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[2021] ZAGPJHC 490
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Sienaert Prop CC v The City of Johannesburg Metropolitan Municipality and Another (2021/31566) [2021] ZAGPJHC 490 (23 September 2021)
SAFLII
Note:
Certain
personal/private details of parties or witnesses have been
redacted from this document in compliance with the law
and
SAFLII
Policy
REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
DIVISION, JOHANNESBURG
CASE
NO: 2021/31566
REPORTABLE:
YES/NO
OF
INTEREST TO OTHER JUDGES: YES/NO
REVISED.
NO
DATE:
23 September 2021
In
the matter between:
SIENAERT
PROP
CC
Applicant
and
THE
CITY OF JOHANNESBURG
METROPOLITAN
MUNICIPALITY
First Respondent
CITY
POWER (SOC)
LIMITED
Second Respondent
JUDGMENT
Weiner J
Introduction
[1]
The applicant sought an order as a matter of urgency for the
following
relief:
(a)
That the first and second respondents are held in contempt of the
court
order granted by Kollapen J on 20 July 2021 under case number
2021/31566 (the ‘Kollapen J order’);
(b)
That the respondents pay a fine of R100 000.00 to the applicant, or
an
amount to be determined by the Court (this claim was not pursued);
(c)
That the respondents are to credit the electricity portion of the
Rates
Clearance Figures to zero, whereupon the applicant will pay the
outstanding R422 635.49 as reflected in the applicant’s
request for Rates Clearance Figures; and
(d)
Costs on the attorney and client scale.
Contempt
and urgency
[2]
The Kollapen J order provided that:
‘
1.
The respondents are to respond to the applicant’s queries,
listed under the query
numbers in paragraph 1.1 below, within 14 days
from service of this order, and provide written reasons for the
determination of
the queries, via email to the applicant’s
attorneys at the email address
Dino@kgt.co.za
1.1
70020071988; 8002489934 and 800300666
2.
Upon compliance with paragraph 1 above, the respondents are to
re-issue, within
7 days from the provision of the written reasons,
revised clearance figures in terms of Section 118(1) of the Municipal
Systems
Act in respect of the property known as ERF[....] LONGDALE
for the last 24 months.
3.
The respondents are to remove, from any revised rates clearance
figures, any
charges relating to electricity, including forward
projection charges, in respect of the Property in accordance with the
reasons
given in terms of paragraph 2 above.
4.
No order as to costs.’
[3]
The respondents contended that they have issued the required
clearance
certificate and that the applicant is simply refusing to
pay the amounts claimed. They submitted that the applicant should
have
paid under protest as provided for in the
Local Government:
Municipal Property Rates Act 6 of 2004
which governs this situation.
Section 50(6)
provides: ‘The lodging of an objection does not
defer liability for payment of rates beyond the date determined for
payment.’
[4]
Similarly,
s 54(4)
states: ‘An appeal lodged in terms of
this section does not defer a person’s liability for payment of
rates beyond
the date determined for payment.’
[5]
The applicant submitted that these sections deal with rates and not
electricity,
and are therefore not applicable in the present matter.
[6]
The
respondents relied on
Casting,
Forging & Machining Cluster of South Africa (NPC) v National
Energy Regulator of SA
,
[1]
where it was held that:
‘…
to
interfere by means of an interim interdict would amount to an
intrusion into the exclusive terrain of an organ of state as another
branch of government. As a matter of fact, the applicants can prevent
the termination of electricity supply by paying the amount
charged in
terms of the tariff as determined by NERSA, “
under protest
”,
pending finalisation of the main application. Taking into account all
these considerations, I am not convinced that the
applicants have
shown a
prima facie
right as contended for, or that the
balance of convenience favours them. For these reasons, and also when
this matter is considered
from a holistic viewpoint, I am of the view
that the application should be refused.’
[7]
The applicant contended that the
NERSA
judgment is
distinguishable. The judgment dealt with the tariff which was
applicable. The respondents appear to have misconceived
the
applicant’s argument. In the present case, it is not in dispute
that the applicable tariff is the Demand Medium Voltage
(DMV). The
tariff was changed from Demand Low Voltage Tariff (DLV) to DMV, but
the respondents have failed to implement that tariff
in calculating
the electricity consumption.
[8]
There is clearly a valid dispute in this matter, one which is clear
from
the respondents’ internal correspondence. As appears
therefrom, the respondents’ officials acknowledged that—
‘
–
The client’s
account is billed on Demand Low Voltage Tariff which is incorrect.
–
The account should be on
Demand Medium Voltage.’
[9]
The
applicant has a right to have a court determine the
s 118(1)
dispute.
