IN THE HIGH COURT OF SOUTH AFRICA
EASTERN CAPE DIVISION, EAST LONDON CIRCUIT COURT
Case no. 2025-182522
REPORTABLE
In the matter between:
TRANSNET PROPERTY Plaintiff/Applicant
and
BUFFALO CITY METROPOLITAN
MUNICIPALITY Defendant/Respondent
JUDGMENT
STRETCH J.:
[1] The plaintiff is Transnet Property which is a state -owned company more
fully described as a division of Transnet SOC 1 Limited. The defendant is
Buffalo City Metropolitan Municipality, being a municipality contemplated in
terms of section 2 of the Local Government Municipal Systems Act 32 of 2000
(“the Systems Act”). The parties will hereinafter be referred to as Transnet and
BCMM.
1 SOC is an acronym for State-Owned Company.
[2] It is common cause that BCMM is/was a lessee of premises at Orient
Theatre Complex, KuGompo, in terms of a rental agreement with Transnet.
During April 2025, Transnet and BCMM entered into a written agreement, in
the form of an acknowledgment of debt. Ex facie the agreement, so it is
pleaded, BCMM acknowledged its indebtedness to Transnet in the sum of
R12 565 339,25 for, inter alia, arrears rental due to Transnet in respect of the
lease agreement which the parties had entered into previously. One of the te rms
of the acknowledgment of debt was that BCMM would make payment in
respect of the arrears in 12 equal instalments of R1 047 111,60 per month,
commencing on 31 July 2025. Any default would result in the full sum of the
arrears with interest becoming due and payable immediately, and Transnet
would be entitled to proceed for the immediate recovery of the outstanding debt
without notice to BCMM. In the event of summons already having been issued,
the acknowledgment of debt would be made an order of court, fo llowed by
appropriate legal proceedings including a claim for, inter alia, attorney and
client costs, should BCMM also default in terms of the court order. Any
document purporting to be a certificate of balance would be prima facie proof of
the indebtedness with sufficient probative value for Transnet to obtain summary
judgment or provisional sentence against BCMM in any court for the amount
stated in the certificate. The acknowledgment of debt further states in
mandatory terms, that in the event of “ the matter” having proceeded to
litigation, a settlement agreement had to be concluded by the parties, containing
all the express provisions agreed to by them in respect of the subject matter of
the agreement.
[3] It is not in dispute that pursuant to having entered into the agreement,
BCMM has not made a single payment towards the rental of the premises. As a
consequence, Transnet elected to enforce its rights to proceed with legal action
in terms of the acknowledgment of debt, for the recovery of the full outstanding
balance.
[4] In accordance with the terms of the acknowledgment of debt, Transnet
and BCMM duly entered into a settlement agreement during May 2025, in
respect of all the monies due. The settlement agreement is, for all intents and
purposes a mirror image of the acknowledgment of debt, in essence substituting
it by way of novation as the entire and sole agreement and understanding
between the parties with respect to the debt describ ed. It also provides for either
of the parties to give the other seven days’ written notice to rectify any breach
referred to in the settlement agreement, before pursuing any contractual
remedies at its disposal.
[5] BCMM failed to pay the first instalment on or before 31 July 2025 in
accordance with the settlement agreement. During August 2025 Transnet gave
BCMM seven days’ notice to rectify this breach. BCMM failed to do so. About
two weeks later, on 27 August 2025, Transnet’ s attorneys addressed a further
demand to BCMM and its attorneys, to no avail. According to Transnet’s claim,
BCMM did not respond to the demand and made no effort to cure the breach.
[6] On 2 October 2025 Transnet instituted action against BCMM for payment
of the R12 565 339,25, together with interest and costs on an attorney and client
scale. BCMM filed its plea to Transnet’s claim five months later, on 5 March
2026. Therein it raised a special plea, purportedly in terms of s 45 of the
Intergovernmental Relations Framework Act 13 of 2005 (“the IRFA”). The
special plea reads as follows:
1. Section 45 of the Intergovernmental Relations Framework Act 13 of 2005
prohibits legal proceedings between Organs of State or Institutions of the State,
unless an intergovernmental relations dispute has been declared and all
negotiations have failed.
