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IOLProperty - South African Property For Sale
Wednesday Feb 06, 2013

Property rates row debated in Constitutional Court

The Constitutional Court yesterday questioned how municipalities were supposed to provide services if residents withheld payment whenever they had a gripe.

"How could we pick and choose and municipalities still remain viable?" asked Deputy Chief Justice Dikgang Moseneke.

Fed up with services of the Moqjaka municipality in the Free State, Kroonstad resident Olga Rademan stopped paying the rates part of her bill, but kept up payment for electricity, sewerage and water.

The municipality cut off her electricity even though she was fully paid up.

Rademan argued that the municipality had no right to do that.

In terms of the Electricity Regulation Act, municipalities were not allowed to cut the electricity supply unless a client had not paid. "If you paid your electricity, you must receive electricity," her lawyer Dennie du Preez argued.

For residents concerned about municipal financial mismanagement, there was no other course of action.

There was no law that allowed for withholding of money from municipalities, but it was also wrong to cut her power off when she was paid up.

The only other option, if residents were disgruntled, was the ballot box, which was "not such a strong weapon", or intervention by the national government.

In 2011, the Treasury intervened in Limpopo to help sort out the province's finances.

Du Preez said if the municipality wanted its money for rates, it should sue under the common law, but it could not cut off her electricity.

The municipality cited the Municipal Services Act to justify its actions.

It contended it could consolidate all amounts a resident or property owner owed into one bill, and if any aspect was outstanding, it could cut the power - regardless of what was paid up and what not.

The by-laws the municipality used were promulgated in terms of the Municipal Services Act, the court heard.

Jimmy Claasen SC, for the municipality, said the by-laws gave the municipality the right to cut power if any aspect of the bill was unpaid.

This was part of the agreement the resident entered into with the municipality to receive services.

Disgruntled residents could get a declaration from a court, exercise their options at the ballot box, or protest. "But they can't withhold money," he said.

Judge Moseneke asked how municipal customers could be held so strictly to a contract that they had to pay for water, for example, if they had not received it for six months.

What happened to a municipality that was in breach of its own contractual obligation to provide the water? he asked.

Claasen said ratepayers should apply to the courts against the municipality, and not withhold their money.

Chief Justice Mogoeng Mogoeng commented that the court's decision would have a profound effect on the approach to service provision. The matter was deferred.

Sapa

 
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