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[2015] ZAGPPHC 342
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Minnaar N.O. and Others v Ekurhuleni Metropolitan Muncipality (10716/2013) [2015] ZAGPPHC 342 (22 May 2015)
REPUBLIC
OF SOUTH AFRICA
IN THE HIGH COURT
OF SOUTH AFRICA
GAUTENG DIVISION,
PRETORIA
CASE NO: 10716/2013
In the matter
between:
FREDERIK
VILJOEN MINNAAR
NO
...................................................................................
First
Applicant
LYNETTE
JEAN MINNAAR
NO
........................................................................................
Second
Applicant
TREASURY
TRUST
NO
..........................................................................................................
Third
Applicant
and
EKURHULENI
METROPOLITAN
MUNICIPALITY
...............................................................
Respondent
JUDGMENT
DODSON
AJ
Introduction
[1] This judgment
deals with the question whether the Ekurhuleni Municipality may
insist upon payment by a property owner of an
amount prescribed in
its electricity supply tariffs for reinstating an electricity
connection that has been removed due to tampering
by a tenant with
the prepaid electricity meter.
[2] The trust was
not legally represented when the matter was heard. The first
applicant appeared in person and argued the matter
as a lay person.
Factual
background
[3] The applicants
are the trustees of the Nobilis Trust. It is the owner of the
property situated at 2 Kent Avenue, Benoni. It
leases the property in
order to generate income.
[4] On or about 26
July 2007, the first applicant on behalf of the trust concluded a
written “agreement for supply of water
and electricity”
with the respondent on a standard form.
[5] The electricity
is supplied to the premises via a prepaid electricity meter.
[6] On 16 October
2012, the trust received a document which reads as follows:
"Dear
Sir/Madam
NOTIFICATION OF
ELECTRICITY METER TAMPER
During a recent
electricity meter audit at your property [the address and meter
number are given] by representatives of the Energy
Department, the
meter/installation
was
found
tampered. THIS IS ILLEGAL and the following action is taken:
1) WARNING ISSUED
AND THE INSTALLATION NORMALISED
2) REINSTATMENT
FEE ISSUED AND THE CONNECTION HAS BEEN SWITCHED OFF: X
First incident
R2,052.00 (incl VA T) X
Second incident
R4,104.00 (incl VAT)
Third incident:
R6,156.00 (incl VAT)
This factual
information has now been recorded. It has been noted that any further
tampering with the electricity supply to your
home / business will
result in further disconnection and prosecution. [Reference is then
made to sections of the electricity by-law
- these are dealt with
below.]
The city tariffs
make provision for a meter reinstatement fee. Our next audit will see
this meter visited within a short period
from the date of this
letter. If your meter/installation again shows signs of interference,
further action will be taken and you
may face prosecution in court. ”
[7] The “X”
marks referred to above are written in manuscript to indicate which
of the options applies. There is also
a handwritten note at the top
of the letter which reads:
“
Meter
bridged inside seal number -340968. ”
[8] The first
applicant confirms that the prepaid electricity meter had been
bridged so as to bypass the charging mechanism. The
first applicant
surmises that this must have been done by his tenant prior to his
having vacated the premises at the end of his
lease agreement,
particularly bearing in mind that he had had a similar problem with
the tenant once before.
[9] The first
applicant took up the attitude that the amount of R2 052 referred to
in the notice was a fine for which he should
not be held liable
bearing in mind that it was the tenant and not him or the trust that
was guilty of tampering with the meter.
He entered into
correspondence with officials of the municipality in this regard.
They did not contest his description of the charge
as a fine but
insisted that the by-laws rendered him liable for it.
[10] It was
essentially that sequence of events that resulted in the present
application. In its notice of motion, the trust sought
an order
simply compelling the municipality to reinstate the electricity
supply to the premises and seeking the costs of the application.
