Ms Olga Rademan lives within the Moqhaka Municipality (“the Municipality“), and refused to pay taxes and levies on her property.   She is a member of the Moqhaka Rate Payers’ and Residents’ Association to which she pays the amount due in respect of property rates. She had however paid the Municipality what was due for services, including electricity.  On 17 August 2009, Ms Rademan’s electricty supply was cut off by the municipality. 

Ms Rademan brought an urgent application before the Kroonstaad magistrate’s court for the restoration of her electricity supply and this was granted. The Municipality appealed to the High Court, and the High Court overturned the Magistrate’s decision finding that the Municipality was within its rights to disconnect Ms Rademan’s electricity. The Supreme Court of Appeal agreed with the High Court, and Ms Rademan appealed to the Constitutional Court. 

Justice Zondo, writing for the Court, held that the legislative framework applicable to the dispute at hand did allow the Municipality to amalgamate the different accounts for services rendered (like water, electricity, waste management) into one consolidated account.  The effect of this debt consolidation is that the non-payment of any portion of the account causes the ratepayer to be in arrears on the entire consolidated debt and the Municipality is resultantly entitled to reduce or withhold the delivery of services such as electricity.  In essence, the Constitutional Court held that a ratepayer cannot choose which of the municipal service they pay.  Accordingly, the Constiutional Court found that Ms Rademan’s account was in arrears, and that the Municipality was entitled to discontinue the supply of electricity to her household.

The second contention was dismissed for similar reasons.  Section 21(5)(c) of the Electricity Regulation Act 4 of 2006 (“the ERA“) allows a Municipality to terminate the supply of electricity if a customer (Ms Rademan in this case) contravenes ‘the payment conditions of that license’.  The Court investigated the contractual provisions between Ms Rademan and the Municipality, and found that the Ms Rademan agreed to be bound by the By-laws of the Municipality.  These By-laws state that the Municipality is entitled consolidate different accounts, and that the failure to fully pay the account entitles the Municipality to restrict or disconnect the supply of electricity.  Accordingly, the Court found that the Municipality was entitled to terminate the supply of electricity in terms of section 21(5)(c) of the ERA.  

Justice Zondo did, however, stress that ratepayers were not obliged to pay for municipal services not rendered.

In a concurring opinion, Froneman J held that the provisions of the ERA were not at all relevant to the case.  He held that the ERA pertains only with the termination of electricity in the context of the national government, and does not deal with cases like the present dispute. He nevertheless found that the The Local Government: Municipal Systems Act, 32 of 2000  and the relevant municipal allows permitted the action taken by the Municipality.

Download judgment here.