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[2014] ZAFSHC 226
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Van Rooyen v Hillandale Homeowners Association (1603/2014) [2014] ZAFSHC 226 (11 December 2014)
IN THE HIGH COURT OF
SOUTH AFRICA
FREE STATE DIVISION,
BLOEMFONTEIN
Case No: 1603/2014
DATE: 11 DECEMEBR 2014
In the matter between:-
GERT RENIER VAN
ROOYEN
...................................................
APPLICANT
And
THE HILLANDALE
HOMEOWNERS
..................................
RESPONDENT
ASSOCIATION
CORAM: MOENG, AJ
JUDGMENT BY: MOENG, AJ
HEARD ON: 13 November 2014
DELIVERED ON: 11 December 2014
INTRODUCTION
[1] This is an application based on the
mandament van spolie. The main issue to be decided is whether the
respondent’s conduct
in limiting/refusing applicant to purchase
pre-paid water and electricity vouchers is lawful. The applicant
leases premises described
as 15 Wildehond Street, Woodland Hills
Wildlife Estate, Bloemfontein (“the leased premises”)
from the Sue Celken Family
Trust (“the trust”) pursuant
to a written lease agreement concluded during November 2012. The said
property is situated
within the Woodland Hills Wildlife Estate,
Bloemfontein (“the Estate”). The respondent (“the
association”)
is a non-profit company incorporated under
section 21 of the Companies Act 61 of 1973 and is responsible to
govern, administer
and manage the Estate. The main object of the
company is said to promote, advance and protect the communal
interests of its members.
[2] This is the return date of a rule
nisi granted on 8 April 2014 by Naidoo J in the following terms:
1. Condonation is granted to the
applicant for non-compliance with the Rules of Court pertaining to
form, process and service and
that this application is heard as an
urgent application in terms of the provisions of Uniform Rule
6(12)(1) read with (2);
2. A rule nisi is issued, returnable
on Thursday 8 May 2014 at 9:30 or as soon thereafter as the
applicant’s legal representative
can be heard, calling upon the
respondent to advance reasons, if any, why the following order should
not be granted as a final
order:
2.1 That the respondent be ordered,
without delay, to restore the applicant’s access to its
internet site to be able to purchase
prepaid water and electricity
for use at the immovable premises situated at 15 Wildehond Street,
Woodland Hills Wildlife Estate,
Bloemfontein.
2.2 That the respondent be ordered,
without delay, to sell prepaid water and electricity to the applicant
and to allow the applicant
to purchase the same for use at the
immovable premises situated at 15 Wildehond Street, Woodland Hills
Wildlife Estate, Bloemfontein.
2.3 That the respondent be prohibited
and restrained from taking any steps, whether it be directly or
indirectly , to prohibit or
frustrate the applicant from purchasing
prepaid water and electricity so as to be able to utilise the same at
the immovable property
situated at 15 Wildehond Street, Woodland
Hills Wildlife Estate, Bloemfontein.
2.4 That the respondent be interdicted
and restrained, whether it be directly or indirectly, with
interfering in any manner with
the provision of and/or consumption by
the applicant of water and electricity at the immovable property
better known and described
as 15 Wildehond Street, Woodland Hills
Wildlife Estate, Bloemfontein.
2.5 That the respondent pays the cost
of this application on the scale as between attorney and client.
3. The relief set out in prayers 2.1 to
2.4 operate as interim interdict with immediate legal operation until
finalisation of this
application.
[3] The applicant now seeks
confirmation of this order whereas the respondent prays that it be
discharged.
BACKGROUND
[4] On 6 April 2004, the Estate was
declared an approved township by proclamation in terms of section
14(1) of the Townships Ordinance
of 1969. Some of the conditions of
establishment of the township were that the township owner was
responsible for the installation
and maintenance of water and
electricity reticulation to the township and had to make arrangements
with the Mangaung Local Municipality
(as it then was) and or the
supplier of water and electricity in the area for such supply to the
township. The respondent purchases
water and electricity in bulk from
the municipality and or CENTLEC (a company responsible for the supply
of electricity) and in
turn ‘resells’ same to the
residents of the Estate.
[5] It is common cause according to the
Articles of Association of the respondent that every owner of an erf
shall be a member of
the association upon registration of the erf
into his/her name and shall remain a member until he/she ceases to
own the erf. The
Trustees may from time to time make rules, subject
to the provisions of the Memorandum and Articles of Association and
every member
is bound by such rules or regulations.
