Golden Core Trade and Invest (Pty) Ltd v Merafong City Local Municipality and Another

AngloGold Ashanti Limited (later substituted by Golden Core Trade and Invest) operated gold mines in Carletonville that used substantial quantities of water from Rand Water for industrial (35%) and domestic (65%) purposes, supplying 502,600 kl monthly. In July 2003, Merafong City Local Municipality became a water services authority. In February 2004, it requested mines to apply for approval to receive water for industrial use under s 7 of the Water Services Act 108 of 1997. In April 2004, AngloGold applied to continue purchasing water from Rand Water at Rand Water's tariffs. On 31 May 2004, the Municipality approved the supply but imposed significantly higher tariffs (R4.18/kl industrial, R3.91/kl domestic) compared to Rand Water's rates, adding surcharges despite providing no additional services. AngloGold appealed to the Minister under s 8(4) in June 2004. On 18 July 2005, the Minister upheld the appeal, ruling the surcharge on industrial water was unreasonable and overturning it, while directing negotiations for a reasonable domestic water tariff. The Municipality received legal advice that the Minister lacked power to set or interfere with municipal tariffs but never sought judicial review of the Minister's decision. Instead, it continued imposing its tariffs and threatened to cut off water supply if AngloGold didn't pay. AngloGold paid under protest. In 2011, AngloGold sought enforcement of the Minister's decision. The Municipality brought a conditional counter-application seeking declaratory relief and alternatively challenging the constitutionality of s 8(9), but did not seek review of the Minister's decision until 2017, following the Constitutional Court's remittal of the matter.

• Whether the high court erred in condoning the Municipality's delay of approximately 13 years in reviewing the Minister's decision
• Whether the high court should have entertained the Municipality's reactive challenge to the Minister's decision despite the lengthy delay
• Whether the Minister's decision under s 8(9) of the Water Services Act was lawful and within her powers
• Whether s 8(9) of the Act authorizes the Minister to interfere with a municipality's imposition of tariffs and surcharges for water supply
• The scope and duration of effect of the Minister's appellate decision
• Whether AngloGold was entitled to declaratory relief to enforce the Minister's decision
• The proper approach to delay in legality reviews and reactive challenges

The appeal was upheld with costs, including costs of two counsel. The high court judgment was set aside. The Municipality's review application was dismissed with costs. The court declared that: (1) the tariff imposed by the Municipality for supply of water to the appellant for industrial use in the period 1 July 2004 until promulgation of a new tariff was unlawful; (2) the tariff for domestic use during the same period was unlawful. The Municipality was ordered to pay the appellant's costs in all prior proceedings including the original High Court proceedings in 2013 and 2021, the Supreme Court of Appeal proceedings in 2015, and the Constitutional Court proceedings in 2019, all including costs of two counsel.

A party that deliberately fails to review an administrative decision, understanding it is required to do so, and instead resorts to self-help by ignoring the decision and using coercive means to enforce its own position, cannot later expect a court to overlook its unreasonable delay in bringing review proceedings. The delay will be unreasonable both by reason of its length and the party's culpable conduct. Even where a delayed review raises serious legal questions, these do not warrant overlooking delay when: (1) the impugned decision has long expired and has no ongoing effect; (2) the party deliberately flouted its legal obligations; and (3) no live issue of practical consequence remains to be determined. A ministerial decision under s 8(9) of the Water Services Act that overturns a municipality's decision on tariffs can only affect the specific tariffs that were the subject of the appeal, and has no effect beyond the period for which those tariffs were imposed. Once new tariffs are promulgated, the ministerial decision's effect expires. The two-step test in Khumalo for delay in legality reviews requires courts to assess whether there is a serious question warranting judicial attention, not to determine the merits of the challenge at the threshold stage. Determining merits at the threshold stage improperly assumes jurisdiction and skews the weighing of relevant factors.

The court observed that both parties had inflated the significance of the issues at stake and their consequences. The Minister's reasons, while appearing far-reaching (suggesting industrial water supply is not a municipal service and no surcharge can be levied), were not binding precedent as the Minister is not a court of law - what mattered was the decision taken, which was limited to specific tariffs for a limited time. When new tariffs were imposed in subsequent budget cycles, AngloGold was at liberty to appeal them and the Municipality could have persuaded the Minister of any errors in her reasoning. The court noted that proper formulation of constitutional challenges requires full and proper motivation demonstrating clearly why unconstitutionality should be declared, including showing the provision cannot sensibly be interpreted consistently with the Constitution. Constitutional challenges cannot be inserted as afterthoughts shortly before hearing. The court expressed agreement with the high court that the Municipality's belated constitutional challenge should not be countenanced. The court observed that while the regulatory scheme raises important questions about reconciling s 8 of the Water Services Act with s 229 of the Constitution (municipal power to impose surcharges) and s 151(3) (municipal right to govern subject to national legislation), these questions should be decided in an appropriate case, which this was not given the expired nature of the decision under review.

This case provides important guidance on the treatment of delay in administrative law challenges, particularly legality reviews and reactive challenges. It clarifies that while courts have discretion to overlook delay, this discretion must be exercised with regard to the nature of the delay, the conduct of the party seeking relief, and whether there remains a live issue warranting judicial intervention. The judgment emphasizes that a party cannot deliberately ignore an administrative decision while simultaneously claiming it is invalid, and then expect a court to overlook such conduct when belatedly seeking review. The case also demonstrates that the merits of a challenge, while relevant to whether delay should be overlooked, should not be determined at the threshold stage - courts must assess whether there is a serious question to be decided, not decide the merits themselves. The judgment reinforces the principle from Oudekraal that administrative decisions remain binding until set aside by a court, and that self-help by simply ignoring such decisions is impermissible. It further clarifies that ministerial appellate decisions under s 8(9) of the Water Services Act are limited to the specific decisions on appeal and do not have indefinite ongoing effect. The case also illustrates proper standards for constitutional challenges to legislation, requiring such challenges to be pertinently raised with full motivation, not added as afterthoughts.