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[2015] ZAGPJHC 46
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Ferox Investments (Pty) Ltd v City of Johannesburg (2012/8287) [2015] ZAGPJHC 46 (3 March 2015)
REPUBLIC OF SOUTH
AFRICA
IN THE HIGH COURT OF
SOUTH AFRICA,
GAUTENG LOCAL DIVISION,
JOHANNESBURG
CASE NO: 2012/8287
DATE: 03 MARCH 2015
In the matter between:
FEROX INVESTMENTS (PTY)
LTD
..............................................................................
APPLICANT
And
CITY OF
JOHANNESBURG
.........................................................................................................
RESPONDENT
J U D G M E N T
WRIGHT J
INTRODUCTION
1. The applicant company owned a piece
of immovable property until 31 August 2010 when the applicant’s
ownership was transferred
to a different party. The applicant
requested clearance figures from the respondent City before transfer.
On 8 July 2010 the City
demanded the sum R1 089 090,44. This figure
was said by the City to be valid for the period 1 August 2010 to 31
December 2010.
The City’s figure was an estimate, as the
consumption of water to date of transfer was not known in advance.
The applicant
paid R1 004 421,86 to the City and the property was
transferred to the buyer. This payment was made on 27 August 2010.
Since transfer,
the applicant has been trying to get the City to give
the applicant an accounting and payment of the correct amount owing
to the
applicant. It is common cause that the applicant did not incur
any liability to the City after 31 August 2010 for water and sewerage
for the property in question. The dispute in this case concerns only
water and sewerage charges up to 31 August 2010 for this property.
A SUMMARY
2. On 3 November 2010 the City produced
a tax invoice reflecting a credit, owing by the City to the applicant
of R1 637 210,31.
On 9 June 2011 a representative of the City sent an
email to the applicant saying that a refund of R1 627 038,16 was in
progress.
The discrepancy between R1 637 210,31 and R1 627 038,16 was
not explained. On 27 July 2011 the City refunded to the applicant the
sum of R444 277,90. The difference between the amount on the invoice
of R1 637 210,31 and R444 277,90 is R1 192 932,41.
3. On 11 August 2011 and seemingly out
of the blue the City raised a debit of R1 182 760,26. Despite an
on-going effort by representatives
of the applicant to get the City
to explain this debit it took the City until 8 February 2013 to
produce a document headed “Adjustment
Calculation”. It
did so by way of an attachment to an answering affidavit in the
present litigation. This cryptic document,
which contains an
indication that it was prepared on 21 July 2011 claims an amount of
R613 268,67 for water for the period 2008/07/18
to 2010/08/31 and an
amount of R424 240,33 for sewerage for the same period. Vat of R145
251,26 was added, giving a total of R1
182 760,26. The City has never
produced the underlying documentation for this figure.
4. The difference between R1 192 932,41
and R1 182 760,26 is R10 172,15. I shall revert to this later.
5. In essence, the issue is whether the
three meters on the property are all independent of each other, each
measuring a different
flow of water, (in which case the City may
charge for water flowing through all three meters) or whether one of
the meters acts
only as a check meter for the other two, in which
case the City may not bill for the check meter.
THE LITIGATION UP TO THE START OF
EVIDENCE IN THE PRESENT HEARING
6. The applicant began litigating by
way of a provisional sentence summons in which it relied on the
undertaking of 9 June 2011.
That action was unsuccessful, apparently
on the basis that the City’s email of 9 June 2011 did not
amount to an acknowledgement
of debt. The applicant launched the
present application by serving it on the City on 6 March 2012. In the
notice of motion the
applicant claims a statement of account
supported by vouchers, a debatement of the account and payment of the
amount due to the
applicant and an invoice for the amount of R1 182
760,26.
7. On 24 May 2013 Jordaan AJ made an
order in the form of that made in Metallurgical and Commercial
Consultants (Pty) Ltd v Metal
Sales Co (Pty) Ltd
1971 (2) SA 388
W.
In short, Jordaan AJ ordered a debatement of the account to be
followed by payment by the City to the applicant of whatever
was
payable. It was also ordered that the deponents to affidavits appear
at a hearing and that in the event of either party wanting
to call as
a witness a person who had not deposed to an affidavit such party
would be obliged to furnish to the other side a summary
of that
person’s evidence not less than ten days before the hearing.
