1
SAFLII Note: Certain personal/private details of parties or witnesses have been redacted from this document
in compliance with the law and SAFLII Policy
IN THE HIGH COURT OF SOUTH AFRICA
GAUTENG LOCAL DIVISION, JOHANNESBURG
CASE NUMBER: 30238/2023
In the matter between:
EIGHT NINE SEVEN DELVILLE (PTY) LIMITED APPLICANT
and
CITY OF EKURHULENI METROPOLITAN
MUNICIPALITY FIRST RESPONDENT
DR IMOGEN MASHAZI
(cited in her capacity as the municipal manager of
The first respondent) SECOND RESPONDENT
DR IMOGEN MASHAZI THIRD RESPONDENT
JUDGMENT
(1) REPORTABLE: NO
(2) OF INTEREST TO OTHER JUDGES: NO
(3) REVISED: NO
13/12/2024
______________ _________________________
DATE SIGNATURE
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OOSTHUIZEN-SENEKAL CSP AJ:
Introduction
[1] The applicant, Eight Nine Seven Delville (PTY) Limited (“ Delville”) seeks
declaratory relief to address the unlawful termination of electricity supply to their
property at 3[…] B[…] Road, W[…] Ext 4 (“the property”). Additionally, the applicant
seeks interdictory relief to prohibit the first respondent, the City of Ekurhuleni
Metropolitan Municipality (“ the City”) from holding them liable for outstanding debts
incurred by former tenants who have since vacated the property.
[2] The applicant further seeks an interdict to prevent the City from terminating
the electricity supply based on disputed liabilities.
[3] The relief sought includes an order prohibiting the termination of municipal
services to the property until disputes are resolved alongside a mechanism to
facilitate proactive dispute resolution and ensure accurate and fair accounting.
[4] The applicant also seeks declaratory relief based on the principle of
prescription, as an alternative form of relief.
[5] Additionally, the applicant requests that punitive costs be awarded against the
City.
[6] The respondents oppose the relief sought.
[7] Amongst others, t he City request condonation for the late filing of its
answering affidavit. The applicant does not oppose this request for condonation. In
light of the parties’ agreement, I find no reason to withhold condonation. The delay
was minimal, no prejudice was caused, and the explanation provided for the delay is
reasonable. Accordingly, condonation is granted.
Factual Background
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[8] The applicant is the owner of the property, also known as Gorg Park, which
consists of eight commercial units ( “the units”), all rented to tenants. The City is the
sole provider of municipal services to the property.
[9] In April 2022, the City installed a bulk meter at the property, identified as
meter number 2[…] (“the bulk meter”) and following the installation, the City began
issuing a single account for all electricity supplied to the property. The applicant
became the sole customer responsible for payment to the City after the bulk meter
was installed.
[10] Prior to the bulk meter installation, each tenant maintained an individual
account with the City. The property previously had eight supply points, each with its
own meter. These meters were removed approximately one week after the bulk
meter was installed, and the separate accounts were terminated.
The 8 historic meters and 4 separate consumer agreements
The applicant's account
[11] The applicant had a consumer agreement with the City for the supply of
electricity to four of the units at the property, under account number 2[ …]. This
account covered units 1, 2, 5, and 8.
[12] The applicant’s account was up to date at the time of the disconnection of
electricity supply to the entire property on 29 September 2021. No outstanding
balance existed on the applicant’s account as of that date.
The Aros, Beth & Bev and Rapid accounts
[13] Aros Engineering CC ( “Aros”) occupied Unit 6 and had a separate account
with the City, under account number 2[…].
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[14] The meter assigned by the City to Unit 6 was identified as meter number S[…]
(“the Aros meter ”). The City issued separate invoices to Aros under account
number 2[…] (“the Aros account”).
[15] Units 3 and 7 were occupied by Beth & Bev Packaging Products CC ( “Beth &
Bev”). Beth & Bev entered into separate consumer agreements with the City for
these units, which were terminated when Beth & Bev vacated the property on 4 May
2022.
[16] Each unit was equipped with its own meter to measure electricity
consumption: meter number S[…] for Unit 3 and meter number S […] for Unit 7 (“the
Beth & Bev meters”). The City assigned account numbers 2[ …] and 2[…] to Beth &
Bev for the respective units (“the Beth & Bev accounts”).
[17] Rapid Dawn 1186 CC (“Rapid”) occupied Unit 4 and also had its own account
with the City. Rapid vacated the property on 4 May 2022.
[18] Although Rapid and Beth & Bev Packaging Products CC were separate legal
entities, both were family -run businesses, with Elizabeth Baillie being a member of
Beth & Bev and her daughter-in-law, Renate Dreyer, being a member of Rapid.
[19] Unit 4 was equipped with its own electricity meter, and the City measured the
consumption for this unit through meter number S […] (“the Rapid meter ”). Rapid
entered into a consumer agreement directly with the City upon taking occupation of
Unit 4, approximately 20 years ago. The City assigned account number 2 […] to
Rapid in relation to Unit 4 (“the Rapid account”).
[20] In addition to Unit 4, Rapid also occupied Unit 8 from approximately May
2019. However, Rapid did not enter into a consumer agreement with the City for Unit
8, as this unit and its associated meters fall under the applicant’s account, as
previously noted. Rapid vacated Unit 8 on 4 May 2022.
[21] It is important to note that there were no arrears on the consumption charges
for Unit 8, as the account associated with the unit (the applicant ’s account) was
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always up to date. Therefore, the consumption charges for Unit 8 are not relevant to
the current issues.
[22] For convenience, and in light of the fact that both Rapid and Beth & Bev
defaulted not only on rental payments but also on their consumption charges under
their individual accounts with the City, they will collectively be referred to as “ the
defaulting tenants. ” This definition shall apply mutatis mutandis when referring to
their accounts with the City, their consumer agreements with the City, the units they
occupied (excluding Unit 8), the supply connections to each of their units, and the
meters that measured the electricity consumption for their units (excluding the meter
for Unit 8).
