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[2013] ZAGPPHC 193
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Jacobs & Smilowski CC v City of Tshwane Metropolitan Municipality (47730/2011) [2013] ZAGPPHC 193 (10 July 2013)
REPORTABLE
IN
THE HIGH COURT OF SOUTH AFRICA (NORTH GAUTENG, PRETORIA)
CASE
NO: 47730/2011
DATE:10/07/2013
In
the matter between:
JACOBS
& SMILOWSKI
CC
..........................................................................
APPLICANT
and
THE
CITY OF TSHWANE METROPOLITAN MUNICIPALITY
…................
RESPONDENT
JUDGMENT
KUBUSHI,
J
[1]
This is an opposed application, the purpose of which is to order the
respondent to restore the water and electricity supply,
to the
applicant’s property and to restrain the respondent from
suspending and/or disconnecting any services in respect of
the said
property. Ancillary to that order the applicant also requested an
order declaring the respondent in contempt of a court
order of the
magistrate court Pretoria which was granted in favour of the
applicant against the respondent in that court.
[2]
The application was initially brought to court on an urgent basis on
19 August 2011. A rule nisi was granted on that day with
the return
date of 27 September 2011. The rule nisi was extended to 18 October
2011, further extended to 28 November 2011 and again
extended to 30
January 2012. It is not clear from the record what happened in court
on 30 January 2012. Nothing is recorded on
the file nor is there any
documentation in the file indicating what happened on that date. In
fact there is nothing on record for
the whole of 2012. The matter was
in court again on 13 March 2013 and it was postponed sine die. When
the matter appeared before
me on 22 April 2013 the rule nisi had
expired but the applicant still persisted with the relief sought.
[3]
The respondent’s counsel in her heads of argument raised a
point in limine that the applicant’s replying affidavit
was not
properly attested and that it should not be considered as part of the
papers before court. When the matter was argued the
parties’
counsel informed me that the point has since fallen away and will not
be pursued.
[4]
The applicant is the registered owner of a property known as 262
Charles Street Brooklyn, Pretoria (the property). The said
property
is registered as a zone 1 residential area. The respondent is a
municipality duly incorporated in terms of
section 12
of the
Local
Government: Municipal Structures Act 117 of 1998
. The respondent as a
municipality is empowered by the Local Government: Municipal Property
Rates Act 6 of 2004 (the Property Rates
Act) to levy rates in respect
of the property.
[5]
According to the applicant the respondent is levying incorrect rates
for the property. His case is that he informed the respondent
in 2008
that he is using the property for residential and business purposes.
He also lodged an application for the rezoning of
the property from
residential to business usage and the application is still pending.
The parties as a result, agreed that a business
and commercial rate
be levied against the property. He has since then been paying those
rates and is to date hereof still paying
them. However, during 2008,
the respondent unilaterally without consulting him began imposing
other rates on the property which
are three times higher than the
normal rates levied in respect of business and commercial property.
He lodged a complaint with
the respondent and instead of resolving
the complaint the respondent opted to disrupt the water and
electricity supply to the property.
He only became aware in 2010 that
he was being charged rates on a special scale for ‘non-permitted
use’ of the property.
He contends that the respondent is not
entitled to charge these rates because the Property Rates Act does
not authorise it to do
so.
[6]
The applicant’s counsel contended in argument that the
respondent is not entitled to cut the water and electricity supply
to
the property because the applicant is not in arrears with his
payments to the respondent. He has been paying the full amount
of the
rates for business and commercial usage as agreed with the
respondent. The respondent is actually charging the applicant
a
penalty on top of the agreed levy.
[7]
The applicant’s counsel contended further that the applicant’s
monthly payments for the water and electricity account
in respect of
the property are also paid up to date. The respondent could not rely
on the provisions of section 102 of the Systems
Act which allows a
municipality to consolidate the accounts of a rate payer for purposes
of debt collection. The respondent did
not consolidate the accounts
and could not have done so because of the dispute which existed
between the parties in respect of
the rates’ account.