[6] The rules further provide that no
member shall let or part with the occupation of his residence,
whether temporarily or otherwise,
unless the proposed occupier has
agreed to be bound by all the provisions of the rules. Such an
occupier shall at all times be
bound by the rules. The Board also
reserves the right to enforce the rules contained in the Manual for
Community Participation
and to use fines to enforce such rules. If
the fines are not paid the right to take further steps is reserved
including the right
to collect penalties against the owner of an erf
that is leased out. Any such amount which is due by a member by way
of a levy
or fine shall be a debt.
[7] Of paramount importance for our
purposes, is that rule 13.11 of the Manual for Community
Participation provide that ‘no
electricity shall be provided or
sold to any occupier or owner of any erf in respect of which levy
payments are outstanding for
a period of 60 days or longer, until
such time as all outstanding levy payments are paid in full’. A
further critical provision
is paragraph 10.3 of the water and
electricity supply agreement which provides that ‘vereistes vir
die voorsiening van water
of elektrisiteit of die voortgesette
voorsiening daarvan mag insluit ‘n vereiste dat alle heffings
of ander betalings verskuldig
aan die Vereeniging ten volle betaald
is ….’.
[8] With regard to the aesthetical
appearance of the estate, the rules provide that the collective pride
in the Estate depends to
a considerable extent on the contribution
made by every owner in creating and maintaining a pleasing appearance
of their property
and thereby to the Estate as a whole. If the
Approval Committee is of the opinion that the appearance of any piece
of land or buildings
or any structure on the land is unsightly, not
properly maintained for the Estate in general or where it deviates
from the requirements
as set out in the Manual for Community
Participation the board may notify the owner and request that the
necessary measures be
taken to address and solve the problem. If the
owner, after having been given a reasonable period to address the
problem, has not
complied with the request, the board or manager may
levy a monthly fine which may be recovered as per para [7] above.
THE FACTS
[9] Applicant avers that part of the
element of possession and occupation of the property is the
availability and the provision
of water and electricity which is
facilitated by the Estate by way of a pre-paid metering system.
Pre-paid water and electricity
vouchers can either be purchased
directly from the Estate’s administration office during office
hours or by internet, 24
hours per day.
[10] During March 2014, applicant
started experiencing problems with the respondent regarding his
ability to purchase electricity.
His internet site for the purchase
of electricity was blocked and he was forced to purchase same from
the administration offices
of the respondent during office hours.
Respondent’s personnel however refused and/ or restricted the
purchase of electricity
to units that would last him for a few days.
This was as a result of the failure of the trust (his lessor) to pay
certain penalties/levies
which were charged due to the trust’s
failure to adhere to aesthetical rules.
[11] He took this matter up with the
trust and a letter of demand against the refusal to sell applicant
electricity was directed
to the respondent. On 7 April 2014, the
respondent refused to sell to the applicant’s mother any water
and electricity. Applicant
asserts that the refusal to sell him water
and electricity is unlawful and infringes upon his constitutional
rights to human dignity,
equality, access to water and to the use of
the property.
[12] He further avers that the
respondent is acting contrary to the provisions of section 7(1) of
the Electricity Regulation Act
4 of 2006 (“ERA”) since
it, without a license issued by the National Energy Regulator of
South Africa (“NERSA”),
buys and sells electricity as a
commercial activity. Applicant contends that any provision in the
respondent’s constitution
or rules that purports to give the
respondent the power to terminate the supply of electricity
contravenes the provisions of ERA
as well as the provisions of
schedule 4B of the Constitution of the Republic of South Africa. Mr.
Snellenburg however indicated
in his heads of argument that applicant
will accept for purposes of the application that respondent is
entitled to ‘resell’
electricity to residents in the
Estate.
[13] Applicant further contends that
respondent’s conduct is contrary to the provision of section
24(5) of the Mangaung Metro
Municipality (MLM) bylaws relating to
electricity supply. Section 24(5) provides that the service provider
selling pre-paid electricity
to a consumer, may deduct a percentage
from the amount tendered to offset any amount that such a consumer is
indebted to the service
provider. The respondent, so the argument
goes, cannot make the sale of electricity subject to less favourable
conditions than
if CENTLEC provided electricity to the end user.
[14] The respondent in turn raised two
points in limine relating to misjoinder and non-joinder of the trust
as owner of the property.
