This is an application for summary judgment which is opposed by the respondent.
The
background facts are the following.
On 6
May 2004, the parties entered into a written agreement for the purchase and
sale of rate water for a period of ten years. It was a term of the
agreement that billing was per allocation as opposed to per consumption in that
the respondent undertook to pay for 15,000 mega litres of raw water per year
regardless of whether it was the same or not. The respondent failed to pay
the applicant US$547,627=81 which was due as at the end of September
2011. The parties met on 17 October 2011 and agreed on a compromised
figure of US$167,114=22 as being due. The respondent failed to pay up the
acknowledged compromised debt prompting the applicant to issue out summons
under case number HC1378/12 claiming for the said compromised sum together with
interest at the rate of 5% per annum and collection commission. The
applicant also sought an order for costs on a higher scale.
The
respondent entered appearance to defend. Its plea is basically that billing per
allocation is repugnant to public policy and it should pay for consumed water
less what had been paid since October 2011.
The
applicant then maintained the present application for summary judgment under
case number HC2463/12.
The
respondent opposed the application in line with its said plea.
The issue is whether it is against public policy for the applicant to bill a local authority per allocation as opposed to per consumption
It is trite law that a contract or term may be declared contrary to public policy if it is clearly inimical to the interests of the community, or it is contrary to law or morality or runs counter to social or economic expedience, or is plainly improper and unconscionable, or unduly harsh or oppressive - Botha v Finanscredit (Pvt) Ltd 1989 (3) SA 773 (A)….,; Olsen v Standaloft 1983 (1) ZLR 67 (SC) and Karimazondo v Standard Chartered Bank Zimbabwe 1995 (2) ZLR 404 (SC).
In casu, the respondent is a local authority i.e. a municipality contracting on behalf of Kadoma rate payers and residents who actually pay for the water in issue. The respondent is not a profit making organization but a public entity. The question is whether asking for the respondent's residents and ratepayers to pay for no water (value) received is inimical to the interests of the said community. Is the agreement between the parties not contrary to the law or morality? Is such an agreement unconscionable? Is it not unduly harsh or oppressive?
It is trite that summary judgment should not be granted when any real difficulty as to a matter of law arises - Shingadia v Shingadia 1966 (3) SA 24 (R)…,. Summary judgment proceedings are inappropriate for dealing with clearly arguable questions of law that should properly be dealt with on exception - Hollandia Reinsurance Co Ltd v Nedcor Bank Ltd 1993 (3) SA 574 (W).
In casu, there are clearly arguable questions of law raised by the respondent, and also in light of legislation governing fairness of consumer contracts in our jurisdiction, summary judgment is incompetent.
Accordingly, the application for summary judgment is dismissed with costs.
