Page 70 - Q&A_Digital.indd

In a long line of court cases regarding the responsibility of owners for
outstanding debts and the ability of municipalities to recover such
from home owners, a strong view in favour of the home owner has
been upheld in the recent High Court judgement of Argent Industrial
Investments v Ekurhuleni Metropolitan Municipality.
In this case Argent Industrial received an account from the municipality
in March 2015 that showed an amount was in arrears for R1,152,666.98
after a water meter reading was done by the Municipality. Argent
Industrial paid an estimated water account provided by the municipality
every month, with the last actual water meter reading by the Municipality
only done in 2009. The arrear amount reflects the difference between the
actual consumption and the estimated consumption that was already
paid by Argent Industrial.

Argent Industrial contested the account and argued that they were not
liable to pay for any arrears of more than three years prior to March
2015, and any older amounts would have prescribed according to the
Prescription Act. The Municipality argued that prescription only starts to
run when the consumer is billed and that was when the Municipality
became aware of the existence of the debt. They further argued that
because Argent Industrial made monthly payments it constituted an
acknowledgement of their debt which also interrupted the running of
prescription.
The court however held that it was not Argent Industrial’s obligation
to read water meters and calculate their consumption and have
Property actual consumption of water. A delay of three years to read the water
everything in order for when the Municipality demands payment for the
meters was also held to be unreasonable. The court also disagreed that
prescription started running when Argent Industrial was invoiced and
when the Municipality became aware of the debt. The Municipality knew
that they were supplying water to Argent Industrial and that they were
paying monthly estimates provided by the Municipality. The Municipality
however did not know what the exact consumption of Argent Industrial
was, knowledge which was within its reach, had it fulfilled its functions
and the Municipality could have acquired this knowledge by exercising
reasonable care. The court held further that the Municipality’s argument
that Argent Industrial’s regular payments for estimated consumption
amounted to an acknowledgement of their liability did not carry any
weight as a consumer cannot acknowledge a debt that he was not
aware of, when either the details of the debt are particularly within the
knowledge of the other party, or only the other party has the ability to
quantify the debt, and does not do so.
Accordingly, the court ordered the Municipality to calculate the average
monthly water consumption of Argent Industrial from September 2009
until March 2015, using the meter reading on the municipal account

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