Results 1 to 2 of 2

Thread: Municipality debt and prescription

  1. #1
    Diamond Member Citizen X's Avatar
    Join Date
    Sep 2011
    Location
    lenasia
    Posts
    3,329
    Thanks
    856
    Thanked 698 Times in 610 Posts

    Municipality debt and prescription

    Municipal debts and extinctive prescription

    Contrary to common belief, municipal debts in the form of electricity and water do prescribe in 3 years. Many property owners have to contend with exornabt bills from the city council for amounts accrued over a number of years and only invoicedat the last moment.
    In Argent Industrial Investments (Pty) Ltd v Ekurhuleni Metropolitan Municipality( 17808/2016) [2017] ZAGPJHC 14; 2017 (3) SA 146 (GJ) this ground breaking judgment aimed to bring relief was handed down on 13 February 2017

    For several years the Ekurhuleni Minucipality charged the applicant for estimated water usage No meter readings were conducted. The applicant paid but in 2015 were billed R1,152,666.98. This bill was arrive at by calculating the the difference between Argent’s actual water usage and the estimated use.

    Argent’s main argument: The applicant argued that based upon section 11(d) of the Prescription Act 68 of 1969, they could not be responsible for differences in the two amounts received after a number of years
    For five and a half years Ekurhuleni Municipality charged Argent for their estimated water consumption, with no actual meter readings being done. Argent paid these bills diligently, but were slammed with a bill of R1,152,666.98 in 2015. This new bill was for the difference between Argent’s actual water usage and the estimated consumption

    Argent’s argument
    Relying on prescription, Argent claimed that they were not liable for discrepancies in the costs, which were older than 3 years at the time when they finally received the bill.

    The court ruled as follows:


    “For the reasons above, I make the following order

    1.The respondent is to
    1.1reverse all charges for water consumption added to Municipal account
    number 2604227860 ("the applicant's account") on the invoice dated
    24 March 2015, as a result of the reading of the meter on 13 March
    2015;
    1.2reverse all interest and legal fees charged to the applicant's account in respect of the charges for water consumption added to the applicant's account on 24 March 2015;
    1.3calculate the applicant's average monthly consumption over the period 21 September 2009 and 13 March 2015, using the meter reading reflected on the invoice of the applicant's account dated 24 March 2015, and charge the applicant an amount based on that average for the period 13 March 2012 to 13 March 2015, and
    1.4send the applicant a full statement of account reflecting the reversals, calculations and charges dealt with in this order, and an invoice reflecting the amoun that is due and payable, within 14 days of this order.
    2.The respondent is not entitled to claim any payment from the applicant in respect of the applicant's account for any period before 13 March 2012.
    3.The respondent may not terminate, restrict, or threaten to terminate or restrict services on the basis of the applicant not having paid the amounts added to the applicant's account in the invoice of 24 March 2015.
    4.The respondent is to pay the costs of this application.”

    The judgment in short

    1. where a resident/property owner gets a bill that reflects charges older than 3 years they are not liable, it prescribed, prescription can be claimed
    2. Monthly payments on estimated amounts will not interrupt prescription as ‘actual payment.’
    3. A consumer cannot be expected to conduct meter readings
    4. Prescription starts to run when the municipality became aware or
    5. should reasonably have become aware of the actual water consumption and not when the meter reading was conducted
    LLB(UNISA), N.Dip(TWR)
    Contact details: Send me a private message
    Services:
    Now available: The South African A-Z legal and business contracts(2000 pages)
    Prescribed debt matters, Labour Law Consulting, and drafting of professional legal and business contracts, and
    assistance with Labour Court review applications


  2. Thanks given for this post:

    Andromeda (22-Jan-19)

  3. #2
    Diamond Member Citizen X's Avatar
    Join Date
    Sep 2011
    Location
    lenasia
    Posts
    3,329
    Thanks
    856
    Thanked 698 Times in 610 Posts
    Should anyone seek professional assistance in pursuing a prescription claim from the municipality, please don't hesitate to contact me via pm or email
    LLB(UNISA), N.Dip(TWR)
    Contact details: Send me a private message
    Services:
    Now available: The South African A-Z legal and business contracts(2000 pages)
    Prescribed debt matters, Labour Law Consulting, and drafting of professional legal and business contracts, and
    assistance with Labour Court review applications


Similar Threads

  1. Debt: How to claim prescription in practice and how to enter a special plea
    By Citizen X in forum General Regulatory Compliance Forum
    Replies: 95
    Last Post: 10-Dec-18, 08:09 AM
  2. [Question] Debt Review & The Prescription Act
    By TMcG123 in forum National Credit Act Forum
    Replies: 3
    Last Post: 25-Oct-17, 05:11 PM
  3. Prescription where payment or acknowledgement of debt has taken place
    By Citizen X in forum National Credit Act Forum
    Replies: 0
    Last Post: 26-Feb-17, 11:28 AM
  4. Law of Prescription
    By Neville Bailey in forum General Business Forum
    Replies: 2
    Last Post: 07-Nov-13, 12:24 PM
  5. Prescription act?
    By cnel_za in forum Tax Forum
    Replies: 4
    Last Post: 04-Oct-11, 09:41 PM

Tags for this Thread

Did you like this article? Share it with your favourite social network.

Did you like this article? Share it with your favourite social network.

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •