Ekurhuleni Metropolitan Municipality v Ergo Mining (Pty) Ltd and Another (A5041/2016) [2017] ZAGPJHC 263 (29 August 2017)

REPUBLIC OF SOUTH AFRICA

IN THE HIGH COURT OF SOUTH AFRICA

GAUTENG LOCAL DIVISION, JOHANNESBURG

APPEAL CASE NO: A5041/2016

COURT A QUO CASE NO: 2014/45277

REPORTABLE

OF INTEREST TO OTHER JUDGES

REVISED.

29/8/2017

In the matter between:

EKURHULENI METROPOLITAN MUNICIPALITY Appellant

and

ERGO MINING (PTY) LIMITED First Respondent

ESKOM HOLDINGS SOC LIMITED Second Respondent

JUDGMENT

MABESELE J, (ADAMS J AND SARDIWALA AJ CONCURRING):

[1] This is an appeal, with the leave of the Supreme Court of Appeal, against the whole of the judgment and order of the Court below.

[2] In terms of the order the appellant and the second respondent are interdicted and restrained from terminating the electricity supply to the metallurgical plant of the first respondent, pending the final determination of the main application launched by the first respondent against the appellant and the second respondent.

[3] In the main application the first respondent seeks a declaratory order that the appellant does not supply electricity to the first respondent’s plant (known as ‘the Ergo Plant’) and that it in fact is the second respondent which supplies electricity to the first respondent’s plant.

[4] This appeal concerns the interpretation of section 102(2) of the Systems Act[1] which provides inter alia that a municipality will not be able to implement its credit control and debt collection measures where there is a dispute between the municipality and a person liable for payment to the municipality for the provision of services.

[5] Of particular significance and to which attention is drawn is the meaning of the word ‘dispute’ and the phrase ‘specific amount’ in section 102(2) of the Act.

[6] The second respondent did not participate in this appeal although it opposed the application in the Court below.

[7] The dispute between the parties concerns the obligation of the first respondent to pay the appellant for electricity it had consumed at its Vlakfontein metallurgical plant.

[8] The first respondent has declined to pay the amount due on the basis that the electricity it consumed is drawn from the second respondent’s transformers.

[9] Due to the failure by the first respondent to pay the amount due the appellant threatened to disconnect electricity supply to the first respondent’s plant. Due to these threats the first respondent approached the Court on an urgent basis for the interdictory order. It invoked the provisions of section 102(2).

[10] The Court below granted the order in favour of the first respondent.

[11] The appellant’s contention is that the dispute raised by the first respondent does not fall within the ambit of section 102(2).

[12] Before I proceed with the discussion concerning the provisions of section 102(2) I wish to deal first with a preliminary issue raised by Mr Chaskalson who appeared on behalf of the first respondent. The issue concerns the appealability of the order of the Court below which reads as follows:

‘1. [The appellant] and the [second respondent], or any person on their behalf, are interdicted and restrained from terminating or otherwise interfering with supply of electricity to the [first respondent’s] plant situated at 183 Vlakfontein Road, Brakpan, Gauteng, pending final determination of the main application, unless the [appellant and the [second respondent] are authorised to do so by an order of court or the [first respondent] has failed to satisfy any final judgment awarded in favour of the [appellant] in respect of such electricity charges within 10 days of the award of such final judgment.

2. Should the main application be dismissed, the [first respondent] is to pay the money that is being held in its attorney’s trust account to the [appellant] within 10 days from the date of dismissal of the main application.

3. Costs are in the main application.’

[13] Mr Chaskalson argued initially, in his heads of argument, that this Court had no jurisdiction to hear this appeal against the judgment below on the basis that the requirements of section 17(1)(c) of the Superior Courts Act[2] were not satisfied. But during the hearing of the appeal he abandoned this argument. He persisted, however, with the point that the relief sought is interim in nature because it is to operate only until such time as the main application is finally determined.

[14] An argument in the contrary is that the order is final in effect because section 102(2) which resulted in granting the order in favour of the first respondent will not rise in the main application and further that the order stripped the appellant of its power to terminate the supply of electricity where the first respondent was in arrears.

[15] According to Harms AJA, in Zweni v Minister of Law and Order[3] a non-appealable decision is a decision which is not final (because the Court of first instance is entitled to alter it), nor definitive of the rights of the parties nor has the effect of disposing of at least a substantial portion of the relief claimed in the main proceedings.

[16] The Court below granted the order in favour of the first respondent after it had found that the first respondent raised a bona fide dispute in accordance with section 102(2) which prevents the appellant from implementing its credit control and debt collection measures.

In the main application the first respondent seeks a declaratory order that the second respondent supplies electricity to its Ergo Plant. This implies that the Court below will never again be called upon to adjudicate on the applicability of section 102(2) and of the appellant’s entitlement to cut the supply of electricity to the first respondent’s plant. Therefore the order is final in effect and has effectively prevented the appellant from exercising its statutory powers to terminate the supply of electricity to the first respondent in the event the first respondent fails to effect payment due to the appellant for electricity consumption.