The Bulk Meter
[23] On 21 April 2022, the City installed a bulk meter at the property, replacing the
eight historic meters. The applicant became the sole customer responsible for the
supply to the entire property. The City was expected to invoice the applicant based
on readings from the bulk meter.
[24] Initially, the applicant was unaware of the bulk meter ’s installation. However,
on 17 August 2022, the City clarified that the bulk meter had been installed on 21
April 2022, and it recorded consumption from that date. This was confirmed through
email communications with the City.
The disconnection of electricity supply
The first disconnection
[25] On 29 September 2021, prior to the installation of the bulk meter, the City
disconnected the electricity supply to the entire property, including the applicant's
units. The disconnection was allegedly due to an outstanding debt on Rapid’ s
account, which was unrelated to the applicant ’s account. However, the City
disconnected all supply points, including those for the applicant and Aros, which
were up to date.
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[26] Following the disconnection, the applicant became aware of arrears allegedly
owed by Rapid to the City. The applicant requested that the City terminate the supply
to the defaulting tenants’ units to prevent further accumulation of arrears. The City
complied by disconnecting the defaulting tenants’ units.
[27] The managing agent of the applicant, Carter was informed by City officials
carrying out the disconnection that it was due to Rapid owing a substantial amount
on its account (not the Aros, Beth & Bev, or the applicant ’s accounts). Carter was
shown a 24- hour final notice letter ( “the Rapid notice” ), which was dated 29
September 2021. This notice referred to an outstanding balance of R1,649,989.35
on the Rapid account in respect of unit 4. The City proceeded to disconnect all eight
supply points, including those for the applicant ’s historic units and Aros’ supply
connection.
The second disconnection
[28] The defaulting tenants failed to pay the rental and ancillary charges owed to
the applicant, leading to the cancellation of their lease agreements on 16 February
2022. However, the tenants refused to vacate the property. Following the first
disconnection, the applicant became aware of arrears allegedly owed by Rapid to
the City. Upon investigation it was discovered that Beth & Bev had also failed to pay
for the supply to units 3 and 7.
[29] The applicant proposed that the City disconnect supply only to the defaulting
tenants’ units. The City then attended the property the same day and disconnected
supply to the defaulting tenants ’ units, specifically at the connection points to the
historic meters.
[30] However, the defaulting tenants illegally reconnected electricity to Unit 4,
which led to the installation of the bulk meter on 21 April 2022. Despite this, Unit 4
continued to receive electricity until the defaulting tenants vacated the property.
The third disconnection
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[31] On 13 May 2022, the City sent a team of officials to the property in response
to complaints of the applicant about illegal reconnections. During this visit, the City
issued final notices to the defaulting tenants for unpaid arrears. The City also issued
a notice for electricity meter tampering.
[32] The applicant engaged with the City on several occasions to resolve the
disputes, including through numerous demands for payment and requests for
clarification of the outstanding amounts on the applicant’s and the defaulting tenants’
accounts.
[33] To mention but a few, t he applicant engaged with the City on the following
occasions to resolve the disputes, 29 September 2021, 31 December 2021, and
during the periods of 1 January to 31 May 2022, 1 June to 30 June 2022, 1 July to
31 August 2022, and 1 September until the application was filed. Throughout these
consultations, the applicant issued a total of 28 (twenty eight) demands concerning
both the arrears on the applicant’s account and the outstanding amounts related to
the defaulting tenants’ accounts.
Common Cause Facts
[34] The following facts are common cause:
[34.1] The applicant is the owner of a property comprising 8 units, and the City
is the sole supplier of municipal services to the property.
[34.2] Prior to the installation of a bulk electricity meter by the City, supply to
the property was measured through eight separate meters, one for each unit
(“historic meters” ). Following the installation of the bulk meter on 21 April
2022, the supply to all 8 units has been measured through this single bulk
meter.
[34.3] The applicant holds an account with the City (Account No. 2 […])
(“applicant’s account ”), on which the City historically levied electricity
charges only for units 1, 2, 5, and 8 ( “applicant's historic units ”), prior to the
installation of the bulk meter.
[3.4] Aros Engineering CC ( “Aros”) occupied unit 6 ( “Aros unit ”) at all
material times and maintained its own municipal account (Account No. 2[ …])
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(“Aros account ”). Consumption was measured through meter S […] (“Aros
meter”).
[34.5] Units 3 and 7 ( “Beth and Bev units ”), which were occupied by Beth
and Bev Packaging CC ( “Beth and Bev” ) until 4 May 2022, were not billed
under the applicant ’s account prior to the installation of the bulk meter. Beth
and Bev also traded under the name Plastic and Packaging. The City billed
the Beth and Bev units under separate accounts (Account Nos. 2[ …] and
2[…]) ( “Beth and Bev accounts” ). Consumption for these units was
measured through meters S[…] and S[…] (“Beth and Bev meters”).
[34.6] Beth and Bev entered into consumer agreements directly with the City
for supply to their units approximately twenty years ago.
[34.7] Unit 4 (“Rapid unit”) was occupied by Rapid Dawn 1186 CC ( “Rapid”)
until 4 May 2022, which maintained its own meter (S035147706) ( “Rapid
meter”). The City billed Rapid under its own account (Account No. 2[ …])
(“Rapid account”). Rapid also concluded a consumer agreement directly with
the City roughly twenty years ago.
[34.8] On or about 21 April 2022, the City installed the bulk meter at the
property, after which the 8 historic meters (including the Rapid and Beth and
Bev meters) were removed. The electricity supply to all 8 units was thereafter
measured by the bulk meter, with the applicant becoming the sole consumer
responsible for the supply to all units from 21 April 2022 onwards.
