Process that Led to Sale of Mr Mkhize's Home Due to Arrear Rates: briefing by Umvoti Municipality

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Cooperative Governance and Traditional Affairs

07 February 2005
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Meeting Summary

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Meeting report

PROVINCIAL AND LOCAL GOVERNMENT PORTFOLIO COMMITTEE
8 February 2005
PROCESS THAT LED TO SALE OF MR MKHIZE'S HOME DUE TO ARREAR RATES: BRIEFING BY UMVOTI MUNICIPALITY

Chairperson:
Ms N Ntshulana-Bhengu (ANC)

Document handed out
Email info@pmg.org.za for the following documents:
Nel & Stevens correspondence
Natal Mercury Article: “Update on R8 000 house auction” – 6 February 2004
Natal Mercury Article: “S.A.C.P. Monitoring Council activities” – 6 February 2004
Natal Mercury Article: “Next (and final?) chapter in R8 000 house auction” – 20 February 2004

SUMMARY
The Committee was briefed by members of the Umvoti Municipality on the rates policy that led to the repossession of Mr Mkhize’s house. The Committee also heard from Mr Mkhize and representatives from SANCO. The Committee discussed the issue and its implications for legislation and put forward questions for the Mayor and representatives from Umvoti Municipality.

The Umvoti municipality was asked by the Committee to indicate the steps it took to assist Mr Mkhize to pay his rates as, even though he might not have concluded a written agreement with the Umvoti municipality on repayment, the fact was that he had been paying approximately R2000 per month to extinguish the debt. The Mayor insisted that the applicable laws had been followed and he could not rescind the process. He said that Mr Mkhize did however have the right to test this matter in a court of law.

The Committee expressed its extreme dissatisfaction with the fact that the Umvoti municipality constantly spoke only of the machinery used by local government in the form of empowering legislation and ordinances, yet it did not indicate the impact the system was having on members of the municipality when the very aim was to trace the effectiveness and efficiency of political management of councilors in addressing this issue. Members were especially dissatisfied that the Umvoti municipality failed to comment on the corrupt activities of its credit controller. The Chairperson stated that a solution to this matter would not be found during the meeting and much work needed to be done by the Committee and all involved on a local government level to ensure such corrupt practices do not occur in future, and might involve the passing of legislation.

MINUTES
Introduction by Chairperson
The Chair stated that the purpose of the meeting was to gain first hand information from the affected parties and relevant structures on the issue surrounding the issue regarding Mr Mkhize’s property. The little information available to the Committee was gained from the media reports, as the issue has received much media coverage. A march was held on 23 December 2004, led by the South Africa National Civic Organisation (SANCO), who were not satisfied with the manner in which a local sphere of government dealt with this matter. For this reason Parliament has charged this Committee to look into the matter, and to examine how exactly the laws and policies that it passed impact individuals. The second issue to be considered is whether these laws were applied fairly and whether steps were taken to educate members of the public on these laws and policies. A further issue is the relationship between policies at a national and local government level and the co-ordination of their implementation.

The Committee must also identify lessons to be learnt from Mr Mkhize’s case and use the issue as a case study to inform Parliament as to whether this was an isolated incident that related to Umvoti municipality alone, or whether this was commonplace. Loopholes in legislation that allow corruption must also be identified. This meeting will not entertain party politics as Members have enough time to do that during debates in Parliament. The meeting will thus exclusively allow the affected parties to state their cases and use that information to focus on the governance and monitoring issues of the Umvoti municipality.

She requested the South Africa National Civic Organisation (SACO) to make its presentation, as its march on this matter sparked the attention to the matter.


Mr W Dorman (DA) stated that this meeting would not take the form of a trial as his party respected all spheres of government. The aim instead was as the Chair indicated. He asked whether the affected parties present today were summonsed to appear or whether they were invited to appear.

Mr M Mshudulu (ANC) stated that, on a point of order, the ANC finds it unnecessary for Mr Dorman to pose such a question. He stated that the Chair was very clear in informing the Committee that the affected parties were invited to appear today. The DA must not begin to “play the political role”, and the question was out of order.

South Africa National Civic Organisation Presentation
Mr Dumisane Mthalane, Member of the National Working Committee and Head of the Socio-economic development desk, stated that in December 2004 he was in Greytown on business when he became aware of this matter. He contacted the Umvoti Municipality and arranged a meeting for 15 December, where he met the mayor, financial manager and deputy financial manager of the Umvoti Municipality. He stated that when he first met the Mayor on a previous occasion the Mayor informed him that the repossession of Mr Mkhize’s house was not a good thing and advised Mr Mkhize to seek legal representation. Yet during the official meeting with the Mayor and his financial managers the Mayor stated that there was nothing left to discuss, that the matter was over as the house has been sold.

At this stage it became apparent that no progress would be made with the Umvoti municipality, and SANCO decided to stage a march on 23 December 2004. SANCO demanded that Mr Mkhize be given back his house as the matter was not handled properly. The process was not managed properly by the Umvoti municipality. Mr Mkhize received a summons from the Umvoti municipality informing him that he owed R12 000, and Mr Mkhize bagan payment at the offices of the Nel & Stevens law firm. Mr Mkhize paid R2 000 every month, beginning in July 2003. He paid R2 000 on 9 December 2004 and on 12 December 2004 he met a messenger of the court in a Spar shopping store who informed him that his house had been sold. Mr Mkhize was shocked, even more so because he did not even receive a summons informing him of the action taken against him.

