Point in limine persisted in for months then conceded at hearing -
Costs awarded against respondent raising point - Costs of unsuccessful Part
B application awarded against app licant on ordinary scale
JlJDGMENT
Wessels AJ
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Introduction
[ 1] This matter concerns Part B of an application in which the applicant seeks
declaratory relief against the first respondent. The applicant obtained urgent relief
in Part A on 20 March 2025, when Koraan AJ granted an order resto ring the
electricity supply to the applicant 's premises pending the final determination of
Part B of the application.
[2] In Part B of the application , the applicant seeks final relief in the form of a
declaratory order that the first respondent is precluded from implementing any
debt collection or credit control measures including the termination of electricity
supply in respect of the historic arrears on its account pending the resolution of
the disputes declared in terms of s 102(2) of the Local Government: Municipal
Systems Act 1 ('the Systems Act ' ). In the alternative, the applicant seeks an order
directing the first respondent to resolve those disputes within 150 days, or such
fm1her period as this Court deems reasonable , and that failing such resolution ,
the first respondent be precluded from claiming any debt reco rded in the disputes.
The applicant further seeks an order amending its citation to reflect its current
status as a private company , together with costs on the attorney and client scale.
Facts
[3] The applicant is the owner of Portion 214 of the Farm Waterk loofNo 305
JQ, Rusten burg, a property of approximately 12 hectares in extent, utilised for
tourism and hospitality purpose s (' the property'). The applicant's municipal
account initially reflected a debt of Rl 228 710.72 raised on 6 November 2018,
followed by numerous debits and credits thereafter. The applicant lodged
1 Local Government: Municipal Systems Act 32 of 2000.
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multiple disputes with the first respondent, commencing in February 2022, for
inter alia this debt, charges for services not rendered, and interest levied.
[4] Throughout this period, the applicant has consistently asserted that it
remained liable for the undisputed portions of its account. In its founding and
supplementary affidavits, the applicant alleges that, to give effect to this
understanding and to demon strate its bona tides , it paid the amounts it considered
to be undisputed, including monthly charges for electricity consumption and
other services actually rendered, into the trust account of attorneys, BMH Law
Inc. This, it is contended, was done pending the resolution of the disputes, on the
basis that the disputed amounts shou ld be isolated and preserved.
[5] On 13 March 2025, despite these pending disputes, the first respondent
terminated the electricity supply to the property. This led to the urgent
proceedings in Part A, in terms of which the spoliat ion order was granted. The
respondents now seek a reconsideration of that order under Uniform Rule 6(12)( c ), with particular focus on the costs awa rded. The respondents have also
raised points in limine concern ing the applicant's locus standi and an alleged
failure to exha ust internal remedies under s 62 of the Systems Act. The
respondents contend that, even if proven, payment into a private trust account
does not constitute payment to the first respondent, and that the applicant
accordingly remained in arrears. This, the respondents argue, entitled them to
implement credit control measures notwithstanding the declared disputes. Given
the absence of proof of such payments, I am unabl e to find that the applicant has
met its obligation to pay undisputed amounts. This factor weighs against the grant
of any equitable relief in its favour.
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Application for Reconsideration
[6] The responde nts seek a reconsideration of the order granted in Part A on
20 March 2025, specifically the costs order. They contend that the full factual
context, particular ly the app licant's alleged failure to exhaust internal remedies,
was not suffic iently ve ntilated during the urgent proceed ings, and that had this
been apparent, the court might have reserved the costs for determination in Part
B.
[7] Relating to the issue of reconside ration, Rule 6(12)( c) prov ides:
'(c) A person against whom an order was granted in such person's absence in an urgent application may by notice set down the matter for reconsideration of the order.' (emphasis added)
[8] It is common cause that the respondents filed a notice of intention to
oppose Part A of the application. Critically, on the day before the hearing of Part
A, 19 March 2025, the respondents' attorneys corresponded with the applicant's
attorneys. In this commu nication, the respondents confirmed that t hey had just
received instructions to come on record and, significant ly, 'request[ ed] your
indulgence to fi le our Answering Affidavit by tomorrow morning, 20 March
2025.' This request for an indulgence to file an answering affidavit is a clear
indication that the respondents were active ly engaged in the matter, were aware
of the impending hearing and had the opportunity to prepare their defence . The
respondents were not caught off guard. Despite this, no opposing papers were
filed.