2. The parties attended an intergovernmental relations facilitation by the National
Minister of Cooperative Governance and Traditional Affairs and entered into the
agreement attached as T3 to the combined summons.2
3. Where it appears that there is non -compliance with such agreement, in terms of
section 45 of the said Act, the parties are obliged to go back to the facilitator who
shall deal with the matter, and deal with the intergovernmental dispute until it has
been determined by that facilitator and the relevant Minister that all negotiations
have failed.
4. The Plaintiff’s conduct in instituting the action in these proceedings without full
compliance with the said legislative framework’s provisions as alluded to above,
is unlawful and unconstitutional and in violation of s 45 of the Act, and as such
the Plaintiff is prohibited from instituting such action.
5. Wherefore, the defendant prays for dismissal of the plaintiff’s claim with costs, on
attorney and client scale.
[7] On 26 March 2026 Transnet delivered an application for summary
judgment against BCMM, for payment of the aforementioned sum of
R12 565 339,25 together with interest and costs. In Transnet’s affidavit
supporting summary judgment, deposed to by its regional head, it is contended
that:
(a) the special plea has not raised a triable issue and is not a bona fide
valid defence in law in that it is dilatory rather than exculpatory;
2 The settlement agreement
(b) BCMM’s reliance on s 45 of the IRFA constitutes a misinterpretation
of the applicable statutory framework and the express contractual
terms agreed to between the parties;
(c) BCMM’s opposition has been filed solely for the purposes of delaying
the action.
[8] It is contended on BCMM’s behalf that the plea of non -compliance with
the IRFA raises a valid defence and a triable issue. It seems to be BCMM’s case
that the parties should re-engage with a facilitator, or with the relevant Minister,
and that Transnet is barred from pursuing any contractual remedies until
something akin to a declarator has been issued stating that the parties have
reached a deadlock.
[9] At the hearing of the application, it was further contended that BCMM’s
approach, in seeking to rely on s 45 of the IRFA as a defence is the antithesis of
the purposes of the Act because the parties had exhausted the remedies provided
for in the legislati on. They had negotiated and engaged, BCMM had
acknowledged its indebtedness to Transnet, and they had entered into a further
agreement - all in repeated attempts to resolve the matter with the use of
intergovernmental mechanisms. Notwithstanding these efforts, BCMM
nevertheless defaulted time and time again.
[10] It is contended on Transnet’s behalf that the special plea does not seek to
invoke s 45 of the IRFA. Rather, it is a technical shield to avoid the
consequences of BCMM’s own written undertakings. The issue before me, so it
is argued, is whether a party which has already engaged in several
intergovernmental processes in terms of the IRFA, can insist that the entire
process begins afresh before legal enforcement may follow.
[11] The applicable sections of the IRFA read as follows:
1. Interpretation
(1) In this Act, unless the context indicates otherwise - . . . .
‘intergovernmental dispute’ means a dispute between different governments
or between organs of state from different governments concerning a matter –
(a) arising from –
(i) a statutory power or function assigned to any of the parties; or
(ii) an agreement between the parties regarding the implementation of
a statutory power or function; and
(b) which is justiciable in a court of law, and includes any dispute between the
parties regarding a related matter; . . . .
41 Declaring disputes as formal intergovernmental disputes
(1) An organ of state that is a party to an intergovernmental dispute with another
government or organ of state may declare the dispute a formal intergovernmental
dispute by notifying the other party of such declaration in writing.
(2) Before declaring a formal intergovernmental dispute the organ of state in question
must, in good faith, make every reasonable effort to settle the dispute, including
the initiation of direct negotiations with the other party, or negotiations through an
intermediary.
42 Consequences of declaring formal intergovernmental disputes
(1) Once a formal intergovernmental dispute has been declared, the parties to the
dispute must promptly convene a meeting between themselves, or their
representatives-
(a) to determine the nature of the dispute, including-
(i) the precise issues that are in dispute; and
(ii) any material issues which are not in dispute;
(b) to identify any mechanisms or procedures, other than judicial proceedings, that
are available to the parties to assist them in settling the dispute, including any
mechanism or procedure provided for in legislation or any agreement between
the parties;
(c) to agree on an appropriate mechanism or procedure to settle the dispute,
subject to subsection (2); and
(d) to designate a person to act as facilitator.
