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J A HEHER

JUDGE OF APPEAL

BRAND JA:

[49] I have had the advantage of reading the judgment of my brother Heher. I agree with most of his reasoning as well as with the result that he proposes. There is, however, one aspect on which I find myself in respectful disagreement. Although our divergence of views will make no difference to the outcome in this appeal, it may be of substantial importance in the future application of s 59(3) and (4) of the Act.

[50] The ambit of our disagreement is delineated by Heher JA’s conclusion (in para 43) that ‘[t]he representation procedure for which s 59(4) provides, must take place after the debt has been admitted or judicially established’. Succinctly stated, my contrary view is that although the requirements of both s 59(3) and 59(4) must be satisfied in order to justify the restriction of a debtor’s water supply under s 59(3)(b), I am unable to infer the prescription of an order of proceedings found by Heher JA, – which requires the establishment of both the fact and the amount of the debt prior to the hearing in terms of s 59(4) – in either of the two subsections concerned.

[51] If Heher JA’s conclusion is correct, it would mean that the association is compelled to seek a court order whenever the fact or quantum of the debtor’s alleged liability is denied, however spurious or contrived the grounds for such denial may be. As is, with respect, correctly pointed out by Heher JA (in para 39), s 59(3) creates a mechanism of enforcing a debt without the requirement of judicial sanction. On his construction, judicial sanction can, however, only be avoided if the debtor admits liability. In the absence of such admission, the association will be compelled to seek judicial determination of the debt before the jurisdictional prerequisite of a s 59(4) hearing can be satisfied, with the resulting delay and period of grace for the defaulting debtor that it entails.

[52] As appears from Heher JA’s judgment, he arrived at this conclusion of a prescribed order, essentially for two reasons: first, because this was held to be the position by this court in Impala 1; secondly, on the basis that it follows from the structure and purpose of the provisions of s 59(3) and (4). I respectfully find myself unpersuaded by either of these two considerations. I first deal with the purpose and structure of the provisions of the two subsections. In my view a proper reading of two subsections reveals the following: when a debtor is in the opinion of the association a defaulter in the sense of one who has not paid a water charge lawfully raised, it must allow the debtor to make representations. If those representations do not persuade the association otherwise, it would be entitled to restrict or suspend the water supply.

[53] If the debtor admits being in default, no question of seeking the sanction of the court arises. If the debtor disputes the association’s claim, the latter has two courses of action open to it. First, it may proceed to exercise the statutory power under s 59(3), but it must be ready to ward off spoliation proceedings, and to discharge the onus which it will bear in those proceedings to establish both the fact and the amount of the debtor’s alleged liability. Apart from a spoliation order, inability on the part of the association to discharge this onus may, of course, also give rise to a claim against it for the damages resulting from its unlawful action.

[54] The alternative and more cautious procedure would be to approach the court first, either in proceedings seeking an order for payment of the amount claimed, or in proceedings, such as those launched by the respondent in this matter, for an order sanctioning the restriction or suspension of the debtor’s water supply under s 59(3). In the exercise of the latter option, the association must be prepared to establish the fact and quantum of the debtor’s liability in motion proceedings.

[55] In any event, the association would have to afford the debtor the opportunity to make representations in terms of s 59(4) and then to consider those representations before it either decides to restrict the water supply of its own accord, or to seek a court order to that effect. However, if it decides not to adopt the option of first seeking an order for payment of the amount claimed, there is nothing, in my view, that precludes the association from inviting s 59(4) representations to be made on the supposition, assumption or premise that the amount claimed is due. The invitation would, of course, have to make it clear that the purpose of the proposed hearing is not to establish liability, but to elicit explanation why, on the supposition or premise that liability had been established, the restriction should not be imposed. A debtor who, in the light of this invitation elects not to make representations, but to rely solely on his denial of liability, will do so at his peril. If the association can prove the fact and the amount of his liability, either in spoliation proceedings or in the proceedings seeking authorisation to restrict the debtor’s water supply, all the requirements for invoking the statutory powers bestowed upon it by s 59(3) will be met. No consideration derived from a construction of the Act, or of logic, in my view, dictates that a debtor who wrongfully disputes liability should be allowed a period of grace or an opportunity to delay the restriction of his water supply which is denied to a debtor who admits default. This would be the effect of the construction adopted by Heher JA.

