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[2017] ZAWCHC 151
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Dark Fibre Africa (Pty) Ltd v City of Cape Town (7748/2017) [2017] ZAWCHC 151; 2018 (4) SA 185 (WCC) (14 December 2017)
IN THE HIGH COURT OF SOUTH AFRICA
(WESTERN CAPE DIVISION, CAPE TOWN)
Reportable
CASE
NO: 7748/2017
In
the matter between:
DARK
FIBRE AFRICA (PTY) LTD
Applicant
And
THE
CITY OF CAPE TOWN
Respondent
JUDGMENT: 14 December 2017
DAVIS J
Introduction
[1]
The
applicant (“DFA”) is a licensee in terms of s 22 (1) of
the Electronic Communications Act 36 of 2005 (“ECA”),
legislation which confers upon it a public servitude.
Exercising this right as a licensee, DFA has installed fibre optic
cables in underground ducts or pipes, through which it sells
broadband access. Some of these pipes are installed under
roadways
and sidewalks in the road reserve on land, owned by the
respondent (“the City”). It appears that DFA’s
method includes digging of trenches in sidewalks to install these
ducts through which the fibre optic cables run.
[2]
On 30
May 2016, DFA informed the City that certain conditions, which the
City had inserted in his wayleaves, including those related
to the
payment of a roadway trenching deposit, were unacceptable and it
would refuse to accept these conditions. On 13 January
2017 DFA
declared that the roadway trenching deposit would not be paid by it
and that it would commence with construction without
abiding by this
condition.
[3]
On 06
February 2017, it notified the City of its intention to construct a
fibre optic route in the City’s road reserve in
Durbanville.
It invited the City ‘to comment on the contemplated
construction, which comments will be considered by
DFA’, and it
provided that, if the parties failed to reach consensus on practical
matters relating to the construction within
30 days, it would
commence with the proposed construction.
[4]
On 16
February 2017, the City granted DFA a wayleave and a work permit
containing its standard conditions for this project.
When it
received the documents, DFA crossed out four conditions, including
the requirement to pay roadway trenching deposits.
In
correspondence with the City, DFA reiterated its refusal to pay these
deposits and declared that it alone would decide whether
to trench a
roadway. It adopted the position that it did not require a
wayleave from the City to construct this network.
The City
pointed out that it had never used the wayleave process to deny DFA a
right to enter the road reserves, but that s 22(2)
of the ECA
required DFA to comply with applicable law, including its bylaws.
In exercising its rights, the City requested
DFA to adhere to its
conditions, which the City claimed were designed to protect the
public and the City from unsafe and damaging
practices.
The critical questions
[5]
Following
upon this summary of the facts, there are four questions which
require determinations from this court:
1.
may
the City impose on a statutory licensee installing electronic
communications networks the conditions in issue in this matter;
2.
may
the City invoke its budget setting powers to do so in particular to
demand deposits, one of which is not refundable from the
applicant;
3.
may
the City demand in separate conditions two ‘deposits’,
one of which is not refundable?
4.
may
the City impose a condition which includes a right to levy a future
tariff, which it justifies as a measure to ‘disincentive’
the use of trench digging for the purpose of laying cables?
These conditions flow from the amended
notice of motion, granted in terms of an interlocutory application,
which, to the extent
relevant, reads thus:
‘
Interdicting
the respondent from enforcing, prescribing or imposing conditions on
any works carried out by the applicant in
constructing or maintaining
any electronic communications network within the area of jurisdiction
of the respondent that are similar
to the conditions imposed by the
respondent in:
(b)(i)
paragraphs 1(b), 1(c), 1(d), 7 and 11 of the wayleave approval issued
by the respondent under reference number BW/075/2017
on or about 16
February 2017; and
(b)(ii)
the first sentence of paragraph 1(f) of the permit to work issued by
the respondent under reference number BW/075/2017 on
or about 16
February 2017.
or
from interfering in such works on the basis of such conditions.
(b)A.
The conditions imposed by means of:
(b)A.1
paragraphs 1(b), 1(c), 1(d), 7 and 11 of the wayleave approval issued
by the respondent under reference number BW/075/2017
on or about 16
February 2017; and
(b)A.2
the first sentence of paragraph 1(f) of the permit to work issued by
the respondent under reference number BW/075/2017
on or about 16
February 2017
are
reviewed and set aside in terms of s 6 read with s 8 of PAJA.’
Thereafter, the notice of motion
includes further prayers which follow the subject of this
application, to the extent that the DFA
suggests that they may be
necessary in order to grant the relief as set out in prayers (b) and
(d) A, reproduced above.
The conditions
[6]
The
amended set of relief needs to be read with the wayleave approval for
the proposed construction work of DFA of 16 February 2017
as issued
by the City. When it granted the wayleave application, the City
made it the subject to a series of conditions,
four of which were
deleted by DFA and which in turn, as indicated, are the subject
matter of this dispute. These are:
1.
Payment
of refundable or nonrefundable deposit which must be paid prior to
the issuing of any wayleave/permit together with a trench
reinstatement deposit; further
2.
a
reservation by which the City reserves a right to impose a tariff
charge in respect of the use of City land for the installation
of
telecommunications infrastructure; and
3.
a
condition which provides that, should these services (or part
thereof) have to be relocated for whatever reason as determined
return by the City then these service owners will immediately do so
at no cost to the City.
In the founding affidavit deposed to
by Mr van Deventer, on behalf of applicant, it is suggested that
these conditions;
1.
do
not constitute applicable law to which DFA has to have regard as
envisaged by s 22 (2) of the ECA and have no bearing on the
manner in
which DFA will be executing its works;
2.
amount
to discretionary requirements by the City, entirely unassociated with
any bylaw related to the actual execution of the works.
The relevant legislation
[7]
Section
22 of the ECA provides:
‘
Entry
upon and construction of lines across land and waterways. –
(1)
An electronic communications network service licensee may-
(a)
enter
upon any land, including any street, road, footpath or land reserved
for public purposes, any railway and any waterway of
the Republic;
(b)
construct
and maintain an electronic communications network or electronic
communications facilities upon, under, over, along or
across any
land, including any street, road, footpath or land reserved for
public purposes, any railway and any waterway of the
Republic; and
(c)
alter
or remove its electronic communications network or electronic
communications facilities, and may for that purpose attach wires,
stays or any other kind of support to any building or other
structure.
