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[2014] ZAGPJHC 104
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Wireless Business Solutions (Pty) Limited v Independent Communications Authority of South Africa (2013/11814) [2014] ZAGPJHC 104 (1 April 2014)
IN
THE SOUTH GAUTENG HIGH COURT, JOHANNESBURG
REPUBLIC
OF SOUTH AFRICA
CASE
NUMBER: 2013/11814
DATE:
01 APRIL 2014
In
the matter between: -
WIRELESS
BUSINESS SOLUTIONS (PTY) LIMITED
.......................
Applicant
And
THE
INDEPENDENT COMMUNICATIONS
AUTHORITY
OF SOUTH
AFRICA
....................................................
Respondent
J U D G M E N T
MUNDELL,
AJ: -
[1]
The genesis of this application was an
urgent application enrolled for hearing on 5 April 2013. In
Part A of the notice of
motion the applicant sought urgent relief to
direct the respondent to return to it certain equipment as well as to
interdict and
restrain the respondent from interfering with the
applicant’s use of certain radio apparatus to transmit and/or
receive radio
signals on certain defined frequencies (“the
operation of the network”). That relief was to pend the
outcome
of the main relief sought in Part B.
[2]
On 5 April 2013 Vally J in effect granted
Part A of the notice of motion. Paragraph 3 of Vally J’s
order records that
the interim relief would lapse on 1 June 2013.
On 14 May 2013 Boruchowitz J gave an order which directed that the
matter
be heard by agreement on Monday 10 June 2013 together with
certain ancillary directions relating to the delivery of affidavits.
Boruchowitz J extended the interim relief to 29 June 2013.
[3]
The applicant is the provider of internet
connectivity services to various individual consumers and corporate
subscribers and is
engaged in the operation of the network. The
respondent, on the other hand, is a juristic person established in
terms of
Section 3(1) of the Independent Communications Authority of
South Africa Act, 13 of 2000
(“the
ICASA Act”).
In terms of Section
4(3)(b) of the ICASA Act, the respondent, amongst others, is required
to monitor the electronic communications
sector to ensure compliance
with the ICASA Act and the underlying statutes. The “
underlying
statutes”
in turn are defined to
mean the Broadcasting Act, the Postal Services Act and the Electronic
Communications Act.
[4]
The ICASA Act makes provision for the
appointment by the respondent of suitably qualified inspectors to
perform the functions provided
for in that Act (Section 17F).
An inspector is, in terms of the provisions of Section 17F(5)(c)
authorised to investigate
and evaluate any alleged or suspected
non-compliance by a licensee with its license terms and conditions.
For that purpose,
an inspector is “
at
any reasonable time without prior notice and on the authority of a
warrant”
entitled to enter upon
any premises, search that premises and seize for further examination
or safe custody any document or thing
which has a bearing on any
alleged non-compliance with the Act.
[5]
The contemplated warrant is one issued by a
Magistrate or a Judge in terms of Section 17G(4)(a) of the ICASA Act,
the requirement
being that it must appear to the Magistrate or Judge,
from information furnished to him or her on oath or affirmation, that
there
are reasonable grounds for believing that a document or thing
which has a bearing on the alleged non-compliance with the provisions
of the Act is or will be in the possession or under the control of
any person or on or in any premises within the area of jurisdiction
of that Magistrate or Judge and cannot otherwise reasonably be
obtained.
[6]
Section 31
of the
Electronic Communications
Act, 36 of 2005
is in the following terms:
“
31
Radio Frequency Spectrum License
(1)
Subject to sub-sections (5) and (6),
no person may transmit any signal by radio or use radio apparatus to
receive any signal by
radio except under and in accordance with the
radio frequency spectrum license granted by the Authority to such
person in terms
of this Act.”
[7]
The authority referred to in the
afore-quoted provision is the respondent.
[8]
The centre-piece of the debate in this
application is whether the applicant is operating in contravention of
Section 31(1)
of the
Electronic Communications Act. The
relief
sought in the notice of motion is to be seen in that context.
[9]
In close association with
Section 31(1)
,
Section 32(1)(a)
of the
Electronic Communications Act provides
that
no person may possess any radio apparatus unless he or she is in
possession of a radio frequency spectrum license granted
in terms of
that Act.
[10]
The
relief sought in Part B of the notice of motion is, firstly, for a
declaratory order that the applicant is licensed to operate
the
network on six frequency spectrums.
