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[2000] ZASCA 22
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Kempton Park/Tembisa Metropolitan Substructure v Kelder (51/98) [2000] ZASCA 22; 2000 (2) SA 980 (SCA); [2000] 2 All SA 451 (A); (31 March 2000)
THE SUPREME COURT OF APPEAL
OF
SOUTH AFRICA
CASE NUMBER: 51/98
In the matter between:
KEMPTON PARK/TEMBISA
METROPOLITAN SUBSTRUCTURE
APPELLANT
and
SIMON JAN JACOB KELDER
RESPONDENT
CORAM
:
HEFER,
OLIVIER and PLEWMAN JJA; MELUNSKY and MTHIYANE AJJA
DATE OF HEARING
:
17
MARCH 2000
DATE OF JUDGMENT
:
31 MARCH
2000
JUDGMENT
Municipal council - Interpretation of Council
Resolutions - Mandamus to Compel Compliance.
PLEWMAN JA
[1]
The
issues to be decided in this appeal fall within a very narrow
compass. This is the consequence of the manner in which the
case
was presented and the basis upon which the appeal was argued. The
underlying problem as the decision in
Pretoria
City Council v Walker
[1998] ZACC 1
;
1998 (2) SA 363
(CC) illustrates, has much wider implications. This
will become apparent from the facts set out below. It will also be
clear
therefrom that the real differences between the parties could
well have been addressed on different grounds. But the parties
restricted the enquiry to the issue whether appellant, a local
government, can be compelled by a mandamus to carry into effect
certain resolutions passed by its council in circumstances to be
more fully outlined. For this reason it is unnecessary to consider
matters such as those raised in the
Walker
case. Both lower courts consequently decided the matter on this
narrow ground. The matter is one which, in the interests of
justice, this Court should decide. The jurisdictional requirements
of the constitutional order existing at the time when the
proceedings were initiated are thus established.
[2]
Appellant
is the Kempton Park/Tembisa Metropolitan Substructure. It was
brought into existence by proclamations issued in terms
of the
Local
Government Transition Act 209 of 1993
and Chapter 10 of the Interim
Constitution Act 200 of 1993. These proclamations brought about the
amalgamation of the earlier
municipal structures of Kempton Park,
the Township of Tembisa and certain other minor entities. I will
refer to appellant as
the council. Respondent was a resident and
ratepayer of Kempton Park and is now a resident and ratepayer of the
enlarged entity.
[3]
The proclamations and the statutes referred to brought about
profound changes in this country at local government level. The
significance of these changes was extensively reviewed in the case
of
Fedsure Life
Assurance and Others v Greater Johannesburg Transitional
Metropolitan Council and Others
[1998] ZACC 17
;
1999 (1) SA 374
(CC).
[4]
This
case concerns the provision of electricity in the enlarged area by
the council as the supply authority. Tembisa has a population
of
between 600 000 and 1 million - no precise figure can be
established. It contains 30 000 formal housing units and an
undetermined
(and seemingly indeterminable) number of informal
housing units. By 1981, 24 500 of the formal units had been
provided with
electricity and equipped with meters to measure each
unit’s consumption of electricity. In the years which
followed approximately
9 000 of these meters were rendered
inoperative because they were vandalized or otherwise interfered
with. The remaining
5 500 formal units had not at any time been
supplied with electricity and none of the informal units enjoyed a
supply of electricity.
There was a large influx of people into Tembisa,
particularly in the years after 1986 when influx control ceased to
be enforced.
A period of intense political activity followed. A
rent boycott was organized and there were disturbances which led in
the
end to a loss of administrative control in the area. In this
situation many inhabitants simply installed or made illegal
connections
to the electricity supply network to draw power
therefrom. There is an estimate in the papers that approximately 10
000 such
connections were made. These, as is obvious, were not
metered and the electricity consumed was not paid for. This
practice
also caused overloading of the supply system and frequent
blackouts in various areas - a marked source of friction between the
inhabitants and those in authority. Attempts to remove the illegal
connections proved not only futile because they were merely
re-established but also dangerous in so far as the persons effecting
the removal were concerned.
The position in November 1995 was that, not taking the
illegal connections into account, there were approximately 24 500
housing
units in the area wired for and consuming electricity of
which 9 000 were not metered. While the supply to those which were
wired was unreliable, the majority of the inhabitants did not enjoy
a supply of electricity at all. There was also by this time
an
entrenched “culture of non-payment” for services and the
overall recovery of electricity charges was very low.
The entire
system of administration was in fact in serious disarray.
