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[2023] ZAFSHC 50
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Imperial Logistics South Africa v City Of Mangaung Metro Municipality (6050/2022) [2023] ZAFSHC 50 (20 February 2023)
SAFLII
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Certain
personal/private details of parties or witnesses have been redacted
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Policy
IN
THE HIGH COURT OF SOUTH AFRICA
FREE
STATE DIVISION, BLOEMFONTEIN
Case
No:
6050/2022
Reportable:
YES/NO
Of
Interest to other Judges: YES/NO
Circulate
to Magistrates: YES/NO
In
the matter between:
IMPERIAL
LOGISTICS SOUTH
AFRICA
Applicant
and
THE
CITY OF MANGAUNG METRO MUNICIPALITY
Respondent
CORAM
:
TSANGARAKIS, AJ
HEARD
ON
:
9 FEBRUARY 2023
DELIVERED
ON
:
20 FEBRUARY 2023
INTRODUCTION
[1]
This application concerns the entitlement of the respondent to
disconnect the municipal electricity services
to the applicant’s
property as described in prayer 1 of the relief reproduced in
paragraph 3 below (“
the property
”).
[2]
Part A of the relief sought by the applicant served before this Court
on 2 December 2022. On that date
an order was granted inter alia
(i) postponing the application to 9 February 2023, (ii) regulating
the periods of time in terms
of which the respective parties were to
file further affidavits, (iii) directing the respondent to reconnect
the electricity supply
with immediate effect pending finalisation of
Part B of the application and (iv) standing the costs over for later
adjudication.
[3]
In terms of Part B, it being the remaining portion of the relief that
serves before me for adjudication, the
applicant moves for an order
in the following terms:
“
1.
That it be declared that the Respondent’s conduct in
disconnecting the municipal electrical services
on 1 December 2022,
to the property described as Erf [....] Bloemfontein E[....]
[....]Township, Registration Division Bloemfontein
Road, Free State,
with municipal account number [....] is unlawful;
2.
That the Respondent be interdicted and restrained from disconnecting
municipal service supply to the
property without first complying
with:
2.1
its obligations in terms of the Municipal Systems Act, 2000, as
amended; and
2.2
its obligations in terms of the By-Law Relating to Credit Control and
Debt Collection, 2013.
3.
That to the extent necessary the respondent is ordered and directed
to reinstate all municipal service
supply to the property;
4.
That the Respondent pay the costs of this application;
5.
That this Honourable Court grants such further and alternative relief
as it may deem fit in the circumstances.
”
THE FACTUAL MATRIX
[4]
The origin of this dispute is to an extent evident from the content
of a court order granted on 28 July
2022 (“the 28 July
2022 order”). The 28 July 2022 order reads as follows:
“
IT
IS ORDERED BY AGREEMENT BETWEEN THE PARTIES THAT:
1.
In fulfilment of its obligations in terms of section 118 of
the Local Government Municipal Systems Act, 2000,
(MSA)
as amended, the applicant shall pay the amount of :
1.1
R7,369,054.74, being the amount of R7,636,563.74 in respect of
the municipal clearance figures less interest in the amount of
R267,509.66;
1.2
together with an amount equal to 4 months’ estimated
charges, which amount is to be calculated by the respondent, and
provided
to the applicant, through its attorneys of record, within 5
days of this order.
2.
The respondent is ordered and directed to issue a certificate
in terms of section 118(1) of the MSA within 7 (seven) days of
receipt
of the payment contemplated by paragraph 1 above.
3.
The payment contemplated in paragraph 1 above is made under
protest, and shall, pending the outcome of the dispute contemplated
in prayers 4 to 6 below, be held by the respondent as such.
4.
The respondent is ordered and directed to take the following
steps in resolution of the dispute which forms the subject of this
application:
4.1
the respondent is ordered and directed to provide the meter
reading records on combined meter numbered 1IH76298I and 1(M68353
(“the
combined meter”) from January 2019 until the date
of any order of this Honourable Court;
4.2
the respondent is ordered and directed to provide a written
report, together with any supporting documentation such as job cards
that may exist, regarding any work done, or contemplated, in respect
of the combined meter between January 2020 until January 2021;
and
4.3
the respondent is ordered and directed to appoint a registered
third party meter checking agency to test the accuracy of the
combined
meter, as contemplated in section 36 of the Respondent’s
By-laws relating to Water Services, 2013, and to provide a written
report to the applicant thereon within 60 days of having appointed
the aforementioned service provider – provided that the
meter
shall be removed from the property within 14 calendar days of this
order and the applicant shall pay the fee as prescribed.
