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[2016] ZAGPJHC 178
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Ekurhuleni Metropolitan Municipality v Anzotrax (Pty) Ltd t/a Topbet Germiston (A5059/2015) [2016] ZAGPJHC 178 (1 June 2016)
REPUBLIC
OF SOUTH AFRICA
IN THE HIGH COURT
OF SOUTH AFRICA
(GAUTENG LOCAL
DIVISION, JOHANNESBURG)
CASE
NO: A5059/2015
DATE:
1 JUNE 2016
In
the matter between
EKURHULENI
METROPLITAN
MUNICIPALITY
....................................................
APPELLANT
And
ANZOTRAX
(PTY) LTD t/a TOPBET
GERMISTON
...............................................
RESPONDENT
Local
authority – Electricity - disconnection of electricity -
whether lawful - Municipality disconnected tenant’s electricity
in regard to indebtedness of the landlord in regard to arrear
property rates and taxes – tenant having its own electricity
account paid up to date - section 34 of the Ekurhuleni Metropolitan
Municipality Electricity By-Laws [date of commencement 24 April
2002]
read with
section 102
of The
Local Government: Municipal Systems Act
32 of 2000
- not providing for joint and several liability in such
circumstances - not providing for consolidation of accounts of
landlord
and tenant - electricity supply to tenant unlawfully cut
off.
Costs
- punitive costs order - Municipality’s persistence with appeal
ill-considered and irresponsible - spurious arguments
advanced -
punitive costs order warranted
.
J
U D G M E N T
VAN
OOSTEN J:
Introduction
[1]
The narrow issue in this appeal concerns the
proper interpretation of
s 34
of the Ekurhuleni Metropolitan
Municipality Electricity By-Laws [date of commencement 24 April 2002]
(the By-laws), read with s
102 of The Local Government: Municipal
Systems Act 32 of 2000 (the Act). The nub of the dispute between the
parties, broadly stated,
concerns the question whether the
municipality is empowered by these provisions to disconnect the
electricity supply to a tenant,
who holds its own consumer agreement
with the municipality in respect of electricity supply and which is
fully paid, in regard
to arrear property rates and taxes owed by the
owner/landlord. That is exactly the fate that befell the respondent
in April 2015,
which prompted the launching of an urgent application
to this court for an order directing the municipality to forthwith
reconnect
the electricity supply to the leased premised and an
interdict restraining the municipality from further terminating the
electricity
supply, save in the event of the respondent being in
arrears in terms of its own electricity consumer agreement. The
municipality
opposed the application which came up for hearing before
Twala AJ. Having heard argument the learned judge granted the relief
sought.
The appeal is before this court with leave of the court a
quo, limited to the proper interpretation to be afforded to the
sections
I have referred to (the empowering sections). The learned
judge, in addition, ordered that the relief granted in the main
application
would remain of full force and effect pending the outcome
of this appeal.
Factual
background
[2] The factual
matrix relevant to a proper interpretation of the empowering sections
is the following. The erstwhile second respondent
in the urgent
application, Robfair Investments No 287 CC (Robfair), was the
owner/landlord of the property situate at 217 Meyer
Drive, Germiston.
The respondent was the tenant of a portion of the building on the
property, known as shop no 1, in terms of an
agreement of lease
concluded on 11 April 2011. On 1 March 2012 the respondent concluded
a separate consumer agreement with the
municipality for the supply of
electricity, water as well as the supply of sewerage and refuse
services at the leased premises.
On 4 December 2013 the municipality,
without notice served on the respondent, terminated the electricity
supply to the leased premises.
The respondent account was paid up to
date. The arrears of some R300 000, relied on by the
municipality for an entitlement
to disconnect the electricity supply,
was that of Robfair, in regard to rates and taxes, as reflected on
its account with the municipality.
The respondent under duress paid
six monthly instalments of R32 000 each, that were due on
Robfair’s account, merely
to secure a reconnection and further
supply of electricity to the premises, which amount it intended to
offset against the rentals
payable to Robfair. This however did not
meet with the approval of Robfair, for the reason proffered that such
payments would prejudice
Robfair’s pending opposed litigation
against the municipality in regard to disputed rates and taxes. The
respondent accordingly
ceased making any further payments on
Robfair’s account, which, once again, led to the municipality
terminating the electricity
supply to the leased premises on 9 April
2015.
