CITY of uMhlathuze Councillors have slammed officials over what they term ‘fruitless expenditure’ on unnecessarily protracted legal proceedings, which could have instead been pumped into urgent service delivery.
During the City’s Executive Committee sitting on Tuesday, Councillors heard that more than R4.3-million had been paid out in settlement fees for the quarters ending 31 March and 30 June.
This included arbitration agreements with the Richards Bay Airport Company and Micromega as well as the unfair dismissal case with the City’s former Electrical Engineer, Dwayne Baker.
Attorney fees for the same period totalled a staggering R9.9-million for litigation instituted by and against Council.
‘This is alarming when we see the huge amount of money spent on court cases, which drag on and when we continuously lose as a result of litigation,’ Cllr MM Mbokazi told Council.
Cllr Louis Fourie questioned why the City chose to incur costs through legal battles and then opt to settle out of court.
One of the cases where Council is being advised to settle the plaintiff’s claim relates to the reported unlawful levying of municipal rates from the Zululand Chamber of Business Foundation (ZCBF).
According to Council’s attorneys, the matter is based purely on a contractual situation and the municipality ‘had no right to unilaterally levy rates or increase rental’.
Should Council not tender costs and not be successful in court, Council may be faced with huge expenses.
Total costs to date in this case stand at R63 610 while the projected fee, inclusive of claim is in the region of R526 057.
Poor decision making
Cllr Beena Simmadhri said ratepayers were unfortunately bearing the brunt of poor decision making.
‘Only after it goes to court, are we trying to have round table discussions to solve issues amicably.
‘We do not have money to complete infrastructure projects and here we are giving away millions of rands.
‘We are paying out settlement amounts because we were in the wrong.’
City Mayor Elphas Mbatha further described attorney fees as ‘shocking’.
Out of 15 attorney firms, the greatest litigation fees were paid to Strauss Daly, totalling more than R3.7-million and Gerhard Botha Attorneys at R1.1-million.
‘We need to help save costs at the municipality. This is the simplest way of bankrupting the municipality.
‘The CFO must stand his ground. These legal fees are inflated and this report relating to litigation is not clear,’ Mbatha said.
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