Have you received a utility bill for your property after a period of time despite making payment to the Municipality?

In Argent Industrial Investment (Pty) Ltd vs Ekurhuleni Metropolitan Municipality, 2017 (SA) (ZAGP), Argent was charged estimates for its water usage for approximately five and a half years. In March 2015, Argent was presented with an invoice in March 2015, in the sum of R 1 152 666, 98 for consumption based on the reading of a meter, which had not been read since September 2009.

Argent sought relief that it is not liable for any charges, which were incurred three years preceding March 2015 as the obligation to pay had prescribed by the time it was presented with the invoice.

The Municipality’s argument was based on its constitutional obligations read with the Local Government: Municipal Systems Act 32 of 2000 and the Ekurhuleni Metropolitan Municipality Credit Control and Debt Collection Policy 2015.2016 in that the excess water charge did not prescribe as prescription only commenced when Argent was billed by the Municipality and since Argent had regularly effected payment in respect of the estimate consumption, it was tantamount to an acknowledgment of debt and as it accordingly interrupted prescription.

The Court found that the Municipality had knowledge that it was supplying Argent with water and it was paying estimate consumption costs. The only fact which the Respondent did not have knowledge of was the exact consumption of Argent which was within the Municipality’s reach, had it fulfilled its function.

Simply put the Court found that had the Municipality attended to regularly read the meter and informed Argent of its indebtedness it would have been entitled to such payments.

The following principles are important to note from this judgment:

1. Should a consumer receive a utility bill, which illustrates charges older than three years, such amounts are deemed to have prescribed.
2. Notwithstanding a consumer making regular payments based on estimated consumption charges to the Municipality such payments do not interrupt prescription of the actual consumption charges.
3. The Municipality has a duty to read the meter and take reasonable steps to recover such debt from the consumer, should it fail to do so, the consumer is not liable for the Municipality’s failure to act.
4. The Municipality has a duty to read meters and invoice consumers at regular intervals.
5. In the event of records being unavailable of actual consumption readings, average consumption usage should be used as the consumer’s liability to the Municipality.