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IOL News
2 days ago
- Business
- IOL News
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. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ Ad loading 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. THE MERCURY
IOL News
3 days ago
- Business
- IOL News
eThekwini city manager defends decisions amid court rulings and financial scrutiny
eThekwini Head and City Manager Musa Mbhele and Malusi Mhlongo, the eThekwini Legal and Compliance Services head. Image: Doctor Ngcobo / Independent Newspapers eThekwini Municipality City Manager Musa Mbhele said he has saved the municipality millions of rand by not signing off on documents while wearing a blindfold. Mbhele has come under public scrutiny following three court cases that cost the municipality millions, involving Daily Double Trading 479 CC, Solbeth Security and Risk Management Services, and Bless Joe Trading CC. The Constitutional Court dismissed the municipality's attempt to overturn a prior ruling, which held it liable for R30 million that is owed to a service provider, Daily Double Trading 479 CC, stemming from 2013. Daily Double Trading challenged the municipality's decision to cancel its contracts, and an out-of-court settlement agreement was reached between the parties. However, the city argued that the lawyer who was involved in the agreement had not been authorised to make such a deal. The city challenged the settlement agreement in court, but the courts have ruled against it, and the municipality's latest bid to appeal was dismissed this week by the Constitutional Court, which found it had no reasonable prospects of success. In another case, businessman Siyabonga Xulu is demanding payment of over R413 million due to his company, Solbeth Security and Risk Management Services. Xulu alleged that the municipality refused to pay for the critical security services his company provided to senior officials, including former city manager Sipho Nzuza, dating back to 2019. Lastly, the municipality hired tents and ablution facilities from Bless Joe Trading CC in April 2019 to provide temporary emergency accommodation for flood victims in Tehuis, Umlazi. In court papers, Bless Joe Trading CC provided a marquee, flooring, eight public toilets, and 50 chairs at R190,000 per day for 14 days. In March 2020, the municipality cancelled the contract, stating that they would provide alternative shelter for the flood victims, but Bless Joe Trading CC argued that the marques were not evacuated. In court papers, the company owner alleged that when he went to pick up his marquee and toilets, he was told by the occupants that they would not move because they had not found alternative accommodation. He, therefore, billed the city even though the contract expired, claiming R73 million. Malusi Mhlongo, the Legal and Compliance Services head, and Mbhele addressed key issues affecting the city administration and recent legal matters. Mhlongo said there has been criticism about the conduct of the legal strategy of cases, most of the time directed at the city manager. 'Any decision that the city manager takes, he takes it on my concurrence on the basis of my advice. He relies on me for legal matters,' Mhlongo explained. He said they respected the court's decision and that payment of legal costs to legal practices does not constitute wasteful expenditure because they paid for the service they received. He said that when the City Integrity and Investigations Unit (CIIU) recommended that two contracts be terminated because they found misconduct at Daily Double Trading 479CC, the company then sued the city for R44 million. 'We are paying R30 million and interest to a service provider for no services received, and that is what the city manager is trying to resist. We are paying because it was authorised by a person who was not properly authorised to give that instruction. Nobody had the authority to reach a settlement that was over R5 million without going to council. This was handled by former city manager Sipho Nzuza. The judge ruled on the matter,' Mhlongo said. He said the matter with Bless Joe Trading CC went through the court process, and they were now abiding by the court ruling to pay based on a market-related amount for a year. 'If the market-related value is between R5,000 and R20,000 per day, it will be a saving. If we are unable to agree on what constitutes a market-related amount, we can argue the amount in court,' he said. Mhlongo said the Solbeth matter had a long history preceding Mbhele's tenure in office. 'The service provider indicated that he would not be able to share what he was doing because it was top secret and involved intelligence work. Our hands are tied because we cannot pay for something we do not know about. We are waiting for a court date over the matter,' Mhlongo said. Mbhele said the municipality had won many complex legal battles under Mhlongo's supervision that were not published in the media. "We protected and defended the ratepayers, right up to the Constitutional Court. The city is in a far better position than it would have been if we just signed an agreement blindfolded," he said. [email protected]
