Arewa v City of Johannesburg Metropolitan Municipality (2017/40710) [2018] ZAGPJHC 668 (13 November 2018)

REPUBLIC OF SOUTH AFRICA

IN THE HIGH COURT OF SOUTH AFRICA

GAUTENG LOCAL DIVISION, JOHANNESBURG

CASE NUMBER: 2017/40710

In the matter between:

ABDUL RASAQ OLAWALE AREWA APPLICANT

And

CITY OF JOHANNESBURG METROPOLITAN MUNICIPALITY RESPONDENT

JUDGMENT

WINDELL, J:

INTRODUCTION

[1] This is an application brought by the applicant for payment of the amount of R147 437.22 (One Hundred and Fourty Seven Thousand Four Hundred and Thirty-Seven Rand and Twenty-Two Cents) by the respondent to the applicant within 20 (Twenty) days from the date of the order with interest at 10,25% per annum from date of judgment to date of payment.

[2] At the time of launching the application the applicant was the registered owner of Erf 2120, Blairgowrie (“the property”).

[3] A court order under case number 19412/2016 was handed down on 20 September 2016 ordering the respondent to deliver a duly vouched and accurate account in respect of the municipal services to the property within 10 (ten) days of the order.

[4] The applicant sold the property on 29 May 2017.

[5] On 3 June 2017, the applicant’s transferring attorneys applied for clearance figures.

[6] On 20 September 2017, a court order was handed down ordering the respondent to provide the applicant with figures relating to the property under case number 27329/2017.

6.1 On 21 September 2017, the respondent provided the clearance figures to the applicant and indicated that an amount of R152 241.21 due to the respondent for the respondent to produce a clearance certificate as envisaged in terms of section 118(1) of the Local Government Municipal Systems Act 32 of 2000.

6.2 On 27 September 2017, the clearance amount was paid by the applicant. It was submitted that the amount was paid in order to obtain the clearance certificate.

6.3 On 24 October 2017, the applicant launched this application for repayment of the amount not due to the respondent and paid under protest.

6.4 On 31 October 2017, the property was transferred to the new owner.

[7] The main issue to be determined is if the payment qualifies as a payment under protest or an application for a refund.

CLAIM FOR REPAYMENT OF AMOUNT PAID UNDER PROTEST OR APPLICATION FOR A REFUND?

[8] The applicants rely on the matter of Euphorbia (Pty) Limited Trading as Gallagher Estates v City of Johannesburg[1]. In this matter Van Oosten J confirmed the principle that an amount paid under protest and not due can be re-claimed.

[9] In a letter dated 21 September 2017, the applicant informed the respondent that he would make payment of the amount under protest and claim back the amount not due to the respondent.

[10] It is submitted that the applicant only made the payment of the amount under protest to obtain the clearance certificate he required to finalize the sale of the property.

[11] In Commissioner for Inland Revenue v First National Industrial Bank Ltd[2], the court held that:

“The addition of the words “under protest when a payment is tendered can, so it seems, fulfil one or more of several functions: (i) The phrase can serve as confirmation that, in the broad sense, the payment was not a voluntary one or, in the narrower sense, that it was due to duress.

The failure so to stipulate could support an inference that the payment was voluntary or that in truth there was no duress. (ii) It can serve to anticipate or negate an inference of acquiescence, lest it be thought that, paying without protest, the solvens conceded the validity or the legality of the debt, or his liability to pay it, or the correctness of the amount claimed. The object is to reserve the right to seek to reverse the payment. The effect is not to create a new cause of action but to preserve and protect an existing one namely, that payment was an indebitum solutum which is recoverable in law, e.g. by means of the condictio indebiti or in terms of section 32(1)(a) of the Stamp Duties Act, 1968. (iii) It could serve as the basis for an agreement between the parties on what should happen if the contested issue is tested and resolved in favour of solvens. Such an agreement would indeed would indeed create a new and independent cause of action.

In the instant case (i) is not applicable because the payment was a voluntary one, not due to duress; and (ii) is not applicable because, in the absence of mistake, duress or any other recognized ground for invoking the condictio indebiti; there was no independent cause of action to preserve or protest.

Hence the real question is whether (iii) applies.”

[Commissioner for Inland Revenue (supra) at 333]

[12] The respondent submits that the payment made by the applicant was not one made under duress – for similar reasons as in the Commissioner for Inland Revenue matter referred to above.