5.
Upon receipt of the reports contemplated in paragraphs 4.2 and
4.3 above, the applicant will have 30 (thirty) calendar days within
which to launch appropriate legal proceedings to impugn the report or
reclaim the amounts paid to the respondent, if necessary.
6.
Should the applicant fail to launch legal proceedings
contemplated in paragraph 5, the amount found to be due in the
resolution
shall be paid over to the respondent, or held by the
respondent as no longer paid over under protest, as the case may be.
7.
Each party shall pay their own costs.
”
[5]
Briefly the facts that gave rise to the 28 July 2022 order are that
the applicant, as registered owner of
the property, responsible for
the payment of the respondent municipality’s account(s), had
entered into a deed of sale in
terms of which it was obliged to give
registration of transfer of the property to the purchaser it being
the current tenant of
the property. The process of registration of
transfer was frustrated in and because of a dispute of the
applicant’s then
indebtedness to the respondent which rendered
the obtaining of a clearance certificate in terms of section 118 of
the Municipal
Systems Act 32 of 2000 (“the MSA”)
problematic. Such certificate is necessary to pass transfer of the
property.
[6]
The dispute in that application had as its foundation the fact that
the applicant disputed the computation
of the amount purportedly owed
by it to the respondent at that time. This dispute was prosecuted
inter alia on the basis that the
respondent had relied, in the
computation of applicants purported indebtedness to it, upon the
readings of an incorrect meter (which
were subsequently corrected)
and aberrant water meter readings.
[7]
The court order of 28 July 2022 clearly serves as a methodology
recording the terms and conditions of the
manner in which the
respective parties envisaged that the dispute between them would be
resolved. As stated by the respondent,
by way of its answering
affidavit filed in the resistance of the present application, the
purpose of the order is:
“
9.2.4
to take certain steps in the resolution of the dispute, namely to:
a.
provide the meter reading records on the combined meter from
January
2019
until
28 July 2022
(paragraph 4.1 of the Court
Order)”
[8]
A significant portion of the facts, as pleaded by both parties, are
dedicated to the dispute between the parties
relevant to their
respective interpretation of the order of 28 July 2022. Counsel
for both the applicant and the respondent
submitted, correctly so in
my view, that this Court is not called upon to pronounce the manner
in which the Court order of 28 July
2022 falls to be
interpreted. The particularity of these facts are accordingly by and
large irrelevant to the adjudication of this
application. It suffices
to record that it is common cause that there exists a dispute between
the parties regarding the interpretation
of that Court order. More
importantly, within the context of this application, the dispute
provided for in the 28 July 2022 order
(being relevant the applicants
purported indebtedness to the respondent) remains to date very much
alive.
[9]
A synopsis of the more pertinent facts evident from the pleadings of
record reveals that it is the applicant’s
case that:
9.1
There exists an ongoing and unresolved dispute regarding the
applicant’s pecuniary obligations to the respondent,
the extent
of which is evident from the 28 July 2022 order and the events that
subsequently transpired in relation thereto;
9.2
The respondent did not receive proper notice of the impending
disconnection as required in terms of its By-Laws
and Credit Control
Policy;
9.3
The applicant has been paying the undisputed charges on its municipal
account; and
9.4
There exists a process of negotiation between the parties relevant to
the clearance certificates required to give
effect to registration of
transfer of the property pursuant to the 28 July 2022 order.
[10]
A similar synopsis of the respondent’s case illustrates that:
10.1 Its disconnection of
the municipal electricity services to the property was lawful and
that the necessary jurisdictional requirements,
as required inter
alia in terms of its By-Laws and Credit Control Policy predominantly
relevant to its Notice of Intention to Limit
or Disconnect or
Discontinue the Supply of Electricity or Water (“
the
pre-termination notice
”), were both in existence and
complied with; and
10.2
The applicant has not made payment of its undisputed payment
obligations to the respondent.
