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[2009] ZAGPJHC 6
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Darries and Others v City of Johannesburg and Others (08/22689) [2009] ZAGPJHC 6; 2009 (5) SA 284 (GSJ) ; [2009] 3 All SA 277 (GSJ) (3 April 2009)
Links to summary
IN THE SOUTH GAUTENG HIGH COURT
(JOHANNESBURG)
CASE NO: 08/22689
In the matter between:
DEIDRE
LEANDA DARRIES
First Applicant
OCCUPIERS
OF
ENNERDALE MANSIONS,
STAND
158 PERCY STREET, ENNERDALE
Second to Thirtieth Applicants
and
CITY
OF JOHANNESBURG
First
Respondent
CITY
POWER (PTY) LTD
Second Respondent
MEMBER
OF THE EXECUTIVE COUNCIL
FOR
LOCAL GOVERNMENT, GAUTENG
Third Respondent
THOMAS
NEL
Fourth Respondent
J U D G M E N T
JAJBHAY,
J
:
A. INTRODUCTION
[1]
This application concerns the disconnection of electricity supply
to the applicants’ places of residence since 8 July
2008. An
urgent application was initially brought in which the applicants
sought urgent relief under Part A of the notice of
motion. The
urgent application was dismissed with costs.
[2]
The second respondent is utilised by the first respondent to
provide electricity to residents such as the applicants.
Electricity is one of the municipal services that the first
respondent is required to provide by the Constitution
1
and relevant legislation.
[3]
The relief sought under Part B of the notice of motion is in
essence that the Court should declare that it is unlawful, in
terms
of the applicable legislation, for the second respondent to
disconnect electricity to a building without first giving the
occupants (i.e. the applicants in this case) an opportunity to make
representations and without taking the occupants’ personal
circumstances into account. This is in circumstances where the
second respondent does not have any contractual relationship
with
the occupants such as the applicants, for the supply of electricity.
Here, the second respondent has a contractual relationship
with the
owner of the building in question. In turn, the occupants have a
contractual relationship with the owner of the building,
who is
their landlord, for the provision of electricity.
[4
]
The relief sought in Part B of the notice of motion is
divided into various parts. The crisp issue, however, is this:
is
it lawful and constitutional for the respondents to disconnect the
electricity supply to a residence without complying with
the
recognised components of the right to procedural fairness as
envisaged by the PAJA
2
and the Constitution and without considering the circumstances of
the residents affected?
THE APPLICANTS’
CONTENTIONS
[5] The essence of
the applicants’ arguments in this regard may be summarised as
follows. PAJA and section 33 of the Constitution
require that the
respondents comply with procedural fairness in respect of the
residents of a building before disconnecting
electricity to that
building. Procedural fairness in this regard is an inherently
flexible standard. In the circumstances
of the present case, it
may well be that procedural fairness in respect of the residents
would have been discharged by the
respondents placing one prominent
notice in the foyer of the affected building, indicating that the
residents were entitled
to make written representations, and if the
residents elected to make such written representations, considering
those representations
and the circumstances set out therein, before
deciding whether to disconnect the electricity. Moreover, it was
argued that
section 26 of the Constitution
3
requires that the personal circumstances of persons must be taken
into account before any measure is taken which impacts negatively
on their right to housing. The applicants contended that
Electricity is an important component of that right.
[6] They further
contended that the relevant provisions of the Credit Control
By-Laws
4
and the Electricity By-Laws
5
must, if reasonably possible, be read subject to PAJA and sections
26 and 33 of the Constitution in this regard. If they cannot
be so
read, they are invalid and unconstitutional.
[7] Alternatively,
they argued that if on a proper interpretation the by-laws preclude
adherence to the requirements of procedural
fairness, they are then
in conflict with PAJA and sections 26 and 33 of the Constitution
and are invalid and unconstitutional
to that extent.
THE
SECOND RESPONDENT’S CONTENTIONS
[8] The second
respondent argued that its obligation to give notice and to permit
representations before disconnecting electricity
supply is to the
party with whom it has contracted to supply electricity and not the
occupants of such a person’s building,
i.e. his tenants.
Where the second respondent has not contracted with individual
occupants of a building, it does not obtain
or keep such occupants’
details, it simply does not know them.
[9]
The second respondent stated that it always, as in this case,
gives adequate notice to the contracted party and affords
an
opportunity to make arrangements to pay or to make representations
why the supply of electricity should not be disconnected.
In any
event where, as in this case, the occupants were aware from time to
time of the reasons for the disconnections of electricity
supply,
they were free to approach the second respondent and make any
representations, which would be taken into account.
[10]
The occupants were also at liberty, with the consent of their
landlord,
6
to make arrangements to open electricity accounts in their own
name, in which event they would acquire the right to be notified
and afforded an opportunity to make any representations prior to
the termination of electricity supply. The second respondent
contended that the conduct of the second respondent to give notice
only to the contracted party is not in conflict with its
governing
legislation or with the Constitution.
THE
MATERIAL FACTS
[11] The following
facts are either common cause or have not been seriously disputed
by any of the respondents. At the time
that this application was
brought, the applicants all lived in Ennerdale Mansions in
Johannesburg. Certain of the applicants
have since left the
building as a result of the intolerable conditions. The average
income of the households in Ennerdale Mansions
is R3000.00 to
R4000.00 and some of the households have no income at all. Four of
the flats are occupied by elderly people
and there are 38 children
residing in the block of flats. The tenants pay their electricity
bill as part of their rent accounts
(although electricity is
charged separately and is not part of the rent) and all have kept
up with their payments.
