REPUBLIC OF SOUTH  AFRICA

IN THE HIGH COURT OF SOUTH  AFRICA

(GAUTENG  DIVISION, PRETORIA)

CASE NO:	32443/15

DATE OF JUDGMENT:27 MAY 2016

In the matter between:-

PETRUS LOUW HERBST JACOBS  & SMILAWSKI CC

First Applicant Second Applicant

and

CITY OF TSHWANE  METROPOLITAN  MUNICIPALITY	Respondent

JUDGMENT

KOOVERJIE AJ:

A.	APPLICATION:-

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1.	The Applicant seeks interim interdictory relief against the Respondent from terminating the water and electricity supply to the property, pending the outcome of the action to be instituted by the  Second  Applicant  for  a declarator to be instituted by the second applicant within 15 days.

Previous Litigation

2.	At this juncture it is necessary to deal with the previous  applications  brought by the applicants. The issues  between the  parties  have  been dealt with by our courts since 2011.

3.	In 2011 the second applicant launched an application against the respondent requesting the restoration of the water and electricity supply to the property coupled with an order declaring the respondent to be in contempt of court in respect of a Magistrate's court decision. An interim order was granted in the second applicant's favour. However the rule nisi lapsed.

4.	The opposed application was then set down  before  Judge  Kubushi  on 10 July 2013 and was dismissed with  costs.  The  order  read that the  rule nisi was discharged. This judgment has been  attached  as Annexure  "COT1" to the respondent's answering papers and will be dealt with in detail below.

5.	The second applicant obtained leave to appeal to the Supreme Court of Appeal. The Supreme Court of Appeal requested additional heads in inter
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alia addressing the court on whether or not the order was appealable  due to the fact that the rule nisi had lapsed. The applicants decided not to proceed with the appeal and filed their notice of withdrawal on 20 August    2014.

6.	Counsel for the respondent, submitted that the issues in dispute had already been dealt with by Judge Kubushi and raised the point of res judicata . The matter was dealt with as an opposed matter. Although the  rule  nisi  had already lapsed, counsel representing  both  parties  agreed  between themselves and approached Judge Kubushi that the matter would be argued on the basis that the Applicant seeks a final order as set out in the Notice of Motion.

7.	It was further submitted that the order given by Kubushi J  namely  that the "rule nisi is discharged" instead of dismissing the  application  with  costs was an oversight on her part.

8.	This explanation was relayed to the Supreme Court of Appeal  by  way  of heads which the Judge President had requested.

9.	However, counsel for the applicant submitted that since Kubushi J's order is irregular or the term she used "non sensical" this  court  should  not  have regard to it. In light of this a dispute still persists between the parties and no determination has been made in this regard.
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, 10.    On the conspectus  of the evidence  before me, I find that Kubushi J dealt  with the issues in dispute and the application proceeded as  an  opposed application where the parties agreed to a final determination. I reiterate paragraph 2 of Kubushi J's  judgment:

"...The matter was in court again on 13 March 2013 and it was postponed sine die. When the matter  appeared  before  me  on 22 April 2013, the rule nisi had expired but the applicant still persisted with the relief  sought."

On this basis, therefore this court  would  consider  the  judgment of Kubushi J.

B.	BACKGROUND:-

11.	The Second Applicant is the registered owner of the property situated at 262 Charles Street, Brooklyn in Pretoria.

12.	There are two separate accounts in respect of the property. The water and electricity account is in the name of AB Truter, a previous tenant of  the property. This account is not in arrears and is duly paid. The First Applicant resides and runs a business from this property. Since occupation, the first applicant has not changed the account to his or his business' name.

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. 13. The rates and taxes account  is  in the  name  of  the  second  applicant. The Second Applicant is obliged  to  pay the  rates and taxes  account.  He alleges in the papers that he pays an amount of R3 500,00 per month. At the time of the application, the property was zoned as a "residential area". Since the Applicants are conducting a dive business on the property, the property was considered to fall under "non-permitted   use".

14.	The rates and taxes account remains in substantial arrears.  As  a  result thereof the electricity services to the property had  been  terminated  on  or about August 2011. It was on this basis that the Applicants approached Court for urgent relief.