[34.9] On 29 September 2021 (before the installation of the bulk meter), the
City disconnected electricity supply to the property due to arrears owed by
Rapid. The applicant became aware that Rapid, along with Beth and Bev
(“defaulting tenants” ), had illegally reconnected the Rapid unit. Mr.
Grobbelaar, acting on behalf of the applicant, reported the illegal reconnection
to the City.
[34.10] On 13 May 2022, the City attended the property, served a 24- hour
final notice of termination based on the defaulting tenants ’ arrears, and
subsequently disconnected electricity supply to the entire property ( “the
contentious disconnection”).
[34.11] Rapid entered into an Acknowledgement of Debt (“AOD”) with the City
on 6 October 2021, admitting liability for R1,496,412.00.
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[34.12] On 4 May 2023, following the service of this application, a
representative of the City attended the property and advised that the
electricity supply to the entire property would be disconnected unless
R2,367,003.00, owed by Rapid, was paid. This disconnection was scheduled
for 5 May 2023.
[34.13] At no point in time has the applicant’s account been in arrears.
[35] The following facts are also common cause regarding the disconnections at
the property:
[35.1] On 29 September 2021, prior to the installation of the bulk meter, the
City disconnected electricity supply to the property. The dispute regarding this
disconnection is that the applicant contends that the entire property was
disconnected, while the City asserts that only the supply to the Rapid unit was
terminated. According to the termination notice dated 29 September 2021, the
notice reflected arrears solely on the Rapid account for the Rapid unit, in the
amount of R1,649,989.35.
[35.2] Following the termination of the lease agreements with the defaulting
tenants, the applicant's representatives approached the City requesting the
termination of electricity supply to the defaulting tenants' units. This request
led to the disconnection of electricity supply to the defaulting tenants' units on
or about 18 March 2022. The disconnection only affected the units occupied
by the defaulting tenants.
[35.3] On 13 May 2022, the City attended the property with various officials
and handed over a twenty -four-hour final notice of termination addressed to
the defaulting tenants, dated 11 May 2022. This notice referred to alleged
electricity meter tampering and the arrears owed by the defaulting tenants. On
that same day, the City disconnected electricity supply to the entire property,
referred to as the “contentious disconnection”.
[35.4] Regarding the fines/reconnection fees, the City demanded a payment
of R22,239.50 from the applicant to secure reconnection following the first
disconnection in September 2021, which was paid on 4 October 2021. Upon
the contentious disconnection, the City imposed a fine of R66,719.41, labelled
as a "third incident."
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[35.5] Rapid concluded an Acknowledgement of Debt (“AOD”) with the City on
6 October 2021, admitting liability for R1,496,412.00. The AOD was signed by
a member of Rapid only and confirmed that Rapid was the responsible party
on the Rapid account, acknowledging its lawful debt to the City.
[35.6] The applicant sent a total of 28 ( twenty-eight) demands to the City,
requesting resolution of the disputes and seeking to address the impasse.
However, the majority of the allegations regarding the demands sent,
received, and read by the City ’s officials are met with bare denials,
accompanied by arguments defending the City’s interpretation of its policies.
Issues for Determination
[36] The issue for determination in this matter is:
[36.1] Whether the City can impute liability for the defaulting tenants ’ debt to
the applicant, considering the tenants had separate consumer agreements
with the City.
[36.2] Whether there are any material factual disputes.
[36.3] Whether the applicant ’s demands constitute “ disputes” under Section
102(2) of the Municipal Systems Act
1 (“MSA”).
[36.4] Whether the applicant exhausted alternative remedies before and after
the institution of proceedings.
[36.5] Whether the City is entitled to terminate, or threaten to terminate,
municipal services despite the disputes.
[36.6] Whether the relief sought infringes upon the doctrine of separation of
powers.
1 Municipal Systems Act 32 of 2000.
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[36.7] Whether the defaulting tenants ’ electricity and related charges have
prescribed, to the extent that liability can be imputed to the applicant.
[36.8] Whether the applicant ’s disputes regarding electricity charges are
meritorious.
[36.9] Whether a case has been made out for the interim interdict.
[36.10] Whether punitive costs are warranted.
Submissions by the Applicant
[37] The applicant asserts that the City cannot attribute the arrears of the
defaulting tenants to them, as the tenants had independent consumer agreements
with the City, and their arrears were a result of their individual consumption. This
argument is grounded in the principle of the separation of liability, a core tenet of
contractual obligations under the MSA. According to the applicant, each tenant had a
distinct contract with the City, meaning their debts and consumption should remain
their responsibility, unless there is clear evidence of joint liability or an arrangement
that shifts this responsibility.
[38] In essence, the applicant contends that the City cannot hold them liable for
the historical debt of defaulting tenants, particularly for debts accrued before the
installation of the bulk meter, as these debts were incurred under separate consumer
agreements with the City.
Submissions by the Respondents
[39] The City on the other hand, argues that the arrears of the defaulting tenants
should be attributed to the applicant as the property owner. The respondents
maintain that, despite tenants having independent contracts with the City, the liability
for payment ultimately rests with the property owner.
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[40] Counsel for both the applicant and the respondents presented comprehensive
heads of argument, for which I am grateful. During the hearing, both Counsel
engaged with me constructively. For the purposes of this judgment, I will not reiterate
their submissions.
Applicable Legal Principles
[41] The applicant seeks declaratory relief, a legal remedy in which a C ourt makes
a determination about a disputed issue without necessarily ordering a specific course
of action. It is a discretionary remedy, granted when there is a genuine dispute that
can resolve an uncertainty in the law or prevent future legal complications.
[42] In terms of Section 102(2) of the MSA allows municipalities to issue demands
for payment of arrears for services provided. However, such demands must be clear,
precise, and lawful, and the MSA sets out a framework for resolving disputes,
including those related to arrears and liability.
