CIV/T/379/96
IN THE HIGH COURT OF LESOTHO

LESOTHO ELECTRICITY CORPORATION PLAINTIFF

AND

LESOTHO HOTELS INTERNATIONAL (PTY) LTD DEFENDANT

JUDGMENT

Delivered by the Honourable Mrs Justice K.J. Guni on the
25th day of May 1999

Plaintiff has been supplying electricity to defendant at
VICTORIA HOTEL COMPLEX where such electric power so supplied by
plaintiff
is being consumed since around about August 1982. Demands
for payment or bills for electricity consumed by defendant were sent
by
plaintiff and for a period of two to three years such bills were
satisfactorily fully paid up.

Plaintiff is LESOTHO ELECTRICITY CORPORATION, created by
and

operates under the Lesotho Electricity Corporation Act
No.7 of 1969. The

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primary function of this Corporation is to generate,
transmit, distribute and supply electricity and perform any other
ancillary functions
connected and/or related to its main functions.
Defendant is LESOTHO HOTELS INTERNATIONAL (PTY) LTD. A company duly
incorporated
in terms of the Company Laws of Lesotho. It carries on
the Hotel Business at VICTORIA HOTEL COMPLEX at Kingsway, Maseru. It
is at
these premises where Plaintiff supplies Defendant with electric
power there consumed.

Correspondence between the parties shows this Court that
Defendant experienced some financial problems as a result of which it
became
increasingly difficult for it to meet its financial
commitments. Round about 1988 its financial state of affairs
deteriorated to
such an extent that Defendant was placed under
judicial management. Only part-payments of the electricity bills
rendered by Plaintiff
to Defendant were made. Undertakings to pay
fully the outstanding bills were also made during that period. The
dispute which had
been simmering, from as early as 1984 - regarding
the exact amount of electricity for which Defendant is liable came to
the surface.
In the letter (at page 22 of EXHIBIT B bundle - produced
by agreement by the parties) it is claimed that the tenants listed in
that
letter receive their electricity through the one and the same
meter as the Hotel. Defendant was

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in that letter requesting Plaintiff to arrange to instal
separate meters for the electricity supplied to those other tenants.
It was
pointed out to Plaintiff subsequently in a letter (at page 23
of EXHIBIT B bundle) that the LESOTHO TOURIST BOARD offices situated
on Kingsway receives its electricity supply through the same meter as
the Hotel. It was emphasized that the said state of affairs
had been
going on for the previous five years. It was expressly stated on
behalf of Defendant in that letter that the hotel pays
electricity
for boiling the water for the following:-

1. 
   Tangles Hair Salon

   
   

2. 
   Kingsway Cinema

   
   

3. 
   S.P. Pharmacy

   
   

4. 
   Lesotho Airways Reservation Office

   
   

5. 
   Sharp Stationers

   
   

6. 
   Molly's shoe Shop

   
   

7. 
   Blues Boutique

   
   

The outstanding balance on the electricity account of
the Defendant to Plaintiff in the late eighties was a cause for
concern to the
parties. It was felt on behalf of the hotel that if
these other tenants paid for their consumption of electricity
Defendant would

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be in a position to manage payment for its own
consumption. Defendant expected its electricity bill to be reduced
substantially by
installation of separate meters for supplying those
other tenants. Were these expectations founded and reasonable in the
circumstances
of this case? Evidence will give a clear answer to this
question.

The Managing Director of LESOTHO ELECTRICITY
CORPORATION, one Mr E.R. MAPETLA in his letter (at page 25 - Bundle -
EXHIBIT B) in reply
to the letter written on behalf of Defendant (at
page 23 - Bundle - EXHIBIT B) pointed out that only the LESOTHO
TOURIST BOARD offices
on Kingsway receive electricity through the
same meter as the hotel. All others had their own separate meters.
Was Defendant unaware
that this was the position? The case is still
open for Defendant to show that this was not the position as stated
on behalf of Plaintiff.
But so far there has been no evidence to show
this Court that Defendant was paying electricity for those tenants
for which it is
not liable - with the exception of the tourist Board
at some stage because presently it is no longer the position.