(2) Where a mechanism or procedure is specifically provided for in other legislation
or in an agreement between the parties, the parties must make every reasonable
effort to settle the dispute in terms of such mechanism or procedure.
(3) If the parties to a dispute fail to convene a meeting in terms of subsection (1) the
Minister may convene the meeting if-
(a) a national organ of state is involved in the dispute;
(b) the dispute is between different provinces and provincial organs of state from
different provinces; or
(c) the dispute is between organs of state from different governments that do not
fall under paragraph (a) or (b) of this subsection or subsection (4).
(4) If the parties to a dispute in a province fail to convene a meeting in terms of
subsection (1) the MEC for local government in the province may convene the
meeting if the dispute is-
(a) between a provincial organ of state and a local government or a municipal
organ of state in the province; or
(b) between local governments or municipal organs of state from different local
governments in the province.
(5) If the parties fail to attend a meeting convened by the Minister or MEC or to
designate a facilitator referred to in subsection (1) (d), the Minister or MEC may
designate a facilitator on behalf of the parties.
43 Role of facilitator
(1) A person designated as a facilitator must-
(a) assist the parties to settle the dispute in any manner necessary; and
(b) submit to the Minister or MEC for local government in the relevant province
(i) an initial report concerning-
(aa) the nature of the dispute and the precise issues that are in dispute;
(bb) the mechanism or procedure to be used to settle the dispute; and
(cc) any other matters that may be prescribed by regulation in terms of
section 47; and
(2) A report referred to in subsection (1) (b) must be submitted to-
(a) the Minister, if the report concerns a dispute referred to in section 42 (3); or
(b) the MEC, if the report concerns a dispute referred to in section 42 (4).
(3) If a dispute referred to in subsection (2) (b) affects the national interest, the
Minister may request the facilitator to submit a report to the Minister as well.
44 Assistance by Minister or MEC for local government
(1) A party to a formal intergovernmental dispute may request assistance in the
settlement of the dispute from-
(a) the Minister, if it is a dispute referred to in section 42 (3); or
(b) the MEC for local government in the relevant province, if it is a dispute
referred to in section 42 (4).
(2) On receipt of a request in terms of subsection (1) the minister or MEC may
take any appropriate steps to assist the parties in settling the dispute, including
the designation of an official in the public service or other person to act as
facilitator between the parties.
(3) A facilitator designated in terms of subsection (2) acts on the instructions of
the Minister or MEC, as the case may be.
45 Judicial proceedings
(1) No government or organ of state may institute judicial proceedings in order to
settle an intergovernmental dispute unless the dispute has been declared a formal
intergovernmental dispute in terms of section 41 and all efforts to settle the
dispute in terms of this Chapter were unsuccessful.
(2) All negotiations in terms of section 41, discussions in terms of section 42 and
reports in terms of section 43 are privileged and may not be used in any judicial
proceedings as evidence by or against any of the parties to an intergovernmental
dispute.
[12] These sections must be read in conjunction with the relevant portions of
section 41of the Constitution which provide as follows:
41. Principles of co-operative government and inter-governmental relations. –
(1) All spheres of government and all organs of state within each sphere must - . . . .
(h) co-operate with one another in mutual trust and good faith by-
(i) fostering friendly relations;
(ii) assisting and supporting one another; . . . .
(v) adhering to agreed procedures; and
(vi) avoiding legal proceedings against one another. . . .
. . . .
(3) An organ of state involved in an inter -governmental dispute must make every
reasonable effort to settle the dispute by means of mechanisms and procedures
provided for that purpose, and must exhaust all other remedies before it
approaches a court to resolve the dispute (emphasis added).
(4) If a court is not satisfied that the requirements of subsection (3) have been met, it
may refer a dispute back to the organs or state involved.
[13] It is of particular importance to note that it is not disputed that both the
acknowledgment of debt and the settlement agreement are products of
intergovernmental negotiations between the parties. Indeed, it is BCMM’s case,
as set forth in its special plea that:
(a) both parties attended intergovernmental relations facilitation;
(b) the national minister of Cooperative Governance and Traditional
Affairs (“COGTA”) was the facilitator;
(c) the settlement agreement was a product of such facilitation.