[12] The fourth
respondent in this matter, Mr Nel, is the owner of Ennerdale
Mansions and is the applicants’ landlord.
He has not filed
any papers in this matter. On 8 July 2008, at approximately 10h30,
the electricity supply to Ennerdale Mansions
was cut off by
employees of City Power. The applicants received no prior notice of
this disconnection. The son of the fourth
respondent circulated
notices informing the residents that the electricity would be
disconnected for a few days owing to “unforeseen
circumstances”, which was a dishonest statement in the
situation. When the electricity was not restored by Friday 11
July,
the residents elected a committee to deal with the problem.
[13] The steps
that the applicants, as lay persons, took in an attempt to restore
the electricity were to approach the Council,
to attempt to
understand why the disconnection took place. The Council referred
them to the Human Rights Commission (“the
HRC”), for
assistance. The HRC referred them to the Rental Housing Tribunal,
for relief.
[14] An official
employed at the Council informed the first applicant that City
Power had disconnected the electricity supply
because the fourth
respondent, the owner of the block, was in arrears in the amount of
R400 000.00. It took some time for
the applicants to obtain legal
assistance. Once they did so, they were advised by their legal
representatives that a disconnection
of an electricity supply,
being administrative action as contemplated in PAJA, must be
procedurally fair. A letter of demand
was therefore written to the
Council and City Power on Friday, 18 July 2008 demanding that the
electricity supply be reconnected
by 10h00 on Monday 21 July,
failing which this application would be launched. When the power
was not reconnected, this application
was instituted.
[15] The
electricity disconnection took place some 8 months ago. Since
then, the following has transpired. Various people
have left the
building because the living conditions have become unbearable. The
residents that have remained have been prejudiced.
They have had
to incur additional expenses to secure paraffin for cooking and to
buy fresh food on a daily basis because
of the lack of
refrigeration. The applicants are all poor and the additional
expenses that have arisen as a result of the
disconnection have
been prejudicial to them.
[16] The health of
certain children has been affected. In particular, a child who
requires regular use of a nebulizer to
treat her asthma has been
particularly prejudiced.
[17] Those of the
applicants who have chosen to remain living in Ennerdale Mansions
have spent 8 months without access to electricity
in circumstances
where prior to the disconnection, they had paid their accounts in
full. The disconnection was as a result
of the non-payment by their
landlord of his account. The applicants, as poor people, have been
particularly prejudiced by the
disconnection.
THE CONSTITUTIONAL
AND LEGISLATIVE FRAMEWORK
[18]
Municipalities form an important component of our constitutional
scheme of government. They constitute the first line for
the
delivery of services. One of the objects of local government is to
ensure the provision of services to communities in a sustainable
manner.
7
This is provided for in section 152 of the Constitution. Section
152(b) and (d) of the Constitution provides that the objects
of
local government are
inter
alia
:
to
ensure the provision of services to communities in a sustainable
manner; and
to
promote a safe and healthy environment.
[19]
A safe and healthy environment includes one that is free from
dangerous illegal connections for the supply of electricity,
which
often cause dangerous power surges. Electricity is one of the
services that local government is required by the Constitution
to
provide in a sustainable manner. The Constitutional Court has
emphasised that the collection of charges for electricity is
an
imperative for local government to ensure that it can provide
services in a sustainable manner. Services may be disconnected
to
ensure the collection of arrears.
[20]
In the
Mkontwana
case,
8
Yacoob J said
inter
alia
the
following:
“
[52] The
importance of the purpose of the provision has been discussed
earlier.
It
is emphasised that municipalities are obliged to provide water and
electricity and that it is therefore important for unpaid
municipal
debt to be reduced by all legitimate means
.
It bears repeating that the purpose [of s 118 of the Municipal
Systems Act, requiring settlement of municipal arrears before
property may be transferred] is laudable, has the potential to
encourage regular payments of consumption charges, contributes
to
the effective discharge by municipalities of their obligations and
encourages owners of property to fulfil their civic responsibility.
...
[62] Section
118(1) does not relieve the municipality of its duty. It must
continue to do everything reasonable to ensure appropriate
collection of its debt. That municipal debt as a whole has
accumulated to devastating proportions is of considerable concern.
So too is the evidence to the effect that, in relation to many of
the applicants before this Court, large amounts due in relation
to
consumption charges have remained outstanding for a considerable
period. There is disputed evidence before us concerning the
degree
of inefficiency of the municipalities that have been cited. No more
should be said about this aspect than that if the
inefficiency of
the municipality degenerates to the extent where it can be proved to
be negligence that occasioned damage to
the owner of the property
concerned, owners may have a delictual claim for damages against the
municipality.
It
must be emphasised that it is imperative for municipalities to do
everything reasonable to reduce amounts owing. Otherwise,
the
sustainability of the delivery of municipal services is likely to be
in real jeopardy
.”(My
Emphasis)
[21]
In a separate concurring judgment in
Mkontwana
9
O’Regan J said :
There can be no doubt
that municipalities bear an important constitutional obligation and
a statutory responsibility to take appropriate
steps to ensure the
efficient recovery of debt.”