(i)	"A Dispute"

15.	Counsel for the applicant argued that a dispute between the parties still exist concerning the calculation of the rates and taxes amount, hence they are entitled to the interim relief.

16.	The Applicants rely on Section 102(2) of the Local Government Municipal Systems Act, 32 of 2000 ( "the Municipal Systems Act').  On  their understanding thereof, the municipality may not consolidate the separate accounts of persons nor implement debt collection in respect of the arrear amount, if there  is a dispute  between the municipality  and a person  referred to concerning any specific amount claimed by the municipality from that
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person. In other words since a dispute persists between the parties, the municipality is prohibited from enforcing its debt collection on the  arrear amount. Counsel for the respondent submitted that the applicants have misconceived the interpretation of Section 102 of  the  aforesaid  Act. Reference was  made to Rademan   v Moghaka Municipality   &  Others 2012 (2)   SA   387   (SCA)   in   par    19,  where   it  clarified  the  interpretation   of  the aforesaid section:

"[19] This section makes it clear that in pursuit of its obligations to charge and receive payments for municipal services, a municipality has the option to consolidate the accounts for various services it provides ... It should be borne in mind that water and  electricity  are not  the only municipal  services  that a
municipality is responsible  for...  Thus a failure to pay rates  and

taxes is likely  to have  very serious  consquences."

17.	The Respondent contended on the papers,  that  no dispute  existed between the parties, neither has any formal dispute been lodged by the Applicants as required in terms of the by-laws.

18.	The Applicant's argument was inter alia the following:

18.1	a dispute exists in respect of the arrear amount in respect of the rates and taxes;
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18.2	the word "dispute" has not been defined  in  the  Municipal Systems Act. It is thus imperative for the court in the action proceedings make a determination.

18.3	the Applicants submitted that, despite the meeting held on 18 August 2014 and the Second Applicant's letters dated 20 August 2014 and 21 May 2015, the Respondent had failed to provide the Second Applicant with an explanation upon which the calculation was made.

18.4	the Respondent persists with its view that it is entitled to  charge the rates and taxes based on the "non-permitted use" of the property. The Respondent  is not entitled to charge a higher  rate in respect of the full property as a result of the fact that only 30% is being used for business purposes.

18.5	The Respondent is not entitled to charge a penalty to the First Applicant since the property is used for multiple purposes as contemplated in Sections 9(1) and 9(2) of the Municipal Property Rates Act. The rates should  have  been  calculated  in accordance with these provisions.

18.6	The Applicants further contended that at no stage prior to this application had the Respondent  formally  notified  the Applicants of its intention to terminate the water and electricity services. It
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is on this basis that the Applicants should be  granted interim relief.

(ii)	Judge Kubushi's Judgment

19.	As already alluded to above, this Court's attention was drawn to a previous matter launched by the second applicant under case number 47730/2011, in the  matter  between  Jacobs  and   Smilawaski   and   the   City  of Tshwane Metropolitan  Municipality.   Having  read  the  judgment   I find that,  Judge Kubushi had dealt with the aforesaid  issue in dispute.  This very "dispute" has once again been brought before this Court.

20.	The Court made the following findings in respect of the aforesaid dipute:

•	Paragraph 21
"The Applicants' property thus falls squarely within the category. It is common cause that the property is currently zoned for residential usage. Even though the Applicant alleges that he has applied for the rezoning of the property, it is not in dispute  that  the property  has not been rezoned.   By  operating  a business   on the property   the Applicant  is doing so in  contravention  with  the permitted  use  of  the  property.    The Respondent   is   thus   entitled   to   lev y   the   rate   as   it does.    There  is  no reason    and    the    Applicant    himself    has   provided    none for the Respondent to be charging rates for business  and commercial usage. There is no reason provided for in either policy or the bylaws for the rates which the Applicant wants to enforce. The property is currently 3 areas as residential and residential use rates must be applicable but once the Applicant  is  using  the property  for the purpose   for which  it is not zoned  'non permitted   use' rates   must be levied."  (my emphasis)

