About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Supreme Court of Appeal
SAFLII
>>
Databases
>>
South Africa: Supreme Court of Appeal
>>
2014
>>
[2014] ZASCA 39
|
|
Capricorn District Municipality and Another v South African National Civic Organisation (237/2013) [2014] ZASCA 39; 2014 (4) SA 335 (SCA) (31 March 2014)
Links to summary
THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
REPORTABLE
Case
No: 237/2013
In
the matter between:
CAPRICORN
DISTRICT MUNICIPALITY
........................................
FIRST APPELLANT
LEPELLE-NKUMPI
LOCAL
MUNICIPALITY
.................................................................................
SECOND
APPELLANT
and
THE
SOUTH AFRICAN NATIONAL
CIVIC
ORGANISATION
................................................................................
RESPONDENT
Neutral
citation:
Capricorn District
Municipality v SANCO
(237/2013)
[2014]
ZASCA 39
(31 March 2014)
Coram:
Mthiyane DP, Lewis, Bosielo, Petse and
Willis JJA
Heard:
21 February 2014
Delivered:
31 March 2014
Summary:
High Court granting mandatory
interdicts directing municipalities to repair and replace water
pipelines and faulty water meters
within 12 months and to charge each
consumer R70 per month and R50 per month pending such repairs or
replacements ─ Orders
incompetent and inconsistent with the
principles of legality and separation of powers ─ such
functions falling within municipalities’
executive and
legislative powers ─ High Court order set aside on appeal.
ORDER
On
appeal from:
North Gauteng High Court,
Pretoria (Legodi J sitting as court of first instance):
1 The appeal is
upheld with costs, including the costs of two counsel.
2 The order of the
court below is set aside and replaced with the following:
‘
The
application is dismissed with costs, including the costs of two
counsel, where so employed.’
JUDGMENT
Mthiyane
DP (Lewis, Bosielo, Petse and Willis JJA concurring)
[1]
This is an appeal arising from an order granted by the North Gauteng
High Court (Legodi J) in favour of the respondent, directing
the
appellants to replace or repair all leaking water pipes and all
defective water meters in Lebowakgomo Zone A, Limpopo within
twelve
months from the date of the order; that, pending the final
replacement and repair of the above pipes and meters, and the
issuing
or production of reliable and accurate water accounts to the
satisfaction of each respective water consumer, to charge
a flat rate
of:
(a) R70.00 per
household per month for water consumption from 12 September 2011;
(being the date on which the application was instituted)
and;
(b) R50 per month
from August 2009 until 11 September 2011 per household per month for
water consumption.
The
appeal is before this court with its leave, the court below having
refused leave.
[2]
The question to be considered in the appeal is whether these
mandatory orders are competent in the light of the principles of
legality and separation of powers. The appellants contend that the
flat rate imposed by the court, as the basis for payment for
the
water consumed by each household or business entity, contravenes the
legal framework for the imposition of water tariffs, and
thus the
principle of legality. They argue also that the repair and
replacement of pipes and water meters are matters which fall
within
the legislative and executive powers of the municipalities concerned.
The orders violate the doctrine of the separation
of powers. A
further issue is whether the decision of the high court was correct
on the facts.
The
facts
[3]
The appellants are responsible for providing water services in
Lebowakgomo Zone A, Limpopo (Zone A). The first appellant, Capricorn
District Municipality (the district municipality), is the water
service authority
[1]
and the
second appellant, Lepelle-Nkumpi Local Municipality (the local
authority) is the water service provider.
[2]
The local authority manages the bulk water supply to Zone A, on
behalf of the district authority, with which it has a water service
delivery agreement. I shall refer to them collectively as ‘the
municipalities’.
[4]
The local authority has over the years experienced water leakages and
water shortages which it attributes to ageing infrastructure.
The
reticulation system in Zone A consists of asbestos pipelines which
were installed about 30 years ago and are in need of replacement.
The
community of Zone A allege that they are issued with inflated water
accounts which often do not reflect the actual water consumed
by
them. They claim that this is due to water leakages and faulty water
meters and to local authority employees who do not read
water meters
but simply make estimates of what they believe should be paid by each
consumer. To substantiate the point the respondent,
the South African
National Civic Organisation (Sanco) which brought these proceedings
on the community’s behalf, cited the
case of an elderly
consumer who received a statement of account of approximately R5000,
reflecting the same as being in respect
of water consumed by her in
one month. Sanco calculated this as equivalent to a charge for 296
kilolitres of water ─ a quantity
which they say could fill
almost a quarter of an Olympic swimming pool.