[22]
In
Geyser
and Another v Mzunduzi Municipality and Others
10
Kondile J stated:
“
The
purpose to be achieved by the deprivation in s 118 of the Act is
debt recovery. The total national debt was R22 billion and
first
respondent’s debt was R392 million, a few months ago, in
respect of municipal service fees for electricity, water
etc.
Outstanding debts of this magnitude seriously threaten the continued
supply of basic municipal services and demonstrate
a need for
effective security being put in place in respect of such service.
This is a legitimate and important legislative
purpose, which is
essential for the economic viability and sustainability of
municipalities in the country and in the interest
of all the
inhabitants. There is therefore a rational connection between the
means employed and the legitimate legislative purpose
designed to be
achieved.”
[23]
The following provisions of the Municipal Systems Act
11
underscore what the Court said in the
Mkontwana
case.
Sections 4(2) (d) and 73(2) (c) provide that municipal services
must be financially sustainable. Section 96 deals with
the debt
collection responsibility of municipalities and provides as
follows:
“
96 Debt
collection responsibility of municipalities
A municipality-
(a)
must
collect all money that is due and payable to it,
subject to this Act and any other applicable legislation; and
(b) for this purpose,
must adopt, maintain and implement a credit control and debt
collection policy which is consistent with
its rates and tariff
policies and complies with the provisions of this Act.”
[24]
Section 97 prescribes what a credit control and debt collection
policy must provide for. It states as follows:
“
97 Contents
of policy
(1) A credit control
and debt collection policy must provide for-
(a) credit control
procedures and mechanisms;
(b) debt collection
procedures and mechanisms;
(c) provision for
indigent debtors that is consistent with its rates and tariff
policies and any national policy on indigents;
(d) realistic targets
consistent with-
(i) general recognised
accounting practices and collection ratios; and
(ii) the estimates of
income set in the budget less an acceptable provision for bad
debts;
(e) interest on
arrears, where appropriate;
(f) extensions of time
for payment of accounts;
(g)
termination
of services or the restriction of the provision of services when
payments are in arrears
;
(h)
matters
relating to unauthorised consumption of services, theft and
damages
;
and
(i) any other matters
that may be prescribed by regulation in terms of section 104.
(2) A
credit control and debt collection policy may differentiate between
different categories of ratepayers, users of services,
debtors,
taxes, services, service standards and other matters as long as the
differentiation does not amount to unfair discrimination.”
(my emphasis)
[25]
Section 98 requires a municipality to adopt by-laws to give effect
to the municipality’s credit control and debt
collection
policy, its implementation and enforcement.
[26]
The obligation imposed on a municipality, under s 96(a) of the
Municipal Systems Act, to collect all money that is due
and
payable to it, accords with the same requirement in terms of the
common law, which stresses the fiduciary obligations
of local
government.
12
The first respondent has adopted by-laws to give effect to its
credit control and debt collection policy, its implementation
and
enforcement (“
the
credit control by-laws
”).
The following provisions of the credit control by-laws are
relevant. Section 2 provides that the by-laws apply
in respect of
amounts of money due and payable to the Council for
inter
alia
electricity
consumption and the availability thereof. Section 3(1) provides
that no municipal service may be provided, unless
and until
application for the service has been made in writing on a form
substantially similar to the form prescribed; any
information and
documentation required by the Council have been furnished; a
service agreement, in a form substantially similar
to the form of
agreement prescribed, has been entered into between the customer
and the Council; and an amount equal to the
amount prescribed, in
cash or a bank cheque, has been deposited as security or other
acceptable security, as prescribed,
has been furnished.
13
[27]
Section 7(b)(ii) deals with the termination of service agreements.
It provides
inter
alia
that
the Council may, subject to compliance with the provisions of the
by-laws and any other applicable law, by notice in writing
of not
less than 14 working days, to a customer, terminate his or her
agreement for the provision of the municipal service
concerned, if
the customer has failed to pay any prescribed fee or arrears due
and payable in respect of the municipal service
concerned.
[28]
Section 7(2) provides that a customer to whom notice has been
given in terms of subsection (1)(b), may within the period
of 14
working days referred to in the subsection, make written
representations to the Council why the agreement concerned should
not be terminated and if such representations are unsuccessful,
either wholly or in part, the agreement concerned may only
be
terminated if the decision on such representations justifies it.
[29]
Section 13 deals with how a municipality may deal with arrear
accounts. In terms of subsection (1), if a customer fails
to pay
an amount due and payable for any municipal service rates on or
before the due date for payment specified in the account
concerned, final demand notice may be sent to the customer.
Subsection (2)(a) to (e) provides that a final demand notice
referred to in subsection (1) must contain
inter
alia
the
following: the amount in arrears and any interest payable, and a
statement that payment must be made within 14 days of
the date of
the final demand notice; that the customer may in terms of section
21, within the period concerned in paragraph
(a), conclude a
written agreement with the Council for payment of the arrears in
instalments; that if no such agreement is
entered into within the
period stipulated in paragraph (b), the municipal service
concerned may be terminated or restricted
and that legal action
may be instituted for the recovery of any amount in arrear without
further notice; that the customer’s
name may be made public,
and may be listed with a credit bureau in terms of section
20(1)(a); and that the account may be
handed over to a debt
collector or attorney or collection.
