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[2019] ZAFSHC 264
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Copper Sunset Trading 443 (Pty) Ltd v Centlec SOC Ltd (2189/2019) [2019] ZAFSHC 264 (15 November 2019)
IN
THE HIGH COURT OF SOUTH AFRICA,
FREE
STATE DIVISION, BLOEMFONTEIN
Case
No:
2189/2019
In
the matter between:-
COPPER
SUNSET TRADING 443 (PTY)
LTD
Plaintiff
and
CENTLEC
SOC
LTD
Defendant
REASONS
FOR JUDGMENT
JUDGE:
N. M. MBHELE, J
DELIVERED
ON
:
15 NOVEMBER 2019
[1]
The matter served before my brother Mhlambi, J, on an urgent basis,
where the applicant prayed for an order in the following
terms:
1.
That this application be heard as an urgent application and that the
Honourable Court condones the non-compliance with the rules
pertaining to form and service as set out in Rule 6(12).
2.
That a rule nisi be issued, returnable on Thursday, 1 August 2019,
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 reconnect the Applicant’s
electricity at 10 James Dick Street, Wilgehof, Bloemfontein
(the
“affected premises”) within two hours of this Order being
granted and provided to the Respondent.
2.2
That the Respondent be prohibited from disconnecting the electricity
supply to the affected premises, or from disrupting supply
of
electricity for reasons pertaining to arrears allegedly owed with
regards to electricity account number: 50000931381, until
such time
as the dispute lodged by the Applicant, and/or proceedings for
statement and debate of account, to be lodged within 30
days of the
dispute not being resolved, is finalised.
2.3
That the Respondent be ordered to attach a working locking mechanism
on the affected premises’ meter’s electrical
box within
two hours of this Order being granted and provided to the Respondent.
2.4
That in the event of the Respondent failing to reconnect the
Applicant’s electricity supply at the affected premises,
the
Applicant is entitled to appoint an independent contractor to perform
such reconnection, and the Respondent will be responsible
for the
cost thereof.
2.5
That the Respondent be ordered to pay the costs of this application.
3.
That the Orders in prayers 2.1 – 2.4 above, shall serve as an
interim interdict, with immediate effect, pending the final
adjudication of this application.
4.
Further and/or alternative legal relief.
[2]
Mhlambi J, made the following order per agreement between the
parties;
1.
The matter is postponed to the opposed roll of 13 June 2019;
2.
The respondent is to file answering affidavit on or before close of
business on 24 May 2019;
3.
The applicant is to file its replying affidavit on or before close of
business on 31 May 2019;
4.
The parties are to file heads of argument in terms of practice rules;
5.
The applicant will pay under protest an amount of R10 000.00
towards the electricity account, which remains disputed, and
provide
proof of payment by 17:30 on 17 May 2019;
6.
The applicant will pay his monthly current account.
7.
The respondent will reconnect the applicant’s electricity to
the affected premises before 22:00 on 17 May 2019. And will
not
terminate supply pending the finalisation of this application and/or
payment in full of the applicant’s current account
with
respondent.
8.
Costs to stand over for later determination.
[3]
The matter came before me for confirmation of a rule nisi.
After
listening to the arguments I made the following order:
1.
The Application is heard as an urgent Application and condonation is
granted in respect of the non-compliance with the rules
pertaining to
form and service as set out Rule 6(12).
2.
Subject to the applicant paying its monthly consumption of
electricity, the respondent is prohibited from disconnecting the
electricity supply to the premises known as the Copper Sunset Flats
at 10 James Dick Street, Wilgehof, Bloemfontein, for the reasons
pertaining to arrears allegedly owed as a result of reconnection fees
levied against the applicant for the period covering 12 March
2019 to
16 May 2019 with regards to electricity account number: 50000931381.
3.
The Respondent shall install a working locking mechanism for the
electricity meter box at the aforementioned premises within
the 14
days from date of the order.
4.
The Respondent is to attend to the issues raised by the applicant in
relation to the disputed reconnection fees and finalise
such within
60 days from the date of this order.
5.
Each party to pay its own costs.
The
parties requested reasons for my judgment. The reasons are set out
below.
[4]
Background
The
applicant is a legal entity acting as a landlord to tenants at a
block of flats situated at 10 James Dick Street, Wilgehof,
Bloemfontein (the property).
The
respondent is a state owned company and an entity of the Mangaung
Metro Municipality (MMM) contracted by the latter to supply
electricity to citizens and entities within MMM’s area of
jurisdiction.