[8]
On the contrary, the respondent’s contention is that it is
correctly levying the property under the ‘non-permitted
use’
category. According to the respondent different scales for rates are
levied for different usages of property. The applicant
is using the
property for different purposes for which it has been zoned for. In
terms of the municipal by-laws, a property used
for a different
purpose than what it is zoned for falls under the ‘non-permitted
use’ category. Rates for ‘non-permitted
use’ of
property are higher than those for the correct usage of the property.
[9]
The respondent’s counsel contended in argument that the
applicant’s premise is flawed in that pending the finalisation
of the application for rezoning it cannot be said that the property
falls under the business and commercial use but it falls under
the
‘non-permitted use’ category. He contended further that
the respondent was not bound by the provisions of section
102 to
consolidate the applicant’s accounts in respect of the property
for purposes of debt collection. The respondent was
however, entitled
in terms of section 5.2 of the City of Tshwane Metropolitan
Municipality Credit Control By-Laws (the Credit By-Laws)
to
discontinue the services to the property because the applicant was in
arrears with the payment of the rates to the property.
The applicant
is paying a lesser amount than that required for a monthly levy for
the ‘non-permitted use’ category.
[10]
Despite numerous attempts the parties were not able to resolve this
issue. The respondent intermittently cut the water and
electricity
supply to the property. It even instituted a claim against the
applicant in the magistrate’s court for the recovery
of the
‘arrear’ amounts. For reasons which I shall refer to
later in this judgment when I deal with the order for contempt
of
court, those proceedings were dismissed. Even after the dismissal of
the proceedings, the respondent proceeded to cut the supply
of
services to the property.
[11]
The applicant as a result launched this application and on 19 August
2011 Van der Bijl J granted an interim order which read
thus:
“
BY
AGREEMENT and having read the papers filed of record, I make the
following order:
1.
The Respondent is called upon to show cause before this Honourable
Court on or before Tuesday 27 September 2011 why the following
interim order should not be made final:
1.1
Ordering the respondent to immediately restore the water and
electricity supply to the property known as 262 Charles Street,
Brooklyn, Pretoria.
1.2
Interdicting and restraining the respondent, in the absence of a
court order, from further interrupting the water and electricity
supply to the Applicant’s property known as 262 Charles Street,
Brooklyn, Pretoria.
1.3
Declaring that the Respondent is in contempt of the order granted by
the Magistrates Court under case number 22210/2011 in failing
to
furnish the Applicant with corrected statements and continuously
interrupting the water and electricity supply to the Applicant’s
property known as 262 Charles Street, Brooklyn, Pretoria.
1.4
Ordering the Respondent to submit an amended account of the water and
electricity consumption at the premises referred to in
paragraph 1.1
above, within 30 days from date of this order.
1.5
That the respondent pays the costs of the application on an attorney
and own client scale.
1.6
Further and/or alternative relief.
2.
That the Rule Nisi shall operate as an interim interdict with
immediate effect in terms of paragraph 1.1 and 1.2 above until
the
return date.
3.
Ordering the Municipal Manager: Oupa Nkowane to disclose to the
Applicant’s attorneys of record the name of the person
actually
charged with compliance of the order made in the Magistrate’s
Court under case number: 22210/2011
4.
The costs occasioned on Friday 19 August 2011 are reserved to be
decided by the Court adjudicating upon the rule nisi."
RESTORATION
OF WATER AND ELECTRICITY SUPPLY IS THE APPLICANT IN ARREARS WITH
RATES & TAXES
[12]
I am not in agreement with the applicant that the respondent is not
entitled to charge the rate for ‘non-permitted use’
in
respect of the property. His counsel’s contention that the
respondent is charging a special levy or penalty is also not
valid.
The ‘non-permitted use’ is one of the categories of
property on which the respondent is entitled to levy rates.
This
category is included in the respondent’s rates policy and
implemented through the by-laws.
[13]
The respondent, as a municipality is empowered by the Property Rates
Act to impose rates on property.
Section
2 of the Property Rates Act states that -
“
Power
to levy rates
(1)
A metropolitan or local municipality may levy a rate on property in
its area.
