By Chantelle Gladwin- Wood, Partner, Maike Gohl, Junior Partner
18 March 2021
- Introduction
In recent months there has been a lot of hype in the media with regard to various residents or associations taking action against municipalities that are failing to provide services at all, or properly. As such, we felt that it was necessary to advise you on what your rights are in this regard.
- Rates Boycotts
It is unlawful to withhold the payment of property rates for any reason, even if the municipality is not providing the “services” that you would typically associate with what you pay rates for.
To understand why this is the case, we need to distinguish between “rates” and “taxes” and other kinds of services (such as electricity and water services).
In our law, rates and taxes include refuse and sewer charges and these are charges that are payable not because the municipality provides a service (such as rubbish collection) but merely because you, as the property owner, can afford the luxury of owning a property, and you need to contribute to the cost of keeping up the city or town that you live in, as a property owner. These services are not ‘voluntary’ – you absolutely have to pay the municipality for them – and you can’t “opt-out” of them. The reason for these charges includes keeping the city clean, not just by rubbish collection, but in many other ways as well (providing bins in public places, cleaning public toilets, spraying for disease, the provision of sewers to flush bacteria away from homes, etc.).
You can’t chose to pay rates, refuse and sewer charges, because this would result in disease spreading all over the city. These charges are thus taxes that you are required to pay, absent any service delivery for the costs. It’s similar to how you have to pay income tax – because the law says that you must – regardless of what services you receive in return for your money.
However, the supply of water and electricity to a property are not taxes. They are ‘consumption charges’ or ‘services’. These are normally paid for based on consumption recorded. These you don’t have to pay for if you don’t receive the service. So hypothetically you could boycott these charges. However, in most cases, you pay for these when and in the amount that you use them, it would be wrong to use the service and then not pay therefor (because if you are using, you are clearly receiving the service, so you can’t really claim that you are not paying because you didn’t receive the service).
There are some cases, however, in which municipalities charge fixed fees for consumption charges (most notably for electricity charges). These fixed fees are not connected to the amount consumed – a separate charge is levied for the consumption. If (and this is a big if, because the structuring of electricity tariffs is very complicated) the fixed charge is an additional use charge and not part of the cost recovery calculation for the provision of the service, then consumers could lawfully boycott (refuse to pay this), and only pay the consumption charges, based on a failure by the municipality to provide services, including electricity. This would only really happen where, for example, a municipality charges this kind of fixed charge (as they do, for example, in Bitou Municipality, where there is a fixed charge for electricity provision of up to around R2,000 per property per month before consumption charges are levied on top of that) and there is no electricity supply to the property. In such a case the consumer could refuse to pay the fixed charge because there is no supply that it could even utilize/consume.
- What rights do consumers have? Generally
Every municipality should have a specific dispute resolution process, set out in its Credit Control Policy/By-laws, which explains to consumers how you would declare a dispute and how the municipality should handle it.
Consumers should follow this process. When this process ends, if the consumer is not happy, they can lodge an appeal to the Municipal Manager in terms of section 62 of the Municipal Systems Act. This might already be included as part of the municipality’s unique dispute resolution process, in which case you don’t need to do it twice (you only do it once).
If your dispute is not billing related, but rather another failure by a municipality, you may need to consider the by-laws and/or policies relevant to the specific service it is failing you in and ascertain whether there is a separate dispute resolution process, if nothing is set out therein, you can immediately proceed to sending the appeal in terms of section 62 as set out above.
After this, if you are not getting any joy, you can escalate the matter to an Ombud (if your municipality has an Ombud), or the public protector, the Consumer Ombud or (if the matter involves a credit agreement) the National Credit Tribunal. You do not need a lawyer in any of these forums, but you can have one to assist you if you feel that you need assistance.
If you are unable to obtain assistance, or you have little faith in any of these mechanisms working, or you are unable to wait the long period of time that it sometimes takes to resolve matters such as these, you can obtain legal advice immediately. There are few attorneys in South Africa who specialize in municipal law, as it has only been in the last ten to fifteen years or so that municipalities have been acting so unlawfully, that a specialized practice grew up out of the need by consumers to address this conduct. They will be able to advise you best as to what you could do to take the matter forward.
