Legal costs, overspending leave Dr Beyers Naudé municipality in a financial fix

The cost of a court battle between a victim of sexual assault and an Eastern Cape local municipality has risen beyond R12-million after years of legal wrangling, and adds to the payouts that need to be made by the embattled organisation as a result of litigation. 

Last week, the Mail & Guardian reported that a high court found in a recent civil matter that the Dr Beyers Naudé local municipality owes the former employee R3.9-million after the municipality and one of its managers, Xola Vincent Jack, were found jointly and severally liable for the amount.

The matter dates back to 2009 when Jack was found to have sexually assaulted the 23-year-old employee, who resigned from the municipality a year later. Jack remains employed by the municipality, and is based in Jansenville. 

The woman’s instructing attorney, Arno Bouwer, said his client received her first payment of R2-million on 11 May this year. The second payment is due by 15 July. 

Bouwer said that when the legal costs for the municipality and the victim are calculated, the tally is likely to exceed R12-million. 

A cooperative governance committee meeting in parliament last week heard that the cumulative amount for the matter was R12.5 million. 

The committee was being briefed by the South African Local Government Association, the Eastern Cape’s treasury and its auditor general on matters concerning the province’s Saartjie Baartman district municipality, under which Dr Beyers Naudé local municipality falls.

The committee was told that the Dr Beyers Naudé local municipality had no funding to make such payment. 

Adding to the municipality’s legal costs is a pending case between it and Eskom. The municipality owes the national power utility more than R7-million and, after agreeing to pay R5-million, failed to honour it. 

The municipality has 28 other litigation cases. 

The auditor general business executive in the Eastern Cape, Shereen Noble, told the committee that unauthorised expenditure in the province had increased over the past two years. Overspending in 2018-19 totalled R254.2-million. Of this amount, the Dr Beyers Naudé municipality was responsible for more than R102-million. 

The M&G reported last week that a new investigation has been instituted, relating to the chief financial officer and unpaid pension funds since 2019. Outstanding payments should have been made by the end of March this year, but it has been alleged that the full amount has not yet been paid.

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Eunice Stoltz
Eunice Stoltz is a general news reporter at the Mail & Guardian.

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