No Longer Left in the Dark: Right to Municipal Services and the Procedural Fairness Obligations of Electricity Providers

Joseph v City of Johanesburg [2009] ZACC 30 (9 October 2009) The Constitutional Court of South Africa has held that government-owned electricity service providers have an obligation to accord procedural fairness to tenants receiving electricity before disconnecting supply.

Facts

The applicants were tenants in a block of apartments.  City Power, the relevant government-owned service provider, entered into a contract with the landlord to supply electricity to this block.  Over time, the tenants paid their electricity bills to the landlord, but he failed to pass on the payments to City Power.  Accordingly, on 8 July 2008, City Power disconnected the electricity supply to the block without giving the tenants any prior notice of its intention to do so.  The applicants challenged City Power’s actions on the basis that City Power had a duty to accord the tenants procedural fairness in the form of notice and an opportunity to make representations before disconnection.

Decision

Background

The Promotion of Administrative Justice Act 3 of 2000 (‘PAJA’) gives effect to the right to ‘lawful, reasonable and procedurally fair’ administrative action under s 33 of the South African Bill of Rights.  Section 3(1) of the PAJA provides that ‘[a]dministrative action which materially and adversely affects the rights or legitimate expectations of any person must be procedurally fair.’  The High Court found that s 3(1) was not engaged because terminating supply had not affected any right of the applicants.  In particular, it was the landlord and not the tenants that had entered into the supply agreement with City Power.

Skweyiya J, writing for the unanimous Constitutional Court, disagreed.  His Honour held that the termination of supply was an (i) administrative action that (ii) materially and adversely affected (iii) rights of the applicants.  Accordingly, City Power was obliged to accord the applicants procedural fairness.  Since no notice was given to the tenants, the decision to disconnect supply was held to be unlawful, and City Power was ordered to reconnect the supply of electricity.

This case note focuses on two issues: whether any rights of the applicants were affected by the decision to terminate supply for the purposes of s 3(1) PAJA, and the content of procedural fairness if s 3(1) is engaged.

Right to receive electricity

The key issue was whether disconnecting the electricity supply affected any rights of the applicants, as no legitimate expectation was claimed.  This turned on ‘whether the broad constitutional relationship that exists between a public service provider and the members of the local community gives rise to rights’ for the purpose of PAJA s 3.  Skweyiya J found that the applicants could be said to have a ‘right’ to receive electricity for the purpose of the PAJA.

His Honour noted that the ‘provision of basic municipal services is a cardinal function, if not the most important function, of every municipal government.’  Constitutional and statutory provisions impose a duty on local governments to provide services including electricity.  There is thus a ‘correlative public law right’ to receive those services.  Such ‘legal entitlements that have their basis in the constitutional and statutory obligations of government’ constitute ‘rights’ for the purpose of s 3 PAJA.  His Honour observed: ‘In depriving [the applicants] of a service which they were already receiving as a matter of right, City Power was obliged to afford them procedural fairness before taking a decision which would materially and adversely affect that right.’

Content of procedural fairness

Skweyiya J held that procedural fairness required adequate pre-termination notice, containing ‘all relevant information, including the date and time of the proposed disconnection, and the place at which the affected parties can challenge the basis of the proposed disconnection.  Moreover, it must afford the applicants sufficient time to make any necessary enquiries and investigations, to seek legal advice and to organise themselves collectively if they so wish.  At a minimum, it seems to me that 14 days’ pre-termination notice is fair’.  Procedural fairness did not require City Power to process representations in every case.  Rather, tenants must be able to challenge a proposed termination and tender payment of arrears.  Where a valid ground of challenge has been raised, City Power would be expected not to disconnect the supply of electricity.

Relevance to the Victorian Charter

This decision has potentially significant implications for the obligations of essential service providers in Victoria. 

Although the electricity sector in Victoria is privatised (in contrast to the State-owned supplier in Joseph), it is likely that Victorian electricity service providers would nevertheless be bound by the Victorian Charter as ‘functional public authorities’ under s 4(1)(c).  As such, they are likely to be legally required to act compatibly with human rights and give proper consideration to human rights in decision making processes (s 38(1)). 

Moreover, although the Victorian Charter does not directly enshrine social or economic rights (in contrast to the South African Bill of Rights), there are a number of civil and political rights with social and economic dimensions that may engage the supply of electricity, including the right to privacy, family and the home (s 13). 

The decision is available at http://www.constitutionalcourt.org.za/site/Joseph.htm.

Chris Tran, Summer Clerk, Mallesons Stephen Jaques Human Rights Law Group