•	When considering whether the Respondent was entitled to  disconnect the Applicants water and electricity supply, Kubushi J stated at para 23:
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"The Local Government Systems Act 32 of 200 (the Systems Act) is a legislative measure that seeks to support and strengthen the capacity of municipalities to manage their own affairs. Section 96 thereof provides for every municipality a credit control and debt collection policy. The municipalities are therefore mandated by Section 96(1)(a) to collect all money that is due and payable. In terms of Section 97(1) a credit control and debt collection policy must provide for amongst (a) credit control procedures and mechanisms (b) debt collection procedures and mechanisms and (g) provision for termination of municipal services or restriction of the provision of municipal services when payments of ratepayers are in arrears ....

•	At paragraphs 24 and 26 she makes the following findings:

[24] It is clear from the above mentioned that a municipality has the power to terminate or restrict the provision of municipal services when a resident is in arrears for payments for services ... "

[26] On  the  basis  of  the  b ylaws  the  Respondent is   therefore entitled to terminate the services of water and   electricity to the property of the Applicant when he is in  arrears with  his payments  in respect of any of his services.   In this instance, I have already made a finding; the Applicant  is in arrears with the  payment  of  the  rates  account   of   the  property."  (my emphasis)

21.	This Court is of the view that the dispute is before the Court on the same facts and in respect of the same parties. The relief sought however was different. In the previous matter the Second Applicant (the Applicant in that matter) requested relief  to  order  the Respondent to restore the water and electricity  account.  In  this matter the relief sought is to interdict the Respondent for "terminating the water and/or electricity supply".

22.	Since the Court has already made a finding on the "dispute" it falls away. I am in agreement that with the findings  therein  and  had further applied my mind to the provisions of the  relevant legislation. The respective provisions the Municipal Systems Act as well as the
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Credit Control By-Law which empowers the  municipality  to restrict and disconnect the supply of municipal  services.

23.	More specifically: cognisance is taken of the relevant legislative provisions namely:
•	Section 97(1)(g) of the Municipal Systems Act stipulates:
"(1) A credit control and debt collection policy provide for ­

(g)	termination of services or the restriction of the provisions of services when payments are in arrears."

•	Section 5(2)(b) of the Municipal Systems Act stipulates that
members of the community have a duty to pay service fees, sub-charges on fees, rates on property and other taxes, levies and duties imposed by the municipality  promptly.

•	Section   5(2)(a)(i)	of the Credit Control By-Law further stipulates:

"(a)	The  council  may,  restrict or disconnect  the supply of water, gas and electricity, or discontinue  any other service to any premises whenever a  user of any service:
(i)	)      fails to make full payment on the  due date or fails to make acceptable  arrangements for the repayment of any  amount for services, rates of taxes."

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•	Clause    5.2(d)   of   the   Credit   Control   By-Laws  empowers   the entities of the municipality to terminate services of one account  if another  account  is  in  arrears,  even  when the  account is in the name of a different person.

•	Clause  5.4(b)  of the Credit Control By-Laws  stipulates    that even in the event that a dispute exists in respect of the amount owing by an owner  in  respect  of  municipal  services  the owner   is required   to   make   regular   minimum  payments   based on the calculation of the average municipal account.

C.	INTERIM RELIEF

24.	It is settled law that for the Applicants to succeed in obtaining  interim  relief  it has to establish:

24.1	a prima facie right;

24.2	a well-grounded apprehension of irreparable harm if the  interim relief is not granted and the ultimate relief if it is eventually granted;
24.3	a balance of convenience in favour of the granting of the  interim relief; and
24.4	the absence of any other satisfactory remedy.

(i)	Prima facie  rights

25.	In demonstrating that the Applicants have a prima facie right they have to demonstrate that they have a right upon a balance of probabilities and that the Respondent has threatened such right.

26.	The high watermark of the Applicant's case and consequently their rights was premised on Section 102(1) and 102(2) of the Municipal Systems Act. In essence, since a dispute exists between the parties, Section 102(2)  prevents the Respondent from pursuing the arrear rates and taxes as well as restricting the water and electricity supply.