The Rules relating to discovery, expert notices and
pre-trial
conferences were made applicable to the contemplated hearing. The
issues to be determined by oral evidence were not defined
beyond an
order that the account be debated. Jordaan AJ ordered the costs of 23
May 2013 to be in the cause. In my view Jordaan
AJ clearly had in
mind that a trial type hearing would be needed to determine the
matter if the debatement did not resolve the
question.
8. On 18 September 2013 Tsoka J
postponed the matter sine die and reserved the question of costs.
9. When the matter came before me while
sitting on civil trial duty Mr Beharie, for the City requested a
postponement saying that
he was not in a position to proceed with the
matter. It soon became apparent that the City was in a state of
disarray regarding
the account in question. When I demurred on the
postponement Mr Beharie requested 24 hours to enable him, his team
and his client
to gather their thoughts. Against the argument of Mr
Georgiades, for the applicant who wanted to proceed with the matter
straight
away, I ordered that the matter stand until the next day. I
ordered the parties to hold a meeting in court the next morning in my
absence and to debate the matter in an attempt to get to grips with
the problem. That meeting led to an inspection in loco. When
the
court reconvened, little if anything had been achieved. Mr Beharie
moved again for a postponement citing an alleged need on
the part of
his client to wait for reports that had been commissioned by the City
the day before. Mr Beharie indicated that his
client would work
tirelessly to come to a state of readiness. I refused the
postponement. The City’s lack of any indication
of an attempt
to get to the bottom of the matter over a period of about 4 years had
caught up with it.
10. Neither Mr Georgiades nor Mr
Beharie could give me any reason why I should not order that when the
matter commenced the next
morning neither party would be allowed to
refer to any document not contained in the affidavits, the
applicant’s discovery
affidavit or in a witness statement
prepared by the applicant’s utilities manager, Ms Van Der Merwe
and handed to the City’s
attorney on 27 October 2014 at a
pre-trial conference.
11. Given:
11.1 the invoice for a credit,
11.2 the City’s indication to the
applicant that the refund was in progress,
11.3 that both events happening long
after transfer of the property and
11.4 the fact that the unsubstantiated
debit of R1 182 760,26 seemed to come out of the blue nearly a year
after clearance figures
were provided by the City
I would have thought that the onus may
have been on the City to justify not paying the amount of R1 192
932,14 or any part of it
and to begin leading evidence. However, the
parties had agreed at a pre-trial conference that the onus would be
on the applicant
and that it would begin.
12. Prior to commencing the hearing I
debated the matter with both counsel in an attempt to get a better
understanding of it. Mr
Beharie, having taken an instruction from his
attorney and a representative of the City, both of whom were sitting
next to him,
unequivocally admitted on behalf of the City that as at
3 November 2010 the City’s invoice of that date, reflecting the
credit
owed by the City to the applicant was correct. Later Mr
Beharie sought to withdraw the admission. I allowed the admission to
be
withdrawn as I accepted that it may have been made in error.
13. With the debatement having been
fruitless, the applicant’s real claim is for payment of R1 192
932,41 and interest on
the sum of R1 637 210,31 at the rate of 15,5%
per annum from 4 November 2010 (the date after the City’s
invoice of 3 November
2010) to 17 August 2011, being the date of the
payment of R444 277,90 and interest at the rate of 15,5% per annum on
the sum of
R1 192 932,41 from 18 August 2011 to date of payment.
14. Mr Georgiades submitted that R1 182
760,26 was the amount of the applicant’s claim. This sum is not
claimed in the notice
of motion although an invoice in that amount is
claimed from the City. In my view this figure does not form either a
claim or a
basis for it. There is no allegation that this amount was
paid by the applicant to the City. There is no suggestion that the
City
has been enriched at the expense of the applicant. The
applicant’s case concerning this figure is simply that it is an
incorrect
debit raised long after the property was transferred. Mr
Georgiades did not abandon the amount of R10 172,15 being the
difference
between R1 192 932,41 and R1 182 760,26.
