CoJ verdict will have far-reaching implications

CoJ verdict will have far-reaching implications

It’s the first comprehensive investigation into compliance notices.
The hearings between the City of Johannesburg (CoJ) and the National Consumer Commission (NCC) concluded on Friday without a verdict being handed down.

The hearings have been on-going since Wednesday with the National Consumer Tribunal (NCT) presiding over an application by the CoJ to have 45 compliance notices issued by the NCC against it set aside.


While the two parties laid down their final arguments, the hearings are viewed as being ground breaking in terms of SA’s consumer legislation. This is because the NCT’s final verdict is likely to have far-reaching implications concerning the interpretation of the CPA.

Said the chair of the NCT, Professor Tanya Woker: “We are breaking into new areas. It’s the first comprehensive investigation into compliance notices… We have to apply our minds into these legal issues; its new legislation (so) there is nothing we can judge it by.”

She had indicated that findings will have implications for all of SA’s municipalities as well as the courts.

Owing to the far-reaching implications of the NCT’s findings, Woker has refrained from providing an indication as to when a verdict will be handed down, saying only that it will consider the matter thoroughly and provide its opinion “in due course”.


The compliance notices in question relate primarily to allegations that the CoJ has failed to provide its consumers with a “quality service” in billing for water and electricity and that the inaccurate billing of consumers constitutes unfair or unreasonable pricing as defined by the Consumer Protection Act (CPA).

The CoJ has also been accused of failing to provide a quality complaints resolution mechanism that would meet the reasonable expectations of its consumers.

Although the City has admitted that it has “problems” concerning its billing systems and its complaints resolution mechanisms, it is attempting to have the notices overturned based on arguments concerning the applicability of sections of the Consumer Protection Act (CPA) in this matter and on assertions that the NCC did not follow due process in issuing the notices.


In a nutshell, the CoJ is contesting the legality of the notices although it has not contested NCC’s allegations that it has dysfunctional billing and complaints resolution mechanisms.

Advocate Michelle Le Roux, acting on behalf of the CoJ, contests that the NCC did not follow due process when issuing the compliance notices as it did not launch a full and proper investigation into the complaints upon which the notices were issued.

“What we say is that an investigation needs to ascertain the facts… If the real concern is the complaints system, then you need to find out more about how that system works.

She asked “was the City aware that it was being investigated?” suggesting that a series of meetings that took place between the NCC and the CoJ prior to the notices being issued, did not constitute an investigation as would be legally required.

“The issue here was whether the complaint resolution system of the City works,” she said, adding the meetings were not “scrutinising what’s going on”.

Should it be concluded that the NCC had entered into a sufficient enough investigations to warrant the notices, the CoJ contests that sections contained within the CPA relating to unjust pricing of goods and services and a consumer’s right to demand a “quality service” do not apply to the CoJ’s billing of consumers or its complaints resolution mechanism.

Le Roux contests that the billing of customers is “incidental” to the City’s provision of a “good” such as water and electricity.

She has indicated that unless the billing and complaints functions were outsourced they do not constitute a service.


However, the NCC’s director of legal services, Oatlhotse Thupayatlase, argues that at a meeting on April 15 last year, the CoJ had admitted that it had had problems with its systems and had agreed with the NCC on a “super-structure” of processes designed to deal with complaints directed to the NCC concerning the City.

“The system that was set-up had failed,” he said. “There was a superstructure that was set up to deal with complaints that were coming through… Either you commit to that structure or you don’t…

“There was clearly not commitment” on behalf of the CoJ, he said.

Following the failure of the City to meet its commitments, the NCC “got frustrated” and with no other avenue left to deal with the complaints, issued a compliance notice.

He argues that the NCC engaged in a “fact-finding mission” prior to issuing the notices and had engaged in a sufficient enough investigation to confirm that the City was failing its consumers as outlined by the CPA.

The applicability of the CPA to the CoJ’s billing system will be something that the NCT will have to decide, he said, although he has previously indicated that it would be “very difficult” for the tribunal to conclude that the City’s billing systems did not constitute a “service” as defined by the CPA.


Denny Crane

Denny Crane
It's not me ... yet. Denny Crane from the TV series Boston Legal. Click on picture if you're not sure who he is!