(2)
In taking any action in terms of subsection (1), due regard must be
had to applicable law and the environmental policy of the
Republic
.’
[8]
The
critical question in this case, which unlocks much of the dispute, is
the meaning of s 22 (2), in particular the phrase ‘
due
regard must be had to applicable law and the environmental policy of
the Republic’
.
[9]
This
section has been subjected to intensive judicial scrutiny in
Tshwane
City v Link Africa and others
2015
(6) SA 440
(CC). The importance of this judgment to the present
dispute requires that it be afforded careful analysis. The
facts
were briefly thus. In 2013
Link
Africa
,
a network license holder and operator under the ECA, notified Tshwane
City that it planned to run fibre optic cabling through
the latter’s
underground infrastructure. At some point, Tshwane City sought
to interdict this activity.
The High Court found that s
22 did not require the consent of the Tshwane City and, further, it
was doubtful that the Tshwane City
was a bearer of rights under s 25
of the Constitution of the Republic of South Africa, 1996,
being the property clause.’
Further, it found that s 22 of the
ECA did not authorise the arbitrary deprivation of property.
What Link Africa proposed
to do was for the benefit of Tshwane City
residents and did not constitute a deprivation.
[10]
The
dispute finally reached the Constitutional Court. In their
majority judgment, Cameron and Froneman JJ held that the real
dispute
before the court was not about entry without consent but about the
common law rights of a property owner confronted by
a public
servitude over his or her land. See para 110. This observation
then brought the court to an examination of the ECA
in general and s
22 in particular. The court found that s 22 effectively created
a public servitude and that
‘
the
rights s 22 grants are similar to a general servitude.
These allow the dominant owner to select the essential incidental
rights of the necessary premises and to take access to them as needed
for the exercise of the servitude.
’
(para 142)
[11]
Then
comes a judicial caveat: ‘but the right is not unrestricted.
The dominant servitude – holder cannot just
barge in. A
large part of the argument on behalf of the
City
of Tshwane
and Msunduzi was premised on the outrageous notion of the licensee
just barging in brazenly disregarding ‘municipal protections
and duties and works. That can never be. It is alien to
our law’s conception of rights over another’s property.
As stated in Hollmann, the exercise of the servitude is subject to
the important condition that incidental rights must be exercised
“civiliter”. This court has embraced the principle
that rights over the property of another must be exercised
civiliter
modo
.’
(at 142-143)
[12]
Translating
this to the facts of the
Tshwane
case, Cameron and Froneman JJ said:
‘
what
does it mean to exercise a right to enter another’s property
respectfully and with due caution? Our existing law
tells us
.
It
is bound up with the facts. And the common law is amply
flexible and adaptable enough to cater for the novel needs
the
statute creates. Electronic communications networks may be
constructed over the land of others only with respect and
due
caution. This is a path away from co-signing important
statutory provisions serving a vital public function, to oblivion
.’
(para 144)
[13]
In
further distilling the general principles which flowed from this
analysis, the two learned justices said the following:
‘
the
following general principles apply to our common law of servitudes:
(a)
Servitudes may not be enforced on landowners, except in the case of a
way of necessity. Enforcement of a way of necessity
may only be
done through the courts. Compensation in proportion to the
advantage gained by the plaintiff and the disadvantages
suffered by
the defendant is payable when this happens;
(b)
The holder of the right of a general servitude may select the
essential incidental rights to exercise the servitude, like the
premises needed and the access thereto. This selection must be
exercised in a civil or reasonable manner (
civiliter
).
Disputes about this choice must also be determined in court if no
agreement between the parties can be reached; and
(c)
Where changed circumstances require it, the common law of servitudes
must be adapted to arrive at a solution that is just to
the parties
and does not prejudice them. In the case of enforced servitudes
this must be done in a manner that least inconveniences
the servient
owner.
So
we know that the common law and statutes must be read in harmony as
far as reasonably possible. Section 22 grants public
servitudes
to network licensees. These must be exercised in compliance
with common law principles. Because they are
enforced general
servitudes, not determined by agreement between network licensees and
landowners, the cautionary inhibitions the
common law imposes apply.
This
means:
(a)
network
licensees may select the premises and access to them for the purposes
of constructing, maintaining, altering or removing
their electronic
communications network or facilities in taking action in terms of
section 22(1);
(b)
this
selection must be done in a civil and reasonable manner. This
would include giving reasonable notice to the owner of
the property
where they intend locating their works. The proposed access to
the property must be determined in consultation
with the owner;
(c)
compensation
in proportion to the advantage gained by the network licensees and
the disadvantages suffered by the owner is payable
in respect of the
exercise of the public servitudes section 22(1) grants; and
(d)
where
disputes arise about the manner of exercising the rights under
section 22(1) or the extent of the compensation payable, these
must
be determined by way of dispute resolution to the extent that it is
possible, or by way of adjudication. Access to the
property in
the absence of resolution will be unlawful.’ Paras 150-152
[14]
The
judgment then turned to deal with the power and duties of
municipalities. In this connection the following
paragraph
in the judgment is relevant:
‘
Local
authorities are in a distinctive position from private landowners.
As far as municipalities are concerned, “applicable
law”
in section 22(2) refers to laws that they may make within their
constitutional legislative competence in terms of Ch 7
of the
Constitution. If laws fall within that competence, they must be
complied with before section 22(1) may be exercised.
In each
case where a local authority asserts that it has the constitutional
competence to require compliance with its own laws,
it must be tested
against the provisions of Ch 7 of the Constitution to determine
whether it really has that constitutional competence.
Telecommunications
is not an area over which local authorities hold constitutional
competence. Here, we agree with the minority
judgment that the
City failed to make out a case that any of its competencies under the
Constitution or legislation have been infringed.’
para 185-186
[15]
Finally,
the following conclusion holds significance for the present dispute:
‘
These
provisions indicate that licensees, though empowered by national
legislation, must abide by municipal by-laws. The only
limit is
that by-laws may not thwart the purpose of the statute by requiring
the municipality’s consent. If by-laws
exist that
regulate the manner (what counsel called the “modality”)
in which a licensee should exercise its powers,
the licensee must
comply.’ Para 189
[16]
It is
clear that in
Link
Africa
,
the City of Tshwane failed to make out a case that any of its
competencies under the relevant constitutional legislation had been
infringed. But this alone does not answer the key question as
to what is meant by the statement that bylaws may not thwart
the
purpose of the ECA by requiring the municipality’s consent.
