Astral Operations Limited v Ekurhuleni Metropolitan Municipality and Another (39702/2016) [2016] ZAGPJHC 380 (18 November 2016)

IN THE HIGH COURT OF SOUTH AFRICA

GAUTENG LOCAL DIVISION, JOHANNESBURG

Case No. 39702/2016

In the matter between:

ASTRAL OPERATIONS LIMITED Applicant

and

EKURHULENI METROPOLITAN MUNICIPALITY First Respondent

RAND WATER Second Respondent

Case Summary: Application for Final Interdict - sought against municipality not to implement its water shedding programme pending a consultative process to be followed – alleged contravention by municipality of s 4(3)(b) of the Water Services Act 108 of 1997 (the WSA) in not having been heard prior to implementation of water shedding programme – municipality acted in terms of subsections 11(2) or 12(1) of its water supply by-law - subsection 4(3) of the WSA does not require notice and an opportunity to make representations where other consumers would be prejudiced – consequences of providing uninterrupted water to applicant would be prejudicial to other consumers – the decision to implement water shedding programme and its consequences will have legal effect until set aside by a court in proceedings for judicial review – this is not a case where a collateral challenge even arises – application dismissed.

Application for Amendment – of the relief claimed for a final interdict to relief for an interim interdict pending the finalisation of review proceedings to be instituted - no or an inadequate explanation proffered for belated application for an amendment - case made out in the founding affidavit does not sustain claim for an interim interdict pending the outcome of a review proceedings – municipality was not called upon to raise a defence to the relief sought in terms of the amendment and it is impermissible to consider municipality’s answering affidavit in isolation, divorced from the context of the case it was called upon to answer – application dismissed.

JUDGMENT

MEYER J

[1] This is one of fifty urgent applications which I have heard in the urgent motion court last week. The applicant, Astral Operations Limited (Astral), sought to interdict the first respondent, the Ekurhuleni Metropolitan Municipality (EMM), from implementing its water shedding programme in relation to Astral, pending a consultative process to be followed to determine how the water shedding programme should be implemented or amended or to grant Astral twelve weeks to implement a contingency plan to comply with the programme. The ordinary rules for the granting of a final interdict applied. (See Telkom v Mzanzi and others (383/12) [2013] ZASCA 14 (18 March 2013).)

[2] The application was heard on Thursday, 10 November 2016, during the afternoon and into the evening. I reserved judgment overnight. When I was about to make an order on Friday morning, 12 November 2016, Astral brought an oral application for the amendment of its notice of motion in which it then sought an interim interdict pending the outcome of an urgent review application for the setting aside of EMM’s decision to implement the water shedding programme. I dismissed the main application with costs, including those of two counsel and I made the same order in the interlocutory application. These are my reasons.

[3] Subsection 72(1) of the National Water Act 36 of 1998 (the NWA) inter alia gives the Minister of Water and Sanitation (the minister) the powers listed in Schedule 3 of that Act. In terms of item 6(1)(i) of Schedule 3, the minister may by notice in the Gazette limit or prohibit the use of water. Subsections 151(1)((l) and 151(2) make it an offence to fail to comply with a temporary restriction on the use of water in terms of item 6 of Schedule 3. On 12 August 2016, a notice was published in the Gazette (the ministerial notice) by the Acting Director-General of the Department of Water and Sanitation (the national department) under delegated authority of the minister in terms of item 6(1) of Schedule 3, limiting the taking of water from the Integrated Vaal River System, a system that supplies water to amongst others, EMM. The ministerial notice required a 15% curtailment on urban water usage from the date of the ministerial notice until further notice.

