The judgment of the Constitutional Court (ConCourt) on Friday, 26 April, on the withholding of fees for services not rendered in the case between Rademan and the Moqhaka Local Municipality (MLM) has elicited a lot of attention, especially in local circles, where some residents have also been withholding fees.

The members of the local ratepayers association, the Soutpansberg Ratepayers Association (SRPA), have been withholding certain funds from the Makhado Municipality (MM) for a number of years now, based on the fact that these members are not satisfied with the services provided by the MM. To that effect, the SRPA declared a dispute with the MM a number of years ago and only the fees for electricity supply are being paid to the MM, with the rest being held in a trust account.

What the judgment boils down to is that the municipality has the right to consolidate a user’s account, even though certain services and the client’s consumption thereof are specified on that account. If a consumer therefore has a dispute with the municipality regarding services which, in the consumer’s view, have not been rendered (properly), that consumer cannot refuse to pay the whole account or request that a partial payment of the account be allocated only to the electricity portion of that account. Consolidation of the account is the prerogative of the municipality (including the MM) and as such a consumer is responsible for payment of the whole account.

In the judgment, reference is made to the Local Government: Systems Act (LGSA) (Act 32 of 2000) which spells out the duties and obligations of a municipality, as a well as its rights. Point 10 of the judgment stresses that a municipality can make by-laws which aid it in this function and that the national and provincial government must, “by legislative and other measures, support and strengthen the capacity of municipalities to manage their own affairs, to exercise their powers and to perform their functions.” Any judgment regarding municipal services will therefore take this into account.

In this regard, it may appear that municipal by-laws are given preference over national laws. The chairman of the National Ratepayers Union (NRPU), Mr Jaap Kelder, in his initial reaction to the judgment, stresses that Rademan had (perhaps erroneously) relied on a possible conflict between the conditions of the Electricity Regulation Act (ERA) (Act 4 of 2006) and the LGSA regarding the termination of the electricity supply. Rademan argued that her electricity could not be cut because she had paid that portion of her account. The ConCourt disagrees.

However, the ConCourt goes further than just give judgment on the case between Rademan and the MLM. It points out that a remedy exists for a resident or ratepayer where “the municipality demands payment for a service or services in circumstances where the municipality has not provided the service or services” (point 41). It further points out (point 42) that “in the present matter it was not Ms Rademan’s case that the municipality claimed payment for services it had not rendered. Indeed, in the present matter it has not been proved that the municipality was claiming payment for services that had been rendered poorly or inefficiently. However, where a municipality claims payment from a resident or ratepayer for services, it is only entitled to payment for services that it has rendered. By the same token, where a municipality claims from a resident … for services, the resident … is only obliged to pay the municipality for services that have been rendered. There is no obligation … to pay for a service that has not been rendered” [our emphasis].

The judgment continues (point 44) by pointing out that a dispute can be declared regarding the service delivery or lack thereof between the municipality and the consumer which, in the case of the MLM’s by-laws, will be referred to an appeals committee, whose decision is final in terms of local remedies. If the resident is not satisfied with the ruling of the appeals committee, the matter can be brought to court for a decision.

According to Kelder, this is in line with the NRPU’s contention that ratepayers should not be forced to pay for services rendered poorly or not at all. In a letter to the SRPA and other ratepayers associations, he states that this ruling closes the door for people who refuse to pay for electricity on grounds other than a dispute declared. This will mainly affect the non-paying public, whereas those withholding their payment (paying into a trust account instead) will not be affected because the money will be available when necessary.

The implication for the local SRPA and its members is that the dispute with the MM regarding problematic service delivery will probably be contended based on the MM’s by-laws and whether or not the same remedy (or alternatives) exists as in the case of the MLM’s by-laws. A thorough study of the MM’s by-laws will determine this. The question remains how one would argue such a case in court and prove poor service delivery or lack of service delivery. According to Kelder, a very clear “paper trail” needs to be established to provide evidence of the latter. What is apparent, however, is that this saga is very far from over.