[17]
On
behalf of the City, Mr Budlender, who appeared together with Mr
Paschke, submitted that what was meant by this phrase, read in
the
context of this dispute, was that a bylaw could not provide that a
right granted under the ECA to a licensee to access
another
person’s land could be made subject to the consent of the
landowner. He submitted that a municipality may impose
its own
conditions to deal with matters within a municipality’s
specific legislative competence but which did not negate
the
essential content of the statutory public servitude right enjoyed by
the licensee.
[18]
In
this connection, he referred to the judgment in
Maccsand
(Pty) Ltd v City of Cape Town and others
2012 (4) SA 181
(CC). In this case, the court was required to
deal with the interplay between the Mineral and Petroleum Resources
Development
Act 28 of 2002 (‘MPRDA’) and Land Use
Planning Ordinance 15 of 1985 (‘Lupo’). The issue
was whether
the application of LUPO ended once the grant of a mining
right and permit had been given to a party in terms of the MPRDA. The
Constitutional Court found that there was no conflict between these
two pieces of legislation because they were concerned with different
subject matters. The exercise of a mining right granted in
terms of the MPRDA was subject to the provisions of LUPO.
See
para 51 of the judgment.
[19]
The
argument of the City did not entail that a valid decision by DFA
under the ECA to install its service could extend to action
by the
latter which was in breach of applicable municipal law. Such a
conclusion would run against the approach which had been
adopted in
Maccsand
supra
.
The City could impose conditions on licensees in terms of valid laws
which the Constitution provided the City a legal power
to
administer. When the City exercised its rights in terms of s 22
(1) and 24 of the ECA, a licensee must comply with these
laws when it
exercised its own rights granted pursuant to the provisions of the
ECA.
[20]
There
was some suggestion from Mr. Gauntlett, who appeared with Mr. Pelser
on behalf of DFA, that this description of the law needed
to be
qualified in the light of a decision in
Msunduzi
Municipality v Dark Fibre Africa
[2014] ZACA 165 (SCA). However, this case appeared to turn on a
municipality seeking to interdict the construction of an
underground
fibre optic network cable along certain streets within its
jurisdiction, following the exercise of rights obtained
by the
licensee in terms of the ECA. This judgment does not constitute
authority for the proposition that a municipality
may not impose its
own conditions which deal with matters within the municipality’s
specific legislative competence where
the exercise thereof does not
negate the statutory public servitude of the licensee in terms of the
ECA.
[21]
To
the extent that in paragraph 21 of the judgment in
Msunduzi,
supra
there is a
dictum
which suggests, that a provision that a party, such as the applicant
in this case, cannot dig on the municipality’s roads
and
thoroughfares without permission of the City Engineer would fall
‘
foul
of the principle that applicable law may not be used to limit the
very act authorised under s 22’
,
this finding appears to be inconsistent with the approach adopted
later by the Constitutional Court in
Link
Africa, supra
.
[22]
Having
found that a municipality’s powers need to be reconciled with
rights under s 22 of the ECA, it is now necessary to
evaluate the
legal justifications upon which the City purported to act.
The legal basis by which the City
can act pursuant to a license in terms of s 22
[23]
In
order to understand the context of the City’s action, it is
necessary to define a wayleave which is central to the impugned
decision of the City. It is ‘a right of way granted by a
landowner, generally in exchange for payment and typically
for
purposes such as the erection of telegraph wires or laying of pipes’.
Thus it is, in essence, a contract which reflects
a landowners
agreement that a licensee may use its land which it may specify the
conditions attached to such agreement.
[24]
There
are, as indicated earlier in this judgment, four conditions which are
the subject of the present dispute. The question
arises as to
whether the City has a legally justified rightin imposing these
conditions.
[25]
In
his supplementary affidavit, on behalf of the City Mr. Henry Du
Plessis the Director: Asset Management and Maintenance in the
Transport and Urban Development Authority of the City of Cape
Town justified the imposition of the four disputed conditions
as
follows:
‘
Conditions
1(b) / 1(c) and part C of Chapter 66 of the City’s 2017/18
Tariff Book
Conditions
1(b) / 1(c) of annexure F1 (p49) comprise a single deposit intended
to disincentive trenching roadways, and where trenching
takes place,
to provide part of the compensation to which the City is entitled for
the inherent degradation of the structural integrity
of the pavement.
This
pair of conditions states:
b)
Refundable deposit:
Local
Roads = L X Approved Tariff/ m (VAT not charged)
Metro
Roads = L X Approved Tariff/ m (VAT not charged)
(Tariff
Description: Refundable Deposit for the prevention of trenching
across roadways: Local Roads / Metro Roads)
c)
Non-refundable deposit:
Local
Roads = L X Approved Tariff / m (VAT charged)
Metro
Roads = L X Approved Tariff / m (VAT charged)
(Tariff
Description: Refundable Deposit for the prevention of trenching
across roadways: Local Roads / Metro Roads. However:
The
tariff becomes vatable when the deposit is forfeited in the event
when trenchless technology was not used)’
…
For
a licensee which has not provided a guarantee, conditions 1(b) / 1(c)
operate as follows:
1.
The
deposit (excluding VAT) contemplated in condition 1 (b) is payable
before construction commences.
2.
If
after construction, the City confirms that a trenchless method was
used for road crossings, then the deposit is refunded within
a
reasonable time.
3.
If
a trench must be used for a road crossing, the license is permitted
to dig the trench but then the deposit is not refunded.
In that
case, the deposit becomes vatable. This is what is contemplated
in condition 1(c).’
[26]
Mr.
Du Plessis
continues:
‘
As
I have explained, the tariff in Part C of Chapter 66 (and conditions
1(b) / 1 (c) which give effect to it) is intended to
disincentivise
(or discourage) trenching across roadways because of the harm that
such trenches cause. The tariff provides licensees with
a
financial incentive (refund of the deposit) to use trenchless
technologies where feasible and safe. Disincentivisation
of
roadway trenching serves rational, reasonable and legitimate
purposes.
As
explained in the City’s answering papers, the City accepts
however that roadway trenches are sometimes necessary.
In such
cases, the City approves applications for roadway trenches.
Hence,
conditions 1 (b) / 1 (c) do not prevent DFA from installing its
network and do not thwart the purposes of the ECA. They
do not
make a licensee’s access to the City’s land dependent on
the City’s consent and they do not purport to
empower the City
to refuse consent.
