Page 48 - Energize October 2022

VIEWS AND OPINION

concerning a landlord’s profit-making by levying electrical service charges on tenants About the author
over and above the rent and the actual cost of electricity they consumed. The Vally Padayachee, CD(SA), FInstD;
court characterised the Rental Housing Tribunal’s ruling in the initial complaint as FIRMSA; MBA; MSc (Eng); GCC; EDP
administrative action and reviewed it to determine whether it was fair and just in (Wits); Dip DataMet (UNISA), is regarded
the circumstances. as a power and energy expert. He is the
In this case, a landlord applied for the High Court to set aside a decision by the AMEU Strategic Adviser; Chairman, NRS
Gauteng Rental Housing Tribunal (“Tribunal”). Eighty rental tenants had brought Association Management Committee;
a complaint to the Tribunal based on their landlord’s charge of about R385 per Chairman, VPA; a former Johannesburg
month per tenant for electricity in addition to the costs they paid for their individual City Power executive; and a former
consumption. The tenants discovered that the utility service provider, City Power, executive manager at Eskom.
charged the landlord about R337,50 per month for the whole building. This meant Padayachee has over 40 years’ hands-
that their landlord was generating a significant profit from the service charge. The on experience across all levels from
Rental Housing Tribunal found that this levying of electrical service charges on operational, management, executive, CEO
tenants was an “unfair practice” under the Gauteng Unfair Practices Regulations up to and including Board level, in the
and, consequently, interdicted the landlord from levying the charges. It also ordered power and energy sectors. His profile also
the landlord to provide a copy of its City Power monthly electricity account to includes having worked in such major blue-
tenants on demand, and to repay all services charges levied. The landlord sought to chip companies as Toyota Manufacturing
have the Tribunal’s ruling reviewed by the High Court and an order of costs against SA; SAPREF Shell & BP Refineries, Mobil/
the tenants. Engen Refinery, DUT; Eskom, City Power
The court upheld the Tribunal’s ruling, holding that the landlord had failed JHB, GIBB Consulting Engineers, PDNA
to show that the ruling was not fair and just and should be set aside. Finding Mott Macdonald Consulting Engineers and
that the “function” of the Tribunal was administrative and, therefore, governed Altron Power (Powertech Group)
by the Promotion of Administrative Justice Act (PAJA), the court found that the
appropriate standard of review was provided by Section 33 of the Constitution (on The author makes the following
just administrative action), namely, whether the action was lawful, reasonable and disclaimers:
procedurally fair. The High Court held that the Tribunal had reasonably and fairly a) The author wishes to state that the
found that the Unfair Practice Regulations applied to the landlord and that the views expressed in this article may not
landlord was not entitled to make a profit by charging a service fee for electricity represent the views of all the members
received from a utility service provider. of the respective organisations
he represents, given inter alia the
Enforcement of the decision and outcomes: diversity of the cross section of the
The landlord will have to repay all the tenants the amounts they were unlawfully respective membership profiles of the
charged from 2009 to 2013. The tenants are all still in undisturbed occupation. The organisations.
tenants are currently (2015) calculating how much is owed to each unit and will be b) The author is providing the information
approaching the landlord for a refund in due course as per the court order. in this article as a guide and as a public
service and it is not intended to be a
Groups involved in the case: legal interpretation of any applicable
Socio-Economic Rights Institute of South Africa (SERI) legal and associated statutes, etc.
Although reasonable care was taken
Significance of the case: the author is not responsible for any
This decision sets precedent enabling tenants being overcharged by their landlords errors or omissions in this article.
to seek recourse. [Source: https://www.escr-net.org/caselaw/2016/young-ming- The author accordingly advises
shan-cc-v-chagan-no-and-others-2015-3-sa-227-gj] readers and/or users of information
in this article to first check with
Where the reseller is buying in bulk and is on a tariff that does not provide any their respective professional service
free electricity or charge in steps (such as a large user LPU tariff): must the reseller providers the accuracy and/or
still charge the end-user based on the applicable residential or business tariff using correctness of such information if they
steps, and/or provide for a free allowance? wish to utilise such information in any
Resellers cannot charge a tariff (including service fees, etc.) other than that set/ risk mitigation and/or business-related
approved for a licensed distributor [Source: Schindler’s Attorneys]. decision-making process, project or
exercise.
Can disconnection or reconnection fees lawfully be charged by resellers?
Resellers have absolutely no rights in law other than those given to the distributor Contact Vally Padayachee,
on behalf of whom they are a reselling. Only the licensed distributor can exercise Phone 083 297-2287,
the powers given by Section 21 of the ERA. [Source: Schindler’s Attorneys]. vally@vpassociates.co.za

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