[43] A municipal service contract is the agreement between a municipality (as the
service provider) and a consumer (the service recipient), such as for services like
electricity, water, or refuse removal. These contracts typically outline the terms of
service, consumer obligations, and the consequences of non- payment. The liability
for paying for services usually falls on the person or entity receiving the service, not
the property owner, unless the property owner has assumed responsibility through
other agreements.
[44] When consumer s enter into a service supply contract with the municipality,
they are agreeing to be billed for the municipal services consumed and are obligated
to pay for these services as per the terms outlined in the contract. Importantly, the
contractual relationship is generally established between the municipality and the
person or entity consuming the service, regardless of ownership of the property.
However, issues can arise when the payment obligations and liabilities are not
clearly delineated, especially when tenants are involved.
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[45] The issue of whether a property owner can be held liable for arrears incurred
by tenants depends on several factors, including the nature of the contract between
the municipality and the consumer, and the provisions of the MSA.
[46] In cases where the property owner leases the property to tenants who have
separate consumer agreements with the municipality, the tenants are usually
considered the consumers of the service. As such, they are responsible for paying
for the services they consume, and their arrears should generally not be imputed to
the property owner.
[47] Under the MSA, municipalities are required to establish clear agreements with
consumers, which typically include the tenant's responsibility to pay for the services
consumed. The consumer agreements are entered into directly between the
municipality and the individual consumer (tenant), meaning the tenant becomes
liable for any unpaid charges, not the property owner.
[48] The owner of the property, however, could be held liable under specific
circumstances, such as:
[48.1] If the property owner assumed liability for payment of the municipal
services in the lease agreement with the tenant.
[48.2] If the services were provided to the property owner, even though
tenants were consuming the services. For example, if the owner is the
designated consumer for the property, then the owner could be liable for any
arrears.
[48.3] Failure of the tenant to pay and the municipality seeking payment from
the property owner, especially in cases where the tenant is no longer residing
in the property, or if the owner is in control of the supply.
[48.4] Municipal policies or local government bylaws that allow the
municipality to hold the property owner responsible for arrears, particularly if
the arrears are accumulated due to the landlord’ s failure to ensure tenants
paid for services.
[49] However, where the tenant has entered into a separate consumer agreement
with the municipality, MSA dictates that the liability for arrears should rest with the
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tenant unless there is an explicit agreement or statutory provision to the contrary. In
other words, unless the municipality has established that the property owner is the
responsible party under the consumer agreement, the property owner cannot be held
liable for arrears accrued by tenants.
[50] The MSA governs the relationship between municipalities and consumers,
setting out the framework for the supply of municipal services. Key provisions in the
MSA relevant to liability for arrears are the following:
[50.1] Section 102: This section addresses the obligation of the consumer to
pay for municipal services and outlines the procedures for dealing with
arrears. If a consumer disputes the charges, the municipality is required to
engage with the consumer to resolve the dispute and may not disconnect
services until the dispute is resolved.
[50.2] Section 118: This section provides that arrears for municipal services
(such as electricity) can be claimed from the property owner in cases where
the owner has a direct agreement with the municipality for the provision of
services. However, this typically applies to circumstances where the owner is
either the registered consumer of municipal services or the contract between
the municipality and the tenant specifies that the owner is ultimately
responsible.
[50.3] Section 98: In terms of disconnection, the MSA allows the municipality
to disconnect services for non- payment of arrears, but only after due process
is followed, which includes a notice and an opportunity for the consumer to
resolve the issue. Importantly, a dispute over arrears does not justify
immediate disconnection, and the municipality must provide the consumer
with a chance to resolve the dispute.
[50.4] Section 102(2): This provision outlines the obligation of consumers to
dispute incorrect accounts or charges in writing. If a dispute is raised, the
municipality is prohibited from taking enforcement action (such as
disconnecting services) until the dispute is resolved.
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Evaluation
[51] This case hinges on the application of the MSA, specifically regarding whether
a property owner can be held responsible for arrears incurred by tenants with
separate consumer agreements. The principle of separation of liability suggests that,
unless the owner explicitly assumed responsibility or a statutory provision dictates
otherwise, the liability for arrears should remain with the tenant. The case also
illustrates how municipalities may interact with both property owners and tenants in
managing liabilities for municipal services.
[52] Following the installation of the bulk meter, one would expect that the City’s
invoicing for consumption would be accurate. Unfortunately, this has not been the
case. The applicant continued to receive invoices reflecting the removed historic
meters well after the bulk meter was installed, as evidenced by the City’s invoices for
May 2022 and July 2022. The situation was further complicated when the applicant
received invoices in August 2022 that reflected both the historic meters and the bulk
meter, despite the bulk meter having already been installed. Subsequent invoices for
September and October 2022 only reflected the bulk meter, yet they contained
confusing reversals and credits.
[53] Furthermore, the City continued to issue invoices for consumption on the Aros
account even after the bulk meter ’s installation. Aros was invoiced in May 2022 for
the removed Aros meter. In June and July 2022, Aros was invoiced for both the
removed Aros meter and the bulk meter. However, in September and October 2022,
invoices for Aros reflected only the removed Aros meter, with no mention of the bulk
meter. The Aros meter should not have appeared on any invoices after the
installation of the bulk meter, as the applicant is the sole party liable for the charges
measured by the bulk meter.
[54] Since the Aros meter was removed shortly after the bulk meter ’s installation,
Aros should not have received any further invoices from the City. After the
installation of the bulk meter, the City has no basis to invoice the applicant for
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charges related to the historic meters, which no longer exist. The City’s actions
represent an unlawful attempt to recover charges.
[55] The respondents’ assertion that the applicant is liable for the arrears of the
defaulting tenants’ accounts seems to contradict the established principle that liability
for utility charges lies with the consumer under their individual agreements with the
City. The City’s attempts to impute the defaulting tenants’ debts to the applicant lack
clear legal or contractual grounds.
