Lekwa Local Municipality v Eskom Holdings SOC Ltd and Others (126/2019) [2020] ZAMPMHC 24 (8 July 2020)

IN THE HIGH COURT OF SOUTH AFRICA,

MPUMALANGA DIVISION, MIDDELBURG

(LOCAL SEAT)

CASE NO: 126/2019

In the matter between:

LEKWA LOCAL MUNICIPALITY

APPLICANT

AND

ESKOM HOLDINGS SOC LTD

1ST RESPONDENT

SOUTH AFRICAN LOCAL GOVERNMENT

ASSOCIATION

2ND RESPONDENT

PREMIER: MPUMALANGA PROVINCE 3RD

RESPONDENT

MEC: CO-OPERATIVE GOVERNANCE

AND TRADITIONAL AFFAIRS

4TH RESPONDENT

NATIONAL ENERGY REGULATOR

OF SOUTH AFRICA

5TH RESPONDENT

JUDGMENT

JUDGMENT HANDED DOWN VIA EMAIL DUE TO COVID 19. JUDGMENT DEEMED TO HAVE BEEN HANDED DOWN ON 08 JULY 2020.

BRAUCKMANN AJ

INTRODUCTION

[1] The applicant (“Lekwa”) is one of the financially challenged local municipalities in the Mpumalanga province. For the reasons set out later in this judgment, I am not going deal with the merits of the application in detail, but will touch on the important aspects that has a bearing on the judgment. I gave an ex tempore judgment on 07 July 2020, and provide my reasons for the order herewith.

[2] This is an application, brought on an extremely urgent basis, with severely truncated time-periods determined for the respondents to consider the application, decide whether they want to oppose and even less time to file opposing papers in.

[3] The applicant (“Lekwa”) seeks, amongst other, declaratory orders and an interdict against the first respondent (“Eskom”) in terms whereof this Court is asked to restrict Eskom’s rights in terms of section 34[1] of the Constitution.[2] Lekwa also applies to have the fifth respondent (“Nersa”) joined in the proceeding pending in this Court.

URGENCY

[4] According to Lekwa the urgency of the matter arose on 18 February 2020 when Eskom sent a letter to Lekwa demanding payment of the amount owed on its current account. The letter is attached and marked as Annexure "LM9" to Lekwa's Founding Affidavit. The letter concludes with the following

statements by Eskom’s attorneys:

“9. Our client demands that you pay the amount of R 1 047 770 176.00 or, alternatively, contact us with a reasonable and acceptable plan to Eskom on or before 02 April 2020.

10. Should you fail to pay or make arrangements as aforesaid, our instructions are to institute legal proceedings against you, the cost of which you will be liable for”

[5] From a reading of the letter, and Lekwa’s founding affidavit, it is apparent that it became aware of Eskom’s claim for payment of its current outstanding account since at least 18 February 2020. Since the letter was received, and replied to by Lekwa’s attorneys, no legal steps were taken by Eskom. That much is common case amongst the parties as I did not note that any summons had been issued or any other steps taken by Eskom.

[6] The Practice Directives[3] of this division is clear, and to start with, I will quote them verbatim. The urgent court is the most abused procedure / court in this division. Applicants often approaches the urgent court, without any grounds for urgency in the hope to steal a march on other litigants that patiently await their turn on the opposed roll. It has become time that these divisions Judges consistently refuse to hear applications that are not deserved of being heard in the urgent court. I have too often heard the argument that “we are here M ’lord, we might as well deal with the matter as all the affidavits have been filed. Why just ‘kick the can down the road’ ”? The argument never fails to not only schock me, but also makes me wonder as to how such a practitioner can get him/her self so far to argue accordingly without being aware of the fact that he/she is underestimating the intelligence of the judicial officer in his/her face.

[7] The Practice Directives relevant to the matter before me are:

“10.1 Urgent applications shall be heard at 10h00 on every Tuesday of each week.

10.2 Matters to be enrolled for hearing on the Tuesday at 10h00 must be filed with the Registrar by not later than 12h00 on Thursday of the preceding week to enable the Registrar to prepare and submit in time the file(s) to the judge on the urgent roll.

