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[2021] ZAGPJHC 636
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ESTA (Pty) Limited v The City of Johannesburg Metropolitan Municipality and Others (27423/2018) [2021] ZAGPJHC 636 (1 September 2021)
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Certain
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IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
LOCAL DIVISION, JOHANNESBURG
Case
Number: 27423/2018
REPORTABLE:
NO
OF
INTEREST TO OTHER JUDGES: NO
01/09/2021
In
the matter between:
ESTA
(PTY)
LIMITED
Applicant
and
THE
CITY OF JOHANNESBURG
METROPOLITAN
MUNCIPALITY
First Respondent
CITY
POWER (PTY)
LTD
Second Respondent
JOHANNESBURG
WATER (PTY) LTD
Third Respondent
JUDGMENT
YACOOB,
J:
INTRODUCTION
1.
The applicant (“Esta”),
initially approached this court on an urgent basis for:
1.1.
the reconnection of water to its property
at [....] Nugget Street (“the premises”);
1.2.
the repair of the hazardous electricity
connection at the premises;
1.3.
a declaration that debt for consumption
charges at the premises which predated 30 June 2015 had prescribed;
1.4.
an order that the three respondents rectify
Esta’s municipal accounts to reflect actual meter readings and
municipal tariffs,
for the period after 30 June 2015, and
1.5.
that debatement take place 60 days after
rectified accounts had been provided.
2.
At the first hearing of the matter, counsel
for Esta indicated that the relief sought in prayers 1 and 2 of the
notice of motion
(for reconnection of water and repair of the
hazardous connection) was no longer necessary. He also indicated that
prayer 5, for
debatement, had been included in an attempt to avoid
further litigation but that it would not be pursued if the court
accepted
the respondents’ submission that an order for
debatement is not possible.
3.
Esta also sought to amend its notice of
motion, to include an alternative prayer that the charges in dispute
be ringfenced to allow
the respondents to issue summons on the
disputed debt.
4.
For convenience I shall refer to the three
respondents collectively as “the City” unless it is
necessary to differentiate
among them. They have made common cause in
opposing this application.
5.
At the first hearing of the matter counsel
for the City contended that much has been done to correct the
problems raised by Esta.
In addition it was contended that Esta’s
case was now based on its replying affidavit instead of its founding
affidavit.
This was due to Esta having set out new developments in
the case, including new information obtained from the City. In the
City’s
answering affidavit, the contention was made that the
City had been forced to answer before it had completed its
investigations
and that it was still in the process of investigating
the issues raised.
6.
Taking into account the City’s
contentions, that litigation is a fluid process particularly when it
deals with ongoing events,
and that the developments were due to the
City only responding substantively to Esta’s complaints after
the application was
brought, the matter was postponed
sine
die
and the City directed to file a
supplementary answering affidavit, which was to include what further
investigations it had undertaken
since the answering affidavit was
filed, what the result was of those investigations, and an
explanation of the information contained
in the invoices Esta had
attached to its replying affidavit, which the City had provided to
Esta about eight months after it had
filed its answering affidavit.
Esta was permitted to file a supplementary replying affidavit, and
did so.
7.
Before I deal with the later developments
in the matter, I set out the facts leading up to this application.
FACTUAL
BACKGROUND
8.
Esta has since 1966 owned business premises
at [....] Nugget Street, Johannesburg, and has an account with the
first respondent
(“the City”) for payment of services
provided to the premises, including water, sanitation and
electricity.
9.
In 2008 Esta notified the City that its
account contained incorrect information, including readings on faulty
electricity meters,
readings on non-existent meters, and readings
based on estimations. The City did not respond, and Esta again
addressed correspondence
to the City in July 2009 dealing with the
same complaints. There was still no response from the City.
10.
In September 2014, according to the Esta,
the faulty meters at the property were removed and a new electricity
meter, number [....],
was installed, with a zero reading. The City
nonetheless continued to charge Esta based on estimated readings for
meters which
had been replaced.
11.
In December 2014, the City’s
attorneys addressed correspondence to Esta regarding its alleged
outstanding debt. Correspondence
was exchanged between Esta and the
attorneys during 2015 regarding the debt and the deficiencies.
Throughout this period, the City
continued to bill incorrectly. In
May 2016, the City began charging Esta in accordance with readings on
the new meter, but still
failed to remedy the charges that had been
levied on the old meters. The City’s attorneys acknowledged in
June 2016 that
only now were correct readings being recorded for both
water and electricity for the property.
