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[2014] ZAFSHC 248
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Van Rooyen v Hillandale Homeowners Association (1603/2014) [2014] ZAFSHC 248 (11 December 2014)
IN THE HIGH
COURT OF SOUTH AFRICA
FREE
STATE DIVISION, BLOEMFONTEIN
Case
No: 1603/2014
In
the matter between:-
GERT
RENIER VAN ROOYEN
…............................................................................
APPLICANT
and
THE
HILLANDALE HOMEOWNERS
ASSOCIATION
…...................................................................................................
RESPONDENT
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. T
he
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