About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: North Gauteng High Court, Pretoria
SAFLII
>>
Databases
>>
South Africa: North Gauteng High Court, Pretoria
>>
2017
>>
[2017] ZAGPPHC 414
|
|
AFGRI Operations Limited v Dipaleseng Local Municipality (70550/14) [2017] ZAGPPHC 414 (9 March 2017)
IN THE HIGH COURT OF
SOUTH AFRICA
(GAUTENG
DIVISION, PRETORIA)
Case
no: 70550/14
9/3/2017
Not
reportable
Not
of interest to other judges
Revised.
In
the matter between:
AFGRI
OPERATIONS
LIMITED
Applicant
and
DIPALESENG
LOCAL
MUNICIPALITY
Respondent
JUDGMENT
MAGARDIE
AJ
1.
In this matter, the applicant approached the
court for a declaratory order to the effect that the respondent is
not entitled to
levy the applicant with a maximum demand charge for
electricity supply in the absence of a municipal tariff policy and/or
a by-law
authorising same. In the alternative, the applicant seeks an
order directing the respondent to use the applicant's own electronic
electricity meter reading as the only source of determining the
applicant's electricity consumption.
2.
On the one hand, the applicant contends that
neither the respondent's tariff policy or by-laws contain any
provision for the maximum
demand charge justifying the levying of the
additional charge; on the other hand, the applicant also contends
that it is being
overcharged for its actual electricity consumption
due to the respondent's functionaries not employing the correct
consumption
method when calculating the applicable tariff.
3.
The deponent to the applicant's founding
affidavit is an electrical maintenance manager. He gave a detailed
list of his qualifications
and work experience in the electricity
field. The deponent spent a considerable amount of time presenting a
narrative on different
electricity meters and how they function as
well as the basis for the applicant's conclusion that it is being
overcharged.
4.
I must hasten to highlight that the applicant's
prayers are not interrelated. One would have expected that if the
applicant's gripe
was about overcharging, the plausible thing to do
would have been to approach the respondent with a complaint before
rushing to
court. The applicant's rushing to make a court application
deprives the respondent of an opportunity to rectify the alleged
wrongs.
This point was indeed contended in the respondent's papers.
However, the applicant's reply thereto was that neither the tariff
policy nor the by-laws make provision for an internal appeal.
5.
At the outset, it is apposite to highlight the
fact that the respondent's approach to this application leaves a lot
to be desired.
Various implausible points
in
limine
were taken by the respondent arguing,
inter alia,
that the
applicant's affidavit was vague and embarrassing and making it
difficult for the respondent to answer to same. The respondent's
points
in /imine
are
certainly not easily understood insofar as I could not really share
the respondent's view. It is simple to delineate what the
applicant's
case is all about and to deal with the pertinent issues raised
therein. There was certainly no substance in the points
in
limine
raised by the respondent.
6.
Apart from the points
in
limine
in the answering affidavit, the
respondent also filed what appears to be a legal opinion crafted to
advise the respondent on this
matter. The respondent also seeks
condonation for the late filing of its answering affidavit which
application is not opposed by
the applicant. This lackadaisical
conduct displayed by the respondent is certainly baffling especially
when regard is had to the
fact that we are dealing with an organ of
state, and more particularly one of the three layers of government.
The little said about
the conduct of the legal representation who
assisted the respondent the better.
7.
As a result of the approach I have adopted
he.,ein, I have found it unnecessary to traverse the issues
pertaining to functionality,
mechanical composition and the SABS
compliance of electricity meters.
8.
The following points are at the heart of this
application, namely:
8.1.
Whether the respondent's maximum demand charges
is lawful; and
8.2.
Whether the court can order the respondent to use
the applicant's own electricity meters to determine the applicant's
electricity
consumption for billing purposes.
9.
In
Fedsure Life Assurance
Ltd & Others v Greater Johannesburg Transitional Metropolitan
Council & Another,
the following was
said:
"[56] These provisions imply that
a local government may only act within the powers lawfully conferred
upon it. There is nothing
startling in this proposition - it is a
fundamental principle of the rule of law recognised widely, that the
exercise of public
power is only legitimate where lawful. The rule of
law - to the extent at least that it expresses this principle of
legality -
is generally understood to be a fundamental principle of
constitutional law."
[1]
10.
Section 229
of the Constitution provides that a municipality may impose rates on
property and surcharges on fees for services provided
by or on behalf
of the municipality, and if authorised by national legislation, other
taxes and levies.
[2]
Needless to say
that electricity, as in this instance, is one of the services
rendered by a municipality.
11.
In
Pharmaceutical
Manufacturers Association of South Africa & Another: In re ex
parte President of the Republic of South Africa
& Others
it
was held that the exercise of all public power must comply with the
Constitution, which is the supreme law, and the doctrine
of legality,
which is part of that law.
[3]
12.