“10.4 The enrolment shall be guided by when urgency arose and the nature of urgency and at the hearing of the matter the court shall first consider whether the enrolment is accordance with the preceding sub-paragraphs before it deals with urgency and or merits of the application.

10.5 No application brought on urgent basis will be enrolled and heard unless the affected party or parties have been given sufficient notice of the place, date and time of the hearing of the application. This includes reasonable time to enable the affected party to prepare, file opposing papers and attend court.

10.9 In each and every matter that is brought on urgent basis, the reasons for urgency must be clearly and concisely set out in the founding affidavit and it must be clear that urgency was not self-created.

10.10 Any application brought on urgent basis will be struck from the roll if not properly enrolled and or if urgency is not evident from or established in the papers.”[Own emphasis]

[8] The practice Directives were not plucked out of the thin air by this division’s Judge President, but was carefully formulated and based on, not only his years of experience as a judicial officer, but well established principles in our case law.

[9] The law on urgency is clear. Urgent applications must be brought in accordance with the provisions of rule 6(12) of the Uniform Rules of Court, with due regard to the guidelines set out in cases such as Die Republikeinse Publikasies (Edms) Bpk vs Afrikaanse Pers Publikasies (Edms) Bpk[4] as well as a well-known case of Luna Meubelvervaardigers (Edms) Bpk v Makin and Another[5].

[10] The Practice Directives, as appears from the quoted paragraphs above, requires an applicant, in an urgent application, to set out explicitly the circumstances which render the matter urgent. It is further emphasised that while an application may be urgent, it may not be sufficiently urgent to be heard at the time selected by the applicants. Further to the aforesaid, the Practice Directives provide that should the practices regarding the proceedings in urgent application not be adhered to, and the application not be enrolled on a date or at a time that is justified, the application will not be enrolled and an appropriate cost order will be made.

[11] In the judgment of East Rock Trading 7 (Pty) Limited and another v Eagle Valley Granite (Pty) Limited and others[6] it was held:-

“The import thereof is that the procedure set out in Rule 6(12) is not there for the taking. An applicant has to set forth explicitly the circumstances which he avers render the matter urgent. More importantly, the applicant must state the reasons why he claims that he cannot be afforded substantial readdress at a hearing in due course. The question of whether a matter is sufficiently urgent to be enrolled and heard as an urgent application is underpinned by the issue of absence of substantial readdress in the application in due course. The rules allow the court to come to the assistance of a litigant because of the latter, were to wait for the normal course laid down by the rules, it will not obtain substantial readdress.

It is important to note that the rules require absence of substantial redress. This is not equivalent to irreparable harm that is required before the granting of an interim relief. It is something less. He may still obtain redress in an application in due course, but it may not be substantial. Whether an applicant will not be able to obtain substantial redress in an application in due course will be determined by the facts of each case. An applicant must make out his case in this regard.”

[12] In the well-known and widely approved judgment, In re: Several Matters On Urgent Roll 18 September 2012,[7] the Court held that:-

“Further, if a matter becomes opposed in the urgent motion court and the papers become voluminous there must be exceptional reasons why the matter is not to be removed to the ordinary motion roll. ‘The urgent court is not geared to dealing with a matter which is not only voluminous but clearly includes some complexity and even some novel points of law.’ See Digital Printers vs Riso Africa (Pty) Limited case number 17318/02, an unreported judgment of Cachalia J delivered in this division.”

[13] The Court further held that:

“Urgency is a matter of degree. … Some applicants who abuse the court process should be penalised and the matters should simply be struck off the roll with costs for lack of urgency. Those matters that justify a postponement to allow the respondent to file affidavits should in my view summarily be removed from the roll so that the parties can set them down on the ordinary opposed roll when they are ripe for hearing, with costs reserved.”[8]

[14] The abovementioned principle was once again considered in the case of Mogalakwena Local Municipality vs The Provincial Executive Council, Limpopo and others[9] in which the Court confirmed:

“I proceed to evaluate the respondent’s submission that the matter is not urgent. The evaluation must be undertaken by an analysis of the applicant’s case taken together with allegations by the respondent which the applicant does not dispute. Rule 6(12) confers a general judicial discretion on a court to hear a matter urgently …

It seems to me that when urgency is an issue the primary investigation should be to determine whether the applicant will be afforded substantial redress at a hearing in due course. If the applicant cannot establish prejudice in this sense, the application cannot be urgent.

