In what is seen by RASP Consultants as a minor victory for uThukela District Municipality and a mere setback for RASP itself, the company’s application in which it appealed the Pietermaritzburg High Court ruling that compelled it to hand back the municipality’s bank accounts was dismissed.

The accounts had been seized after uThukela failed to pay instalments agreed to in a voluntary consent order lodged at the High Court, having admitted it owed RASP a whopping R137 million.

Under the arrangement, an acceleration clause stipulated that, should uThukela fail to pay an instalment, the full amount plus interest would become due, bringing the total to R168 million.

Responding to the setback, RASP immediately launched a motion to the Supreme Court of Appeal in South Africa. RASP has not accepted Judge Jikela’s ruling as final. The matter has already been taken further by way of a petition to the Supreme Court of Appeal. The legal process is therefore still alive and far from concluded.

Legality of clause

Judge Jikela ruled that RASP’s challenge to the order directing repayment of the monies extracted cannot be sustained, particularly in circumstances where the legality of the execution of the acceleration clause is being challenged.

She added that the interim order does not set aside the consent order of October 3, 2025, nor does it pronounce on its validity; it merely suspends its operation.

She dismissed RASP’s application for leave to appeal the interim order, with costs.

Supreme Court of Appeal

RASP has since escalated its legal wrangle with uThukela to the Supreme Court of Appeal, where it has filed a notice of motion to have Justice Jileka’s refusal for leave to appeal set aside.

Contained in the notice of motion is an affidavit submitted by RASP, in which a spokesperson explained that RASP had been granted a High Court order by consent on October 3, in which uThukela had agreed to pay RASP R138 million in 24 consecutive staggered instalments.

The spokesperson further points out that an acceleration clause contained with the consent order stipulates that, should uThukela breach the terms of the order, the full amount shall immediately become due.

uThukela waited 29 days after deadline to pay

uThukela subsequently failed to pay RASP its first instalment on the agreed-upon due date and then failed to meet the extended deadline for payment that was granted by RASP.
According to the spokesperson, uThukela only paid its first instalment 29 days after the expiry of the indulgence period granted by RASP.

RASP accepted this payment, but proceeded to act on the acceleration clause, obtaining a writ of execution, with the Sheriff attaching and garnisheeing uThukela’s bank accounts. R80 million was since paid to RASP from uThukela’s bank accounts by the Sheriff.

Urgent application made 40 days later?

Following an urgent application to the High Court by uThukela 40 days later, Jikela suspended the operation and execution of the consent order and the writs of execution, uplifted the attachments and garnishees on uThukela’s bank accounts, and directed the Sheriff to release all monies withdrawn from the accounts.

Funds that were already paid to RASP by the Sheriff had to be returned within 48 hours.
Jikela found that RASP’s acceptance of the first instalment, despite being later, gave rise to the waiver of the acceleration clause. She further found that the attachment of municipal funds was irregular, as this constituted public resources.

Legal injustice?

RASP, however, describes Jikela’s judgment as ‘a legal injustice of considerable gravity’. RASP’s spokesperson explains that Jikela’s judgment generates legal uncertainty as to the enforcement of judgments against municipalities, and the integrity of consent orders as a mechanism for resolving legal disputes.
RASP argues that Jikela suspended the operation of a valid consent order, reversed steps taken to execute it and restrained its enforcement, despite the fact that uThukela had never challenged the validity of the consent order.

“The indebtedness was already recorded in a voluntary consent order. The issue before the court related to the manner in which RASP approached the recovery and enforcement of the amount due to it, including the operation of the acceleration clause and the attachment of municipal bank accounts,” added RASP. “RASP’s underlying claim was not rejected, nor did uThukela’s indebtedness disappear.”

Read the full story on the Front Page of the Ladysmith Gazette next week!

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