[11] It emerged,
however, at the hearing of the matter, that subsequent to the
exchange of affidavits the applicant had paid the
amount of R2 052
under protest and the electricity supply had been reconnected. The
first applicant therefore sought at the hearing
and without prior
notice to the respondent, to amend his notice of motion in order to
provide for relief in the form of repayment
by the municipality of
the amount paid under protest.
[12] The
municipality objected to what it described as an attempt to amend the
entire basis of the case at this stage of the proceedings.
The
amendment was refused but I indicated that I would, in preparing my
judgment, give consideration to whether or not the relief
should, as
the first applicant contended, be granted under the prayer for
“further and/or alternative relief in the original
notice of
motion. I will assume for purposes of this judgment that the
applicants are entitled to do so.
The applicant’s
contentions
[13]
The first applicant argues that the payment of R2 052 demanded in the
“notification of electricity meter tamper”
amounts to a
fine for criminal conduct for which he or the trust cannot in law be
held liable as neither he nor the trust committed
the offence. What
is indicative of this charge amounting to a fine, he argued, is the
fact that the charges in respect of other
items in “Tariff H”
(entitled “Residential time of use”) of the electricity
supply tariffs
1
for reconnecting the electricity supply, are much lower. For example,
item 3.2 provides a charge of R126,50 plus VAT
“
for
restoring the supply due to non-payment of the account”.
The
same amount is charged in terms of item 4.2
“
for
reconnecting a supply at the customer’s request”.
By
contrast, item 5 provides:
“
For
reinstating a customer connection that has been removed due to
tampering by the customer:
Estimated
cost of material, labour and transport plus 10% with a minimum charge
of: VAT exclusive R1800.00.
2
Note 1: The
connection reinstated will not necessarily be identical to the one
removed.
Note 2: The
second tampering event will see the fee doubled. The third event will
see the above fee tripled. ”
[14] The applicant
contends that the service or action required to be done by the
municipality in the case of tampering is essentially
the same as a
reconnection, yet the amount charged is more than 14 times greater.
This he argues shows that the amount represents
a fine and not a fee
for the service rendered.
[15]
Consistent with this argument that the charge is a fine and not an
ordinary charge or fee, he says that the matter is regulated
by
section 36 of the Ekurhuleni Metropolitan Municipality Electricity
by-laws.
3
It provides as follows:
“
36.
Offences and penalties
(1) Any person
contravening or failing to comply with any provision of these By-laws
shall be guilty of an offence and shall upon
conviction hereof be
liable for a fine not exceeding R2000.oo or in default of payment to
imprisonment for a period not exceeding
12 months.
(2) The occupier,
or if there be no occupier, the owner of any premises supplied with
electricity, where a breach of these By-laws
has occurred, shall be
deemed to be guilty of that breach unless he proves that he did not
know and could not by the exercise of
reasonable diligence have known
that it
was
being or
was
likely to be committed
and tha
t it
was
committed
by some other person over whose acts he had no control. ’’
[16] To the extent
that section 36(2) may render him liable even if he is correct in
contending that section 36 applies, the first
applicant contends that
this provision is unconstitutional. However, no challenge to the
constitutionality of this subsection was
ever contained in the notice
of motion.
[17] The applicant
also contends that the amount of the penalty provided for in section
36(1) of the electricity by-laws is also
indicative of the charge in
the being a fine for a criminal offence because it provides for a
fine in a similar amount.
Analysis
A fine for a
criminal offence?
[18] It is so that
tampering with a prepaid meter constitutes a criminal offence. Thus s
20 of the by-law provides as follows:
“
20.
Tampering
(1) No person
shall in any manner or for any reason whatsoever paint, deface,
tamper or interfere with any meter or service connection
or service
protection device or supply or any other equipment of the Council.
Only an authorized employee of the Council may make
any adjustment or
repair thereto.