[4] It is necessary for a better understanding of the background facts leading up to this litigation to first refer to the legislative

framework within which EMM sought to enforce the ministerial notice. EMM is a ‘water services provider’ and ‘water

services authority’ within the meaning of s 1 of the Water Services Act 108 of 1997 (the WSA). Subsection 4(1) provides

that ‘[w]ater services must be provided in terms of conditions set by the water services provider.’ Subsection 21(1)(f) provides that ‘[e]very water services authority must make by-laws which contain conditions for the provision of water services

and which must provide at least . . . the circumstances under which water services may be limited or discontinued and the procedure for such limitations or discontinuation’. Subsection 21(2)(e)(i) and (ii) provides that ‘[c]onditions under which water services are provided . . . may provide for the general limitation or discontinuation of water services where . . . national disasters cause disruptions in the provision of services . . . or . .

. sufficient water is not available for any other reason’.

[5] EMM has published Water Supply By-Laws by council resolution MI 1991/2001, which commenced on 6 March 2002 (the water supply

by-laws). Subsection 11(2)(a) provides that ‘[i]f the Council considers it necessary as a matter of urgency to prevent any wastage of water, unauthorised use of water, damage to property, danger to life or pollution of water, and national disaster or if sufficient water is not available for any other reason the Council may, without prior notice and without prejudice to the Council’s power under section 9(2)(b) . . . suspend the supply of water to any premises’. Section 12 is headed ‘[s]pecial water restrictions’ and subsections 12(1) and (2) read thus:

’12.(1) The Council may at any time, by public notification in a manner, as the Council may consider expedient-

(a) restrict the supply of water in the whole or any part of its area of supply to such hours as it may determine;

(b) prohibit or restrict the use of water-

(i) during specified hours of the day or on specified days;

(ii) for any specified purpose or for any purpose other than that specified.

(c) determine and impose-

(i) limits on the quantity of water, which may be consumed over a specified period;

(ii) special charges, which shall be levied in respect of water, consumed in excess of the limit imposed under subsection 12(c)(i)

(iii) a general surcharge on the prescribed charges in respect of the supply of water; or

(d) impose restrictions or prohibitions on the use or manner of use or disposition of an appliance by means of which water is used or consumed, or on the connection of appliances to a water installation.

(2) A notification in terms of subsection 12(1) may be limited to apply only to specified areas or to specified categories of consumers, premises or activities.’

[6] EMM sought and obtained a council resolution in response to the ministerial notice. The council meeting was held on 31 August 2016. It was resolved that restrictions and prohibitions on water use be implemented in terms of the water supply by-laws, that a 10% increase be imposed on all metered water consumption above 25 kilolitres per month for all household/domestic users and that the applicable water restriction tariffs be imposed on all other user categories who fail to reduce their consumption by 15%. The Head of the Department Water and Sanitation (EMM’s head of the water and sanitation department) was also granted the authority ‘to implement any other measures necessary towards achieving the demand reduction target of 15%.’

[7] The measures initially imposed by EMM to restrict water use resulted in a 3.5% reduction, woefully short of the 15% reduction prescribed in terms of the ministerial notice. On 4 October 2016, EMM’s head of the water and sanitation department met with the minister and the MEC of Cooperative Governance and Traditional Affairs in Gauteng. At the time of the meeting EMM’s daily water consumption from Rand Water was approximately 974 860kl. EMM’s head of the water and sanitation department was informed that the minister was going to instruct Rand Water to throttle the water provision to EMM by 15%, by both reducing the water pressure and turning off water provision completely once a certain volume of water usage had been reached. This would result in a maximum daily water ration of 828 631kl. By authorising Rand Water to throttle EMM’s water supply the minister thus ensured the 15% reduction in water consumption would be achieved.

