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

The two appellants are body corporates of residential estates established under section 36(1) of the Sectional Titles Act 95 of 1986. Malakite Body Corporate (established 24 October 2016) has 290 residential units and Greenstone Crest Body Corporate (established 7 May 2015) has 620 residential units. Both estates are zoned 'Residential 3'. Each estate includes a Lifestyle Centre with a restaurant and gym operated by third-party operators, accessible to residents. The electricity supply to these facilities cannot be separately metered from the residential units. After taking ownership from their common developer (Balwin Properties), each appellant concluded agreements with the City of Johannesburg and City Power for provision of municipal services including electricity. The municipality charged them a commercial/business tariff rather than a domestic tariff due to the mixed domestic and non-domestic use that could not be separately metered. The municipality proposed split meters as a solution to enable separate billing. Applications for split meters were made (March 2019 and October 2018 respectively) but were abandoned due to high costs. The appellants faced disconnections and threats thereof due to alleged outstanding payments. They brought an application seeking orders that they be charged domestic tariffs and that their records be rectified accordingly.

• What is the proper interpretation of section 5(10) of the Standardisation of Electricity By-Law 1999 regarding 'communal loads for both domestic and non-domestic uses which cannot be separated'?
• What is the meaning of 'mixed domestic and non-domestic loads' in the municipality's tariff policy?
• Whether the municipality was justified in charging a business/commercial tariff where residential units and commercial facilities (restaurants and gyms) could not be separately metered?
• Whether the zoning of property as 'Residential 3' determines the applicable electricity tariff classification?
• Whether lifestyle centres that are 'ancillary' to residential use constitute 'non-domestic' use for electricity tariff purposes?

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

Communal loads for both domestic and non-domestic uses which cannot be separated must be metered and charged at the appropriate non-domestic (business/commercial) rate as determined by the municipal council from time to time, in accordance with section 5(10) of the Standardisation of Electricity By-Law 1999. The term 'mixed domestic and non-domestic loads' in municipal tariff policies applies where there is any combination of domestic and non-domestic (business) use that cannot be separately metered, regardless of whether the non-domestic component is ancillary, secondary, or less significant than the domestic component. The degree or predominance of domestic versus non-domestic use is irrelevant to the application of business tariffs under the by-laws where loads cannot be separated. Property zoning classification (such as 'Residential 3') does not determine electricity tariff classification; the actual use and whether loads can be separately metered are the determining factors. Commercial facilities such as restaurants that sell food to residents and guests at a profit constitute non-domestic/business use for electricity tariff purposes, even if located within residential estates and accessible only to residents.

The Court observed that the concept of 'reading-in' is not a mode of interpretation but rather a constitutional remedy applied only after a finding of constitutional invalidity, and even then it is not readily employed as it involves law-making which belongs to the legislature. The Court noted that introducing a test based on the 'degree' of mixing or 'predominance' of use would create great uncertainty and inevitable arbitrariness, as thresholds would be difficult to set. The Court commented on hypothetical examples provided by the appellants (such as caravan parks with kiosks, or churches selling sandwiches) noting these were presumptive and served no practical purpose as they were not part of the actual case, no unfair discrimination was claimed or established, and the validity of the by-laws was not challenged. The Court indicated that the solution for avoiding business tariffs in mixed-use situations is the installation of separate or split meters to enable separate metering and billing of domestic and non-domestic loads.

This case provides authoritative guidance on the interpretation and application of municipal electricity by-laws and tariff policies in South Africa. It clarifies that mixed domestic and non-domestic electricity loads that cannot be separately metered must be charged at business/commercial rates, regardless of whether the non-domestic component is considered 'ancillary' or secondary to the primary residential use. The judgment establishes that property zoning does not determine electricity tariff classification. It reinforces the principle that clear and unambiguous provisions in by-laws and policies must be given effect without reading in additional qualifying criteria based on the degree or predominance of different uses. The case is significant for sectional title schemes, residential estates, and other developments with mixed-use components, clarifying their electricity billing obligations. It upholds the municipality's right to structure tariffs to ensure full cost recovery for electricity supply. The judgment also reinforces proper statutory interpretation principles in the municipal law context, rejecting attempts to introduce uncertainty through interpretations based on degrees of use or ancillary considerations not found in the legislative text.