[14] In the circumstances I have some difficulty in understanding what it is
that BCMM expects Transnet to do with respect to the forward conduct of this
matter. BCMM seems to place some reliance on the SCA judgment in Eskom
Holdings SOC v Resilient Properties and Others 3 in support of its contention
that Transnet has not made every reasonable effort to settle what it refers to as
“the dispute” , to resolve it by whatever mechanism or procedure available
outside court and to avoid judicial proceedings before a genuine attempt has
been made to settle “the dispute”. It is contended that on this basis it is
questionable whether the action is ripe for adjudication. It is also argued that
there is another defence, which stands independently. This defence is whether
the IRFA applies to this matter at all. In rather cursory heads of argument, senior
counsel has contended, what appears to be somewhat tongue in cheek, that this
too is a triable issue which, if resolved in BCMM’s favour, would have Transnet
non-suited.
[15] I am not sure what to make of these submissions. There seems to me to be
no reason why this court, as presently constituted should firstly, not be in a
position to decide whether the IRFA applies, and secondly, if it does, to what
extent it has been compl ied with. Differently put, the ambit and nature of the
resistance to summary judgment in my view, is nothing other than a duplication
of the special plea, and can, in these circumstances, be decided on the papers.
[16] To my mind BCMM’s reliance on Eskom Holdings is misplaced. In that
matter Petse DP considered three matters, two of which featured Eskom as the
appellant. In these two matters, the primary concern raised was whether
Eskom’s conduct, in interrupting the bulk supply of electricity to two
municipalities (to coerce these municipalities to pay their debts to Eskom) was
defensible on both constitutional and statutory grounds. Eskom had provided
electricity to municipalities which in turn sold the electricity to other customers
or end -users. The municipalit ies failed to pay Eskom. When litigation
3 2021 (3) SA 47 SCA
commenced, the two municipalities owed Eskom over R1,2 billion and half a
billion rand respectively. Eskom commenced interrupting the supply of
electricity, extending the interruptions incrementally, until the point of total
terminations unless the municipalities made substantial payments to reduce their
indebtedness to Eskom. It was not in dispute that the municipalities had
repeatedly failed to honour their payment arrangements with Eskom. In
justifying its stance Eskom stated that the respondents (who were end -users of
electricity in the scenario) were not without a remedy in that it was open to
them to seek a mandamus against the municipalities directing them to pay their
debts which would obviate the need for Eskom to implement the decision to
interrupt the electricity supply. In dealing with this aspect, Petse JA noted that it
was cold comfort to suggest that end users of electricity could seek a mandamus
directing delinquent municipalities to pay their debts i n circumstances where it
was known that they were unable to do so. 4 Over and above this, the end users
were not in default. They had paid their debts to the municipalities. The end
users also contended but that Eskom had not exhausted the mechanism provided
for in s 41 of the Constitution and s 40 of the IRFA to resolve its disputes with
the municipalities before taking these radical interruption decisions. 5 One of the
defences which Eskom raised was that s 41 of the Constitution and sections 40
and 41 of the IRFA were not applicable because there was no ‘dispute’ between
Eskom and the two municipalities. 6 To this end, Eskom contended that the
municipalities had unequivocally admitted liability, had undertaken to settle
their debits over an agreed period, and had undertaken to pay for their current
consumption of electricity when billed, but had failed to honour these
undertakings. In the court of first instance, Hughes J said the following:
4 Eskom Holdings para 19
5 Eskom Holdings para 22
4 Eskom Holdings para 19
5 Eskom Holdings para 22
6 Eskom Holdings para 23
‘It is apparent that there is a dispute with regard to payments due to Eskom by the two
municipalities concerned. It is common cause that both parties have constitutional
duties and obligations towards the public at large. Both parties in my view, have failed
the public at large; on the one hand we have the delinquent municipalities and on the
[other] hand we have Eskom having not been paid by the municipalities opting to
deprive the public of basic services in terms of the Constitution and the Bill of Rights.
