Brandfort Forum and Others v Masilonyana Local Municipality and Others (4949/2021) [2021] ZAFSHC 288 (5 November 2021)

IN THE HIGH

COURT OF SOUTH AFRICA

FREE STATE

PROVINCIAL DIVISION

Case No.: 4949/2021

In the matter between:

BRANDFORT FORUM 1st Applicant

INA BEUKES N.O.

2nd Applicant

FRANS BESTER POSTHUMUS N.O.

3rd Applicant

JOHAN

ALBERTUS FOURIE N.O. 4th Applicant

(The second to fourth applicants are cited in their capacities

as the trustees of the Masilonyana Brandfort Forum Trust:

IT001914/2021(T))

and

MASILONYANA

LOCAL MUNICIPALITY

1st Respondent

LEJWELEPUTSWA

DISTRICT MUNICIPALITY 2nd Respondent

MAFUMA CONSULTING (PTY) LTD 3rd Respondent

Coram: Opperman, J

Date of hearing: 4 November 2021

Order Delivered: 5 November 2021

Reasons for Judgment: The reasons for judgment were handed down electronically by circulation to the parties’ legal representatives by email and release to SAFLII on 11 November 2021. The date and time for hand-down is deemed to be 11 November 2021 at 15h00.

Summary: Urgent application – interim interdict pending review and/or declaratory order – decision and conduct of municipality to install pre-paid electricity meters

REASONS FOR

JUDGMENT

INTRODUCTION

[1] The simple solution to this case would have been for the first respondent to place its cards on the table and show the legality of their decisions and conduct. They had ample opportunity to do so. It would have spared costs, agitation and litigation that caused and causes distrust between the very two entities; the local municipality and the residents, that must work together in Brandfort to ensure democracy and efficacy to serve the people of the Republic of South Africa. The Supreme Court of Appeal said it all in Kalil N.O. and Others v Mangaung Metropolitan Municipality and Others (210/2014) [2014] ZASCA 90; [2014] 3 All SA 291 (SCA); 2014 (5) SA 123 (SCA) (4 June 2014) at paragraph [30]:

…This is public interest litigation in the sense that it examines the lawfulness of the exercise by public officials of the obligations imposed upon them by the Constitution and national legislation. The function of public servants and government officials at national, provincial and municipal levels is to serve the public, and the community at large has the right to insist upon them acting lawfully and within the bounds of their authority. Thus where, as here, the legality of their actions is at stake, it is crucial for public servants to neither be coy nor to play fast and loose with the truth. On the contrary, it is their duty to take the court into their confidence and fully explain the facts so that an informed decision can be taken in the interests of the public and good governance. As this court stressed in Gauteng Gambling Board and another v MEC for Economic Development, Gauteng, our present constitutional order imposes a duty upon state officials not to frustrate the enforcement by courts of constitutional rights. (Accentuation added)

[2] In GGB & another v MEC for Economic Development (620/2012) [2013] ZASCA 67 (27 May 2013) at [52] compliance to constitutional order was stressed:

Our present constitutional order is such that the State should be a model of compliance. It and other litigants have a duty not to frustrate the enforcement by courts of constitutional rights. In Tswelopele Non-Profit Organisation v City of Tshwane Municipality 2007 (6) SA 511 at para 17, this court stated the following:

‘This place intense focus on the question of remedy, for though the Constitution speaks through its norms and principles, it acts through the relief granted under it. And if the Constitution is to be more than merely rhetoric, cases such as this demand an effective remedy, since (in the oft-cited words of Ackermann J in Fose v Minister of Safety and Security) “without effective remedies for breach, the values underlying and the right entrenched in the Constitution cannot properly be upheld or enhanced”:

“Particularly in a country where so few have the means to enforce their rights through the Courts, it is essential that on those occasions when the legal process does establish that an infringement of an entrenched right has occurred, it be effectively vindicated.” (Accentuation added)

[3] On 20 October 2021 the third respondent began with the installation of pre-paid electricity meters in the town Brandfort, Free State Province; this to replace the conventional electricity metering system used up to date.

