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SCA upholds Eskom appeal over municipality’s R41-million debt



Staff Reporter

The Supreme Court of Appeal (SCA) has upheld, with costs, an appeal against the decision of the Free State High Court in which Letsemeng Local Municipality was granted an interdict to prevent the interruption of the supply of electricity by Eskom.

As at January 31, 2020, the municipality’s debt to the national power supplier had accumulated to an astronomical figure exceeding R41 million.

Based on Letsemeng’s recurrent failure to comply with its obligations, Eskom issued a final notice to interrupt electricity supply with effect from February 18, 2020, which would have affected Koffiefontein, Jacobsdal and Petrusburg, among other towns within the council’s administrative area.

This prompted the municipality to launch an urgent application in the High Court seeking to interdict Eskom from implementing the interruption pending the review of that decision and the determination of a dispute between the parties to be referred to the National Energy Regulator of South Africa.

Eskom filed a counter-application in which it sought, inter alia, to compel Letsemeng to comply with its obligations in terms of the electricity supply agreement (ESA) that it had concluded with Letsemeng.

The High Court granted Letsemeng the interim interdict but dismissed Eskom’s counter-application.

Eskom then approached the SCA seeking a determination on whether the power company was entitled to the relief sought in its counter-application.

In the counter-application, Eskom sought several prayers, including to compel Letsemeng to comply with the payment conditions set out in the ESA.

It also wanted the municipality directed to pay the amount of R5 million which National Treasury had made available for payment to the power utility.

The SCA, in a majority judgment handed down on Thursday, held that Eskom was not entitled to an order declaring that Letsemeng was in breach of section 153(a) of the Constitution because it had not made out a case for that relief.

It further held that Eskom sought vaguely drafted structural orders that would require affidavits being filed with the High Court regularly with no explanation why these orders were necessary and the purpose they intended to serve.

With regard to prayers to compel Eskom to comply with the payment conditions set out in the ESA, the SCA held that these were aimed at securing payment from Letsemeng on the basis of its contractual and statutory obligations.

Letsemeng did not honour any of the AODs and the various payment arrangements it made with Eskom.

Furthermore, Letsemeng undertook to pay the amount of its equitable share earmarked for electricity.

A total of R5 million had been advanced to it by Treasury solely to pay Eskom but it reneged.

In the context of Letsemeng having applied to interdict Eskom from interrupting the supply of electricity, Eskom had no suitable alternative remedy other than its counter-application for the mandatory orders to enforce Letsemeng’s reciprocal obligations to pay for the electricity it received.

Letsemeng’s defence that it should not be ordered to pay what it agreed to pay because it was unable, due to its financial weakness, was no defence.

The SCA held that, to the extent that this may amount to the tacit raising of a defence of impossibility of performance, the position is clear: if a person promises to do something that can be done, such as delivering a thing or paying a debt, but which that person cannot do due to circumstances peculiar to themselves, they are nonetheless liable on the contract.

It said the commercial mayhem that would result, if the rule was otherwise, is not difficult to imagine.

Contractual obligations are enforced by courts irrespective of whether a defaulting party is able to pay or not.

The focus is on the rights of the innocent party, not the means of the defaulting party.

The SCA held that the High Court erred in dismissing Eskom’s counter-application in its entirety.

Accordingly, the appeal was upheld and the order of the High Court dismissing Eskom’s counter-application was set aside and replaced with an order in terms of which Letsemeng was directed to pay Eskom:

  • all amounts, in respect of the electricity it received from Eskom, when such amounts are due and payable as set out in the ESA and Section 65(2) of the Local Government: Municipal Finance Management Act 56 of 2003;
  • all arrear debts due and payable to Eskom, in accordance with the terms of the AOD;
  • such portion of the equitable share that relates to electricity within 24 hours of receipt of the share;
  • the amount of R5 million which the National Treasury made available to the municipality for payment to Eskom;
  • costs, including the costs of two counsel.

Judge Clive Michael Plasket, in a separate concurring judgment, held that the relief granted related to admitted liabilities on the part of Letsemeng which it had not suggested that it was not liable to pay.

The repayment plan figures were prepared by Letsemeng taking into account its own affordability and revenue collected from the sale of electricity to customers.

Therefore, Letsemeng “warranted” that it could afford to pay the amounts it had agreed to pay.

Accordingly, there was no dispute between Eskom and Letsemeng about its liability to Eskom and how it would pay its debt which required resolution by negotiation.

In a dissenting judgment, Judge Ashton Schippers held there was a dispute between the parties concerning the manner in which Letsemeng could be enabled to settle its indebtedness to Eskom.

He said both parties were obliged to make every reasonable effort to resolve the dispute in accordance with the procedures provided for in the Constitution.

Schippers further held that there was a practical difficulty in implementing the orders granted in that Letsemeng, like most municipalities, was in financial crisis.

He said Eskom was aware that Letsemeng did not have the means to settle its outstanding electricity debt of some R41 million.

It was therefore unrealistic of Eskom to expect Letsemeng to comply with its obligations under the AODs and the ESA.

Thus, according to Schippers, the High Court was correct in its observation that the granting of the wide-ranging orders sought in the counter-application would not assist Eskom, if Letsemeng could not pay.

Consequently, he said, the orders sought by Eskom in the counter-application, save for an order that Letsemeng be directed to pay the sum of R5 million which Treasury made available for payment, were difficult to implement.

In the event that the dispute was unresolved within four months of the date of the order, Eskom would be entitled to set down the counter-application for its determination.