[56] In this matter, the applicant has raised 28 (twenty eight) demands with the
City regarding the arrears. These demands likely represent a series of written
requests asking the City to address the issues of liability and incorrect billing, which
the applicant believes are in dispute. The fact that there have been numerous
communications and meetings between the applicant and the City’s officials
indicates that the applicant took appropriate steps to resolve the issues before
resorting to legal action. I cannot find that the applicant did not follow the correct
procedures relating to a dispute being declared in this matter. In fact, the contrary is
evident, the applicant attempted on numerous occasions to resolve the disputes
relating to the billing of electricity supply by the City.
[57] The 28 (twenty eight) demands suggest that the applicant made repeated
attempts to engage the City on the dispute, including in- person meetings and
correspondence, in accordance with the provisions of the MSA. The MSA
encourages consumers to attempt to resolve disputes with municipalities before
seeking legal action. The applicant’s persistence in raising these demands
demonstrates that they followed the procedural requirements for resolving disputes
and made genuine efforts to resolve the matter amicably.
[58] Given that the applicant issued multiple demands and engaged with the City
in good faith, it is clear that the applicant exhausted available remedies before
seeking judicial intervention. This is significant in evaluating whether the City acted
unlawfully by continuing to pursue the arrears despite the ongoing disputes.
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[59] The City must comply with the provisions of the MSA, including
acknowledging the disputes raised by the applicant, engaging in meaningful
discussions, and ensuring that its billing practices adhere to the legal framework.
The City’s failure to address these demands properly or to follow due process in its
billing and disconnection actions may be deemed unlawful.
[60] The applicant has consistently raised valid concerns regarding the City’s
actions, including erroneous billing and the imputation of the defaulting tenants’
debts. The City’s failure to address these concerns adequately, combined with its
reliance on incorrect billing practices, further strengthens the argument that a
legitimate dispute exists.
[61] Moreover, the City’s threats to disconnect electricity, even after the disputes
had been raised, is a significant issue. While municipalities are permitted to
disconnect services for arrears, they must do so in accordance with the provisions of
the MSA, including acknowledging any disputes raised by the consumer. Given that
the applicant has valid disputes concerning the charges, the City ’s threats to
disconnect without resolving these disputes are unlawful.
[62] I therefore find that the City cannot terminate services or threaten termination
while the disputes remain unresolved.
[63] The applicant’s disputes regarding electricity charges appear meritorious,
particularly given the evidence of erroneous billing, improper imputation of liability,
and the lack of a clear resolution from the City. The applicant has consistently raised
valid concerns, and the City’s failure to resolve these issues in a timely and effective
manner suggests that the disputes are indeed legitimate.
[64] The installation of a bulk meter by a municipality is a practical measure that
allows for collective metering of electricity usage across multiple units on a property.
This method simplifies billing and is useful in managing multiple tenants or units. It
also helps address issues like illegal reconnections, where tenants may bypass their
individual meters or the City’s disconnection orders.
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[65] However, the introduction of a bulk meter raises legal complications when
tenants have individual consumer contracts with the municipality. The core issue in
these cases is whether the property owner (the applicant) can be held liable for
arrears incurred by tenants who have separate consumer agreements, especially
when the property owner is not personally responsible for the unpaid municipal
charges.
[66] In this case, the municipality installed a bulk meter to measure the collective
electricity consumption of eight units on the applicant’s property, including units
leased to tenants with individual consumer contracts. As a result, the electricity
consumption of all the units, whether occupied by the property owner or tenants, is
now metered as a single, aggregated reading.
[67] The bulk meter complicates matters as it aggregates the consumption of all
eight units into one metered supply. While this simplifies billing and monitoring, it
does not alter the fact that tenants ’ arrears are tied to their individual consumer
contracts with the City. The City’s use of the bulk meter to bill the property owner for
the total consumption of all eight units does not shift the responsibility for these
arrears to the property owner.
[68] If the City wishes to recover arrears from tenants, it must pursue each tenant
individually, as they are the consumers responsible for paying for the electricity they
consumed. The property owner cannot be held liable for the tenants’ debts unless
the owner explicitly agreed to assume responsibility, which is generally not the case
when tenants have separate contracts with the City.
[69] It is undisputed that the applicant’s account with the City is not in arrears,
indicating that the applicant has met its obligations under the municipal agreement.
Consequently, the applicant should not be held liable for the arrears of tenants who
have separate contracts with the City.
[70] Furthermore, t he applicant reported illegal reconnections by tenants (Rapid,
Beth, and Bev) to the City, following disconnections by the City. This action shows
that the property owner was not complicit in the illegal reconnections. The applicant’s
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reporting of these reconnections is significant because it shows proactive steps
taken to address illegal activities on the property, which could have directly
contributed to further disputes. These actions do not, however, make the property
owner liable for the tenants’ arrears or any fines related to the reconnections. The
tenants are responsible for these unauthorized actions, and any fines or penalties
should be directed toward them, not the applicant. The applicant’s efforts to report
the illegal reconnections further distance it from responsibility for the arrears or fines
linked to those actions.
[71] The City’s imposition of a fine on the applicant for the illegal reconnections is
problematic and concerning. The applicant denies any involvement in these
reconnections. The fact that the tenants engaged in illegal reconnections does not
automatically transfer liability to the property owner. Tenants responsible for illegal
reconnections should bear the consequences of their actions, not the landlord.
Furthermore, the applicant’s report to the City about these illegal actions
demonstrates compliance with legal obligations and efforts to prevent further illegal
activity.
[72] The fine of R66,719.41 imposed by the City seems excessive, especially
given that the applicant had no involvement in the illegal reconnections. The fine,
categorized as a “third incident” fine, raises concerns about the City ’s approach to
enforcement. The imposition of this fine on the applicant, who denies involvement in
the reconnections, is problematic, as it appears to have been wrongfully imposed.