In conclusion it is evident to me that Eskom and the municipalities failed to adopt the
dispute mechanism at their disposal in terms of IRFA . . . . I agree with the amici that
in this instance, the failure to pursue the process and mechanism, as is found in IFRA
(sic), would constitute a ground for review.’7
[17] On appeal, it was contended on behalf of one of the end users that
because of the egregious nature of the rights likely to be violated by the
termination of electricity to a municipality, s 21(5) 8 should be interpreted so as
to require prior judicial authorisation of any decision by Eskom to interrupt or
terminate the supply of electricity to a municipality. 9 This submission did not
receive the approval of the appeal court. Petse JA did however, find that when it
comes to municipalities and the distributors of electricity, further considerations
would come into play. At paras 58 to 61 of Eskom Holdings, the Court said the
following:
‘Terminating the supply of electricity to an entire municipality in circumstances
provided for in s 21(5) would be a radical step. Such reduction or termination of the
supply of electricity would adversely affect every consumer within the affected
municipality. Indeed, it would have the effect of collapsing the entire municipality,
rendering it unable to fulfil its constitutional and statutory mandate to provide basic
services. . . . And a municipality whose electricity supply is terminated by Eskom
services. . . . And a municipality whose electricity supply is terminated by Eskom
would not be able to “give members of the local community equitable access to the
7 Eskom Holdings para 29
8 (of the Electricity Regulation Act 4 of 2006, referred to in Eskom Holdings as the ERA)
9 Eskom Holdings para 53
municipal services to which they are entitled” as required by s 4(2)(f) of the
Municipal Systems Act. Nor would such a municipality be able to provide services in
respect of water, sanitation and electricity in terms of s 9(1)(a)(ii) of the Housing Act
as these services rely on electricity for their functionality. . . . The Municipal
Structures Act also seeks to ensure sustainable, effective and efficient municipal
services, and t o promote social and economic development in a safe and healthy
environment. Without the supply of electricity to a municipality, all these
developmental and transformative goals would be nothing more than a dream deferred
with deleterious effects to local communities.’
[18] In finding that Eskom was required to comply with the IRFA before
taking the decision to interrupt electricity supplies, Petse JA placed due and
proper emphasis, in my view, on the fact that the IRFA is that very legislative
measure which is contemplated in s 41(2) of the Constitution, describing the
position as follows:
‘[63] . . . . In its preamble, 10 the broad object of s 41 is taken further by stating,
amongst other things, that “all spheres of governmen t must provide effective,
efficient, transparent, accountable and coherent government for the Republic to secure
the well -being of the people and the progressive realisation of their constitutional
rights” (emphasis added). It goes on to state that the pervasive need for government to
redress the legacies of apartheid and discrimination are “best addressed through a
concerted effort by go vernment in all spheres to work together and to integrate as far
as possible their actions in the provision of services, the alleviation of poverty and the
development of our people and our country.” . . . . In particular s 4 of the IRFA states
that its object is:
“[T]o provide within the principle of co -operative government … a framework for the
national government, provincial governments and local governments, and all organs of state
national government, provincial governments and local governments, and all organs of state
… to facilitate coordination in the implementation of policy and legislation including –
10 (that is the preamble to the Constitution)
…(b) effective provision of services;
…(d) realisation of national priorities.” . . . .
[65] Section 40 of the IRFA, which is headed “Duty to avoid intergovernmental
disputes” provides:
“All organs of State must make every reasonable effort –
(a) to avoid intergovernmental disputes when exercising their statutory powers or performing
their statutory functions (emphasis added); and
(b) to settle intergovernmental disputes without resorting to judicial proceedings.
Any formal agreement between two or more organs of state in different governments
regulating the exercise of statutory powers or performance of statutory functions, including
any implementation of protocol or agency agreement, must include dispute -settlement
mechanisms or procedures that are appropriate to the nature of the agreement and the matters
that are likely to become the subject of a dispute (my emphasis).”
. . . .
[74] . . . .The real disputes concerned the manner in which these two municipalities
could be enabled or empowered to pay their debts to Eskom and thus whether it was
appropriate in the circumstances to interrupt the supply of electricity to exact payment
from them. . . .
[76] Moreover, in signing the acknowledgments of debts the municipalities did not
thereby consent to the interruption of electricity. . . .
[78] I elaborate on why I earlier held that Eskom was required to comply with s 41(3)
of the IRFA before embarking on the course it had chosen in order to extract payment
from the ELM and the TCLM. 11 Municipalities bear certain obligations to provide
their communities with basic services, including electricity. The source of these
obligations is the Constitution itself, buttressed by a number of statutory provisions. If
any one of these obligations is breached by the municipality, the Constitution provides
the necessary remedies to resolve the breach.
