KNYSNA NEWS - Grey Elephant Investments (GEI), embroiled in a rates dispute with the Knysna municipality since 2020, has applied to the Western Cape High Court to resolve the issue.

In a notice of motion filed on 9 December, GEI says all tariffs including water, waste removal, sewerage and electricity it has been billed for by the Knysna municipality since 2023 are "illegal".

GEI is the owner of Knysna Mall, the Rex Hotel and Rex Extension, all properties involved in the disputed rates issue since 2020.

GEI is seeking an order to declare the Knysna municipality's tariff policy of 2024 and 2025 unlawful and "ultra vires" (illegal) - to levy a fixed basic rate for water and wastewater/sewerage on business consumers per premises and number of business units, or shops or hotel rooms.

'Charged unlawfully'

Also that the municipality has, since July 1, 2023 charged GEI unlawfully for the removal of 6 240 refuse bin loads, and the bulk tariff on electricity, above the demand GEI had indicated to the municipality.

In a detailed and technical application of 53 pages, including a number of addendums setting out the saga, GEI also seeks to amend the municipal service accounts to GEI, amend its tariff policies and to ensure that all municipal service accounts rendered to GEI and also those to "all the affected ratepayers within the jurisdiction" of the municipality are rendered in accordance with the orders sought in the motion.

'Matter of public interest'

GEI also seeks the costs of the action. Knysna businessman Neil Lurie, in a supporting affidavit, said the "unlawful manner" in which the municipality levies municipal service charges on business consumers within its jurisdiction "is a matter of public interest and affects all business entities within the jurisdiction of the municipality".

"In addition, it is in the broader public interest that local authorities act lawfully and do not engage in conduct which is ultra vires."

Lurie said: "In essence, the notice of dispute set out that the applicant cannot reconcile how the municipality is calculating the municipal services charges levied on it, as well as setting out why the municipality is acting unlawfully."

'Cherry picks'

Lurie said he had spent "countless hours" poring over the municipality's policies "and I simply could not make sense of the way in which the municipality calculates or renders accounts".

"It seems as if the municipality simply cherry picks whatever variable or formula suits it at the time to calculate the service and/or consumption charges that it debits the applicants (GEI) municipal accounts."

At one stage during the dispute the municipality had threatened to cut off services to GEI and Rex Extension, but a court order in 2020 interdicted the municipality from doing so.

GEI and the municipality then entered into settlement negotiations, according to Lurie.

'Internal review'

"On 23 July last year (2023) GEI made a settlement offer that was accepted at the council's July meeting, subject to an internal review," said Lurie.

In terms of the settlement GEI had offered to pay the municipality R10 211 502.88 for charges up to 30 June 2023.

Lurie said on September 24 2024 the municipality "in an astonishing about turn for the first time" advised GEI about a further council resolution involving the settlement of the 2020 dispute, was conditional upon payment of all amounts accrued by GEI.

'New conditions'

"Essentially the municipality sought to unilaterally impose new conditions into the settlement agreement," said Lurie.

Lurie said he had at three round-table meeting tried to solve the impasse.

In a highly detailed and technical application reference is made to R33 432 047.27 of debt being written off by the municipality.

In a letter apparently from then acting municipal manager Phaale Simon Malepeng, dated 6 September 2024 and attached as an addendum, he indicated this amount could be as high as R73 645 736.70.

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