[13] It follows that the “payment under protest” could have as function (ii) or (iii) as referred to in the Commissioner for Inland Revenue matter .

[14] Function (ii) as referred to in Commissioner for Inland Revenue has as object to reserve the right to seek to reverse the payment. The effect is not to create a new cause of action but to preserve and protect an existing one, namely, that the payment was an indebitum solutum which is recoverable in law, e.g. by means of the condictio indebiti or in terms of legislation (section 32(1)(a) of the Stamp Duties Act, 1968 (Commissioner for Inland Revenue matter).

[15] In the present matter, a refund would be similar to the provisions of section 32(1)(a) of the Stamp Duties Act as in Commissioner for Inland Revenue matter. The applicant has however disavowed reliance on a refund.

[16] As far as (ii) in the Commissioner for Inland Revenue is concerned, the respondent must therefore rely on recovery by means of a condictio indebiti.

[17] The applicant has, however, failed to make out a case for relief based on the condictio indebiti, amongst others by failing to prove that it was the applicant that made payment of the amount paid under protest and also, that in the absence of mistake, duress or any other recognized ground for invoking the condictio indebiti, there was no independent cause of action to preserve or protect.

[18] All that remains open to the applicant would therefore be to place reliance on the third (iii) function as discussed in Commissioner for Inland Revenue.

[19] This would entail an agreement to the effect that the amount would be recoverable if not due.

[20] If the applicant is therefore relying on this third function of “payment under protest”, it was bound to show how the condition of the “agreement” for repayment between the parties have been met, namely, that the amount paid “under

protest” was (eventually) determined not to be due.

[Commissioner for Inland Revenue (supra) at 335]

[21] Presumably in an attempt to show that the payment was not due, the applicant raises a number of issues, none of which resolves the question on whether payment was made (even under protest) of an amount that was determined not to be due to the Respondent.

[22] To this end, the applicant refers to the account statement of September 2016, that, according to the applicant reflected indebtedness of the applicant to the respondent of an amount of R37 060.37. The applicant, however, never alleges that this amount was indeed paid (and only did so in reply).

[23] The applicant refers to the account statement for July 2017 that reflected indebtedness of an account of R1 578.43 towards the respondent and to the account statement for September 2017 that reflected indebtedness of R4 803.99.

[24] The applicant again failed to prove that these amounts were paid and further does not deal with the fact that irrespective of these account statements, the indebtedness of the applicant has been demonstrated in terms of the account statement of November 2017.

AMOUNT LIQUIDATED AND CAPABLE OF EASY AND PROMPT ASCERTAINMENT

[25] It is submitted that the amount claimed by the applicant is liquidated as it is capable of speedy and prompt ascertainment for the following reasons:

25.1 On 20 September 2016 the court ordered that respondent to provide the with a vetted and accurate account;

25.2 The respondent duly did so and provided the applicant with a vetted accurate account of R37 060.37.

25.3 This amount was paid by the applicant and thereafter the applicant received monthly accounts from the respondent. The account for September 2017 (the same month the clearance figures were issued) indicated that an amount of R4 803.99 was due to the respondent.

25.4 The applicant has admitted that the municipal charges for October 2017 should be deducted from the amount that needs to be repaid as the property was transferred on 1 October 2017.

25.5 It is therefore submitted that the amount that needs to be repaid to applicant can simply be calculated as follows:

25.5.1 R152 241.21 (clearance figures paid) – R4 803.99 (amount due in September 2017) – amount due for October 2017) = amount payable to applicant.

[26] The respondent submitted that when determining the clearance amount it scrutinized and vetted the account to come up with the number.

[27] The respondent itself had vetted and scrutinized the same account as per a court order in September 2016 and provided the applicant with an amount of R37 060.37 that the applicant duly paid.

[28] The allegation by the respondent that the account went up with R152 241.21 in a year with the applicant paying monthly accounts received from the respondent cannot be held.

THE APPLICANT SHOULD HAVE FORESEEN THAT THE AMOUNT WOULD BE DISPUTE

[29] It is submitted that the applicant should have foreseen that the amount would be disputed. I cannot agree for the following reasons:

29.1 The calculation set out above is an easy and quick one;

29.2 The respondent has already vetted the account in September 2016;

29.3 The applicant had been receiving monthly accounts since September 2016.

PREMATURE INSTITUTION OF LEGAL PROCEEDINGS

[30] The respondent alleges that the applicant instituted legal proceedings prematurely and should have applied for a refund in terms of the respondent’s Credit Control and Debt Collection By-Laws.