Section 74(1)
of the
Local Government: Municipal
Systems Act 32 of 2000
as amended ("the Municipal Systems Act")
provides that a municipal council must adopt and implement a tariff
policy on
the levying of fees for services provided by or on behalf
of a municipality, of which policy should comply with the provisions
of the said Act. Section 74(2) of the Municipal Systems Act provides
for principles that a municipal tariff policy should cover.
13.
Section 74(3) of the Municipal Systems Act
provides that a tariff policy may differentiate between categories of
users, debtors,
service providers, services, service standards,
geographical areas, and other matters as long as such differentiation
does not
amount to unfair discrimination.
14.
Section 75 of the Municipal Systems Act provides
that a municipal council must adopt by-laws to give effect to the
implementation
and enforcement of its tariff policy. Like the tariff
policy, such by-laws may also differentiate between different
categories
of users, debtors, service providers, services, service
standards, geographical areas, and other matters as long as such
differentiation
does not amount to unfair discrimination.
15.
In
Liebenberg NO &
Others v Bergrivier Municipality,
the
Constitutional Court said that:
"[26] Therefore, a failure by a
municipality to comply with relevant statutory provisions does not
necessarily lead to the
actions under scrutiny being rendered
invalid. The question is whether there has been substantial
compliance, taking into account
the relevant statutory provisions in
particular and the legislative scheme as a whole."
[4]
16.
In a letter
dated 17 July 2014, the applicant's attorneys demanded that the
respondent should
"prescribe
a
process
in terms whereof our client can have
the
dispute,
set
out in
this letter, resolved.’
[5]
Although having
narrated the gist of the applicant's grievance, the applicant's
attorneys did not seek any action insofar as rectification
or
correcting the alleged wrong visited upon the applicant was
concerned; instead, the envisaged solution that was demanded was
the
creation of an internal dispute resolution process.
17.
This issue warrants some pertinent consideration
when regard is had to the fact that, further down in the last page of
the said
letter, in particular paragraphs 4.9 to 4.12, the applicant
also made further three demands, including furnishing the applicant
with approved electricity tariffs for the past three years,
recalculation of the applicant's electricity consumption and the
crediting
of the applicant's account.
18.
It is curious that in the current application to
which the aforementioned letter is attached to the founding
affidavit, the applicant
is seeking none of the four demands listed
in paragraphs 4.9 to 4.12. The prayers in the application are also
not similar to those
in annexure
FA06.
19.
Insofar as the issue of the maximum demand charge
is concerned, I have had regard to what the tariff policy of the
respondent provides.
I am not persuaded by the applicant's argument
in this regard. In
Virginia Land Estate Co Ltd
v Virginia Village Board of Management & Another
1961 (1) SA 167
(0)
it was held that electricity is supplied
to and when available to a consumer, not only when it is used.
20.
Against the forgoing backdrop, I am of the
considered view that the respondent indeed made available to the
applicant
three-phase electricity and is
therefore entitled to charge the applicant for same. The fact that
the applicant has not consumed
the quantities supplied cannot be
decisive. The bottom line is that the three-phase supply has always
been available to the applicant
if it wanted to use same in
circumstances that would not require any further efforts on the part
of the respondent to coordinate
the maximum supply.
21.
The tariff policy of the respondent makes
provision for the levying of surcharges. The levying of the
surcharges is acknowledged
in paragraph 3.5 of the applicant's letter
marked
FA06
to the
founding affidavit. I have to agree with the respondent's submission
that the suggestion that there is no regulatory framework
to provide
for the maximum demand charge is incorrect insofar as the
respondent's tariff policy provides for the surcharges. Accordingly,
it cannot be correct that the respondent is levying the additional
charge without any legal basis.
22.
I consider it appropriate to digress herein to
visit the provisions of the Municipal Finance Management Act 56 of
2003 as amended
("the MFMA"). Section 60 of the MFMA
provides that a municipal manager is the accounting officer of the
municipality
and provides guidance and advices in terms of the MFMA,
to the political structures of the municipality.
23.
Section 64(1) of the MFMA provides that the
municipal manager is responsible for the management of the revenue of
the municipality.
Section 64(2)(b) of the MFMA provides that the
municipal manager must ensure that all revenue due to the
municipality is calculated
on a monthly basis.
24.
Section 59(1 )(b) of the Municipal Systems Act,
provides that the municipal council must develop a system of
delegation that maximizes
administrative and operational efficiency
and provide for adequate checks and balances, and in accordance with
that system, may
instruct any such political structure, political
office bearer, councilor, or staff member to perform any of the
municipality's
duties.
25.
Section 4(1 )(c)(i) and (ii) of the Municipal
Systems Act provides that the council of the municipality has the
right to finance
municipal affairs by charging fees for services and
imposing surcharges on fees, rates on properties and, to the extent
allowed
by national legislation, impose other taxes, levies and
duties. I have already dealt with the provision of the MFMA that
makes
it the responsibility of the municipal manager to collect
revenue due to a municipality on a monthly basis.
26.
When one considers the legislative scheme
referred to herein above, it is categorically correct that a tariff
policy of a municipality
is enforced by the promulgation of by-laws.