(2)
...
(3)
A municipality must exercise its power to levy a rate on property
subject to -
(a)
section 229 and other applicable provisions of the Constitution;
(b)
the provisions of this Act; and
(c)
the rates policy it must adopt in terms of section 3.”
[14] Section 3 of the Property Rates
Act provides that -
“
Adoption and contents of rates
policy
(1)
The council of a municipality must adopt a policy consistent with
this Act on the levying of rates on rateable property in the
municipality.
(2) ...
(3)
A rates policy must
(a)
(a)
determine the criteria to be applied by the municipality if it -
(i)
levies different rates for different categories of properties;
(ii)
[15] Section 6 of the Property Rates
Act reads as follows:
“
By-laws to give effect to rates
policy
(1)
A municipality must adopt by-laws to give effect to the
implementation of its rates policy.
(2)
By-laws in terms of subsection (1) may differentiate between -
(a)
different categories of properties; and
(b)
different categories of owners of properties liable for the payment
of rates:"
[16]
Section 8 of the Property Rates Act provides that -
“
(1)
Subject to section 19, a municipality may in terms of the criteria
set out in its rates and policy levy different rates for
different
categories of rateable property, which may include categories
determined according to the -
(a)
use of the property;
(b)
permitted use of the property; or
(c)
geographical area in which the property is situated.”
[17]
Subsection 8 (2) thereof sets out a list of categories of rateable
property that a municipality may determine in terms of
subsection (1)
to include amongst others, residential property, business and
commercial property etc.
[18]
The Council of a municipality must in terms of section 3 (1) of the
Property Rates Act adopt a policy consistent with that
Act for the
levying of rates on rateable property in the municipality. Hence, the
respondent adopted a policy, the Property Rates
Policy, for the
determination of criteria for levying rates. Paragraph 3 thereof
provides for the determination of different categories
and rates of
properties. It also set out a list of categories of rateable property
determined by the municipality for purposes
of levying differential
rates. Included in the list is the category of ‘non-permitted
use’. Implementation of this
policy takes place in terms of
section 2 of Chapter 2 of the Property Rates By-Laws. Section 2 (2)
(j) thereof provides for 'non-permitted
use’ as a category of
rateable property for purposes of levying differential rates.
[19]
It can be argued that the categories enumerated in section 8 (2) of
the Property Rates Act do not include ‘non-permitted
use’
as a category of rateable property. However, the section does not put
a limit to the categories that a municipality
may determine. The
provisions of the section are very explicit and are not peremptory.
That subsection sets out categories of rateable
property which a
municipality may determine and it may include some of the categories
listed therein. It does not, in my view,
state categorically that the
categories specified therein must be determined.
[20]
In relation to property, ‘non-permitted use’ is defined
in both the policy and the by-laws as any use of a property
that is
inconsistent with or in contravention with the permitted use of that
property in which event and without condoning the
‘non-permitted
use’ thereof, the property shall be valued as if it were used
for such non-permitted purposes only.
[21]
The applicant’s property thus falls squarely within this
category. It is common cause that the property is currently
zoned for
residential usage. Even though the applicant alleges that he has
applied for the rezoning of the property, it is not
in dispute that
the property has not been rezoned. By operating a business on the
property the applicant is doing so in contravention
with the
permitted use of the property. The respondent is thus entitled to
levy the rates as it does. There is no reason and the
applicant
himself provided none, for the respondent to be charging rates for
business and commercial usage. There is no category
provided for in
either the policy or the by-laws for the rates which the applicant
wants to enforce. The property is currently
zoned as residential and
residential use rates must be applicable but since the applicant is
using the property for the purpose
for which it is not zoned,
‘non-permitted use’ rates must be levied.
