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[2023] ZAFSHC 446
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Olympic Flame (Pty) Ltd v Matjhabeng Local Municipaltiy (656/2023) [2023] ZAFSHC 446 (16 November 2023)
SAFLII
Note:
Certain
personal/private details of parties or witnesses have been
redacted from this document in compliance with the law
and
SAFLII
Policy
IN THE HIGH COURT
OF SOUTH AFRICA,
FREE STATE
DIVISION, BLOEMFONTEIN
Reportable: YES/NO
Of Interest to other
Judges: YES/NO
Circulate to Magistrates:
YES/NO
Case No: 656/2023
In
the matter between:
OLYMPIC
FLAME (PTY) LTD
Applicant
and
MATJHABENG
LOCAL MUNICIPALITY
Respondent
HEARD
ON:
07 NOVEMBER 2023
JUDGMENT
BY
:
MHLAMBI, J
DELIVERED
ON:
16 NOVEMBER
2023
[1] On
30 March 2023, a
rule nisi
was issued calling upon the
respondent to show cause, if any, why the following orders should not
be made final:
2.1. That the
Respondent be ordered to immediately restore the electricity supply
to the Applicant’s immovable property
at 2[…] 1[…]
th
S[…], Industria, Welkom, Free State Province (“the
Premises”).
2.2. That the
Sheriff of the High Court, be authorised to take any and all actions
necessary to effect the reconnection of
electrical supply to the
Premises should the Respondent fail to adhere to the terms set out in
prayer 2.1. hereof.
2.3. That the
Respondent be interdicted and restrained from disconnecting the
electricity supply to the Premises pending the
dispute resolution
processes and/or action envisaged in paragraphs 2.4. and 2.5. hereof.
2.4.
That the Applicant be ordered to lodge a formal dispute against the
electricity charges billed on its tax invoice and/or
electricity fees
bill in respect of such charges issued to it by the Respondent, in
terms of Section 11 of the Respondent’s
officially adopted Debt
and Credit Control Policy, within 30 days from date of confirmation
of the aforesaid rule nisi, failing
which, the relief granted in
paragraph 2.1, 2.2 and 2.3 shall lapse.
2.5.
Alternatively, to paragraph 2.4, that the Applicant within 30 days,
from date of finalisation of this application, be
ordered to
institute declaratory proceedings against the Respondent relevant to
its indebtedness to the Respondent, failing which,
the relief granted
in paragraphs 2.1, 2.2 and 2.3 shall lapse.
2.6. That the
Respondent should be ordered to pay the costs of this application.
3.
The orders in paragraphs 2.1 to 2.3. supra shall serve as interim
interdict with immediate effect pending
the aforesaid return date
.”
[2] The
application was opposed by the respondent on the basis that the
applicant was the registered owner of
the property situated at 2[…]
1[…]
th
S[…], Welkom, also known as erf 9[…],
Welkom Extension 2[…] which was bought from the previous owner
on 31
October 2001 and transferred to the applicant on 24 May 2005
under title deed number: T15[…]. The previous owner was a
company
known as Bluedust (Pty) Ltd which made an application to the
respondent for the supply of electricity to the property. The
respondent
complied and Bluedust (Pty) Ltd paid for the electrical
supply under the municipal account number 121[…]. The
applicant,
subsequent to the transfer of the property into its own
name, failed to transfer and/or make an application for the
electricity
meter to be registered into its own name. The electricity
meter (EL A[…]) remained in the name of Bluedust (Pty) Ltd to
whose property the municipality continued to supply electricity
through a metering system for the actual consumption of electricity.
[3] On
30 December 2022, the respondent delivered and/or served a notice for
the disconnection of the electricity
supply to the premises due to
non-payment. The notice stated that the electricity would be
disconnected on 13 January 2023 if the
amount of R 202 885.60
was not paid on/or before 12 January 2023,
[4] The
applicant, in reply to the respondent’s opposition, admitted
that it failed to register the electricity
meter into its own name
and contended that the respondent failed to mention in its founding
affidavit that the applicant had on
numerous occasions attempted to
register the meter in its own name. According to the applicant, the
respondent refused to assist
with the registration until such time
that the applicant had settled Bluedust (Pty) Ltd’s arrear
electricity account. By
so doing, the respondent was holding the
applicant liable for another company’s debt.
[5]
The applicant contended that the respondent could not use the notice
of disconnection
[1]
dated 30
December 2022 as a basis for the electricity disconnection
which took place on 13 February 2023. The notice was
defective and
invalid in the following respects:
5.1 It was not addressed
to the applicant but to Bluedust (Pty) Ltd;
5.2 It notified Bluedust
(Pty) Ltd that the electricity/water supply to the premises would be
disconnected/reduced if it failed
to pay the amount of R 202 885.60
before or on 12 January 2023.
5.3 The disconnection
would be effected on 13 January 2023.
5.4 The notice was only
valid for a period of 14 days as indicated also at the bottom of the
said notice.
5.5 The electricity
supply was only disconnected on 13 February 2023.
[6] The
applicant’s contention was that when the electricity supply was
disconnected on 13 February 2023, no
pre-termination notice was given
for the electricity disconnection as the one dated 30 December 2022
had lapsed and was of no force
and effect.
[7]
As to the adequacy of the pre-termination notice prior to the
termination of basic municipal services, both
parties referred me,
albeit for different reasons and approaches, to the case of
Joseph
and Others v Johannesburg and Others
[2]
.