[1]
[11]
In paragraph 2 of Part B the applicant asks
for an order reviewing and/or setting aside the suspension or
cancellation of its license
by the respondent. Paragraph 3
moves for the setting aside of a warrant issued by Claassen J on 7
March 2013. Both
paragraphs 2 and 3 are sought “
To
the extent necessary”
. That
qualification is inserted as the relief sought in paragraphs 2 and 3
is conditional upon the failure of that sought
in paragraph 1.
[12]
The warrant authorised by Claassen J
permitted the search of certain defined premises occupied by the
applicant and the seizure
of: “
All electronic communications facilities/electronic communicationsnetwork/
electronic
communications network service, with all associated
peripheral equipment, utilised in the transmission and/or receiving
of radio
frequencies in the specified spectrums.”
The warrant was executed on 3 April 2013. It is the
equipment seized pursuant to that execution which the respondent
was
directed to return to the applicant in terms of paragraph 2.1 of
Vally J’s order of 5 April 2013. The warrant was
issued
in terms of Section 17G(iv)(b) of the ICASA Act.
[13]
The relief sought in paragraph 1 of the
notice of motion (Part B) is predicated on the fact that the
respondent had not taken a
decision to suspend or cancel the
applicant’s licenses so that those licenses remain valid.
The relief sought in paragraph
2 of the notice of motion is premised
on the assumption that the respondent had decided to suspend or
cancel the applicant’s
license.
[14]
The respondent disavows any such decision.
In the heads of argument delivered on the respondent’s behalf
by Mr Kennedy
SC, the opposition to the relief sought in paragraph 2
of the notice of motion is put in the following terms:
“
18
Prayer Two, which seeks to review and set aside ‘the suspension
or cancellation
of a license’ is likewise misconceived.
ICASA (the respondent) has not taken any decision to suspend or
cancel a license.
The previous licenses are deemed to have
lapsed due to non-payment.”
[15]
That argument was legitimately based on the
contents of the respondent’s answering affidavit in paragraph
26 whereof the deponent,
Dr Mncube, said:
“
Regarding
Prayer Two of Part B of the notice of motion, namely the prayer for
the review and/or setting aside of the alleged suspension
or
cancellation of the relevant licenses, the respondent has not taken
any decision to suspend or cancel any of the six licenses.”
[16]
A decision on the part of the respondent to
either cancel or suspend the applicant’s six licenses would
constitute administrative
action as defined in
Section 1
of the
Promotion of Administrative Justice Act, 3 of 2000
. The
applicant has not, in support of the conditional relief sought in
paragraph 2 of Part B of the notice of motion, sought
to invoke the
provisions of that Act. In the result, no case is made out in
support of paragraph 2 of Part B of the notice
of motion.
[17]
For its part, the applicant admits that it
is liable to make payment of the prescribed license fees, and that it
is in arrears in
those payments. The applicant contends that:
[17.1]
a dispute between it and the respondent
endures concerning the amount of the fees payable;
[17.2]
there are continued negotiations between
the applicant and the respondent concerning that which is allegedly
owing by the latter
to the former.
[18]
The applicant suggests that, in the face of
those disputes and negotiations, the respondent had not taken a
decision to cancel the
applicant’s license and, in any event,
conducted itself in such a manner as to lead the applicant to believe
that, pending
resolution of the disputed license fees, the licenses
would remain valid.
[19]
I do not intend to relate the entire
history of the dispute between the applicant and the respondent in
the context of the license
fees owing. The following portions
of that debate are relevant:
[19.1]
in
a letter dated 27 February 2012 addressed by Mr Thami Mtshali
[2]
to Dr Stephen Mncube,
[3]
Mtshali
recorded the applicant’s contention that the sum then owing by
it to the respondent was R8 479 391.66;
[19.2]
payment of that amount was not, however,
tendered by the applicant. It proposed to the respondent that
it would effect payment
in twelve equal instalments, the first
payment to fall due within seven days of the respondent’s
approval of that submission;
[19.3]
no
apparent resolution of the dispute was achieved and, on 5 December
2012, Mlindi Kgamedi
[4]
again
addressed Dr Mncube in terms which included the following paragraph:
“
We
urgently need to get an indication from your goodselves as to your
attitude on our proposal. You may recall that we have
proposed
that we make a payment of R1 000 000.00 (One million Rand)
towards the license fees that are outstanding and
that this would the
(sic) defray any possible action on your part with respect to
hampering WBS business. This payment would
be made concurrently
with the discussion between ourselves on the set off with respect to
the migration costs. To date we
have not received any feedback
from your goodselves and the Authority’s silence in this regard
is affecting our planning
going forward.”
