In January this year, the High Court delivered a landmark judgment in the case of Body Corporate The Straight v Jansen Madike Katisi. The judgment addresses the issue of non-paying unit owners enjoying an electricity supply at the expense of the body corporate.
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PexelsThe matter involved an application for a monetary judgment in the amount of R107,940 against a body corporate member for unpaid levies and electricity charges, together with interest and costs of the application. In addition to the monetary judgment, the Body Corporate sought the authorisation to disconnect the electricity supply to the owner’s residential property until the outstanding balance was settled.
In March 2023, the board of trustees signed a resolution stipulating that litigation would be initiated to recover all monies due and owing. Included in the resolution was the provision for the disconnection of electricity to units of members of the scheme that failed to pay the electrical consumption charges.
The application was officially launched in April 2023 and became opposed in May 2023, and after numerous attempts to have the respondent’s papers filed and delivered, the matter was set down for hearing in August 2024.
Failure to pay levies and utilities
The Body Corporate alleged that the respondent, who had bought the residential unit in June 2014, had failed to pay levies and utilities due to them over a period of 25 months between February 2021 to March 2023. During that period, a total amount of R107,940 unpaid levies became due and owing to the Body Corporate, of which R16,610 was for unpaid and arrear electricity charges.
The respondent conceded to owing the debt and explained that due to the Covid-19 pandemic, he had a lack of income, placing him in an unfavourable position since 2020.
He then offered a payment arrangement stipulating that he would pay R8,000 per month to extinguish his unpaid levies and utilities. He also proposed letting the property to settle his arrears. It does not appear from the judgment that he ever did so, and the full arrears amount remained unpaid.
Upon hearing the matter, the High Court noted that the respondent conceded to his indebtedness and had not put up a valid defence against the relief sought, entitling the Body Corporate to a monetary judgment.
However, the contentious part of the matter involved the disconnection of the electricity supply.
Authorisation to disconnect of the electricity supply
The Body Corporate sought authorisation to engage the services of an electrician to disconnect the electricity supply if the respondent did not satisfy the judgment debt within 10 days of the High Court granting the order. The electricity supply would remain disconnected until full payment of the judgment debt was received.
The respondent argued that cutting off the electricity supply without prior agreement would be a constitutional violation of his right against the “arbitrary deprivation of property in terms of section 25(1) of the Constitution” and the “public law right to receive electricity from the municipality”.
In support of this argument, the respondent relied on two cases. The first being Lion Ridge Body Corporate v Alexander, which held that the disconnection affected the constitutional rights of the respondent and could only be granted either by Management and Conduct Rules or an agreement between the parties.
Additionally, the case of Joseph v City of Johannesburg, which held that disconnection without notice violated the respondent’s constitutional right to access to adequate housing and human dignity under sections 10 and 26 of the Constitution.
Mogamat Saudiq Moerat 8 Apr 2024
The Body Corporate’s response to the arguments was simple. Firstly, it acknowledged that it cannot unilaterally disconnect the respondent’s electricity supply and therefore it sought the court’s authorisation. Secondly, that following an annual general meeting in May 2020, the trustees passed a resolution enabling them to institute legal action in the event of unpaid levies.
The Body Corporate relied on the purchase of the immovable property to prove a tacit agreement between itself and the respondent as he was bound by the rules and regulations passed by the trustees of the Body Corporate, as well as any resolutions passed by the trustees.
Prejudice to other members
The Body Corporate had paid the electricity charges on a monthly basis from February 2021 to March 2023. The Body Corporate noted that if the electricity remains unpaid, electricity supply to every unit will be affected. The court noted that this would prejudice members of the Body Corporate, who in turn will be left without electricity and suffer significant decrease to their property values.
In coming to its decision, the court highlighted the tension between the rights of the Body Corporate to be reimbursed for the payments made and the right of the respondent to have electricity supplied.
In balancing the competing rights, the court considered the fact that the Body Corporate is a non-profit organisation dependent on the recoveries of levies and municipal charges for its continued existence.
Additionally, the critical fact that the Body Corporate is obligated to pay Eksom in order to continue receiving an electricity supply to its units. In paragraph 34 of the judgment, the High Court noted that it would be unfair to paying owners if the Body Corporate continued to pay the electricity charges of non-paying members who are then able to enjoy benefits of electricity.
When assessing the tacit agreement between the Body Corporate and the respondent, the court noted that the respondent did not attend the hearing, failed to file heads of argument and did not seek leave to file a supplementary affidavit addressing the allegations made by the Body Corporate in relation to the tacit agreement. This point was therefore undisputed.
Municipalities can disconnect
The court noted differences between agreements between municipalities and non-paying owners, whereby the municipality is allowed to disconnect the power of a non-paying owner, as well as the relationship between a landlord who may, upon notifying the non-paying tenant, stop paying the municipality who could then disconnect the power.
Body Corporates’ cannot be excluded from disconnecting a non-paying member’s electricity supply as the Body Corporate would suffer prejudice to its financial stability of both itself and its members when members fail to pay. Following this reasoning, the court granted the authorisation to disconnect the electricity.
In authorising the disconnection of electricity, a preventative measure to safeguard the remaining owners’ interests are implemented, ensuring that the financial responsibility is shared equally to avoid any hardships and repercussions. The court noted that the Body Corporate will now be able to prevent the situation worsening by disconnecting the electricity supply in circumstances where the respondent is not paying and avoid the risk of Eskom disconnecting their electricity supply.
Cannot enjoy ‘free’ electricity
This judgment serves as a lesson to both body corporates and homeowners. It seeks to balance the rights provided by our Constitution and the consequence of non-payment, especially whilst enjoying those rights.
When considering the factual dynamics of the application, it is clear that one cannot enjoy ‘free’ electricity at the expense of a third party. The court applied the law and logic in a way which serves as a protective measure for all body corporates who may find themselves in this position.
It should be noted, however, that the Body Corporate’s contention that there was a tacit agreement between it and the respondent was not seriously challenged and it would be prudent to weigh up the facts in each matter where the question may arise.
