Madibeng Local Municipality v Public Investment Corporation Ltd (603/2017) [2018] ZASCA 93; 2018 (6) SA 55 (SCA) (1 June 2018)

Madibeng Local Municipality v Public Investment Corporation Ltd (603/2017) [2018] ZASCA 93; 2018 (6) SA 55 (SCA) (1 June 2018)

The Supreme Court of Appeal held that the loans raised by Brits Town Council from the Public Investment Corporation Ltd were for the purpose of repaying existing loans, which is expressly permitted under s 52(1)(a) of the Local Government Ordinance 17 of 1939. Such loans do not require prior written approval from the provincial Administrator. The court found no merit in Madibeng's defence that the loans were unenforceable for want of such approval. The procedure adopted by the High Court—determining the separated issue on affidavit—was proper, as the parties agreed to it and the facts were not in dispute. The punitive costs order was justified by Madibeng's unconscionable conduct, but the...

Citation
[2018] ZASCA 93
Parties
Appellant: Madibeng Local Municipality; Respondent: Public Investment Corporation Ltd
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
1 June 2018
Case Number
603/2017
Procedural Posture
Civil Appeal / Appeal From Gauteng Division of the High Court, Pretoria
Outcome
Appeal dismissed. Orders of the High Court set aside and replaced with a declaratory order and a clarified costs order.
Judges
Ponnan, Wallis, Willis, Plasket, Makgoka
Legal Topics
Municipal Loans, Local Government Ordinance, Declaratory Relief, Punitive Costs, Rule 38 Affidavit Evidence
Land and Property Civil Procedure Municipal Loans Local Government Ordinance Declaratory Relief Punitive Costs Rule 38 Affidavit Evidence

Case Brief

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Parties

Madibeng Local Municipality

Appellant

Public Investment Corporation Ltd

Respondent

Procedural Posture

Civil Appeal / Appeal From Gauteng Division of the High Court, Pretoria

Legal Issues

  1. 1 Whether the loans raised by Brits Town Council (predecessor to Madibeng Local Municipality) from the Public Investment Corporation Ltd were unenforceable for want of prior written consent of the provincial Administrator under s 52(2) of the Local Government Ordinance 17 of 1939.
  2. 2 Whether the procedure adopted by the High Court in determining the separated issue on affidavit was irregular and prejudicial to Madibeng.
  3. 3 Whether the punitive costs order granted by the High Court was appropriate in the circumstances.

Ratio Decidendi

The Supreme Court of Appeal held that the loans raised by Brits Town Council from the Public Investment Corporation Ltd were for the purpose of repaying existing loans, which is expressly permitted under s 52(1)(a) of the Local Government Ordinance 17 of 1939. Such loans do not require prior written approval from the provincial Administrator. The court found no merit in Madibeng's defence that the loans were unenforceable for want of such approval. The procedure adopted by the High Court—determining the separated issue on affidavit—was proper, as the parties agreed to it and the facts were not in dispute. The punitive costs order was justified by Madibeng's unconscionable conduct, but the...

Court Disposition

Appeal dismissed. Orders of the High Court set aside and replaced with a declaratory order and a clarified costs order.

Orders

  • It is declared that the loans raised by the defendant from the plaintiff are not unenforceable for want of compliance with s 52(2) of the Local Government Ordinance 17 of 1939.
  • The defendant is ordered to pay the plaintiff’s costs on an attorney and client scale, such costs to include the costs of two counsel.