He stated that Mr Mkhize paid R13 000 when the original debt was for R11 000, and he was paying R2000 per month. This clearly indicated that “somebody was gunning for this house” because he has evidence of other individuals who owed vast amounts to the tune of R67 000 and even R91 000 to Umvoti municipality, yet their property remained intact. They were on the same schedule as Mr Mkhize and included business people who owed vast amounts to the Umvoti municipality. The schedule was headed by a man, whose brother was an attorney with the legal firm concerned here, Nel & Stevens, and owed R14 000 to the Umvoti municipality. Yet nothing has happened to his assets.

An article was published in the Greytown Gazette which highlighted the problems with the property, and people from Greytown did not want to purchase Mr Mkhize’s house because they felt it was unfair for them to purchase his house. It was for that reason that Mr Mkhize’s house was purchased by an outsider who was not aware of the political games at play within the Umvoti municipality.

It was important to note that in the meeting with the Mayor and his financial managers on 15 December 2004, the Mayor stated that the allegations that Mrs Nalini Khan, the Umvoti municipality credit controller, was part and parcel of the sale of the house were cleared as the investigation into her involvement had been completed. The Mayor stated that the investigation conducted by the audit firm KPMG cleared Mrs Khan of the allegations. He stated that it was very interesting that the Mayor informed him on 15 December 2004 already that the KPMG report cleared Mrs Khan of any liability in the matter, when in fact that KPMG process only began on 6 January 2005. This clearly indicates that KPMG, the internal auditors of the Umvoti municipality, “could not bite the hand [that fed it]” and thus had to agree to the statement made by the Mayor on 15 December.

Nel & Stevens wrote to Umvoti municipality stating that the advertisement in the Greytown Gazette for the sale of Mr Mkhize’s property was incorrect, and they advised Umvoti municipality that the matter could still be settled with Mr Mkhize to ensure he still pays what he owes, because the sale was void. This letter was dated 16 February 2004. On 17 February 2004 an outsider, Mr N Chetty, brother of Mrs Khan, replied to the letter. This was odd as the letter from Nel & Stevens was addressed to the Umvoti municipality. Mrs Khan instructed Nel & Stevens to proceed with the sale, and threatened to report them to the Kwazulu-Natal Law Society if they did not proceed as instructed.. 


It took the whole of 2004 for Umvoti municipality to finalise the matter and transfer the land to the Dlamini family, the new owners of the house. He stated that he was informed by the Dlamini’s that it was Mrs Khan who signed the papers, and Mrs Khan also signed the deed of sale at Nel & Stevens. Her father’s signature, who was supposed to be the purchaser of the house, did not appear on any of the documents. Only Mrs Khan’s signature appeared on the documents.

He stated that SANCO was of the view that Mr Mkhize’s house must be returned to him, the Umvoti municipality must deal properly with Mrs Khan.

The Chair requested Mr Mkhize to state his side of the matter

Input by Mr Mkhize
Mr Mkhize began addressing the Committee in Zulu.

Mr L Green (ACDP) requested that Mr Mkhize’s input be translated into English.

Ms M Gumede (ANC) replied that it was common knowledge that South Africa had eleven official languages, and Mr Mkhize cannot be blamed for not knowing English.

The Chair stated that no-one present has disputed that South Africa had 11 official languages.

Mr M Nonkonyana (ANC) proposed that a Member summarise Mr Mkhize’s input in English.

The Chair agreed.

Mr Mkhize completed his input in Zulu.

Mr Nene (ANC) stated that he would provide a broad outline of Mr Mkhize’s input, as it will not be as detailed as his own input. Mr Mkhize bought his house for R25 000 with arrear rates of approximately R10 000 from a Mr Bobby Moola. The transfer was completed and Mr Mkhize began building, following all the procedures laid down by the municipality. Upon completion of the house in 2000 his wife passed away. His niece then stayed in the house. Mr Mkhize then received a summons for approximately R12 000 from Nel & Stevens because he had not paid the arrears for period of time. He received summons from Nel & Stevens for a debt of R12 000 and made arrangements to pay no less than R2000 per month, as directed by Mrs Maharaj. On 12 December 2003 he met the Sheriff of the Court at a supermarket who informed him, very arrogantly, that his house was repossessed and would be auctioned. He told the Sheriff that it was not possible because he had been paying R2000 per month, which the Sheriff dismissed out of hand and stated that his house would be sold in any event.

The auction of his house was attended by Mr Scott, Mrs Khan and her father Mr Chetty, in total five people. Mr Mkhize then approached the Mayor who also failed to understand how Mr Mkhize’s house could have been sold. His house was sold at a time when he was only owing R4000 because he was paying the monthly instalments of R2000. The Mayor convened a meeting which Mrs Khan attended. Mr Mkhize stated that she left the meeting in tears. He was then informed that the matter had been resolved but he was advised to seek legal representation because it was not certain whether Mrs Khan would take legal action. Mr Mkhize then approached the firm of Shepstone & Wylie in Pietermaritzburg and was also approached by a police officer who attempted to arrange Legal Aid for him, yet he was discouraged by his family from doing so because they had already enlisted the services of Shepstone & Wylie. Mrs Khan continued to harass the occupants of the house, alleging that the house no longer belonged to Mr Mkhize.

Mr Mkhize requested Parliament to find out why his house was repossessed when he was paying the monthly installments agreed upon. He was also surprised that Mr Kruger, from Nel & Stevens, informed the media that Umvoti municipality has done the correct thing. Mr Mkhize has since been barred from entering the premises by security guards. His attorney has basically abandoned the case because, even though he had paid the R5 005, he has lost contact with his attorney. During his last communication with his attorneys he was informed that his correspondence had gone missing, to the extent that he suspected that his mail to the attorneys could have been intercepted at the Post Office, as Mrs Khan did have a friend working there.

