Law firms are licking their lips at the prospect of SA National Roads Agency (Sanral) going to war with Gauteng motorists, over the non-payment of e-tolls.
In response to questions from Moneyweb, Sanral says it has summonsed nearly 5 500 individuals and 837 businesses for non-payment of e-tolls. The Organisation Undoing Tax Abuse (Outa), which is fighting e-tolls, says a further 6 500 summons were delivered “by the bakkie load” this week at various magistrates courts. That’s a total of about 13 000 summonses that have been issued so far.
These cases are likely to clog the justice system, as many of these are being defended. Some of the cases will be heard in the high courts, others in magistrates courts dotted around the country. One summons is claiming R6.9 million in unpaid e-tolls, another R1.6 million.
The Organisation Undoing Tax Abuse (Outa) is defending scores of its members against Sanral, and has briefed one of SA’s top legal heavyweights, Gilbert Marcus SC, to argue its case in court, which could drag on for years.
“We want to see if we can join these cases so they can be heard together, since they involve pretty much the same legal arguments,” says Outa chairman Wayne Duvenage.
Sanral’s Strategic Plan document shows an allocation of R8.5 million for legal fees in the 2015/16 financial year, and R5.7 million for the current year.
This may not be enough. Most of these cases are likely to be defended, many of them by Outa. The summonses seen by Moneyweb are ‘simple summonses’, meaning they are simple claims for repayment of outstanding debt, without the supporting evidence, such as photographs of vehicles passing under the e-tolls gantries. Outa is likely to demand that Sanral furnish the supporting evidence, which will run to tens of thousands of pages in some cases. If you multiply this by more than 6 000 cases, the courts are going to be drowned in a blizzard of paper.
Sanral has appointed Daly Attorneys to manage the issue of summonses, backed by a network of correspondent attorneys around the country. Werksmans Attorneys is on retainer to Sanral as its attorney of record on e-tolls. According to Outa, some attorneys have refused to represent Sanral on principle.
According to one legal expert, the attorneys issuing the summonses are likely to make about R25 million out of Sanral. That doesn’t count what attorneys will make from defending their clients, which is likely to be a similar number.
Vusi Mona, general manager for communications at Sanral, says it is obliged by the Public Finance Management Act to collect monies owing to it. Therefore more summonses can be expected.
“We have to consider the 1.5 million compliant individuals, businesses and corporates who have been doing the right thing and paying their e-tolls. We also have to consider the importance of upholding the rule of law.”
Outa disputes the figure of 1.5 million e-tolls subscribers. “It’s hogwash,” says Duvenage. “This is the number of e-tags that were issued, but most of these were fitted in government and car-rental fleets in Cape Town, Durban and elsewhere, and never once passed under an e-toll gantry.”
Duvenage says Sanral’s legal onslaught is a mark of its desperation. Its bond issuing programme is under pressure as investors are unsure whether it will be able to meet its repayment obligations without leaning on government guarantees.
Says Mona: “It would be safe to say that the country cannot afford that Sanral fails. Specifically it has to do with not only our credit rating but the country’s. Should Moody’s Investor Services downgrade our country – the sovereign credit rating – it would directly impact on our cost of borrowing, specifically for the bonds issued under the guarantee, which is almost R30 billion.”