[5]
The
council’s approach to the difficulties it faced in Tembisa was
aimed at a re-assertion of control which would enable
it to recover
electricity charges. But it recognized that enforcement of a
uniform structure of electricity tariffs in its entire
supply area
and universally enforceable against all was an end which was not
immediately achievable. It accordingly resolved
on 22 August 1995 to
adopt a “Business Plan to Normalise the Electricity Supply to
Tembisa” prepared earlier by its
Director of Electricity in
conjunction with its Electrical Engineering Services Committee. In
so far as the recovery of electricity
charges is concerned, the Plan
proposed remedial steps to be implemented in phases all directed at
the ultimate objective of
normality.
[6]
The
object of respondent’s application was to force the council to
cut off the supply of electricity to persons who failed
to pay the
charges therefor and to maintain such discontinuation until all
outstanding debts and fines had in such cases been
paid by the
defaulters. This relief is covered by the first and second prayer
in the Notice of Motion. It is alleged in the
founding affidavits
that the council had by resolution adopted a credit control
procedure which directed that it follow this
course in cases of
non-payment. The third prayer is in a sense supplementary in that
it sought to compel the council also to
initiate legal proceedings
to recover any unpaid electricity charges. The fourth prayer is
directed at compelling the council
to disconnect and remove on a
continuing basis all unlawful electrical connections and to
prosecute all persons who effected
illegal connections to the
system.
[7]
Respondent’s
contention in support of the first three prayers is that the council
is obliged to take the specified steps
because it had by such
resolutions decided to enforce its credit control policy in that
manner. The council, for its part, contests
the matter mainly on
the ground that the relevant resolutions (or rather, as will be
seen, the only relevant resolution) did
not have the content
suggested by respondent. It also argues that the remedy invoked is
a discretionary one and that its application
will be inappropriate
in the circumstances.
[8]
In
the Witwatersrand Local Division Mynhardt J refused the application
(particularly in so far as the first three prayers are
concerned) on
the ground that the council was not obliged to enforce its credit
control procedures against defaulters because
the relevant
procedures were a matter within the council’s discretion. The
reasoning was that s 87(1) of the Local Government
Ordinance No 17
of 1939 (Transvaal) (which is still in force), being permissive and
not peremptory, preserved the council’s
discretion as to
whether it would cut off the supply to defaulters and as to the
manner or method by which unpaid charges were
to be recovered.
[9]
The
court
a quo
overruled Mynhardt J and made the following order:
“The respondent is ordered -
1. to terminate the supply of electricity to any
consumer where such usage can be metered whose account is overdue
and with whom
is has not arrived at an arrangement contemplated by
clause 1.1, 1.2 or 1.3 of its credit control policy.
2. to maintain the discontinuation of any service which
has been terminated pursuant to the order in paragraph 1 until such
time
as the debt has been discharged or the consumer and the
respondent have arrived at an arrangement contemplated by the credit
control policy;
3. to take all reasonable steps to recover payment of
outstanding electricity accounts including legal steps where it is
satisfied
that no reasonable prospect of recovering such debt exists
unless legal steps are taken;
4.1 to take all reasonable and practical steps to
terminate any unlawful connection to the electrical reticulation
system under
its control;
4.2 to lay charges against any person who appears to
have committed a criminal offence in relation to the use of
electricity or
any connection with the electrical reticulation
system under its control.”
It is against this order that the council appeals.
[
10
] In
my view the court
a
quo
erred in
granting the first three prayers. Its decision in that regard can
be set aside on any one of several grounds but I
prefer to show no
more than that it misconstrued the only relevant resolution.
[11]
As
mentioned earlier respondent’s case is essentially that the
council is obliged to put its resolutions into effect. In
his heads
of argument resolutions, said to have been adopted on 27 June 1995,
31 July 1995 and 29 August 1995, were mentioned;
but in the course
of the debate it became clear that the only resolution upon which
reliance was placed is the one passed on
29 August 1995.
[12]
It
is essentially paragraphs (a) and (b) of the resolution of 29 August
1995 which call for consideration. But it is advisable
that I also
quote paragraphs (c) and (d) thereof. The remainder of the rather
lengthy resolution does not assist in the interpretation
of
paragraphs (a) and (b) and is therefore omitted. The relevant parts
read:
“
(a) That the Substructure
RECONFIRMS
its principle of uniform tariffs for the total community of the area
of its jurisdiction.
(b) That the Substructure
RECONFIRMS
the principle that where consumption can be metered, the metered
rates as well as the normal credit control measures
BE
IMPLEMENTED
.