Discussions and negotiations went on between the parties
for sometime - while they tried to find the ways and means of
settling the
apparent dispute. There was no settlement. As the
dispute went on, so did the Defendant's consumption of

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electric power supplied by Plaintiff. The arrears
continued to built up to an unacceptable amounts. Defendants at some
stage paid
how much it wanted, when it felt like doing so. Defendant
had more excuses to support the refused to pay for its consumption of
electricity
supplied by Plaintiff. It would appear that at some stage
Defendant claimed that the street lights and robots controlling
traffic
at Kingsway were energized from the same source and through
the same meter as the hotel. So far the evidence led on behalf of
Plaintiff
showed this Court that the street lights and those robots
are energized from the pillar boxes found there at Kingsway. The
investigations
conducted by an expert witness - one Dr Botha, did not
disclose any connection between their meters, at any stage in the
life of
the street lighting and robots and also the hotel. Plaintiff
supplied electricity for street lighting and robots separately and
from
the different source.

At the time this trial was going on, which is
approximately six months ago, the electricity consumption of
Defendant was valued at
well over three million maloti. At the close
of Plaintiff's case, by an agreement between the parties, the special
and an Amended
Plea was filed on behalf of Defendant. It is pleaded
that the Plaintiff's claim is based on the supply of electricity in
terms of
and in accordance with the provisions of ELECTRICITY ACT
NO.7 of 1969 and electricity Regulations 1970. (Here after referred
to as
the Act and the Regulations). Plaintiff has not alleged

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the conclusion of a written agreement with the
Defendant, nor consequently pleaded the identity of the
representatives concluding
the same, or the time and place of
conclusion thereof or the terms thereof.

In this special and amended plea, Defendant relies on
the provisions of Section 9. Electricity Regulations 1970 which
provides thus:-

" No person shall use a supply of electricity from
the mains unless or until he shall have entered into a written
agreement with
the corporation for such supply. The agreement shall
be in terms of Form 1 as annexed to these regulations. (My
underlining).

These regulation were made by the Minister in terms of
Section 46 (1) of the Electricity Act for the sole purpose of
carrying into
effect the provisions, purposes and principles of the
said act. It is argued on behalf of the Defendant that the consumer
such as
this Defendant may only be supplied with electricity pursuant
to the conclusion of a written agreement between the Plaintiff and
the consumer. There is no other way except as provided for by the Act
and Regulations. There is no written agreement between the
Plaintiff
and the Defendant for the supply of the electricity which is consumed
by Defendant. Defendant is therefore in terms of
the above proviso:-
"a person using a supply from the mains without having entered
into a written agreement." An application
for supply of
electricity was

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made by the Judicial Manager of Defendant. That is no
more than what it is, the mere application. No conclusion of a
written agreement
between the parties is alleged on behalf of
Plaintiff. Plaintiff's claim is based on the supply of electricity to
Defendant in terms
of and in accordance with the provisions of the
ELECTRICITY ACT NO.7 of 1969 and the Electricity Regulations 1970.

In terms of section 20 (1) Electricity Act 1969,
Plaintiff is obliged and entitled to supply electric power to the
occupier of any
premises. The relevant portion of this section reads
as follows:-

"20 (1) subject to the provisions of this Act, the
corporation, on being requested to do so by the owner or occupier of
any premises,
shall within a reasonable time make and continue to
make a supply of electricity available to those premises." (My
under lining)

A request or application for supply of electricity was
made to Plaintiff on behalf of the Defendant hotel. It is not denied
that such
a request for supply of electricity by Plaintiff was made
on behalf of the hotel even although an initial application which was
made
prior to defendant being placed under judicial management was
not readily available. It would appear that it was on the basis of
this special request by Defendant that Plaintiff acted in accordance
with the provisions of section 20(1)

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of the Act by supplying and continuing to supply
Defendant with electricity. Defendant does not deny that electricity
is being supplied
to it by Plaintiff. This Defendants admits that it
is a consumer of electricity (as shown in its plea at paragraph 3.2-
page 17 of
the Pleadings). The word "consumer" is defined
in Part 1, section 2 of the ELECTRICITY ACT 1969. It means a person
supplied
or entitled to be supplied with electricity by the
corporation, the Plaintiff in this matter. It is denied on behalf of
the defendant
hotel that plaintiff is supplying electricity in
accordance with the Act and Regulations. The fact that plaintiff is
supplying defendant
with electricity is not denied. The denial is
directed at the manner in which the supply was being metered. It is
described as not
being in terms of proper system provided by the Act
and Regulations. (Paragraph 4 Plea at page 18 of the pleadings).

