- The Constitutional Court ruled that Merafong’s water surcharges on Golden Core since 2004 were unlawful and must be repaid.
- The municipality’s 13-year delay in seeking judicial review was described by the court as “egregious” and unjustifiable.
- Merafong is required to repay R126 million plus interest to Golden Core, and to cover all legal costs in the case.
The Constitutional Court has ruled that Merafong City Municipality’s water surcharges since 2004 were unlawful and must be repaid with interest to Golden Core Trade and Invest.
Acting Justice J Tolmay condemned the municipality’s 13‑year delay in challenging a ministerial ruling, calling it “egregious,” and rejected Merafong’s claim that the tariffs were valid for only one year. Chief Justice Mandisa Maya emphasised that municipalities are accountable to ministerial oversight and cannot ignore unlawful actions.
The dispute began when Merafong imposed surcharges on water supplied to AngloGold Ashanti, despite the Minister of Water Affairs ruling in 2005 that the charges were “unreasonable” because Merafong “provided no value for the services given to AngloGold by Rand Water.”
The minister directed that domestic tariffs be negotiated fairly, but Merafong ignored the ruling, continued demanding payments, and threatened to cut the water supply, forcing Golden Core to pay under protest. Litigation followed through the High Court, Supreme Court of Appeal (SCA), and ultimately the Constitutional Court.
The High Court found in favour of AngloGold, declaring Merafong’s surcharges unlawful. The municipality argued that the minister’s decision applied only to the 2004/2005 financial year. The SCA partially upheld AngloGold’s case but controversially limited the unlawfulness to a single year, reasoning that future tariffs could not automatically be invalid. Golden Core challenged this in the Constitutional Court, highlighting that such a limitation “undermines the Minister’s authority and perpetuates illegality.”
Scathing rebuke from the Constitutional Court
Justice Tolmay criticised Merafong’s delay. “The delay in bringing the review was inordinate… slightly short of 13 years from the date of the Minister’s decision. The Supreme Court of Appeal rightly characterised the delay as ‘unreasonable, and egregiously so’,” wrote Justice Tolmay.
Rejecting the SCA’s one-year limitation, the court stated: “The only logical conclusion is that the tariffs, after the 2004/2005 financial year, were equally non‑compliant. As the original decision was set aside, no valid decisions could subsequently have been taken by Merafong until the Minister’s decision was reviewed and set aside.”
Justice Tolmay warned that restricting unlawfulness to one year would allow municipalities to “perpetuate illegal conduct annually, creating uncertainty and continuous litigation.” The court reaffirmed the principle from Oudekraal that administrative acts remain valid until set aside.
Justice Tolmay explained: “For a public official to ignore irregular administrative action on the basis that it is a nullity amounts to self‑help.” Quoting Magnificent Mile and Kirland, she emphasised that Merafong’s failure to seek a timely judicial review meant its surcharges remained unlawful throughout.
Merafong argued that Section 8(9) of the Water Services Act, allowing the Minister to overturn municipal tariffs, was unconstitutional. The court disagreed. Chief Justice Maya noted the Minister’s powers aligned with Section 155(7) of the Constitution, while Justice M Madlanga added: “Constitutional balance requires accountability, not unchecked autonomy. Municipalities cannot escape oversight when imposing unreasonable tariffs.”
Repayment and human impact
The court ordered Merafong to repay Golden Core the unlawfully imposed surcharges, estimated at R126 million between 2009 and 2017, plus interest dating back to 2004. Parties must negotiate repayment within six months; failing that, mediation and High Court intervention will follow.
Justice Tolmay emphasised that relief must be “just and equitable,” recognising both AngloGold’s financial prejudice and Merafong’s duty to provide services, but concluding that the municipality “continues to enjoy a substantial benefit from unlawful conduct.”
The ruling has a direct human impact. AngloGold’s mines employ thousands, and the unlawful surcharges strained operations, threatening jobs and local economic stability. By affirming ministerial oversight, the Court reinforced protections for industry and communities against arbitrary municipal tariffs.
Costs and accountability
Costs were awarded against Merafong across multiple stages of litigation, including proceedings in the High Court, SCA, and Constitutional Court.
Get your news on the go. Click here to follow the Conviction WhatsApp channel.