He stated that it was ridiculous that his house was sold on 12 December 2003 when he paid the R2000 on 9 December 2003. When asked for reasons for the sale of the house Mr Kruger showed no sympathy for Mr Mkhize’s family, and stated that “he would prove to that Parliament that he knows the law”. Mr Mkhize was not informed of the auction of his house at all, which amounts to “daylight robbery” as far as he is concerned. He apologised for his use of language but believed that “these people are crooks”.

Mr Mkhize stated that he has lived in Greytown all his life and has never heard of anything like this. The Mayor constantly raises the issue that Mr Mkhize owns several properties, and he felt he was entitled to them because he has a large family.

The Chair stated that a translator has now arrived for Mr Mkhize, and invited him to conclude his input.

The Translator indicated that Mr Mkhize had spoken to the council members who responded that they knew nothing of the issue. According to the council members, the problem might lie between Mrs Khan, the Mayor and Mr Kruger.

The Chair requested the law firm of Nel and Stevens to address the Committee.

Mr P Ngubane, Mayor of Umvoti municipality, requested that he be allowed to address the Committee before Nel & Stevens, so that he could respond to the allegations levelled against the municipality.

The Chair replied that the agenda was very carefully planned and Nel & Stevens would be addressing the Committee. Furthermore, the inputs from the Umvoti municipality and Nel & Stevens must not respond to Mr Mkhize’s input, but should instead restrict themselves to the facts of the matter and the actions that themselves took. Each party involved would be allowed to address the Committee, and then the Committee was have a discussion on the input from each. It was at that stage that people would be able to respond to allegations made against them.
 
Input by Nel and Stevens Law Firm
Mr Kruger stated that he made it clear from the outset that he does not do collections. He stated that the matter came to his knowledge in January 2004 and he investigated the matter. He stated that he would try and follow the sequence of events as presented by Mr Mkhize. Mr Mkhize stated that when he bought the house from Mr Moola there were arrear rates of R10 000.

The Chair informed Mr Kruger that his input at this stage should not have anything to do with what Mr Mkhize has said today, but must instead relate exclusively to the work done by Mr Kruger as legal representative of Umvoti municipality. A discussion will be held after each involved party have address the Committee, and at that stage will everyone be allowed to respond to allegations levelled.

Mr Kruger stated that Nel & Stevens was instructed to issue summons for the collection of an amount of R14 593 together with costs and interest from Mr Mkhize. The summons was finally issued on 24 March 2002 after repeated unsuccessful attempts by the Sheriff of the court, it was eventually served properly. Judgment was then obtained in court for the said amount plus costs and interest. A warrant of execution was issued in response to the judgment and, after various attempts, the Sheriff succeeded in serving the warrant. He found that there were no movables that could be attached. The warrant was reissued to authorise the attachment of immovable property.

The warrant was served on all the relevant parties as required by law. Certain payments were made on behalf of Mr Mkhize, which varied. At the time there were three collections which Nel & Stevens handled on behalf of the Umvoti municipality against Mr Mkhize for arrear rates on various properties. Payments were made and allocated to the various accounts. The payments were erratic. Mr Kruger stated that his investigation indicated that Mr Mkhize had not made any direct arrangement with Nel & Stevens’ collections department to make payments, he did not undertake to pay the costs that went with it. Mr Mkhize did not conclude a written undertaking as to when he would pay, as is the procedure, but rather that “he would pay as and when he deemed it fit”.

The advertisements appeared in the Greytown Gazette and Government Gazette, and set down for 12 December 2003. Mr Mkhize did make a payment on 9 December 2003. Mr Kruger stated that he had inquired why the sale had continued after Mr Mkhize had made the payment and he was informed that it continued because there remained an amount outstanding at that stage, and because no arrangements had been made as to how that amount would be settled. Persons present at the sale of the house included a representative from the Umvoti municipality, but this was not Mrs Khan. Her father Mr Chetty was there, as was the Sheriff of the Court, attorney Johan Scott from the firm Van Rooyen and Vorder, an estate agent as well as a married couple.

At least 3 properties were sold on that day. One was sold for R100 to the council to recover arrear rates. Another property was bought by the estate agent for R37 000. Mr Mkhize’s property was sold to Mr Chetty at R8 000. The conditions of sale was signed by Mrs Khan on behalf of a purchaser to be nominated, which is what did take place.

Mr Kruger stated that he was then telephoned by a journalist from the Natal Witness, and requested an interview. The interview was arranged, but Mr Kruger did not invite him as he came at his own request. At the same time the Greytown Gazette requested an interview and Mr Kruger then accommodated both at the same interview. These people arrived at Mr Kruger’s office with unannounced guests totalling 9 people, which included: Mr Mkhize, his son and grandson, a journalist as well as a councillor. Mr Kruger was then bombarded with questions on reasons for the sale of the house. Mr Kruger specifically denies that he ever referred to Parliament or that Parliament could not do a thing about the matter.

The Chair interrupted Mr Kruger and reminded him that he was making the mistake of responding to allegations levelled by Mr Mkhize. Mr Kruger’s input at this stage should not have anything to do with what Mr Mkhize has said today, but must instead relate exclusively to the work done by Mr Kruger. A discussion will be held after each involved party have address the Committee, and at that stage will everyone be allowed to respond to allegations levelled.

Mr Kruger apologised, and pledged to confine his input to his own actions and statements. He did however find it very difficult to state his actions when those actions were done in response to something that was said to him. He requested Members to bear with him as it was his first appearance in Parliament.