Respondent contends that it is not the
applicant’s access to water and electricity that is limited but
that of the trust
as the respondent did not enter into an agreement
with the applicant, but with the trust.
[15] Respondent admitted that it
limited the sale of water and electricity to the applicant, but
disputes that access thereto was
denied. Deponent on behalf of the
respondent contends that the limited sale was caused by the failure
of the trust to adhere to
the aesthetical rules relating to air
conditioners. Fines were levied against the trust but it failed to
pay same.
[16] The trust, as a member of the
respondent, and the applicant as lessee, are bound by its rules.
Applicant was the previous owner
of the property concerned and it is
contended that he is aware of the rules in issue. Rule 13.11 of the
Manual for Community Participation
provides that no electricity shall
be provided or sold to any occupier or owner of any erf in respect of
which levy payments are
outstanding for a period of 60 days or
longer, until such time as all outstanding levy payments are paid in
full.
[17] On 15 February 2013, the trust,
represented by one of its trustees, entered into a water and
electricity provision agreement
with the respondent. The provisions
of rule 13.11 formed part of the agreement. Paragraph 10.3 of this
agreement provides that
“vereistes vir die voorsiening van
water of elektrisiteit of die voortgesette voorsiening daarvan mag
insluit ‘n vereiste
dat alle heffings of ander betalings
verskuldig aan die Vereeniging ten volle betaald is ….”.
[18] Respondent disputes that it buys
and sells electricity as a commercial activity in contravention of
the provisions of section
7(1) of ERA. It argues that CENTLEC sells
electricity in bulk to the members of respondent and no profit is
made out of the resale
to different households. Respondent avers that
it entered into a service agreement with the MLM and this agreement
is as a consequence
of the provisions of section 76 of the Systems
Act 32 of 2000 which provides that a municipality may provide a
municipal service
in its area or a part of its area through a
community based organisation or other non-governmental organisation
legally competent
to enter into such an agreement.
THE ISSUES
[19] The main issue that has to be
determined is whether the respondent’s conduct in
limiting/refusing applicant to purchase
pre-paid vouchers is lawful.
Respondent raised two preliminary issues which I will address before
dealing with the main issue.
These related to whether applicant as
lessee has locus standi to seek relief against the respondent and
whether he merely has a
personal right against respondent to provide
him with water and electricity, thereby disqualifying him from
obtaining a spoliation
order.
ADJUDICATION OF THE ISSUES
• Does applicant have locus
standi?
[20] Respondent argues that the
contract for the provisioning of water and electricity was entered
into between the trust as owner
of the property and the respondent.
Applicant’s right to water and electricity, so the argument
goes, is subordinate to the
right of the trust thereto. It is
therefore the trust, and not the applicant that has a right of
recourse against the respondent.
The respondent contends that the
applicant has therefore failed to show that it has a clear right.
[21] The salient facts in casu are that
the applicant is leasing the premises in question from the trust. It
is the applicant and
not the trust that consumes the water and
electricity. The rules of the respondent relating to the provision of
water and electricity
are not only applicable to an owner with whom a
contract has been entered into but is also applicable to occupiers
who are not
owners. In this regard, rule 13.11 of the Manual for
Community Participation provides that no electricity shall be
provided or
sold to any occupier or owner of any erf in respect of
which levy payments are outstanding for a period of 60 days or
longer.
[22] The mandament van spolie is a
possessory remedy. All that the spoliatus has to prove is possession
of a kind which warrants
the protection accorded by the remedy and
that he was unlawfully ousted. The main issue at hand relates to
restoration of the applicant’s
right to be able to purchase
prepaid water and electricity as well as his possession and use
thereof. The contractual relationship
between the respondent and the
trust does not exclude the enjoyment of applicant’s right to
access water and electricity.
I am satisfied from the facts that the
applicant had been exercising rights to water and electricity without
disturbance and that
the exercise of those rights fell within the
concept of quasi-possessio.
[23] The contract does not in my view
disentitle the applicant to seek the relief. The fact that no direct
contractual relationship
exists between the applicant and the
respondent is irrelevant. In Joseph and Others v City of Johannesburg
and Others
2010 (4) SA 55
(CC), City Power after having disconnected
the electricity supply to inhabitants of a block of flats with whom
it had no contractual
relationship, but had such a relationship with
the owner of the building, contended that 'customer' as intended in
the bylaw meant
only persons that had a contractual relationship with
a service provider, and that this limitation was justified by the
city's
debt-collection policy. City Power opposed the relief sought
on the basis that they owed no duty of procedural fairness to the
tenants, but only to the person they contracted with and not to the
inhabitants of the block of flats. This argument was dismissed
and
the Court held that the fact that no direct contractual relationship
existed between the local authority/service provider and
consumers
was irrelevant. I am satisfied that the applicant has a direct
interest in the matter and can therefore approach the
court for
relief.
