Pay your electricity bill or have your power switched off. File photo
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.
The 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 body corporate is incorporated under section 2(1) of the Sectional Titles Schemes Management Act and was established in 2007.
The respondent bought the immovable residential unit in June 2014 and, as the owner of the unit, automatically became a member of the body corporate.
The body corporate is managed by a body of trustees, which oversees the affairs of the body corporate and has a fiduciary relationship to act in a manner which is beneficial to its members. The obligations of the trustees include the recovery of monthly levies to manage and administer the affairs of the body corporate, particularly in relation to the maintenance and upkeep of the common property.
This is a common practice authorised by section 3 of the Act and section 29(1) of the Community Schemes Ombud Service Act, which provides that the body corporate must recover contributions in respect of levies payable to the ombud on a quarterly basis.
Section 4(i) of the Act, read together with Management Rule 25 of the Sectional Title Schemes Act and Conduct Rules, set out in Annexure 2 of the regulations entitles the body corporate to judgment for any outstanding levies.
The body corporate alleged that the respondent had failed to pay levies and utilities over 25 months from 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 because of the Covid-19 pandemic he had no income, placing him in an unfavourable position since 2020. He then offered a payment arrangement that he would pay R8 000 a 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. But the contentious part of the matter involved the disconnection of the electricity supply.
The body corporate sought authorisation to get 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 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.
The body corporate’s response to the arguments was simple. First, it acknowledged that it cannot unilaterally disconnect the respondent’s electricity supply and therefore it sought the court’s authorisation. Second, after 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 because 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.
The body corporate had paid the electricity charges on a monthly basis from February 2021 to March 2023. It noted that if the electricity remains unpaid, electricity supply to every unit will be affected. The court said this would prejudice members of the body corporate, who in turn will be left without electricity and suffer a significant decrease to their property values.
In balancing the competing rights of the body corporate and the constitutional rights of the respondent, the court considered the fact that the body corporate is a nonprofit organisation dependent on the recoveries of levies and municipal charges for its continued existence.
Additionally, the body corporate is obligated to pay Eskom to continue receiving an electricity supply to its units. 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.
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. In addition, a landlord 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 because it and its members would suffer prejudice to their financial stability. 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 is 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.
This judgment serves as a lesson to both body corporates and homeowners. It seeks to balance the rights provided by the Constitution and the consequence of non-payment, especially while enjoying those rights. 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 that serves as a protective measure for all body corporates who may find themselves in this position. But 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.
Charlise Finch is a candidate attorney and Pierre le Roux is the director and chief executive at Herold Gie Attorneys.