He stated that the advertisements included incorrect erf references. As a result he wrote a letter to Umvoti municipality and sent a copy to Mr Chetty as the successful bidder, advising them of the incorrect description. He concluded the letter by stating that the saga can perhaps now have a happy ending as the payment of the outstanding amount by Mr Mkhize should put pay to the problem. Mr Kruger was instructed to continue with the transfer and it took place successfully, now registered in the name of Mr Chetty. He received correspondence from Shepstone & Wylie, and a short visit from Mr Mthalane.

The Chair requested the Umvoti municipality to state its side of the story.

Umvoti municipality input
Mr Ngubane stated that Chapter 7 of the Constitution was important here as it related to the powers and functions of the local government sphere. He referred Members to Section 155 of the Constitution that dealt with autonomy of the local government sphere. One of the important roles to be played by the local government sphere was to educate the community. He was pleased that an institution such as the South African Local Government Association (SALGA) existed, as it organised important conferences and workshops for people involved in the local government sector. Most municipalities lacked institutional support and were dependent on grants from both provincial and local government, yet have to ensure that they perform their functions properly.

With regard to Mr Mkhize’s matter, the Umvoti municipality must ensure that it performs its duties in accordance with the Constitution. A crucial duty was to ensure that it delivered services, and one of the basic needs was to has the necessary funds so as to pay its officials. There were delegated powers that must also be considered as a local sphere of government, and bylaws were also passed in line with the Constitution. The council consisted of various committees. The municipality also had a financial manager who delegated powers to other officials. The Municipal Finance Management Act (MFMA) required the municipality to report to the MEC for Local Government as well as to the Minister of Finance on its income and expenditure. In this exercise individual cases would not be reported on, but rather the total overall financial situation of the municipality. Councillors also formed a municipal committee that considered the indigent policy and the shortcomings, and the matter would then be referred to the municipality’s executive committee.

All the committees functioned openly and transparently. In Mr Mkhize’s case all ratepayers who owed the Umvoti municipality were referred to the municipal council. The council would usually send notices with those statements or registered post to their addresses, and He stated that he hoped they all received their notices. If they did not honour the terms of the notice, the municipality would then proceed to hand them over to its legal representatives. Mr Mkhize did contact him in January 2004, and the meeting was attended by the Umvoti municipality Chief Financial Officer and his deputy in February 2004. He stated that Mrs Khan was not present at the meeting. This was the procedure followed by the municipality.

Dr L Mortimer, Municipal Manager: Umvoti municipality, stated that Mr Mkhize has been a resident of Greytown for many years and own various properties. He had a record of non-payment, as established by previous presenters. He stated that he agreed with the Chair that politics should not dictate the outcome of a policy decision or legal matter involved. Yet none of the presenters informed the Committee that an existing Ordinance was used by the Umvoti municipality, Section 172 of Ordinance 25 of 1974 Section 172. Yet no-one has indicated that the neighbouring eThekwini municipality uses a similar Ordinance 105, which they used to attach and sell properties on the same basis as Ordinance 25.

He was astounded that Umvoti municipality, which has been producing unqualified audit records for many years and for that reason was respected enough to be used for pilot projects by the provincial and national government, was now being vilified for this incident. He stated that he accepted the outcome as the financial manager, as that was his duty. Umvoti municipality was always prepared from the outset to assist the process, because it wanted to find a solution to the issue.

The law firm of Shepstone & Wylie appointed Mr Nguni to represent Mr Mkhize. Subsequent to the auction on 12 December 2003 he advised Mr Nguni on the procedure that should be followed, but he did not give any legal advice because he was not a legal advisor. He stated that he was aware that Mr Van Rooyen, an Umvoti magistrate, was approached for assistance, and offered assistance freely and willingly to Mr Mkhize. He would not be outlining the chain of events as it was set out clearly by previous presenters, but would instead focus on legislation and policies that would determine a way forward.


Mr Mshudulu stated that, on a point of order, it appeared that Umvoti municipality was providing an opinion or assessment of today’s inputs and meeting rather than informing Members of their role in the matter. If Dr Mortimer has nothing more to add to the facts of the matter, he should then hand over to another official to make input.

Mr Hlubi (ANC) agreed with Mr Mshudulu. He stated that Dr Mortimer should refrain from political discussions as he was a functionary, not a politician..

The Chair stated that Dr Mortimer apparently did not hear her opening remarks when she ruled that this matter must be considered without “wearing any political hats”. She questioned whether Dr Mortimer understood the role of a public representative, which was to pass legislation and to exercise oversight over the legislation it passed by monitoring its implementation. She requested Dr Mortimer to continue and inform Members of the events relating to the sale of Mr Mkhize’s house.

Dr Mortimer informed Members that the house was sold on 12 December 2003, and the question then was why Mr Mkhize’s house was sold. For the record the credit control policy of the council dictates the manner in which a defaulter must be dealt with, as well as the system of delegation which grants authority to various officials who dealt with defaulters in a specific manner in accordance with the council’s policy. This was how the credit controller was granted certain authority to deal with defaulters. He concluded his input by apologising for offending the House.

Mr S Van Der Merwe, Chief Financial Officer; Umvoti municipality, stated that any ideas that this was a recent debt should be dispelled. The arrears in respect of the property first arose in 2000 and registered letters were served in terms of the applicable legislation. Still no offer was forthcoming from the debtor to settle the arrears and the count was first handed over to another firm of attorneys in March 2001. That firm took action over a period of 2 years, including attempts to attach a vehicle. The sale of the vehicle was postponed by those attorneys because the debtor promised to settle the debt. He however failed to do so and further action was taken in an attempt to recover the debt. On 30 January 2002 Umvoti municipality was advised that the warrant of execution was in the hands of the Clerk of the Court for reissue.