[4] In an attempt to improve service delivery, the first respondent (the “Municipality”), that is “cash strapped”,[1] embarked on a project to increase its recovery rate on fees for services rendered; in this instance, electricity. The project is the installation of the said pre-paid electricity meters. Their intentions are praiseworthy indeed but their actions must be legal.

[5] It is the case for the applicants that the process employed to achieve this goal is not proper and might be to the detriment of the residents of Brandfort.

[6] In Case No. 4903/2021 Masilonyana Municipality (first applicant then and the first respondent in the instance) and Mafuma Consulting (Pty) Ltd (second applicant then and third respondent in the instance) brought an urgent and ex parte application on 21 October 2021 wherein one Frans Postimus, Hennie Pretorius and Werner Lochner were the respondents. A rule nisi was issued, returnable on 11 November 2021, calling upon the respondents to show cause, if any, why the following orders should not be confirmed:

2.1 That the respondents be interdicted and restrained from in any manner whatsoever, directly – or indirectly and/or preventing the second applicant from installing pre-paid electricity meters within the Brandfort and Theunissen districts in the Free State.

3. That the order set out in paragraph 2.1 shall serve as an interim interdict with immediate legal force and effect pending the aforesaid return date.

[7] During the application the Municipality assured the Court under oath that:

25. The Second Applicant is duly appointed and authorised to perform the said installation works in Brandfort and Theunissen and there exist no cause for preventing it from doing so (to say the least surely not perceived failure to supply information outside of the confines of PAIA).

[8] The above matter was postponed by agreement between the parties to 2 December 2021 and the rule nisi extended to the same date.

[9] On the 26th of October 2021 Masilonyana Brandfort Forum launched an urgent application to interdict the installation of the pre-paid meters. The basis of the application is that the Municipality did not comply with their administrative duties to lawfully embark on the installation of the pre-paid meters. It is also alleged that the rates that are fixed for the electricity on the pre-paid tariffs are elevated and illegal.

[10] On the 26th of October 2021 the Court invited the parties to mediate the matter. The installation of the pre-paid electricity meters seems to be in the best interest of the tax-payers and the Municipality assured the Court in the 4903/2021-case that they acted lawfully. The attempt failed and the matter ended in Court as an urgent opposed motion on 27 October 2021. The Municipality opposed the application in its totality.

[11] After having heard the parties, I ruled as follows:

In result the following order was made:

1. That the applicants’ non-adherence to this Court’s rules relating to time periods and service is condoned and that the application be heard as an urgent application in terms of Rule 6(12) of the Uniform Rules of Court;

2. the application is postponed to be heard on Thursday, the 4th of November 2021 at 14:00;

3. the applicants shall file their supplementary affidavit before / on Friday, the 29th of October 2021 at 12:00;

4. the respondents shall file their opposing affidavits before / on Monday, the 1st of November 2021 at 12:00;

5. the applicants shall file their replying affidavits before / on Wednesday, the 3rd of November 2021 at 12:00;

6. the parties shall file their heads of argument before or on Thursday, the 4th of November 2021 at 10:00;

7. costs to be costs in the application.

THE PARTIES

[12] The first applicant is the Masilonyana Brandfort Forum, an association with perpetual succession, which conducts its activities in Masilonyana Brandfort, Free State Province. The first applicant conducts its business as the Masilonyana Brandfort Forum Trust (MBF Trust), IT001914/2021(T).

[13] As is evident from the constitution of the first applicant, the objectives of the first applicant include:

1. To serve the interests of the residents of Brandfort in general;

2. To act as a mouth piece for all the taxpayers and the residents;

3. To identify and rectify problem areas in the interest of the taxpayers and residents of Brandfort; and

4. To institute and defend legal proceedings.

[14] The second to fourth applicants represent the MBF Trust in their capacities as trustees. They were duly authorised to act as such in terms of a Letter of Authority issued by the Master of the High Court on 13 August 2021 with reference No. IT001914/2021(T).

[15] The first respondent is the Masilonyana Local Municipality, a municipality contemplated in section 2 of the Local Government: Municipal Systems Act 32 of 2000, operating under the care of the municipal manager with its offices situated at 47 Le Roux Street, Theunissen, Free State.