[17] In addition, of paramount and worthy consideration, justifying the hearing of this appeal, is the interest of justice in that the appellant has constitutional obligations in supplying services to its residents, inclusive of services to the poorest of the poor.[4] It has the right to govern, on its own initiative, the local government affairs of its community as provided for in the Constitution.

[18] For these reasons the order of the Court below is considered to be appealable.

[19] I now turn to the provisions of section 102 of the Systems Act and the question whether the dispute raised by the first respondent fall within the ambit of section 102(2).

[20] Section 102 provides:

‘Accounts

(1) A municipality may –

(a) consolidate any separate accounts of persons liable for payments to the municipality;

(b) credit a payment by such person against any account of that person; and

(c) implement any of the debt collection and credit control measures provided for in this Chapter in relation to any arrears on any of the accounts of such a person.

(2) Subsection (1) does not apply where there is a dispute between the municipality and a person referred to in that subsection concerning any specific amount claimed by the municipality from that person.’

[21] The first respondent disputes liability for payment to the appellant for the electricity supplied to its plant on the grounds that such electricity is supplied by the second respondent. For this reason, the first respondent preferred to pay the appellant at the second respondent’s tariff which is far lower than the appellant’s tariff, thus, resulting in the appellant experiencing a shortfall of approximately R3 million rands in its monthly income.

[22] The learned judge below was of the view that the argument by the first respondent that it is entitled to pay the appellant at the Eskom tariff and not appellant’s tariff is in fact a dispute relating to the payment of a ‘specific amount’. He was also of the view that the first respondent has not raised a dispute in general terms with a view to delaying payment of its account but has furnished facts that would adequately enable the appellant to ascertain or identify the disputed

item or items and the basis for its objection thereto.

[23] The learned judge, in his judgment,[5] went further, stating the following:

‘The dispute raised by the applicant is not merely an exercise in delay. It is not general or broad. It clearly sets out the basis for the objection. Since the municipality’s right to claim payment of the disputed amount is bona fide disputed by the applicant, the proper approach for the municipality is to institute an action for the recovery thereof, alternatively, to wait for the final determination of the main application …’

[24] Mr Hulley’s argument is that the first respondent is not the type of person described in section 102(1) and the dispute it raised is not the type of dispute that section 102(2) was meant to protect. His reasons are that the first respondent, throughout its founding affidavit, maintained that it was not liable to the appellant for the payment of electricity consumption and further that the first respondent has not challenged either the actual calculation of the amount claimed to have been due in accordance with the appellant’s approved tariffs or the amount of electricity consumed at its plant. He submitted, therefore, that the Court below erred in deciding otherwise.

[25] It is not in dispute that the first respondent is liable to the appellant for inter alia the applicable rates, taxes, water, sewage and refuse charges in respect of the premises upon which the first respondent’s plant is located and that the appellant has consolidated the first respondent’s separate water and sewage accounts with the

disputed electricity accounts in terms of section 102(1)(a) of the Systems Act. In this regard, the first respondent attached to the papers the invoices dated February 2013 and October 2014, respectively. Therefore it is beyond debate that the first respondent

is the type of person described in section 102(1).

[26] Turning to the interpretation of section 102(2), I am mindful of the fact that interpretation is the process of attributing meaning to the words used in a document. In this regard, Wallis JA, in Natal Joint Municipality Pension Fund v Emdumeni Municipality,[6] said:

‘… Interpretation is the process of attributing meaning to the words used in a document, be it legislation, some other statutory instrument, or contract, having regard to the context provided by reading the particular provision or provisions in the light of the document as a whole and the circumstances attended upon its coming into existence. Whatever the nature of the document, consideration must be given to the language used in the light of the ordinary rules of grammar and syntax; the context in which the provision appears; the apparent purpose to which it is directed and the material known to those responsible for its production. Where more than one meaning is possible each possibility must be weighed in the light of all these factors. The process is objective not subjective. A sensible meaning is to be preferred to one that leads to insensible or unbusinesslike results or undermines the apparent purpose of the document. Judges must be alert to, and guard against, the temptation to substitute what they regard as possible, sensible or businesslike for the words actually used. To do so in regard to a statute or statutory instrument is to cross the divide between interpretation and legislation. In a contractual context it is to make a contract for the parties other than the one they in fact made. The “inevitable point of departure is the language of the provision itself”, read in context and having regard to the purpose of the provision and the background to the preparation and production of the document.’

[27] This approach was emphasised in Cool Ideas v Hubbard[7] wherein it was said:

‘A fundamental tenet of a statutory interpretation is that the words in a statute must be given their ordinary grammatical meaning, unless to do so would result in an absurdity. There are three interrelated riders to this general principle, namely:

(a) that statutory provisions should always be interpreted purposively;

(b) the relevant statutory provision must be properly contextualised; and

(c) all statutes must be construed consistently with the Constitution, that is, where reasonably possible, legislative provisions ought to be interpreted to preserve their constitutional validity.’