When
roadway trenching takes place, the deposit is ‘forfeited’.
In other words, according to condition 1 (c),
the deposit is
‘non-refundable’ in the event of roadway trenching.
This payment provides part of the compensation
to which the City is
entitled for the inherent degradation that roadway trenches cause to
the structural integrity of the pavement.
The payment
contributes to increased future road maintenance costs and
compensates the City for the reduction in the road’s
lifespan.
The
amount of the payment in condition 1 (c) is based on the costs of
directional drilling (the road crossing method which it incentivises)
and the likely disadvantages to the City of roadway trenching (the
road crossing method which it disincentivises).
The
disadvantages to the City of roadway trenching include (i) increased
maintenance costs; and (ii) when the pavement fails, the
costs of
completely repairing the affected portion of the road.
Increased
maintenance in (i) includes resealing the joint between the
reinstated and pre-existing asphalt, repair of cracks, the
repair of
potholes, traffic accommodation, administration, supervision, and
procurement. These maintenance tasks must be
performed in
addition to the complete repairs which will also be required.
The
inherent degradation of the structural integrity of the pavement will
require a complete repair about twice in the life cycle
of the road.
Even though many roads in the City are not new, this is a
conservative assumption – especially considering
the poor
quality of reinstatement work typically performed by licenses,
including DFA. As mentioned in the City’s answering
papers, roadway trenches reinstated by DFA are already showing signs
of failure, in some cases less than 12 months after reinstatement.
A
complete repair includes the cost of: breaking open the road;
removing compromised materials from the trench and deposing of them;
new materials for the subgrade, base, and surface layers; reinstating
and compaction of the new layers; compaction testing and
control;
traffic accommodation; overheads; administration; supervision; and
procurement. These costs are higher per linear
meter for the
repair of a failed trench (which is an ad hoc, small project) than
for a new road construction (which has economies
of scale).
The
difference in the costs for the two types of road is because,
compared with a Local Road, the pavement of a Metro Road has a
significantly higher construction standard and thickness and there is
a greater cost of accommodating traffic on a Metro Road.’
[27]
Turning
to the further condition referred to as ‘compensation
reservation’, in terms of which the City reserves the
right to
impose a tariff charge in respect of the use of City land for the
installation of telecommunication infrastructure, Mr.
Du Plessis
says:
‘
The
facts in relation to compensation are the following
1.
It
would take considerable time to determine compensation on a
case-by-case basis for each of the 5,000 wayleaves per year across
Cape Town. The City lacks the capacity to do so.
2.
If
the City had to attempt to determine compensation on a case-by-case
basis the City would be unable to grant wayleaves nearly
as
efficiently as it currently does. The process could grind to
halt and overwhelming backlogs could develop.
3.
Since
a licensee may not lawfully access land before an agreement is
reached on compensation (or failing that adjudication), a
case–by-case method for determining compensation is highly
impractical and is likely to thwart the ECA’s purpose of
promoting the rapid deployment of electronic communication
facilities.
4.
As
mentioned in the City’s answering papers, the City has
attempted to engage with DFA about a reasonable and practical method
for determining the amount of the compensation payable by DFA.
The City invited DFA to make proposals on a methodology for
determining compensation and proposed an information exchange.
5.
DFA
has failed to respond. It refuses even to acknowledge that in
principle it is liable to pay compensation for use by DFA of the
City’s land.
6.
The
City is currently engaging with all licensees which are active in
Cape Town on the process for determining compensation payable
to the
City. Subject to input received from licensees (those which are
open to engagement) the City is currently minded to
formulate an
appropriate formula or tariff which takes consideration of all
relevant considerations. It could provide for
exceptions in
special cases, and would therefore not necessarily have to be a
one-size-fits-all approach. In short, the City
intends to draft
a formula, which may or may not be incorporated in a tariff, which
enables the efficient determination of compensation
which is
rational, reasonable and proportionate.
7.
A
licensee which disputes the amount of compensation payable in a
particular case will be able to resolve the dispute in an appropriate
forum. This might be by way of appeal, arbitration, review or
adjudication.’
[28]
With
regard to the question of relocation costs, Mr. Du Plessis pointed
out that, in its indemnity of 15 March 2010, DFA consented
to this
arrangement and signed the acceptance of the relevant paragraph of
the City’s standard conditions. Since
June 2012, he
contends that DFA had thus waived whatever statute right it might
have had in terms of s 25 (1) of the ECA to require
the City to pay
the relocation costs.
[29]
I
have cited at length from this affidavit because these
justifications, as offered by the City, are the prism through which
to
examine DFA’s case to which I now turn.
DFA attack on these conditions and
the justification therefrom
1.
The
refundable deposit
[30]
Mr.
Gauntlett submitted
that the City had considerable difficulty in finding a legal basis
for the imposition of this deposit which
would withstand legal
scrutiny. Mr. Gauntlett turned to the City’s
reliance on s 11 (1) (b) of the Street Bylaws,
which prohibits a
person ‘
making
or causing to be made an excavation or digging or causing to be dug a
pit, trench or hole in a public road… other
than in accordance
with the requirements prescribed by the City.’
[31]
He
submitted that what had occurred in this case was the imposition, of
conditions on an
ad
hoc
basis as opposed to providing in advance a specific requirement
demanded of a party.
[32]
Referring
to the meaning of the word ‘prescribed’ as contained in s
11 (1) (b) of the relevant bylaw, Mr. Gauntlett
contended that this
word had a clear meaning as evidenced in the approach adopted in
Goldberg
and others v Minister of Prisons and others
1979 (1) SA 14
(A) 48 B:
‘
the
word “prescribed” in that sub-regulation means a previous
ordering or ordaining and not an
ad
hoc
determination (
cf
Read v SA Medical and Dental Council
1949 (3) SA 997
(T) at 1009 and 1013), and that the sub-regulation,
therefore, contemplates rules or guidelines laid down by the
Commissioner which
would be implemented by, inter alios, the
officials charged with the task of censorship.’
[33]
Even
if the City had prescribed general conditions, these could not
‘thwart the purpose’ of s 22 (1) of the ECA. Mr.
Gauntlett then turned to the further justification proffered by the
City, namely the effect of s 75 A (1) (a) of the
Local Government:
Municipal Systems Act 32 of 2000
which provides
:
(1)
A
municipality may-
(a)
levy
and recover fees, charges or tariffs in respect of any function or
service of the municipality; and
(b)
recover
collection charges and interest on any outstanding
amount.