(c) That all efforts
BE
MADE
to have
meters installed as soon as possible.
(d) That all existing meters
BE
CHECKED
for
correctness and fixed where necessary.
(e) ......”
[13]
It
is common cause that cutting off the supply of electricity to
defaulters was included in the “normal credit control
measures”. The question is whether the credit control measures
were to be enforced immediately against all defaulters.
I do not
think the resolution can be read in this manner. The words
“reconfirm” of themselves take one back to a
previous
enunciation of the principle. This was the adoption on 22 August of
the Business Plan. The use of the words “its
principle”
and “the principle” contrasted with the positive terms
of paragraph (c) and (d) clearly show that
the council merely
reaffirmed its commitment to the Business Plan which, as stated
earlier, provided for a phased implementation
of the credit control
policy in order to avoid the very steps listed in the Notice of
Motion. Indeed the word “principle”
would be meaningless
on the respondent’s construction of the clause. For these
reasons alone respondent’s assertion
that a firm decision had
been taken to enforce the council’s credit control policy
immediately must be rejected.
[14]
The
court
a quo
’s
conclusion as to the effect of the council’s resolutions seems
to have been influenced by the nature of the duties
it held to have
been imposed on the counsel.
The court held that
the council stands in a fiduciary position in relation to its
ratepayers because “[t]he recognition
and maintenance of a
fiduciary relationship is at the heart of representative local
government in an open and democratic society.”
As a
consequence, it found, “other duties culled from those
recognized as attaching to a trustee” are imposed on
the
council. Certain duties derived from the private law of trusts were
then identified and relied upon in order to justify a
mandamus.
[15]
I
am unable to support this approach. That there is in a broad sense a
fiduciary relationship between the council and its ratepayers
is
plainly correct. As Feetham AJA explained in
Sinovich
v Hercules Municipal Council
1946 AD 783
at 820
“
[i]t may, I think, be safely affirmed that the
main object of establishing municipal councils and similar bodies
for purposes
of municipal government, as understood and carried on
in the Union of South Africa ......, is to enable representatives of
the
inhabitants of given areas to administer, subject to some degree
of control by a central authority, the local affairs of those
areas
in the general interests of their respective communities; and, in
order to make such administration adequate and effective,
it has now
become a common practice to give to each municipal council wide
powers to decide according to its discretion, subject
to certain
checks and safeguards, what measures will or will not serve ‘a
useful civic or municipal purpose’ in its
own area.”
That local government should be representative of the
inhabitants of its area of jurisdiction and that its actions should
be open
and transparent can certainly not be doubted. No one would,
in this day and age, question these propositions. But I do not
subscribe
to the attribution to the council of private law duties
derived from the law of trusts. The council, as has been stated,
owes
its existence to the provisions of the
Local Government
Transition Act 209 of 1993
and the proclamations made in terms
thereof. Its powers and duties are conferred by the Constitution, by
other statutes and the
relevant principles of public and
administrative law. To impose upon it additional duties in
accordance with the principles of
private law seems to me to negate
its function as an organ of state and a branch of government.
[16]
I
mention this because the duties imposed on trustees also formed the
basis on which the court
a
quo
granted the
fourth prayer. In my view that prayer should not have been granted,
firstly, because it effectively deprives the
council of the
discretion which it plainly has in regard to the way in which to
deal with the illegal connections and the persons
who make them and,
secondly, because it ignores what has happened in the past and what
the disconnection of illegal connections
entails. In the answering
affidavits it is said that the removal of these connections has
proved futile in past attempts because
they are immediately
re-established; that their removal is a life-threatening operation;
and that the council has estimated that
it would take approximately
10 000 employees working day and night to remove them - a force
which it simply cannot afford or
muster. This being so, what
further “reasonable and practical steps” are expected?
[17]
For
these reasons I am of the view that the appeal must be upheld. There
was some argument on costs with a suggestion that respondent
has
been acting in a public-spirited manner and should not be mulcted in
costs. I am unpersuaded that this is the spirit in
which he has
been acting or, even if he has, that there is any reason not to
apply the ordinary rule that costs follow the result.
I am also
satisfied that the matter is sufficiently complex and important for
the appellant to have employed two counsel.
The appeal accordingly succeeds
with costs including the costs of two counsel. The order of the
court
a quo
is set aside. Substituted therefor is an order dismissing the appeal
with costs.
C PLEWMAN JA
CONCUR:
HEFER JA)
OLIVIER
JA)
MELUNSKY
AJA)
MTHIYANE
AJA)