[22]
It is common cause that the rates levied for ‘non-permitted
use’ are higher
than
those for residential use. According to the Property Rates Schedule
(the Schedule) for the financial year 1 July 2012 to 30
June 2013,
the tariff for residential properties is calculated at 1, 354 whereas
that for ‘non-permitted use’ is calculated
at 6, 014. The
applicant’s contention is that he is paying a rate for business
and commercial usage. This rate is also lower
than that for
‘non-permitted use’. According to the Schedule the tariff
for business and commercial use is calculated
at 2, 708 which is far
less than the tariff applicable to ‘non-permitted use’.
On this summation and on his own evidence
the applicant would be in
arrears with the payment of his rates account.
IS
THE RESPONDENT ENTITLED TO DISCONNECT THE APPLICANT’S WATER AND
ELECTRICITY SUPPLY?
[23]
The Local Government: Systems Act, 32 of 2000 (the Systems Act) is a
legislative measure that seeks to support and strengthen
the capacity
of municipalities to manage their own affairs. Section 96 thereof
provides for every municipality to have a credit
control and debt
collection policy. The municipalities are therefore mandated by
section 96 (1) (a) to collect all money that is
due and payable. In
terms of section 97 (1) a credit control and debt collection policy
must provide for amongst others: (a) credit
control procedures and
mechanisms; (b) debt collection procedures and mechanisms and (g)
provision for termination of municipal
services or restriction of the
provision of municipal services when payments of ratepayers are in
arrears. Section 98 provides
that a municipal council must adopt
by-laws to give effect to the municipality’s credit control and
debt collection policy.
See RADEMAN v MOQHAKA MUNICIPALITY AND OTHERS
2012 (2) SA 387
(SCA) para [13].
[24]
It is clear from the above mentioned that a municipality has the
power to terminate or restrict the provision of municipal
services
when a resident is in alTearsl^ffTfh¥^ayrfierrts for services. In
this instance, the applicant is not in arrears with
the payment of
the water and electricity account to the property. He is therefore of
the view that the respondent should not have
terminated the supply of
water and electricity to the property. He also contends that the
respondent cannot rely on the provisions
of section 102 of the
Systems Act which allows a municipality to consolidate the accounts
of a ratepayer for purposes of debt collection
because the respondent
did not consolidate the accounts to the property.
[25]
To my mind, the argument by the respondent’s counsel, that the
respondent was not compelled by section 102 of the Systems
Act to
consolidate the respondent’s accounts before it could terminate
the supply of water and electricity to the property,
is correct. The
provisions of this section are not peremptory. As such the respondent
did not have to rely on this section but
he relied on section 5.2 of
the City of Tshwane Metropolitan Municipality: Credit Control By-Laws
(Credit Control By-Laws).
[26]
The Systems Act empowers a municipality to adopt its own credit
control and debt collection policy. The respondent has as a
result
adopted a credit control and debt collection policy which is
implemented through the Credit Control By- Laws. Section 5.2
(a) (i)
of the by-laws empowers the municipality to restrict and disconnect
the supply of municipal services. The section provides
that -
“
The
Council may, restrict or discontinue the supply of water and
electricity, or discontinue any other service to any premises
whenever a user of any service fails to make full payment on the due
date or fails to make acceptable arrangements for the payment
of any
amount for services, rates or taxes.”
[26]
On the basis of the by-laws the respondent is therefore entitled to
terminate the services of water and electricity to the
property if
the applicant is in arrears with his payments in respect of any of
his services. In this instance, as I have already
made a finding the
applicant is in arrears with the payment of the rates account of the
property.
[27]
The issue of whether a municipality is entitled without a court order
to terminate municipal services to residents who refuse
or fail to
pay their rates has been laid to rest by the Supreme Court of Appeal.
In that judgment the court made a finding that
there is no statutory
instrument which requires a municipality to obtain a court order
authorising the discontinuation of a municipal
service. See RADEMAN v
MOQHAKA MUNICIPALITY AND OTHERS
2012 (2) SA 387
(SCA) para [21].
[28]
Consequently, clause 1.1 and 1.2 of the interim order should be
discharged.
AN
ORDER FOR CONTEMPT OF COURT
[29]
When the dispute about the amount owed by the applicant to the
respondent could not be resolved, the applicant’s account
was
handed over to the respondent’s attorneys for collection.
