Lourens NO and Others v Impala Water Users Association (534/04) [2006] ZASCA 76; [2006] SCA 82 (RSA) (31 May 2006)

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[2006] ZASCA 76
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Lourens NO and Others v Impala Water Users Association (534/04) [2006] ZASCA 76; [2006] SCA 82 (RSA) (31 May 2006)

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_________________
J A HEHER
JUDGE
OF APPEAL
BRAND JA
:
[49] I
have had the advantage of reading the judgment of my brother Heher. I
agree with most of his reasoning as well as with the
result that he
proposes. There is, however, one aspect on which I find myself in
respectful disagreement. Although our divergence
of views will make
no difference to the outcome in this appeal, it may be of substantial
importance in the future application of
s 59(3) and (4) of the Act.
[50] The
ambit of our disagreement is delineated by Heher JA’s conclusion
(in para 43) that ‘[t]he representation procedure for
which s 59(4)
provides, must take place after the debt has been admitted or
judicially established’. Succinctly stated, my contrary
view is
that although the requirements of both s 59(3) and 59(4) must be
satisfied in order to justify the restriction of a
debtor’s water
supply under s 59(3)(b), I am unable to infer the prescription of an
order of proceedings found by Heher JA, –
which requires the
establishment of both the fact and the amount of the debt prior to
the hearing in terms of s 59(4) – in either
of the two subsections
concerned.
[51] If
Heher JA’s conclusion is correct, it would mean that the
association is compelled to seek a court order whenever the fact
or
quantum of the debtor’s alleged liability is denied, however
spurious or contrived the grounds for such denial may be. As is,
with
respect, correctly pointed out by Heher JA (in para 39), s 59(3)
creates a mechanism of enforcing a debt without the requirement
of
judicial sanction. On his construction, judicial sanction can,
however, only be avoided if the debtor admits liability. In the
absence of such admission, the association will be compelled to seek
judicial determination of the debt before the jurisdictional
prerequisite of a s 59(4) hearing can be satisfied, with the
resulting delay and period of grace for the defaulting debtor that it
entails.
[52] As appears from Heher JA’s judgment, he arrived
at this conclusion of a prescribed order, essentially for two
reasons: first,
because this was held to be the position by this
court in
Impala 1;
secondly, on the basis that it follows from
the structure and purpose of the provisions of s 59(3) and (4). I
respectfully find myself
unpersuaded by either of these two
considerations. I first deal with the purpose and structure of the
provisions of the two subsections.
In my view a proper reading of two
subsections reveals the following: when a debtor is in the opinion of
the association a defaulter
in the sense of one who has not paid a
water charge lawfully raised, it must allow the debtor to make
representations. If those representations
do not persuade the
association otherwise, it would be entitled to restrict or suspend
the water supply.
[53] If
the debtor admits being in default, no question of seeking the
sanction of the court arises. If the debtor disputes the
association’s
claim, the latter has two courses of action open to
it. First, it may proceed to exercise the statutory power under s
59(3), but
it must be ready to ward off spoliation proceedings, and
to discharge the onus which it will bear in those proceedings to
establish
both the fact and the amount of the debtor’s alleged
liability. Apart from a spoliation order, inability on the part of
the association
to discharge this onus may, of course, also give rise
to a claim against it for the damages resulting from its unlawful
action.
[54] The
alternative and more cautious procedure would be to approach the
court first, either in proceedings seeking an order for
payment of
the amount claimed, or in proceedings, such as those launched by the
respondent in this matter, for an order sanctioning
the restriction
or suspension of the debtor’s water supply under s 59(3). In the
exercise of the latter option, the association
must be prepared to
establish the fact and quantum of the debtor’s liability in motion
proceedings.
[55] In
any event, the association would have to afford the debtor the
opportunity to make representations in terms of s 59(4) and
then to
consider those representations before it either decides to restrict
the water supply of its own accord, or to seek a court
order to that
effect. However, if it decides not to adopt the option of first
seeking an order for payment of the amount claimed,
there is nothing,
in my view, that precludes the association from inviting s 59(4)
representations to be made on the supposition,
assumption or premise
that the amount claimed is due. The invitation would, of course, have
to make it clear that the purpose of
the proposed hearing is not to
establish liability, but to elicit explanation why, on the
supposition or premise that liability had
been established, the
restriction should not be imposed. A debtor who, in the light of this
invitation elects not to make representations,
but to rely solely on
his denial of liability, will do so at his peril. If the association
can prove the fact and the amount of his
liability, either in
spoliation proceedings or in the proceedings seeking authorisation to
restrict the debtor’s water supply,
all the requirements for
invoking the statutory powers bestowed upon it by s 59(3) will be
met. No consideration derived from a construction
of the Act, or of
logic, in my view, dictates that a debtor who wrongfully disputes
liability should be allowed a period of grace
or an opportunity to
delay the restriction of his water supply which is denied to a debtor
who admits default. This would be the
effect of the construction
adopted by Heher JA.