[34]
Mr.
Gauntlett submitted
that the City is not authorised to impose tariffs on service
providers instead of service users. DFA cannot
be subjected to
tariffs when it is required to construct a network upon, under or
over a street. The street is not a conduit
used beneficially by
a licensee for its intended purpose, namely vehicle traffic.
Streets impede the provision of the service
which the Act
authorises. Accordingly, the City is not entitled to invoke s
75 A to justify the imposition of this
condition.
[35]
Mr.
Gauntlett also
attacked the manner in which the various conditions duplicated
themselves. The City had contended that the
refundable deposit
was designed to prevent trenching. But the second condition
simultaneously serves the same object, the
third condition
simultaneously provided for a ‘trench reinstatement’ and
the fourth purported to reserve a power to
exact compensation by
tariff in the future. In his view, no legitimate governmental
objective identified by the City was
served by the simultaneous
imposition of all four conditions.
[36]
A
further fundamental objection raised by DFA on the facts is that
trenching was sometimes unavoidable if a party such as DFA is
to
perform that for which it has been licensed under s 22(1) of the ECA.
The impugned conditions ‘are in clear violation
of the
principles that had been laid down in the
Link
Africa
case; that is they thwart the rights of DFA. If the street
bylaw is analysed it was clearly intended to be applied to deal
with
ordinary cases of disorderliness not to prevent licensees authorised
by national legislation such as the ECA to perform important
public
functions.
[37]
Mr.
Gauntlett
contended, contrary to the City’s assertions, that DFA had been
instructed to stop trenching, on pain of incarceration.
Further, an essential purpose of the ECA is to provide networks to
people living, for example in Kraaifontein, that is in disadvantaged
as well as sub economic neighbourhoods. Thus there was no
justification that the so called disincentivisation condition was
proportionate to the corresponding advantages and disadvantages
claimed by the City. There was, in short, no proportionality
between the objective of the condition and its effect.
[38]
Mr.
Gauntlett submitted
that trenching a street in Kraaifontein is ‘
not
the road to riches which the City assumes’
.
Instead, DFA suffered a loss of R 11 million for the period during
which the City sought to prevent the Kraaifontein project.
Therefore the City’s attempt to share in supposed profits by
purportedly imposing an additional form of tax on DFA when it
provides a public service was illconceived.
[39]
To
the argument raised by Mr Du Plessis that ‘road way trenches
reinstated by DFA are already showing signs of failure in
some cases
less than twelve months after installation’ Mr. Gauntlett
referred to an affidavit deposed to by Mr. Kevyn
Weber a director of
Kevyn Weber Consulting Engineers (Pty) Ltd (‘KWCE’). Mr.
Weber described how KWCE was appointed
by DFA,
inter
alia
,
to do quality assurance on construction work to ensure that the City
is satisfied with the standard of work completed:
‘
KWCE
acts as an intermediary between the contractor and the City.
For example, where a road requires to be trenched, as indicated
by
the circumstances, KWCE will compile a report to the City to obtain
approval to trench rather than drill at the location
.’
[40]
The
City then conducts an inspection of DFA routes together with KWCE
and, if satisfied, accepts the completed works. Then ‘
the
City takes over the reinstatement and remedial work done by the DFA
contractor’
.
DFA rather than the City was liable for the period up till twelve
months after conducting the work to repair any defects that
might
have arisen. Thus the alleged ‘poor quality of
reinstatement work’ to which the City referred, is
not
legitimately dealt with by imposing an additional trench condition in
that there was already a timeline month defect liability
provision.
[41]
Turning
to the non-refundable deposit, Mr. Gauntlet submitted that the City
had conflated two conditions. The second condition was,
in effect,
the same as the first condition. It served no legitimate independent
purpose and was thus irrational and liable to review.
In short, the
second condition stands and falls with the first because the City did
not advance any independent justification.
The trench reinstatement deposit
[42]
Mr.
Gauntlett submitted
that this condition was not authorised by law because it purports to
provide for “pre-emptive damages”.
No mechanism was
provided for the determination thereof. Nothing in any of the
statutory provisions invoked by the City,
in his view, permitted the
latter to impose obligations on a licensee, duly authorised, and
hence required to carry out functions
in terms of on the license
which it possessed. Mr. Gauntlett submitted that the
justification provided by the City in this
connection revealed the
irrationality of the condition.
[43]
In
the first place, it contended that ‘the purpose of this
condition is to cover the potential costs to the City of remedying
any substandard reinstatement works’. But then the
City went on to say that the purpose ‘is for possible
damages
to the road reserve’, resulting from a licensee performing
substandard reinstatement works. Furthermore, the
contention
that the conditions imposed upon DFA because of examples of defective
work performed by the latter were isolated incidents
and
representative of a record of ‘substandard reinstatement work’
conducted by DFA. The claim found no support,
in the expert
affidavit filed by the City which merely listed isolated incidents
thereof. Furthermore, as it was the licensee’s
responsibility to repair defective reinstatement, there could be no
more than “a probability” that the City “may”
have to incur the costs itself. At best, the condition was
based on potential costs rather than the actual costs.
The reservation condition
[44]
Mr.
Gauntlett submitted
that nothing in any statutory provision pleaded by the City permitted
it to impose a condition reserving a stated
right to impose a tariff
charge ‘
in
respect of the use of City land for the installation of
telecommunications infrastructure’
.
The City could not in law use its general budget setting powers to
impose “tariffs” which were not really
tariffs but rather
the imposition of pre-paid “possible damages” or
“deposits” from which, in an unregulated
way it may “help
itself”. The City could not employ general powers
conferred for one purpose, being revenue raising,
to achieve another
purpose, however laudable that might be. Recourse to the tariff book
was not sufficient because this self-evidently
did not itself purport
to impose fees, charges or tariffs.
The relocation of services
[45]
The
applicant's submission was that there was no statutory provision to
justify this right. Mr. Gauntlett further submitted
that the
waiver had not taken place. In an email dispatched immediately,
after the initial heads of argument were filed by
DFA on 08 September
2017, DFA clarified its stance, namely that the purported imposition
of the relocation costs condition was
properly assailable as a public
law act.
Evaluation
Streets bylaw
[46]
As
noted, section 11 (1) (b) of the Street Bylaw prohibits a person
‘
from
making or causing to be made any excavation or digging or causing to
be dug, pit, trench or a hole in a public road otherwise
in
accordance with requirements prescribed by the City
’
.
