IN THE HIGH COURT OF SOUTH AFRICA
KWAZULU -NATAL LOCAL DIVISION, DURBAN
CASE NO: D3860/2024
In the matter between:
KWADUKUZA MUNICIPALITY PLAINTIFF/RESPONDENT
and
KWADUKUZA MALL (PTY) LTD DEFENDANT/EXCIPIENT
REGISTRATION NO: 2016/267719/07
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ORDER
___________________________________________________________________
In the premises t he following order is made:
The exception is dismissed with costs, including costs of two counsel , on scale C.
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JUDGMENT
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Mathenjwa J
[1] The excipient, the defendant in the action has excepted t o the plaintiff’s
particulars of claim on the grounds that they do not disclose a cause of action in that
they fail to allege compliance with the essential provisions of the Local
Government: Municipal Systems Act (‘the Act’). 1
[2] The plaintiff alleges in its particulars of claim that the defendant owes it two
amounts arising from two accounts held by the defendant in respect of electricity
1 Local Government: Municipal Systems Act 32 of 2000.
2
supplied and consumed by the defendant to its property. The defendant raises an
exception on the grounds that the plaintiff has purpo rted to advance its claim for
payment of the sum of the two accounts pursuant to “consolidation” of the two
accounts absent the allegations in terms of s 102 of the Act that it was entitled to
consolidate the two accounts and to claim payment given that there is no dispute
between the plaintiff and the defendant concerning any specific amount thus claimed
by the plaintiff from the defendant.
[3] Section 102 of Act provides that:
‘(1) A municipality may -
(a) consolidate any separate accounts of persons liable for payments to the municipality;
(b) credit a payment by such a person against any account of that person; and
(c) implement any of the debt collection and credit control measures provided for in this
Chapter in relation to any arrears on any of the accounts of such a person.
(2) Subsection (1) does not apply where there is a dispute between the municipality and a
person referred to in that subsection concerning any specific amount claimed by the
municipality from that person .’
[4] The defendant contends that the plaintiff’s claim is advanced on the basis
that two specific amounts are owing in terms of statement of account s which
originally reflected on different or separate accounts. In order for these accounts to
be made the subject of the debt collection measure , which the institution of the
present action amounts to, the plaintiff had to consolidate the separate accounts of
the defendant in the manner provided for in s 102(1) of the Act. That section
provides that where there does exist a dispute between the municipality and the
person concerning the amount which the municipality purported to claim, the
municipality does not have the power to consolidate that person’s account. The
absence of any such dispute is thus the pre -requisite to the exercise by the
municipality of the powers conferred upon it in terms of s 102. The absence of any
dispute, the argument went, is an essential element of the cause of action which the
municipality has purported to advance. The absence of any allegation to the effect
that the amount which has been claimed is not subject to a dispute between the
parties is accordingly fatal to the cause of action which the plaintiff has attempted to
advance.
3
[5] The plaintiff contends that the defendant’s exception is bad in law in that the
particulars of claim reflect that the defendant’s account in respect of electricity
supplied to the defendant’s property is in arrears, the defendant is the owner of the
property and is liable for the sum claime d. The plaintiff disputes that s 102(2) of the
Act precludes litigation, and submits that it instead restrict s the municipality’s
implementation of those measures mentioned in Chapter 9. Plaintiff’s counsel
referred this court to s 3(1) of the Institution of Legal Proceedings Against Certain
Organs of State Act2 which prohibits the institution of legal proceedings against
organs of state unless the creditor has given the organ of state notice in writing of
his or her intention to institute the legal proceedings. The application of s 3 (1) shows
that while it governs the institution of legal proceedings, it is not a fact of jurisdiction
that ought to be established for lawsuits against organs of state .
[6] The issues for determination in this application are:
(a) whether the provisions of s 102(2) of the Act are jurisdictional fact s
necessary for the exercise of the municipality’s power to consolidate separate
accounts in terms of s 102(1) of the Act ; and
(b) whether the absence of an allegation that there is no dispute between the
municipality and the defendant renders the pleadings excipiable for lack of a
cause of action.
[7] The starting point in determining the meaning and scope of the provisions of
s102 is the interpretation of the Act. The current approach in our law regarding the
interpretation of statutes was expressed in Natal Joint Municipal Pension Fund v
Endumeni Municipality .3 At paragraph 18 Wallis JA stated that:
‘… The present state of the law can be expressed as follows: Interpretation is the process of
attributing meaning to the words used in a document , be it legislation, some other statutory
instrument, or contract, having regard to the context provided by reading the particular
provision or provisions in the light of the document as a whole and the circumstances
attend ant upon its coming into existence. Whatever the nature of the document,
2 Institution of Legal Proceedings Against Certain Organs of State Act 40 of 2002.
3 Natal Joint Municipal Pension Fund v Endumen i Municipality 2012 (4) SA 593 (SCA) .
4
consideration must be given to the language used in the light of the ordinary rules of
grammar and syntax; the context in which the provision appears; the apparent purpose to
which it is directed and the material known to those responsible for its production … The
“inevitable point of departure is the language of the provision itself ”, read in context and
having regard to the purpose of the provision and the background to the preparation and
production of the document .’ (Footnotes omitted.)
