eThekwini Municipality has five-day deadline to pay R53 million to company after dismissed Concourt case

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.

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.

Cooperative Governance and Traditional Affairs (Cogta) MEC Thulasizwe Buthelezi has written to  eThekwini mayor, Cyril Xaba, to ascertain the total legal costs incurred by the City in defending this matter.

A statement from Cogta said: “MEC Buthelezi's demands are based on the principles of accountability and the need to ensure proper measures are taken against officials whose failure to follow proper processes led to the municipality spending millions of rands attempting to overturn the decision, which the courts have found to be binding. The city is now obligated to pay R30 million to the service provider and potentially further millions in legal costs, while it faces ongoing financial challenges and service delivery issues affecting residents and the business community.”

The mayor's spokesperson Mluleki Mntungwa said the judgment had been noted. He said the matter will be tabled again at council for deliberations.

THE MERCURY