[8] On 5 October 2016, EMM received a letter from Rand Water setting out the reduction in water it would implement through throttling

measures. The implementation of these measures has resulted in a finite volume of water being allocated to EMM on a daily basis, specifically only 85% of the total volume that EMM previously used on an average daily basis. EMM was required to submit a plan on how water restrictions would be managed. The head of EMM’s water and sanitation department therefore had to make provision for this 15% reduction across EMM. He instituted the Water Restrictions Schedule from which Astral now sought exemption. As explained in a letter addressed to Rand Water dated 21 October 2016 the schedule ensures ‘every water district [in EMM] will experience limited water supply to no water at different periods per week’. No issue was taken with this averment by EMM. The authority that was given to EMM’s Head of the water and sanitation department at the council meeting held on 31 August 2016 to implement ‘any other measure necessary’, according to EMM, included the authority to impose water rationing and to restrict the supply of water in the whole or any part of the EMM area of water supply to such hours as may be determined, as contemplated in section 11 or 12(1)(a) of the water supply by-laws.

[9] Astral is active in the broiler industry, which industry is involved in the growing and slaughtering of broiler chickens for human consumption. It is a distributor and supplier of breeding parent stock, supplying day old chicks to independent broilers as well as parent stock to its own businesses. It has conducted a poultry abattoir and processing facility since 1964. Its principal place of business falls within the Ekurhuleni industrial area which area includes the businesses of other large companies.

Astral is a major water user in EMM’s area of water supply. Its abattoir and processing facility use water for critical

functions, such as cleaning, sanitation, cooling, transportation, chilling, disinfection and evisceration processes. Water is also used to produce boiler steam used in the initial slaughter process and to de-feather the broiler chickens as well as cooling the plant in order to be able to deliver fresh as well as frozen products.

[10] EMM is divided into different zones, each of which includes between 2000 and 3 500 occupants/water users. When water rationing is implemented the water supply is shut off at zone level. Astral is located within EMM’s ‘Clayville Zone’. The water restriction schedule implemented by EMM results in the Clayville Zone, including Astral, not receiving any water on Tuesdays, Thursdays and Saturdays from 21:00 to 5:00. The interruption in the continues water supply to its abattoir and processing facility seriously prejudices Astral’s operations and causes it substantial financial loss. Its chief operating officer central region, Mr. Eugene Viljoen, who deposed to its founding affidavit, states that the interruption to the continues water supply to the abattoir would probably result in an estimated mortality of some 270 000 chickens per day. Astral only became aware of EMM’s water shedding programme on the morning of 8 November 2016 by means of an email which had been sent to it by the Olifantsfontein Business Forum (OBF), which represents the Olifantsfontein industrial area within which Astral’s abattoir and processing facility is situated.

[11] It is common cause that EMM is obliged to administer its services in a transparent and fair manner and that the same holds true for the interruption of services. It is also common cause that EMM has failed to engage Astral in any manner prior to scheduling the interruption of its water supply. EMM contended that it was not under an obligation to engage with the applicant prior to the interruption of its water supply. Astral contended that EMM was bound by the provisions of subsection 4(3) of the WSA, which, so it contended, proscribes that procedures for the limitation or discontinuation of water services must be fair and equitable and must require reasonable notice and an opportunity for representations.

[12] I have referred to subsection 4(1) of the WSA, which requires water services to be provided in terms of conditions set by the water services providers. The conditions must, in terms of subsections 4(2)(iv) and (v) provide for ‘the circumstances

under which water services may be limited or discontinued’ and for ‘procedures for limiting or discontinuing water services’. Subsections 4(3)(a) and (b) provide as follows:

‘Procedures for the limitation or discontinuation of water services must-

(a) be fair and equitable;

(b) provide for reasonable notice of intention to limit or discontinue water services and for an opportunity to make representations, unless-

(i) other consumers would be prejudiced

(ii) there is an emergency situation; or

(iii) the consumer has interfered with a limited or discontinued service.’

[13] This is not an application under the provisions of the Promotion of Administrative Justice Act 3 of 2000 (PAJA) or of the Constitution of the Republic of South Africa, 1996 (the Constitution) for the review and setting aside of the decision of the head of the water and sanitation department under delegated authority of the council nor of the decision of the council taken on 31 August 2016. These decisions (and thus also their consequences) will have legal effect until set aside by a court in proceedings for judicial review.