[56] This brings me to the judgment in Impala 1. Heher JA derives a great deal of support for his conclusion from paragraph 8 of that judgment. If that paragraph does indeed support his conclusion, I would be in the rather invidious position of saying that part of a judgment that I have concurred in, is wrong. I am not persuaded, however, that there is anything in paragraph 8 which differs from what I believe to be the correct construction of s 59(3) and (4). Paragraph 8 is quoted fully by Heher JA (see para 33 above). What he finds particularly supportive of his view is the statement in the last sentence that:

‘This hearing [prescribed by s 59(4)] is intended to be premised on the water charge being unquestionably due, and to elicit explanation why the restriction should not be imposed.’

[57] Heher JA’s understanding of this sentence is that the water charge must be established either by admission or judicial determination before the 59(4) hearing can take place (para 39). If not, he says, reference would not have been made to ‘unquestionably due’ but rather to ‘probably due’. I do not agree. That is not how I understand the statement by Farlam JA. What he says, in my view, is that since the 59(4) hearing is not intended as a hearing on liability, it must take place on the premise that liability has been established. That does not mean, however, that liability must first be established as a fact. On the contrary, if that is what Farlam JA had in mind he would not have referred to a ‘premise’. What that term conveys is that if liability has not been established as a fact, the hearing can be based on the premise or the hypothesis that these charges are in fact due. So understood, the reference to ‘unquestionably due’, which Heher JA finds particularly revealing (in paras 39 and 41), adds very little to the present debate. All it means is that, for purposes of the hearing, the premise is not that the charges are ‘probably due’ but that they are due as a fact.

[58] Paragraph 8 must be understood in the context of the judgment in Impala 1 as a whole and particularly in the light of paras 22 and 27 which read as follows:

‘. . . I agree with the judge a quo that section 59(3) can only be invoked when the water use charge the non-payment of which triggers the power to restrict the supply of water to a user is legally payable. Indeed, I did not understand counsel for the appellant to dispute this proposition.’

And:

‘In the circumstances it is clear that the onus to show that the portion of the water use charges not paid was legally due rested on the appellant. I cannot hold that it was discharged. As counsel for the respondents (correctly in my view) submitted, in view of the fact that the question as to whether the unpaid portion of water use charge is legally due by the respondents is the subject of other proceedings in the court a quo and the appellant consented in its summary judgment application to an order giving the respondents concerned leave to defend, that question must be regarded for present purposes as an open one.’

[59] Thus it was common cause in Impala 1 that the charges claimed had not been established, either by admission or judicial determination. A fortiori, there was no dispute that the 59(4) hearing had not taken place after both the fact and the amount of the debtors’ liability had been established in either of these two ways. If Heher JA’s understanding of para 8 is therefore to be accepted, the judgment would have ended immediately after the last sentence in paragraph 8. The question as to who bore the onus to prove liability or non-liability and whether that onus had been discharged, would not even have arisen. Otherwise stated, it is, in my view, evident from the judgment in Impala 1 that had the association been able to prove in the spoliation proceedings, that the water charges claimed were legally due, the appeal against the spoliation order would have succeeded.

[60] I therefore agree that the appeal should succeed, not for the reasons held by Heher JA (in paras 32-45), but because I hold the view that on the facts more fully set out in paras 46 and 47, the respondent had failed to establish the quantum of the water charges on which it relied as the foundation for its application. As I have said, once the appellant opted for an enforcement order in terms of s 59(3)(b) instead of first seeking a judgment for payment of the water charges allegedly due, it shouldered the onus of establishing both the fact and the amount of each respondent’s liability and, because it had failed to clear that hurdle, the court a quo should have dismissed its

application with costs. I therefore concur in the order proposed by Heher JA in para 48.

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F D J BRAND

JUDGE OF APPEAL

Howie P }

Scott JA } Concurred in the judgment of Brand JA

Van Heerden JA }

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