Umvoti municipality continued to write to the attorneys confirming its concern that the finalisation of the matter was constantly being delayed, especially since the rates were accruing on an annual basis and the debt was thus growing. Ultimately in January 2003 Nel & Stevens took over the matter from the previous attorneys, who informed Umvoti municipality that they were no longer carrying out collections.

With regard to the levels of responsibility, the executive committee of the municipality is responsible for determining the policy and it was carried out by the management. The authority to collect revenue was delegated by the municipal manager to the Chief Financial Officer, who would then have to implementation the council’s credit control policy. The council was thus not responsible for individual actions against debtors.

Mr Ngubane stated that he now wished to respond to the matters raised by SANCO and Mr Mkhize.

The Chair stated that she asked Mr Ngubane whether he wanted to add anything to the Umvoti municipality input. She stated that she has not yet opened discussions on the matter, and she has explained herself more than once.

Discussion
Mr P Smith (IFP) sought clarity as to whether Mr Mkhize’s case was being used as an example of the system of laws governing this issue, or whether the details regarding this case was being unpacked with a view to remedying the incident. He requested the Umvoti municipality to provide Members with a copy of Ordinance 25 of 1974 as well as its credit control policy. Clarity was also needed on the system of delegation employed by the Umvoti municipality.

Mr M Lekgoro (ANC) stated that the primary focus of the meeting was to understand the system of governance at local government level and how it impacted on individuals, and the Mkhize case demonstrated the point. There were many Mkhize’s in South Africa and the present case must be used to assist them. The responded by the Umvoti municipality merely related to the Committee the machinery used by local government, yet it did not indicate the impact the system was having on members of the municipality when the very aim was to trace the effectiveness and efficiency of political management of councilors in addressing this issue. The principle of batho pele was crucial here. He asked whether the Umvoti municipality was aware that Mr Mkhize was a pensioner.

The Chair replied that it could be a situation that was happening throughout the country, but the aim was also to understand in detail what exactly took place in the Mkhize case as well as where the loopholes were. The case study allowed the Committee to assess whether the laws were being properly implementation in accordance with the Constitution.

Mr L Greene (ACDP) stated that this was a very important case for the ACDP. When the Property Rates Bill was being processed the ACDP raised the concern in the House that no person, especially a pensioner, must lose their property because they cannot pay their rates. The Mkhize case was precisely the kind of incident that the ACDP wants to fight against. All municipalities that apply the law in such a heartless manner must be stopped.

He stated that he was informed that a house was sold for R100 when a policy was in place which required municipality to assist those who have fallen behind in their rates. He asked Umvoti municipality to indicate the steps it took to assist Mr Mkhize to pay his rates. Mr Mkhize might not have concluded a written agreement with the Umvoti municipality on repayment, but the fact was that he paid approximately R2000 per month to extinguish the debt.

Mr Van Der Merwe responded that accounts and registered letters were sent out before the matter was handed over to the first firm of attorneys.

The Chair clarified the question for Mr Van Der Merwe: the question did not ask the Umvoti municipality to explain the procedures it followed, but rather what assistance was given by the Umvoti municipality to Mr Mkhize.

Mr Van Der Merwe sought clarity on the kind of assistance being referred to.

The Chair asked whether a letter of demand constituted assistance. She stated that she was not referring to the procedures, but whether Mr Mkhize was assisted in line with government’s batho pele principles.

Mr Ngubane replied that the Municipal Systems Act referred to community participation. In this case the ward councilor would have liased with Mr Mkhize, and the mayor would have to communicate the affairs of the council and its budget to the community. He stated that he would accompany the councilors concerned to the communities, as part of batho pele.

Ms H Mpaka (ANC) stated that, on a point of order, the question requested the Umvoti municipality to inform the Committee of the steps it took in assisting Mr Mkhize around the procedures that Mr Van Der Merwe has referred to. The question did not refer to the broader issue of public participation.

Mr Ngubane continued that the Umvoti municipality acted in line with batho pele that the municipality communicate its rates policy to the community.

Ms Mpaka interrupted Mr Ngubane to state that this involved two different elements: public participation and batho pele principles. She questioned whether Mr Ngubane understood the principles himself.

The Chair stated that there was no sense in auctioning a house for R100 as referred to earlier by Mr Greene because a resident owed the municipality R300, when it was clear that the result of that sale would increase the slum settlement.

Mr Ngubane replied that he had planned to respond in a broader sense before addressing the specific issue. Communication is a two-way process in which the affected party would liase with the administration. The procedure was that the council would write to the affected party.

The Chair interrupted Mr Ngubane and stated that he clearly does not understand the question posed to him. The question was whether the Umvoti municipality assisted Mr Mkhize in line with the Masakhane and batho pele initiatives within government.

Mr Ngubane responded that he was trying to address this very question by explaining to Members that individual citizens were not addressed, but instead an entire commokunity was engaged to educate them on such programmes.

The Chair interrupted and indicated that Mr Ngubane’s response must indicate in detail that he consulted with the ward councilor as to when the councilor visited Mr Mkhize on the issue, when the workshop was held in the ward Mr Mkhize resided in and on what date a public participation programme on the Umvoti municipality’s policies. All these steps would have provided Mr Mkhize with a very clear picture of events.

Mr Nbugabe responded in Zulu, and the translator was asked to interpret. He stated that when he received the matter of Mr Mkhize, the procedures before the Committee were followed. The municipal official in charge of finance was then requested to mediate in the selling of Mr Mkhize’s house, and to ensure that the willing buyer of Mr Mkhize’s house be reimbursed. Umvoti municipality then informed Mr Mkhize that if he was not happy with the resolution of the municipality, there were other available avenues for him to follow.