In Capitec Bank Holdings Ltd and Another v Coral Lagoon Investments 194 (P ty) Ltd
and Others4 Unterhalter AJA endorsed the guidance offered by Endumeni on the
approach to the interpretation of the words, but added that:5
‘… the triad of text, context and purpose should not be used in a mechanical fashion. It is
the relationship between the words used, the concepts expressed by those words and the
place of the contested provision within the scheme of the agreement (or instrument) as a
whole that constitute the enterprise by recourse to which a coherent and salient
interpretation is determined… ’
[8] My analysis of s 102 of the Act must commence by placing it within the
framework of the scheme of credit control and debt collection proc edures outlined in
Chapter 9 of the Act. Chapter 9 is designed to provide for responsibilities and
obligations of municipalities in maintaining credit control and debt collection in its
areas. A municipality’s power s to provide services and impose surcharges on fees
for services provided is sourced direct ly from the Constitution.6 These responsibilities
and obligations are succinctly stated in Body Corporate Croftdene Mall v Ethekwini
Municipality .7 At paragraph 15 Maya JA stated as follows:
‘Chapter 9 of the Systems Act provides for municipal credit control and debt collection.
Section 96 deals with the “debt collection responsibility of municipalities ” and enjoins a
municipality to (a) collect all money that is due and payable to it, subject to the Act and any
other applicable legislation; and (b) for that purpose, to 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 the Act. Section 97 requires the credit control and debt
4 Capitec Bank Holdings Ltd and another v Coral Lagoon Investments 194 (Pty) Ltd and Others 2022
(1) SA 100 ( SCA) .
5 Íbid para 25 .
6 In terms of s 152 (1)(b) of the Constitution, the provision of services to communities is one of the
objects of local government; and s 229(1) (a) empowers municipalities to impose ‘rates on property
and surcharges on fees for services provided by or on behalf of the municipality ’.
7 Body Corporate Croftdene Mall v Ethekwini Municipality 2012 (4) SA 169 SCA.
5
collection policy to provide, inter alia, for credit control and debt collection procedures and
mechanisms, interest on arrears where appropriate, and the termination of services or the
restriction of the provision of services where payments are in arrears. …’
[9] The cause of action in respect of the debt collection mechanism provided for
under Chapter 9 arises from an agreement between a municipality and a credit
debtor to render services ; the actual rendering of the services ; and payment for
rendering the services. In the absence of an allegation that services were rendered
to the credit debtor no obligation arises to pay for the services and no cause of
action would be made out in the particulars of claim for services rendered.8 In the
present matter the plaintiff instituted an action in terms of s 102 of the Act which
bestows municipalities with a discretion to consolidate accounts for different services
it provides . The purpose of this section is to enhance the realisation of municipalities
responsibilities to receive payments for services rendered and provide democratic
and accountable government for local communities. In expressing the objective of s
102, Bosielo JA in Rademan v Moqhaka Munici pality and Others9 stated that :
‘This section makes it clear that in pursuit of the obligation to charge and receive payments
for municipal services, a municipality has the option to consolidate the accounts for various
services it provides. This is intended to circumvent the very problem confronting us in this
appeal, that is, allowing residen ts to choose which account they wish to pay and which they
will not pay…’
[10] Defendant’s counsel referred this court to case law which he submits support s
his contention that an “allegation of absence of dispute” in the particulars of claim is
an essential element of the cause of action if litigation is instituted in terms of s 102
of the Act . In SZC Investments ( Pty) Ltd v Swindon Property Services (Pty) Ltd10 an
exception was taken to the plaintiff’s claim for estates agent commission. Section 26
of the Estate Agency Affairs Act11 prohibits any person from performing any act as
an estate agent unless a valid fund certificate had been issued to that person and s
34A prohibits any person from receiving remun eration or other payment in respect of
8 City of Johannesburg Metropolitan Municipality v Mir -Air Prop ( Pty) Limited [2024] ZAGPJHC 977
paras 29 and 140 .
9 Rademan v Moqhaka Municipality and Others 2012 (2) SA 287 (SCA) para 19 .
10 SZC Investments (Pty) Ltd v Swindon Property Services (Pty) Ltd [2022] ZAKZPHC 63.
11 Estate Agency Affairs Act 112 of 1976.
6
the performance of any act as an estate agent unless at the time of the performance
of the act a valid fidelity fund certificate has been issued to that person. At paragraph
32 Koen J found that a failure on the part of the plaintiff to have alleged and attached
a fidelity fund certificate covering the relevant period when he rendered the services
was fatal to the plaintiff’s claim as pleaded and the exception succeeded.
[11 ] In Van Heerden v Nolte12 the defendant excepted to the plaintiff’s particulars
of claim on the ground that they lack ed averments necessary to sustain an action in
that they fail ed to allege compliance with the essential provisions of the National
Credit Act (‘the NCA ’).13 Section 129(1) (b) of the NCA prohibits commencement of
litigation by a credit provider before he or she has complied with the provisions of s
129. The court found that the particulars of claim were excipiable on the grounds
that they d id not allege compliance with s 129 . In paragraph 19 of the judgment the
court held that :
‘If the agreements are credit agreements, then the averments in the particulars of claim
must include allegations that the plaintiff has complied with the provisions of ss 129 and 130
of the NCA, which permit a credit provider to enforce an agreement only once alternative
procedures have been pursued.’