[5]
The respondent supplies electricity in bulk and bills applicant for
such supply. The applicant supplies electricity to
its tenants,
comprising of 18 households, through the use of prepaid meters.
On 15 April 2019 the respondent terminated supply
of electricity to
the property. The electricity was reconnected on 16 April 2019. The
applicant avers that the reconnection was
as a result of the dispute
he lodged with the respondent regarding its bill wherein the
applicant demanded reinstatement of electricity
supply.
[6]
On 16 May 2019 the Respondent terminated electricity supply to the
premises. On the same day a notice, dated 3 May 2019
informing
the applicant that its electricity supply has been disconnected due
to its account being in arrears was received at the
premises. It is
this termination of electricity supply that prompted the applicant to
approach this court on an urgent basis.
[7]
The applicant thereafter lodged a dispute with the Respondent as the
Municipality’s service provider regarding the arrear
amount
which included reconnection fee. The dispute was lodged in
terms of
section 102
of the
Local Government: Municipal Systems Act
32 of 2000
. The respondent has at the time of hearing of this
application not responded to the above complaint.
[8]
The applicant disputes the reconnection fees charged by the
respondent and submits that the disconnection was in itself unlawful
as it was done in contravention with the applicable by laws. It is
the applicant’s case that the notice informing it of the
disconnection was only delivered on 16 May, the date on which the
electricity supply was terminated. The notice, although
it was
delivered on 16 May 2019, it was dated 3 May 2019. The disconnection
fees were levied in advance together with interest
thereon.
[9]
The issues in question are whether the respondent’s
disconnection of electricity supply to the property was lawful and
whether section 102 of the Municipal Systems Act is applicable to the
respondent. On 16 May the outstanding balance owing to the
respondent
by the applicant, according to the notice, was R 14 296. 39
including reconnection fees, notice fees and interest
thereon. The
applicant paid an amount of R10 000.00 in response to the court
order granted by Mhlambi, J after which electricity
supply was
reconnected.
[10]
The respondent resists the interim relief sought by the applicant on
the basis that it is of the view that section 102
of the
Municipal Systems Act is not applicable to the respondent and since
the objection was lodged against it such objection is
not valid. The
first respondent denies that the reinstatement of electricity supply
at the applicant’s premises during the
month of April was done
by the respondent in response to the dispute lodged by the applicant.
It is the respondent’s case
that the electricity was
disconnected on 11 April 2019 and when its employee, Hloni Ntsane,
visited the property on 30 April 2019
he found that the electricity
was illegally reconnected where after he disconnected it again and
locked the electricity meter box.
According to the respondent, on 30
April the meter had the same readings it had when the electricity was
disconnected on 11 April
even though there had been consumption of
electricity on the property before the 30
th
April. No
further evidence was supplied on how this came about. On 16 May
the electricity was again found reconnected.
[11]
The applicant denies that Ntsane visited the premises on 30 April and
disconnected electricity. It is not clear why on 3 May
2019 when the
respondent wrote a notice informing the applicant of its reasons for
disconnection it did not state that the electricity
was disconnected
because the applicant had tampered with the meter box which
information was within the respondent’s knowledge
on 30 April
2019 already. The applicant submitted that the disconnection of
electricity supply requires a reasonable notice by
the supplier of
such service. There is no evidence to gainsay the applicant’s
version that on both 15 April and 16 May 2019,
when the electricity
supply was disconnected, no prior notices were served on the
applicant.
[12]
Section 9 (1) and (2) of the Mangaung Local Municipality by Laws
relating to electricity supply reads as follows:
“
Right
to disconnect supply
1.
The service provider shall have the right to disconnect the
supply of electricity to any premises if the person liable
to pay for
such supply fails to pay any charge due to the service provider in
connection with any supply of electricity which he
may at any time
have received from the service provider in respect of such premises,
or, where any of the provisions of this by-law
are being contravened,
provided the service provider has given the person 14 (fourteen)
days’ notice to remedy his default
and the person has failed to
remedy such default after notice has been given, or in the case of a
grave risk to person or property,
or as envisaged in terms of section
44 of this by-laws, without notice. After disconnection for
non-payment of accounts or
the improper or unsafe use of electricity,
the fee as prescribed by the service provider shall be paid.”
[13]
The respondent is bound by the above provisions. It had to give
the applicant a 14 days pre- termination notice. For
the notice
to be adequate it must contain all the 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.
See
(Joseph and Others v City Of Johannesburg An Others
2010 (4) SA 55
(CC).