[30]
Section 15 (which the applicants challenge) provides as follows:
“
Power
to terminate or restrict provision of municipal services
15
(1) For the purposes of
subsection (2), a final demand notice means a noticed contemplated
in sections 11(5)(b), 11(7), 12(6)
and 13(1).
(2) Subject to the
provisions of subsection (4), the Council may terminate or restrict
the provision of water or electricity,
or both, whichever is
relevant, in terms of the termination and restriction procedures
prescribed or contained in any law,
to any premises if the customer
in respect of the municipal service concerned –
(a)
fails
to make full payment of arrears specified in a final demand notice
sent to the customer concerned
,
before or on the date for payment contemplated in sections
11(5)(b), 11(7), 12(6) or 13(1), whichever is applicable, and no
circumstances have arisen which require the Council to send a
further final demand notice to that customer in terms of any
of
those sections, and the customer –
(i) fails to enter into
an agreement in terms of section 21, in respect of the arrears
concerned before termination or restriction
of the service
concerned; or
(ii) fails to submit
written proof of registration as an indigent person in terms of
section 23, before such termination or
restriction; ...
(e) provides
electricity or water to a person who is not entitled thereto or
permits such provision to continue;
(f)
causes
a situation relating to electricity or water which, in the opinion
of the Council, is dangerous or constitutes a contravention
of any
applicable law, including the common law
;
(g)
in
any way reinstates the provision of a previously terminated or
restricted electricity or water service
;
...
(3) The Council may
send a termination notice or a restriction notice to a customer
informing him or her –
(a) that the provision
of the municipal service concerned will be, or has been terminated
or restricted on the date specified
in such notice; and
(b) of the steps which
can be taken to have the municipal service concerned reinstated.
(4) Any action taken in
terms of subsections (2) and (3) is subject to compliance with –
...
(d) the Promotion of
Administrative Justice Act, 2000 (Act No. 3 of 2000), in so far as
it is applicable.” (Emphasis
added)
[31]
It is clear from the provisions of section 15 that disconnection
of electricity supply is a legitimate method for the
collection of
arrears and may be followed by legal action to recover payment. It
does not have to be preceded by such legal
action. It is also clear
from the provisions of section 7(2) read with those of section 15
that notice is given to a customer
(i.e. the one contracted to the
second respondent for the provision of electricity) and such a
customer is afforded adequate
opportunity to make arrangements to
pay or to make representations why electricity supply should not be
terminated. The notice
to the customer complies with the
provisions of PAJA as far as they are applicable in respect of
procedural fairness.
[32]
Other relevant by-laws are the Electricity By-Laws adopted in terms
of section 101 of the Local Government Ordinance.
14
Relevant provisions of the Local Government Ordinance include the
following. Section 3(1) provides that no supply shall be given
to an
electrical installation unless and until the owner or occupier of
the premises or any duly authorised person acting on
their behalf
has concluded a consumer’s agreement in a form prescribed by
the council. Section 5 deals with direct billing.
This applies
where an owner wants his tenants to be billed directly. It sets out
requirements to be met. Of significance is
that the owner bears the
costs of modifications, etc., such as metering that are required to
introduce direct billing. It follows
that direct billing requires
the consent and cooperation of the owner.
[33]
Section 14 deals with disconnection of supply. It entitles the
municipality to disconnect the supply of electricity without
notice
where there are amounts in arrears or where there are illegal and
unsafe connections. This provision appears on the
face of it to
conflict with the provisions of sections 7(2) and 15 of the credit
control by-laws as the latter provisions require
prior notice.
[34]
To the extent that there is a conflict between the relevant
provisions of the credit control by-laws and the provisions
of
section 14 of the Electricity by-laws, the general rule is that “an
earlier enactment is to be regarded as impliedly
repealed by a
later one if there is an irreconcilable conflict between the
provisions of the two enactments”.
15
This is sometimes expressed by the maxim
lex
posterior priori derogat
.
The underlying principle is that a statutory provision which is
inconsistent and irreconcilable with an earlier statute
in
pari materia
,
revokes it to the extent of their inconsistency and
irreconcilability. The test for an implied repeal is as follows:
“
The
books tell us that repeal by implication of an earlier statute by a
later one is neither presumed nor favoured. It is only
when language
used in the subsequent measure is so manifestly inconsistent with
that employed in the former legislation that there
is a repugnance
and contradiction, so that the one conflicts with the other, that we
are justified in coming to the conclusion
that the earlier Act has
been repealed by the later one.”
16
[35]
It follows that an attempt must be made to read two enactments
together before concluding that the later enactment has
impliedly
repealed the former one:
“
Now
it seems to me that the Act and the Proclamation are in pari materia
and in terms of R v Palmer (1748) 1 Leach 355, should therefore
be
read ‘as forming one system and as interpreting and enforcing
each other’. Unless and until they are clearly repugnant
they
will therefore be read together.”
17
[36]
There is an exception to the general rule. The exception applies
when the earlier enactment is a special one and the
later enactment
is a general one. In this case, the prior legislation is preserved
in accordance with the maxim
generalia
specialibus non derogant
.
The Appellate Division has explained the exception as follows:
“
The
true import of the exception therefore appears to be that, in the
absence of an express repeal, there is a presumption that
a later
general enactment was not intended to effect a repeal of a
conflicting earlier and special enactment.