The Chair stated that if it was true that Umvoti municipality intervened and instructed the buyer of Mr Mkhize’s house to be reimbursed, what was the report given to Mr Ngubane after this transpired.

Mr Ngubane replied that he received a report that Mr Mkhize was unwilling to repay the buyer for the expenses incurred in buying Mr Mkhize’s house, and that Mr Mkhize was intending to contest this.

The Chair requested the total cost of the expenses.

Mr Kruger responded that he did speak both to Mr Mkhize and the buyer of the house about this.

Mr Mthalane stated that, on a point of order, Mr Ngubane indicated that he had instructed the financial manager to intervene yet Mr Kruger, an attorney, was now being asked to respond. Mr Kruger was not the financial manager, nor was he a municipal official.

Mr Van Der Merwe replied that he met with Mrs Khan after the meeting, and encouraged her to do what she could to terminate the sale, thinking at that stage that she had bought the property. He stated that this was the end of his involvement in the matter.

Ms Mpaka asked whether Mr Van Der Merwe then reported back to Mr Ngubane to inform him that he has just encouraged Mrs Khan to terminate the sale.

Mr Greene asked whether the same action was taken against the businesses in the Umvoti municipality which had outstanding rates, so that Members could gauge whether there was a consistent application of the law.

Mr Nene asked whether there was any correspondence or communication that rescinded the letter which Mr Kruger said was incorrect. Secondly, he sought clarity on the council resolution on Mr Mkhize’s case, and whether it was implemented.
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Mr Ngubane replied that the total cost of the expenses owed by Mr Mkhize amounted to R35 000. He requested the attorneys to respond.

The Chair stated that Mr Kruger has nothing to do with the matter at this stage because the sale had already gone though, the matter was being dealt with internally by the municipality and an official was delegated to reverse the sale. 

Dr Mortimer replied that Mr Ngubane had asked him to intervene and speak to Mrs Khan and the outcome of that meeting resulted in exactly the same thing: Mrs Khan returned to Dr Mortimer and informed him that there were no favourable negotiations with Mr Mkhize. The Chair Umvoti municipality was made aware that the only way the legal process could be reversed was via another legal process, and thus the Umvoti municipality did not have the authority to negotiate itself out of the matter. It essentially requires another legal process to reverse the matter.

Mr M Mthimkhulu, Chief Whip of the ANC in Kwazulu-Natal legislature, sought a breakdown of the R35 000 in expenses.

Mr Van Der Merwe responded that his brief was talk to Mrs Khan because she shared a relationship with the purchaser of the property, and he did have a talk with her. That subsequently resulted in discussions at the attorneys’ office with Nel & Stevens and the purchaser of the property.

Mr Greene suggested that Mrs Khan could very well have purposefully decided not to be helpful towards Mr Mkhize precisely because she had a vested financial interest in completing the sale, as her father was the purchaser of the house. This meant that Mrs Khan acted unethically in that she used information gained as a result of her position of employment in the municipality to promote not only her own interests but also those of her relatives. He asked whether the municipality was aware of this, as nothing was done by Umvoti municipality to stop the sale of Mr Mkhize’s house.

Mr Ngubane replied that he would not want to engage in discussions on ethics. As far as the council was concerned, it did its duty in trying to mediate and then handed the matter over to its attorneys who were tasked to restore the house to Mr Mkhize. As stated earlier, the offer was put to Mr Mkhize that he would first have to pay the R35 000 legal fees before his house could be returned to him.

Mr Nonkonyana stated that it made no sense for the municipality to require Mr Mkhize to “pay for their sins” and pay the R35 000, when they should not have sold his house in the first place. The only option is then for the municipality to take steps to correct the wrong.

Mr B Solo (ANC) stated that the municipality officials clearly did not take this matter seriously as it was “lunch as usual” and reverted to the old practice of exploiting the previously disadvantaged. Mr Mkhize was subjected to a “white lawyers, white firms, white officials who do not understand the circumstances” he was living under, nor were they prepared to take a further step and assist him. The conflict of interests referred to by Mr Greene was glaringly clear here, and the municipality must look at this matter very carefully.

Mr Hlubi stated that the officials from the Umvoti municipality have traveled a long way from Pietermaritzburg only to provide no answers at all to the Committee, and questioned the purpose of their visit. Dr Mortimer informed the Committee that the municipality was dealing with an Ordinance of 1974 which was 30 years old.

Secondly, he stated that the Committee appeared to be “wast[ing its] time to talk to people who don’t respond”. Mr Ngubane is the political head of the municipality yet he has been very quiet during the meeting, and his input was “a futile exercise” as it provided no “zeal and oomf”. It appeared that the Umvoti municipality cannot account for its actions, and Mr Ngubane was not even sure whether the figure was in fact R35 000. Perhaps the Mayor was the functionary and the officials were the politicians.

Ms L Mashiane (ANC) asked the Umvoti municipality to explain whether the council took a resolution on the matter, and whether it understood the implications of the decisions it took on the community. Secondly, she questioned whether the council understood the simple operations of developmental local government, and noted that none of the officials were taking down her questions. Thirdly, she asked whether the auctioner was appointed by the municipal council or by individuals in the council, and who instructed the auctioners. Fourthly, she asked whether the list of houses to be auctioned was widely publicised or whether Mrs Khan kept it to herself. Furthermore, the Umvoti municipality was saying that the decision taken by the municipal council cannot be reversed, yet Ms Mashiane was aware that such decision could be rescinded.