Having established an understanding between the parties
that the Plaintiff will continue to supply the Defendant with the
electricity
consumed by the said Defendant at its hotel, the
Defendant made further admission (in its plea at paragraph 3.3 - page
18) that it
is obliged to pay to the Plaintiff the price for
electricity consumed by it. Plaintiff continued to make electric
power available
to this Defendant hotel at its premises on Kingsway
Maseru, sincerely believing and correctly so, that this Defendant
will honour
its obligations to pay, as expected of

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such a consumer, the price of electricity consumed by it
as admitted in the plea.

At paragraph 5 of the Plaintiff's declaration or
particulars of its claim, it is made clear that in terms of the Act
and /or regulations
the Defendant is obliged to make payment for the
full value of electricity consumed by it in a particular period upon
receipt of
a statement of account by the Plaintiff, reflecting the
amount due in respect of such period. In its plea (page 18 of the
pleadings)
at paragraph 4, admission is made on behalf of the
Defendant with regard to the references to the regulations. The
Defendant's problem
appears up until this stage, to be with regard to
the proprietary and/or accuracy of the metering system. The liability
to pay for
electricity consumed by the Defendant hotel is not totally
and completely denied. It seems to me, that once the problem of
metering
system is resolved the way to determine the amount of money
to be paid for the electricity consumed by the Defendant will be
found.
The evidence led so far by Plaintiff was to establish first of
all that defendant is liable to pay for its consumption of
electricity
supplied to it by plaintiff. In the second place,
plaintiff endeavoured to show this court the extent of such
liability. The validity
or invalidity of the agreement or arrangement
between the parties does not arise. Laing v The Caledon Municipality
(19C.T.R599).
The type or form of the arrangement under which the
defendant hotel is being supplied with electricity by plaintiff,
cannot be

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used as an excuse for refusal by the defendant to honour
its commitment under the same arrangement.

The failure to have a written Agreement as required by
the Act, may just have been a slip up, mishap, an oversight and/or
negligence.
For many years defendant's conduct induced plaintiff to
continue to supply it with electricity on the understanding that
defendant
is obliged and wilting to pay for its consumption of
electricity so supplied to it by plaintiff

Defendant relies, in his special plea on the nature of
Plaintiff Plaintiff is a creature of statute and only has those
powers and
capacities as set out in the relevant Act and Regulations.
Defendant admits that Plaintiff supplied and still, is supplying
electricity
to it. Defendant admits that it is a consumer of
electricity supplied to it by Plaintiff. Defendant admits further
that it is obliged
to pay to Plaintiff the value and/or price of the
electricity it consumes. This chain of admissions made by Defendant
deliberately
or inadvertently, is a clear indication that there was
an understanding between these two parties that Plaintiff will supply
Defendant
with electric power and that Defendant will pay as indeed,
Defendant paid for sometime at the beginning of their relationship.
Plaintiff
led evidence to prove the extent of the Defendant's
liability. It was after such evidence that a special plea was filed.

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It is on the basis of that special and Amended plea that
an application for absolution from the instance was made.

Section 9 of Electricity Regulations 1970 prohibits the
use of the supply of electricity without a written agreement by the
user.
Defendant admittedly is deliberately breaking the law. It has
been using the supply of electricity without a written agreement
between
it and Plaintiff. The fact that Defendant is breaking the law
by using the supply of electricity without a written agreement does
not absolve Defendant from liability which results from such unlawful
use. Plaintiff's claim is based on the portions of the Act
and
Regulations which authorise the supplying of electricity. It is not
based on the unlawful use although - thieving also may result
in some
kind of liability once the thief is caught and brought to book. This
is not the case here. It was also argued that Plaintiff's
claim is
not based on unjust enrichment, therefore the court is not entitled
even to look at that aspect. I do appreciate all these
sentiments
herein expressed. But the issue raised by special and Amended plea is
whether or not plaintiff can legally make arrangement
other than the
one specified in the regulations?