Once such prejudice is established, other factors come into consideration. These factors include (but are not limited to): Whether the respondents can adequately present their cases in the time available between notice of the application to them and the actual hearing, other prejudice to the respondent’s and the administration of justice, the strength of the case made by the applicant and any delay by the applicant in asserting its rights. This last factor is often called, usually by counsel acting for respondents,

self-created urgency.”[Own emphasis]

THE PARTIES SUBMISSIONS ON URGENCY

[15] Lekwa states that the application must be heard urgently because if the application is heard “through normal motion procedure” it will take up to nine months to be finally adjudicated. The delay will cause Lekwa irreparable harm, as Eskom would continue delaying the matter, referring the dispute to arbitration which would, according to Lekwa, “deal with all amounts owing by Lekwa to Eskom, and the reasons for Lekwa not being in a position to pay such”. This, Lekwa argues, amounts to “forum shopping” by Eskom.

[16] There are for some undisclosed reasons fears with Lekwa that Eskom will obtain some order that would frustrate “the Order” made by Judge Mashile in another matter between the parties. I will turn to deal with the Order in so far as needed later on. Any proceedings that Eskom may consider taking in future, involving Lekwa, must first be served on Lekwa, unless it is so urgent and the service thereof will defeat the purpose of thereof. I cannot imagine, based on any facts provided in any of the affidavits before me, any dispute to be of such nature. On 20 February 2020 Eskom threatened to take legal action in order to recover the debt due to it, but that will have to be done in due course. There is absolutely no explanation by Lekwa why Nersa’s

joinder is of utmost urgency.

[17] Eskom denies that the application is urgent and argues that it amounts to an abuse of the process of the court at all. It further states that the relief sought in Lekwa’s Notice of Motion is legally incompetent. The relief is too wide and far reaching. It would not be appropriate for the Court to grant such relief without Lekwa identifying, and giving details of all and any of the disputes which it is asking the court to declare should be resolved in terms of the dispute resolution mechanism that was agreed between the parties in terms of the order of the Honourable Judge Mashile ADJP on 22 August on 22 August on 2019 (“the Mashile Order”). In terms of the Mashile Order, so argues Eskom, it was agreed between Eskom and Lekwa that the dispute relating to Eskom's entitlement to claim payment in terms of the Acknowledgement of Debt and Repayment Plan Agreement concluded between the parties on 12 May 2016 ("AOD") would be resolved in accordance with the dispute resolution mechanisms set out in the Order. It was never agreed between the parties, and the Mashile Order cannot be understood to mean that any and all disputes between Eskom and Lekwa have to be resolved in the manner as provided for in terms of the Order, and accordingly, Lekwa is not entitled to the declaratory relief which it seeks.

[18] Eskom also states that Lekwa has paid the total outstanding amount owed to Eskom in terms of the AOD. There is no longer any issue to be decided between the parties and therefore no basis for keeping the dispute resolution process

provided for in terms of the Mashile Order alive by granting the relief sought by Lekwa.

[19] According to Lekwa the urgency of the matter arose on 18 February 2020 when Eskom sent a letter to Lekwa demanding payment of the amount owed on its current account, but waited until 24 June 2020 to bring its urgent application. In its Notice of Motion it allowed Eskom only three court days to consult and file opposing papers. Eskom argues that the unilateral time periods imposed upon it by Lekwa were impossible to comply with, especially during the COVID 19 pandemic which is currently playing out.