This
presumption falls away, however, if there are clear indications that
the legislature nonetheless intended to repeal the earlier
enactment.
This is the case when it is evidence [sic] that the later enactment
was meant to cover, without exception, the whole
field or subject to
which it relates
.”
18
(Emphasis added)
[37]
The credit control by-laws were intended by the legislature to
cover the field as far as concerns the collection of arrear
payments for municipal services, including the supply of
electricity by the second respondent. That this is the case is
clear from sections 96 and 97 of the Municipal Systems Act.
Therefore, the credit control by-laws should be interpreted to have
impliedly repealed section 14 of the Electricity By-Laws to the
extent that the latter provision permits the disconnection
of
electricity without prior notification to a customer. This
interpretation of the provisions of the credit control by-laws
and
the Electricity By-Laws is also required by section 39(2) of the
Constitution in order to protect the rights of customers
of the
second respondent to procedural fairness in the event of intended
terminations of electricity supply on account of outstanding
payments.
[38]
To the extent that the applicants seek declarations of invalidity
of section 14 of the Electricity By-Laws (in prayer
7 of their
notice of motion) for permitting the termination of electricity
supply where there are arrears, without any notice,
I believe that
such declaratory relief ought not to be granted. The provisions of
section 14 have been impliedly repealed
by the provisions of the
credit control by-laws as far as the issue of notification is
concerned.
THE
CONCEPTUAL DIFFICULTIES IN THE APPLICANTS’ ARGUMENT
[39]
Much of the argument contained in the applicant’s case is
based on the premise that the applicants have a socio-economic
right
to electricity, and that this is part of the right to adequate
housing. Reliance is placed by the applicants on paragraph
37 of
the judgment in
Grootboom
.
19
All of these authorities make it clear that the right under s 26
of the Constitution is a right of
access
to adequate housing, which will depend on the circumstances of each
case. In a particular case, it is not a foregone conclusion
that
anything at all is required to be provided to a claimant. In some
cases it may be required that a claimant is provided
with a piece of
land, in others with the means to erect a structure, while in others
it may require access to services, electricity,
facilities and the
like. There is no absolute right of access to electricity let
alone a right to an uninterrupted supply of
electricity where the
municipal provider is not being paid and where the consumers are not
indigent persons.
[40]
This is to be contrasted with the right of access to water –
which itself is guaranteed as a fundamental right in
s 27(1)(b) of
the Constitution. There is no similar provision in relation to
electricity. In terms of the Water Services
Act,
20
disconnection is not permitted if this would endanger the health of
the residents, and if they are unable to pay for the service.
In
the present matter, there is no statutory protection against
disconnection as in the Water Services Act, nor are the present
applicants persons who are indigent and who qualify for assistance
in terms of the relevant by-laws.
[41]
By disconnecting electricity, City Power is not denying the
applicants’ right of access to adequate housing or, indeed,
to
municipal services. City Power says that it will restore the
supply of electricity, provided that suitable arrangements
are made
for payment of the arrears. To the extent that the applicants have
allegedly paid for electricity to their landlord
(fourth respondent)
and he has not paid this over to City Power, the applicants have
rights of recourse against the fourth respondent.
Nothing that has
been done by City Power has deprived the applicants of their rights
in terms of their contracts with the fourth
respondent. They are
able to enforce those rights against him (and not against City
Power).
[42]
City Power has taken action against the fourth respondent, not
against the occupiers. This is because the fourth respondent
is in
breach of his obligations under his contract with City Power and
under the relevant by-laws. The fourth respondent (Nel)
– and
not the occupiers – has the right, in terms of the contract
and the by-laws, to electricity supply being restored,
provided that
he pays. If he does not, City Power is entitled to take action
against him (as it has done), provided that it
does so lawfully and
fairly. The occupiers’ rights are against Nel, and not City
Power. There is no nexus between them
and City Power. If the
applicants have their electricity supply terminated because of Nel’s
default, they can enforce their
rights against Nel, or arrange for
direct billing (with Nel’s consent) or move elsewhere to
premises where electricity
is supplied. They are therefore not
deprived of
access
to electricity supply services.
[43]
In the present case, I do not believe that the action taken by City
Power affects the rights of the applicants of access
to adequate
housing or to municipal services. Even if it were to be found that
the applicants’ rights of access to housing
and to services
have been prejudicially affected, the cause of this is the failure
by Nel to comply with his contractual obligations
to the applicants
– and not because of the action taken by City Power. In any
event, even if it were to be correct that
City Power’s actions
do limit the rights of access to adequate housing and services of
the applicants, such limitation
is reasonable and justifiable.
FAIRNESS
IN TERMS OF PAJA
[
44]
I now turn to the argument that the applicants are customers and
therefore entitled to procedural fairness in terms of
PAJA as
required by section 15 of the by-laws. This argument relies
entirely on the definition of customer in the Credit
Control
By-Laws. It ignores the substantive provisions of the by-laws. A
person becomes a customer under chapter 2, section
3 (i.e. by
concluding an agreement). See also sections 4, 6, 7, 8(2)(b),
11(1), 13(1) and 15(2).
