Royal Northlans Golf and Country Estate (Pty) Ltd (Reg No 1997/01748/07) v Bela Bela Local Municipality (27415/2008) [2008] ZAGPHC 360 (19 June 2008)

IN THE HIGH COURT OF SOUTH AFRICA

(TRANSVAAL PROVINCIAL DIVISION)

Case no. 27415/2008

ROYAL NORTHLANS GOLF AND COUNTRY

ESTATE (PTY) LTD (REG NO 1997/01748/07) APPLICANT

and

BELA BELA LOCAL MUNICIPALITY RESPONDENT

JUDGMENT

MAVUNDLA J.

[1] The applicant has approached this Court by way of an urgent application seeking an order in the following terms:

"1. That the application be dealt with in accordance with the provisions of Rule 6(12) of the Uniform Rules of Court this

dispensing with the time limits and forms;

2. The respondent be ordered to reinstate the Applicant's electricity supply in relation to account 102499/003943 on Portion 56 (a Portion of Portion 25) of the farm Het ad 465;

The Responent be ordered to pay the costs of this application on a scale as between attorney and client Further and /or alternative relief."

[2] In its founding affidavit the applicant states that the purpose of the application involves an order against the respondent for the reconnection/ reinstatement of the electricity service supply to the applicant pursuant to an agreement in relation to alleged arrears of same and payment thereof by the applicant to the respondent, thus settlement of the electricity account in full 0. Respondent, contrary to the agreement without any reason thereof, bluntly refuses to reinstate the applicant's electricity services under circumstances which renders the application urgent.

[3] The applicant is the registered owner of Portion 56 (a Portion of Portion 25) of the farm Het Bad 465situated within the boundaries. The applicant is since 1996 in the process of developing a golf and country estate in the said property. Towards this end the applicant states that the parties entered into an agreement which deals with bulk electrical services to be supplied by the respondent to the applicant. It is further averred that its common cause between the parties the applicant had access to electricity supply against payment to the respondent of its prescribed tariffs(levies) and consumption.

[4] The applicant states that the electricity supply to itself was disconnected by the respondent on 26 February 2008, the applicant not having paid its account. A variety of visits to the respondent's offices and subsequent negotiations between itself and the respondent as well as the applicant's attorneys, which related not only to the electricity supply, but to further unrelated disputes not relevant for purposes of this application.

[5] The applicant further avers that during the course of negotiations since March 2008, the applicant endured not having electricity supply to its premises. The applicant further avers that during April and again in May 2008 it received very disturbing electricity accounts on its municipal account. The electricity average consumed by the applicant in rand value averaged approximately R20, 000,00 Per month. The April and May account however indicated approximately R99 000,00 added to the electricity consumption at the applicant's premises It avers that the respondent was clearly wrong in this regard.

[6] According to the applicant the dispute pertaining to the electricity, together with certain other disputes, unrelated to the present application but to the development as a whole, including property rates and taxes and but services installed on behalf of the respondent by the applicant. Culminated in the applicant's decision to call a meeting with duly authorised representatives of the respondent with a view to air all possible disputes between the parties and in an attempt to finalise same.

[7] The applicant further avers that the reason why during the early parts of May 2008 it decided to endeavour to settle all outstanding

issues between itself and the respondent resulting from the applicant's endeavours is that: 7.1 During April 2008 the applicant

for reasons unrelated to this application, settled all monetary issues outstanding between the parties ant the applicants professional team, causing the contractual relationship that existed between the applicant and its professional team, causing the contractual relationship that existed between the applicant and its professionals to cease.

7.2 The applicant successfully negotiated and concluded a service and construction agreement with a Malasian company, AL-AMBIA SDN. BHD.to

7.2.1 rectify and complete the installation of the internal services; and

7.2.2 construct 460 golf and residential villas on the Royal Northland &Golf Estate proclaimed township; and

7.2.3 redesign (with Gary Players's assistance) and upgrade theWarmbaths Golf course and club (forming part of the development as awhole)

7.2.4 The agreement as stated above, was reached after two visits from the foreign contingent and executors of the financier (EXIM

BANK(MALASIA); The date of the company's representatives' arrival andsubsequent planning and construction process is set for 20 June 2008.The 'time line" planning involved careful consideration and recruitment of local contractors and sourcing of materials for the construction process.; the applicant had as a matter of urgency to finalise (if possible) the outstanding disputes as between itself and the respondent. With the construction date in mind, the applicant thus caused upon its attorneys to arrange a meeting with all relevant role-players from the respondent at their earliest convenience.