[20] Eskom further states that he fact that Lekwa wants the Mashile Order to be interpreted, and declared to mean that all disputes between the parties should be decided in terms of the dispute resolution mechanisms in the Order, does not make the matter urgent. The Mashile Order was specifically tailored to resolve a calculation difference in that it requires the accountants of the parties to meet and debate the electricity account of Lekwa. Only if after a meeting of the accountants/auditors there still remains a dispute then NERSA would be approached. Put differently, NERSA’s involvement would only be triggered by an impasse between accountants. In that event, NERSA is also required to debate the electricity account of Lekwa. It would not be appropriate for the Court to issue a blanket order sought by Lekwa because it could result in the court ordering resolution of

disputes by accountants or by a process of debatement which has nothing to do with the accountants or debatement. The matter cannot

be urgent because no issues have been referred to NERSA, and there is no upcoming arbitration. There was also no notice of intended interruption of the power supply to Lekwa at all. The 'sanctity of the order' and the purported protection thereof does not assist Lekwa in establishing urgency as the said Order has been complied with.

DISCUSSION

[21] Lekwa is paying mere lip-service to Rule 6 (12) and Practice directive 10. The bald allegation by Lekwa that if the matter is not heard on an urgent basis, it will result in its 'untimely demise' is not supported by any facts at all. The Court is aware of the fact that Lekwa is financially not well, but that has a lot to do with the administration of Lekwa, and cannot be laid before Eskom’s door or proffered as a ground for urgency. I pause to mention that not one of the affidavits filed complied with the requirements for an affidavit, and therefore the application (opposition included0 stands to be struck off for that reason alone. I fail to comprehend how attorneys and counsel (in casu four counsels) can still overlook the lack of compliance of the act and regulations at this day and age. The more because it has been decided in this division as well as the Gauteng division that affidavits not complying with the requirements does not constitute affidavits at all[10].

[22] This is a classic example of “self-created urgency” which must be frowned upon by any Court dealing with this type of abuse. I cannot fathom any reason for urgency in this matter. It seems as if Lekwa, and their attorneys, are oblivious to the fact that the debt in terms of the AOD has been settled. On Eskom’s own version, the dispute that forms the subject-matter of the Mashile-order is not alive at all. The debt due is in respect of the current account and as argued by Eskom can never be subjected to the terms of the Mashile order as that was not the intention of the parties. The normal terms of the Electricity Supply Agreement (“ESA”) applies to the debt.

Both Eskom and Lekwa filed statements in terms of the Mashile order and the matter has been resolved. There is no reason for this Court to issue the declaratory orders because Eskom does not intend to pursue the claim in terms of the provisional sentence summons any further. The relief sought by Lekwa is moot.

[23] It is also not for this Court, sitting as an urgent Court, to interpret the Mashile-order. The Court is simply not geared for that. The time afforded to Eskom and the other respondents to consult and file opposing affidavits is not sufficient. Having regard to Eskom’s opposing affidavit, it soon became clear to me that this is not a simple matter and that it involves various other cases that are pending, finalised or about to be instituted. The matter also has a very long and complex history. The opposing affidavit filed by Eskom was filed late, but it is obvious that they endeavoured to file

on time. As there will be no prejudice to Lekwa, and because it is in the interest of justice, the late filing is condoned as requested.

[24] In urgent applications the urgency is often addressed in other portions of the founding affidavit than those under the heading of “Urgent”. One normally look at the application as a whole, as something in the founding or opposing affidavit might inform the urgency in the matter. In the current application no replying affidavit have been filed at all. Even without the replying affidavit it is clear that there are various substantial factual disputes that cannot be solved on the affidavits, as application procedures are not suited for resolving such disputes[11]. I do not intend dealing in detail with the merits of the application or opposition thereof, but am of the view that if any urgency that might have existed, and on applying the well-established rule in Plascon Evans Paints,[12] such urgency simply disappears because of a lack of any prospects of success in favour of Lekwa.