[56] This brings me to the judgment in
Impala 1.
Heher JA derives a great deal of support for his conclusion from
paragraph 8 of that judgment. If that paragraph does indeed support
his conclusion, I would be in the rather invidious position of saying
that part of a judgment that I have concurred in, is wrong.
I am not
persuaded, however, that there is anything in paragraph 8 which
differs from what I believe to be the correct construction
of s 59(3)
and (4). Paragraph 8 is quoted fully by Heher JA (see para 33 above).
What he finds particularly supportive of his view
is the statement in
the last sentence that:
‘
This
hearing [prescribed by s 59(4)] is intended to be premised on the
water charge being unquestionably due, and to elicit explanation
why
the restriction should not be imposed.’
[57] Heher JA’s understanding of this sentence is that
the water charge must be established either by admission or judicial
determination
before the 59(4) hearing can take place (para 39). If
not, he says, reference would not have been made to ‘unquestionably
due’
but rather to ‘probably due’. I do not agree. That is not
how I understand the statement by Farlam JA. What he says, in my
view,
is that since the 59(4) hearing is not intended as a hearing on
liability, it must take place on the
premise
that liability
has been established. That does not mean, however, that liability
must first be established as a fact. On the contrary,
if that is what
Farlam JA had in mind he would not have referred to a ‘premise’.
What that term conveys is that if liability
has not been established
as a fact, the hearing can be based on the
premise
or the
hypothesis
that these charges are in fact due. So understood,
the reference to ‘unquestionably due’, which Heher JA finds
particularly revealing
(in paras 39 and 41), adds very little to the
present debate. All it means is that, for purposes of the hearing,
the premise is not
that the charges are ‘probably due’ but that
they are due as a fact.
[58] Paragraph 8 must be understood in the context of
the judgment in
Impala 1
as a whole and particularly in the
light of paras 22 and 27 which read as follows:
‘. . . I
agree with the judge
a quo
that section 59(3) can only be
invoked when the water use charge the non-payment of which triggers
the power to restrict the supply
of water to a user is legally
payable. Indeed, I did not understand counsel for the appellant to
dispute this proposition.’
And:
‘In the circumstances it is clear that the onus to show that the
portion of the water use charges not paid was legally due rested
on
the appellant. I cannot hold that it was discharged. As counsel for
the respondents (correctly in my view) submitted, in view
of the fact
that the question as to whether the unpaid portion of water use
charge is legally due by the respondents is the subject
of other
proceedings in the court
a quo
and the appellant consented in
its summary judgment application to an order giving the respondents
concerned leave to defend, that
question must be regarded for present
purposes as an open one.’
[59] Thus it was common cause in
Impala 1
that
the charges claimed had not been established, either by admission or
judicial determination.
A fortiori,
there was no dispute that
the 59(4) hearing had not taken place after both the fact and the
amount of the debtors’ liability had
been established in either of
these two ways. If Heher JA’s understanding of para 8 is therefore
to be accepted, the judgment would
have ended immediately after the
last sentence in paragraph 8. The question as to who bore the onus to
prove liability or non-liability
and whether that onus had been
discharged, would not even have arisen. Otherwise stated, it is, in
my view, evident from the judgment
in
Impala 1
that had
the association been able to prove in the spoliation proceedings,
that the water charges claimed were legally due, the appeal
against
the spoliation order would have succeeded.
[60] I therefore agree that the appeal should succeed,
not for the reasons held by Heher JA (in paras 32-45), but because I
hold the
view that on the facts more fully set out in paras 46 and
47, the respondent had failed to establish the quantum of the water
charges
on which it relied as the foundation for its application. As
I have said, once the appellant opted for an enforcement order in
terms
of s 59(3)(b) instead of first seeking a judgment for payment
of the water charges allegedly due, it shouldered the onus of
establishing
both the fact and the amount of each respondent’s
liability and, because it had failed to clear that hurdle, the court
a quo
should have dismissed its
application with costs. I therefore concur in the order
proposed by Heher JA in para 48.
………………
.
F
D J BRAND
JUDGE
OF APPEAL
Howie
P }
Scott
JA } Concurred in the judgment of Brand JA
Van
Heerden JA }