[11]
That which is recorded in paragraphs 9 and 10 above constitutes a
broad overview of the respective parties fundamental
submissions as
they developed during the argument of the application before me.
Additionally relevant facts shall be dealt with
under the heading
“
EVALUATION
” below.
STATUTORY FRAMEWORK AND
APPLICABLE PRECEDENT
[12]
Section 5(1)(g) of the MSA provides that:
“
Members
of the local community have the right to have access to municipal
services which the Municipality provides, provided the
duties in
subsection (2)(b) are complied with.
”
[13]
Section 102 the MSA provides as follows:
“
(1)
A municipality may-
(a)
consolidate any separate accounts of persons liable for
payments 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 a dispute
between the municipality and a person referred to in that
subsection
concerning any specific amount claimed by the municipality from that
person.
”
[14]
In terms of section 20(3)(a) of the respondent’s Credit Control
and Debt Collection Policy (dated 30 June 2022)
(“
the Credit
Control Policy
”), a municipality is authorised to
discontinue the supply of electricity to an immovable property if the
customer fails to
pay any account.
[15]
Section 20(6) of the Credit Control Policy provides:
“
Prior
to the limitation, disconnection or discontinuation of the supply of
electricity or water as per paragraph 20(3) above, the
Municipality
or Municipal Entity shall:
(a)
provide the customer with adequate notice, including:
(i)
the date of the proposed limitation, disconnection
or discontinuation;
(ii)
the reason for the proposed limitation, disconnection or
discontinuation;
(iii)
the place at which the customer can challenge the basis
of the proposed limitation, disconnection or discontinuation;
(iv)
the notice may be a combined notice between both the Municipality and
the Municipal Entity; and
(b)
allow the customer fourteen (14) days within which to
challenge or make representations.
”
[16]
Section 36(2) of the Credit Control Policy authorises specific
methods of service of the required pre-termination notice.
They are
these:
“
(2)
If a notice is to be served on a person in terms of this
policy then such service shall be effected by:
(a)
delivering the notice to him or her personally, or to
his or her duly authorised agent;
(b)
delivering the notice at his or her residence or place
of employment, to a person apparently not less than 16 (sixteen)
years of age, and apparently residing or employed there;
(c)
if he or she has nominated an address for legal
purposes, delivering the notice to such an address;
(d)
registered or certified post, addressed to his or her
last known address;
(e)
in the case of a body corporate, delivering it to the
registered office or the business premises of such a body
corporate;
or
(f)
if service cannot be effected in terms of the
afore going subsections, by affixing it to the principal door
of
entry to the premises or displaying it in a conspicuous place on the
property to which it relates.
(g)
with respect to notices in respect of valuation rolls,
section 49 of the Property rates act shall be followed.
”
[17]
It was held in
Ngqumba
en ‘n Ander v Staatspresident en Andere
;
Damons
NO en Andere v Staatspresident en Andere
;
Jooste
v Staatspresident en Andere
1988
(4) SA 224
(A) at 226B – C
that
the rule in
Plascon-Evans
[1]
applies even where the onus in a matter is on the respondent.
However, where an onus rests on the respondent, and the respondent
fails to allege and prove a defence, judgment ought to follow.
[18]
In the matter of
Euphorbia (Pty) Ltd t/a Gallagher Estate v
City of Johannesburg
[2016] ZAGPPHC 548
the Court
dealing with a municipality’s onus to prove the correctness of
the municipal charges, explained the position at
paragraph 17 as
follows:
“
[17]
In the absence of special circumstances,
considerations of policy, practice and fairness require that
the
City is saddled with the onus of proving the correctness of its
meters, the measurements of water consumption and statements
of
account rendered pursuant thereto. It cannot reasonably be expected
from the consumer, having raised a bona fide dispute concerning
the
services delivered by the City, to pierce the municipal veil in order
to prove aspects that peculiarly fall within the knowledge
of and are
controlled by the City.