Summons was issued in the magistrate’s court, Pretoria
for the
amount of R76, 760.00. On 19 January 2011 pursuant to a notice of
application in terms of rule 60 (3) of the Uniform Rules
of Court,
served and filed by the applicant, the respondent was ordered to
provide the applicant with certain requested documents.
The
respondent failed to provide the requested documentation and on 12
May 2011 the action was dismissed. The order dismissing
the action
read as follows:
"AFTER
HAVING READ THE DOCUMENTS FILED OF RECORD AND AFTER HEARING COUNSEL
FOR APPLICANT, THE FOLLOWING ORDER IS MADE:
1.
The action instituted by the Respondent/Plaintiff under case number
22210/2010 is dismissed;
2.
The Respondent is ordered to pay the costs of suit on the scale as
between attorney and client, which costs shall include the
costs of
Counsel as per the parameters of the Pretoria Bar, subject to the
direction of the taxing master;
3.
The Respondent is ordered to supplement its records to reflect the
content of this order with immediate effect.”
[30]
It is the applicant’s case that the respondent has failed to
comply with paragraph 3 of the order. According to him,
the parties
understood the content of paragraph 3 of the order to mean that the
amounts that were claimed by the respondent under
case number
2221/2010 had to be deducted from the monthly statements and the
respondent’s record had to reflect the contents
of the
aforementioned order with immediate effect. Paragraph 1.3 of the
interim order seeks to declare the respondent in contempt
of the
order granted under case number 2221/2010 in failing to furnish the
applicant with corrected statements and continuously
interrupting the
water and electricity supply to the applicant’s property.
[31]
The respondent in resisting this allegation raises a number of
defences but in particular contends that it has complied with
the
order.
[32]
I beg to differ with the applicant in this regard. Besides the fact
that the applicant does not in his papers set out a case
for
non-compliance with the order under case number 2221/2010, I am of
the view that the respondent has complied with the order.
The order
does not require the respondent to furnish the applicant with
corrected statements neither does it order the respondent
to not
continuously interrupt the water and electricity supply to the
property. The court order is explicit in my view. Paragraph
1.3 of
the order requires the respondent to 'supplement its records to
reflect the content of this order with immediate effect’.
The
respondent in its opposing affidavit states that it
complied
with the court order by making a note on their file and records that
the action was dismissed. There are only two issues
stated in the
court order, namely, the dismissal of the action and the payment of
costs. These are the issues which the court ordered
to be reflected
with immediate effect in the records of the respondent. This to me is
sufficient compliance. How the parties interpreted
the order is of no
consequence as what is to be given effect to is the court order
itself and not what the parties understood the
order to mean.
[33]
In the premises, paragraphs 1.3 and 1.4 of the interim order fall to
be discharged as well.
COSTS
[34]
The court granted an order for costs on an attorney and client cost
in the interim order and reserved costs occasioned on Friday
19
August 2011 to be decided by this court. Before me, the applicant
still persisted for a punitive cost order on the basis that
the
respondent was in default. The respondent also argued for a punitive
cost order against the applicant on the basis that the
applicant did
not act responsibly.
The
respondent is the successful party in this instance and is entitled
to its costs of suit which should include the costs of Friday
19
August 2011. I am of the view that there are no special circumstances
entitling it to a punitive costs order. Normal party and
party costs
should be awarded.
[35]
I therefore make the following order:
(a)
The rule nisi is discharged with costs.
(b)
the respondent is awarded the costs of suit including the costs
occasioned on 19 August 2011.
E.
M. KUBUSHI
JUDGE
OF THE HIGH COURT
Appearances:
HEARD
ON THE : 22 APRIL 2013
DATE
OF JUDGMENT :10 JULY2013
APPLICANTS’
COUNSEL : ADV A. P. L. ELS
APPLICANTS’
ATTORNEY : HATZENBERG INCORPORATED
RESPONDENT’S
COUNSEL : ADV N. ERASMUS
RESPONDENT’S
ATTORNEY : MATABANE INCORPORATED