Port Elizabeth Municipality v Uitenhage Municipality 1971 (1) SA 724 (A)

Port Elizabeth Municipality v Uitenhage Municipality 1971 (1) SA 724 (A)

Issue: Whether a municipality can recover payments made under duress.

Facts:

The Port Elizabeth Municipality (Port Elizabeth) and the Uitenhage Municipality (Uitenhage) were two neighboring municipalities. Port Elizabeth supplied water to Uitenhage under a contract.

In 1966, Port Elizabeth increased the water tariff. Uitenhage objected to the increase, arguing that it was unreasonable. However, Uitenhage continued to pay the increased tariff under protest.

In 1969, Uitenhage sued Port Elizabeth for a refund of the money it had paid under protest. Port Elizabeth argued that Uitenhage was not entitled to a refund because it had not been under duress when it paid the increased tariff.

Held:

The Court held that Uitenhage was entitled to a refund of the money it had paid under protest. The Court reasoned that Uitenhage had been under duress because it had feared that Port Elizabeth would cut off its water supply if it did not pay the increased tariff.

The Court also found that Port Elizabeth had been aware of Uitenhage's protest and that it had not acted in good faith when it refused to refund the money.

Key Facts:

• A municipality supplied water to a neighboring municipality under a contract.
• The supplying municipality increased the water tariff.
• The neighboring municipality objected to the increase but continued to pay the increased tariff under protest.
• The neighboring municipality sued the supplying municipality for a refund of the money it had paid under protest.

Reasons:

• The Court held that the neighboring municipality was entitled to a refund of the money it had paid under protest.
• The Court reasoned that the neighboring municipality had been under duress because it had feared that the supplying municipality would cut off its water supply if it did not pay the increased tariff.
• The Court also found that the supplying municipality had been aware of the neighboring municipality's protest and that it had not acted in good faith when it refused to refund the money.

Conclusion:

The Court's decision in Port Elizabeth Municipality v Uitenhage Municipality 1971 (1) SA 724 (A) is a significant case in South African law. The Court's decision made it clear that a municipality cannot recover payments made under duress.