To this extent, the Municipal Systems Act requires of the respondent
to pass by-laws
to give effect of the tariff policy. However, in the
event that no specific provision of the by-law deals with a specific
provision
of the tariff policy, such does not render the tariff
policy ineffective. This must be considered against the backdrop of
the doctrine
of substantive compliance espoused in the Constitutional
Court case cited elsewhere hereinabove.
27.
It is clear that the municipal manager's duties
in terms of the provisions of the MFMA, to calculate and collect
revenue due to
a municipality on a monthly basis is in line with the
delegation of municipal duty to charge fees for services in terms of
the
Municipal Systems Act. For this reason, to the extent that the
municipal manager or functionaries or agents by him/her charge more
money than the municipality is entitled to, a person aggrieved
thereby is entitled to invoke the appeal process in terms of the
provisions of section 62 of the Municipal Systems Act.
28.
Accordingly, contrary to the applicant's views,
it is clear that any person aggrieved by whatever decision made by
any functionary
of a municipality, in the exercise of delegated
powers, has a legislative recourse of internal appeal. Therefore, it
cannot be
correct that there is no appeal procedure for the kind of
grievance that the applicant brought before this court. Section 62(4)
of the Municipal Systems Act also provides for the level of authority
to which such appeals can be directed, depending on the level
of the
first functionary/agent against whose decision or action the appeal
is directed.
29.
Having considered the invoice together with the
respondent's rate policy, it is correct that there is no mention of
"maximum demand charge"
in
either document. There are standard basic charges for electricity,
followed by the extent of the actual monthly consumption and
the
amount which is now referred to as
"maximum
demand charge".
It is the last-mentioned
charge that the applicant is aggrieved about.
30.
Insofar as the merits are concerned, the
respondent's argument is that the maximum demand tariff is intended
at discouraging over
usage of electricity and that the charge can
easily be located under the municipal's powers to levy surcharges for
services rendered.
Whatever the rationale for the maximum demand
charge, if the applicant is aggrieved thereby, the applicant must
exhaust the internal
remedy provided in section 62 of the Municipal
Systems Act.
31.
The applicant contends that in the event of the
court not finding in its favour in respect of the first prayer, it
seeks an order
to the effect that its electricity consumption should
be determined from the electricity meter that the applicant
installed. It
contents that the respondent has been overcharging
insofar as the respondent's calculation methods were incorrect. The
respondent
made telling submissions against the applicant's prayer
that it basically amounted to self-help. I am inclined to agree with
the
respondent in this regard. The fact that the applicant installed
its own electricity meter in the presence of the respondent's agent
does not change the colour of the action. The presence of the
respondent's agent cannot be used to denote the respondent's
acceptance
to the unlawful action. For all intents and purposes, the
applicant's action of installing an alternative electricity meter was
unlawful. Consequently, the court can neither be requested to order
an organ of state to perform an unlawful act nor condone an
unlawful
action performed by the applicant.
32.
Sight should not be lost of the fact that the nub
of the applicant's case is succinctly summarized in paragraphs 4.8 to
4.12 of
FA06,
namely
the method of calculation, not the functionality of the respondent's
electricity meter. The applicant categorically stated
that it is not
contesting the functionality of the respondent's electricity meter.
The gripe is with the functionaries or the contractors
of the
respondent who are responsible for the meter reading during each
monthly cycle in preparation of electricity bills. With
the applicant
not contesting the meter reading but the method of calculation of the
charges, it is not easily understood why the
issue was brought to
court without approaching the respondent with an appeal against such
as provided for in section 62 of the
Municipal Systems Act.
33.
The application cannot succeed. There is also no
reason why the costs should not follow the result. The respondent has
been successful
herein and as such, is entitled to the costs. In the
result, I make the following order:
33.1.
Condonation is granted for the late filing of the
respondent's answering affidavit.
33.2.
The application is dismissed with costs.
__________________
S
L MAGARDIE
ACTING JUDGE OF THE HIGH
COURT
On
behalf of Applicant:
GILDENHUYS MALATJI
ATTORNEYS
GMI
House
164
Totius Street
Groenkloof,
Pretoria
Tel:
012 424 8682
Ref:
R Venter/01712589
On
behalf of Respondent:
M & A ATTORNEYS
1791
Sation Street
Balfour
Tel:
017 773 2160
Ref:
Ms Maringa
C/O
MUSHWANA INC.
Suite
220, 2nd Floor, Centenary Building
23
Bureau Lane
Church
Square, Pretoria
Tel:
012 323 1898
[1]
[1998] ZACC 17
;
1999 (1) SA 374
(CC) paragraph 56. See also South African Property
Owner Association v The Council of the City of Johannesburg
Metropolitan Municipality
& Other
2013 (1) SA 420
(SCA)
paragraph 5.
[2]
Constitution of the Republic of South Africa 108 of 1996 (as
amended).
[3]
[2000] ZACC 1
;
2000 (2) SA 674
(CC) paragraph 20.
[4]
2013 (5) SA 246
(CC) at page 255 paragraph 26.
[5]
See paginated papers annexure FA06 at page 73-78.