(2) When as a
result of illegal tampering by a consumer, it is necessary to make
alterations to the metering system to prevent further
tampering, the
consumer shall be liable for the total cost of such alterations. ”
[19] The use of the
word “illegal” in s 20(2) makes it clear that the
infringement of the prohibition contained in s
20(1) constitutes a
criminal offence. Beyond that, s 20(2) does not come into play in
this matter because there is no evidence
to suggest that it was
necessary for the municipality to make alterations to the metering
system to prevent further tampering.
We are therefore concerned only
with s 20(1).
[20] The
consequences for a criminal contravention of s 20(1) are provided for
in s36(1) of the by-law, which is quoted above. As
is apparent from
that quotation, that subsection renders contravention of any
provision of the bylaws an offence and provides for
a fine upon
conviction not exceeding R2 000 or imprisonment for a period not
exceeding 12 months.
[21] Clearly a
prosecution and conviction of such an offence could only take place
through the medium of a criminal prosecution
in a criminal court
having jurisdiction in respect of the offence.
[22] It is the
applicant’s contention that the municipality has in this
instance purported unlawfully to do just that. It
has, without having
jurisdiction, prosecuted, convicted and sentenced him to a fine of R2
052.
[23] In order to
assess the correctness of this contention, it is necessary to
establish whether the municipality has indeed followed
this unlawful
path or whether there is a lawful basis for its actions.
[24] If regard is
had to the “notification of electricity meter tamper” it
is clear that the notice purports to impose
a “reinstatement
fee”. The fee that it imposes is an amount of “R2.052.00
(incl VAT)”. The reference to
a "fee” and not to a
penalty is indicative of the municipality seeking to impose a charge
and not to impose a penalty.
The fact that the amount is inclusive of
VAT also points to a fee for a provision of a service rather than the
imposition of a
penalty.
[25] Further, if
regard is had to the amount of R2 052, it is clear that the
municipality was seeking to rely on the electricity
supply tariffs
referred to above, and in particular, item 5 of tariff H. If VAT is
added to the amount of R1 800 provided for in
item 5, it comes to
exactly R2 052.
[26] If regard is
had to the phrase “estimated cost of material, labour and
transport plus 10% with a minimum charge of contained
in item 5, it
is clear that the tariff seeks to charge a fee for a service, rather
than to impose a penalty, at least in the case
of the first instance
of a tampering.
[27] In assessing
whether the minimum charge is a realistic one, when compared with the
low charge for other forms of reconnection,
regard must be had to s
12(5) of the by-law which provides that-
“
...where
Council’s equipment has been tampered with to prevent full
registration of consumption by the meter, the electricity
supply
shall be physically removed from those premises and will only be
reinstalled upon payment of the applicable fee, as prescribed
in the
tariff of charges.”
[28] The charge
accordingly envisages services beyond mere reconnection. It
contemplates the complete reinstallation of a supply,
and presumably
related apparatus, which has been “physically removed from the
premises”. This in my view justifies
a charge in excess of the
lesser charge for a simple reconnection.
[29] The tariffs are
imposed by the municipality in terms of
s 75A
of the
Local
Government: Municipal Systems Act No. 32 of 2000
. It provides in
relevant part as follows:
“
75A.
General power to levy and recover fees, charges and
tariffs
(1) A
municipality may-
(a) levy and
recover fees, charges or tariffs in respect of any function or
service of the municipality; and
(b) recover
collection charges and interest on any outstanding amount.
(2) The fees,
charges or tariffs referred to in subsection (1) are levied by a
municipality by resolution passed by the municipal
council with a
supporting vote of a majority of its members. ”
[30] The
municipality thus had the power to impose the tariff that it did in
item 5 of tariff H of the electricity supply tariffs.
It is clear
from the provincial gazette containing the tariffs that reliance was
placed on
s 75A.
In the circumstances, there can be no suggestion
that in imposing the tariff, the municipality was acting outside its
powers or
purporting to impose a criminal penalty.
