Body Corporate of Annper Heights v City of Johannesburg (2017/38126) [2018] ZAGPJHC 593 (13 September 2018)

REPUBLIC OF SOUTH AFRICA

IN THE HIGH COURT OF SOUTH AFRICA

GAUTENG LOCAL DIVISION, JOHANNESBURG

CASE NUMBER: 2017/38126

In the matter between:

THE BODY CORPORATE OF ANNPER HEIGHTS Applicant

And

CITY OF JOHANNESBURG Respondent

JUDGMENT

WINDELL, J:

INTRODUCTION

[1] This is an application for the rendering of a statement of account by the respondent and a debate thereof.

[2] The applicant is the Body Corporate of Annper Heights, of the Sectional Title Scheme known as Annper Heights, duly established in terms of Section 2(1) of the Sectional Titles Schemes Management Act, No. 8 of 2011. The applicant’s building is in Edenvale and comprises of a block of flats of 11 floors with 56 Units, 2 lifts and staff rooms.

[3] The respondent is City of Johannesburg, a Municipality duly established by the MEC for Local Government and Development Planning,

in the Gauteng Province, acting in terms of Section 12(1) of the Local Government Municipal Structures Act 1998, by notice in Provincial Gazette No.6766 of 2000, dated 1 October 2000.

[4] The respondent supplies electricity to the applicant, which purchases same from the respondent.

THE COMPLAINT

[5] The applicant contends that the charges for electricity consumption billed to its account are incorrect as it is exceptionally high and the charges that it had calculated through Prime Property Investments (Pty) Ltd (“Prime”) (the authorized managing agent of the applicant) was less.

[6] It is submitted that the reason for the incorrect billing is three electric meters that were installed at the applicant’s building (“the Old Meters”). The applicant contends that the Old Meters were faulty and the respondent therefore replaced them with a single meter, Number 98369708 (“the Replacement Meter”) in April 2017. The applicant only became aware of the Replacement Meter when it received the Statement/Tax Invoice for June 2017 from the respondent. This statement set out the actual consumption on the Replacement Meter, but since then low estimate charges had been raised, that resulted in a lesser recovery from tenants/occupants/owners of the applicant. The respondent contends that it is entitled in terms of its by-laws to charge for consumption based on estimations where actual readings are not available. As soon as actual readings become available, the charges based on estimations are reversed on the account statement of the consumer and the respondent will replace such charges with charges based on actual meter readings.

[7] On 11 September 2017 the applicant’s attorney, Arnold Joseph addressed a letter to the respondent setting out the applicant’s

position. In the letter the applicant requested:

[7.1] Full and precise details as to how each debit, reflected on the applicant’s account has been computed and calculated from July 2016 to April 2017 in respect of the Old Meters and from May 2017 to date hereof in respect of the Replacement Meter (“the Relevant Periods);

[7.2] The amount of consumption and the method of calculation for the Relevant Periods;

[7.3] Copies of the meter readings, log book(s) and any other information pertaining to the debits raised on the account for the Relevant Periods;

[7.4] Full details of the tariff used in calculating the debits over the Relevant Periods;

[7.5] A full and precise statement of the amount owing by the applicant to COJ, alternatively, credits due by COJ to the applicant in respect of electricity charges for the Relevant Periods, duly suspended by meter readings and/or proper proof thereof;

[7.6] A debatement of the account;

[7.7] An irrevocable written undertaking to continue the supply of electricity to the applicant;

[7.8] An irrevocable written undertaking that the applicant’s account will be flagged so as to avoid disconnection of the supply of electricity to the applicant.

[8] A reconciliation of the accounts was received from the respondent, which included the reading period, the number of days, actual or estimate readings on the Old Meters and the Replacement Meter, the total consumption and over or under recovery from the Unit owners. The applicant contends that the reconciliation clearly shows that the billing by the respondent was incorrect. For example: On the November 2016 account, for a 15 day period and on an actual reading, the respondent billed the applicant R196,346.61 excluding VAT, but for the months from November 2016 to March 2017, the billings were exceptionally high, totalling R756,388.18 excluding VAT, with a small credit of R61,493.15 excluding VAT, being reversed on the statement for April 2017. For the same period, Prime, on behalf of the applicant, using the respondent’s published tariffs together with readings taken by the caretaker of the applicant, calculated and only recovered R256,863.39, resulting in an unrealistic shortfall.

[9] A rates consultant was subsequently instructed by the applicant to take the matter up with the respondent. During this time, the respondent disconnected the supply of the electricity to the building of the applicant on two occasions. The applicant contends that the disruption in the supply of electricity to the building of the applicant compelled the latter to enter into a payment arrangement with the respondent even though its charges were being disputed at the time. The respondent agrees that electricity was disconnected as the account was in arrears when the disconnection was effected. The respondent states that it had noted from the account history that electricity consumption had been high at the applicant’s building and the applicant was attempting to create a scenario in which the replacement of meters could be identified as the cause of extraordinary high consumption and that this caused the account to accumulate a large amount of arrears. However, the account was already in arrears in May 2016 in the amount of R493,029,89 and the applicant entered into an instalment plan or arrangement to settle the arrears over a certain period.