[14] In Oudekraal Estates (Pty) Ltd v City of Cape Town and Others 2004 (6) SA 222 (SCA) ([2004] 3 All SA 1), para 26, Howie P et Nugent JA said the following:

'For those reasons it is clear, in our view, that the Administrator's permission was unlawful and invalid at the outset. Whether he thereafter also exceeded his powers in granting extensions for the lodgement of the general plan thus takes the matter no further. But the question that arises is what consequences follow from the conclusion that the Administrator acted unlawfully. Is the permission that was granted by the Administrator simply to be disregarded as if it had never existed? In other words, was the Cape Metropolitan Council entitled to disregard the Administrator's approval and all its consequences merely because it believed that they were invalid provided that its belief was correct? In our view, it was not. Until the Administrator's approval (and thus also the consequences of the approval) is set aside by a court in proceedings for judicial review it exists in fact and it has legal consequences that cannot simply be overlooked. The proper functioning of a modern State would be considerably compromised if all administrative acts could be given effect to or ignored depending upon the view the subject takes of the validity of the act in question. No doubt it is for this reason that our law has always recognised that even an unlawful administrative act is capable of producing legally valid consequences for so long as the unlawful act is not set aside.'

[15] I do not think that this case is one where a collateral challenge even arises. In Oudekraal, para 35, the following was said about this defence:

‘It will generally avail a person to mount a collateral challenge to the validity of an administrative act where he is threatened by a public authority with coercive action precisely because the legal force of the coercive action will most often depend upon the legal validity of the administrative act in question. A collateral challenge to the validity of the administrative act will be available, in other words, only 'if the right remedy is sought by the right person in the right proceedings'.’

And in V & A Waterfront Properties (Pty) Ltd and Another v Helicopter & Marine Services (Pty) Ltd and Others 2006 (1) SA 252 (SCA) ([2006] 3 All SA 523), para 10, Howie P said that a collateral challenge-

‘. . . is applicable in proceedings where a public authority seeks to coerce a subject into compliance with an unlawful administrative act. If these proceedings are not of that nature then the grounding order will have legal effect until set aside by a reviewing court’.

[16] In any event, subsection 4(3)(b) of the WSA does not require notice and an opportunity to make representations where other consumers would be prejudiced. The consequences of providing uninterrupted water to Astral will be borne by the occupants of Ekurhuleni who, in the light of the drought being experienced in South Africa, face the risk of severe water shortages or more

stringent restrictions. They will obviously be prejudiced if the whole area in which Astral’s abattoir and processing

facility is situated is exempted from the water shedding programme. The provisions of subsection 11(2) or of subsection 12(1) of the water supply by-laws, in terms whereof EMM acted in restricting the use of water, also do not require a prior public consultation process. It is thus unnecessary for me to consider the questions whether the subsections 11(2) and 12(1) of the water supply by-laws comply with the empowering provisions and prescripts of the WSA and whether the provisions of subsection 4(3) of the WSA apply to EMM’s decision and its implementation of the water shedding programme.

[17] Astral failed to establish a clear right, which is the first requirement in order to succeed in obtaining a final interdict.

Averments to sustain a right to a continued uninterrupted supply of water do not appear in the founding affidavit. The main

application was therefore dismissed.

[18] I now turn to Astral’s belated application for an amendment of its notice of motion. EMM opposed the application on the following grounds: First, no or an inadequate explanation was proffered for the late application for an amendment; Second, the case made out in the founding affidavit does not sustain a claim for an interim interdict pending the outcome of review proceedings; Third, EMM was not called upon to raise a defence to the relief sought in terms of the amendment and it is impermissible to consider EMM’s answering affidavit in isolation, divorced from the context of the case it was called upon to answer. I considered these grounds of opposition to be valid and cumulatively a bar to permitting the amendment.