27.	This court finds that the Applicant's rights are premised on a misconstrued interpretation of the aforesaid provision.

28.	As already alluded to above, the relevant provisions of the Credit By-Laws entitles the Respondent to terminate the  water  and  electricity services. Kubushi J had dealt with the  issues in dispute  between the parties and   made a finding thereon.

Irreparable Harm

29.	The test in this regard is an objective one i.e. on the basis of  the  facts presented to it, the court must decide whether there is any basis for the entertainment of a reasonable apprehension of injury to the Applicant.
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Irreparable loss in this instance would be if the Applicants are entitled to the services  in issue and it is taken away from  them.

30.	It is trite law that if the Applicant establishes a clear right then this test is not necessary.  In Setloqelo   v  Setloqelo   1914 AD   221  at  227,  the court stated "the test must be applied whether the  continuance  of a thing  against which an interdict is sought would cause irreparable injury to the applicant."

31.	The Applicants have not established a prima  facie  right and thus there  exists no basis to entertain if there would be irreparable injury caused  to  the Applicant.

Balance of Convenience

32.	In this instance this court must weigh the prejudice to the  Applicant  if  the interim interdict is refused against the prejudice to the Respondent if it  is granted. This is normally  considered  in  light  of the  prospects  of  success in the main action. The stronger the prospect of success, the less need for the balance of convenience to favour the Applicant. The weaker the prospects of success, the greater the need for the balance of convenience to favour him.

33.	The Applicants have indicated that a business is being managed on the premises and the provision of water and electricity services are crucial to the operation of the business. The Respondent on the other hand, submitted that
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arrears in municipal accounts are detrimental to the efficient running of the Respondent.

34.	I find that the Applicants' prospects of success in the main action are not promising. As already alluded to above,  they  have  not established  a prima facie right.

No Other Satisfactory  Remedy

35.	In the absence of another adequate remedy, a court  should  grant  interim relief. Counsel for the Applicants emphasised  that  the  applicants  have no other alternative remedy. The Respondent is the service provider who is responsible to make the municipal services available to the Applicant. They
require these services for their business. 

36.	The alternative remedy is to comply with  Clause 5.4(b) of the Credit  By-Laws by making the minimum payments or enter into an arrangement with the Respondent on the outstanding arrears.

37.	It is trite law that a court should exercise its discretion judicially upon a consideration of all facts. This court further  takes  cognisance  of the fact that the "dispute" between the parties have been ongoing long before the first application was lodged in the Magistrate's Court.

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. 38. Kubushi J dealt with the facts of  this  matter  in  detail,  the  same  issues  in dispute which were again presented in this court, which judgment had already been delivered on 10 July 2013. After  lodging  an  appeal  in  the Supreme Court of Appeal, they withdrew such appeal on 20 August 2014. There are no new facts before this court, particularly on what the Applicant has done to resolve the matter, and in settling the arrear  rates and taxes   .

39.	It is common cause that this account is in arrears. Kubushi J had  made  a finding that the calculation method applied by the Respondent was in line with premises which fell under "non-permitted uses".

D.	CONCLUSION:-

40.	Consequently the Applicants are not entitled to the interim  relief they  seek. This court has noted that the Applicant has requested the  Respondent  to furnish it with the calculation formula. The Respondent has an obligation to furnish the Applicant with the calculation method and the updated calculation itself.

ORDER:-

41.	The following order is made:

(1)	The application is dismissed with costs.

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(2)	The Respondent is requested to furnish the Applicant with a detailed updated calculation of the arrear amount in respect of the rates and taxes to date, as well as the calculation  method  it applied  within 5 days of date of judgment.

(3)	The Respondent restricted from terminating the access  of the water and electricity services to the property for a period of 1 month, which period is calculated from the date of this judgment.

KOOVERJIE AJ
Acting Judge

Date of hearing:  7 June  2016

Parties:

Applicants' attorney: Applicants'  counsel:

Respondent's attorney: Respondent's  counsel:

Schoonraad Attorneys Adv.  C Grabler

Matabane Attorneys Adv.  N Erasmus

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