[2]
As stated in
Mkontwana
v Nelson Mandela Metropolitan Municipality
,
[3]
there is a justiciable issue, which an applicant is entitled to have
decided before a court.
[10]
The
respondents suggested that this Court should rather direct the
respondents to re-issue the clearance certificate, which would
be in
line with what was ordered in the matter of
YST
Properties CC v eThekwini Municipality
,
[4]
which would permit the respondents to retain their autonomy, where it
was held:
‘
The
first respondent is ordered, within 24 hours of service of this
order, to furnish the applicant with the certificate in terms
of
s
118(1)
of the [Local Government: Municipal Systems Act 32 of 2000],
which certifies that all amounts that became due in connection with
the remaining extent of Portion 13 of Erf 793, Dunns Grant, for
municipal service fees, surcharges on fees, property, rates and
other
municipal taxes, levies and duties during the two years preceding the
date of application for the certificate of rates have
been fully
paid.’
[11]
The order in
YST Properties
is similar to the one that was
contained in the Kollapen J order. It has not been complied with;
thus the applicant now seeks the
present relief.
[12]
The respondents contended that a material dispute of fact exists in
relation to the amount
which the applicant states is due in order to
obtain the clearance certificate. They submitted that such a dispute
cannot be resolved
on paper and it needs expert evidence. In the
matter before Kollapen J, the applicant annexed an affidavit and
expert report from
Robert Coutts (Mr Coutts) of EnergyMax (who they
described as experts in this field) which appended a schedule
reflecting extensive
calculations explaining that, in utilising the
incorrect tariff, the electricity had been overcharged in an amount
of at least
R10 970 852.09 (which it contended exceeded the
electricity charges in the clearance figures). The report concludes
that
the amount, in excess of R10 970 000, is a
conservative estimate. Mr Coutts has calculated the amounts owing
based upon
the correct tariff being applied.
[13]
The
respondents have not disputed the calculation contained in the
report. It now states that there is a dispute of fact on this
issue
and experts are needed. The respondents did not take the opportunity
to deal with and challenge the report. It must therefore
stand.
[5]
The respondents should have raised a dispute as the amounts owing,
based upon the correct tariff being levied, are within their
knowledge, but they failed to do so. In
Euphorbia
(Pty) Ltd t/a Gallagher Estates v City of Johannesburg
,
[6]
in dealing with such an issue, the court held that:
‘
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….’
[14]
The Municipality is obliged to prove its accounts. In
Mkontwana
,
the Constitutional Court held:
‘
It
is necessary for all municipalities to ensure that they have
reasonably accurate records and that they are able to provide
complete,
credible, comprehensible and reasonably detailed
information in relation to consumption charges that are owing within
a reasonable
time of being requested to furnish it….’
[7]
[15]
The
respondents have failed to raise a genuine dispute of fact in this
regard. In
Wightman
,
[8]
the SCA held:
‘
A
real, genuine and bona fide dispute of fact can exist only where the
court is satisfied that the party who purports to raise the
dispute
has in his affidavit seriously and unambiguously addressed the fact
said to be disputed….
The
second respondent’s general denial leaves important matters
unanswered. The failure to deal issuably with the factual
averments
is unjustifiable on any rational basis….’
[16]
The
respondents sought, in this matter, to raise a defence to the
application before Kollapen J, but they did not oppose that matter;
nor did they seek to set it aside; thus the order stands.
[9]
It cannot now be revisited. This Court cannot sit as a court of
appeal over Kollapen J’s order. The order was granted and
served on the respondents 2021. Non-compliance does not appear to be
disputed. As set out above, other defences are raised, dealing
with
the validity and/or correctness of the Kollapen J order – but
no appeal or application to set aside the order has been
instituted.
[17]
Contempt
has therefore been established.
[10]
The applicant contended that the non-compliance is ongoing, despite
the present application. The respondents have not offered an
undertaking to comply with the Kollapen J order. An application for
contempt is urgent by its very nature, more particularly where
there
is a continuing infringement of the order.
[11]
The
mandamus
relief and urgency
[18]
The
respondents submitted that the applicant approached this Court
seeking contempt of court in order to make out a case for urgency,
and then opportunistically sought the additional relief in regard to
the issue of the clearance certificate. In
Matjhabeng
Local Municipality v Eskom Holdings Ltd & Others
,
[12]
it was stated that contempt proceedings may warrant relief, other
than a criminal sanction, such as a
mandamus
.