The effect of the
appellant’s proposed interpretation
[3] Before I turn to
a consideration of the wording of the empowering sections, it is
necessary to make some preliminary observations
concerning the
consequences of the municipality’s contention, on the
assumption that the proposed interpretation of the empowering
sections is legally tenable. Generally stated the municipality, in
essence, contends for an interpretation of the empowering sections,
read with its Credit Control and Debt Collection Policy: 2012-02, as
empowering it to consolidate the separate accounts held
with it
by, firstly, the owner/landlord in respect of rates and taxes and,
secondly, the tenant in respect of electricity consumption,
into one
account, on the basis of the owner and the tenant being jointly and
severally liable for payment of all debts owing to
the municipality
in respect of the property. There are considerable difficulties with
this approach. First and most importantly
it may lead to manifest
absurdities and could never have been the intention of the lawgivers
(see EA Kellaway:
Principles of Legal Interpretation
p120-122
)
[4] It is necessary
to say something on the general nature and content of the concept of
joint and several liability (Christie
The Law of Contract in South
Africa
6ed p 263). In contract joint and several liability exists
if imposed by express words or necessary implication (
Tucker and
Another v Carruthers
1915 AD 251).
In solidum
liability
may also be imposed by statute, as is illustrated by
ss 17(5)
and
23
(5) of the
Matrimonial Property Act 88 of 1984
. Both these
subsections, in express terms, provide for joint and several
liability of spouses in regard to joint household necessaries.
In
regard to joint and several liability for payment of debts our law
pre-supposes a pre-existing underlying liability of all parties
in
respect of that debt, with the exception of voluntary assumed
in
solidum
liability, for example, as surety and co-principal debtor
to the principal debtor (
Wille’s Principles of South African
Law
9ed 817). Applied to the facts of the present matter, no
legal basis of any nature or kind exists for holding an
owner/landlord
and a tenant jointly and severally liable in regard to
the latter’s rates and taxes. The reasons therefore are not
hard to
find: firstly, no
vinculum iuris
exists between them,
and, secondly, even if the empowering sections were to be interpreted
as imposing joint and several liability
in the circumstances of this
case, it notionally might not pass Constitutional muster. For these
reasons alone the appeal is without
merit and cannot succeed.
Interpretation of
the empowering sections
[5]
Section 34
of
the By-laws provides as follows:
34.
Owner’s and consumers liability
(1)
The owner and the consumer shall be jointly
and severally liable for compliance with any financial obligation,
except as provided
in
section 34(2)
or other requirement imposed upon
them by these By-laws.
(2)
The liability for compliance with any
financial obligation in respect of the consumption of electricity,
shall be the sole responsibility
of the consumer.
The court a quo held
that
s 34(1)
was not applicable to the present case and further
expressed the view that the section is intended for defaulting
tenants who disappear
leaving behind their municipal account in
arrears.
[6] The clause, in
my view, contains clear and unambiguous wording (
Du Plessis v
Joubert
1968 (1) SA 585
(A) 594H-595B). The consumer, in terms of
the definitions clause ‘means a person to whom the Council has
agreed to supply
electricity or is actually supplying electricity, or
if there is no such person, the owner of the premises’. Joint
and several
liability in respect of ‘any financial obligation’,
in terms of ss (2), excludes indebtedness arising from the
consumption
of electricity. The reference to ‘these By-laws’
is to the Electricity By-laws, which as stated in the pre-amble,
‘provide
for the supply and usage of electricity within the
municipal area of the municipality’ and for ‘matters
incidental
thereto’ and accordingly do not ‘impose’
any financial obligation in regard to rates and taxes, which are
imposed
in terms of the
Local Government: Municipal Property Rates
Act 6 of 2004
. I do not see how to get over these plain words of the
enactment and nothing of substance was advanced which would justify
straining
the language in order to read anything else into the
section than what the ordinary and plain words clearly convey.
Counsel for
the municipality sought to find some aid in the
interpretation of this section, in the municipality’s Credit
Control and
Debt Collection Policy: 2012-02, which I hardly need to
say, is wholly inappropriate. In conclusion the definite terms of the
section
can and should be adhered to and I read them as meaning
exactly what they say. On this basis alone the municipality’s
proposed
interpretation to found joint and several liability of the
respondent in respect of the owner’s rates and taxes, is
clearly
misconceived.
[7]
The Act is a legislative measure that seeks to support and strengthen
the capacity of municipalities to manage their own affairs,
exercise
their powers and to perform their functions (see
Nelson
Mandela Bay Metropolitan Municipality v Nobumba NO and Others
2010
(1) SA 579
(ECG) para 10-21). Section 4(3) of the Act requires a
municipality, in the exercise of its executive and legislative
authority
to ‘respect the rights of citizens and those other
persons protected by the Bill of Rights’. Section 102 of the
Act
provides:
‘
(1)
A municipality may:
(a)
consolidate any separate accounts of
persons liable for payment to the municipality;
(b)
credit a payment by such a person against
any account of that person; and
(c)
implement any of the debt collection and
credit control measures provided for in this Chapter in relation to
any arrears on any
of the accounts of such a person.