[5]
The local authority has acknowledged that Zone A does sometimes
experience water leakages and water shortages and that its
reticulation system needs to be rectified by the construction of a
new water reticulation network in the entire area. It also
acknowledged
that its existing ageing infrastructure needed
rehabilitation and averred that it had taken steps to attend to the
problem.
[6]
On 10 May 2011 the district municipality appointed Morwa Consulting
Engineers to undertake a comprehensive study of the water
provision
problems. It was intended that as soon as the engineers had concluded
their study, the district municipality would then
determine the
required budget and the exact bill of quantities needed and thereupon
call for tenders for the completion of the
entire reticulation
system. Morwa Consulting Engineers were expected to deliver their
final report during 2012, after which the
district municipality would
begin practically to address the problem of the reticulation system
in Zone A.
[7]
Before the municipalities could rectify the water service problem,
Sanco called a meeting of the community on 1 November 2009
and, on
the following day, mobilized the community to march and ‘toi
toi’ to the offices of the local authority. The
marchers
presented the mayor with a resolution, demanding: that the local
authority ‘write off all water debts with immediate
effect;
that it replace all faulty water meters within Zone A and that,
pending adherence to the above demands, each consumer (be
it
individuals or business owners), pay a flat rate of R50.00 per month
to the local authority in respect of their water consumption.
[8]
Subsequently, Sanco embarked on further protests, which culminated in
another march to the offices of the MEC for Local Government
and
Housing for the Limpopo Province on 25 February 2010. The MEC was
presented with a memorandum prepared by Sanco, which catalogued
demands similar to those presented to the mayor during the previous
march. There was thereafter further interaction between the
community
and the municipalities which yielded nothing significant. It bears
mention that in none of the interactions between the
parties did the
affected community members pursue available grievance procedures laid
down to address the problem of inflated or
erratic statements of
accounts allegedly issued by the local authority. In terms thereof, a
customer in Zone A who disputed a bill
was required to follow a
procedure determined by the terms of the Write Off and Irrecoverable
Debt Policy. This procedure allows
for an orderly system for the
resolution of disputes that balances the rights of consumers with the
rights and duties of municipalities
– Clause 7.14 of the policy
document entitled Disputes and Payments during Disputes.
[9]
On 12 September 2011 Sanco launched the present application in
the North Gauteng High Court for a mandatory interdict,
for the
relief set out in the opening paragraph of this judgment and further
relief pertaining to the furnishing of members of
the community with
letters of ‘proof of residence’ and ‘proof of good
standing.’ It appeared that the local
authority had refused to
issue these letters to any resident who had not paid his or her water
account. There is, however, no longer
any dispute between the parties
pertaining to the issuing of these letters. The question of whether
the mandatory interdicts were
competent still remains. So too, it is
not clear whether it was established that the water billing system
was unreliable as a result
of leaking water pipes and defective
infrastructure in Zone A.
Legal
framework
[10]
Before addressing these issues it is helpful to set out briefly the
legal framework governing the supply of water and the powers
and
functions of municipalities in relation thereto. Under our
constitution everyone has the right of access to ‘sufficient
food and water’.
[3]
The
State is enjoined to take reasonable legislative and other measures,
within its available resources, to achieve progressive
realisation of
each of these rights.
[4]
A
municipality has the
executive
authority
in respect of and has the right to administer . . . ‘potable
water systems’
[5]
and must
perform the executive and legislative functions within certain
parameters set down in national legislation. In terms of
s 74(1) of
the Systems Act 32 of 2000 a municipality is obliged to adopt and
implement a tariff policy on the levying of fees for
municipal
services which complies with the Systems Act, the Municipal Finance
Management Act 56 of 2003 and other applicable legislation.
[11]
In terms of s 74(2) of the Systems Act, tariff policies must reflect
various principles including (but not limited to) the
following:
(a) Users of
services must be treated equitably in the application of tariffs;
(b) The amount that
individual users pay for services should generally be in proportion
to their use of that service;
(c) Tariffs must
reflect the costs reasonably associated with rendering the service,
including capital, operating maintenance and
administration and
replacement costs, and;
(d)
Tariffs must be set at levels that facilitate sustainability of the
service, taking into account subsidization from sources
other than
the service concerned.
[12]
The general power of a municipality to levy and recover fees, charges
and tariffs in respect of any service is sourced in s
75A(1) of the
Systems Act. Section 75A(2) provides that fees, charges or tariffs
are levied by a municipality by resolution.
[13]
There is then the
Water Services Act 108 of 1997
which, together with
the Systems Act, enjoin municipalities to give effect to the right of
access to water protected in the Constitution,
subject to applicable
norms and standards, including in relation to tariffs.