12.
In February 2018 the water was disconnected
from the property, and this prompted the urgent approach to court,
for the relief set
out earlier, although the relief sought has now
evolved. The application was instituted in July 2018.
13.
In its answering affidavit (filed in
December 2018) the City acknowledges that there were errors in the
accounts and sets out what
the City has done to correct the errors,
as well as deal with the other complaints the application seeks to
have remedied. It also
acknowledges that it only took steps to
correct the errors after the application had been served. It
complains that despite asking
for more time to complete
investigations, it was forced to file the affidavit. It asserts that
the electricity account is still
being investigated.
14.
According to the City there was a three
phase electricity meter in place at the property during 2014 (numbers
[....], [....] and
[....]). The meters were replaced in 2015 with a
new meter, [....]. The closing readings of the old meters and the
opening reading
on the new meter was not available. The deponent
undertook to make that information available to the court by way of
supplementary
affidavit as soon as it was obtained. The 2015 meter
was replaced in 2018 with meter number [....]. I note that this is
unlikely,
considering that Esta already was referring to meter number
[....] in correspondence dating from at least 2015.
15.
The City acknowledged that there had been
“overlap” among the meters which resulted in double
charges.
16.
In August 2019 the City provided Esta with
“recalculations”, which Esta annexed to its replying
affidavit. The City
did not provide the information in a
supplementary affidavit as it had undertaken to do. Instead it
objected to Esta adjusting
the relief it sought in accordance with
the new information provided to it extracurially by the City and
which Esta had to then
place before the court.
17.
The invoices containing these
recalculations begin with a balance brought forward on 17 March 2010
of R231 514.23, for electricity.
There is no explanation or
calculation supporting this amount. As will be seen below, this
amount is now the main issue of contention
between the parties.
18.
The calculations also show that the City
allocated Esta’s payments to disputed arrears amounts despite
an alleged agreement
between Esta and the City that this would not be
done. Esta relies on letters it sent to the City’s erstwhile
attorney after
it met with them as proof of this agreement.
19.
In addition, the new statements show that
faulty or non-existent meter numbers were used, with only estimated
charges, even after
the new meter was installed. The first recorded
reading of the new meter was in May 2016.
THE
SUPPLEMENTARY AFFFIDAVITS AND THE SECOND HEARING
20.
Oddly, despite the City’s allegations
in its answering affidavit regarding ongoing investigations, it
emerged that the City
had not in fact conducted or continued any
investigations after the date of the first answering affidavit, apart
from recalculating
amounts as set out in the invoices annexed to
Esta’s replying affidavit. No explanation was given why those
recalculations
could not have been done in time to be included in the
first answering affidavit.
21.
As I have already mentioned, recalculation
relied on readings from various meter numbers, which are not accepted
by Esta. It also
relied on an amount carried forward in March 2010
when the system was changed, of which no account or calculation is
given. Taking
into account that Esta’s complaints date from at
least 2008, the City’s failure to account is more than a little
problematic.
22.
According to the deponent of the
supplementary affidavit the City only has the information captured on
its SAP system and everyone
is obliged to accept the correctness of
that data. Evidence must be produced that the data is incorrect
before it can be changed.
However there was no explanation why the
City for at least eight years simply ignored Esta’s complaints
that the information
was being captured incorrectly. This is directly
at odds with the City’s obligation to keep proper records and
bill correctly.
23.
The City migrated to the SAP system on 17
March 2010. Although the deponent does not say so, this is presumably
the reason for the
unexplained balance brought forward. Whether the
City still possesses the raw data from which that balance was gleaned
is unclear.
24.
The City, oddly, insists that the new meter
was only installed on 11 September 2015, despite Esta referring to
the number of the
new meter already in May 2015. It seems to me that
this insistence is unreasonable and shows an unwillingness to accept
responsibility
for errors and failure to account. The City relies on
meter reading schedules which it attaches to the supplementary
replying affidavit
for its insistence.
25.
By the time of the second hearing, the
relief sought by Esta had once again evolved, as a result of the
information contained in
the City’s supplementary affidavit.
26.
Esta proposed that, despite the fact that
the City’s calculations were obviously unsubstantiated,
according to Esta’s
analysis in its supplementary replying
affidavit, it be ordered to pay the full amount owing as from March
2010, excluding interest,
and that the amount before March 2010 be
written off, with interest, on the basis either that it had
prescribed or that the City
in any event could not substantiate those
charges.