Normally, if you have exhausted all of your other options (such as appeals, the Ombud, etc.) you would be advised to approach a court for assistance. There are many different kinds of relief that you might ask a court to grant and it is very important to obtain professional advice from experienced municipal law attorneys so that the relief is structured in the most practical way possible. Litigating against municipalities is fraught with difficulties for a myriad of reasons, and expert advice is necessary to ensure that the court order obtained will result in relief that is
(i) practical and possible;
(ii) can be provided timeously;
(iii) will actually solve the problem; and
(iv) will actually be attended to by the municipality.
You also want to be able to recover as much of your legal costs as possible, when you obtain a court order against a municipality. This must be specifically pleaded and normally if you want to recover the costs of any experts you may need to prove your claim, you need a court order expressly authorizing this. This is another important consideration when you are crafting your litigation strategy. You will normally recover only around 30 – 50% on the normal ‘party and party’ tariff, and you could recover 50% – 70% on the punitive “attorney and client” tariff, but it is rare that you would recover 100% of your costs, because the court tariffs are not reflective of the actual attorney charge-out rates paid by the client to the attorney, accordingly there are often shortfalls that are not recovered.
Sometimes you find that municipalities fail to comply with court orders, in which case follow up court action is needed. This might require obtaining a contempt of court order, with the aim of arresting or fining the responsible person until such time as compliance occurs. Alternatively, it may require executing against the municipality’s assets (obtaining a writ of execution against the assets of the municipality, having them attached and removed by the sheriff and then sold to satisfy the money judgment owed to the creditor). This too requires a litigation strategy crafted by experienced attorneys.
- What rights do consumers have? Specifically
Every different kind of ‘service’ provided by a municipality comes with its own set of unique challenges and remedies.
For example, if your rubbish is not being collected by the municipality, where it owes you a duty to do this (and this is not going to the be the case in every case), you could bring a court application to compel the municipality to collect the rubbish and clean up the area.
If you are being incorrectly charged, you can take the municipality to court to obtain an order that the municipality corrects your bill and remove the overcharge, or change the tariff, to correctly reflect the true amount payable by you to it.
If you are not being provided with information that you require by it for the protection of your own rights (municipalities are famous for refusing to provide consumers with ‘job cards’ – documents that prove meter inspections, calibrations, and installation and removals) you have the right to approach a court to compel the municipality to give you that information so that you can use it to do whatever you need to do (usually you would need it to win a case against the municipality for overbilling). In this instance, you could also bring an application in terms of the Promotion of Access to Information Act against the municipality, but you would need to consider which option is more beneficial to your matter.
We have (literally) hundreds of such examples. One needs to be a bit more specific in terms of what the service delivery failures are, for us to give you a clearer picture of how you could respond to remedy that failure.
Note that a municipality’s duty to deliver certain ‘services’ is limited to its financial ability to do so. You cannot always compel service delivery if the municipality does not have the means to deliver those services. This is critical for consumers to understand. If a municipality is behaving badly and squandering its resources and not doing a good job of delivering services there is a good chance that you would be able to compel it to jack itself up and deliver services, but if you attempt to oblige a municipality to deliver services that it literally does not have the resources to provide, you will lose.
- Conclusion
As such you as set out above, if you are having issues with a municipality for whatever reason, it is important to make sure you approach the issue correctly. Follow the internal dispute resolution mechanisms of your municipality and if all else fails, approach attorneys that are well versed in municipal law to assist you in coming up with a strategy to compel your municipality to act as it should. You especially do not want to take drastic action, which could later compromise your strategy against the municipality, as it is very difficult to get a favourable court order if you are seen to have approached a court with “unclean hands”.
Please note: this article is for general public information and use. It is not to be considered or construed as legal advice. Each matter must be dealt with on a case by case basis and you should consult an attorney before taking any action contemplated herein.