[14]
Section 11
of the
Water Services Act imposes
important aspects of the
duty progressively to ensure access to water services on water
services authorities. That is made expressly
subject to ‘the
duty of consumers to pay reasonable charges which must be in
accordance with any prescribed norms and standards
for tariffs for
water services.’
[6]
[15]
I have already referred to the fact that the district municipality
concerned in this case is a water service authority. It
is
responsible for ensuring that adequate investments are made in water
services infrastructure so that water provision is ultimately
sustainable and that the residents of Zone A and other areas that
fall within its jurisdiction receive adequate and reasonable
quality
water services at all times. The overall responsibility for providing
water and sanitation services in Zone A is thus vested
in the
district municipality.
[16]
As I have already mentioned, the local authority is the water service
provider and concluded a water service agreement with
the district
municipality for this purpose. It is the entity that provides water
to consumers in Zone A. In performing its functions
as a water
service provider, it is required to manage retail water distribution
and to administer revenue collection. While there
is a duty on the
local authority, as the water service provider, to provide access to
water services, there is a corresponding
duty on consumers ‘to
pay reasonable charges, which must be in accordance with any
prescribed norms and standards for tariffs
for water services.’
[7]
[17]
Consumers, in particular those that are indigent, are entitled to a
free basic water supply in a determined amount.
[8]
When water over and above the amount is consumed, it is paid for. It
is however not Sanco’s case that any of the consumers
in Zone A
are indigent. The essence of the complaint is that excessive and
inaccurate statements of accounts are issued because
of faulty meters
and water leakages.
The
issues in the appeal
[18]
It is against this background that I turn to consider the issues in
the appeal, commencing with the question whether the order
made by
the court below, directing the municipalities to replace and repair
the pipelines by a certain time and charge a flat rate
of water
consumed by each consumer in Zone A, was competent.
[19]
The legal basis upon which the court below considered itself entitled
to issue the mandatory interdicts, directing the municipalities
to
repair and replace the water leaks and faulty water meters and to
charge a flat rate of R70 and R50 respectively for water consumed,
is
not readily apparent from the judgment. At best the learned judge
remarked: ‘I think an order for
mandamus
would
be dictated by the facts of each case.’ Unfortunately that is
not always the case. One is dealing here with a sphere
of authority
which falls within the executive and legislative authority of the
municipality as the third level of government. In
our constitutional
order, local government is recognised as the third sphere of
government and in that capacity it exercises both
legislative and
executive functions. When a decision is taken by a municipality
through its council, it will not ordinarily be
administrative in
character. In these circumstances the executive and legislative
powers of a municipality are excluded from judicial
scrutiny. See
Mazibuko
& others v City of Johannesburg & others
.
[9]
[20]
In the present matter it appears that the district municipality
commissioned a firm of consulting engineers to conduct a study
which
would ultimately lead to the rehabilitation of the entire
reticulation system in Zone A. In doing so it was performing an
executive function and the order of the court below, which had the
effect of fast tracking the process, offended the doctrine of
the
separation of powers and the legal framework within which the
municipality was acting. In
Mazibuko
the Constitutional Court found that a business plan adopted by the
Johannesburg City Council to determine how water services were
to be
implemented, amounted to the exercise of its executive powers.
[10]
Similarly, the measure taken in the present matter to address the
problem of water leakages and water shortages occurred in the
course
of the municipalities’ exercise of executive powers.
[21]
The court below also erred in respect of the imposition of the flat
rates. I have already referred to s 74 (1) of the Systems
Act in
terms of which a municipality is obliged to adopt and implement a
tariff policy on the levying of fees for municipal services
provided
by the municipality which complies with the Systems Act, the
Municipal Finance Management Act and any other applicable
legislation. Section 74(2) lays down what the tariff policy must
reflect. Amongst other things, it provides that consumers must
be
‘treated equitably’, in the application of the tariff
(2
(a)
),
that they must pay for services ‘in proportion to their use of
that service’ (2
(b)
)
and that the tariff must reflect ‘the costs reasonably
associated with the rendering of service, including capital,
operating
maintenance and administration and replacement costs’
(2
(d)
). It
is therefore clear that the order made in the court below flies in
the face of these provisions.
[22]
The decision of this court in
Kungwini
Local Municipality v Silver Lakes Home Owners Association
[11]
is instructive. In that case Van Heerden JA said the following:
‘
In
a post-constitutional South Africa, the power of a municipality to
impose a rate on property is derived from the Constitution
itself:
the Constitutional Court has described it as an “original
power” and has held that the exercise of this original
constitutional power constitutes a legislative – rather than an
administrative – act. The principle of legality, an
incident of
the rule of law, dictates that in levying, recovering and increasing
property rates, a municipality must follow procedure
prescribed by
the applicable national or provincial legislation in this regard.’