The
relevant passage that I was referred to reads as follows:
“
[61]
I agree that
affording notice to the applicants would not undermine City Power's
ability to provide an efficient service. Accordingly,
City Power must
afford the applicants pre-termination notice. For the notice to be
'adequate' it must contain all relevant information,
including
the date and time of the proposed disconnection, the reason for
the proposed disconnection, and the place at which
the affected
parties can challenge the basis of the proposed disconnection.
Moreover, it must afford the
applicants
sufficient time to make any necessary enquiries and
investigations,
to
seek legal advice and to organise themselves collectively if they so
wish. At a minimum, it seems to me that 14 days' pre-termination
notice is fair, and is consistent with the provisions of the credit
control bylaws.”
[8] The
respondent held the view that it complied with the 14-day
pre-termination notice period that it was required
to afford to the
customer. There was no legal and contractual relationship between the
parties for the supply of electricity to
the premises as the
applicant never applied for such services. Consequently, the
applicant did not have the necessary
locus standi
to enforce
contractual rights it never had. The current consumer of electricity
on the premises was the applicant’s tenant,
Industrial
Materials and Services Trust. The applicant failed to make out a
proper case for the relief it sought.
[9] The
applicant on the other hand contended that the termination of
electricity constituted an administrative action
which materially and
adversely affected the rights of a person. Accordingly, such
administrative action must comply with the minimum
procedural
fairness requirements of section 3(2)(b) of the Promotion of
Administrative Justice Act, 3 of 2000 (PAJA), which entails,
inter
alia,
the adequate notice of the nature and purpose of the
proposed administrative action and the reasonable opportunity to make
representations.
The respondent,
in casu,
failed to give
adequate notice for the electricity disconnection of 13 February 2023
as the one issued in December 2022 had, even
e
x facie
the
document, become invalid.
[10]
The applicant contended furthermore that a new property owner should
not be held liable for the historical debt of the
previous owner
[3]
.
The supply of electricity and water are basic municipal services
whose termination adversely affects the rights to such services.
[4]
[11]
It is evident from the contents of the answering affidavit that the
respondent was, for a considerable period, aware of the
circumstances
surrounding the premises: that the applicant held the property as an
investment property that it leased to the current
lessee.
[5]
The applicant paid the rates and taxes, refuse and water supply to
the property.
[6]
Despite the
transfer of the property from the previous owner, Bluedust (Pty)
Ltd., to the applicant in 2005, the respondent continued
to supply
electricity to the property in the name of the previous owner who for
all intents and purposes, was no longer in charge
of the premises.
This led to the large amount demanded in the pre-termination notice.
This is mindboggling as the provisions of
the respondent’s
credit control and debt control policy
[7]
determines that should any account in respect of services not be paid
by due date, a final demand for payment within 7 days should
be
issued. Failure to respond to the demand would entitle the
respondent’s officials to discontinue or reduce the level of
service rendered.
[12]
The respondent’s policy is based on human dignity which must
always be upheld
[8]
and
implemented with equity, fairness and consistency.
[9]
Why was this debt allowed to escalate for so long? Paragraph 4.2.7 of
the policy provides that if there is an outstanding debt
on the
property, this debt must be settled in full, or suitable payment
arrangements must be made by the owner of the property,
before any
customer/owner is registered for services. Does this explain why the
applicant was unable to register for the electricity
services as the
previous owner’s debt had not been settled in full.
[13]
The applicant has, in my view, sufficiently demonstrated that he has
sufficient interest to launch this application. The crucial
question
that is dispositive of this controversy is whether proper notice was
given by the respondent. The answer is no. It was
emphatically
recorded in the pre-termination notice that “
Notice
is valid for 14 days!!!!”
[10]
and
the disconnection would be effected on 13 January 2023.
[14]
In the founding affidavit, the following was said:
“
Just
to iterate, the electricity supply to the property was disconnected
after due notice was given because of the failure to pay
for the
electricity consumed on the property.”
[11]
In
the written heads of argument, it is conceded that 46(forty-six)
calendar days lapsed since the delivery of the aforesaid
disconnection
notice. It is therefore crystal clear that no
pre-termination notice was given and addressed to the applicant prior
to the disconnection
of the electricity supply on 13 February 2023.
This failure to give the applicant the requisite proper notice was
fatal to the
respondent’s case. It would not be correct to
allow the respondent to apply self-help to enforce its rights. The
applicant
must succeed in its application.
[15] The costs must
follow the event.
[16] In the
circumstances, I make the following order:
Order:
The rule nisi is
confirmed with costs which shall include the reserved costs of the
drafting of the affidavits in the interlocutory
application.
MHLAMBI, J
On
behalf of the applicant:
Adv.
P.C Ploos van Amstel
Instructed
by:
Honey
Attorneys
Helicon
Heights
Bloemfontein
On
behalf of the respondent:
Adv.
D.R Thompson
Instructed
by:
Tshangana
Associates Inc
107
Kellner Street
Westdene
BLOEMFONTEIN
[1]
Annexure “OP1” to the replying affidavit.
[2]
2010 (4) SA 55 (CC).
[3]
Jordaan
and Others v City of Tshwane Metropolitan Municipality and Others
[2017] ZACC 31.
[4]
Joseph
and Others, supra.
[5]
Paras
10-19 of the AA.
[6]
Para
20 of the AA.
[7]
2020/2021;
paras 7.1.2 and 7.1.3.
[8]
Para
4.1.
[9]
Para
4.3.
[10]
Annexure
“OP1” on page 62 of the Indexed papers.
[11]
Para
42.