[25] There is no explanation in the founding affidavit why Lekwa waited almost 4 months before this application was launched. Then, to make matters worse, only three days are afforded to Eskom and the other roll players to file their opposing papers. The Practice Directive is clear in this regard. No application brought on urgent basis will be enrolled and heard unless the affected party or parties have been given sufficient notice of the place, date and time of the hearing of the application. This includes reasonable time to enable the affected party to prepare, file opposing papers and attend court. In each and every matter that is brought on urgent basis, the reasons for urgency must be clearly and concisely set out in the founding affidavit and it must be clear that urgency was not self-created. Any application brought on urgent basis will be struck from the roll if:

[25.1] it is not properly enrolled and/or

[25.2] if urgency is not evident from or established in the papers.

[26] Lekwa simply failed to prove that the matter is urgent.

COSTS

[27] I cannot find that the costs should not follow the event in this matter. It is difficult to see why Lekwa approached the Court in the circumstances. It could have waited for Eskom to follow the alleged incorrect procedures and raised the legal points then. If Eskom was incorrect in approaching the Court in that forum or process, its claim will be dismissed with a cost award in favour of Lekwa. The cart has been put before the horses in this matter and I am of the view that Lekwa must bear the wasted costs.

[28] I therefor make the following order:

[28.1] Condonation is granted for the late filing of First Respondent’s opposing affidavit and no order as to costs is made;

[28.2] The application is struck of for lack of urgency and improper enrolment;

[28.3] The applicant is ordered to pay First Respondent’s wasted costs, which costs include the cost of two counsel if so employed.

HF BRAUCKMANN.

ACTING JUDGE OF THE HIGH COURT OF SOUTH AFRICA

REPRESENTATIVE FOR THE APPLICANT: ADV SJ V RENSBURG SC with ADV M. MATHAPHUNA

INSTRUCTED BY: MOHLAHLA INC. info@mohlalainc.co.za

REPRESENTATIVE FOR THE 1ST RESPONDENT: ADV PL UYS with ADV L RAKGWALE (Ms)

INSTRUCTED BY: NGENO & MTETO INC. liwalam@ngenomtetoinc.co.za

DATE OF HEARING: 07 JULY 2020 (VIA ZOOM – LINK)

DATE OF JUDGMENT: 07 JULY 2020 (VIA EMAIL)

[1] 34 Access to courts Everyone has the right to have any dispute that can be resolved by the application of law decided in a fair public hearing before a court or, where appropriate, another independent and impartial tribunal or forum.

[1] 34 Access to courts

Everyone has the right to have any dispute that can be resolved by the application of law decided in a fair public hearing before a court or, where appropriate, another independent and impartial tribunal or forum.

[2] Act 108 of 1996.

[3] PRACTICE DIRECTIVE FOR MPUMALANGA DIVISION OF THE HIGH COURT ISSUED IN TERMS OF SECTION 8(3) OF THE SUPERIOR COURTS ACT 10 OF 2013 READ WITH RULE 37A (1) AND (2) OF UNIFORM RULES OF COURT AS AMENDED

[4] 1972(1) SA 773 (A) at para 782A to G.

[5] 1977(4) SA 135 (W), see further also Sikwe vs SA Mutual Fire and General Insurance 1977 (3) SA 438 (W) at 440G - 441A

[6] (2012) JOL 28244 (GSJ) at para 6 and 7.

[7] (2012) 4 All SA 570 (GSJ) at paragraph 15.

[8] At paragraph 18.

[9] (2014) JOL 32103 (GP) at para63 – 64.

[10] Anderson Insurance Underwriting Managers CC FSP No. 339695 v The Only Professional Modern Autobody CC t/a Modern Collision Repair Centre (A03/2019) [2020] ZAMPMHC 17 (11 June 2020) and Absa Bank Ltd v Botha NO and Others 2013 (5) SA 563 (GNP).

[11] National Director of Public Prosecutions v Zuma [2009] ZASCA 1; 2009 (2) SA 277 (SCA) at paragraphs 24 to 27.

[12] Plascon Evans Paints Ltd v Van Riebeeck Paints (Pty) Ltd [1984] ZASCA 51; 1984 (3) SA 623 (A) pages 634 to 635.