11 (the two municipalities involved)
[79] As an organ of state, Eskom bears certain constitutional duties. The relationship
between Eskom on the one hand and the ELM and the TCLM on the other is more
than merely a contractual one regulated purely in terms of the ESAs that the parties
concluded. Eskom supplies bulk electricity to the municipalities which, in turn, have a
concomitant duty to supply it to the end -users. The unique feature of this relationship
is that Eskom, as an organ of state, supplies electricity to local spheres of government
to secure the economic and social well -being of the people. This then brings the
relationship within the purview of IRF A (my italics). . . .
[81] In paragraph 77 above, mention is made that Eskom itself realised that the
parlous state in which the ELM and the TCLM are warranted intervention by the
provincial government and, if need be, the national government. But this avenue was
not explored because Eskom was not prepared for the process to unfold. . . .
[88] There is one crucial fact that is uncontentious in relation to Eskom’s appeals. It is
that Eskom’s decision to interrupt bulk electricity supply to the ELM and the TCLM
was used as leverage to extract payment.’
[19] There are a number of obvious reasons why Eskom Holdings is
distinguishable from the matter at hand. The list is not exhaustive:
a. The relationship between Transnet and BCMM is of a purely
contractual nature, in the nature of a lease agreement.
b. There is nothing radical about the action which Transnet has
instituted. It is in terms of an acknowledgment of debt reiterated in
its settlement agreement with BCMM, both of which have been
products of negotiation in order to avoid litigation.
c. Consumers are not affected by the lease agreement/contract, the
acknowledgment of debt based on the lease agreement, and the
settlement agreement based on the acknowledgment of debt
between the parties and/or BCMM’s failure to comply with the
agreement, its acknowledgment of debt and ultimately, the
settlement agreement.
d. The lease agreement, the acknowledgment of debt and the settlement
agreement are not products of the exercise of statutory powers or in
the performance of statutory obligations, including powers and
obligations of organs of government regulated by the Constitution in
order to provide effective, efficient, transparent, accountable and
coherent government for the Republic to secure the well-being of the
people and the progressive realisation of their constitutional rights,
as set forth in the IRFA’s preamble, which preamble pertinently
traverses the mischief which this legislation seeks to address.
e. It also has nothing to do with the government needing to redress
poverty, underdevelopment and marginalisation of people and
communities as referred to in IRFA’s preamble.
f. In particular, it has nothing to do with provision of basic services to
the people, as also referred to in IRFA’s preamble.
g. It is necessary to emphasise that this matte r is not one where
Transnet has made certain stifling and unrealistic decisions which
have rendered BCMM unable to fulfil its constitutional obligations
to its citizenry, resulting in environmental and socio -economic
catastrophe.12
[20] Counsel for BCMM has also referred me to RAF v Taylor and related
matters13 read together with the Constitutional Court judgment of Madlanga J in
12 See for example Eskom Holdings v Lekwa Ratepayers Association 2022 (4) SA 78 SCA at paras 29 – 31,
supporting the dictum of Eskom Holdings v Resilient Properties. As an obiter point in the matter at hand,
Unterhalter AJ commanding the minority decision in Eskom Holdings Soc Ltd v Vaal River Development
Association 2023 (4) SA 325 CC held that IRFA did not apply to the dispute between Eskom and the
municipalities, and that the SCA in Resilient Properties and Vaal River Development had fallen into error on this
score, taking into consideration the facts of those matters.
score, taking into consideration the facts of those matters.