[31] This is not an application for a refund and the Debt Collection Policy is not applicable to the matter.

[32] The applicant, upon receiving the clearance figures and given the long history of the matter could clearly see that the figures were incorrect and followed the principle set out in the matter of Euphorbia referred to above to make payment of the amount under protests.

[33] The applicant informed the respondent on 21 September 2017, that it would pay the amount under protest and institute these proceedings to recover the amount not due to the respondent.

[34] The applicant only made payment of the amount under protest to obtain the clearance figures he required to finalize the sale of the property.

[35] The applicant had no other recourse, but to launch these proceedings.

IS APPLICANT ENTITLED TO REPAYMENT OF MONEY?

[36] The respondent’s main defence is that it vetted the municipal account and found only R10 634.71 is due to the applicant.

[37] In support of this allegation the respondent annexed annexure “TN2” to its answering affidavit and alleges that the account shows all the charges on the property over the entire period that the applicant was the owner as well as all the payments/transfers received.

[38] The account does not show all the payments/transfers received from the applicant and only shows an alleged lump sum amount apparently received from the applicant over the period he was the owner of the property.

[39] The respondent had already vetted the account and provided the applicant with an amount of R37 060.37 in September 2016 as per a court order handed down by the above Honourable Court under case number 2016/19412.

[40] In the matter of Argent Industrial Investment (Pty) Ltd and Ekurhuleni Metropolitan Municipality[3], the court held that water and electricity charges prescribe after three years. Any water and electricity charged older than three years that the respondent added to the account which had not been charged for previously had prescribed. The court also pointed out that prescription to run when the Municipality should have become aware of the charges and not when an account is issued.

[41] Section 96 of the Local Government: Municipal Systems Act 32 of 2000 (“the Act) holds that:

“A municipality –

(a) must collect all money that is due and payable to it, subject to this Act and

any other applicable legislation; and

(b) for this purpose, must adopt, maintain and implement a credit control and debt collection policy which is consistent with its rates and tariff policies and

complies with the provisions of this Act.”

[41] In the Constitutional Court case of Jordaan et al v The City of Tswane Metropolitan Municipality et al[4], the court specifically dealt with the duty imposed on Municipalities under section 96(a) of the Act. The court specifically pointed out that a municipality has a duty to send out regular accounts, develop a culture of payment, disconnect the supply of electricity and water in appropriate circumstances and take appropriate steps to collect amounts due.

[42] In Euphorbia referred to above at paragraph 8 this court held that the onus is on the Municipality to prove the correctness of its accounts.

[43] The above matters show that the duty to accurately account is with the respondent and that the respondent should have all the

information (including the specific payments received) relating to the account on its system.

[44] The onus of proving the correctness of its accounts and in this matter annexure “TN2” is with the respondent. (See Euphorbia).

[45] After the respondent vetted the account in September 2016, following the court order referred to above, it sent the applicant monthly accounts, the last account being in September 2017 which showed that an amount of R4 803.99 was due to the applicant.

[46] The allegation that the account had gone into arrears by R152 241.21 in a year (with the applicant receiving monthly accounts which he paid) after the account had been vetted by the respondent in September 2016 is simply not plausible.

[47] In addition to the above if it is found there are indeed charges that the respondent missed in its vetting during September 2016, water and electricity charges older than three years cannot be considered as per the Argent Industrial Investment (Pty) Ltd judgment referred to above.

_________________________

L. WINDELL

JUDGE OF THE HIGH COURT OF SOUTH AFRICA

Attorney for applicant: Neels Engelbrecht Attorneys

Counsel for plaintiff: Advocate D Landman-Louw

Attorney for defendant: Sello Ramashilo Attorneys

Counsel for respondent: Advocate P.J. Kok

Date matter heard: 28 August 2018

Judgment date:

[1] [2016] ZAGPPHC 548 at 10

[2] [1990] 2 All SA 327 (A)

[3] Argent Industrial Investment (Pty) Ltd and Ekurhuleni Metropolitan Municipality (17808/2016) [2017] ZAGPJHC 14; 2017 (3) SA 146 (GJ) (13 February 2017 at para 11 to 20

[4] 2017 (6) SA 287 (CC)