[10] On 1 December 2017, the applicant obtained an interim order interdicting the respondent from disconnecting the supply of electricity to the applicant pending the outcome of this application.

[11] The applicant conceded that its account is in arrears, but states that is as a result of the incorrect consumption and charges

reflected on the respondent’s statement of account. It is submitted that it is entitled to receive accurate statements from the respondent on the basis of a contract, alternatively, under the Statutory Regulation for the supply of Municipal Services.

Furthermore, in support of its submission, the applicant contends that it has exhausted all its options available to it outside of instituting this application. The respondent agrees that the applicant is entitled to accurate accounts and alleges that it has complied with its obligations in that regard. It however disagrees that the applicant has exhausted its internal remedies and contends that the applicant has not shown that it logged any dispute within the meaning of section 102 of the Local Government Municipal Systems Act, 2000 (“the Act”) with the respondent.

RENDERING OF AN ACCOUNT

[12] The monthly account statements form part of the papers before the court. The following particulars could be gleaned from the account statements provided to the applicant:

[12.1] the period to which the meter readings relate and in respect of which charges for electricity consumption are included on any particular statement;

[12.2] the meter numbers from which readings were obtained;

[12.3] the meter reading obtained from each meter;

[12.4] whether such reading was an actual or estimated reading;

[12.5] the amount of consumption (per meter and cumulatively on all meters) during the meter reading period;

[12.6] the calculation of the charges for electricity consumption by reflecting the amount of consumption multiplied by the appropriate tariff (depending on the relevant tariff step) and reflecting the appropriate tariff;

[12.7] all other charges and levies (e.g. demand side management levy, service and network charge).”

[13] In terms of Section 95(d) of the Act the respondent must, where the consumption of electricity has to be measured, take reasonable steps to ensure that the consumption by individual users of electricity is measured through accurate and verifiable metering systems. In terms of Section 95(e) of the Act, the respondent must ensure that persons liable for payments receive regular and accurate accounts that indicate the basis for calculating the amounts due. The respondent’s contention is that it had already provided the applicant with all the information it sought as per the monthly account statements and that the applicant failed to show that the information requested from the respondent (by way of its letter of 11 September 2017) was not contained on the account statements that the applicant has received – especially as the account statements issued by the respondent contain all the details and information as set out in paragraph 10 of the Answering Affidavit.

[14] I agree with the respondent. It is evident that the applicant had received monthly account statements from the respondent as they were attached to the applicant’s founding affidavit. The only outstanding issue as contained in the notice of motion is the debatement of the account.

IS APPLICANT ENTITLED TO THE DEBATEMENT OF THE ACCOUNT?

[15] The respondent, relying on the decision in Moila v City of Tshwane Metropolitan Municipality[1] submits that the applicant, essentially, has no cause of action as it has no right in law to debate the account. It is argued that a distinction must be drawn between the right to receive an account and the right to debate an account. In Moila, Willis JA held that a ratepayer is not entitled to the debatement of a municipal account. He found as follows:

“The right to debate an account is not be confused with the right to receive the same. The two are not coextensive. The rights of those who are liable for the payment of municipal services to receive accounts from the relevant municipality is made clear in sections 95 and 102 of the Local Government Municipal Systems Act 32 of 2000 (the LGMS). The relevant portions of s 95 read as follows…….”:

[16] In Absa Bank Bpk v Janse van Rensburg[2] Brand JA held that in order to succeed in a claim for delivery and debatement of an account, a party would have to prove either one of the following categories of relationships: firstly, the existence of a fiduciary relationship between the parties; secondly, a contractual obligation to do so; and thirdly, the existence of a statutory duty obliging the other party to deliver and debate an account. The learned Judges stated as follows:

“Dit spreek eintlik vanself dat daar nie ‘n vertrouenshouding tussen skuldeiser en skuldenaar bestaan nie… ek kan nie aan enige rede dink waarom ‘n skuldeiser in dié omstandighede regtens verplig sou wees om die bedrag van die eis teen homself, te help bepaal nie”.

[18] The applicant relies on s 95 (f) of the Act which provides for the ‘prompt redress for inaccurate accounts’. In Molia supra the court held that s 95 does not provide for the debate of the account and that s 95 is of no assistance in a matter where the relief sought is the statement and debatement of an account.

[19] In the present matter, the relationship between the parties does not entitle the applicant to a statement and debatement of account. In accordance with generally accepted principles, the basis for the underlying relationship between the applicant and respondent is that of debtor and creditor which falls outside the ambit of a fiduciary relationship.

[20] In the result the following order is made:

[20.1] The application is dismissed with costs.

________________________________

L WINDELL

JUDGE OF THE HIGH COURT OF THE REPUBLIC OF SOUTH AFRICA

Attorney for applicant: Arnold Joseph Attorneys

Counsel for applicant: Advocate C.D. Roux

Attorney for respondent: Selolo Ramashilo Attorneys

Counsel for respondent: Advocate PJ Kok

Date matter heard: 13 June 2018

Judgment date: 13 September 2018

[1] [2017] ZASCA 15

[2] 2002 (3) SA 701 (SCA)