[9] On the day of the hearing, the order was not granted ex parte as the
respondents' attorney was present in court. To bring these facts with in the ambit
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of Rule 6(12)(c), I would have to find that the order was granted in the absence
of the respondents. In Industrial Development Corporation of South Africa v Sooliman 2, the court held the following:
'The crit ical phrase in the rule is 'reconsiderat ion of the order'. The rationale is to address the potential or actual prejudice because of an absence of audi alterem partem when the ex parte order was granted . The rule is not a "review" of the granting of the order. A 'reconsideration·
is, as has been often said , of wide import. It is rooted in doing justice in a particular respect , i.e. to allow the full vent ilation of the contr oversy.'
[ 1 O] The respondents were not absent. They were represented by an attorney
who had, just the day before, indicated an intention to file papers. They had the opportun ity to place their version before this Court, but elected not to do so. The essence of the rule is to remedy a situation where a party was genuinely absent and could not be heard. That is not the case made out by the respondents. The respondents had their day in court and chose not to partic ipate substantively.
[ 11] To reconsider the costs order in these circumstances would effectively border on this Court considering the issue as a court of appeal, which it is not. The application for reconsideration is therefore dismissed.
Locus Standi
[12] The first point in limine raised by the respondents concerns the applicant 's locus standi, based on its conversion from a close corporation to a private company during the course of this litigation. During argument, respondents ' counsel wise ly conceded this point. A conversion from a close corporation to a
1 Industrial Development Corporation of South Africa v Sooliman (2013/2 1466) [2013) ZAG P JHC 179; 2013 (5) SA 603 (GSJ) ( 18 July 2013).
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private company does not terminate the existence of the juristic person, it merely
changes its form. The entity continues to exist, and pending litigation may be continued by or against the converted entity. This point in limine is dismissed.
Merits
[1 3] The second point m limine requires more rigorous scrutiny. The respondents contend that the applicant has failed to exhaust internal remedies as
provided for ins 62 of the Systems Act. Counsel for the respondents did not argue this point independently but submitted that it should be dealt with alongside the main points, given its close relation to the merits.
[ 14] The respondents submit that the applicant's grievances regarding the property's categor isation and billing were addressed in correspondence dated 15 December 2022 and subsequently reflected in a supplementary valuation roll. They contend that if the applicant was dissatisfied with these admi nistrative decisions, its proper recourse was an internal appeal to the second respondent
under s 62 of the Systems Act. Having failed to do so, it is further advanced, the applicant cannot now rely on the original dispute as a perpetual shield against
debt collection under s 102.
The Legislative Framework
[ 15] To properly evaluate this point, it is necessary to consider the broader
legislative framework governing municipal billing and credit control, specifically
the interplay between ss 95(f), 102, and 62 of the Systems Act.
[16] Section 95(f) imposes a duty on municipalities to:
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' In relation to the levying of rates and other taxes by a municipality and the charging of fees
for municipal services, a municipality must, within its financial and administrative capacity-
(f) provide accessible mechanisms for those persons to query or verify accounts and
metered consumption, and appeal procedures which allow such persons to receive
prompt redress for inaccurate accounts. ' (own emphasis)
[17] Section 102(2) provides a protective mechanism to th e extent that a
municipality may not implement debt control m easures against p ersons where
there is a p ending dispute pertaining to a s pecific amount claimed b y t he
municipality. In the interest of context, ss 102(1) and (2) read as follows:
'( I) A municipality may-
(a) consolidate any separate accounts of persons li able for payments to the municipality;
(b) credit a payment by such a person against any account of that person; and
(c) impl ement a ny of the debt collection and credit control m easures prov ided for in this Chapter in relation to any arrears on any of the accounts of such a person.
(2) Subsection (1) does not apply where there is a dispute between the municipality and a person referred to in that subsection concerning any specific amount claimed by the municipality from that person.' (own emphasis)
[ 18] An appeal mechanism, as an internal remedy, is provided for in s 62( 1 ). It
reads:
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·(I) A person whose rights are affected by a decision taken by a political structure, political office bearer, councillor or staff member of a municipality in terms of a power or duty delegated or sub-delegated by a delegating authority to the political structure, political office bearer, councillor or staff member, may appeal against that decision by giving written notice of the appeal and reasons to the municipal manager within 21 days of the date of the notification of the decision.'
