SCA Upholds Interdict Against Electricity Disconnection

Case Law Summary: City Of Tshwane Metropolitan Municipality v Glofurn (Pty) Ltd [2024] ZASCA 101

This appeal concerned whether the City of Tshwane Metropolitan Municipality (“the City”) was entitled to implement credit control and debt collection measures against Glofurn (Pty) Ltd (“Glofurn”) by threatening to disconnect the electricity supply to its premises. The key issue concerned whether Glofurn’s dispute lodged under s102(2) of the Local Government Municipal Systems Act 32 of 2000 (“the Systems Act”) remained unresolved, therefore precluding the City from implementing such debt collection measures.

The Gauteng Division of the High Court granted an interim interdict in favour of Glofurn, interdicting the City from disconnecting Glofurn’s electricity supply pending resolution of the dispute. The City appealed the order to the SCA.

The dispute relates to two electricity accounts- a pre-paid account, and a post-paid account. The post-paid account allocated to Glofurn was closed by the City as of 1 March 2022. After the closure of the old post-paid account, the City migrated Glofurn to a pre-paid system, and allocated a new account number.

Although Glofurn did not receive any invoices from the City since the closure of the old account, it continued to make average payments to the old account. By June 2022, the old account was in credit in the amount of R400?000. The City however continued to bill Glofurn using the new account. On 29 June 2022, the City issued an invoice to Glofurn stating it was in arrears in the amount of R766?457.81.

This prompted Glofurn to lodge a formal dispute in terms of the Systems Act with the City. As the City threatened to cut off its electricity services, Glofurn launched an urgent application to the high court where it sought an order interdicting the City from implementing its debt collection measures, pending the determination of the dispute between itself and the City. Interdictory relief was granted by the high court but was taken on appeal to the SCA by the City.?

The Glofurn contended that as a rule, the City was entitled to implement debt collection and credit control measures where there are arrears on any account. However, section 102(2) of the Systems Act prohibits implementation of such measures where a dispute exists between the consumer and the municipality.

Mbatha J held that in all respects, Glofurn had established a clear right to have the dispute investigated before the City was entitled to disconnect the electricity supply. The appeal was thus dismissed with costs.?

Read the full judgment at?https://www.saflii.org/za/cases/ZASCA/2024/101.html.