27.
The City still, at the hearing, persisted
with arguments based on Esta having continually “moved the
goalposts”. But
that movement has been occasioned solely by the
City having only dealt with Esta’s complaints after Esta
brought this application.
Esta cannot be faulted for having trimmed
the relief sought in these circumstances. It would not have been
competent to continue
to seek the same relief in the circumstances.
28.
The City is responsible for the moving of
the goalposts, as it did not produce the required information
timeously, or comply with
its duties of service delivery, adequate
record keeping and transparency in a way that would have allowed Esta
to seek at the outset
the more reasonable relief it seeks now.
29.
To the extent that there is a dispute of
fact, it is about something that ought to have been within the City’s
knowledge,
and which the City ought to have produced, and is unable
to. Esta could not have foreseen that. The City cannot rely on its
own
errors to support a contention that Esta is blameworthy.
30.
The City suggests that it cannot be faulted
for allocating Esta’s payments to older debt. This is
disingenuous in circumstances
where the older debt is disputed. It
means that Esta can never be free of the debt because the City
considers the old debt to have
been paid and it cannot therefore
prescribe or otherwise be dealt with. There is no incentive for the
City to deal with the dispute
because it has a hold over Esta if Esta
wants to continue to receive the services which it is paying for, and
which it cannot procure
from anybody else.
31.
The City’s rights in terms of the
by-laws are intended to be applied fairly and in circumstances where
the City is doing its
job. They are not intended to be used as a tool
in bullying people who have no choice. Esta’s undertaking to
continue to
pay for consumption in terms of the new meter and
performance of that undertaking cannot in good faith be used to
undermine Esta’s
rights to dispute something it has been
disputing for over a decade. By applying the payments to the disputed
debt, the City then
has no need to substantiate the amounts Esta
disputes, since from the City’s point of view these have now
been paid. This
is patently unfair.
32.
For these reasons I am satisfied that the
City in the circumstances of this case was incorrect to allocate
Esta’s payment
to the disputed debt. Had the City responded to
Esta’s complaints when they were raised in 2008 this whole
debacle would
have been avoided. It did not do so and it is not
appropriate that Esta bear the burden of the City’s failure.
The City must
substantiate its claim for the amount brought forward
on 17 March 2010 if it still wants to claim it.
33.
The City submits that an order cannot be
made that the amount has prescribed, because part of that amount is
in the nature of tax,
and that does not prescribe. I agree. Esta
bears the burden of proving which part of the debt may have
prescribed and it has not
done so.
34.
For these reasons, I consider it
appropriate that the debt dating from before 17 March 2010 be
“ringfenced” and none
of Esta’s payments be
allocated towards that debt. The City may bring action proceedings to
claim that debt if it so wishes.
However, the City may not use that
debt against Esta in any way, until and unless it has been determined
by a court that that debt
is in fact owing.
35.
In these circumstances, it is appropriate
that the City recalculate Esta’s debt to exclude the amount
brought forward from
17 March 2010, but otherwise on the same basis
as in the invoices dated 12 August 2019.
COSTS
36.
I can see no reason why costs should not
follow the result. Esta has been substantially successful and has
been forced to come to
court in order to get the City to pay
attention to its complaints.
37.
For these reasons I make the following
order:
37.1.
The City is directed to recalculate Esta’s
debt on the account [....] on the same basis as that set out in the
invoices dated
12 August 2019, but omitting the balance brought
forward on 17 March 2010.
37.2.
Esta shall pay the recalculated amount
within 30 days of the recalculation being provided to it.
37.3.
The City is directed not to treat the
balance brought forward on 17 March 2010 as outstanding arrears owing
by Esta until and unless
the amount has been claimed in a Court and
that Court has determined the claim.
37.4.
The respondents are to pay the costs of
this application, jointly and severally.
S.
YACOOB
JUDGE
OF THE HIGH COURT
GAUTENG
LOCAL DIVISION, JOHANNESBURG
Appearances
Counsel
for the applicant:
Mr AJ du Plooy
Instructed
by:
Mervyn Smith Attorneys
Counsel
for the first respondent:
Mr SD Maritz
Instructed
by:
Mohamed Randera & Associates
Date
of hearing:
23/06/2020 and 23/11/2020
Date
of judgment: 01/09/2021