[19.4]
the letter incorporated an undertaking to
pay the sum of R4 million over the period 7 December 2012 to 31 March
2013;
[19.5]
on 24 January 2013 Dr Mncube addressed
Mtshali on a range of issues, recording, amongst others, the
respondent’s view that
the applicant had not paid spectrum
license fees since as long ago as the 2009/10 financial year and that
the amount then owing
by the applicant to the respondent was in the
sum of approximately R60 million. Dr Mncube’s letter
concluded in the
following terms:
“
The
payment arrangement of R1 million is therefore rejected as offered as
a conditional acceptance of your letter. Therefore,
WBS (the
applicant) is advised to engage the authority on the payment
settlement plan based on the full amount of +R60 million
due.”
[19.6]
further
communications ensued which culminated in another letter addressed by
Mtshali to Dr Mncube on 4 April 2013. That letter
sets out some
of the history of the disputes between the parties. It was sent
after the execution of the warrant that had
been issued by Claassen J
on 7 March 2013. In the letter, Mtshali emphasized the fact
that the applicant had repeatedly stressed
to the respondent the
urgency in resolving the outstanding issue relating to the fees
payable “…
because
we live with the constant threat that if we do not pay the
outstanding license fees then we run the risk of having our service
totally terminated or suspended.”
[5]
[19.7]
the following proposal was advanced by the
applicant:
“
In
terms of a Settlement Plan, we hereby wish to further propose that
the total fees will be settled over a Sixty months period
where
monthly WBS will pay R1.Million per month over such a duration
proposed. Should the Authority wish for these fees to
be
settled over a shorter period, we are also willing to consider a 36
Months period whereby a total of R15Million will be paid
annually.
Should there be
any discrepancies and difference in calculation in favour of either
party then such difference will be credited
to the effected party.”
[20]
In
his founding affidavit
[6]
Mtshali records that this letter was addressed by him after he had
personally attended at the respondent’s offices at
approximately
16h00 on 3 April 2013 for the purposes of discussing
the attachment and seizure of the applicant’s property, but
without
success.
[21]
In a supplementary founding affidavit
delivered on 16 April 2013 in accordance with paragraph 4.2 of Vally
J’s order of 5
April 2013, Mtshali summarises the applicant’s
case in support of the relief sought in paragraph 1 of Part B of the
notice
of motion to be that, as he put it, “
the
applicant’s licenses had not expired”
.
The case advanced in argument is that, although license fees are due
by the applicant and, admittedly, have not been paid
by it, the
applicant’s licenses remain effective until suspended and
ultimately withdrawn in the terms contemplated in Regulation
12 of
the Radio Frequency Spectrum Regulations, 2011 published in
Government Gazette 34172 of 31 March 2011 which took effect on
1
April 2011 (“the RFS Regulations”).
[22]
The respondent’s opposition to the
relief sought in paragraph 1 of the notice of motion (Part B) is that
the six licenses
are no longer valid and had lapsed owing to the
non-payment of the outstanding license fees. Furthermore, the
respondent
is not willing to accept the applicant’s tender of
payment in instalments.
[23]
Regulation 9 of the RFS Regulations is in
the following terms:
“
9
Procedures in respect of renewals
(1)
Renewal of a radio frequency
spectrum license is performed on an annual basis by payment of the
prescribed annual license fees,
except in the case of multi-year
licenses where the renewal is carried out upon completion of the
multi-year license period.
(2)
The licensee must pay the renewal
fee within forty (40) working days before the due date.
(3)
If the annual radio frequency
spectrum license fees are not paid by the due date then the radio
frequency spectrum license will
be deemed to have expired on the due
date.
(4)
An application for renewal of a
license must be –
(a)
in the format as set out in
Form
B of Annexure A
; and
(b)
accompanied by the applicable fee.”
[24]
Due date
,
in turn, is defined in Section 1 of the RFS Regulations to mean 31
December of each year.
[25]
The applicant did not pay the required
license fees for any of the years 2010, 2011 or 2012. On a
reading of the afore-quoted
Regulation 9, the applicant’s
licenses are deemed to have expired.
[26]
Mr Budlender, who appeared for the
applicant together with Mr Berger, submitted that the use of the word
“
deemed”
in RFS Regulation 9(3) points to the conclusion that the respondent
may, either expressly or by its conduct, choose to consider
the
licenses having expired. In other words, as I understood the
argument, Regulation 9(3) affords the respondent the entitlement
to
make an election.
[27]
In
S
v Rosenthal
[7]
Trollip JA said:
“
The
words ‘shall be deemed’ (‘word geag’,
Afrikaans text) are a familiar and useful expression often used
in in
legislation in order to predicate that a certain subject-matter, eg a
person, thing, situation, or matter, shall be regarded
or accepted
for the purposes of the statute in question as being of a particular,
specified kind whether or not the subject-matter
is ordinarily of
that kind. The expression has no technical or uniform
connotation. Its precise meaning, and especially
its effect,
must be ascertained from its context and the ordinary canons of
construction.”