The Constitutional Court held that:
‘
Not
every court order warrants committal for contempt of court in civil
proceedings. The relief in civil contempt proceedings can
take a
variety of forms other than criminal sanctions, such as declaratory
orders, mandamuses, and structural interdicts. All of
these remedies
play an important part in the enforcement of court orders in civil
contempt proceedings. Their objective is to compel
parties to comply
with a court order. In some instances, the disregard of a court order
may justify committal, as a sanction for
past non-compliance. This is
necessary because breaching a court order, wilfully and with mala
fides, undermines the authority
of the courts and thereby adversely
affects the broader public interest….’
[19]
The applicant contended that the relief that the respondents be
obliged to issue a clearance
certificate as contemplated in s 118(1)
of the MSA on payment of only the charges levied for rates, taxes,
water and ancillary
charges, is an appropriate order. The applicant
accepted that the municipal charges (exclusive of electricity) may
have increased
since the issuing of the clearance figures on 12 May
2021. They have provided for that in an amended draft order. This
affords
the respondents an opportunity to amend the rates clearance
figures, to exclude electricity and to include any further rates,
taxes,
water and ancillary charges which may have arisen since the
issuing of the clearance figures.
[20]
The applicants contended that the relief they seek is urgent for the
following reasons:
(a)
The urgent court was approached in terms of the initial application
on
7 July 2021. That notice of motion afforded the respondents
until 13 July 2021 to serve their answering affidavit. The
respondents
elected not to oppose that application and the Kollapen J
order was granted. The respondents now attempt to respond to the
initial
application in their answering affidavit in the current
application.
(b)
The applicant contended that it has been threatened with liquidation
if
it is not able to effect transfer of the property for which the
Rates Clearance Certificate is being sought, pursuant to a settlement
agreement concluded with Sasfin Bank Ltd (‘Sasfin’),
which initially obliged the applicant to secure transfer of the
property by 30 June 2021. In the urgent application that served
before Kollapen J, a supplementary affidavit was deposed to which
set
out that Sasfin had granted an extension for the transfer of the
property to 31 August 2021.
(c)
On 26 August 2021, Sasfin addressed a further letter which records
inter alia
—
‘
As
already pointed out, the anticipated sale of the property is linked
and indeed is integral to the sale of the plant as the purchaser
of
both assets is effectively the same entity. Any delay in transfer
risks the entire transaction.
We
therefore again stress that it is imperative that the transfer of the
Property not be delayed and that all efforts be made to
resolve your
dispute with the City of Johannesburg as a matter of extreme urgency,
failing which we reserve our rights to take
appropriate enforcement
action against all guarantors including but not limited to calling up
our surety mortgage bond.’
[21]
The facts upon which the applicant relies contain the same elements
and reasons for urgency
as contained in the previous applications. At
that time, the court found that those matters were urgent. This is a
continuation
of the series of events which led to the application
before Kollapen J being launched as a matter of urgency.
[22]
The only submission by the respondents is that the matter is not
urgent, as the applicant
should simply pay over R10 000 000
(under protest) as an alternative to seeking the relief claimed. The
respondents have
not disputed that the applicant’s account has
been billed ‘on demand low voltage’ tariff which is
incorrect,
as opposed to ‘on demand medium voltage’.
[23]
The applicant seeks punitive costs. It submitted that it is clear
that the respondents
have failed to abide by a court order and have
failed to raise a genuine dispute on the computation relied on by the
applicant.
The application did not concern the correctness of
Kollapen J’s order. That could not have been decided by this
Court.
[24]
This
application concerned an order for contempt of court and a
mandamus
– based on Kollapen J’s order. The respondents have not
raised any legitimate defence to the charge of contempt. In
my view,
when an organ of state wilfully disobeys a court, a punitive costs
order is warranted. As stated by Plasket AJ, as he
then was, in
Victoria Park Ratepayers’ Association v Greyvenouw CC
:
[13]
‘
The
applicant seeks an order that the respondents pay its costs on the
scale of attorney and client. This is based on four cumulative
considerations, namely: …; that the nature of the proceedings
– to preserve and maintain the dignity, authority and
effectiveness of the courts calls for such a costs order; that the
applicant who, after all, has an order in its favour, was forced
to
approach the court again because of non-compliance with that order
likewise militates in favour of a departure from the usual
party and
party costs order; and that “it is just and fair that the
applicant should, as far as practically possible, not
be out of
pocket in an application of this nature, especially where the
Municipality, which has much greater resources at its disposal,
declined to come to the assistance of the residents and ratepayers
falling under its jurisdiction.”’
[25]
The applicant has tendered to pay R1 million in respect of the
amounts allegedly
owing in order to obtain the clearance certificate
and cover charges that may have been levied since the date of
applicant’s
calculations.
Therefore,
the following order is made:
1.
The first and second respondents are held in contempt of the
court
order granted by His Lordship Mr Kollapen J in the above Honourable
Court on 20 July 2021 under case number 2021/31566;
2.