There is nothing in the wording of this widely phrased provision
which would indicate that a licensee falls outside
the scope
thereof. In respect of the
dictum
of Corbett JA (as he then was) employed by DFA in support of the
meaning of ‘prescribed’, Mr. Budlender noted that
this
was a minority judgment and that the majority judgment in this case
given by Wessels ACJ contained the following passage at
32 C-H:
‘
In
my opinion the word “prescribed” is used in a
non-technical sense and means no more than the Commissioner has
determined
the manner in which the appellants are to be treated.’
This
dictum
indicated clearly that
‘
prescribed
means making known to the public by way of a publication in a
newspaper or a government or provincial gazette, for example.’
[47]
If
the bylaw empowers the City to impose conditions in relation to
excavation pits, trenches or holes, it would be difficult to
conceive
how it would know precisely the nature of any or all of these
occurrences in every conceivable case. Furthermore,
unlike the issue in
Goldberg,
supra
which related to the Prisons Act, the Streets Bylaw does not contain
a provision empowering the City to prescribe regulations which
means
that the word ‘prescribe’ cannot refer to ‘
a
previous ordering or ordaining by way of regulations
’
.
To the extent relevant, in s 20 (1) (a) of the Bylaw provision is
made for the City, by written notice,
‘
(to)allot
any number to any premises in any public road and direct the owner of
such premises to display the number allotted to
the premises and the
City may also, in
exceptional
circumstances
,
prescribe the position where it is to be displayed’
.
[48]
As
the word “prescribe” is used again in the same bylaw it
indicates that the word “prescribed” read as
a whole does
not admit of the narrow interpretation advocated by DFA, but should
be given a consistent meaning in the interpretation
of the bylaw.
[49]
Turning
to the application of the Systems Act, Mr Budlender submitted that,
among the matters constituting a municipal function
and/or
service contemplated in s 75 A (1)(a) of the Systems Act, are the
provision and maintenance of structurally sound municipal
roads in a
financially sustainable manner, the protection of the municipal road
infrastructure from degradation and damage, the
provision of the road
reserves for ducts, pipes and other facilities to facilitate the
provision of services, the preservation
of the value to the City of
the land comprising the road reserve and widening realignment,
re-levelling and other work on municipal
roads to increase their
capacity and maintain their function.
[50]
The
City was thus entitled to levy and recover fees, charges or tariffs
in respect of any of these functions or services.
[51]
It
thus followed that the charges imposed in terms of s 75 A of the
Systems Act are levied in respect of the City’s function
and
service of providing roads together with the administration thereof.
The DFA derived a benefit from the service, that is enabling
it to
use the City’s roads for the purposes of its specific activity.
The impugned conditions
[52]
The
further question arises as to whether the City exercised its power in
a justifiable fashion. For this reason, one must return
to the
various conditions which are the subject of the dispute.
Conditions 1 (b) and (c) appears to operate as follows.
A
deposit (excluding VAT) as contemplated in condition (1) (b) is
payable before construction commences. If it is clear that a
trenchless method is used for the road crossing, the deposit must be
refunded within a reasonable time. If a party such as
DFA
employs a trench method, then although the license is permitted to
dig the trench based upon its license in terms of ECA, the
deposit is
not refunded and, further, this deposit becomes vatable.
[53]
The
City claims that the deposit is forfeited because it represents a
part compensation to which the City is entitled for the inherent
degradation that roadway trenches cause to the structural integrity
of its roads. The payment contributes to the increased
future
of road maintenance costs and compensates the City for the reduction
in the road’s lifespan. Were this is not
to be the case,
ratepayers would be required to ‘foot the bill’, as
opposed to the private party which has obtained
significant financial
advantages following upon it being a license holder in terms of s 22
of the ECA. There is thus no double
payment in this case.
One deposit is required: the deposit may be refunded if a trenchless
method is used; if not, the deposit
is retained by the City.
Significantly, when one has recourse to Part C of Chapter 66 of the
City of Cape Town 2017/18 Tariffs,
Fees and Charges, it is made clear
that there is a refundable deposit for the prevention of trenching
across roadways. Under
the remarks column, the following
appears:
‘
Payable
upfront prior to issuing of construction permit to applicant where a
public road reserve is being utilised for the installation
of pipes,
cable or ducting for water, electrical or communication services
.’
In the remark section the following
then appears:
‘
This
tariff is only applicable to external service infrastructure owners.
The tariff becomes vatable when a deposit is forfeited
in the event
when trenchless technology was not used. The deposit will be refunded
once each roadway is inspected to confirm a
trenchless installation
method where used in still pipes, cables and ducting. This
deposit does not apply when a trench is
required to be dug to a
service situated below the road services running parallel to the
roadway.’
[54]
It is
clear that conditions 1 (b) and 1(c) are coupled together and apply
as one deposit with two potential outcomes, depending
on whether
trenching takes place. DFA made much of the phrase ‘
Services
rendered refundable deposits for the prevention of trenching across
roadways’
.
But whatever the words employed in this description, when the text is
read as a whole it is clear that trenching is not
prevented.
Trenching can take place. The deposit is only forfeited when an
enterprise such as the DFA does not employ
trenchless technology.
Hence, this is not a case in which it can be said that the City
refuses a request by DFA to trench when
it is necessary to do so.
Agreed that the description as contained in the Tariff Book refers to
prevention. However, as noted when
the entire segment of the Tariff
Book is read, as I have set it out, the only manner in which it may
be contended that the deposit
achieves prevention is that it may
deter trenching by possibly reducing the financial viability of
trenching. But that is not the
basis of the case which is made out by
DFA as an objection to the deposit.
[55]
The
City has also provided expert evidence which does not appear to be
contested that roadway trenching which effectively involves,
as I
understand it, the breaking open of the sealed service layer road and
the digging through each of the underlying separate
road layers,
introduces a weak line in the pavement layers where water penetration
can occur. This creates a vulnerability
to joint cracking,
thermal movement and differential movement caused by differences in
the age and quality of materials. In turn,
this allows water ingress
which may lead to the rapid deterioration of the pavement integrity
and hence shorten the life of the
road.
[56]
In
this connection, it is necessary to refer specifically to the
affidavit of Mr. Johan Snyman, the Area Manager of the Asset
Management
and Maintenance Department in the Transport and Urban
Development Authority of the City. Mr. Snyman says the
following about
trenching:
‘
Trenching
involves breaking open the sealed surface layer road and digging
through each of the underlying, separated road layers.