[45]
Notices contemplated in section 7 (terminating the agreement) and
section 15 (terminating supply) are to be issued to
the customer
(with whom an agreement has been concluded). The obligation to
comply with PAJA to the extent that it applies
is in respect of
the customer (with whom a contract has been concluded). On the
above interpretation of “customer”
the obligation to
comply with PAJA (to the extent applicable) is not towards the
applicants but a customer. If the applicants
are correct that they
are entitled to fair administrative action in terms of PAJA (which
gives effect to section 33 of the
Constitution), then the Credit
Control By-Laws limit that right. Their right to fair
administrative action would arise on
the basis that the decision
to terminate supply constitutes administrative action under PAJA.
The limitation must be justified
under section 36 of the
Constitution and not under section 3(4) of PAJA.
[46]
There is a proper basis to justify limitation under section 36 on
the facts of this case. The applicants can pay. They
are not
indigent. If they were indigent they would apply for assistance
in terms of chapter 4 (indigent persons) of the
Credit Control
by-laws for assistance and would be provided with electricity on
that basis. They are not like Grootboom.
Another important factor
under justification is that in terms of section 21 of the by-laws
they could obtain authorisation
from Nel to enter into an
agreement with City Power to pay for the arrears. The applicants
have not attempted to exhaust
these alternatives.
DOES
THE CREDIT CONTROL BY-LAWS REQUIRE NOTICE TO THE APPLICANTS PRIOR TO
TERMINATION
?
[47]
On a proper interpretation of the provisions of sections 7(2), 13
and 15 of the Credit Control By-Laws, it is clear that
notice prior
to termination must be given to a customer. A customer is a person
who has entered into a written agreement with
the second respondent
for the provision of electricity as is required by section 3(1) of
the credit control by-laws. It is
such a customer who should be
afforded an opportunity to make arrangements to pay or to make
representations as to why (despite
failure to pay) electricity
supply should nevertheless not be terminated.
[48]
There is no requirement in the Credit Control By-Laws for the
second respondent to give notice to tenants of a building
owned by a
customer and to afford such tenants an opportunity to make
representations. Evidently, and unlike in the case of
a customer,
the second respondent would not be able to require the tenants, with
whom it is not contracted to supply electricity,
to make
arrangements to pay any outstanding arrears. Generally, it will
not even know who those tenants are not only because
there are no
contractual (or other) arrangements between them but also because
tenants come and go. The requirement that notification
be given to a
customer does not infringe any of the rights of the applicants as
they are not customers of the second respondent.
JUSTIFICATION
IN TERMS OF SECTION 36 OF THE CONSTITUTION
[49]
The only question that remains is whether the failure to provide
for prior notification to tenants such as the applicants,
makes the
provisions of the Credit Control By-Laws unconstitutional. This
raises the issue of justification under section 36
of the
Constitution. The Credit Control By-Laws are a law of general
application as contemplated in section 36(1) of the Constitution.
21
To the extent that it may be correct that the by-laws limit any
right of the applicants I believe that the limitation is justified
under section 36
22
of the Constitution.
Legitimate
governmental purpose
[50]
The purpose served by the provisions of the Municipal Systems Act
and the Credit Control By-Laws which permit the termination
of
electricity supply is to ensure that municipal services are provided
in a sustainable manner. If customers of the second
respondent are
permitted to run up substantial arrears without the termination of
services, the first respondent would fail in
its constitutional duty
to provide sustainable municipal services as emphasised in the
Mkontwana
case.
[51]
The obligation of the second respondent to collect payments for
services rendered is in relation to its customers, i.e.
those that
have contracted with it for the provision of electricity. The
obligation does not arise in relation to tenants of
buildings with
whom the second respondent is not contracted to provide electricity.
The instrument of termination can never
be aimed at them in order
for them to rectify any arrears accumulated by their landlord.
Where they make payment to the landlord
for electricity in terms of
a contract entered into between them, the second respondent is not
involved. This is an internal
matter. When the landlord, as is the
position of the fourth respondent breaches the contractual
obligations between him and
the tenants by failing to maintain
payments with the second respondent, and thereby to ensure
uninterrupted electricity supply,
the remedy that the tenants have
(in this case the applicants), is to proceed against their landlord
and enforce their contractual
rights.
[52]
In the present matter, the fourth respondent and his Company
accumulated substantial arrears and showed no serious intention
to
correct the position. Tenants at the premises have, over a period
of time, been made aware that the terminations of electricity
supply that happened were in part due to the substantial arrears
that the fourth respondent and his Company had accumulated.
[53]
The terminations were also due to illegal and unsafe reconnections
of electricity supply. As at 28 November 2008, when
the second
respondent filed an answering affidavit to the applicants’
supplementary founding affidavit, it was owed substantial
amounts
of monies by customers – more than R171 million, of which
more than R60 million had then been outstanding for
a period of not
less than 121 days.
[54]
It is clear from the amounts outstanding from customers that if
the second respondent did not terminate the supply of
electricity
where customers do not pay it could run the risk of breaching its
constitutional obligations to supply electricity
to the residents
of the first respondent. This would work hardship on the
residents. As the Court emphasised in the
Mkontwana
case,
the second respondent cannot permit the accumulation of arrears
without enforcing collection.
It is not an answer for the applicants to say that the second
respondent should first institute legal action to recover arrears
before terminating supply. The by-laws themselves recognise the
need to terminate supply, which may be followed by the institution
of legal proceedings. The institution of legal proceedings without
the termination of supply would permit the accumulation
of further
arrears. Legal proceedings cost money, which ought to be utilised
for the provision of services. Litigation will
also cause
unnecessary delays.