[ 19] The principle that an aggrieved party must first exhaust internal remedies
before approaching a court is a cornerstone of our administrative law. The leading authority on this point is the Constitutional Court's judgment in Koyabe and Others v Minister for Home Affairs and Others 3 .
[20] In Koyabe4, the court articulated the rationale for this requirement as follows:
'Internal remedies are designed to provide immediate and cost-effective relief, giving the executive the opportunity to utilise its own mechanisms, rectifying irregularities first, before aggrieved parties resort to litigation."
[21] The Constitutional Court emphasised that this duty, while valuable and necessary, must not be applied rigidly or used to frustrate an aggrieved person, as follows 5:
·The duty to exhaust internal remedies is therefore a valuable and necessary requirement in our law. However, that requirement should not be rigidly imposed. or should it be used by administrators to frustrate the efforts of an aggrieved person or to shield the administrative process from judicial scrutiny. PAJA recognises this need for flexibility, acknowledging in s
3 Koyabe and Others v Minister for Home Affairs and Others (CCT 53/08) [2009] ZACC 23; 2009 (12) BCLR I 192 (CC);20l0 (4) SA 327 (CC) (25 August 2009). 4 Ibid fn3 para 35.
5 Ibid fn3 para 38.
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7(2)(c) that exceptional circumstances may require that a court condone non-exhaustion of the internal process and proceed with judicial review nonetheless.·
[22] Crucia lly, the Constitutional Court addressed the quality of the remedy that
must be exhausted, in which regard it held6:
'In a constitutional democracy like ours, where the substantive enjoyment of right s has a high premium, it is important that any existing administrative remedy be an effective one. A remedy will be effective if it is objectively implemented, taking into account the relevant princ iples and values of administrative justice present in the Constitution and our law.·
[23] In addition, it was remarked in Kubaye that judicial enforceme nt of this
duty must conside r the availability, effect iveness and adequacy of the existing
internal remedies.
[24] Important to the facts in this application, the Constitutional Court rejected
the notion that a person could simp ly allow the time for an internal remedy to lapse and then proceed directly to court. The following finding in Kobaye is apposite 7:
' ... the mere lapsing of the time-period for exercising an internal remedy on its own would not satisfy the duty to exhaust nor would it constitute exceptional circumstances. Someone seeking to avoid administrative redress would, if it were otherwise, simply wait out the specified timeperiod and proceed to initiate judicial review. That interpretation would undermine the rationale and purpose of the duty. Thus, an aggrieved party must take reasonable steps to exhaust available internal remedies with a view to obtaining administrative redress."
[25] These principles , as established in Koyabe, have been refined and app lied specifica lly to municipal account disputes in Body Corporate of Willow and Aloe
6 Op cit fn3 para 44.
7 Op cit fn3 para 47.
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Grove v C ity of Johannesburg and Another8. In that matter, the court exami ned the legislative scheme for credit control and dispute resolution in the municipal context as follows:
'T hus, in sum, the Act require s that disputes in relation t o s pecific charges on a m unicipal account must be dealt with through a co-operativ e structure w hich places obligations on both the customer and the municipality and which afford s to the custom er procedural fairness. Thi s includes an internal appeal mechanism. '
[26] The court further addressed the important consequence s of failing to utilise these interna l mechanisms as follows:
' [ I 00 J Thus, any rev iew process would , of necessity, entail an inquiry into whether the internal remedies available to the customer in terms of the legislati ve scheme have been exhausted.
[IOI ] I t is thus clear that the seekin g of a mandamus against the municipality to restore a serv ice is not as simpl istic an application as many applicants to our courts, especially the urgent court, bet ieve it to be.
[ I 02]. ..
[ I 03] In sum, an applicant who seeks t he court's assistance in restoring services must show that he is at least substantially corn pliant with his o bligations under the dispute resolution m achinerv. If he is compliant then h e has the automatic protections of the contractual scheme created by the Act and the bye-laws [sic!. '(emphasis added)
[27] In Body Corporate of Willow and Aloe Grove, the court clarified the function of a court in matter s concern ing a municipal dispute 9. It was held that a
8 Body Corporate of Willow and Aloe Grove v City of Johannesb urg and Another (4 1604/2020; 1354 1/2022) (2023) ZAG PJHC 145 1 ( II December 2023).
