Maluti-a-Phofung Local Municipality v Eskom Holdings SOC Limited and Others (3627/2020) [2020] ZAFSHC 187 (22 October 2020)

IN THE HIGH COURT OF SOUTH AFRICA,

FREE STATE DIVISION, BLOEMFONTEIN

Case No. 3627/2020

In the matter between:

MALUTI-A-PHOFUNG LOCAL MUNICIPALITY Applicant and ESKOM HOLDINGS SOC LIMITED 1st Respondent THE SHERIFF, BLOEMFONTEIN WEST 2nd Respondent FIRST NATIONAL BANK LIMITED 3rd Respondent SOUTH AFRICAN MUNICIPALITY WORKERS UNION (SAMWU) 4th Respondent CONFEDERATION OF THE SOUTH AFRICAN TRADE UNIONS (“COSATU”) 5th Respondent

CORAM:

DAFFUE J

HEARD ON: 25 SEPTEMBER 2020

JUDGMENT BY: DAFFUE J

DELIVERED ON: 22 OCTOBER 2020

[1] On 25 September 2020 the legal representatives of the Maluti-A-Phofung Local Municipality (herein later referred to as “MAP”) drafted a notice of motion and founding affidavit which were signed that same day. MAP intended to make application at 14h00 that day for certain relief. The papers were served on the 1st respondent, Eskom Holdings SOC Ltd (herein later referred to as “Eskom”) approximately 2 hours before the application was to be heard.

[2] MAP intended to apply for a rule nisi with return date 5 November 2020 in terms whereof it sought several orders and the following three to operate as interim interdicts with immediate effect pending finalisation of the application:

2.1 That Eskom be ordered to immediately instruct the Sheriff of Bloemfontein West as 2nd respondent and First National Bank Ltd (later herein referred to as “FNB”) as 3rd respondent to release from attachment and make available from the funds of applicant on its current bank account with FNB, the amount of R20 000 000.00.

2.2 That the Sheriff be ordered to immediately instruct FNB to release from attachment and make available from the funds of applicant on its current bank account with FNB the amount of R20 000 000.00.

2.3 That FNB be ordered to immediately release from the same account the amount of R20 000 000.00.

[3] Instead of filing an answering affidavit, for which there would not be an opportunity in any case, Eskom decided to file a notice in terms of rule 6(5)(d)(iii), relying on points of law, to wit:

1. Lack of urgency;

2. Lis alibi pendens; and

3. Alternative remedies.

[4] The urgent application is the continuation of litigation between MAP and Eskom and it is deemed necessary to briefly refer to the following:

4.1 On 24 July 2020 MAP intended to seek interim relief based on viva voce evidence to be presented in support of the relief claimed. However, prior to the application being heard an agreement was

reached which was made an order of court by Van Zyl J on the same day. In terms thereof the application was postponed to 17 September 2020 and Eskom and FNB were ordered to release and make available with immediate effect the sum of R90 000 000.00 to MAP. It was also agreed that the remainder of the monies attached by the Sheriff in terms of a writ of execution issued by Eskom against MAP under case numbers: 4723/2014 and 5523/2018 shall be transferred to an interest bearing holding account and remain under attachment. Further orders were made pertaining to possible settlement and/or final adjudication of the alleged dispute.

[5] I accept that the further affidavits to be filed in terms of the aforesaid court order were in fact filed. Consequently, Mhlambi J heard an opposed application on 17 September 2020 where after he reserved judgment. At the time when the alleged urgent application number 3627/2020 was heard by me, Mhlambi J’s judgment was still outstanding.

[6] The papers that served before Mhlambi J were not presented to me and as a result I am not au fait with the various allegations and counter-allegations made in that application.

[7] Having been away on circuit court for two weeks after a hectic recess duty stint, I learned that Mhlambi J’s judgment had been delivered in the meantime. I do not know what the outcome thereof is.

[8] As duty judge during the two weeks’ September recess, I had an extremely busy schedule. It is apparent that MAP makes a habit of applying to the court for relief on an urgent basis as if it believes that it has the right to approach the court on any given day without proper notice to opposing parties. Parties should desist from creating their own urgency and then run to court in the expectation of receiving a favourable judgment immediately.

[9] I shall now deal with the three points of law raised by Eskom in the order as pleaded:

9.1 URGENCY

9.1.1 On 24 July 2020 MAP was given access to an amount of R90 000 000.00 of the funds in its attached bank account. If it budgeted properly and considered its financial obligations regularly as it should have done, it would have been clear that there was no money available to comply with its imminent financial commitments. Yet it did nothing on 17 September 2020 or immediately thereafter to approach Mhlambi J on an urgent basis for relief pending the outcome of the reserved judgment.

9.1.2 In any event I am not satisfied that MAP has shown what its true monthly financial commitments are and why it required a further amount of R20 000 000.00. I would have expected a full and proper breakdown of how the amount of R20 000 000.00 was arrived at in order to come to a proper decision.

9.1.3 I agree with Eskom that the urgency sought to be relied on by MAP was self-created and that it would be proper to strike the application from the roll with costs.

9.2 LIS ALIBI PENDENS

9.2.1 Having decided not to strike the application from the roll due to lack of urgency, I decided to hear argument on the other aspects raised on behalf of Eskom. No doubt, the pending litigation referred to above is a material stumbling block preventing MAP from obtaining relief in the present application. The same parties, the same cause of action and the same issues in respect of the same subject matter than in the proceedings before Mhlambi J are before me. MAP has decided to cite SAMWU and COSATU as 4th and 5th respondents in this application, but that does not change the principles applicable to lis alibi pendens. In fact no relief is sought against 4th and 5th respondents.

9.2.2 I agree with Eskom that adjudication of the dispute on the merits thereof may have the potential of judges of this court handing down two conflicting judgments in respect of the same disputes between the same parties. Therefore there is sufficient reason for me to dismiss the application.

9.3 ALTERNATIVE REMEDIES

9.3.1 MAP is in serious financial distress. It was placed under administration earlier this year, an aspect that I take judicial cognisance of insofar as I previously had to adjudicate a matter involving a customer seeking relief against MAP. I have reason to believe that the Free State Provincial Government has decided a few months ago to uplift the administration. In any event, MAP ought to have availed itself to the remedies provided for in ss 135 and 139 of the Local Government: Municipal Finance Management Act, 56 of 2003 (the “MFMA”), but failed to do so.

9.3.2 MAP apparently intends to approach the court regularly and perhaps even on a monthly basis to request the release of funds which has been attached in terms of valid writs of execution. Such attempts will negate and undermine the validity and purpose of the writs of execution and the attachment of MAP’s funds in accordance thereof.

9.3.3 On 24 September 2020 and just prior to the hearing of the application Eskom’s attorneys offered to allow MAP access in the amount of R15 000 000.00 provided that the remainder of the funds are paid into Eskom’s bank account as partial payment of the arrears and subject to further conditions, inter alia the conclusion of a payment plan and the provision of security. This offer was rejected. During oral argument Adv Sibeko SC on behalf of Eskom repeated the offer which was again rejected. Clearly, the offer put on the table is indicative of the existence of alternative remedies available to MAP.

[10] No case has been made out for the relief claimed.

[11] Order:

1. The application is dismissed with costs.

__________________

J P DAFFUE J

On behalf of Applicant: Adv A Roux

Instructed by: Hill McHardy & Herbst Inc

BLOEMFONTEIN

On behalf of 1st Respondent: Adv LT Sibeko SC

Instructed by: Phatshoane Henney Inc