The
nature and extent of the limitation
[55]
The applicants (like any other tenants) would be notified of
intended terminations of electricity supply if they were to
apply
for and conclude direct billing arrangements with the second
respondent. In that event they would be contracted to the
second
respondent directly for the provision of electricity. Electricity
would be provided to them on a pre-payment basis. In
order to put in
place direct billing arrangements, the applicants require the
consent of the fourth respondent to make application
to the second
respondent. This is dealt with in section 5 of the Electricity
By-Laws. The requirement for consent by the landlord
(in this case
the fourth respondent) is imperative. The second respondent cannot
lawfully enter the premises to effect the modifications
required,
such as the installation of meters, for purposes of direct billing
without such consent. It is also the landlord who
is ultimately
responsible for charges run up for services provided to his
premises. He must consent to this risk and be prepared
to monitor
it.
[56]
The significance of direct billing is that the applicants are
provided with an avenue to help themselves. If they contend
that
the fourth respondent refuses to give them the required consent
(whilst simultaneously pocketing their payments for electricity
consumed), their remedies include approaching this Court to
compel the fourth respondent to either comply with his obligations
to pay the second respondent for electricity supplied, or afford
them consent to approach the second respondent for direct
billing –
subject to suitable arrangements being made regarding the payment
of the arrears outstanding on the Company’s
account.
[57]
In contrast to the position of the applicants, it would be
impractical and onerous for the second respondent to have
to give
notice to each and every tenant of a building to which it supplies
electricity, and to afford such tenants an opportunity
to be heard,
prior to terminating supply of electricity on account of
non-payment and the accumulation of arrears and unsafe
illegal
connections (or reconnections) of electricity supply.
[58]
It is important to highlight a concession made by the applicants in
paragraph 47.3 of their founding affidavit with regard
to alleged
illegal connections. They say in this paragraph that:
“
It
is conceded that there may be circumstances, such as when it is
alleged that the electricity supply to a particular building
constitutes a hazard, when it would be inappropriate to afford
residents of a building the right to make representations prior
to
a disconnection. However, it is submitted that when the basis for
the disconnection is the alleged failure of the owner
of a building
to keep up with the required payments, there is no basis to deprive
affected parties the right to make representations.”
The
concession is significant as the reason for the disconnection on 8
July 2008, included illegal connections. That is the reason
why the
feeder cable was completely cut to avoid further illegal
reconnections. When this unlawful conduct (illegal connections)
is
accompanied by non-payment over a long period of time and the
accumulation of significant arrears, there is no basis for the
supply of electricity to be continued. This is particularly the
case when the applicants themselves have known over a long period
of
time of the illegal connections and then the non-payment by the
Company and the fourth respondent. To permit the continued
supply
of electricity in these circumstances would significantly, undermine
the first respondent’s constitutional obligations
to deliver
electricity services (through the second respondent) to residents in
its jurisdiction in a sustainable manner.
[59]
The second respondent has set out sufficient facts to show the
impractical nature of the obligation that the applicants
contend
for, as well as the justification for any limitation of their
rights.
23
It explains that it supplies electricity to about 13 192 large power
users. Large power users are customers who consume 100
kva (kilo
volt amperes) of electricity and above. These include buildings
occupied by tenants such as the applicants, shopping
centres,
filling stations, workshops, etc. Out of the number of 13 192, a
significant number of the large power users are buildings
occupied
by tenants. These include large and small buildings. Ennerdale
Mansions fall under the category of large power users.
[60]
The second respondent does not have the details of the tenants who
occupy these buildings. These tenants are also not
constant –
they move in and out of buildings. The reason the second
respondent does not have the details of the tenants
is because the
tenants are contracted to their landlords (and not the second
respondent) for accommodation and the provision
of services such as
electricity. The second respondent does not interfere with or have
any involvement in the contractual
relationship between the tenants
and their landlords.
[61]
In the circumstances, it would be impractical for the second
respondent to fulfil the obligations sought to be imposed
on it by
the applicants, i.e. to give notices to each and every tenant of a
building in respect of which the landlord is in
arrears with
electricity, and to afford such tenants individually an opportunity
to be heard before electricity is disconnected.
It is the
obligation of the tenants to ensure that payments made for
electricity consumed are paid over to the second respondent
to
ensure the continued supply of electricity. Where this is not
done, the tenants have recourse against the landlord.
[62]
Therefore any limitation of the applicants’ rights as they
contend is minimal given the options open to them under
the
applicable law. For the same reason this constitutes a less
restrictive means to achieve the purpose of providing services
in a
sustainable manner.
The
First Respondent’s contention
[63]
Here it is contended that the applicants enjoy a “non
constitutional” remedy. The remedy is to be founded in
the
common law of contract and therefore, it was argued that the point
raised by the applicants was ‘premature’.
24
This argument loses sight of the fact that this is not a dispute
between the applicants and the fourth respondent. The applicants
specifically approached this court to test whether they are entitled
to the benefit of PAJA, within the facts of the present
matter. This
is not a simple contractual matter. PAJA gives effect to the
constitutional rights. Here, it is not possible to
simply sidestep
the Legislative enactments alluded to by resorting to the common
law.