9 Op cil fn 8 paras 93 and 95.
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court is not in a unique position. A court usually cannot resolve such disputes , as it lacks jurisdiction. A court's function is to see to it that the parties' respective
rights are fairly accommodated within a municipality 's internal proced ures and the law. The function of a court is not to resolve the dispute. It must defer to the municipality in determining the dispute. To order the municipality to rectify the acco unt would constitute an impermi ssible incursion into the parties ' contract. From an admin istrat ive perspective , it would be an impermis sible interference
with decisions to be taken by the municipality.
Application to the Facts
(28] In the present matter, the app licant's attorneys have highlighted what appear to be erratic and inconsistent billing practices by the first respondent. The correspon dence from the applicant's attorneys, specifically the letter dated 12 March 2025, details several significant anoma lies, including a dehit of Rl ,228,7 10.72 in Nove mber 20 18, a levy ofRl ,654, 110.00 in November 2020, followed immediately by a credit note of R 1,932,666.67. On 8 December 2020, multipl e debits and cred its were applied in a single day.
(29] Such volatility in municipal accounting naturally gives rise to a 'dispute' contemplated in s 102. The app licant lodged multiple disputes, commenci ng in February 2022, identifying specific amou nts and components of its account. To this extent, the applicant has comp lied with the initial phase of the dispute reso lution proces s.
(30] The critica l juncture arose when the first respo ndent responded to these queries. The first respondent asserts that it investigated the querie s, particularly those regardin g property categorisation, and communicated its decision via correspondence of 15 December 2022 and the subsequent supplementary
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valuation roll. The applicant contends that these disputes remam unresolved
because the first respondent has not provided a satisfactory expla nation for the
November 2018 debt or the subsequent debits and credits.
[31] However, the evidence reveals that on 23 August 2022, the first respondent
addressed the applicant's questions about the dispute and informed the applicant
of its right to appeal. This letter stated:
• J. Attached is an annexure I in response to the questions raised in your letter.
2. The first column is a list of questions in your letter and second column is the responses to
the questions.
3. Instances where the Municipality cannot provide the requested information, reasons have been provided in terms of the Promotion of Access to Information Act no 2 of 2000.
4. However, in terms of section 25 (3) you may lodge an internal appeal or an application
with the court as the case may !sic! against the refusal of the request by submitting to the Appeal Authority within a !sic) (30) days.· (emphasis added)
[32] However inelegant the structure of this commun ication from the first
respondent might be, it constitutes a decision as envisaged bys 62 of the Systems
Act. Applying the principles from Koyabe and Body Corporate of Willow and
Aloe Grove, this decision triggered the applicant's duty to pursue the available
internal remedies. Although the applicant was informed of its right to appeal, the
record does not reflect that any such appeal was lodged.
[33] A consumer cannot bypass the s 62 appeal process and then rely on the
original dispute as a permanent shield against debt collection in terms of s 102.
To hold otherwise would allow consumers to ignore municipal decisions
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indefinite ly, effectively paralysing a municipality 's ability to collect revenue. The
statutory scheme provided for in the Systems Act requires that once a
municipality has decided on a query raised in terms of s 95(f), the consumer must
either accept the decision or challenge it through the s 62 appeal process. As
Koyabe instructs, an aggrieved party must take reasonable steps to exhaust
available internal remedies to obtain administrative redress. This princip le was
correct ly articulated in Body Corporate Croftdene Mall v Ethekwini
Municipality 10 in the following manner:
' It is, in my view, of importance that subsec 102(2) of the Systems Act require s that the dispute must relate to a 'specific amount" claimed by the munici pal ity. Quite obviously, its obj ective
must be to prevent a ratepayer from delaying payment of an acco unt by raising a dispute in gene ral terms. The ratepayer is required to furni sh facts that would adequate ly e nable the municipality to ascertai n or identify the disputed item or items and the basis for the ratepaye r's objection thereto. If an item is properly identified and a dispute properly raised, debt collection
and credit contro l measures cou ld not be implemented in regard to that item because of the provi sions of the subsectio n. But the measures could be impl emented in regard to the balance in arrears; and they could be impl emented in respect of the entir e amount if an item is not properly identified and a dispute in relatio n thereto is not properly raised. ' (emp has is added)
[34] While ss 95(f) and 102 of the Systems Act offer initial protections against
inaccurate billing and premature debt collection, they do not exist in a vacuum.
