Municipality under fire for recruiting ‘unfit’ law firm
A rural Mpumalanga municipality hired a law firm that was ‘deemed unfit’ or inexperienced in ongoing litigation to force mogul Johann Rupert’s company to pay market-related property rates.
The cash-strapped Nkomazi Local Municipality has been trying to extract as much as possible from Leopard Creek Share Block situated near Malelane alongside the Kruger National Park.
City Press reports that the dispute began in 2011 when the municipality evaluated Leopard Creek at R1.4bn and sought to cancel a 1996 agreement under which Leopard Creek enjoyed paying R35 000 a year in rates.
This arrangement did not change when Parliament passed the Property Rates Act in 2004.
In 2017, the municipality claimed that Leopard Creek owed it R76.4m in property rates according to its evaluation.
As the dispute raged on, Leopard Creek’s experts evaluated the property at R330m in 2018.
Leopard Creek won a Mpumalanga High Court case in 2023 that reviewed and set aside the R1.4bn evaluation of the property after it was dissatisfied with a decision of the Ehlanzeni Evaluation Appeal Board that favoured the Nkomazi Municipality.
Nkomazi Municipality then challenged the judgment and failed in the SCA after the appeals court found that the board ignored expert opinion when it sided with the municipality about the value of the property.
City Press notes that the Municipal Public Accounts Committee (MPAC) found in its report released this week that the municipality paid a law firm R11m in advance to represent it on the Leopard Creek matter.
Noting a general financial problem, MPAC did not hold back.
The committee said in the report that its attention was drawn to the matter of the legal fees paid in advance, and that the law firm paid back R6m.
The DA has demanded that Nkomazi municipal manager Oscar Nkosi institute an urgent investigation into the fruitless and wasteful expenditure emanating from the legal dispute.
Nkomazi Mayor Phindile Magagula disputed MPAC’s finding: ‘The municipality never indicated that the law firm was inexperienced. The only issue had to do with the knowledge of the case.’
Article disclaimer: While we have made every effort to ensure the accuracy of this article, it is not intended to provide final legal advice as facts and situations will differ from case to case, and therefore specific legal advice should be sought with a lawyer.