[16] The second respondent is the Lejweleputswa District Municipality, a municipality contemplated in section 2 of the Local Government: Municipal Systems Act 32 of 2000, operating under the care of the municipal manager with its offices situated at the corner of Jan Hofmeyer and Tempest Streets, Welkom, Free State Province.

[17] The Masilonyana Municipality apparently resorts under the Lejweleputswa District Municipality.

[18] The third respondent is Mafuma Consulting (Pty) Ltd, a private company duly registered as such in terms of the Statutes of the Republic of South Africa with its address situated at Building 6, Tuscany Office Park, Coombe Place, Rivonia, Gauteng. The third respondent was joined as it has a direct and substantial interest in the relief sought. The third respondent did not join the litigation and there lie no application for a costs order against it.

THE

RELIEF SOUGHT

[19] The relief sought, on an urgent basis, was for an interim interdict restraining the first, second and third respondents from installing the pre-paid electricity meters pending a review by the applicants of the first respondent’s decision to install the pre-paid electricity meters and/or the determination of the tariffs and charges related thereto for the distribution of electricity and/or the appointment of the third respondent; alternatively, “on an unfair administrative action basis, alternatively both the sources of review”; alternatively that the first and/or second respondents be interdicted and restrained from installing any pre-paid electricity meters in Brandfort pending an application for a declaration that the first respondent’s conduct is unconstitutional and to be set aside.

[20] In the end; as to costs, the applicants held that the Court has a discretion regarding costs. If the Court deems the opposition to be unreasonable a costs order should follow at this stage, alternatively the costs should be reserved for consideration in the intended review/application for declaratory relief. The respondent has not; it was alleged, complied with the duty towards Court as enunciated in the matter of Kalil NO v Mangaung Metro Municipality 2014 (5) SA 123 (SCA).

THE OPPOSITION TO

THE RELIEF SOUGHT

[21] The opposition to the relief was first and foremost that the application lacks urgency. The issue was ruled upon on 27 October 2021 and reasons that are the following were handed down on 5 November 2021.

[1] The judgment turns on the urgency of the application only. After a ruling that the matter be enrolled on an urgent basis and that the non-adherence to the Court’s rules relating to time periods and service is condoned in terms of Rule 6(12) of the Uniform Rules of Court, I indicated that the reasons for the ruling will follow in due course.

[2] It is trite that the Masilonyana Municipality’s (the “Municipality”) accounting system in regard to electricity supply of the town and surrounding area has been ineffective for a substantial period of time. It seems as if the poor management of the business of the Municipality caused numerous disputes to be declared between the Municipality and the citizens of Brandfort. Service delivery was affected.

[3] The application revolves around the installation of pre-paid electricity meters within the Municipality and specifically Brandfort. It is alleged that the Municipality, without consultation with the citizens of the town and illegally so, started to install the pre-paid meters on 18 October 2021. The application is for the installation to be stopped immediately because it is prohibited and unlawful.

[4] The illegality lies, among others and allegedly, in the fact that the proper and legislatively prescribed procurement procedure was not followed when Mafuma Consulting (Pty) Ltd (Mafuma); the third respondent, was appointed to install the meters. The bylaws of the Municipality, again allegedly so, do not allow for the sale of electricity by means of pre-paid meters.

[5] The most worrisome aspect of the case is the arrangement between Mafuma and the Municipality and an entity known as Ideal Prepaid. It is common cause that Ideal Prepaid receives the payment relating to the pre-paid vouchers directly from the consumers and pays it over to Mafuma after Ideal Prepaid had deducted its fees. Mafuma then deducts its fees and only then does the excess gets paid over the Municipality. On receipt of the aforesaid payment the Municipality also deducts its fees and charges and then, at long last, the remainder of the funds reaches ESCOM. The consequences and effect on the costs for the tax payer are worrisome. The third respondent must also be licenced by NERSA; the National Energy Regulator of South Africa, to trade in electricity if they do.

[6] The first dispute on the recovery of debts for electricity supply was declared as far back as 24 October 2019. Other dates that highlighted the issue are 12 August 2021, 23, 24, 25 and 26 June 2021, 28 April 2021, 7 May 2021, and 19 October 2021.