15. Mr Geordiades requested a ruling
that the matter proceed as an application on paper without the need
for oral evidence. He submitted
that there was no real dispute. I
declined to rule in the applicant’s favour. In my view the
matter was not quite as clear
cut as suggested by Mr Geordiades. I
ruled that the matter proceed as an application which had been
referred to oral evidence and
that the applicant bore the overall
onus and the duty to begin.
THE PRESENT HEARING
16. Ms Van Der Merwe testified. The
applicant lets commercial properties to tenants. She, as utilities
manager is tasked, among
other things with checking that all tenants
are correctly billed for their share of water and sewerage. These
billings are checked
against accounts received by the applicant from
the City. There are three meters on the property in question, one of
which she
used as a check for the other two. There are separate
sub-meters for each tenant. She prepared, from her own workings and
readings
taken by a meter reading company used by the applicant, a
table setting out the balance of R1 637 210,31 owing by the City to
the
applicant as at the end of October 2010. She checked the billings
to sub-tenants, based on actual readings of the sub-meters for
each
tenant against her figure of R1 637 210,31. She stated unequivocally
that in effect the City was double billing because it
wrongly
considered all three meters to be independent whereas the third meter
acted as a check for the other two meters.
17. She confirmed that the City’s
invoice, dated 3 November 2010 is correct. It was the last account
received from the City.
Once she had confirmed with the City that
transfer of the property had been made out of the name of the
applicant she claimed a
refund from the City. During the period May
2011 to July 2011 there was correspondence between Ms Van Der Merwe
and the City concerning
the refund. On 9 June 2011 the City promised
a refund of R1 627 038,16. On 17 August 2011 a refund of R444 277,90
was made. Ms
Van der Merwe received no explanation for why the refund
was so small. It was only in February 2013, after the present
litigation
had commenced that she first saw the “Adjustment
Calculation” dated 21 July 2011 as an attachment to an
answering affidavit.
Ms Van Der Merwe explained that if the check
meter was to be read in addition to the other two meters that this
would mean that
the property was receiving an impossibly high volume
of water.
18. She explained that the invoice of 3
November 2010 had been drawn up by the City based on its own actual
readings rather than
on estimates. She said that the manual posting
of R1 182 760,26 was incorrect. The City’s invoice is a
statement or admission
by the City that the amount on it was owing by
the City to the applicant.
19. Ms Van Der Merwe struck me as an
honest, thorough person who survived a skilful cross-examination by
Mr Beharie using the little
he had at his disposal.
20. After Ms Van Der Merwe’s
evidence Mr Geordiades closed his case. Mr Beharie then closed his
without leading any evidence.
21. Ms Van Der Merwe’s evidence
is not contradicted. The City never explained why one of its own
meters (said by it to be
an independent meter rather than a check
meter) escaped the attention of its own officials for a number of
years. The City’s
debit of R1 182 760,26 remains
unsubstantiated, undocumented and unexplained. In my view Ms Van Der
Merwe’s careful workings
stand.
22. The applicant’s claim arose
prior to 1 August 2014 on which date the Minister of Justice and
Correctional Services changed
the prescribed rate of interest from
15,5% per annum to 9% per annum. See Government Gazette 37831 of 18
July 2014, Volume 589,
Regulation Gazette No. 10235, GN 554. The old
rate remains applicable to the debt notwithstanding the change. See
Davehill (Pty)
Ltd v Community Development Board 1988(1) SA 290 AD at
300H – 301C.
Order:
1. The respondent is ordered to pay to
the applicant:
a. the sum of R1 192 932,41.
b. interest on the sum of R1 637 210,31
at the rate of 15,5% per annum from 4 November 2010 to 17 August
2011.
c. interest on the sum of R1 192 932,41
at 15,5% per annum from 18 August 2011 to date of payment.
2. The respondent is to pay the
applicant’s costs, which are to include those of 24 May 2013
and 18 September 2013.
GC WRIGHT J
JUDGE OF THE HIGH COURT,
GAUTENG LOCAL DIVISION,
JOHANNESBURG
On behalf of the Applicant: Adv C
Georgiades
082 496 1763
Instructed by: Vining Camerer Inc
011 784 1970
On behalf of the Respondent:
Adv N Beharie
083 963 3103
Instructed by: Denga Inc
011 492 0037
Dates of Hearing: 25, 26, 27
February and
2 and 3 March 2015
Date of Judgment: 3 March 2015