The City should have pursued the tenants for their illegal actions, not the applicant.
[73] This brings me to the issue of rebatements by the City regarding the
applicant’s account. Typically, rebatements are initiated by the consumer’s formal
request for review, followed by a municipality’s investigation to determine whether
such a claim is warranted. Municipalities are bound by legal frameworks such as the
MSA, the Municipal Finance Management Act (MFMA)
2, and its own by-laws when
dealing with rebatements.
2 Municipal Finance Management Act 56 of 2003.
20
[74] A typical rebatement process unfolds as follows:
[74.1] Consumers may identify the need for a rebatement in the following
situations:
[74.1.1] Billing Errors : Overcharges due to meter faults, administrative
mistakes, or system errors.
[74.1.2] Excessive Charges: Significant deviations from usual consumption
patterns, often indicating issues like leaks or meter tampering.
[74.1.3] Service Disruptions: Prolonged interruptions in water, electricity, or
other municipal services.
[74.1.4] Eligibility for Relief Programs: Consumers may qualify for indigent
support or other relief policies.
[75] The consumer is required to complete a rebatement application form, which
may involve submitting supporting documents such as:
[75.1] Proof of payment for disputed periods.
[75.2] Billing records that show inconsistencies
[75.3] Evidence of service disruptions, such as photographs or
correspondence.
[75.4] Meter inspection reports, if available.
[76] Upon submission of the rebatement request:
[76.1] The municipality logs the application and assigns a reference number.
[76.2] An acknowledgment of receipt is provided, outlining timelines for
resolution.
[77] Thereafter, t he municipality conducts an internal investigation to verify the
claim:
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[77.1] Account Audit : Reviews the consumer's billing history for
discrepancies.
[77.2] Meter Testing: Inspects or tests the relevant water or electricity meter
for faults.
[77.3] Site Inspection: Visits the property to confirm physical conditions (e.g.,
leaks, illegal connections, or tampered meters).
[77.4] Consultation with Internal Departments: Engages departments
responsible for metering, billing, and technical services to analyse the issue.
[78] After the investigation, the municipality determines whether the claim is valid
and whether the consumer qualifies for a rebatement:
[79] If the claim is validated:
[79.1] Authorization: The responsible municipal officer or department
approves the rebatement. High-value rebatements may require approval from
senior officials or the municipal council.
[79.2] Notification: The consumer is informed of the approval and the amount
to be credited to their account.
[80] The municipality then processes the rebatement:
[80.1] Rebate Amount Credited: The approved amount is applied to the
consumer's account as a credit.
[80.2] Updated Account Statement : The consumer receives an updated
statement reflecting the adjusted balance.
[81] The key considerations in the process are:
[81.1] Municipalities are expected to resolve rebatement claims within
reasonable timeframes, often stipulated in their by-laws.
[81.2] Municipalities must communicate clearly with consumers throughout the
process.
[81.3] Municipalities must act impartially and comply with legislative and policy
frameworks to avoid undue prejudice.
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[82] In the case before me , the applicant did not request a rebatement, nor seek
any adjustments. The City initiated the rebatement process on its own, which raises
significant procedural concerns. Municipal by-laws typically mandate that consumers
apply for rebatements, supported by relevant documentation. By unilaterally initiating
this process, the City deviated from the required procedure, making the process
legally defective. It is evident that the City did not follow its own processes as
prescribed.
[83] Furthermore, the City failed to provide firstly a clear explanation of how the
debasement amount was calculated, secondly the nature of the evidence of an
investigation or audit to justify the adjustment and lastly, no notice was provided to
the applicant of the debasement process or an opportunity for the applicant to
engage or object to the decision. This lack of transparency contravenes the
principles of accountability and fairness enshrined in the MSA and Promotion of
Administrative Justice Act
3 (“PAJA”).
[84] Procedural fairness demands that parties affected by a decision are informed
of its nature and reasons. The City’s failure to notify the applicant or provide
justification for the rebatement constitutes a breach of its obligations under PAJA.
The applicant was denied a chance to understand, contest, or engage with the
decision, and the City’s unilateral action wrongly implicated the applicant for issues
beyond their control.
[85] Municipalities must uphold procedural fairness and transparency in
administrative actions. Failure to do so undermines public trust and exposes
municipalities to judicial scrutiny and potential adverse cost orders.
[86] In conclusion, the Court finds that the applicant is entitled to declaratory relief.
The City is not permitted to impute the defaulting tenants’ arrears to the applicant
without proper consideration of legal aspects relating to contractual obligations by all
concerned, proper investigations and in- depth consultation with all concerned. The
3 Section 33
23
disputes regarding the arrears and electricity charges are valid, and the City’s
actions—threatening disconnections and imposing charges unjustly—are unlawful.
[87] Section 152(1) of the Constitution specifies the objectives of local
government
4 as follows:
[87.1] To provide democratic and accountable government for local
communities.
[87.2] To ensure the provision of services to communities in a sustainable
manner.
[87.3] To promote social and economic development.
[87.4] To promote a safe and healthy environment.
[87.5] To encourage the involvement of communities and community
organizations in the matters of local government.
[88] This section affirms that municipalities must strive, within their capacity, to
achieve these objectives. While resource constraints exist, municipalities must make
reasonable efforts to meet these goals, balancing practical limitations with the need
to serve communities effectively. Adherence to these principles is vital for fostering
trust and development.
[89] The Court finds that the City’s actions, especially its failure to engage
meaningfully with the applicant, are procedurally and substantively flawed. The City’s
failure to provide clear responses and its repeated non- compliance with its statutory
and constitutional obligations demonstrate a disregard for its legal duties.
[90] Furthermore, the City has conceded that disputes exist and even undertook to
investigate them. It cannot now argue that the applicant did not follow due process.
The applicant submitted numerous written demands, which were acknowledged by
the City. The applicant also continued to pay undisputed amounts, showing
compliance and good faith.