• Are applicant’s rights
capable of protection by spoliation proceedings?
[24] Mr. De Bruin for respondent
contended in his heads of argument that applicant had to show that he
had quasi possession, which
is capable of protection by a spoliation
order. He argued that at best for the applicant, he had a personal
right against the respondent
to sell him water and electricity
subject to the conclusion of a contract. He argues that such a
personal right is not protected
by the mandament van spolie. He in
this regard referred to Bon Quelle (Edms) Bpk v Munisipalieit van
Otavi
1989 (1) SA 508
(A); Telkom SA Ltd v XSINET (Pty) Ltd
2003 (5)
SA 309
(SCA); ATM Solutions (Pty) Ltd v OLKRU Handelaars CC and
Another
2009 (4) SA 337
(SCA) and Microsure (Pty) Ltd and Others v
NET 1 Applied Technologies South Africa Ltd
2010 (2) SA 59
(N).
[25] The issue raised is therefore
whether the applicant’s right to access to water and
electricity is a mere personal right
resulting from a contractual
relationship. It can be accepted that in terms of the contract
between the trust and the respondent,
water and electricity would be
supplied to the trust or occupant subject to the conditions alluded
to here above. It can further
be accepted that the mandament van
spolie cannot be utilised to enforce contractual rights. (See Telkom
SA Ltd v XSINET (Pty) Ltd;
ATM Solutions (Pty) Ltd v OLKRU Handelaars
CC and Another and Microsure (Pty) Ltd and Others v NET 1 Applied
Technologies South
Africa Ltd supra).
[26] Whether the mandament van spolie
cannot be utilised to enforce contractual rights where the provision
of water and electricity
is concerned was however not dealt with in
the matters referred to by Mr. De Bruin. These cases are therefore
distinguishable from
the facts in casu. The provision of water and
electricity to citizens is governed by legislation. The
National
Water Act 36 of 1998
deals with the provision of water whereas the
ERA deals with the provision of electricity.
[27] The rights of an occupier of a
building to his water have long been protected by our courts by the
mandament, irrespective
of the contractual relationship between the
parties. (See Sebastian v Malelane Irrigation Board 1950(2) SA 690
(T) and Painter
v Strauss
1951 (3) SA 307
(O).In Impala Water Users
Association v Lourens NO and Others
2008 (2) SA 495
(SCA) it was held
that it is incorrect to say that the rights to water were merely
contractual. These rights were not merely personal
rights arising
from a contract. Farlam JA held at para [18] that:
“In my opinion, it is not correct
to say that the rights in question were merely contractual. It will
be recalled that the
respondents or the entities they represent were
all entitled to rights under the previous Water Act 54 of 1956, which
rights were
registered in terms of the schedule prepared under
section 88 of that Act. These rights were clearly not merely personal
rights
arising from a contract. The individual respondents and the
entities represented by the other respondents all automatically, in
terms of paragraph 7.2 a of the appellant's constitution, became
founding members of the appellant. It is clear therefore that
the
rights to water which belonged to the individual respondents and the
entities represented by the other respondents, in so far
as they were
replaced by or, perhaps more accurately put, subsumed into rights
under the Act, cannot be described as mere personal
rights resulting
from contracts with the appellant. It follows that, on that ground
alone, the Xsinet decision, on which the appellant's
counsel relied,
is not applicable.
[28] In City of Cape Town v Strümpher
2012 (4) SA 207
(SCA) at 210A–212E and 214A–F, a
landowner used water supplied by the City of Cape Town. Following a
dispute as to
the landowner's water accounts, the municipality
disconnected his water supply. The Supreme Court of Appeal held that,
though a
water consumer in the position of the landowner had to enter
into a water-supply contract with the municipality, that did not make
its rights to water merely personal rights arising from the
agreement. The rights claimed by the landowner were also statutory
rights under the
Water Services Act 108 of 1997
, and accordingly
capable of being accorded protection by way of the mandament.