The above principles also apply equally
to a case where a
municipality is levying fees and charges for water service. The
orders imposing a flat rate for water consumption
in Zone A were
completely out of kilter with the foundational principles of our
constitutional order as articulated by our courts
and to the
applicable legal framework. The orders made were thus not competent.
[23]
Turning to the facts, it was submitted that the orders made were
based on incorrect factual findings and that, as a matter
of fact, it
was not established that the water billing system was unreliable as a
result of leaking water pipes and defective water
meters in Zone A.
In coming to the conclusion that water leakages in Zone A led to
incorrect billing of consumers, the court relied
on what it termed a
concession made by the municipalities in this regard. This is in a
passage in the initial report of Morwa Consulting
Engineers, which
reads as follows:
‘
The
total number of households is 2803. The current metering system in
the area is also out-dated and malfunctioning, which may
result in
inaccurate billing of the residents of Lebowakgomo Zone A.
Installation of about 2803 new meters is proposed to ensure
that
every drop of water is accounted for and accurately billed.’
The
municipalities argue that this passage does not contain a concession
that faulty meters lead to inaccurate billing in Zone but
rather a
recognition that water meters may malfunction – not that they
necessarily do or that all do. The extract they submit,
merely shows
that there were steps being taken to address the problem.
[24]
They also averred that they were indeed proceeding to replace the
ageing water meters but did not concede that the existing
water meter
system was dysfunctional in toto. It was explained by Mr Hlaneki on
behalf of the local authority that, pending the
replacement of old
water meters, disputes were resolved on a case by case basis by the
municipalities as provided for in the by-laws.
[25]
The municipalities advanced two further reasons why the order cannot
be justified on the facts. It is contended that water
leakages do not
adversely affect consumers for at least two reasons. First, the
leakages are not captured by any water meter reflecting
what is
payable by any consumer. Where a leakage occurs before the point
where the water meter is situated, the leaking water would
not be
captured by the meter as used by the consumer because the water meter
cannot register usage of water that has not passed
beyond the point
where the meter is situated. It is only where the water leakage
occurs beyond the point where the water meter
is situated that the
water meter will register the leaking water as used by the consumer.
If this occurs the responsibility no
longer rests with the
municipalities to repair the leaking pipe. It resides with the
consumer.
[26]
Secondly, water meter readings are conducted monthly. This is of
course disputed by Sanco. Be that as it may, the mandamus
granted by
the court below is not competent and falls to be set aside.
[27]
In the result the following order is made
1 The appeal is
upheld with costs, including the costs of two counsel.
2 The order of the
court below is set aside and replaced with the following:
‘
The
application is dismissed with costs, including the costs of two
counsel, where so employed.’
K
K Mthiyane
Deputy
President
Appearances
For the Appellant: E
Labuschagne SC (with him S Cowen)
Instructed by:
Mabuela Inc,
Pretoria
Symington
and De Kok, Bloemfontein
For the Respondent:
G Kairinos (with him B Stevens)
Instructed by:
Gildenhuys Malatji,
Pretoria
Phatshoane
Henney Attorneys, Bloemfontein
[1]
Section 1 of the Water Service Act 108 of 1997, water services
authority ─ means any municipality or rural council as defined
in the
Local Government Transition Act 209 of 1993
.
[2]
‘Water Service Provider’ means any person who provides
water to consumers or to another water service institution,
but not
does include a water service intermediary – see
s 1
fn 1
above.
[3]
Section 27(1)
(b)
of the Constitution.
[4]
Section 27(2) of the Constitution.
[5]
Section 156(1) of the Constitution read with Part B of Schedule 4.
[6]
Section 11(2)
(a)
.
[7]
Section 1(2)(d)
of the
Water Services Act.
>
[8]
Section 9
of the
Water Services Act and
Regulation 3
of Compulsory
National Regulations (GN R509 in GG 22355 of 8 June 2001) in terms
of which free basic water supply per person
per day is 25 litres or
6 kilolitres per month.
[9]
Mazibuko
& others v City of Johannesburg & others
2010 (4) SA 1
(CC) para 130-131.
[10]
Mazibuko
supra
fn 8 para 131.
[11]
Kungwini
Local Municipality v Silver Lakes Home Owners Association &
another
[2008] ZASCA 83
;
2008
(6) SA 187
(SCA) para 14. See also para 44.