4 Joseph v City of Johannesburg and Government of the Republic of South Africa v Grootboom
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[91] The City’s conduct reveals ongoing non- compliance with constitutional and
statutory obligations. Its threats to disconnect services and refusal to flag the
account to prevent disconnections are uncontested. Even after the application was
served, the City proceeded to terminate water supply and threatened to disconnect
electricity based on arrears of defaulting tenants. Such actions, compounded by the
issuance of termination notices that did not comply with due process, further
undermine the City’s position.
[92] According to Section 7.1 of the City ’s policy, a minimum of 14 days’ notice
must be given before any disconnection, specifying the date and time of the
proposed action, the reason, and how affected parties can challenge it. This is
consistent with the Constitutional Court’s ruling in Joseph v City of Johannesburg
supra, emphasizing the importance of procedural fairness.
[93] The City’s failure to meet its obligations warrants judicial intervention to
ensure compliance with the Constitution, MSA, and its own policies.
[94] The Court holds that the City’s actions cannot be condoned. Its failure to
adhere to its policies and constitutional obligations requires intervention to protect
the applicant’s rights and ensure municipal accountability.
[95] The doctrine of separation of powers does not shield the City from judicial
oversight. On the contrary, the judiciary is duty -bound to intervene when organs of
state fail to fulfil their constitutional and statutory obligations. Allowing the City ’s
blatant disregard for its duties to go unchecked would undermine the separation of
powers and the rule of law. This principle was affirmed by the Constitutional Court in
Mwelase v Director -General for the Department of Rural Development and Land
Reform
5, which held that C ourts must ensure compliance with constitutional
mandates.
5 Mwelase v Director-General for the Department of Rural Development and Land Reform 2019 (6)
SA 597 (CC).
25
[96] In this matter, the Court has to compel the City to adhere to its obligations
under Section 195 of the Constitution, Section 95 of the MSA, and its own policy.
This is not an encroachment on the separation of powers but a necessary
intervention to enforce constitutional compliance.
[97] To determine whether an interim interdict is warranted in this case, the
applicant must meet the well -established legal requirements for interim interdictory
relief. These include establishing:
[97.1] A clear or prima facie right.
[97.2] A reasonable apprehension of harm.
[97.3] The absence of an alternative remedy.
[97.4] The balance of convenience favouring the granting of the interdict.
[98] The applicant has successfully demonstrated a clear right, though the
standard for an interim interdict only requires a prima facie right. The applicant
argues that the City is not entitled to terminate or threaten to terminate municipal
services while disputes remain unresolved, as mandated by section 102(2) of the
MSA. The City’s actions —terminating services without resolving disputes or
providing proper notice—violate procedural fairness, as outlined in the Joseph case,
PAJA, the City’s own policies, and constitutional requirements for fair administrative
action. Therefore, the applicant has shown a clear right to resist such actions.
[99] The applicant has presented a reasonable apprehension of harm if the City is
not prevented from continuing its unlawful actions. Despite the application being
served, the City has proceeded to terminate the water supply and issue threats to
disconnect electricity. These actions reflect the City’s ongoing intent to act in
defiance of its statutory and policy obligations. Furthermore, the City’s dismissive
response to the applicant’s repeated requests for assurance only heightens the
apprehension of harm. The applicant has complied with all undisputed payments,
which underscores the need for judicial intervention to avert irreparable harm caused
by the City’s failure to follow due process.
[100] The applicant has demonstrated the lack of an alternative remedy. Despite
repeated attempts to resolve the disputes through correspondence, meetings, and
26
formal demands, the City has failed to engage meaningfully or comply with its
statutory duty to resolve disputes in a timely and lawful manner. As such, the
applicant has no recourse other than seeking judicial intervention. This satisfies the
requirement that no alternative remedy is available.
[101] The balance of convenience strongly favours granting the interdict. The
applicant has made all payments that are lawfully due, including ongoing charges
based on bulk meter readings. Granting the interdict will not prejudice the City, as its
right to disconnect services for future unpaid consumption is preserved under prayer
6 of the notice of motion. Furthermore, section 102(2) of the MSA provides a
statutory safeguard against unfair treatment, aligning with the City’s obligations. The
tenants responsible for the arrears that led to the disconnection vacated the property
on 4 May 2022, making any further disconnections irrelevant to securing payment.
The City’s failure to resolve disputes, engage meaningfully with the applicant, or
provide proper notice further supports the applicant’s position.
[102] The applicant has met all the requirements for the granting of an interim
interdict. The City’s unlawful disconnections and its persistent non- compliance with
statutory obligations justify judicial intervention. The interdict should be granted to
prevent further harm and to ensure the City adheres to constitutional, statutory, and
policy requirements.
Costs
[103] The final matter to address is the issue of costs. The awarding of costs lies
within the discretion of the Court, and this discretion must be exercised judicially,
taking into account the conduct of the parties and the broader interests of justice.
[104] In this case, punitive costs are warranted due to the City’s egregious conduct.
Despite the applicant’s persistent efforts to resolve the disputes since December
2021, the City has failed to engage meaningfully or address the issues. The City’s
refusal to acknowledge its shortcomings, particularly its non- compliance with the
MSA and its own policies regarding the unlawful termination of services, is
inexcusable.
27
[105] The City has adopted a dismissive and obstructive approach, raising fictitious
defences, blaming the applicant for not approaching the Court sooner, and deflecting
responsibility. This conduct is reprehensible and calls for a strong judicial response.
The claim that the applicant failed to exhaust internal remedies has been thoroughly
addressed and disproved. It is unreasonable to accuse a litigant, who has actively
sought resolution since December 2021, of failing to pursue alternative remedies.