[29] The right to electricity supply,
despite the contractual relationship between the parties, has
likewise been protected by our
courts through spoliation orders. (See
Naidoo v Moodley 1982(4) SA 82 (T). The Constitutional Court in
Joseph and Others v City
of Johannesburg and Others supra held that
the supply of electricity to inhabitants is done in fulfilment a
constitutional and
a statutory duty to provide basic municipal
services to citizens. The argument that applicant merely had a
personal right against
the respondent to sell him water and
electricity, subject to the conclusion of a contract, is therefore in
my view misplaced. I
am satisfied that applicant did not simply have
a personal right against the respondent.
• Was the respondent’s
conduct in limiting/refusing applicant the right to purchase pre-paid
vouchers lawful?
[30] Having concluded that the
applicant’s rights are capable of protection by spoliation
proceedings, the question which
should follow is whether the
restriction of his rights to water and electricity was lawful.
Respondent admittedly restricted applicant’s
ability to
purchase such vouchers by having limited the number of units for his
consumption. Applicant however contends that respondent
refused to
sell him any such vouchers. A dispute of fact therefore arose on this
aspect. I do not find it necessary to decide on
this factual dispute
since the mere admission by respondent that it limited the number of
water and electricity units for applicant’s
consumption, places
such limitation squarely within the ambit of the mandament van
spolie. A partial deprivation of possession
is sufficient to warrant
the grant of a spoliation order. (See Van Rooyen en ‘n Ander v
Burger 1960(4) SA 356 (O) at 363
F-H).
[31] The applicant contends that the
respondent has no powers to restrict or limit the supply of water and
electricity to enforce
the payment of a penalty for non-compliance
with aesthetical rules. He argues that any such purported power is in
conflict with
the MLM bylaws and the Systems Act 32 of 2000. It is
contended that the provisions in the Manual for Community
Participation and
any subsequent agreement to limit such supply is
unlawful and therefore void.
[32] Mr. Snellenburg referred to Fisher
v Body Corporate Misty Bay
2012 (4) SA 215
(GNP) wherein the
applicant was in arrears with his levy payments towards the
respondent. His access disk into the Estate was resultantly
deactivated and he was unable to gain access to the village complex.
Respondent sought to justify the deactivation of his disc
by
referring to clauses 17.11 and 19 of the standard agreement, which
read as follows:
'17.11 The trustees operating on behalf
of Body Corporate reserve the right to disconnect and lock out
electricity supply or perform
any other action deemed necessary to
any owner or tenant where the owner, family or the owner tenant,
friends or domestic staff
continue to disregard these Rules and
continue to do so after receiving written notice in this regard.’
‘19. The purpose of a levy is to
pay for electricity, effluent, maintenance, employees, salaries,
garden etc. Failure to pay
these accounts by the Body Corporate
simply results in suspension of a service for which all suffer’.
[33] Legodi J held at para [19] that
the clauses referred to above made no reference to a 'rule of
conduct' entitling the Body Corporate
to suspend the access tags of
any owner should the owner fail to make payment of the monthly levy,
which levy is used to maintain
the common property, nor was such
reference made anywhere else in the agreement. He however went on to
state that ‘Even if
there were, in my view, the respondent
would not have been entitled to spoliation without due process of the
law. In other words,
it could not have taken the law into its own
hands, as it did.
[34] The facts at hand differ from
those in Fisher v Body Corporate Misty Bay supra. In casu, the Manual
for Community Participation,
upon which the respondents rely to
justify their action, unambiguously provide that ‘no
electricity shall be provided or
sold to any occupier or owner of any
erf in respect of which levy payments are outstanding for a period of
60 days or longer, until
such time as all outstanding levy payments
are paid in full’. Paragraph 10.3 of the water and electricity
supply agreement
further provides that ‘vereistes vir die
voorsiening van water of elektrisiteit of die voortgesette
voorsiening daarvan mag
insluit ‘n vereiste dat alle heffings
of ander betalings verskuldig aan die Vereeniging ten volle betaald
is ….’.
As indicated, in Fisher v Body Corporate Misty
Bay supra, the clauses relied upon by the respondent, made no
reference to a 'rule
of conduct' entitling the Body Corporate to
suspend the access tags of any owner should the owner fail to make
payment of the monthly
levy which levy is used to maintain the common
property, nor was such reference made anywhere else in the agreement.
