The High Court in a recent judgment reiterated the importance of lodging thorough and adequate disputes in relation to municipal accounts in instances where the disconnection of services is brought before a Court to have such services restored.

In the case of Regona Properties (Pty) Limited and another v. The City of Johannesburg Metropolitan Municipality and another, the High Court in Johannesburg recently handed down a judgment wherein the importance of following proper procedure in lodging disputes with the local authority was illustrated.

Tenants and Landlords alike often find themselves in circumstances where the municipal accounts rendered by the local authority are inaccurate and not a true reflection of the actual consumption of their property. The steps taken after the inaccuracy comes to one's knowledge might be your saving grace when the local authority disconnects your services due to the municipal account being overdue.

In the case of Regona Properties (Pty) Limited v. The City of Johannesburg, the High Court again highlighted the importance of lodging proper disputes when property owners seek interdictory relief when the local authority has disconnected services due to purported nonpayment.

The Facts:

Regona Properties (Pty) Limited is a landlord who leases to a local business its commercial property. The tenant, in terms of the agreement of lease, is responsible for payment of the consumption of municipal services who, as far back as 2017, lodged a dispute with the City of Johannesburg after it realised that it was being severely overbilled for electricity consumption. The Tenant, Regona Products (Pty) Limited, realised the overbilling as it had installed a check metre to monitor the actual consumption of electricity in the leased premises. The check metre was calibrated and ensured that the Landlord and Tenant were able to determine the exact consumption on the leased premises.

Importantly, the Tenant, even after it lodged the dispute with the City of Johannesburg, was in a position to determine their actual consumption and diligently paid for their consumption as they had it; however, they withheld payment of the portion of the accounts rendered from time to time that was disputed.

The Landlord and Tenant essentially provided all the information pertaining to the dispute with a degree of accuracy that at least merits further investigation by the City.

The City of Johannesburg was numerously requested to resolve the dispute, acknowledged the dispute, and flagged the account as one of which is disputed. Despite this, the electricity supply to the leased premises was disconnected on the 25th of July 2023 after the City had delivered two notices to the effect that the disconnection would take place imminently.

Upon delivery of the aforesaid notices, the Tenant and Landlord, attended to the City of Johannesburg to resolve the dispute and address the notices, but to no avail. The City of Johannesburg simply stated that they require payment.

Upon the disconnection, the Landlord and Tenant approached the Court on an urgent basis seeking an interdict that the electricity supply be reconnected immediately, stating that the Municipal Account was placed in dispute as far back as 2017 and providing a further elaborate description of the dispute and the history of the dispute.

The Arguments:

The Landlord and Tenant contended that it had duly followed the process in lodging the dispute with reference to the Municipal Structures Act and the City's by-laws, engaged with the City of Johannesburg numerously, and continued to pay what it deemed due to the City.

The City of Johannesburg opposed the relief sought by the Landlord and Tenant stating that it had a duty to collect revenue, consumers were obligated to pay for services rendered, and the Landlord and Tenant did not approach the Court with clean hands and had failed to enter into a payment plan with the City. The City argued that should the Court grant the relief, it would effectively interdict the By-Laws and Policy of the City.

The City further stated that the matter could not be urgent as the latest notice of disconnection was delivered months prior, in April 2023.

The Landlord and Tenant further argued that it cannot be forced to enter into a payment plan and is entitled to a fair complaint procedure and administrative process as set out in legislation and the City's by-laws.

A fair administrative process entails, as argued by the Landlord and Tenant, that the City adheres to the process as set out in the by-laws, and where there is a conflict between a by-law and policy, the by-law trumps the policy. The Court agreed.

The Judgment:

The Court found that the matter was urgent as the Tenant and Landlord exhausted all avenues to attempt to resolve the dispute even after the notices were delivered and the electricity was disconnected. The Court further found that the City had failed to address the dispute and do what is necessary and incumbent on it to investigate the dispute to resolve it. The Court stated that it is for the City to prove that the accounts were indeed accurate after the dispute was received and that it has a duty to deliver accurate accounts to consumers.

The Court with reference to case law, found that the Landlord and Tenant raised with the City a proper dispute to afford it the protection from disconnection as provided for in Section 102(2) of the Municipal Systems Act in that: –

  1. There exists an irreconcilable dispute between the City and the consumer;
  2. The dispute was properly raised by the consumer, it was properly communicated to the City and in line with the City's by-laws and national legislation;
  3. The dispute was not made in general terms but in a degree of specificity in relation to the specific accounts and items therein;
  4. The consumer had put forward enough facts to enable the City to identify the substance of the dispute raised by the consumer; and
  5. The consumer had satisfied the Court that the aforesaid requirements, 1 to 4, have been met and adequately illustrated it in the papers provided to the Court in the matter.

The Court handed down judgment in favour of the Landlord and Tenant and ordered that the City reconnect the electricity supply to the leased premises immediately.

The Effects:

The above judgment again highlighted the importance that when a dispute is lodged with a local authority in respect of municipal accounts, it is important for consumers to lodge a proper dispute with the local authority, setting out with specificity what the dispute concerns and in compliance with the local authority's by-laws and national legislation.

Consumers who inadequately raise disputes without adherence to the above requirements and are not in line with the prevailing legislation run the risk that their services might be disconnected without further recourse.

National legislation, local by-laws, and case law enable a fair procedure to resolve disputes between consumers and municipalities. Municipalities are protected from unfounded disputes that seek to circumvent the power of municipalities to disconnect services, and consumers, likewise entitled to dispute municipal accounts, are under a duty to enable the local authority to resolve the dispute.

Consult your attorney to ensure that your disputes with the local authority are adequately addressed and in line with the local by-laws and legislation to ensure you will not be left in the dark.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.