The prohibition for the use of supply of electricity
without a written agreement, is mainly the protection of the
Plaintiff. The form
which is prescribed in the

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Regulations, is essentially for the identification of
the premises where the supply must be availed and the particulars of
the consumer
who must be bound to pay for such consumption. I share
the sentiments which led to the conclusion that the agreement
referred to
in section 9 Electricity Regulations 1970, is not a
prerequisite for the creation of a binding relationship between the
consumer
and the supplier. There is a relationship between this
Plaintiff and Defendant, it can be called tacit or implied agreement.
Plaintiff
is the supplier of electricity, Defendant is the consumer
of the electricity so supplied by Plaintiff Defendant does not show
the
slightest inclination to terminate this relationship, Defendant
persists in enjoying the benefit of this so called illegal
relationship
and making profit for itself by using electricity at no
cost to itself for nearly two decades. Was the intention of the
legislator,
by enacting section 9 Electricity Regulation 1970 to
facilitate the smooth functioning of the corporation or to disrupt
and penalise
it? Section 46( 1) THE ELECTRICITY ACT 1969 authorises
the Minister to make regulations for the sole purpose of carrying
into effect
provisions, purposes and principles of the said act. The
interpretation suggested by defendant will definitely bankrupt the
corporation
if where there is no written agreement, as it is the case
here, the hotel must consume electricity free of charge. That could
never
have been the intention of the legislator. Nowhere in the
provisions, purposes and principles of the Act is there any
indication
that in the event of consumption of electricity without
written

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agreement there should be no charge to the consumer.

The provisions of the Electricity Act and Regulations
must be interpreted generously and benevolently particularly those
which give
or take away the powers to the corporation. The
requirement to enter into a written agreement for the supply of
electricity is a
protection that can be waved by the parties as seems
to be the case in this present case. These two parties acted, from
1982 for
quite sometime presumably in good faith, believing that
there is a binding agreement between them. The principle of Estoppel
though
not pleaded and established by the plaintiff-Plaintiff is
nevertheless entitled to rely on it, to counter the belated amended
and
special plea filed by defendant at the close of Plaintiff's case
BLACKIE SWART ARGITEKTE v VAN HEERDEN 1986 (1)SA 249 at 260 1-J.

It was submitted on behalf of Plaintiff that neither
Regulation 9, nor any of the other regulations forbid the supply of
electricity
by Plaintiff to any customer prior to the completion of
the stipulated form. To interpret the terms of this provision so
strictly
as suggested on behalf Defendant will led to a total
miscarriage of justice. There were apparent casual mistakes which
were brought
about by an operation of good faith and enthusiasm to
render service.

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Justice could only be seen, to be done if and when the
law is applied in such a way that the occurrence of injustices such
as that
which may result when allowing Defendant to consume electric
power supplied by Plaintiff for the running of its business at the
total
expense to Plaintiff only and at hundred percent profit to
itself, is stopped.

The mischief, which section 9 of Electricity Regulations
1970, was directed to prevent or stop, clearly must have been the
unlawful
consumption of electricity and mostly the resultant
prejudice which the corporation must suffer because of such unlawful
consumption.
It is absurd for defendant to expect this court to
support its conduct of deriving unfairly, and by deception the
benefit of free
electricity at the expense of plaintiff. Defendant
had no reason to receive and consume the electricity supplied, if it
believed
it is not entitled. The entitlement comes along with the
liability. Defendant cannot take the one without the other.

For years before Defendant was placed under Judicial
Management demands by Plaintiff for payment of electricity supplied
to the Defendant
hotel were nearly satisfactorily met. Even during
the period when the Defendant hotel was under judicial management
correspondence
between the parties show this Court

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that attempts were being made to find ways and means of
reducing Defendant hotel's indebtedness to Plaintiff for the
consumption of
electricity supplied to it by Plaintiff. There was
still no written agreement between the parties for the supply of
electricity by
Plaintiff to Defendant hotel. By their conduct the
parties behaved as if there is a valid and binding contract between
them. Since
1982 Defendant hotel's conduct led the Plaintiff
corporation into believing that their relationship was proper and
lawful. Now almost
two decades after receiving benefits and making
profit for itself from such contract, Defendant wishes to be excused
from liability
on the ground that it was acting unlawfully. If
defendant was, for all these years blind and could not see that
plaintiff had no
capacity nor authority to supply it with electric
power, was turning the blind eye an advantage to defendant? Defendant
cannot escape
the liability on that ground. That would be permitting
defendant to take advantage of the circumstances created by its
deceitful
conduct. The legal position was succinctly expressed on
this point by Lord Campbell L.C, as he then was, in the case of
CAIRCROSS
v LORIMER, (1860) 3 MACQ. 877 at page 829 thus:

