Malakite Body Corporate and Another v City of Johannesburg Metropolitan Municipality and Another

The appellants, Malakite Body Corporate and Greenstone Crest Body Corporate, are body corporates of large residential estates in Gauteng that include lifestyle centres with restaurants and gyms. They entered into agreements with the City of Johannesburg and City Power for the supply of electricity. Because the lifestyle centres (non-domestic uses) were not separately metered from the residential units (domestic uses), the municipality charged a business/commercial electricity tariff for the entire estates’ electricity consumption. The municipality advised that separate (split) meters would allow residential units to be charged domestic tariffs, but the appellants abandoned or pended the installation due to cost. After disputes, threatened and actual disconnections, and unsuccessful negotiations, the appellants approached the High Court seeking orders compelling the municipality to charge domestic tariffs, rectify its records, and interdict disconnections. The High Court dismissed the application, and the Full Court of the Gauteng Division dismissed the appeal. The appellants then appealed to the Supreme Court of Appeal.

The appeal was dismissed with costs, including the costs of two counsel where employed.

The case affirms municipalities’ authority to levy electricity tariffs in accordance with by-laws and approved tariff policies, and clarifies that any unseparated mix of domestic and non-domestic electricity consumption justifies the application of a non-domestic (business) tariff. It underscores textual and purposive interpretation of municipal by-laws and rejects a ‘predominant use’ test in tariff classification, providing certainty for municipal revenue practices.