Costs
This
is not a case where an order for costs should be made. The
applicants have raised important constitutional issues relating
to
the proper approach to constitutional challenges to their right to
electricity in the circumstances of the present case. The
determination of these issues is beneficial to all persons who find
themselves the position of the applicants. In these circumstances
justice and fairness require the applicants should not be burdened
with an order for costs. To order costs in the circumstances
of this
case may have an adverse effect on litigants who may intend raising
constitutional issues.
CONCLUSION
For
the reasons set out above, I determine that the application is
dismissed. Each party is ordered to pay their own costs.
__________________________
M
JAJBHAY
JUDGE OF THE HIGH COURT
Date
of hearing: 26
th
March 2009
Date
of Judgment: 3rd April 2009
On
behalf of the Applicants: Adv S Budlender, Adv A Friedman instructed
by Wits
Law Clinic
On
behalf of the First Respondent: Adv Z Khan instructed by State
Attorney
On
behalf of the Second Respondent: Adv PM Kennedy SC, Adv NH
Maenetje,
Adv TB Hutamo
instructed by Mokhatla
Attorneys
1
Constitution of the Republic of South Africa,
1996.
2
Promotion of Administrative Justice Act 3 of
2000
.
3
Everyone has the right to have access to adequate
housing.
No one may be evicted
from their home, or have their home demolished without an order of
court made after
considering all the relevant circumstances.
4
City of Johannesburg Metropolitan Municipality: Credit Control and
Debt Collection By-Laws, published in notice 1857 of 2005
in terms
of
section 13(a)
of the
Local Government: Municipal Systems Act 32
of 2000
.
5
Greater Johannesburg Metropolitan Council Standardisation of
Electricity By-Laws, published in Notice 1610 of 1999 in terms of
section 101 of the Local Government Ordinance, 1939
6
The consent is required because it would be
illegal for the second respondent to install meters on the premises
without the landlord’s
permission.
7
Merafong Demarcation Forum and others v President of the Republic
of South Africa and others
[2008] ZACC 10
;
2008 (5) SA 171
(CC) para 267.
8
Mkontwana v Nelson Mandela Metropolitan Municipality
2005 (1)
SA 530
(CC).
9
supra
para 124
10
2003 (5) SA 18
(N) at 37 H – I
11
Local Government: Municipal Systems Act, 32 of
2000
.
12
Kempton Park /Thembisa Metropolitan
Substructure v Kelder
2000 (2) SA 980
(SCA) paras 14 and 15;
Eastern
Metropolitan Substructure v Peter Klein Investments (Pty) Ltd
2001 (4) SA 661
(W) paras 25 and 26;
Mercian
Investments (Pty) Ltd v Johannesburg City Council
1990 (1) SA 560
(W) at 566 F – 568 G;
Namex
(Edms) BPK v Kommissaris van Binnelandse Inkomste
[1993] ZASCA 181
;
1994 (2) SA 265
(A) at 284 C – 286 H;
Peri-Urban
Areas Health Board v Administrator, Transvaal
1954 (1) SA 169
(T) at 171 H – 172 C
13
Section (1)(a) to (d) of Chapter 2.
14
Local Government Ordinance, 17 of 1939.
15
Khumalo
v Director-General of Co-operation and Development
[1990] ZASCA 118
;
1991 (1) SA 158
(A) at 164C.
16
New Modderfontein Gold Mining Co v TPA
1919 AD 367
at 400, quoted with approval in
Government
of the RSA v Government of
Kwazulu
1983 (1) SA 164
(A).
17
R v Maseti
1958 (4)
SA 52
(E) at 53H.
18
Khumalo v Director-General of Co-operation
and Development
[1990] ZASCA 118
;
1991 (1) SA 158
(A) at 165E.
19
Government of Republic of South Africa v
Grootboom and Others 2001(1) sa 46 (CC) ; I was also referred to
“Report of the
Special Rapporteur on adequate housing as a
component of the right to an adequate standard of living”; and
The right to
adequate housing ( Art 11.1) 13/12/91 CESCR General
comment 4.
20
Act 108 of 1997.
21
See the discussion in Currie and De Waal
The Bill of Rights
Handbook
(2005) at 169.
22
Section 36
provides:
“
(1) The rights in the
Bill of Rights may be limited only in terms of law of general
application to the extent that
the limitation is reasonable and justifiable in an open
and democratic society based on
human dignity, equality and freedom, taking into
account all relevant factors,
including—
(a) the nature of the right;
(b) the importance of the
purpose of the limitation;
(c) the nature and extent of the
limitation;
(d) the relation between the
limitation and its purpose; and
(e) less restrictive means to
achieve the purpose.
(2) Except as provided in
subsection (1) or in any other provision of the Constitution, no
law may limit
any right entrenched in the Bill of Rights
.”
23
In
Minister of Home Affairs v NICRO
[2004] ZACC 10
;
2005 (3) SA 280
(CC) at
para 37 the Court said:
“Ultimately what is involved in a limitation analysis is the
balancing of means and ends. This entails an analysis of all
relevant considerations
'to determine the proportionality between the extent of the
limitation of the right considering the nature and importance of
the
infringed right, on the one hand, and the purpose, importance and
effect of the infringing provision, taking into account
the
availability of less restrictive means available to achieve that
purpose'.
In this process, different and sometimes conflicting interests and
values may have to be taken into account”.
24
S v Bequinot
[1996] ZACC 21
;
1997 (2) SA 887
CC