Legodi J
was however of the view that even if there was such a
provision, entitling the respondents to deactivate the access disc,
the respondent
would not have been entitled to spoliation without due
process of the law. This remark was made obiter and for the reasons
that
will appear later herein, I am satisfied that the binding
provisions of the Manual for Community Participation as well as the
contract
that was entered into between the trust and the respondent,
did not entitle the applicant to a spoliation order.
[35] The respondent may deny that the
act alleged was one of spoliation, or he may claim that it was
legally justified. (See Van
Rooyen v Burger supra at 358G–359B).
Respondent justifies its conduct by reference to the provisions of
rule 13.11 of its
Manual for Community Participation and paragraph
10.3 of the agreement it concluded with the trust.
[36] Mr. Snellenburg argued that the
respondent is still subject to the bylaws of the MLM and that the
residents of the Estate are
still entitled to expect the MLM to
comply with its obligations. He contended that the municipality and
no other entity has the
right to determine within its area, the
conditions on which electricity is supplied and circumstances under
which it may be terminated
or limited. Section 24(5) of the bylaws,
he debated, provides that the service provider selling pre-paid
electricity to a consumer,
may deduct a percentage from the amount
tendered to offset any amount that such a consumer is indebted to the
service provider.
By refusing to sell electricity to the applicant,
respondent thereby acted contrary to this provision in the bylaws. He
also reasoned
that the respondent’s conduct is contrary to the
provisions of section 57(2) of the bylaws which provides that the
tariffs
or rates at which electricity is resold shall not be less
favourable to the purchaser than those that would have been payable
had
the purchaser been supplied directly with electricity by the
service provider.
[37] It is common cause that in terms
of proclamation 16 of 2004, the Estate was declared a township in
terms of section 14(1) of
the Townships Ordinance of 1969 and
authority was granted to respondent, as a company in terms of section
21 of the Companies Act,
to govern the township. Its administration
of the Estate should logically be in accordance with national and
provincial legislation
as provided for in the Constitution. The
trust, by its ownership of the erf is a member of the respondent and
is bound by its rules.
The applicant, as occupant and lessee is
likewise bound by the rules. The provisions of rule 13.11 of the
Manual for Community
Participation and paragraph 10.3 of the water
and electricity provision agreement, falls squarely within the
Constitution of the
respondent and is therefore binding on both the
trust and the applicant. One of the conditions of title agreed upon
by the trust,
and registered against the title of the property, were
that the trust would be bound by the statutes and rules of the
respondent.
This position therefore differs from illegal clauses in
lease agreements wherein a lessee consents to the termination of the
supply
of his water and electricity in case he is in arrears with his
rent payments.
[38] The question is therefore whether
a party can contractually agree to forfeit certain rights to his
property. Mr. Snellenburg
argued that an owner can waive a
requirement of law which is there for his own benefit, but he cannot
do so if the requirement
is there for the public benefit. He in
support of this contention referred to Springs Town Council v
MacDonalds; Springs Town Council
v Badenhorst
1967 (3) SA 229
(W) at
235 and Strydom v Die Land en Landboubank van Suid-Afrika
1972 (1) SA
801
(A). He contended that having regard to the bylaws and the
relevant legislation, the rights of the applicant are in the public
interests.
[39] It is trite that parties are free
to contract as they please. The law permits perfect freedom of
contract. Parties are left
to make their own agreements, and whatever
the agreements are, the law will enforce them provided they contain
nothing illegal
or immoral or against public policy. In New Garden
Cities Inc Association Not for Gain v Adhikarie
1998 (3) SA 626
(CPD)
Rose-Innes J stated that a term in a contract of sale which
restricts the use of properties in a township to residential
purposes
is in the interest of all property owners in the township. It ensures
that the residential nature of the area is preserved,
without
interference by industry or businesses.
[40] The main object of the company in
casu is said to promote, advance and protect the communal interests
of its members. In an
effort to protect the communal interests of
owners, the aesthetical appearance of the estate appears to be of
paramount importance.
The rules provide that the collective pride in
the Estate depends to a considerable extent on the contribution made
by every owner
in creating and maintaining a pleasing appearance of
their property and thereby to the Estate as a whole. Any owner who
fails to
adhere to these rules is liable to pay fines as determined
from time to time by the board. The main purpose of the fine is aimed
at enforcement of this essential rule and in case the fine is unpaid,
a termination of the sale of water and electricity vouchers
after a
period of sixty days.