[31] It is so that
in the case of a second or third tampering, provision is made for the
doubling or trebling of the fee. These
components of the tariff may
well contain a punitive component. However, that is not sufficient in
my view to render those charges
a criminal fine or to render the
conduct of the municipality in imposing that tariff unlawful. In any
event, and save for the trust’s
belated challenge to the
constitutionality of
s 36(2)
of the by-law, no other by-law, tariff,
or other administrative action on the part of the municipality was
challenged in the proceedings
on the basis that it was either
unconstitutional or unlawful.
[32] Accordingly, I
disagree with the trust’s contention that the charge of R2 052
amounted to the unlawful imposition by
the municipality of a criminal
fine for a criminal offence to which he was not a party.
Basis for joint
and several liability?
[33] That still begs
the question whether there is a lawful basis for the municipality to
hold the trust liable for the conduct
of its tenant who was,
factually, the consumer of the electricity supplied to the premises
(assuming the correctness of the applicants’
version, which I
am willing to do for purposes of this judgment.)
[34] An appropriate
starting point in this analysis is
s 12(5)
of the by-law which is
quoted again for ease of reference:
“
...where
Council’s equipment has been tampered with to prevent full
registration of consumption by the meter, the electricity
supply
shall be physically removed from those premises and will only be
reinstalled upon payment of the applicable fee, as prescribed
in the
tariff of charges.”
[35]
In this provision it is clear that there was a lawful basis for the
municipality to remove the supply of electricity to the
premises
concerned - indeed it was obliged to do so. Moreover, the
municipality is effectively precluded by
s 12(5)
from reinstalling
the supply and associated apparatus, save
‘‘
upon
payment of the applicable fee, as prescribed in the tariff of
charges.”
In
That is clearly a reference to the amount of R1 800 plus VAT referred
to in the electricity supply tariff.
[36] On the basis of
this provision alone, it seems to me that the municipality will be
entitled to adopt the stance that it did
in these proceedings in
refusing to re-install the supply until the amount of R2 052 was
paid. It seems to place the question of
who should pay the R2 052
outside of the municipality’s area of concern, in that it does
not identify who should make the
payment. That would seemingly, in
the present context, be left to be resolved as between the owner and
the tenant. This is so regardless
of the fact that, in the present
context, the effect would be to hold the owner jointly and severally
liable with the tenant for
the charge.
[37] On this basis
alone, I am of the view that the trust would not have been entitled
to the relief that it originally sought in
the notice of motion ie an
order compelling the municipality to reconnect the supply.
[38] I nonetheless
proceed to consider whether there is an express basis for the trust
to be held liable for the tariff fee of R2
052, outside of any
implicit basis in
section 12(5)
of the by-law.
[39] The starting
point in this analysis is
s 3
of the by-law. It provides in relevant
part as follows:
"3.
Consumer’s agreement
(1) No person
shall use or be entitled to use an electrical supply from the Council
unless or until such person has entered into
an agreement in writing
with the Council for such supply, and such agreement together with
the provisions of these Bylaws shall
in all respects govern such
supply
....
(
2
)
...
(3)
...
(4) The Council
may decide whether a consumer’s agreement shall be concluded by
Council with the owner of the premises or
with the occupier of the
premises, or with both, or with any duly authorised person acting on
their behalf. ”
[40]
The terms
“
consumer"’,
“occupier”
and
“
owner”
are
then defined as follows:
“ ‘
consumer’
means a person to whom the Council has agreed to supply electricity
oris actually supplying electricity, or if there
is no such person,
the owner of the premises.”
“ ‘
occupier’
in relation to any premises means:
(a) Any person in
occupation of a premises (sic) at any relevant time;
(b) any person
legally entitled to occupy the premises;
(c) any person in
control or management of a premises (sic); 'owner
'
in relation to
any premises means:
(d) The person in
whose name the premises is (sic) registered or the person’s
authorised agent;
(e) ...