[28]
In my view, the words “
will
be deemed”
as they appear in RFS
Regulation 9(3) do not allow for the conclusion Mr Budlender seeks to
draw therefrom. The words used
lead to the inevitable
conclusion that the regulation requires that licences which have not
been timeously renewed by the appropriate
payment are to be regarded
as having expired with the consequential result that any continued
operation of the network is not permitted.
[29]
That conclusion, however, does not end the
debate. The applicant also relies on RFS Regulation 12, the
relevant portions of
which read:
“
12
Procedures in respect of spectrum
license withdrawal
(1)
The authority will proceed with the
withdrawal of a radio frequency spectrum license as outlined in
Section 31(7-10) of the Act.
…
(3)
The Authority may suspend a radio
frequency spectrum license and assignment for no more than twenty
four (24) months, whereafter
the license may be withdrawn, in any of
the following circumstances:
…
(e)
upon non-payment of the annual radio frequency spectrum license fees
by the due date;”
[30]
The applicant argues that there is a
conflict between RFS Regulations 9 and 12. The former
contemplates an automatic deemed
lapsing of a license at midnight on
31 December of any year in the event that the license fees are not
paid whereas the latter
makes provision for the suspension of a
license by the respondent (for no more than twenty four months) and
the subsequent withdrawal
of the license in the event that (as one of
the possible grounds) the annual radio frequency spectrum license
fees are not paid
by 31 December of any given year.
[31]
I
am not persuaded that RFS Regulations 9 and 12 are in conflict with
one another. An analysis of the two regulations must,
of
course, proceed from the rule of interpretation which promotes
validity rather than invalidity – “
ut
res magis baleat quam pereat”.
[8]
[32]
Regulation 9, in its terms, deals with the
procedure required for a party such as the applicant to renew its
radio frequency spectrum
licences. In order to achieve that
result the prescribed annual licence fees must be paid forty working
days before 31 December
of any given year. In the event that
those fees are not paid, the licence will be deemed to have expired.
That expiry,
however, does not preclude the applicant for renewal of
the licence from following the processes prescribed in Regulation
9(4)
in submitting a late application for renewal. If approved,
a late application will result in the renewal of the licence.
[33]
Regulation 12, on the other hand, caters
for a different set of circumstances. It governs the procedures
necessary for the
withdrawal by the respondent of spectrum licences.
One of the entitlements afforded the respondent in terms of that
regulation
is to suspend a radio frequency spectrum licence for a
period of not more than twenty four months (whereafter the licence
may be
withdrawn) should, for example, there have been a non-payment
of the annual radio frequency spectrum licence fees by the due date.
As an adjunct to the deeming provision contained in Regulation 9, the
respondent may elect to “suspend” the licence
for a
period of twenty four months so as to preclude any renewal thereof in
terms of Regulation 9. Thereafter, and again
at the
respondent’s election, the licence may be withdrawn in which
event, once again, it could not be the subject of a renewal
in terms
of Regulation 9.
[34]
Although Regulations 9 and 12 are, when
read together, somewhat clumsily constructed, that lack of elegance
does not, in my view,
lead to the conclusion that I can ignore the
deeming provision contained in Regulation 9(4). The concepts of
a “deemed
expiry” and a “suspension” followed
by a possible withdrawal self-evidently envision different sets of
circumstances.
[35]
The applicant did not pay the required
licence fees. The result of that non-payment is that the
applicant may not engage in
the operation of the network as it is not
in possession of radio frequency spectrum licences granted by the
respondent as contemplated
in
Section 31
of the
Electronic
Communications Act. I
conclude, accordingly, that, the
declaratory relief sought in paragraph 1 of Part B of the notice of
motion is not warranted. I will
not grant an order in
those terms.
[36]
That brings me to the relief sought in
paragraph 3 of Part B of the notice of motion – that which
seeks the setting aside
of the warrant issued by Claassen J on 7
March 2013. In short, the contention is that, at the time of
the application by
the respondent’s inspector for the issue of
the warrant, that inspector had already formed the view that the
applicant was
operating unlawfully. As a consequence, and as is
contemplated in Section 17F(5)(d) of the ICASA Act, the identified
non-compliance
should have been referred to ICASA’s complaints
and compliance committee rather than having led to an application for
the
issue of a warrant.
