Automated Summary
Key Facts
Merafong City Local Municipality challenged the Minister of Water Affairs and Sanitation's 2005 decision to overturn its water tariffs and surcharges imposed on AngloGold for industrial and domestic use. The Minister ruled the surcharge on industrial water use unreasonable, allowing only domestic use surcharges. Merafong argued the Minister exceeded her authority under the Water Services Act, claiming exclusive constitutional powers to set tariffs. After a 13-year legal battle through the High Court, Supreme Court of Appeal, and Constitutional Court, the court found the Minister acted ultra vires, setting aside her decision and upholding Merafong's tariff-setting authority.
Issues
- The court must determine if the Minister's decision to vary Merafong's tariffs was within her authority under the Water Services Act and consistent with the Constitution, particularly regarding the Minister's power to interfere with municipal executive functions.
- The court needs to assess if Merafong's delay in instituting its review application was unreasonable and whether to condone it, considering factors like negotiations, management changes, and legal advice. The delay spans from 2005 to 2011, with further amendments in 2017.
- Merafong challenges the constitutionality of section 8(9), arguing it infringes on its exclusive authority under the Constitution to determine water tariffs. The court must assess if this section is inconsistent with constitutional provisions on municipal fiscal powers.
- The court will decide on costs allocation, including whether Merafong should recover costs from AngloGold and the Minister, and whether any cost orders from previous courts should be amended or set aside.
- The court must determine if AngloGold's requested relief, including declarations that Merafong may not levy surcharges on industrial water and interdicting charges exceeding unit costs, is valid under the Water Services Act and constitutional provisions. This includes whether Merafong's tariffs for domestic water should be limited as per the Minister's decision.
- In the event the Minister's decision stands, the court must determine if its application is limited to the 2004/2005 financial years, considering the context of the original dispute and subsequent legal proceedings.
Holdings
- Golden Core's application in this court is dismissed with costs, including the cost of two counsel.
- Merafong's counter-application for the review of the Minister's decision dated 18 July 2005 is upheld with costs, including the cost of two counsel, and the Minister's decision is set aside.
- Merafong's late filing of its counter-application for review is condoned.
- No cost order is made against the Minister.
- No cost order is made in the proceedings in the High Court of first instance, the Supreme Court of Appeal and the Constitutional Court.
Remedies
- No cost order is made in the proceedings in the High Court of first instance, the Supreme Court of Appeal and the Constitutional Court.
- Golden Core's application in this court is dismissed with costs, including the cost of two counsel.
- Merafong's late filing of its counter-application for review is condoned.
- Merafong's counter-application for the review of the Minister's decision dated 18 May 2004 is upheld with costs, including the cost of two counsel, and the Minister's decision is set aside.
- No cost order is made against the Minister.
Legal Principles
- The judgment emphasized that national government cannot usurp municipal powers allocated by the Constitution, particularly in matters like water tariff setting. The court found that section 8(9) of the Water Services Act did not authorize the Minister to interfere with Merafong's executive authority over municipal services.
- The court held that the Minister acted ultra vires her authority by overturning Merafong's tariff decisions, which were within the municipality's exclusive constitutional competence under sections 156(1) and 229(1) of the Constitution. This applied the principle that administrative actions exceeding statutory powers are invalid and unlawful.
Precedent Name
- Cape Town City v Aurecon SA (Pty) Ltd
- Affordable Medicines Trust and Others v Minister of Health of RSA and Another
- Pharmaceutical Manufacturers Association of South Africa and Others; In Re: Ex Parte Application of President of the Republic of South Africa and Others
- New Clicks South Africa (Pty) Ltd and Others v ... (unspecified)
- State Information Technology Agency SOC Ltd v Gijima Holdings (Pty) Ltd
- Buffalo City Metropolitan Municipality v Asia Construction (Pty) Ltd
- City of Cape Town and Another v Robertson and Another
- Oudekraal Estates (Pty) Ltd v City of Cape Town and Others
- MEC for Health, Eastern Cape and Another v Kirland Investments (Pty) Ltd t/a Eye and Lazer Institute
- South African Broadcasting Corporation SOC Limited and Another v Mott Macdonald SA (Pty) Ltd
- Altech Radio Holdings (Pty) Ltd and Others v Tshwane City
- Fedsure Life Assurance Ltd and Others v Greater Johannesburg Transitional Metropolitan Council and Others
Cited Statute
- Local Government Transition Act, Act 209 of 1993
- Water Services Act, Act 108 of 1997
- Local Government: Municipal Systems Act, Act 32 of 2002
- Promotion of Administrative Justice Act, Act 3 of 2000
- Constitution of South Africa
- Inter-Governmental Relations Framework Act, Act 13 of 2005
Judge Name
Réan Strydom
Passage Text
- 163.3 Merafong's counter-application for the review of the Minister's decision dated 18 May 2004 is upheld with costs, including the cost of two counsel, and the Minister's decision is set aside.
- [109] In my view, the Minister exceeded the boundaries of the empowerment which vested in her in terms of section 8(9) of the Act. The illegality principle applies and such conduct is unlawful and invalid, albeit, that it still has legal affect until set aside by a court of law.
- [141] I am accordingly of the view that the Minister's purported power to confirm, vary or overturn any decision of the Act, if section 8(9) could so widely be interpreted, which in my view it cannot, is unlawful and invalid in terms of the Constitution.