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IOL News
4 days ago
- Business
- IOL News
KZN Cogta MEC demands clarity from eThekwini Municipality on R30 million matter and legal costs
KwaZulu-Natal Department of Cooperative Governance and Traditional Affairs (Cogta) MEC Reverend Thulasizwe Buthelezi. 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. 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 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. THE MERCURY
IOL News
10-06-2025
- Business
- IOL News
eThekwini Municipality faces backlash over R23 million legal fees for R30 million payout
EThekwini Municipality is expected to pay R23 million extra after losing a legal battle to defend R30 million claim Image: Willem Phungula The eThekwini Municipality has defended its spending of R23 million in defending a R30 million payout. Last week, the city lost a bruising legal battle in the Constitutional Court in trying to overturn the lower courts' orders, which had dismissed its bid with costs. The latest ruling drew the ire of political parties and Cooperative Governance and Traditional Affairs MEC Reverend Thulasizwe Buthelezi, who also categorised the city's costs as wasteful expenditure, which he said must be recovered from the officials responsible for them. The ruling also drew attention to the city's former deputy manager, Sibusiso Makhanya, who, through his attorneys, penned a letter to Mayor Cyril Xaba asking him to take action against City Manager Musa Mbhele, whom he said was liable for this wasteful expenditure. Makhanya gave the mayor five days to take action or face potential legal consequences. He argued that the city charged him for causing it to incur costs similarly; therefore, to be consistent, the city must also charge Mbhele. The company, Daily Double Trading, has already calculated its total costs to R53 million and demanded that the city pay within five days. In the city's response to Makhanya, it defended the legal costs, saying the monies expended in defending the ratepayers' money did not constitute wasteful expenditure. 'There has never been an instance where the legal costs, for work done by the legal representatives, constituted wasteful expenditure, irrespective of the court outcome,' read the letter. The city further stated that the Executive Committee (Exco) fully supported the decision to approach the Constitutional Court and the Exco's resolution was reported to the council meeting of March 31, which also supported it; therefore, there was no need to refer the matter to the Financial Misconduct Disciplinary Board which Makhanya called for. Makhanya dismissed the city's assertion that the cost does not constitute wasteful expenditure, saying in terms of the Municipal Finance Management Act, fruitless expenditure is defined as an expenditure that was made in vain and would have been avoided had reasonable care been exercised. He said if the mayor does act, he would go to court as he indicated in the letter. The municipality has been in a legal battle since 2018 with the electrical company, Daily Double Trading, known as Pholobas. The company claimed it was legally blacklisted by the city and had done work for the city to the value of over R40 million. After the municipality objected, the business was granted a preservation order. The sheriff attached the city's assets, but the parties reached an out-of-court settlement in which the city, through its attorney, allegedly promised to pay the company R30 million, which the company accepted, but the city later disputed. The matter went to court again in 2021, however, the city did not oppose it, and the court ordered the city to pay R30 million with 10% interest from 2018. The municipality filed a leave to appeal, which was dismissed, and went straight to the Supreme Court of Appeal, which also dismissed the matter. [email protected]
IOL News
10-06-2025
- Business
- IOL News
Ratepayers in Durban face hefty costs due to eThekwini Municipality's legal errors
Ratepayers in Durban are left to shoulder the financial burden of a R30 million legal battle involving the eThekwini Municipality. Image: IOL / RON AI Durban's ratepayers are being forced to absorb the financial consequences of officials who continue to make unlawful decisions without fear of accountability Asad Gaffar, chairperson of the eThekwini Ratepayers Protest Movement (ERPM), remarked after the city incurred costs in a R30 million tender legal battle between the eThekwini Municipality and a service provider, Daily Double Trading, which culminated in a recent decision by the Constitutional Court. The Constitutional Court dismissed the municipality's leave to appeal against the Supreme Court of Appeal judgment - the city wanted the upper courts to overturn the Durban High Court ruling in 2022, which ordered it to pay Daily Double Trading R30 million as a settlement to the R43 million claim the company had made for work done. The municipality argued that it did not authorise an attorney to settle with the service provider; therefore, it could not be liable for the payment. However, it did not oppose the matter in court. The municipality is now liable for an additional R20 million in expenditures, including substantial legal fees, as a result of the matter continuing since 2018 at an interest rate of 10% annually. Reverend Thulasizwe Buthelezi, the MEC for the Cooperative Governance and Traditional Affairs (Cogta), called on the municipality to recover the money from the officials involved in causing the wasteful expenditure. Gaffar said the ERPM reiterates its longstanding concern over the widespread culture of impunity, maladministration, and legal recklessness within the municipality. He said that ratepayers were being forced to absorb the financial consequences. He applauded Buthelezi's decisive intervention and his demand for full disclosure of legal costs, as well as disciplinary action against those responsible. 'This is not merely an issue of legal error, but it is a systemic governance failure that has placed further strain on an already embattled municipality, struggling with service delivery backlogs, infrastructure decay, and financial instability,' Gaffar said. The ERPM called for the full implementation of consequence management measures, including disciplinary processes, civil recovery of losses, and, where warranted, criminal referrals.