In the present matter it was impossible for Euphorbia to perform its
own test on the contentious meter as, firstly, only Termets
was
legally permitted to perform the tests and, as it happened, the meter
was untimely disposed of by the City. The statements
and other data
concerning the water usage were in the possession and under control
of the City.
Euphorbia
relied on justified inferences arising from a sudden spike in water
consumption arising from its own comprehensive investigation,
in
order to verify the correctness thereof. It accordingly raised a bona
fide dispute as to the City’s billing in regard
to the
services, and the City bore the onus to prove the correctness
thereof.”
[Bold
font added for emphasis]
[19]
In
Body Corporate Croftdene Mall v Ethekwini Municipality
2012
(4) SA 169
(SCA)
at paragraphs 21 – 23, the SCA reflected
on the meaning of the word “
dispute
” for purposes
of section 102(2) of the MSA and remarked as follows:
“
[21]
Neither the Systems Act nor the policy
defines the term 'dispute'. Some of the definitions ascribed
to it
include 'controversy, disagreement, difference of opinion', etc. This
court had occasion to interpret the word in Frank R
Thorold (Pty) Ltd
v Estate Late Beit and said that a mere claim by one party, that
something is or ought to have been the position,
does not amount to a
dispute:
there must exist two or more parties who are in
controversy with each other in the sense that they are advancing
irreconcilable
contentions
.
[22]
It is, in my view, of importance
that
s 102(2) of the Systems Act requires that the dispute must relate to
a 'specific amount' claimed by the municipality
.
Quite
obviously, its objective must be to prevent a ratepayer from delaying
payment of an account by raising a dispute in general
terms
.
The
ratepayer is required to furnish facts that would adequately enable
the municipality to ascertain or identify the disputed item
or items
and the basis for the ratepayer's objection thereto.
If an
item is properly identified and a dispute properly raised, debt
collection and credit control measures could not be implemented
in
regard to that item because of the provisions of the subsection.
But
the measures could be implemented in regard to the balance in
arrears; and they could be implemented in respect of the entire
amount if an item is not properly identified and a dispute in
relation thereto is not properly raised.
[23]
Whether a dispute has been
properly raised must be a factual enquiry requiring determination on
a case-by-case basis
. It is clear from clause 22.3 of the
policy referred to above that the dispute must be raised before the
municipality has implemented
the enforcement measures at its
disposal.
”
[Bold
font added for emphasis]
[20]
In
Ditsobotla
Local Municipality v IGA Dada Properties
,
[2]
in applying what was stated by the Constitutional Court in
Rademan
v Moqhaka Local Municipality and Others
,
[3]
the following was stated:
“
[18]
The court in Rademan supra stated that “a municipality is
obliged to collect all money that is
due and payable to it, subject
to the Systems Act and any other applicable legislation.” It
was the applicant’s responsibility
to ensure that it takes all
reasonable steps to ensure that the revenue due to it is collected
and calculated on a monthly basis.
The non-payment by debtors of
their accounts has a direct negative impact on the appellant’s
ability to deliver services
to residents. Thus the appellant was
entitled to take reasonable steps to collect debts due to the
appellant.
”
[21]
It is trite law that the onus to prove valid payments rests on the
debtor.
[4]
EVALUATION
[22]
It is convenient, within the facts and circumstances of this matter,
to first deal with the purported validity of the respondent’s
pre-termination notice.
[23]
The respondent alleges that its pre-termination notice was delivered
to the property on 26 October 2022 by Messrs Radebe
and one George.
[24]
On that day Messrs Radebe and George enquired from a security guard
at the gate of the premises to whom they could talk
in relation to
the pre-termination notice. The security took Messrs Radebe and
George to an unidentified female individual who
in turn informed them
that one Ronel was the person to talk to. The unidentified individual
went outside to call Ronel, who was
smoking. They waited in a
reception area and after a while an individual arrived and introduced
herself as Ronel. She accepted
the notice, after being requested to
sign both the original and a copy thereof for purposes of
acknowledgement of receipt. Ronel
furthermore enquired from Mr Radebe
whom she must contact regarding the notice, and when informed that
she may contact Ms Selepe,
she being employed in the debt collection
department of the respondent, she told Mr Radebe that she knows Mss
Selepe as they had
corresponded in the past. Ronel further informed
Mr Radebe that she has to refer the notice to head office in
Johannesburg, because
all payments are attended to thereat.