Once a municipality has formally considered a dispute and rendered a decision,
that decision constitutes an administrative act. If the consumer remains aggrieved,
the appea l procedures mandated bys 95(f) are given practical effect through s 62.
the appea l procedures mandated bys 95(f) are given practical effect through s 62.
10 Body Corporale Crofldene ii/all v Ethekwini ~l11nicipality (603/20 I 0) (2011] ZASCA 188; (2012] I A II SA I (SCA); 2012 (4) SA 169 (SCA) ( I 0 October 20 11 ) para 22.
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[35] The applicant's decis ion to pay disp uted amounts into an attorney's trust
account, while perhaps showing a degree of good faith, does not constitute a valid
payment to the first respondent and does not cure the failure to exhaust interna l
remedies. I would be remiss in my duty not to point out that no bank statements
reflecting transfers to the trust account have been provided and no trust receipts
or confirmatory affidavits from the attorneys holding the funds have been
produced. The mere assertion in an affidav it, unsupported by corroborating
documentation, falls short of the evident iary standard required to establish
payment, particularly where such payment is said to have been made not to the
creditor (the first respondent) but to a third party. The applicant cannot simply
invite this Court to accept its ipse dixit on a matter that is readily susceptible to
proof. This evident iary void underm ines the weight that can be attached to the
appl icant 's protestations of good faith.
[36] The dispute contemplated in s 102 must be managed within the framework
of the Systems Act, which includes the transition from the dispute phase to the appea l phase.
Conclusion
[37] In light of the applicant's failure to exhaust the internal remedies avai lable
to it under s 62 of the Syste ms Act, the appl ication for declaratory relief in Part
B is premature. The applicant has not shown that it took reasonable steps to
exhaust the available remedy, nor has it estab lished exceptional circumstances
that would exempt it from this requirement, as contemplated in Koyabe. On this
basis, Part B of the application must fail.
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Costs
[38] The first point in limine, concerning the applicant's locus standi, was proper ly conceded by the respondents' counsel during argument. Importantly , the respondents had more than sufficie nt time to reconsider and withdraw this point before the hearing. The answering affidav it was filed in June 2025. The matter was enrolled for hearing in February 2026. This interval of some eight months provided ample opportunity for the responde nts to assess the strength of their own case and to avo id unnecessary costs by withdrawing the point timeously. They did not do so.
[39] A litigant cannot raise a point, persist with it through the exchange of papers, and then escape the costs consequences by abandoning it at the door of the court. To hold otherwise wou ld encourage the pleading of marginal points in the hope that they might somehow succeed, without any risk of an adverse costs order. As a general rule, a party that succeeds on a point is entitled to its costs. Conve rsely, a party that raises a point and is unsuccessful , or that concedes a point, must bear the costs occasione d thereby.
[ 40] The application for recons ideration in terms of Rule 6(12)( c) has been dismissed and must suffer a simi lar fate. In the circumstances, it is just and equ itable that the respondents bear the costs occasioned by the first point in limine and the application for recons ideration, on the ordinary party-and-party scale B.
[ 41] The general rule is that costs follow the result. The applicant has been unsuccessful in Pa11 B a nd m ust bear the costs of this application. There is no justificat ion for a punitive costs order. The matter raises no novel and complex quest ions. Both sides have advanced their cases reasonab ly. The ordinary
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principles of costs will apply, and to that extent, the appropriate order should be
awarded on scale B.
Order
l . The application under Part B is dismissed with costs of Part Bon scale B.
2. The respondents ' first point in limine and the application for
reconsideration in terms of Rule 6(12)(c) are dism issed with costs on scale
B.
MWESSELS
ACTING JUDGE OF THE HIGH COURT
NORTH WEST DIVISION, MAHIKENG
Appearances
For applicant
Instructed by
For the respondent
Instructed by
:Adv DH Wijnbeek
:Andreas Peens Attorneys
:Koster
:c/o Maree Maree Inc
:Mahikeng
:Adv PJ Kok
:ME Tlou Attorneys
:Mahikeng
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