The
respondents are to credit the electricity portion of the Rates
Clearance Figures to zero, whereupon the applicant will pay the
outstanding amount, for rates, taxes, water and ancillary charges
(excluding any electricity charges) as reflected in the amended
clearance figure statement to be issued on or before close of
business 27 September 2021 and sent to the applicant's attorneys
email address at
dino@kgt.co.za
,
failing which payment of R1 million will be deemed to satisfy the
amount due owing and payable, for the purposes of issuing a
clearance
certificate;
3.
The respondents are not to include any electricity charges in
its
clearance figures or insist on payment of any electricity charges,
before issuing a clearance certificate as contemplated in
s 118(1)
of the
Local Government: Municipal Systems Act 32 of 2000
.
4.
The respondents are to issue a rates clearance certificate to
the
applicant immediately upon payment of the aforementioned sum set out
in 2 above (whichever is applicable);
5.
This order does not determine, affect, limit or curtail the
respondents’ entitlement to payment for electricity charges,
rates and taxes, water charges or other ancillary charges which
may
become due and payable, as may be determined in due course.
6.
The respondents are to pay the costs of this application on
an
attorney and client scale.
S
E WEINER
JUDGE
OF THE HIGH COURT
GAUTENG
DIVISION, JOHANNESBURG
This
judgment was handed down electronically by circulation to the
parties’ and/or parties’ representatives by email
and by
being uploaded to CaseLines. The date and time for hand-down is
deemed to be 10h00 on
23 September 2021.
Date
of hearing:
14
& 17 September 2021
Date
of judgment:
23 September 2021
Appearances:
Counsel
for the applicant:
C van der Merwe
Attorney
for the applicant:
KG Tserkezis Inc
Counsel
for the 1
st
& 2
nd
respondents:
E Sithole
Attorney
for the 1
st
& 2
nd
respondents:
Madhlopa & Thenga Incorporated
[1]
Casting,
Forging & Machining Cluster of South Africa (NPC) and Others v
National Energy Regulator of SA and Others
[2019]
ZAGPPHC 967;
[2020] JOL 46840
(GP) para 24 (the
NERSA
judgment).
[2]
Section 118(1) of the Local Government: Municipal Systems Act 32 of
2000 (the ‘MSA’) provides:
‘
Restraint
on transfer of property
(1)
A registrar of deeds may not register the transfer of property
except on production to that registrar of deeds of a prescribed
certificate—
(a)
issued by the municipality or municipalities in which that property
is situated; and
(b)
which certifies that all amounts that became due in connection with
that property for municipal service fees, surcharges on
fees,
property rates and other municipal taxes, levies and duties during
the two years preceding the date of application for
the certificate
have been fully paid.’
[3]
Mkontwana
v Nelson Mandela Metropolitan Municipality and Another; Bissett and
Others v Buffalo City Municipality and Others; Transfer
Rights
Action Campaign and Others v MEC, Local Government and Housing,
Gauteng and Others (KwaZulu-Natal Law Society and Msunduzi
Municipality as amici curiae
[2004]
ZACC 9
;
2005 (1) SA 530
(CC) para 71.
[4]
YST
Properties CC v eThekwini Municipality and Others
[2009] ZAKZDHC 23;
2010 (2) SA 98
(D) at 113D-E
.
[5]
See
Wightman
t/a JW Construction v Headfour (Pty) Ltd and Another
[2008]
ZASCA 6
;
2008 (3) SA 371
(SCA) and
Secretary
of the Judicial Commission of Inquiry into Allegations of State
Capture, Corruption and Fraud in the Public Sector Including
Organs
of State v Zuma and others (Helen Suzman Foundation as amicus
curiae)
[2021] ZACC 28; 2021 (9) BCLR 992 (CC).
[6]
Euphorbia
(Pty) Ltd t/a Gallagher Estates v City of Johannesburg
[2016] ZAGPPHC 548 para 17.
[7]
Mkontwana
(note 4 above) para 64.
[8]
Wightman
(note
6 above) paras 13 & 19.
[9]
MEC for
Health, Eastern Cape and Another v Kirland Investments (Pty) Ltd t/a
Eye & Lazer Institute
[2014] ZACC 6
;
2014 (3) SA 481
(CC) para 66
[10]
Zuma
(note
6 above).
[11]
Ibid paras 30-31.
[12]
Matjhabeng
Local Municipality v Eskom Holdings Ltd & Others
[2017] ZACC 35
;
2018 (1) SA 1
(CC) para 54.
[13]
Victoria
Park Ratepayers' Association v Greyvenouw CC and Others
[2003] ZAECHC 19 para 62.