"If a man either by words or by conduct, has
intended that he consents to an act which has been done, and that he
offer no opposition
to it, although it could not have been lawfully
done without his consent and he

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thereby induced others to do that from which they
otherwise might have abstained, he cannot question the legality of
the act he has
so sanctioned to the prejudice of those who have so
given faith to his words or to the fair inference to be drawn from
his conduct."

The Appellate Division of South Africa in Wellington
Court Shareblock v Johannesburg City Council 1995 (3) SA 827, when
dealing with
similar issue, held, on the authority of long line of
cases, such as Laing v Caledon Municipality (1909) 19 CT R 599,
Blemhof Village
Council v Calder 1924 TPD 7, Barnard v Celliers 1929
EDL 106, S.A. Hotel v City of Cape Town 1932 CPD 229. Morland v
Niehams 1973
(1) S.A. 240 (C) that the appellant, having received
benefits under the contract was estopped from raising the ultra-vires
defence.
All these cases are on fours with our present case. This
defendant is estopped from claiming that plaintiff has no authority
or capacity
to make any arrangement under which it supplied him with
electricity as long as this defendant contined to benefit under the
same
arrangement.

As it was pointed out during the trial the Defendant
continues to consume the electricity and its consumption is now
approaching four
million maloti.

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Defendant cannot therefore be heard to say that
Plaintiff has and continues to supply it with such electricity
without the written
agreement and therefore Plaintiff is not entitled
to payment because of the absence of such written agreement. The
absence of the
written Agreement cannot operate only to the benefit
of the defendant and prejudice of plaintiff. If it brought the
benefit acceptable
to defendant, similarly the liability that goes
with that benefit must be acceptable to defendant.

At all times, the failure to pay for electricity
supplied by LEC to Defendant hotel where it was consumed, was based
on the ground
that Defendant hotel was not accurately and properly
metered for such consumption. Defendant was accepting liability to
pay for its
electricity consumption once adjustments were made and
accurate meters installed. This is the impression I get when perusing
correspondence
between the parties, in particular the letter of 10^th
December 1991 - written to Plaintiff's attorneys by defendant's
attorney. (Page 63 EXHIBIT B - BUNDLE).

As was pointed out, in Petersen v Lesotho Electricity
Corporation CIV/APN/260/98, by His Lordship Mr Justice N. Mofolo at
page 5,
"This Court will not allow consumers to play hide and
seek tactics with the LEC to its

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prejudice" after it has gone out of its way to
supply consumers with electric power at great expense to itself.
Defendant cannot
expect this Court to accept that it should be
allowed to consume Plaintiff's electric power free of charge on the
ground that there
is no written agreement between the hotel and LEC.

The examination of the correspondence filed of record,
between the parties and the minutes of the meetings held by the
parties' representatives
(as found in EXHIBIT B - Bundle) leave no
doubt in my mind whatsoever that at all time Defendant convinced
Plaintiff that liability
for consumption of electricity supplied is
not disputed. What seemed to matter was the question of how much is
due and payable. That
is why I completely associate myself with the
sentiments expressed by His Lordship Mr Justice N.Mofolo in
Petersen's case- (supra)
that consumers must not be allowed by the
Courts to play, hide and seek games instead of honouring their
obligations to the LEC which
is or has honoured its obligations to
them. The interpretation of the Act and the Regulation must be done
in such a way that the
corporation is able to perform its functions
for which it was created.

The special and Amended plea must for those reasons
fail. The application for absolution from the instance cannot
succeed. It is therefore
dismissed with costs

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which includes the costs for the two counsels.

K. J. GUNI JUDGE

25^th May 1999

For Plaintiff: Webber & Newdigate
For
Defendant: Du Preez , Liebetrau & Co

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