[14]
The applicant submits that although the respondent is not a
municipality, it is a service provider tasked by the Mangaung Metro
Municipality to fulfil its statutory obligation of supplying
electricity to its population. The respondent contends that
the
respondent is not a municipality and that section 102 of the
Municipal Systems Act is restricted to municipalities and finds
no
application on the respondent.
[15]
Section 1 of the Municipal Systems Act defines a municipal entity as
a private company referred to in section 86 B (1) (a).
A private
company is defined as follows in Section 86B (1) (a):
(a)
a private company-
(i)
established by one or more municipalities in terms of Part 2; or
(ii)
in which one or more municipalities have acquired or hold an interest
in terms of Part 2;
[16]
In
City
Power Ltd v Grinpal Energy Management Services ( Pty) Ltd and Others
2015
(2015) 36 ILJ 1423 (CC)
at paragraphs 20 and 23 the
constitutional court said the following when it dealt with the
applicability of the Municipal Systems
Act to entities performing
functions on behalf of state organs.
“
(20)
A mere reliance on the fact that City
Power is a private company does not take into account that these
entities are usually established
for the sole purpose of performing
public functions as required in terms of section 86E. In terms of
section 86E (1) a municipality
may establish a municipal entity only
for the “purpose of utilising the company as a mechanism to
assist it in the performance
of any of its functions or powers”
and where the functions of such a municipal entity would benefit the
local community.
The public nature of the functions performed by City
Power and the restrictions imposed on such municipal entities by
Municipal
Systems Act distinguish them from other private entities.
……..
(23)
For the purposes of the present dispute,
Grinpal and City Power are organs of state that perform public
functions akin to those
of a municipality. The Johannesburg
Municipality cannot avoid its constitutional obligations and public
accountability for
the rendering of public services by forming a
municipal entity like City Power. It remains accountable to the
people of South Africa
for the performance of those functions by City
Power. Likewise, City Power cannot avoid its constitutional
obligations and
public accountability by delegating its functions to
Grinpal.”
[17]
The argument by Mr. Snyman that the applicant’s dispute should
have been lodged with the Municipality does not appreciate
that
Mangaung Municipality outsourced its constitutional obligation of
supplying electricity to the people in its area of jurisdiction
to
the respondent. The respondent like City Power in
City Power v
Grinpal
supra
renders a public function that would have
otherwise been performed by Mangaung Municipality in terms of the
constitution. It follows
that the respondent substituted the
Municipality as the service provider and that the applicant was
justified to lodge its dispute
with the respondent.
[18]
All billing queries relating to electricity supply in the area of
jurisdiction of Mangaung Municipality should be directed
to the
respondent. It follows that the applicability of the Municipal
Systems Act to the respondent includes section 102 thereof.
The
respondent has a duty to consider the applicant’s dispute. It
would be wrong to say that the respondent has an obligation
to
provide a service that it cannot be held accountable for. In as much
as it is empowered to supply electricity and render bills
to
consumers for the electricity supplied it also has a duty to explain
its tariffs and where there are queries to explain how
amounts were
levied on the impugned accounts.
[19]
Section 102 (1) and (2) of the Municipal Systems Act 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.”
[20]
The applicant disputes the reconnection fees, notice fees and
interests charged thereon. The respondent adopted the ostrich
approach when handling the applicant’s dispute. It is clear
from the above that the respondent had to consider the dispute
before
implementing credit control measures available to it.
[21]
It is trite that the following are requisites for an interim
interdict to be granted:
i.
a
prima
facie
right, although open to some
doubt;
ii.
a well-grounded apprehension of irreparable harm if interim relief is
not granted and ultimate relief is eventually granted;
iii.
the balance of convenience favours the granting of the interim
interdict, and
v.
the applicant has no other satisfactory remedy. See:
Webster
v Mitchell
1948 (1) SA 1186
(W)
[22]
The respondent contends that the balance of convenience does not
favour the granting of an interim order in that the applicant
had
other remedies available to him including settling the account in
full. This argument seeks to take away the right of the applicant
to
question the service offered to it by the respondent. It further
seeks to enforce the suggestion that the respondent as an organ
of
state does not owe its consumers fair and just administrative action.
It
is for the above reasons that the aforementioned order was issued.
_____________
NM
MBHELE, J
On
behalf of the plaintiff: Adv J.F. Mitchley
Instructed
by:
Pieter Skein Attorneys
BLOEMFONTEIN
On
behalf of the defendant: Adv C Snyman
Instructed
by:
Phatsoane Henney Inc
BLOEMFONTEIN