[106] Rather than taking responsibility for its actions, the City has responded with
evasive tactics, baseless conclusions, convoluted arguments, and a mere recitation
of statutory provisions. Such behaviour is unacceptable for an organ of state, which
is constitutionally required to act lawfully, reasonably, and in a procedurally fair
manner. As a public entity, the City is held to the highest standards of accountability
and must uphold the rule of law. Its failure to do so in this case, coupled with its
frivolous and unconscionable opposition to the application, justifies the imposition of
punitive costs.
[107] The applicant should not be burdened with the costs of an application that
was necessitated solely by the City’s actions . The City’s actions have contributed
significantly to the delay and expense of these proceedings. The awarding of
punitive costs reflects the Court’s disapproval of the City ’s conduct and serves as a
deterrent against similar behaviour in the future. Therefore, the applicant is entitled
to full indemnification for the costs incurred in this application, on an attorney -and-
client scale.
Order
[108] In the circumstances the following order is made:
1. Condonation for the late filing of the answering affidavit is granted.
2. It is declared that the first respondent ’s termination of electricity supply to the
whole of the applicant’s property, physically situated at 3[…] B[…] Road, W[…] Ext. 4
Johannesburg, being Erf 3[ …], W […] Ext. 4 Johannesburg (“the property ”), on 29
28
September 2021 and 13 May 2022, for arrears on account numbers 2[ …],
2603364342 and 2602717770, was unlawful.
3. Subject to paragraphs 4 to 4.7 below:
3.1 the first respondent is interdicted and restrained from holding the applicant liable
for payment of, or reflecting/transferring the liability under, account numbers 2[ …],
2[…], 2[…] and 2[…] to the applicant ’s municipal account bearing account number
2[…] (“the applicant’s account”), or any other account of the applicant;
3.2 the first respondent is interdicted and restrained from terminating or restricting
municipal services to the property, based on any amount owing under account
numbers 2[…], 2[…], 2[…] and 2[….].
4. The relief in paragraphs 3 .1 to 3.2 above shall operate as an interim interdict,
effective immediately, and remain effective pending:
4.1 the first respondent fully complying with this order; and
4.2 the final resolution of the disputes/queries raised by the applicant for the period
December 2021 to date hereof (“the disputes”), in respect of the applicant’s account,
and account numbers 2[…], 2[…] 2[…] and 2[…]; and
4.3 the first respondent, rendering full, comprehensible, and comprehensive written
reasons, within 30 (thirty) calendar days from date of service of this order on the first
respondent or its attorneys, explaining all entries, charges, reversals, credits and
debits reflected on the applicant ’s account, and account numbers 2[ …], 2[…], 2[…]
and 2[…] duly supported by source documents, such as meter reading reports, job
cards and similar documents, for the period three years prior to the date of this order;
and
4.4 the first respondent responding in writing to the written demands dispatched by
the applicant’s attorneys on/dated 7 December 2021, 30 May 2022, 13 June 2022, 4
July 2022, 19 July 2022, 2 August 2022, 18 August 2022, 26 August 2022, 16
September 2022, 21 September 2022, 22 September 2022 and 14 October 2022;
and
4.5 the exhaustion/finalisation of internal remedies by the applicant in terms of the
first respondent’s by-laws and the Municipal Systems Act 32 of 2000 (“ MSA”), upon
29
the first respondent complying with paragraphs 4.1 to 4.4 above; and
4.6 the finalisation of any review/appeal pursued by the applicant of any decision
reached by the first respondent, pursuant to paragraphs 4.1 to 4.6 above.
5. Subject to the interdictory and related relief in paragraphs 3 to 4.6 above, the
relief granted in this order does not affect the first respondent’s rights nor its
entitlement to terminate municipal services to the property for non- payment of
current and future municipal charges incurred and arising after 4 April 2023 under
the applicant’s account, unless a dispute is lodged on such charges, as
contemplated inter alia in section 102(2) of the MSA.
6. The second and third respondents are to advise the relevant officials of the
first respondent of the content of this order and the obligations imposed by same via
email and copy the applicant’s attorney into such email, at v[...]
7. The aforesaid e- mail to be addressed to the relevant officials of the first
respondent is to be sent within 7 (seven) days of service of this order on the first
respondent or the respondents’ attorney.
8. The second and third respondents are to render a progress report to the
applicant’s attorney, on/before the 30th of each month following service of this order,
to v[…] detailing the steps taken to ensure compliance with this order, and should it
not be possible to comply with this order within the prescribed time frames, reasons
for such non-compliance are to be given.
9. Any documents, invoices, reasons or other information to be provided/
rendered to the applicant in terms of this order is to be provided, within the time
frames specified in the relevant paragraphs, and is to be provided in writing to v[…]
10. The costs of this application are to be paid by the first respondent on a scale
as between attorney and client.
CSP OOSTHUIZEN-SENEKAL
ACTING JUDGE OF THE HIGH COURT
30
GAUTENG DIVISION, JOHANNESBURG
This judgment was handed down electronically by circulation to the parties’
representatives by email, by being uploaded to Case Lines and by release to SAFLII.
The date and time for hand-down is deemed to be 10h00 on 13 December 2024.
DATE OF HEARING: 6 November 2024
DATE JUDGMENT DELIVERED: 1 3 December 2024
APPEARANCES:
Counsel for the Applicant:
Christo van der Merwe
Cell: 082 788 3911
E-mail: dominus.cvdm@gmail.com
Attorney for the Applicant:
Vanessa de Souza
DE SOUZAATTORNEYS INC.
Tel: 011 873-7022
Cell: 082 878 3991
Email: vanessa@dsalegal.co.za
Counsel for the First, Second and Third Respondents:
Reuben Maphutha
Cell: 083 360 1025
Email: maphutha@rsabar.co.za
Attorney for the First, Second and Third Respondents:
Sibusiso Lusenga
LUSENGA ATTORNEYS INC.
Tel: 010 448 7398
Cell: 078 224 3004
E-mail: sibusiso@lusengainc.co.za