Mr Nonkonyane posed the following questions to the Umvoti municipality delegation for response: - he had hoped that the Umvoti municipality would brief the Committee on the process that led to the suspension of Mrs Khan from office;
- whether the Umvoti municipality could explain who instructed Nel & Stevens to institute legal proceedings against Mr Mkhize;
- he asked what happened to the letter of demand served on Mr Mkhize, and whether the regular payment by Mr Mkhize meant anything to the debt collectors;
- there must have been collusion between key roleplayers involved here, as there was no other explanation for Mrs Khan knowing about the state of the title deeds of Mr Mkhize’s house
- he sought clarity as to how and by whom the warrant of execution was served, and why Mr Mkhize was not informed of the sale of his house;
- he requested copies of the publication of sale;
- whether the council in fact passed a resolution on the sale of Mr Mkhize’s house;
- whether the Umvoti municipality had its own legal unit and, if so, what its role was;
- why Mr Mkhize’s legal representatives Shepstone & Wylie did not act swiftly in coming to his aid;
- the policeman who came to Mr Mhize’s aid must be congratulated as he was the one person in this matter who properly represented government’s batho pele initiative;
- the major players in this matter were white males, and was thus not gender and race representative;
- racism and ethnicity “has raised its ugly head” in Umvoti municipality and must be dealt with decisively;
- Mrs Khan issued the instruction for the sale of Mr Mkhize’s house for R8000 and she herself bought the property, and justice must be served on her;
- he questioned whether the Greytown magistrate was also involved in this collusion as he did not take any steps to assist Mr Mkhize when the Magistrates Court Act specifically empowered him to assist Mr Mkhize;
- the MEC might have to intervene if the municipality does not rectify this matter; and
– the house must be returned to Mr Mkhize.

The Chair read out the list of other defaulters in the Umvoti municipality and the amounts they owed, but whose property has remains intact: Maharaj Jaylal owing R67 000, RSA owing R38 341, another companies owed R52 755 and R36 961 respectively, RSA Department of Education owed R46 393, Govender K and others owed R92 704, Harilal Sonkota owing R69 150
Mr Ntuli (ANC), FSN (Pty) (Ltd) owed R16 592 and a company by the name of Kaizer owed R24 268. The question thus was whether the Umvoti municipality took the similar route in dealing with the debt collection from these businesses.

Secondly, it meant that Mr Chetty paid R8 000 for a house and sold it for R350 000, making an overnight profit of R342 000 for a house that should not have been sold in the first place. This was surely not the intention of the legislation or government, and it was within Parliament’s authority to craft a Bill that would put an end to such corrupt dealings.

Thirdly, the house was sold out from under Mr Mkhize despite the fact that he was making repayments, and there were no attempts by Umvoti municipality to assist Mr Mkhize by arranging a repayment plan or by taking into account his circumstances when collecting the debt. She appealed to Members to use this scenario to unearth whether this was happening throughout South Africa..

Mr Ntuli, councilor from eThekwini Municipality, clarified the statement made earlier by Dr Mortimer that it sued the same legislation as Umvoti municipality. He stated that eThekwini municipality correctly understood the legislation and has even put in place the following policies: a race lifeline policy that takes into account the income levels of communities. Secondly, there was a deferment policy that catered for pensioners. Thirdly, it had an indigent policy that looked at the income levels of members of the community. The eThekwini municipality has also employed persons who champion batho pele by educating people about batho pele. Customer service centres have been created, and the municipality has a schedule of Masekhane campaigns which visit various communities to discuss issues of concern.

He stated that eThekwini municipality has never sold the house of a disadvantaged person since its inception in 1996. The municipality has also been receiving several rewards, the most recent being the Vula award as an appreciation for the performance of the eThekwini municipality.

Mr J Mchunu, representative from the Kwazulu-Natal legislature’s Portfolio Committee on Local Government, stated that the issue of batho pele also included the value of ubuntu, and there was clearly no ubuntu within that municipality. He stated that the municipal officials did not even seem to understand the protocol as, on the flight down from Durban to Cape Town, Mr Ngubane traveled in economy class whereas the rest of his delegation all traveled in business class. This clearly indicated that there was no transformation within Umvoti municipality. It was clear that “the mayor need[s] help [as] he is also subjected to the same problems as [Mr} Mkhize”. His delegation was not representative.

Mr L Mngomezulu, from SANCO, stated the Committee’s efforts today to convince Umvoti municipality to reverse its decision were futile, and the municipality clearly had problems with understanding the concept of a developmental municipality. It has not been mentioned that an Etv journalist and SANCO officials were attacked by members of the Chetty family when they wanted to investigate this matter, and this indicated that calibre of people being dealt with. It was painful to know that someone like Mr Mkhize would lose the house which he worked so hard for.

The fact was that the indigent policies in place were not practically implemented to assist the poor, but simply with a view to increase national allocations. Mr Mhize must be allowed to recover his house at no additional costs. Methods must be identified to assist people to settle their debt without having to attach their house, and SANCO has an important role to play here.

Mr Dorman stated that the fact that the sale and decision to sell municipal property in execution of a debt was delegated to such a low ranking official within the municipality must be looked into.

Secondly, the valuation of the property sold at auctions must be considered in depth, because it cannot simply be sold at the lowest value merely to cover the debt owing.

Mr Ngubane responded that most of the inputs by Members were in fact only statements. He stated that he was disappointment that, despite the Chair’s earlier call, there was significant politics involved in Members’ input. He was also disappointed that more time was given to Members to ask questions than was allocated to Umvoti municipality to respond, and it became difficult to answer the questions.