[7] Urgency does exist without any doubt. The first applicant in due haste endeavoured to engage with the Municipality but was excluded from the decision making. Most importantly is that there is no prove before the court that the installation of the meters is in accordance with the law. If the rule of law is violated it must be stopped immediately. The prejudice, should it be allowed to persist for even a brief period, is obvious. Expenditures have been incurred that might not be legislatively explicable and the Municipality; indirectly the citizens of Brandfort, might suffer substantial losses. The applicants did indeed consider this issue properly before they came to court. In Luna Meubel Vervaardigers (Edms) Bpk v Makin and Another (t/a Makin's Furniture Manufacturers) 1977 (4) SA 135 (W) at 137E – F,[2] Coetzee JP said:

Practitioners should carefully analyse the facts of each case to determine, for the purposes of setting the case down for hearing, whether a greater or lesser degree of relaxation of the Rules and of the ordinary practice of the Court is required. The degree of relaxation should not be greater than the exigency of the case demands. It must be commensurate therewith.

[8] The parties, wisely so, agreed for the papers to be supplemented and the matter to be postponed to grant the parties the opportunity to place all the available evidence on record in order for the dispute to be adjudicated judicially.

ORDER

[9] In result the following order was made:

8. That the applicants’ non-adherence to this Court’s rules relating to time periods and service is condoned and that the application be heard as an urgent application in terms of Rule 6(12) of the Uniform Rules of Court;

9.

the application is postponed to be heard on Thursday, the 4th of November 2021 at 14:00;

10. the applicants shall file their supplementary affidavit before / on Friday, the 29th of October 2021 at 12:00;

11. the respondents shall file their opposing affidavits before / on Monday, the 1st of November 2021 at 12:00;

12. the applicants shall file their replying affidavits before / on Wednesday, the 3rd of November 2021 at 12:00;

13. the parties shall file their heads of argument before or on Thursday, the 4th of November 2021 at 10:00;

14. costs to be costs in the application.

[22] On the 4th of November 2021 the issues were ventilated. The first respondent maintained that:

1. The application lacks a prima facie probability to ultimate success and thus the applicants have not proven a prima facie right to the relief sought. The allegation is that the applicants have made bold, sweeping and vague allegations concerning their apparent gripe with the installation of the pre-paid meters and “as we have been told ad nauseam why they find themselves in this darkened position.”

2. The issue of “no irreparable harm” came to the fore. The applicants have not alleged that once the pre-paid meters have been installed and if they are successful in a proposed review, that these meters cannot simply be removed.

3. The third issue was one of convenience. The first respondent tied it in with irreparable harm because the Municipality stand to suffer more prejudice should the court order be granted.

4. Fourthly the discretion of the Court in regard to interim interdicts were raised in that the Court should refuse the relief in that the interest of justice dictates that the interdict should be refused.

THE FACTS

[23] After hearing arguments for the applicants and the respondent and having studied the affidavits and other evidence on record I find that the following facts were proven:[3]

1. There is not any prove of a resolution that was taken by the first respondent’s council to install and sell electricity by means of pre-paid meters. The embarrassment to the first respondent is that they could not attach the resolution to the Court documents and that previous court orders to make the resolution available to the residents came to nothing.

2. There is not any evidence that proper community participation took place prior to the decision to use an external service provider.

3. There is not any evidence that proper procurement by means of competitive tender process was followed before the third respondent was appointed. The contract that was supplied to the Court shows that it is not properly signed and it is a copy.[4] It has no evidentiary value at all as it is. The appointment of the third respondent seems to be unlawful on the evidence before court.

4. The manner in which tariffs for the supply and sale of pre-paid electricity has been established and fixed has not been placed before the Court and evidence by the applicants shows that it might be illegal. The tariffs are purported, by prove of current sale thereof and the receipts submitted by the applicants, to be elevated illegally.

5. There is no evidence before the Court that the third respondent is duly registered with NERSA to trade in electricity or is exempted thereof.

6. The community, by mouth of the applicants, were told that the use of the pre-paid meters will be voluntarily; the first respondent maintains that the use is compulsory and this exasperates the situation of fair administrative action towards the residents of Brandfort.

