eThekwini Municipality's legal challenges: Officials clarify the impact of recent court rulings
eThekwini Municipality's head of Legal, Malusi Mhlongo and municipal manager Musa Mbhele at a media briefing held on Thursday on recent court judgments against the City.
Image: Doctor Ngcobo / Independent Newspapers
An official who issued an illegal instruction to offer a settlement to a service provider, which has subsequently resulted in the eThekwini Municipality having to pay R53 million, will be dealt with. This was said by senior municipal officials who were at a media briefing held yesterday by the City, which was aimed at dispelling concerns about the mismanagement of ratepayers' money through fruitless litigation.
The officials also defended city manager Musa Mbhele. They asserted that he is being unfairly maligned when the cases predate his term, emphasising that he has acted with integrity and has the full authority and support of the council.
The City's Head of Legal, Malusi Mhlongo, discussed various legal cases involving the municipality. One significant case was the dispute between the City and Daily Double Trading. Recently, the Constitutional Court concluded the matter by denying the City the right to appeal an earlier judgment that found in favour of the company.
At issue in the court case was a settlement agreement that the municipality entered into years ago after being sued by the service provider. The City contends that the agreement was illegal because the official who authorised the settlement lacked the necessary authority. While the company initially claimed R30 million, the total has now escalated to R53 million, including accumulated interest.
Mhlongo stated, 'We are in the process of complying with the order. As soon as the judgment from the Constitutional Court was issued, we instructed the representatives of the company to produce an invoice.' He added that action was initiated on the first day following the judgment, and the payment process is now underway. When questioned about the role of the city's lawyer who entered into this arrangement, Mhlongo clarified that it was a city official who provided an illegitimate instruction for the settlement agreement without the power to do so.
'With the records available, the identity of the person who gave the instruction has become known, but I am not at liberty to publish his or her name at the moment because it is a matter that is still under discussion,' he said. It was not immediately clear how long the City has known the identity of this person and the exact nature of the discussions that are taking place.
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The City also dismissed any suggestion that it failed to put up its case in court, stating that it provided evidence through affidavits rather than via individuals who were summoned to testify. Mhlongo also addressed two other cases. He revealed that on Wednesday, another judgment went against the City concerning the rental of a marquee from a company called Bless Joe Trading.
The City had been renting a marquee to accommodate displaced individuals at a cost of R208,000 per day, which was intended to last for only 14 days but ended up remaining for over a year. The owner of the marquee is now demanding close to R73 million from the City. Mhlongo clarified, 'The judgment stated that we must pay for a year at market-related prices.
'The R208,000 a day was unaffordable, so even if we have to pay R50,000 as a market-related price, that is still a saving compared to R208,000 per day. Therefore, the judgment is not for R73 million.' Additionally, Mhlongo mentioned another case involving a company where it was reported that R500 million was being claimed from the City. He stated that the claim they are aware of from the company is for approximately R41 million.
Following the departure of Sipho Nzuza as city manager, the service provider approached the municipality, claiming to have conducted intelligence work on behalf of the municipality. However, the service provider could not provide a contract or evidence of the work performed, stating that it was too sensitive. Mhlongo said, 'We cannot just give money to a service provider when we do not know what work they have done; we could be implicated in having paid our friends, and we advised him to sue. That way, he can present his evidence in court, ensuring a transparent process.'
He said the company did take the matter to court and they were now waiting for a court date, adding, in the meantime, they have been bombarded with letters from politicians and the media (about the matter). Mhlongo asserted that it is improper for critics to label court losses as wasteful expenditure.
He stated, 'We are defending ratepayers' money, and such actions can never be construed as wasteful.' Mbhele expressed his commitment to defending the interests of ratepayers. He said a few court rulings against the City were being used to paint it in a negative light, adding that the municipality had won the majority of the cases brought against it.
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