(2)
Subsection (1) does not apply where there
is dispute between the municipality and a person referred to in that
subsection concerning
any specific amount claimed by the municipality
from that person.’
The municipality
contends that the section empowers the municipality to consolidate
the accounts of different, independent consumers
into one
consolidated account with one consolidated debt in respect of which
all account holders become jointly and severally liable.
The
contention falls to be rejected. Wide as the term ‘consolidation’
may be (see
Rademan
referred to below, para 30), the wording
of the section clearly provides for the consolidation of separate
accounts of
a person
and there is nothing supporting an
interpretation that the municipality may freely, of its own accord,
simply consolidate accounts
of any number of persons who are liable
for payment to it. Had that been the intention of the legislator,
clear, unequivocal wording
expressing as much in no uncertain terms,
would have been used of which there are none. On the contrary ss (b)
and (c) specifically
refer to
such person
and moreover, and in
ss (b) there is a reference to
any account of that person,
which
cannot in any way be reconciled with the consolidation of the
accounts of any number of persons. Finally, the apparent anomalies
and glaring absurdities arising from the municipality’s
interpretation militate against the proposed interpretation.
[8] Counsel for the
municipality sought to find support for the municipality’s
approach in the judgment of the Constitutional
Court in
Rademan v
Moqhaka Municipality
([2013] ZACC 11);
2
013 (4) SA 225
(CC). The judgment however, deals with a consolidated municipal
account of the consumer, the appellant, in respect of which it
was
held that it represented a single consolidated debt which the
consumer was liable to pay, precluding her to elect how the account
would be settled. Because she was in arrears with payment of rates
and taxes, the Constitutional Court held, the municipality was
entitled to cut off her electricity or for that matter, refuse the
supply any other service. In the present case the municipality
seeks
to hold a tenant jointly and severally liable for the rates and taxes
debt of the landlord which is entirely different and
distinguishable
from the facts in
Rademan
.
Costs
[9]
Counsel for the respondent asked for a punitive costs order against
the municipality in respect of which it was submitted that
the
municipality’s conduct in relying on an unsustainable
interpretation of the empowering sections was irresponsible,
opportunistic
and
mala fide
. I agree. The municipality in
cutting off the respondent’s electricity supply, unduly and
improperly exerted pressure on
the respondent for payment of its
landlord’s arrear rates and taxes, in the face of a pending
dispute with the landlord concerning
those very rates and taxes. A
notice by the municipality advising of the termination of the
electricity supply was left at the
property in circumstances where
proper service on the respondent of such a drastic measure would have
been appropriate. The respondent
not surprisingly denied having
received the notice (see
Darries and Others v City of Johannesburg
and Others
2009 (5) SA 284
(GSJ) paras 19 and 31). The
municipality accordingly unfairly discriminated against the
respondent, in breach of its duty to uphold
and maintain unfair
discrimination in the execution of its mandate to adopt, maintain and
implement credit control and debt collection
policies, including the
termination of services, provided for in terms of s 96, 97 and 98 of
the Act. For this reason alone the
municipality’s opposition to
the urgent application, right from the outset, was unfounded. The
ensuing litigation became
unduly protracted and the municipality’s
persistence with the appeal was ill-considered and irresponsible (see
Senekal v Trust Bank of Africa Ltd
1978 (3) SA 375
(A) 387G;
Madzunye and Another v Road Accident Fund
[2006] SCA 103
(RSA);
2007 (1) SA 165
(SCA) paras 16 and 18). Spurious arguments on
its behalf proposing a fanciful interpretation were advanced and
persisted with in
this court (
Page v Absa Bank Ltd
2000 (2) SA
661
(ECD) 667E). A punitive costs order, in my view, is the
appropriate sanction to be imposed as a mark of this court’s
disapproval
of such conduct (
Nel v Waterberg Landbouwers
Ko-Operatieve Vereeniging
1946 AD 597
at 607;
Rautenbach
v Symington
[1995] 1 ALL SA 184
(O)).
[10]
In the result the following order is made:
1.
The appeal is dismissed.
2.
The appellant is ordered to pay the costs of the appeal such costs to
be taxed on the scale as between attorney and client.
FHD
VAN OOSTEN
JUDGE
OF THE HIGH COURT
I
agree.
P
BORUCHOWITZ
JUDGE
OF THE HIGH COURT
I
agree.
HJ
DE VOS
JUDGE
OF THE HIGH COURT
COUNSEL
FOR APPELLANT ADV P SIEBERHAGEN
APPELLANT’S
ATTORNEYS CHIBA & TOURAPI ATT
COUNSEL
FOR RESPONDENT ADV SB ROSE
RESPONDENT’S
ATTORNEYS POLSON & ROSS ATT
DATE
OF HEARING 27 MAY 2016
DATE
OF JUDGMENT 1 JUNE 2016