7. There is not any evidence before the Court as to what the percentages are that the service providers will gain with the installation of the pre-paid meters and the payment for electricity by the citizens. Transparency in this regard is imperative to prove that the town and its citizens will profit positively from the decision. A proper and relevant budget has not been forthcoming. The monies must be allocated to pay the ESCOM debt and improve service delivery and not line the pockets of service providers unfairly.

8. No effective information has been supplied regarding when the first respondent would have adopted applicable bylaws. No bylaws were adopted by the first respondent to the applicants’ and the Court’s knowledge that permitted the conduct that led to the authorization of the pre-paid electricity meters. If the bylaws were promulgated it was done without the applicants being aware thereof. The alternative legislation relied upon by the first respondent was not complied with.

CONCLUSION

[24] The potential for and probability of unlawful conduct in casu is real.

[25] To allow unlawful conduct to persist is irreparable harm perpetrated against the Constitution of the Republic of South Africa, 1996. To allow for unsuspecting tax payers to be victims of unlawful conduct for any period is irreparable harm. The resident does not have a choice but to pay for the electricity through the already installed; and meters to be installed. If the tariffs are illegal, it is irreparable harm.

[26] The respondents have shown with their conduct in this litigation and case 4903/2021, that there is no other remedy that will stop them to revisit their conduct than an interdict.

[27] It is apposite to warn that the public servants that are involved here might be held personally accountable for their conduct and the costs of the litigation. The tax-payer may not be expected to foot the bill for a case that could have been resolved before it went into litigation; as said above, it would have been a simple matter of putting the evidence on the table. If any party was mistaken in its actions the situation could have been remedied by mature counsel, conduct and mediation. One would hope that sanity will prevail and therefor the costs will be ordered to be in the cause.

[28] The following order is made in the interim:

1. That the first, second and third respondents are interdicted and restrained with immediate effect from installing any pre-paid electricity meters in the town and municipality of Brandfort, Free State Province pending an application for review by the applicants of the first and/or second respondent’s decision to install pre-paid electricity meters and/or to determine the tariffs/charges for the distribution and sale of electricity on pre-paid basis and/or to appoint the third respondent as service provider to install pre-paid electricity meters on the basis of the principles of legality, alternatively fair administrative action basis, alternatively both the sources of review; alternatively, pending an application for a declaration that the first and/or second respondents’ conduct is unconstitutional and to be set aside.

2. The applicants must institute the intended application(s) in paragraph 1 above within fifteen (15) court days from the date of this order. The calculation of the fifteen (15) days period to exclude the day on which this order is granted; being 5 November 2021.

3. The interdict will lapse if the intended application(s) referred to in paragraph 1 above is not instituted within fifteen (15) court days from the date of this order and will be operative until judgment has been handed down in the application(s). The calculation of the fifteen (15) days period to exclude the day on which this order is granted; being 5 November 2021.

4. The costs of this application are reserved for consideration in the intended application for review/application for declaratory relief.

M OPPERMAN, J

APPEARANCES

FOR

THE APPLICANTS

ADVOCATE N SNELLENBERG SC

T O’REILLY

SYMINGTON & DE KOK ATTORNEYS

169B Nelson Mandela Drive

Westdene

BLOEMFONTEIN

051 505 6600

jaucamp@symok.co.za

Ref: FXM3327/O’Reilly.ja

FOR THE FIRST

RESPONDENT

ADVOCATE S GROBLER SC

& ADVOCATE

HENDRIKS

KRUGER VENTER INC

68B Kellner Street

WESTDENE

051 011 2323

reception@krugerventerinc.co.za

Ref: SK/TL/MB0139

[1] Page 220 at paragraph 21 of the Indexed Bundle dated 3 November 2021.

[2] Commissioner, SARS v Hawker Air Services (Pty) Ltd [2006] ZASCA 51; 2006 (4) SA 292 at 299 par 9.

[3] See pages 300 to 344 of the Bundle dated 4 November 2021.

[4] Page 297 of the Indexed Bundle dated 4 November 2021.