[8] The applicant further alleges in its affidavit that there was a meeting between the parties with their respective representatives on 21 May 2008. The applicant further avers that after some serious debate between the parties it was agreed that the respondent shall investigate the dispute regarding electricity account, and the respondent would revert to the applicant within 24 hours. The applicant shall record all other issues and its view on such issues and that the respondent shall after investigating and reschedule a meeting for bon fide negotiations to finalise all outstanding matters. It was further impressed on the respondent's representatives

that due to the arrival of the Malasian construction team during mid-June 2008 dispute should and must be finalised as a matter of extreme urgency to determine the applicant's indebtedness in respect of the electricity account so as to enable the applicant to settle its inbtedness to the respondent. The applicant further state that the electricity account was dealt with separately due to the fact that the other issues were unrelated to the electricity bill and this was confirmed by its attorneys on 26 May 2008 which letter is marked annexure E. On 29 May 2008 (attached and marked annexure F) the respondent furnish it with a breakdown of the electricity account and advised that as per its "Credit Control policy, the outstanding balance must be settled in full before services can be reinstated "

[9] The applicant further state that on 30 May 2008 it caused a payment in the amount of R45684, 00 to be made, which is the amount on the respondent's version is the applicant's current indebtedness in relation to the electricity consumption and charges. The applicant has however stated that annexure "F" indicates a credit for electricity consumption that amounts to R97 609, 34. On the 30 May 2008 the respondent through Ms Baartman bluntly stated that there was no agreement existing in terms of which the respondent is obliged to "switch on the electricity again." The respondent subsequently stopped in dismay of the response of Ms Baartman stopped payment of the aforementioned payment. The respondent further states that it would serve no purpose to settle the electricity account, if other disputes, relating to approximately R6.8 million cannot be resolved prior to 20 June 2008. The applicant further states that there is no legal nor factual basis for the respondent to renege on the agreement to reactivate the electrical services at the property of the applicant. It is however the applicant's view that it has settled the electricity account.

[10] With regard to urgency the applicant states that should the matter not be heard before 20 June 2008 the applicant's contractors will lose faith in the development process, with an international embarrassment and this in turn might cause the applicant irreparable

monitory damage. It further states that the consequences of respondents action resulting in no electricity available to the applicant to pursue its construction, is self evident. Ultimately the respondent stands to gain 460.

[11] The respondent is opposing this application. In its opposing affidavit its is stated inter alia that its common cause that the applicant and the respondent have entered onto a service agreement on or about 20 August 1998. In terms if the agreement, the applicant was responsible for the payment of property tax at the prevailing tariffs and the applicant had access to electricity supply against payment to the respondent of the prescribed tariff (levies) and consumption.

[12] It is stated further by the respondent that as far back as the 20 September 2007 the applicant and the respondent had a meeting

regarding the applicant's outstanding balance owing to the respondent in the amount of R1 700 000, 00, The respondent indicated to the applicant that it was willing to accept R1 100 000, 00 payable immediate payment of an amount of R550 000, 00 thereafter upon payment of a further amount of R550, 000, 00 Payable in three equal instalment. The respondent set out this position in two separate letters dated 27 September 2007 and 30 October 2007. The respondent further informed that applicant that its water and lights must be paid to date since its credit control measures will be taken on the payment of this account and that failure to honour this agreement would lead to the respondent reversing the whole agreement. The respondent adopted a credit and debt collection policy in terms of section 96 of the Municipal System Act, Act 32 of 2000, The respondent further states that it informed the applicant on various occasions in writing of the fact that non-compliance with the aforesaid agreement would lead to the respondent implementing its credit control policy on the applicant's accounts with itself. Save for the payment of only R550 000,00 the applicant failed to honour the agreement by not paying the rest of the outstanding amount of approximately R1 200 000, 00 on time. On 22 January 2008 the respondent informed the applicant that due to the applicant's dishonouring of the agreement the applicant was reversing the whole of the agreement and the full outstanding amount would be due and that the respondent had no alternative but to introduce its credit control policy. The respondent further informed the applicant that it will therefore be disconnecting the electricity supply to the applicant as from 22 January 2008. Apart of the payment of the amount of R550 000,00 the respondent did not receive further payment between October 2007 and January 2008 Subsequently the respondent terminated the electricity supply in February 2008. On 11 March 2008 the respondent informed the applicant that due to the applicant's dishonouring the previous agreements the respondent had no alternative but to implement its credit control policy, notwithstanding the receipt of payment of an amount of R 106 815, 09 which was received on 31 January 2008

[13] With regard to urgency the respondent points out that the electricity was terminated on 26 February 2008 and was fully aware of the respondent's credit control policy regarding reconnection. The respondent further states that the application is premature.

