KZN Cogta MEC demands clarity from eThekwini Municipality on R30 million matter and legal costs
Image: KZN Cogta / Facebook
The MEC for Cooperative Governance and Traditional Affairs, Thulasizwe Buthelezi, has written to the eThekwini Municipality, demanding a full breakdown of the costs related to the legal matter between the eThekwini Municipality and company, Daily Double Trading.
In the letter, MEC Buthelezi stated that the expenditure, especially on litigation regarding this matter, was reckless.
The eThekwini Municipality and Daily Double Trading have been involved in a protracted legal battle that was finally resolved by the Constitutional Court about a week ago which dismissed the City's appeal against an earlier ruling.
At the centre of the dispute was a settlement agreement entered into between the company and officials of the municipality. Daily Double Trading had been one of the service providers for the municipality. However the municipality terminated the contracts it had with the company.
The company challenged this decision in court, and an out of court settlement was then agreed upon between the officials of the municipality and the representatives of Daily Double Trading. The settlement was worth about R30 million.
Later, the municipality attempted to disown the settlement agreement, arguing that the officials who authorised it had no power to do so. However the company challenged this in court and the court found in the company's favour.
The municipality fought the matter all the way to the Constitutional Court, which dismissed the City's application for leave to appeal the judgment that had found in favour of the company.
This ruling means that the City is now liable to pay approximately R30 million of the original amount and R23 million in interest.
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In his letter, MEC Buthelezi said, "A report is requested within 7 days, providing the total contractual losses suffered and the total legal costs incurred by the City in defending this matter, which proceeded to the Constitutional Court and was dismissed with costs."
"Such a report should also clearly indicate what disciplinary action is being taken by the City. Furthermore, it must outline the oversight taken by the council in embarking on this reckless and costly litigation," said the letter.
The MEC's letter comes after the City held a media briefing last week to discuss the court case and other legal matters. At the meeting, senior City officials said an employee who issued an illegal instruction to offer the settlement will be dealt with.
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