13 2023 (5) SA 137 SCA
Eke v Parsons 14 as purported authority for the contention that the settlement
agreement constituted a compromise of an earlier dispute between the parties
because the parties had agreed to new terms in substitution of their existing
rights and obligations. In Taylor, so it is contended, the SCA reiterated the
principles outlined in Eke and confirmed that a compromise extinguishes
disputed rights and obligations, puts an end to litigation, and has the effect of
res iudicata. That being the case, it is argued, the fact that BCMM has also
defaulted in terms of the settlement agreement which is effectively a
compromise, gives rise to new contractual rights and obligations which exist
independently of the original cause of action. Once a compromise has been
reached, says the defendant, the parties are precluded from proceeding on the
original cause of action. It is stated in BCMM’s heads of argument, that with
this legal exposition in mind, it follows that the breach of the settlem ent
agreement is a new dispute and a new cause of action between two organs of
state which is governed by the IRFA in its own right. The argument seems to
be, that in spite of the fact that BCMM has defaulted with respect to the same
debt over and over again, because there is a settlement agreement hovering in
the background providing for payment of the debt in 12 bite -size chunks as
opposed to a demand for payment of the entire amount, which would normally
be the case, the parties must return to the dra wing board and negotiate further,
ostensibly under the auspices of the IRFA. It has further been suggested that the
issue of whether the IRFA applies to this “dispute” at all is a triable issue which,
if resolved in BMCC’s failure would have Transnet non-suited.
[21] Not only is there no logic in this argument, but it seems, in my view, to be
taking undue advantage of the IRFA behind a makeshift shield of a misplaced
allegiance to legislation that was cl early not designed to cater for this type of
allegiance to legislation that was cl early not designed to cater for this type of
14 2016 (3) SA 37 CC
situation. As stated by Transnet’s counsel, BCMM seeks to invoke the IRFA, not
as an instrument of cooperative government, but as a technical shield to avoid
the consequences of its own written undertakings.
[22] I have been at pains to illustrate, with reference to the Eskom cases
(which have their own internal dynamics not relevant to this matter), that the
main purpose of the IRFA is to secure the wellbeing of the people and the
progressive realisation of their constitutional rights. That is the principle. As set
forth in its preamble, it is there to establish a framework for addressing the need
for government to redress poverty, underdevelopment and the marginalisation of
the people and communities. The IRFA exists to facilitate the resolution of inter-
governmental dispute s in the most cost -effective manner, with the lowest
possible impact on the public purse. Its purpose is clearly not, as pointed out by
Transnet’s counsel, to provide a perpetual procedural refuge to an organ of state
that has already resolved the dispute, acknowledged liability and thereafter has
persisted in failing to honour the agreement reached.
[23] The assertion that an applicant should be non -suited for non -compliance
or voluntary partial compliance with the provisions of s 40 of the IRFA has been
raised before in this Division. In Enoch Mgijima Municipality v Minister of
Finance and Others 15 Brooks J referred to defences raised (quite similar to the
ones at hand I might add), as “technical points” , and correctly so in my view. In
dealing with the history of that matter, where dispute resolution mechanisms
had already been invoked under the IRFA, albeit without success, Brooks J said
the following:
15 (4351/2022) [2022] ZAECMKHC 125 (30 December 2022)
‘[21] On these facts, in my view, there is no room to argue successfully that the
applicant was expected to invoke the provisions of section 41 of the
Intergovernmental Relations Framework Act 13 of 2005 once again before
approaching the court. The following statement again drawn from Oliver Reginald
Tambo District Municipality v Independent Electoral Commission and Others supra at
para [16] is apposite to the circumstances of this matter:
“In such circumstances it is difficult to imagine what else the applicant could have
done
in an attempt to settle the dispute that had arisen. There was also no obligation on the
part of the 1 st respondent as an Organ of State to make every reasonable effort to
resolve
the dispute; what was required was a response to the applicant’s letter followed by a
genuine attempt to resolve the dispute.”16
. . . .
[22] Consequently, in my view there is no merit in any of the technical points
adopted for argument on behalf of the respondents. It is to be noted that no argument
was advanced by counsel appearing on behalf of the respondents against that placed
before the court on behalf of the applicant to address the requirements of an
interlocutory interdict and the sufficiency of the applicant’ s case in this regard. Such
an approach adopted by or on behalf of the participating respondents appears to be a
deliberate step away from the spirit and provisions of the Intergovernmental Relations
Framework Act 13 of 2005. Such a step is regrettable particularly where the resultant
arguments adopted are devoid of merit and invite the undesirable prospect of an
adverse costs order being made against the respondents.’