[19] OBF notified Astral on 8 November 2016 that ‘the decision to impose these restrictions has been made on a much higher level than municipal government’. Astral was accordingly alerted to the fact that there was a decision and an application seeking the relief which was sought in terms of the proposed amendment ought to have been launched in the first instance. An explanation was required for the late application for an amendment. But this factor alone was not decisive to my refusal of the amendment.

[20] To support the relief claimed in terms of the proposed amendment Astral ought to have established clear review grounds in its founding papers. The founding affidavit, however, sets out no grounds of review under the provisions of PAJA or the Constitution for the review and setting aside of the decision of the head of the water and sanitation department under delegated authority of the council nor of the decision of the council taken on 31 August 2016.

[21] In Director of Hospital Services v Mistry 1979 (1) SA 626 (A), at 635H–636B, Diemont JA said the following:

“When, as in this case, the proceedings are launched by way of notice of motion, it is to the founding affidavit which a Judge will look to determine what the complaint is. As was pointed out by Krause J in Pountas’ Trustee v Lahanas 1942 WLD 67 at 68 and as has been said in many other cases:

“…an applicant must stand or fall by his petition and the facts alleged therein and that, although sometimes it is permissible to supplement the allegations contained in the petition, still the main foundation of the application is the allegation of facts stated therein, because those are the facts which the respondent is called upon either to affirm or deny”.

Since it is clear that the applicant stands or falls by his petition and the facts therein alleged, “it is not permissible to make out new grounds for the application in the replying affidavit” (per VAN WINSEN J in SA Railways Recreation Club and Another v Gordonia Liquor Licensing Board 1953 (3) SA 256 (C) at 260.).’

[22] EMM was required to answer a case founded on the allegation of fact that Astral was not heard prior to the implementation of the water shedding programme. EMM was not called upon to raise a valid defence to a claim for an interim interdict pending the outcome of review proceedings. The consultative process that was undertaken must, for purposes of review proceedings ‘ . . . be considered in light of “the exigencies and practicalities of the circumstances”.’ (See Reflect-All 1025 CC v MEC for Public Transport, Gauteng 2009 (6) SA 391 (CC), para 45.) To meet a case for review, EMM needs to show that for Astral to have been heard prior to the taking of the decisions and the implementation of the water shedding programme would in all the circumstances have been inappropriate. EMM would accordingly have been prejudiced if the proposed amendment was permitted and its answering affidavit considered in isolation, divorced from the case it was answering.

[23] A case in point is Administrator, Transvaal and others v Theletsane and others [1990] ZASCA 156; 1991 (2) SA 192 (A), at 196 C-E. Therein Botha JA said the following:

‘It was not for the appellants to show that the respondents were given a proper hearing; they were called upon only to meet the specific allegations put forward by the respondents in support of the relief claimed. The appellants were required to answer a case founded on the allegation of fact that the respondents were not given a hearing; they were not called upon in any other way to raise a valid defence to the relief sought. In particular, for instance, the question whether the hearing given was unduly limited in its scope was not an issue to which the appellants’ deponents were required to address their minds. It is not permissible to consider the appellants’ affidavits in isolation, divorced from the context of the case they were answering. To the extent that the appellants’ deponents went further than may have been necessary to answer the case as presented, it cannot be postulated a priori that they will not be prejudiced if their affidavit is relied upon to determine the nature and ambit of the hearing that took place. To do so may be unfair to the appellants and in effect tantamount to reversing the onus.’

[24] The main application for a final interdict and the interlocutory application for an amendment of the relief claimed in the notice of motion were each, therefore, dismissed with costs, including those of two counsel.

P.A. MEYER

JUDGE OF THE HIGH COURT

Date of hearing: 10-11 November 2016

Date of order: 11 November 2016

Date of judgment: 18 November 2016

Counsel for applicant: Adv J Smit

Instructed by: Natalie Lubbe & Associates Inc, North Riding

Counsel for first respondent: Adv D Watson (assisted by Adv Kentridge)

Instructed by: AF Van Wyk Attorneys, Booysen, Johannesburg