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Masks no longer mandatory when outdoors



Staff Reporter

South Africans will no longer be required to wear masks while outdoors, President Cyril Ramaphosa announced on Tuesday night when he gave an update on national efforts to contain the COVID-19 pandemic.

The wearing of masks indoors however remains mandatory.

“As before, it is mandatory to wear a cloth mask or similar covering over the nose and mouth when in public indoor spaces,” said Ramaphosa in a televised address.

“However, a mask is not required when outdoors,” he added.

“This means that we still need to wear masks when in shops, malls, offices, factories, taxes, buses, trains or any other indoor public space.

“But we do not need to wear masks when walking on the street or in an open space, when exercising outdoors or when attending an outdoor gathering.”

The president said after four waves of infection, fewer people are becoming severely ill and requiring hospitalisation.

He said there are far fewer deaths than before.

“Our scientists tell us that this is mainly because some 60 to 80 percent of the population has some form of immunity to the virus, either from previous infection or vaccination . . . we are now ready to enter a new phase in our management of the pandemic,” said Ramaphosa.

About 48 percent of all adults are believed to have received at least one vaccine dose.

Further to that, both indoor and outdoor venues can now take up to 50 percent of their capacity provided that the criteria for entrance are proof of vaccination or a COVID-19 test not older than 72 hours.

“But where there is no provision for proof of vaccination or a COVID test, then the current upper limit will remain – of 1 000 people indoors and 2 000 people outdoors,” he explained.

This change to the restrictions on gatherings, according the president, will be of great benefit to the sporting, cultural, entertainment and events industries, among others.

The maximum number of people permitted at a funeral will increase from 100 to 200.

However, night vigils as well as after-funeral and ‘after-tears’ gatherings are still not allowed.

The regulations on social distancing are also being changed, requiring that a space of one metre is maintained between persons in all settings except schools.

There are also changes to the regulations on international travel.

Travellers entering South Africa will need to show proof of vaccination or a negative PCR test not older than 72 hours.

All unvaccinated travellers entering the country who want to be vaccinated will be offered a vaccination.

All measures are taking effect from this Wednesday.

Ramaphosa said in deciding which restrictions to ease and which to keep in place, they  also looked to the experiences of other countries, including those where the complete lifting of restrictions has been followed by a surge in infections and deaths.

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Man gets six life terms for raping own daughter



Staff Reporter

A 36-year-old man from Clocolan has been sentenced to six life terms by the Free State High Court after he was found guilty of raping his 14-year-old daughter.

In a statement, the National Prosecuting Authority (NPA) said Judge Pina Mathebula sentenced the father, who cannot be named to protect the identity of his daughter, for raping her six times between May and July 2021.

“The victim was staying with the accused, his wife, who is her stepmother, and two other siblings,” read part of the statement issued by NPA regional spokesperson Phaladi Shuping on Thursday.

“In May 2021, the accused told his wife that his late brother told him in a dream ‘to get rid of a tokoloshe that was inside the victim’. The very same night of the alleged dream, the accused raped the victim. The last rape incident took place on 25 July 2021,” added the statement.

The court, sitting in Ladybrand, heard that the wife tried to reprimand him but he assaulted her.

As if not enough, he overpowered and raped the victim, despite her cries and his wife’s reprimands.

He threatened to kill both of them if they were to tell anyone of what he did.

A day later, the accused’s sister visited the family and the wife told her what the husband had done to the child.

The sister reported his brother to the police and he was arrested.

In aggravation, state prosecutor Advocate Moipone Moroka submitted a victim impact report facilitated by Bulelani Mothabeng in which the victim said that she thanks her aunt for coming to her rescue because if it was not for her, she would still be her father’s sex slave.

Moroka further argued that the scourge of violence against women and children has reached an alarming proportion and can be described as a pandemic.

“What aggravates the matter is that the father raped his own daughter multiple times over a period of three months and this means he had ample opportunity to reflect on his actions, but he continued betraying the trust his daughter had in him,” said Moroka.

The father was sentenced to six life sentences for rape and two years for assault and the sentences were ordered to run concurrently.

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Premier mourns journalist



Staff Reporter

Premier Sisi Ntombela has described the late SABC journalist Thabo Katsande as a disciplined, dedicated and hardworking man.

She said this in her special tribute to Katsande, who was based in Bloemfontein, during a memorial service held at the Rose Hall at the Mangaung Metropolitan offices on Thursday.

The journalist passed away at a Pretoria hospital last Saturday following a short illness.

“The Thabo I knew was focused on his work,” said an emotional Ntombela.

“The Thabo I knew was passionate about his trade and wanted to see journalism, particularly in the Free State, grow in leaps and bounds,” she added.

The premier took the opportunity to urge people to value their work and strive to improve their communities as the province is faced with a high unemployment rate.

“We live in an era where some people do not value their jobs . . . and a sense of entitlement has consumed them. Thabo’s work ethic was admirable,” she pointed out.

Ntombela described Katsande as a fearless and fair journalist who showed both the good and the bad through his work.

“Through his work, Thabo helped us to tell . . . the Free State story,” she said.

“He captured the minds of the people with the way he told our stories, the good and the bad.

“The beautiful and the not so beautiful – Thabo told it all, without fear or favour.

“The media fraternity has lost a giant and . . . it will be poorer without him.

“No longer shall we see that charismatic man running around with a camera looking for that perfect shot.”

Katsande will be laid to rest in Bluemgumbosch, eastern Free State, this Saturday.

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