IOL News
06-06-2025
- Business
- IOL News
eThekwini Municipality has five-day deadline to pay R53 million to company after dismissed Concourt case
The eThekwini Municipality will have to pay R53 million to a company after a contractual dispute. Image: File Picture: KHAYA NGWENYA Independent Newspapers The eThekwini Municipality has been given five days to pay R53 million to a service provider or face having its assets attached by the Sheriff of the Court. Lawyers representing the service provider, Daily Double Trading, have stated they will not tolerate any further delays in this matter. This situation follows the Constitutional Court's dismissal of the municipality's application for leave to appeal. The city is embroiled in a protracted battle with Daily Double Trading 479, trading as Pholobas Projects. At the centre of the dispute is an agreement reached between representatives of the City and those of the company. The company was contracted to do work for the City however the municipality decided to terminate the contract. When the company challenged the cancellation of the contract in court, an out of court settlement was struck. In terms of the agreement, which was dealt with by a lawyer representing the City, the company would be paid R30 million. However, the City later disowned the agreement, arguing that the lawyer had no authority to enter into such an agreement on its behalf. The municipality fought the matter in court and lost; its final appeal to seek the right to appeal the earlier judgments was denied by the Constitutional Court. The City now finds itself obligated to pay the original R30 million plus millions of rand in interest. 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 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. Next Stay Close ✕ Anusha Ganas, the attorney for Daily Double Trading, said the Constitutional Court has brought finality to the dispute that has dragged on since 2018. 'The current amount owed is now R53 million.' A letter of demand sent to the municipality stated, 'The said calculation is as per the judgment of Pitman AJ amounting to a total sum due of R53,120,136.99. You will further note from the schedule that the increase escalates currently at the amount of R8,630.14 per day. 'We demand on behalf of our client that your client immediately effects payment of the total within five calendar days from the date hereof. Kindly ensure that this payment also provides for the additional daily interest accruing from 6 June 2025 to the date of payment. We reiterate that our client will not permit any further dilatory steps to delay justice. 'Should your client not effect payment into our trust bank account within the stated period, the Sheriff of the High Court will be instructed to immediately attach and remove assets to the value of the amount specified,' the letter concluded. Councillors in the City have urged the municipality to comply with the court judgment and pay the service provider. DA councillor Thabani Mthethwa stated: 'It is very unfortunate that the municipality has had to incur that expenditure. We encourage the mayor to table the report. We urge the municipality to comply with the court order while the council addresses the internal matters. We will have to review the court judgments and assess the reasons that led the judges to reach their decision, and we will determine if anyone should be held accountable for this. It is very unfortunate that the ratepayers will now have to bear the cost of this fruitless and wasteful expenditure.' IFP councillor Mdu Nkosi stated that the city has no option but to comply with the judgment. 'We believe that we will be called by the mayor soon to engage us on this matter. Remember that the decision to challenge the matter in court was taken; the officials briefed us on their reasons at the time. But seeing that the judgment has been issued in this manner, we now have to engage with them again. This judgment is coming from the Constitutional Court; there is no other court beyond this one, so the council has to comply. What is very painful is that ratepayers' money will now be spent on this matter,' Nkosi said.