(f) ...
(g)
a person receiving rent or profit issuing therefrom, or who would
receive such rent or profit, if such premises were let, whether
on
his own account or as agent for any person entitled thereto or
interested therein. ”
“ ‘
owner’
means and includes the registered owner of the land or premises, or
his authorised agent, or any person receiving the
rent or profits
issuing therefrom, or who would receive such rents or profits, if
such land or premises were let, whether on his
own account or as
agent for any person entitled thereto or interested therein.”
4
[41]
Having regard to the agreement originally signed by
the trust with the municipality for the supply of electricity,
the
trust complies with both the definition of owner and with the
definition of
“
consumer"’
notwithstanding
that it may not necessarily itself be in actual occupation of the
premises. It is also apparent from the definition
of "
consumer”
that
the trust’s tenant will comply with both the definition of
“
occupier”
(because
he was legally entitled to occupy the premises) and with the
definition of
(“consumer"
because,
when he was in the premises, the municipality was
"actually
supplying electricity to him’).
[42] These
definitions must be borne in mind when considering the import of
s 34
of the by-law. It provides as follows:
"Owner’s
and consumer’s liability
(1) The owner and
the consumer shall be jointly and severally liable for compliance
with any financial obligation, except as provided
in
section 34(2)
or
other requirement imposed upon them by these Bylaws.
(2) The liability
for compliance with any financial obligation in respect of the
consumption of electricity shall be the sole responsibility
of the
consumer.”
[43]
The effect of
s 34(1)
is that even if it is to be assumed that the
trust as owner does not fall within the definition of “
consumer”
the
trust as owner is nonetheless rendered jointly and severally liable
with the tenant as consumer for any financial obligations
imposed
upon the tenant not falling within the ambit of
s 34(2).
[44]
Section 34(2)
of the by-law would not avail the owner in the present
context because it only excuses the owner from liability for
compliance
with a financial obligation
“
in
respect of the
consumption
of electricity”.
In
this instance, the charge is in respect of the act of reinstalling
the supply of electricity and related equipment. It is not
in respect
of the consumption of electricity.
[45]
Having regard to the provisions of
s 34(1)
, even if the tariff for
reinstallation of supply following tampering provided for in item 5
of tariff H of the electricity supply
by-laws applies only to the
tenant as the person responsible for tampering with the meter,
5
the effect of
s 34(1)
is to render the trust as owner jointly and
severally liable for that obligation.
[46] In light of my
above finding, it is not necessary for me to consider the further
arguments advanced on behalf of the municipality
pertaining to s 49
of the Local Government Ordinance No. 17 of 1939 which also makes
certain provision for joint and several liability
by an owner and/or
occupier for “basic charges for electricity”.
[47] In the
circumstances, even if the trust was entitled under the prayer for
further and/or alternative relief to claim repayment
of the amount of
R2 052 by the municipality, I find that there is no basis for such a
claim on the facts before me.
[48]
I should add that, whilst I can appreciate the indignation that the
applicants feel at this imposition of joint and several
liability,
the principle of imposing it has received the sanction of, amongst
others, the Constitutional Court. That is so even
in the context of
joint and several liability for electricity and water consumption by
an unlawful occupier of premises.
6
[49]
Thus in the majority judgment in
Mkontwana,
Yacoob
J held as follows:
“
There are
allegations that tenants and those who hold over reconnect
electricity and water illegally after the municipality has
effected a
disconnection consequent upon the failure by the occupier to pay
consumption charges. The submission that it is arbitrary
for the
owner to bear the risk of non-payment in these circumstances must
also be rejected. The relationship between the owner,
the property
and the consumption charge remains sufficiently close to expect the
owner to take the risk. The owner would have chosen
the tenant and
would receive rental where the occupier concerned is a tenant or
would be entitled to damages for holding over from
an unlawful
occupier. The connection is sufficiently strong. ”
[50]
That case concerned
s 118(1)
of the
Local Government: Municipal
Systems Act which
has the effect, in the circumstances of a transfer
of a property, of imposing liability on the owner seeking to effect
registration
of transfer of his or her property, for municipal
service charges, including the electricity charges incurred by a
tenant and left
unpaid, during the preceding two years.