The
trench introduces a weak line in the pavement layers where water
penetration can occur. Trenching creates vulnerability
to joint
cracking, thermal movement, and differential movement caused by
differences in the age and quality of materials.
These
processes allow water ingress, which leads to rapid deterioration of
the pavement integrity and shortens the life of the
road.
These
processes are apparent in the City. Roadways which have been
trenched show significant cracks, deterioration and early
signs of
failure even within a year of trenching.’
[57]
By
contrast, these averments are not dealt with at all by Mr. Weber, who
deposed to an affidavit on behalf of DFA, presumably as
its expert.
[58]
There
was considerable debate about whether the DFA only drills when
necessary. Its written policy in respect of road work trenching
entitled “Civil works standard” was finally provided in
reply. Significantly, in this document the following appears:
‘
The
choice of trenching techniques is the sole discretion of the
Contractor to meet the conditions likely to be encountered on site.
’
Dealing with a
trenchless road crossing technique, the document states: ‘
Horizontal
direction drilling within embankments is considered a high risk
operation and must be avoided unless the drill plan and
method
statement is drafted by a professional geotechnical engineer and
approved by the relevant road authority
.’
[59]
It is
clear that this technique is hardly used in the main, given the
warning that ‘it must be avoided unless the drill payment
method statement is drafted by a professional geotechnical
engineer…’. Significantly, there is recognition that the
relevant road authority must grant approval which, in turn, raises
the interesting question about how far the DFA are prepared
to
recognise that a road authority like the City has a role to play in
dealing with the implementation of a license under the ECA.
There is also recognition that, on occasion, DFA has employed
sub-contractors who are ‘
either
entirely unregistered or registered at an inadequate grade for public
infrastructure work.
’
[60]
To
the extent that there was an argument that the Street Bylaw does not
authorise the imposition of a deposit system, this was not
the case
made out by the City. Its argument was that based on the
tariffs prescribed in terms of s 75 A (1) (a) of the System’s
Act. Accordingly, I am not required to determine whether a
deposit system could be validly imposed in terms of the Street
Bylaw.
Proportionality
[61]
This
brings me to a critical question, central to much of the argument of
DFA; that is the doctrine of proportionality.
[62]
To
recap: DFA makes the argument that the imposed conditions breach its
rights in terms of s 22 and 24 of the ECA because they require
DFA to
pay compensation which is disproportionate to any advantage gained by
DFA and any disadvantage suffered by the City as a
result of the
former’s exercise of its rights pursuant to the ECA. I
have already set out, by way of extensive reference
to Mr. Du
Plessis’ affidavit, the City’s evidence as to how
to calculate and justify the payment amount
in terms of
condition 1 (b) and (c).
[63]
The
problem for DFA, is that while denying the basis of these
calculations, it hardly puts up any evidence to debunk the City’s
justification on the grounds of proportionality, save for some
evidence provided by Mr van Deventer, on behalf of the DFA, who
does
not claim to be an expert in this regard. In particular, DFA argues
that the City should be content with a twelve month defects
liability; that is that DFA is not liable or responsible for its work
after the twelve month period has lapsed. But as I have indicated
earlier, there is no dispute from Mr. Weber in his affidavit that
suggests that deterioration in the roads may manifest itself
only
thereafter and in particular damage caused by trenching may occur
only a few rainy seasons later. Significantly, in attempting
to argue
that the amount is disproportionate, DFA does not suggest that any
different amount would be proportional. It relies
on the bald
allegation of disproportionality which is surely not sufficient,
particularly in that DFA must prove its disproportionality
argument
in order to establish a clear right. To the extent that there is any
doubt so that there is then a genuine dispute of
facts which cannot
be resolved, on the papers, then, on the basis of
Plascon-Evans
Paints Ltd v Van Riebeeck Paints (Pty) Ltd
[1984] ZASCA 51
;
1984
(3) SA 623
(A) at 634 H-I, the City’s version must be accepted
.
[64]
Turning
to the trench reinstatement deposit, much was made by Mr. Gauntlett
that there were only fourteen examples given by the
City of defective
work by DFA, notwithstanding that at any point in time, DFA is
engaged in between 300-400 projects throughout
the City’s
jurisdiction. The City, however, had made out a case that these are
but examples which represent DFA record of
substandard reinstatement
work and lack of adequate engineering supervision, control and
testing.
[65]
In a
letter of 15 June 2017 to DFA, the City set out the history of DFA’s
work on City land. It stated that the City ‘
can
not
rely
upon DFA to ensure that work done on its behalf is performed safely
and to an adequate standard and that the current situation
poses an
unacceptable risk to public safety into the integrity of the City’s
infrastructure
’
.
[66]
In
reply, it is suggested that these averments ‘did not establish
the authority the City claims and are accordingly irrelevant.’
It seeks support in a statement by Mr. Weber that, among the reasons
for his appointment, was the assurance that the City would
be
satisfied with the standard of work. Nothing, however, is said about
any routine compliance with the City’s standards.
[67]
In
any event, if a licensee is required to pay the condition 1 (d), that
is a refundable deposit, the City retains a portion of
the deposit
only in the event that there is substandard reinstatement which the
licensee fails to remedy. The deposit does
not prevent DFA from
installing its network and it does not thwart the purpose of ECA, to
the extent that trenching is still possible.
[68]
There
is no suggestion that this condition makes DFA’s access to the
City’s land dependent on the City’s consent
and there is
no argument that it would purport to empower the City to refuse
consent.
[69]
In
terms of the compensation reservation condition, the City reserves
the right to impose a tariff charge in respect of the use
of City
land for the installation of telecommunication infrastructure. It
appears that what the City has attempted to do is to
reserve the
right, which is provided under the common law namely, to require a
licensee, acting under ss 22 and s 24 of the ECA,
to pay compensation
for the use and occupation of the City’s land.
[70]
In
Link
Africa, supra
the Constitutional Court accepted that, given the public servitude
granted to licensees in terms of s 22 of ECA ‘
compensation
in proportion to the advantage gained by the network licensees and
the disadvantage suffered by the owner is payable
in respect of the
exercise of the public servitude’s s 22 (1) grants’
.
(para 152)
[71]
It
must follow, on the basis of this
dictum,
that the City is entitled to reserve the right to impose a
compensation charge for the use and occupation of its land.
