P A Pearson (Proprietary) Limited v eThekwini Municipality and Others

Microfinish Manufacturing (Pty) Ltd was the occupier and municipal account holder for two separate properties within eThekwini Municipality: one owned by the appellant, P A Pearson (Pty) Ltd, and another owned by Cherokee Rose 164 CC. Microfinish fell into arrears on both accounts and was placed in voluntary liquidation. Acting under s 102(1)(b) of the Municipal Systems Act 32 of 2000, the municipality transferred credits from the Pearson property account to settle the arrears on the Cherokee Rose property account, increasing the outstanding balance on the Pearson property account. Relying on s 118(3) of the Act, the municipality then demanded payment of the increased balance from the appellant as property owner. To restore municipal services, the appellant paid under protest and sought to recover part of the amount, alleging that the municipality’s conduct was unlawful.

The appeal was dismissed with costs.

The case clarifies the interaction between s 102(1)(b) and s 118(3) of the Municipal Systems Act and confirms the wide powers of municipalities to allocate payments across accounts held by a single debtor. It underscores that property owners may be held liable for municipal debts linked to their property even where municipal accounting practices increase their exposure, provided the municipality acts within its statutory authority.