7
There
too the imposition of joint and several liability was implied, rather
than express, by simply prohibiting the registrar
of deeds from
registering transfer of the property before provision of a
certificate from the municipality confirming payment.
It did not say
who was responsible for making the payment, but the Constitutional
Court accepted that it had the effect of imposing
liability on the
owner, even if the owner had not consumed the services.
8
[51] I am
accordingly of the view that even if the applicants were entitled to
claim repayment of the R2052 under the further or
alternative relief
clause in the notice of motion, they would not be entitled to such
repayment.
Costs
[52] The
municipality sought to characterise the applicants’ conduct in
bringing this application as being vexatious and justifying
a
punitive costs award. I disagree. As appears from the above analysis,
the applicable law is anything but simple. The imposition
of joint
and several liability for financial obligations arising from a
tenant’s misconduct would justifiably be a matter
of concern
for property owners. In the circumstances, the applicants are
entitled to seek clarity from the courts.
[53]
However, this cannot be characterised as a case of a private party
seeking to assert a constitutional right as contemplated
in
Biowatch
Trust v Registrar, Genetic Resources and Others
.
9
The costs must therefore follow the result on the ordinary party and
party scale.
[54] I accordingly
make the following order:
(1) The application
is dismissed.
(2) The applicants
are ordered to pay the respondent’s costs.
A DODSON
ACTING JUDGE OF
THE HIGH COURT OF SOUTH AFRICA
GAUTENG DIVISION
PRETORIA
Counsel for the
respondent: ADV AC COMUZIO
Instructed by:
WRIGHT, ROSE-INNES,
c/o
MclNTOSH,
CROSS & FARQUHARSON,
834 Pretorius
Street,
Arcadia,
Pretoria
Date of hearing : 5
May 2015
Date of judgment: 22
May 2015
1
The
electricity supply tariffs are made in terms of
section 75A(3)
of the
Local Government Municipal Systems Act No. 32 of 2000
and contained
in Schedule 2 of the Extraordinary Provincial Gazette No. 159 dated
13 June 2012.
2
Note
that the amount of R2052 is this amount together with VAT.
3
Council
Resolution : MI195/2001 dated 29 November 2001 and CC71/2002 dated 26
March 2002; date of commencement, 24 April 2002.
4
The
duplication in the definition of “owner” comes from the
original by-law as published on the Ekurhuleni Municipality
website
in .pdf form.
5
There
may be a basis for the argument that item 5 of tariff H of the
electricity supply tariffs does not in itself impose liability
on the
owner. That is because it speaks of
reinstating
a
customer
connection
that has been removed due to tampering by the
customer
”
.
“
Customer”
(as distinct from “consumer" is nowhere defined in the
tariff or the by-law. In this phrase it would
seem to contemplate one
and the same person. In the present context, that would be the
tenant.
6
Mkontwana
v Nelson Mandela Metropolitan Municipality & Another;
Bossett & Others v Buffalo City Municipality & Others;
Transfer Rights Action Campaign & Others v MEC, Local
Government & Housing, Gauteng, & Others,
(KwaZulu-Natal
Law Society and Msunduzi Municipality as Amicii
Curiae)
2005
(1) SA 530
(CC) at paras 40, 42, 54 and 109.
7
See
also
Real
People v City of Johannesburg
2011
(5) SA 8
(GSJ). There joint and several liability for electricity
consumption charges was based on section 49 of the Local Government
Ordinance.
8
At
para 33.
9
2009
(6) 232 (CC) at paras [21] - [25],