[25]
In rebuttal of the facts, as aforesaid, the applicant denies that
Ronel is employed whether by the applicant or the occupant
tenant of
the premises. In substantiation of this allegation the applicant
lists by name all of its and the tenant’s employees.
The name
Ronel is not amongst those names listed.
[26]
To my mind, the onus rests of the respondent to allege and prove
satisfaction of the provisions of sections 20(6) and
36(2) of its
Credit Control Policy. Absent the satisfaction of the jurisdictional
requirements provided for in these sections,
the respondent’s
pre-termination notice is invalid and unavoidably renders the
termination of its electrical services to
the property improper and
therefore unlawful.
[27]
During argument, counsel for the respondent submitted that the
pre-termination notice was delivered in accordance with
the
provisions of section 36(2)(b) or (c).
[28]
The respondent’s reliance upon the provision of section
36(2)(b) is, in my view, misplaced. The applicant is a
company and
cannot reside or have a place of residence. The applicant has its
registered address situated at 10 Skeen Boulevard,
Bedford View,
Johannesburg. Service upon this address would obviously have
sufficed.
[29]
Insofar as the respondent relies on the provisions of section
36(2)(c) there is no evidence before me that the respondent
nominated
the premises as “
an address for legal purposes
”.
[30]
Moreover, and in any event, the probabilities illustrate that the
pre-termination notice only came to the attention of
the applicant on
30 November 2022. This being the date upon which the respondent’s
representative attended upon the property
with the intention of
disconnecting the municipal electricity supply thereto. The facts
show further that immediately pursuant
to the pre-termination notice
coming to the applicants attention, its attorneys of record addressed
a letter to Ms Selepe. By way
of that letter the applicant’s
attorneys of record inter alia asserted the unresolved dispute in
respect of the applicant’s
indebtedness to the respondent and
significantly also demanded that the respondent demonstrate how the
amount of R7 576 720.28
(it being the amount reflected in
the pre-termination notice) can be due on the applicant’s
municipal account in circumstances
in which the account totalled
R7 636 563.75 at the time of the 28 July 2022 order. No
response was received in respect
of the letter aforesaid; instead the
respondent proceeded to disconnect the municipal electrical services
to the property. On 1
December 2022 a further letter was addressed by
the applicant’s attorneys to Mr Chauke (of the respondents
attorney of record)
and Ms Selepe in terms of which the applicant
re-asserted the dispute, joined issue with delivery of the
pre-termination notice
and demanded the re-connection of the
electrical services to the premises by 18:00 on 1 December 2022. The
application was issued
the very next day.
[31]
On the facts before me, and over and above the findings made in
paragraphs 28 and 29 above, I additionally find that
the further
jurisdictional requirements for the delivery of a valid
pre-termination notice have not been satisfied and that the
respondent has failed to discharge the onus which rests upon it on
this score. Who Ronel is and why she would have said that which
she
did to the respondent’s representatives responsible for the
delivery of the pre-termination notice is unclear. What is,
however,
clear is that Ronel is not the applicant’s agent, she does not
reside at the property and she is not employed either
by the
applicant or the applicant’s tenant. The respondent bears the
onus of pleading and proving the satisfaction of the
jurisdictional
requirements relevant to delivery of the pre-termination notice. It
has failed to discharge the same.
[32]
Lest my findings in respect of the invalidity of the delivery of the
pre-termination notice be incorrect, which I do
not suggest to be the
case, I deal briefly with the aspect of whether or not the applicant
has made payment of the undisputed municipal
charges to the
respondent.
[33]
The respondent’s case, simply put, is that it accepts that a
substantial portion of the applicant’s indebtedness
to it is
disputed. However, the respondent denies that the applicant has made
payment of its undisputed indebtedness to it and
is accordingly on
this basis entitled to disconnect the municipal electrical services
to the property.
[34]
In support of the proposition, as aforesaid, the respondent relies on
a tax invoice relevant to the applicant’s
account with it. The
invoice is in respect of the period 18 October 2022 to 22 November
2022.