Indeed,
it appears that the City could impose rental or some other
charge to ensure it receives compensation without statutory authority
on the basis of the
dictum
to which I have made reference.
[72]
The
relocation costs condition states:
‘
Should
these services (or part thereof) in future have to be relocated, for
whatever reason as determined by the City of Cape Town,
then these
service owners will immediately do so at no cost to the City of Cape
Town.’
[73]
In
its indemnity of 15 March 2010 DFA consented to this arrangement
which included the following:
‘
AND
WHEREAS City of Cape Town may at any time require DFA to relocate,
remove or protect the Works and Services;
AND
WHEREAS DFA has agreed that, in the event of damage or destruction,
or disruption of services caused by the City of Cape Town,
or any
other third parties or in the event of relocation, removal or
protection of the Works and Services, it shall not hold the
City of
Cape Town liable for any costs or damages suffered, or for the costs
incurred in relocating, removing or protecting the
Works and
Services;
NOW
THEREFORE this deed witnessed:
DFA
hereby holds the City of Cape Town harmless and indemnifies the City
of Cape Town for any claims in respect of damages caused
to the Works
and/or disruption of Services by the City of Cape Town, or any other
third parties or the cost to be incurred by DFA
to relocate, remove
or protect the Works.
’
[74]
For
four years DFA did not object to this condition. In the initial heads
filed on its behalf on 08 September 2017, it was stated
that the
indemnity ‘which is not disputed… means that Dark Fibre
is not entitled to a final interdict (in respect
of the relocation
condition)’. It thus seems that there is no basis now by which
it can be argued that the DFA has not waived
whatever right it might
have possessed.
[75]
To
the extent that it is argued that there is no public law source for
this condition, the City has relied on its private rights
as a
landowner and as a holder of an indemnity given by DFA, including an
assertion under oath in these proceedings.
Notwithstanding that the Constitutional Court in
Link
Africa, supra
referred
to the power of a municipality to make bylaws, it does not appear,
particularly from the earlier passages of the
judgment that I have
set out (para 152), that the City is prevented from relying on a
common law property right in this connection.
Conclusion
[76]
At
the outset of his argument Mr. Gauntlett correctly noted that this
case raised four questions: May the City impose on a statutory
licensee installing electronic communication network the conditions
in issue in this matter, secondly could it invoke its budget
setting
powers to do so; thirdly may it demand separate conditions for
deposits and fourthly may it record a right to levy future
tariffs
for its disincentivising purposes.
[77]
Two
decisions are of particular importance in providing the legal basis
to answer these questions. In the first place, from the
judgment in
Maccsand
supra
,
it is clear that the task of a court, when faced with national
legislation and a potential application of legislation passed by
the
local authority is to work on the basis that ‘each is concerned
with a different subject matter’. (para 51) Each
must, if
possible be given application and treated in a fashion which would
ensure that both can apply in a seamless manner. Further,
in terms of
the judgment
Link
Africa, supra,
this principle was clearly in the mind of the court:
‘
These
provisions indicate that licensees, though empowered by national
legislation, must abide by municipal bylaws. The only
limit is
that bylaws
may
not thwart
the purpose of the statute by requiring the municipality’s
consent. If bylaws exist that regulate the manner …
in
which a licensee should exercise its powers,
the
licensee
must
comply
.’
(para 189) (my emphasis)
[78]
This
dispute is a case study in the application of these
dicta
.
Nowhere in the papers does it appear that a case has been made out by
DFA that their rights in terms of s 22 have been negated,
that is to
the extent that it cannot implement its ECA rights. True the DFA
actively is regulated, to the extent that as a licensee,
it must
abide by municipal bylaws. But that is a very different
situation from a contention that the purpose of the Act has
been
thwarted, particularly in the light of the need to reconcile national
with local legislation.
[79]
In
each of the four conditions, the City has provided clear
justifications for the imposition thereof. In many instances, as I
have documented, this justification has not been met by a plausible
evidential counter narrative. To the extent that there are legitimate
disputes, as this is an application for a final interdict, it follows
that the rule in
Plascon-Evans
must apply in favour of the City. Its version does not stand to be
dismissed on any of the exceptions to the
Plascon-Evans
rule.
[80]
Conceptually,
the justifications offered by the City amount to a ‘nudge’
by the City for licensees to employ trenchless
technology; that the
City seeks to impose conditions that will influence a choice in
behaviour without prohibiting the exercise
of whatever choice the
actor makes. It seeks in this way to influence behaviour so as to
reduce the potential financial burden
that would otherwise fall upon
hard passed ratepayers. See Richard Thayler and Cass Sunstein:
Nudge.
Improving decisions about health, wealth and happiness
(2008).
Review of the Durbanville wayleave
[81]
In
its prayers, DFA has asked for the review and setting aside of the
City’s specific decision on 16 February 2017 to impose
disputed
conditions in respect of the so called Durbanville project.
[82]
For
all of the reasons that I have outlined above, there is no
substantive basis for setting aside the conditions imposed therein.
To the extent that it is argued that in this case there was the
exercise of administrative action on the part of the City, it is
difficult to find, once the conditions as set out are justified for
all of the reasons that I have advanced, that the inclusion
of two
tariff based conditions insofar as the Durbanville wayleave projects
are concerned constitute administrative action.
[83]
In
this context I agree with Mr. Budlender that the
dictum
in
Nedbank
Ltd v Mendelow and another NNO
2013 (6) SA 130
(SCA) paras 24-25 is applicable in this case:
‘
not
every act of an official amounts to administrative action that is
reviewable under PAJA. … A decision must entail
some
form of choice or evaluation. Thus while both the Master and
the Registrar of Deeds may perform administrative acts
in the course
of their statutory duties, where they have no decision-making
function but perform acts that are purely clerical
and which they are
required to do in terms of the statue that so empowers them, they are
not performing administrative acts within
the definition of the PAJA
or even under the common law
.’
[84]
There
does not appear to be a basis to argue that the official who issued
the wayleave in Durbanville had a discretion to override
the
determination of the City Council of the amounts to be charged, in
terms of the clear policy adopted by the City. It
cannot be
that every time a municipal official issues an account for services
rendered it exercises an administrative action;
mutalis
mutandis
in the Durbanville case.
[85]
For
all the reasons set out, the application is dismissed with costs,
including the costs of two counsel.
____________________
DAVIS J