[12] It is appropriate to point out that both Van Heerden and SZC Investments are
distinguishable from the present matter . In th ose judgments the plaintiff s were
required to perform positive act s and take steps before they were entitled to litigate
for debt s due to them . In SZC Investments the plaintiff was obliged to register as an
estate agent and obtain a fidelity fund certificate before he could perform functions of
an estate agent . In Van Heerden the plaintiff was obliged to issue notices to the
credit debtor before it could institute legal proceedings . Also, the provisions of s 3(1)
of the Institution of Legal Proceedings Against Certain Organs of State Act upon
which the plaintiff’s counsel relies is not relevant to the current issue in that s 3(1 )(a)
requires a creditor to take positive steps and issue notice before instituti on of legal
proceedings , and s 3(4)(b) empowers a court to condone non - compliance with s
3(1)(a). Section 102 (1) of the Act does not require a municipality to take any positive
steps before consolidating the accounts in terms of s 102(2). The municipality relies
12 Van Heerden v Nolte 2014 (4) SA 584 (GP).
13 National Credit Act 34 of 2005.
7
on its credit records, which would have shown that the debtor was in arears with the
account , when deciding to start legal action to collect debt related to a particular
account or several accounts. The facts and reasons alleged by the credit debtor
regarding the existence of a dispute on an account will only become known to the
municipality at the time it is raised by the credit debtor .
[13] When considering t he context of s 102 of the Act within the credit control and
debt collection scheme under Chapter 9 it appears that the consolidation of different
account s is not an element of the cause of action nor is the absence of dispute an
essential element of the cause of action . A cause of action has been defined by the
courts as :14
‘…every fact which it would be necessary for the plaintiff to prove , if traversed, in order to
support his right to the judgment of the Court. It does not comprise every piece of evidence
which is necessary to prove each fact, but every fact which is necessary to be proved .’
The excipient bears the onus to satisfy the court that the defendant’s or plaintiff’s
pleading does not disclose a cause of action.15 In order to succeed with an exception
that the pleading does not disclose a cause of action the excipient must show that ex
facie the allegations made by a plaintiff upon which its cause of action is based is
bad in law.16 It is trite law that in deciding an exception a court ‘may uphold the
exception to the pleading only if the excipient has satisfied the court that the cause of
action or conclusion of law in the pleading cannot be supported on every
interpretation that can be put on the facts ’.17
[14] It is instructive to note that an interpretation of s102 of the Act has received
judicial attention in Body Corporate Croftdene Mall , where it was held that ‘the
dispute must relate to a specific amount claimed by the municipality ’.18 The ratepayer
is required to furnish facts that would enable the municipality to identify the disputed
item and the basis for the dispute . If the dispute is properly identified the debt
collection measure is not implement ed in respect of that item. The dispute does not
14 See McKenzie v Farmers' Co -operative Meat Industries Ltd 1922 AD 16 at 23 ; Evins v Insurance
Co Ltd 1980 (2) SA 814 (A) at 838E -F.
15 Frank v Premier Hangers CC 2008 (3 ) SA 594 (WC) para 11.
16 Vermeulen v Goose Valley Investments (Pty) Ltd 2001 (3) 986 (SCA ) para 7.
17 Pretorius and Another v Transport Pension Fund and Others 2019 (2) SA 37 (CC) para 15 .
18 Body Corporate Croftdene Mall v Ethekwini Municipality para 22 .
8
bar a collection of the whole consolidated account, but bars only the collection of the
disputed item. In the event a genuine dispute is raised the municipality must
investigate the dispute, verify the accounts and provide redress for inaccurate
accounts , if any.19 Thus, an allegation on absence of dispute is not a jurisdictional
fact for the institution of legal proceedings in terms of s 102. For these reasons the
exception must be dismissed and the costs should follow the results.
Order
[15 ] In the premises the following order is made :
The exception is dismissed with costs , including costs of two counsel , on scale C .
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Mathenjwa J
Date of hearing: 26 November 2024
Date of judgment: 9 January 2025
Appearances:
Plaintiff/Respondent ’s counsel: Mr I Pillay
19 Section 95 of the Act provides that in ‘the levying of rates and other taxes by a municipality and the
charging of fees for municipal services, a municipality must , within its financial and administrative
capacity -
…
(e) ensure that persons liable for payments, receive regular and accurate accounts that indicate
the basis for calculating the amount s due;
(f) provide accessible mechanisms for those persons to query or verify accounts and metered
consumption, and appeal procedures which allow such persons to receive prompt redress for
inaccurate accounts ;’
9
Instructed by: Andrew Incorporated
Defendant/ excipient’s counsel : Mr A Stokes assisted by Mr M M Swain
Instructed by: V Chetty Incorporated Attorneys