[37]
Section 17G(4)(b) of the ICASA Act directs
that a Magistrate or Judge must issue a warrant if it appears to him
or her, from information
on oath or affirmation, that there are
reasonable grounds for believing that a document or thing which has a
bearing on the alleged
non-compliance or other act referred to in
Section 17F –
“
(i)
is or will be in the possession or under the control of any person or
on or in any premises within the area of jurisdiction of that
Magistrate or Judge; and
(ii)
cannot reasonably be obtained otherwise.”
[38]
It is a requirement of Section 17G(5)(a)
that the warrant contemplated in sub-section (4) must, amongst
others, specify which of
the acts contemplated in sub-section (2)(a)
to (g) may be performed thereunder by the inspector to whom it is
issued. The
warrant issued by Claassen J does so.
[39]
I am not persuaded that the limitations
which the applicant seeks to impose on the provisions of Section 17F
are appropriate.
Although, for example, Section 17F(d) directs
an inspector to refer all non-compliance matters to the respondent’s
complaints
and compliance committee, that requirement does not
preclude the inspector from approaching a Magistrate or Judge for a
warrant
on the basis that there are reasonable grounds for believing
that the document or thing referred to in the appropriate sub-section
has a bearing on the alleged
non-compliance or other act referred to in Section 17F
.
The ambit of Section 17G(iv) is sufficiently wide to permit the issue
of a warrant even in circumstances in which an inspector
is required
in terms of Section 17F(5)(d) or (e), to refer non-compliance matters
or complaints to the complaints and compliance
committee.
[40]
Section 33
of the
Electronic Communications
Act proscribes
possession of any radio apparatus by any person unless
that person is in possession of a radio frequency spectrum license.
Given the conclusions to which I have come, the applicant is not in
possession of such a radio frequency spectrum license and,
for that
reason, is not entitled to possess any radio apparatus.
[41]
Section 32(3)(b)
of the
Electronic
Communications Act authorises
the authority (the respondent) to seize
such apparatus for disposal as contemplated in terms of sub-section
(4).
Section 32(4)
, in turn, directs that apparatus seized by
the respondent must be held by it, at the cost of the applicant,
until:
[41.1]
its possession is authorised in terms of
Section 31
; or
[41.2]
the matter is dealt with by a court of law.
[42]
Section 17(G)(5)(b)
directs that a warrant issued in terms of that
section is valid until, amongst others, it is either executed or the
purpose for
which the warrant was issued no longer exists.
[43]
The warrant has been executed. That execution took place on 3
April
2013. Thereafter, Vally J directed that the goods
attached pursuant to that execution be returned to the applicant.
In my view the order that I intend making will not automatically
revive the warrant or the respondent’s entitlement to be
in
possession of the attached goods - nor does the interim order issued
by Vally J on 5 April 2013 make provision therefor.
As Mr
Kennedy cogently argued, the warrant has expired and its prior
existence is, in the current circumstances, rendered moot.
[44]
In the circumstances I am not satisfied that the warrant issued by
Claassen J
on 7 March 2013 was not validly issued in terms of
Section 17G(4) of the ICASA Act nor am I persuaded that any basis
exists for
now setting it aside – effectively an exercise in
futility. In the result the relief sought in paragraph 3 of
Part
B of the notice of motion must fail.
[45]
The conclusion to which I have come is that the applicant is not
entitled
to the relief formulated in the notice of motion. At
the hearing of the application, and by agreement between counsel, in
reserving my judgment on the merits I granted an order extending the
interim order made by Vally J on 5 April 2013 to a date five
days
after the delivery of this judgment.
[46]
In the result I make the following order:
“
1.
The application is dismissed.
2.
The applicant is to pay the costs of the application which
costs are to include those reserved for determination by Vally J on 5
April 2013.
3.
Paragraph 2 of the order of Vally J dated 5 April 2013 remains
binding for a period of five days from the date of this order, the
first day of that period being the date of this order.”
A
R G MUNDELL, AJ
ACTING
JUDGE OF THE HIGH COURT
APRIL
2014.
[1]
They
are: 1GHz; 5.9GHz; 10.5GHz; 26GHz; 2.6GHz and 1800 MHz GSM
[2]
The
applicant’s Chief Executive Officer
[3]
The
respondent’s Chairperson
[4]
Described
to be the applicant’s Executive Head – Regulatory
Affairs
[5]
The
first paragraph on the third page of that letter.
[6]
Paragraph
29, p.21 of the Bundle.
[7]
1980
(1) SA 65
(A) at 75
in
fine
[8]
Minister
of Education and Training and Others v Ndlovu
1993 (1) SA 89
(A) at
91F;
Cabinet
for the Territory of South West Africa v Chikane and Another
1989
(1) SA
349
(A) at 371