He stated that the Umvoti municipality did have an indigent policy and policies on the appointment of its staff and attorneys. The indigent policy which has certain requirements, such as a person who owned more than one property could not be afforded the opportunity to use the Act. There was also a financial barrier.

The Umvoti municipality attorneys were appointed on a tender basis and were approved by the municipality’s executive council.

Umvoti municipality was definitely abiding by government’s transformation drive. Although it had white officials present, they were committed to the change, and they carried out the instructions of the council in as dedicated a manner as possible.

He stated that bookings were made for economic class for every member of the delegation but, because he was the first person to check in, those that followed were catered accordingly

He stated that to date there was no municipality that has performed as well as Umvoti municipality has. Many people in Umvoti municipality who were in the same situation as Mr Mkhize have been helped via its Masekhane initiative, even those with more than one property. The fact was that Mr Mkhize did not afford himself this opportunity. Umvoti municipality should have been given ample time today to explain its programmes, and should not merely have been accused by Members as it appears that a decision has already been taken to see this council as one that has acted wrongfully.

The fact was that Mr Mkhize did not liase with the municipality, the attorneys nor did he make an offer to repay regularly.

The Chair interrupted Mr Ngubane on a point of order.

Mr Ngubane requested to be allowed to continue his response.

The Chair informed Mr Ngubane that a point of order meant that he had to end his input and allow the Member to speak.

Ms Mashiane stated that Mr Ngubane was not responding directly to the questions raised, and it was for that reason that she requested they write all the questions down. The critical question was whether the council resolution regarding the sale of Mr Mkhize’s house. She requested a copy of the resolution.

Mr Ngubane replied that the council resolution regarding the enforcement of the credit control policy has been taken. The council would not be able to submit a resolution that dealt solely with Mr Mkhize’s case, as it took a resolution to hand over all the people who owed money to the council, which included Mr Mkhize.

Mr
Mthalane stated that Mr Ngubane was contradicting himself, because in a previous meeting held with him he indicated that he had knowledge of the resolution and that it surprised him.

Mr Ngubane replied that there was an understanding. The CFO brought a list of all defaulters and amount owed before council, and it then took a decision as to whether they should be handed over to the attorneys should they fail to pay.

Mr Mthimkhulu stated that the fundamental problem here was that the Umvoti municipality was not answering the questions posed to it. It was for that reason that the Committee was being sidetracked from each issue it was seeking clarity on. They were no accusations but rather questions of clarity.

The Chair agreed. She stated that Mr Ngubane’s analysis might have been correct, but it was not relevant to the meeting or the questions raised by Members. She appealed to the delegation to respond to the questions posed to them.

Mr Ngubane responded that Mr Mkhize did in fact speak with him, but that was before the sale of the property.

The Chair stated that Mr Ngubane was contradicting himself, as he said earlier that Mr Mhize had not spoken to him.

Mr Ngubane replied that he did not avail himself once the process had begun.

The Chair stated that Mr Mkhize had been paying yet the Umvoti municipality proceeded with the warrant of execution.

Mr Kruger responded that he had tried to explain the events earlier but was stopped by Members. He stated that he did issue a summons as well as an attachment, a writ was executed and Mr Mkhize did make payments. Yet the procedure for payment was not followed by Mr Mkhize, as he did not make a formal arrangement with the debt collecting department to pay every month. He stated that his firm did not have authority to accept installments when a large amount was outstanding.

The Chair interrupted Mr Kruger and asked whether he accepted Mr Mkhize’s payments, and whether the payment was recorded in his file..

Mr Kruger replied that payment was accepted for repayment of debt, but nothing was recorded in his file.

Mr Nonkonyane asked Mr Ngubane to indicate whether was prepared to take steps to rectify this clear miscarriage of justice.

Mr Ngubane replied that it would be difficult for him to make such a statement, as he could not unilaterally revoke the council by-laws. He stated that he took Mr Mkhize’s matter very seriously, as he did with all other matters. The applicable laws were followed and he cannot rescind the process. Mr Mkhize did however have the right to test this matter at a court of law. The Administrative Justice Act also allows an individual the chance to respond.

Mr Mngomezulu encouraged Mr Ngubane to resolve the matter without having to go to court, as it was in keeping with government’s approach to a developmental local government.

Mr Lekgoro stated that Umvoti municipality has heard the Committee’s requests but they failed to see the plight of Mr Mkhize and many others like him. The Committee was pleading with Umvoti municipality to hear Mr Mkhize’s  plight, as legal recourse was very expensive to access. Laws cannot be applied in as administrative and sterile a manner as was done during the Apartheid period. The Umvoti municipality could probably not reverse the decision overnight, but the Committee was merely requesting a commitment from them to do so.

Mr Greene stated that there were three options available: the Umvoti municipality could either review the case and take it to a higher court, secondly, the MEC could take the case on review. If there was no response from review the Minister could be approached. There was not much more input that could be gained from the Umvoti municipality.

Concluding remarks by Chairperson
The Chair concluded that she expected the Umvoti municipality to state a convincing case regarding the rooting out of corruption, whereas they instead related the legal avenues it followed. The Umvoti municipality purposefully avoided the question on the relationship between Mrs Khan and Mr Chetty, because this question was asked more than once. This issue was important to good governance. It was Mr Ngubabe’s responsibility to ensure that his officials did not draw the municipality into corrupt activities. If the Umvoti municipality has not dealt with the corruption, it must be done immediately.

She stated that a solution to this matter would not be found today. It was however discovered today that work needed to be done by this Committee and all involved at a local government level to ensure such corrupt practices do not occur in future. It might involve the passing of legislation.

The meeting was adjourned.

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