[14] Counsel for the applicant has referred me to, inter alia, to the Mandarina Trading 488 CC v Bela Bela Local Municipality unreported

judgment of Br. Justice Van Der Merwe which dealt with the aspect of property tax levied by the Local Authorities on properties. I am of the view that the relevant case is not apposite to this particular case which relates to the issue of reconnection of the electricity supply to the applicant. The submission made on behalf of the applicant is, inter alia, that the accounts issued by the respondent not only for the 13 individual erven, but also for portion 56, in the absence of a lawful entitlement thereto, cannot create a right to receive such taxes or an obligation to pay same. This submission, in my view goes against the very application of the applicant who primarily seeks an order compelling the respondent to reconnect the supply of electricity to the applicant. The effect of such an order would result in a situation in terms of which the applicant is supplied with electricity which in turn it consumes but refuses to pay towards such supplied electricity because, according to it, the respondent does not have a lawful entitlement thereto and can therefore not demand for the payment of such supplied electricity.

[15] In the letter of the applicant's attorneys of record dated 26 May 2008 (annexure E) it is conceded that the applicant has not had electricity supplied to it since from 26 February 2008. It therefore is common cause that the electricity supply to the applicant was disconnected since about 26 February 2008. It is common cause that this application was only launched on 6 June 2008. Approximately more than 15 weeks after such termination. Once the applicant decided to embark on the cause of settlement, the applicant lost out its right to approach this Court on urgent basis for reconnection of the supply of electricity. Besides the applicant concedes that there still remain issues in dispute between the parties. I therefore hold the view that the application is not urgent and it must be dismissed for this reason.

[16] In the matter ZULU v MINISTER OF WORKS KWAZULU, AND OTHERS 1992 (1) SA 181 (D &CLD) at 190F-H at Thirion said that:

"I am of the view that since the applicants use the water did not constitute the use of a servitutal right and since any right which the applicant might have had to have water supplied to him did not constitute an incident of his possession or control of a corporeal thing (i.e. his dwelling house), it would not be competent to grant a spoliation order ordering the respondents to resume supplying the applicant with water. To hold otherwise would in effect mean that the Court would grant an order for specific performance of a contractual obligation in proceedings the respondent is precluded from adducing evidence to disprove the existence of the obligation. If a spoliation order were to be competent in the present case and were to be granted, the respondent would have to Court and obtain judgment author sing them to terminate the supply of the water. If they fail to convince the Court that they have a right to terminate the water supply they would presumably be compelled to pump water free of charge to the applicants house for ever." Vide also TELKOM SA Ltd v XSINET (Pty) LTD 2003 (5) SA 309 at 314G paragraph [14].

[17] I am of the view that what is said by Thirion J I in the above quoted paragraph is apposite to this matter The applicant has conceded that there is a dispute about the electricity account and the parties have not settled such dispute. To order the applicant to reconnect the supply of the electricity supply would be ordering the respondent to perform specific performance of a contractual obligation, which obligation I am not satisfied that the applicant has acquitted the onus resting upon it to discharge that it exists. For this reason the application must fail. But also for the reason that the application is not urgent the application must also fail. In the result the application must be dismissed for both reasons.

[18] It is trite that costs follow the event. Consequently the applicant must bear the costs of this application. However I do not think that this is a matter where I must grant punitive costs.

[19] In the premises I make the following order:

1. That the application is dismissed with costs.

N.M. MAVUNDLA

JUDGE OF THE HIGH COURT

HEARD ON THE: 12/06/08

DATE OF JUDGMENT: 19/06/08

APPLICANTS ATT: Mr. BAARTMAN

APPLICANT'S ADV: MR.P ELLIS SC., with

APPLICANT'S ADV: MR. J ROUX.

RESPONDENT ATT: MR. A.P. LEDWABA.