Lindeka Nongqayi and Another v King Sabata Dalindyebo Municipality and Others

The applicants, two women residing with their school-going children at erven 117 and 118 Windsor Hotel, Sutherland Street, Mthatha, challenged the disconnection of their electricity supply on 5 May 2025. The basis of their occupation of the premises was not disclosed. The property was owned by the Eastern Cape Development Corporation (ECDC), the third respondent. The municipality had a contract with ECDC for the supply of electricity to the property. On 3 December 2024, ECDC gave the municipality four days' written notice to terminate the electricity supply to its properties, including erven 117 and 118, with effect from 10 December 2024. The municipality accepted the termination and disconnected the electricity supply. The applicants had previously been subjects of eviction proceedings by ECDC. The applicants did not make any application to the municipality to become consumers of electricity services in their own right after the ECDC contract was terminated.

• Whether the applicants, as non-parties to the electricity supply contract between the municipality and ECDC, had enforceable rights to electricity supply
• Whether the termination of electricity supply constituted administrative action subject to the Promotion of Administrative Justice Act 3 of 2000 (PAJA)
• Whether the applicants were entitled to notice before disconnection as 'users and consumers' of electricity
• Whether the municipality was exercising a public power or a private contractual right when disconnecting the electricity supply
• Whether the doctrine of privity of contract prevented the applicants from enforcing rights under a contract to which they were not parties

The application was dismissed with costs.

1. Non-parties to a contract cannot enforce rights under that contract absent a legal basis such as stipulatio alteri. The doctrine of privity of contract prevents strangers to a contract from suing or being sued on it. 2. PAJA only applies where administrative action materially and adversely affects substantive rights or legitimate expectations. In the absence of established substantive rights, no procedural fairness obligations arise and no notice is required. 3. Where a municipality terminates electricity supply pursuant to the lawful consensual termination of a contract with a property owner, it is exercising a private contractual right, not a public power, and administrative law principles do not apply. 4. Under municipal policies and by-laws, persons seeking to be consumers of municipal services must make proper applications and pay prescribed fees. Without compliance with these requirements, they are not lawful consumers and cannot claim entitlement to services. 5. Courts cannot enforce illegal acts or compel conduct that would violate statutory requirements.

The court observed that even if there was a dispute of fact regarding whether the municipality invited new consumers to apply for electricity services, this would not assist the applicants. The policy does not require such an invitation, and in any event, the applicants failed to make out a clear case establishing their rights. The court noted that litigants cannot apply for referral to oral evidence where they fail to make out a cause of action or leave their case ambiguous or uncertain. The court also commented that it was 'bizarre' that the applicants did not disclose any legal relationship to the property, and that their previous subjection to eviction proceedings demonstrated they were not occupying the property with the consent of ECDC, the owner.

This case reinforces fundamental principles of South African contract law and administrative law. It clarifies the limits of PAJA's application, establishing that administrative law principles do not apply to private contractual relationships unless special circumstances exist. The judgment emphasizes that substantive rights must exist before procedural fairness protections are triggered under PAJA. It confirms the doctrine of privity of contract in the municipal services context, establishing that occupiers of property who are not parties to service agreements with municipalities have no enforceable rights to continued service unless they comply with statutory requirements to become consumers in their own right. The case is significant for municipal law, clarifying that municipalities exercise private contractual rights, not public powers, when giving effect to contractual terminations with property owners, even where essential services like electricity are involved.