[24] In the matter before me. there is no d ispute between the parties, apart
from a technical defence as to whether the steps taken by the parties constitute
due compliance if the IRFA is applied. I am not persuaded, notwithstanding the
steps which have already been taken by the parties to avoid litigation, that the
steps which have already been taken by the parties to avoid litigation, that the
IRFA even finds application in this particular matter at all. This I have been at
16 1995/2021, 2021 ZAECMHC 31, 24 August 2021
pains to illustrate with reference to the Eskom cases (which have their own
internal dynamics), all of which have, to a greater or lesser extent, impacted
directly on the people and their constitutional rights to such an extent that the
people (and not other governmental institutions) resorted to litigation against
Eskom. On the other hand the matter before me arises from a purely contractual
relationship. There is nothing before me to suggest that this lease agreement has
had an impact on the people and their constitutional rights. Considered in terms
of the definition of an intergovernmental dispute in section 1 of the IRFA, it
does not pass muster as an intergovernmental dispute. The definition which I
quoted earlier, states that an intergovernmental dispute is one concerning a
matter arising from a statutory power or function assigned to any of the parties
or an agreement between parties regarding the implementation of a statutory
power or function. That is the starting point. If there is no dispute between the
parties on this score (as in the matte r before me), BCMM cannot be seen to
argue in the alternative, so it would seem, that there may be a dispute about
whether there is a dispute, which is a triable one.
[25] There is no harm in the fact that the parties participated in an out of court
facilitation process which culminated in a settlement agreement. This happens
regularly and is generally encouraged immaterial of whether the parties are
government institutions or not. The fact is that BCMM has been in default of
complying with the settlement agreement for over a year. This is not in dispute.
There is no “intergovernmental relations dispute” which needs to be referred
back to a facilitator as alluded to in the special plea. Nor has BCMM pleaded
any other defence – not in its special plea and not when pleading over.
[26] There is nothing before me to elevate this matter to one which cannot be
[26] There is nothing before me to elevate this matter to one which cannot be
disposed of in terms of Rule 32 of the Uniform Rules of this court. Transnet has
founded its claim upon admitted written agreements addressing BCMM’s
indebtedness to it. The amount of the debt has been liquidated and BCMM is in
clear breach of its obligations to pay, and has been for over a year. Transnet’s
claim is clear, certain and enforceable by way of a claim for summary judgment.
There is no triable issue between the parties to j ustify a denial of the relief
which Transnet seeks. On the particular facts of this matter, BCMM is a
recalcitrant debtor whose technical defences have no prospect of success, and
which have been raised solely for the purpose of delay. 17 Simply stated, BCMM
has failed to discharge the onus (which has shifted to it), of showing the
existence of a genuine triable issue.18
[27] Unfortunately, as in the matter of Enoch Mgijima Municipality (which
happened to have been the successful party in that matter), the unsuccessful
party before me has, and regrettably so, adopted a step which to my mind
constitutes an unnecessary abuse of the true spirit and purpose of the IFRA, and
I see no reason w hy costs should not follow the result. The settlement
agreement is silent on issues such as interest, the nature of any proposed costs
order and the scale thereof. In the premises, the order below can only
incorporate the usual mora interest.
ORDER:
1. Judgment is granted against the defendant (Buffalo City
Metropolitan Municipality) for payment in the sum of
R12 565 339,25.
2. The defendant shall pay interest on the aforesaid amount a
tempore morae calculated from 1 August 2025 (in terms of the
settlement agreement), until the date of final payment.
17 See Joob Joob Investments (Pty) Ltd v Stocks Mavundla Zek Joint Venture 2009 (5) SA 1 (SCA)
18 See Standard Bank of South Africa Ltd v Franzsen (4523/23 [2026] ZAWCHC 132 (19 March 2026)
3. The defendant shall pay the plaintiff’s costs of suit with
counsel’s costs to be determined on scale B.
____________________________
I.T. STRETCH
JUDGE OF THE HIGH COURT
Counsel for the plaintiff/applicant: M. Somandi
Instructed by Bate Chubb & Dickson Inc.
KUGOMPO
Tel. 043 701 4500
Email: tamryn@batechubb.co.za
Ref. C MACOZOMA/tb/T7/MAT55482
Counsel for the defendant/respondent: Ms Z. Mashiya
Instructed by: Makhanya Attorneys
KUGOMPO
Tel. 043 742 3049
Email: makanyaelias70@gmail.com
Ref. ENM – MAKHANYA
Date heard: 23 June 2026
Date handed down: 1 September 2026