[35]
The first entry reflected on such invoice reflects the amount of
R7 576 720.28, this being the precise amount
recorded in
the respondent’s pre-termination notice. How this amount is
calculated is not apparent from such invoice.
[36]
The remainder of the entries on the invoice reflect the
municipal charges rendered by the respondent on 22 November 2022
which are
in respect of interest charges levied by the respondent in
respect of refuse removal, sanitation repairs, arrears sundries,
rates
and water and the levies in respect of sanitation, water and
refuse (together with VAT thereon). The monthly interest levied on
these charges amounts to approximately R53 500.00. The balance
of the monthly charges reflected in the invoice, which the
respondent
argues to be uncontested, amounts to approximately R20 000.00.
These uncontested entries were only charged long
pursuant to the
respondent’s pre-termination notice which was, as I have
explained, dated 25 October 2022. The uncontested
charges for the
months of August, September and October 2022 are, for example, not
reflected.
[37]
The respondent in further support of its proposition that the
uncontested charges have not been paid additionally attaches
a
screenshot of its billing system. The screenshot reflects that the
last payment that the applicant made to it was in the month
of
December 2021 in the amount of R537 918.37.
[38]
The applicant explains that the amount of R537 918.37 was
effected pursuant to a deposit request for clearance certificates
in
that amount and that the respondent has inappropriately allocated
this payment to the disputed amount in contravention of section
102
of the MSA. This is in circumstances in which the charges raised to
the account, in the intervening periods, do not exceed
R537 918.37
given that they ostensibly amount to approximately R20 000.00 per
month.
[39]
Mindful of the principles set forth in judgments of
Ngqumba en
‘n Ander
in paragraph 17 above and
Euphorbia
(Pty) Ltd t/a Gallagher Estate
in paragraph 18 above, the
respondent has unavoidably failed to discharge the onus’s which
it bears in alleging and proving
a defence and placing evidence
before the court evidencing the “
correctness
of its meters, the measurements of water consumption and statements
of account rendered pursuant thereto.”
[40]
The respondent reliance upon the tax invoice and screenshot, as
aforesaid, can therefore not assist it in its attempted
resistance of
the present application. The respondent’s pre-termination
notice reflects the purported indebtedness of the
applicant to the
respondent as at 25 October 2022 in the amount of R7 576 720.28.
There is no evidence before me
which illustrates the manner in which
said amount calculated by the respondent and its allocation of the
amount of R537 918.37
is in contravention of section 102 of the
MSA. On the papers before me, I accordingly find that the applicant
has made payment
of its undisputed charges to the respondent and
discharged the onus which rests upon it in this regard.
CONCLUSION
[41]
I am satisfied that the applicant has made out a case for the relief
that it seeks by of Part B of the notice of motion.
The relief sought
in prayer 2 of the notice of motion follows by operation of law and
there is no need for an order on this score.
Given the subsequent
reconnection of the municipal electrical services to the property, an
order in accordance with prayer 2 of
the notice of motion is also
unnecessary.
[42]
The exists no valid reason(s) why costs should not follow the result,
which includes the costs of 2 December 2022.
ACCORDINGLY,
I MAKE THE FOLLOWING ORDER
:
1.
It is declared that the respondent’s conduct in disconnecting
the
municipal electrical services on 1 December 2022 to the property
described as Erf [....] Bloemfontein E [....] [....] Township,
Registration Division Bloemfontein Road, Free State, with municipal
account number [....], is unlawful.
2.
The respondent is to pay the costs of this application, including the
costs
of 2 December 2022.
S.
TSANGARAKIS, AJ
On
behalf of the Applicant: Adv
H.J. Van der
Merwe
Instructed
by: Jacobs
Fourie Attorneys
Bloemfontein
On
behalf of the Respondent: Adv
J.J. Buys
Instructed
by: Rampai
Attorneys
Bloemfontein
[1]
Plascon-Evans
Paints Ltd v Van Riebeeck Paints (Pty) Ltd
1983
(3) SA 623 (A)
[2]
[2018]
jol 40382 (NW).
[3]
2013
(4) SA 225 (CC).
[4]
Pillay
v Krishna and Another
1946
AD 946
at 955B.