[28] Applying these principles in the present case, I am of the view that the context of section 102(2) is that it is part of Chapter 9 of the Systems Act which deals with credit control and debt collection. Section 102 appears under the heading of ‘Accounts’. In terms of section 95 the appellant is required to, inter alia, ensure that persons liable for payments, receive regular and accurate accounts that indicate the basis for calculating the amounts due; provide accessible mechanisms for those persons to query or verify accounts and metered consumption, and appeal procedures which allow such persons to receive prompt redress for inaccurate accounts. Section 96 makes provision for collection, by the municipality, of all money that is due and payable to it.

[29] In this context, the word ‘dispute’ should, in my view, be interpreted as being a dispute relating to an account issue, with reference to a ‘specific amount’ of consumption of electricity and the tariff at which the electricity was charged. Therefore any dispute outside of this interpretation would not be covered by section 102(2). The result is that the dispute between the parties does not fall within the ambit of section 102(2). Therefore the Court below erred in deciding otherwise.

[30] A further question that requires attention is whether the first respondent was entitled to the interdict at common law.

[31] Mr Chaskalson’s contention is that even if the first respondent is wrong in its assertion concerning the correct construction of section 102(2), it is nevertheless entitled to the interdict as it had satisfied all of the common law requirements for the grant of such relief.

[32] The legal principles governing interdicts are well known. The requisites are:

32.1 A prima facie right;

32.2 A well-grounded apprehension of irreparable harm if the relief is not granted;

32.3 That the balance of convenience favours the granting of an interim interdict; and

32.4 That the applicant has no other satisfactory remedy.

[33] Mr Chaskalson’s argument is that the first respondent has established prima facie that it draws electricity from the transformers of the second respondent and that it receives no electricity from the reticulation system of the appellant.

[34] This argument lost sight of the fact that the appellant contended that it does in fact receive from the second respondent delivery of electricity to a ‘point of delivery’ from which it supplies the power to the first respondent’s plant. In support of this contention the appellant presented evidence that there are cables under its control which conveys electricity from the point of delivery to the first respondent’s plant. In addition, the appellant had been supplying electricity to the first respondent since 2009. Therefore it cannot be said that the first respondent has a prima facie right which entitles it to interdictory relief.

[35] In demonstrating irreparable harm that it would likely suffer should electricity supply to its plant be terminated, the first respondent argued that the plant stands to lose revenue of approximately R4,5 million whilst still incurring expenses to the tune of R2,4 million per day. The difficulty with this argument is that the appellant failed to make out a case why, if payment of the amount claimed was made by it to the appellant, it would not be able to recover it from the appellant, should it be successful in its main application, instead of depositing it into its attorney’s trust account, pending final determination of the main application. This concerns address, also, the first respondent’s claim that it has no alternative remedy available to it.

[36] As regards the requirement that the balance of convenience should favour the granting of the interdict, my view is that granting of the interdict would hamper the appellant in the execution of its constitutional mandate in that it has the effect of restricting its financial resources, thus, restricting its responsibilities to improve socio-economic development in its area. As rightly argued by Mr Hulley, the sale of electricity represents one of the main sources of income of the appellant to inter alia ensure provision of services to all communities throughout its area of jurisdiction and to provide such services in a sustainable manner.

[37] For these reasons I am of the view that the interdictory relief claimed by the first respondent should not have been granted.

[38] Therefore, the appeal succeeds.

[39] In the result, the following order is made:

39.1 The appeal against the order of the Court below is upheld.

39.2 The order of the Court below is set aside and is replaced with the following:

‘The application is dismissed with costs, including the cost consequent upon the employment of two Counsel.’

38.3 The costs of this appeal, including the cost consequent upon the employment of two Counsel, shall be paid by the first respondent.

_________________________________________

M M MABESELE

JUDGE OF THE HIGH COURT

I agree:

________________________________________

ADAMS

JUDGE OF THE HIGH COURT

SARDIWALA

ACTING JUDGE OF THE HIGH COURT

HEARD ON

20 AND 21 June 2017

JUDGMENT DATE

29 August 2017

FOR THE APPELLANT

Adv G I Hulley SC, together with:

Adv J C Uys

INSTRUCTED BY

Klopper Jonker Incorporated

FOR THE FIRST RESPONDENT Adv M Chaskalson SC, together with:

Adv A Williamson

INSTRUCTED BY

Mendelow – Jacobs Attorneys

FOR THE SECOND RESPONDENT No Appearance

INSTRUCTED BY

No Appearance

[1] Local Government: Municipal Systems Act, 32 of 2000.

[2] 10 of 2013.

[3] 1993 (1) SA 523 (A) at 532I-533A.

[4] See Philani-ma-Afrika and Others v Mailula and Others 2010 (2) SA 573 (SCA); [2009] ZASCA 115 para [20]. See, also, First Rand Bank Limited t/a First National Bank v Makaleng [2016] ZASCA 169 para [15].

[5] Vol 16, p 1305, para [45].

[6] 2012 (4) SA 593 (SCA) at para [18].

[7] 2014 (4) SA 474 (CC) at 484E-485B.