[41] In achieving these objectives, the
respondent and its members created a scheme where, by agreement,
every property owner forfeited
whatever right it might otherwise
enjoy had such owner not been a member of the respondent, in exchange
of the fulfilment of the
objectives as stated here above. By becoming
members of the respondent, owners thereby forfeited specified rights
as contained
in the Manual for Community Participation. (See Vanilla
Street Home Owners Association v Ismail and Another (A345/2013)
[2014] ZAWCHC 25
(5 March 2014)
[42] The terms in the contract of sale
which restricted the rights of owners is in the interests of all
property owners in the township
to protect their investment against
unsightly features in their neighbourhood. The contention by Mr.
Snellenburg that the provision
in issue is not for the public
benefit, in this regard the benefit of the owners of erven in the
Estate is therefore misconstrued.
The applicant as lessee and
previous owner of the property in issue was well aware of these rules
whilst he was an owner and later
as lessee. He had the choice of not
renting the property from the trust if he was of the view that the
applicable rules are inconsistent
with his rights. The provisions of
the bylaws relating to the benefit that municipal pre-paid users
enjoyed was already legislated
and was at his disposal. He thereby
had a choice, more so that he had also failed to adhere to the same
aesthetical rule. I am
satisfied that even if the provisions of
Section 24(5) of the bylaws appear to be more beneficial to other
pre-paid users, the
trust and the applicant forfeited the right to
only pay a percentage of the amount they owe to the service provider
as provided
for in the bylaws. The rules of the respondent have a
different scheme of debt collection and the trust agreed to same.
[43] Some of the conditions of
establishment of the township were that the township owner was
responsible for the installation and
maintenance of water and
electricity reticulation to the township at its own expense. The
municipality provides bulk electricity
up to the borders of the
Estate and the respondent is in turn responsible to distribute same
to the different households. Extra
charges are incurred by the
respondent in distributing the electricity to residents. These extra
charges include street lights,
technical losses etc. These charges
are included in the rate at which the electricity is then sold to the
different households.
[44] The respondent, as a non-profit
organisation, makes no profit out of this ‘resale’ but
covers the costs of the
distribution as indicated above. The losses
that respondent incurs would in my view have been incurred by CENTLEC
had it provided
electricity directly to the different households in
the Estate and such losses would have been recouped one way or the
other from
the end user. I am therefore of the view that this is not
contrary to the provisions of section 57(2) of the bylaws in that,
when
viewed in context, the ‘resale’ is not less
favourable to the purchaser than it would have been had the purchaser
been
supplied directly with electricity by the service provider, as
the service provider would also have had to recover these losses.
[45] I am satisfied that the trust’s
failure to adhere to the aesthetical rules triggered the imposition
of penalties which
remained unpaid. The rules and the contract
entered into between the trust and the respondent, are binding on the
applicant. The
respondent was entitled or had the power to refuse to
sell applicant prepaid water and electricity vouchers, or to limit
the number
of units to be sold to applicant. Respondent’s
conduct was therefore not unlawful as it acted within the rules and
the agreement
it entered into with the trust. The conduct of the
respondent did therefore not amount to spoliation.
COSTS
[46] It remains only to consider the
question of costs. In this regard the respondent, in the heads of
argument asked that I order
that the costs include the costs of two
counsel. I believe that respondent’s choice to employ two
counsel was not unreasonable
under the circumstances and was a ‘wise
and reasonable precaution’. Not only was I faced with an
application that ran
into 521 pages, but five sets of affidavits were
filed. The application was of critical importance to the respondent
in that the
validity of its Memorandum and Articles of Association
was attacked, and a decision in favour of applicant may have had an
adverse
effect on the enforcement of rules and may have also have had
momentous financial implications for the respondent. The issues that
sought determination were involved and warranted intense preparation.
I am therefore satisfied that briefing of two counsel was
warranted.
[47] I am under the circumstances
satisfied that the following order be made:
1. The rule nisi dated 8 April 2014 is
discharged with costs, which costs are to include the costs of two
counsel;
2. Applicant is further ordered to pay
the costs occasioned by the extension of the rule nisi on 8 May 2014
and on 22 May 2014.
L.B.J. MOENG, AJ
On behalf of the applicant: Adv. N
Snellenburg
Instructed by: Rossouws Attorneys
BLOEMFONTEIN
On behalf of the respondent: Adv. JP
De Bruin SC & Adv. JG Gilliland
Instructed by: Symington and De Kok
BLOEMFONTEIN