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[2014] ZASCA 165
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Msunduzi Municipality v Dark Fibre Africa (RF) (Pty) Limited (20119/2014) [2014] ZASCA 165 (1 October 2014)
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THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Case
no: 20119/2014
DATE:
01 OCTOBER 2014
Reportable
In
the matter between:
MSUNDUZI
MUNICIPALITY
...............................................................
APPELLANT
And
DARK
FIBRE AFRICA (RF) (PTY)
LIMITED
...................................
RESPONDENT
Neutral
citation:
Msunduzi Municipality v Dark
Fibre Africa
(20119/14)
[2014] ZASCA
165
(01 October 2011)
Coram:
Lewis, Cachalia and Swain JJA and Fourie
and Dambuza AJJA
Heard:
19 September 2014
Delivered:
01 October 2014
Summary
:
Interpretation – s 22 of
Electronic Communications Act 36 of
2005
–
no
permission required from landowner for an electronic network services
licensee to exercise rights in terms of
s 22
– landowner
includes state organs – licensees must comply with applicable
laws – applicable law cannot be used
to limit the very act
authorised in the licence - exercise of rights under
s 22
constitutes
administrative action and subject to PAJA constraints.
ORDER
On
appeal from
: Kwazulu-Natal High Court,
Pietermaritzburg (Steyn J sitting as court of first instance)
The
appeal is dismissed with costs, including the costs of two counsel.
JUDGMENT
DAMBUZA
AJA (Lewis, Cachalia and Swain JJA and Fourie AJA concurring)
[1]
This is an appeal, with leave of the court below, against an order of
the Kwazulu-Natal Division of the High Court, Pietermaritzburg
(Steyn
J) dismissing an application to have the respondent interdicted from
conducting construction work on municipal land within
the area of
jurisdiction of the appellant.
[2]
The appellant is a local municipality established in terms of the
Municipal Systems Act 32 of 2000. It controls land and public
spaces
in the Pietermaritzburg area.
[3]
The respondent is a private company. It holds an Electronic
Communications Network Services licence (ECNS) and an Electronic
Communications Network licence (ECN) both issued by the Independent
Communications Authority of South Africa in terms of the Electronic
Communications Act 36 of 2005 (ECA).
[4]
The background facts to this appeal are: in July 2012 the respondent
notified the appellant of its intention to construct an
underground
fibre optic cable network along certain streets within
Pietermaritzburg. Over the following 16 months, it made numerous
attempts to obtain the appellant’s approval for its
construction implementation plans (the wayleaves). The respondent
refused
to grant such approval. On 9 September 2013 the respondent
advised the appellant that if the approval was not granted by 17
September
2013, it would proceed with construction. On 12 November
2013 the respondent commenced construction. On 25 February 2014 the
appellant
instituted proceedings in the high court, on an urgent
basis, seeking an interim interdict stopping the construction. The
interim
interdict was sought on the basis that the court would grant,
as final relief, a declarator that the respondent had no entitlement
to exercise any of the powers provided for in s 22 without the
appellant’s prior approval. The appellant contended that,
as an
alternative to the declaratory order, the respondent’s decision
to exercise rights under s 22 should be reviewed and
set aside. It
also sought an order that the respondent be permanently interdicted
from entering land owned by the appellant and
from constructing an
electronic communications network or facility thereon. A further
anticipated order was that the respondent
remove its equipment on
land owned by the appellant. The appellant’s case was that the
respondent had failed to obtain permission
from it to commence
construction.
[5]
In dismissing the application, the high court followed the decision
of this Court in
Mobile
Telephone Networks (Pty) Ltd v SMI Trading CC
[1]
(
MTN
)
and found that the respondent did not require permission from the
appellant to exercise its rights under s 22. That court also
found
that the appellant had not made out a proper case for review of the
respondent’s decision to commence construction.
[6]
In
MTN
, a private licensee (MTN) invoked s 22 to justify its
continued occupation, after expiry of its lease, of a base station
located
on the respondent’s land. On appeal this court found
that a licensee does not require the permission of a landowner to
exercise
its rights under s 22.
[7]
Section 22 provides:
‘
22.
Entry upon and construction of lines across land and waterways.
(1)
An electronics communications network licensee may –
(
a
)
enter upon any land, including any street, road, footpath or land
reserved for public purposes, any railway or 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 action in terms of subsection (1), due regard must be had
to applicable law and the environmental policy of the Republic.’
[8]
Malan JA said:
‘
The
powers given by s 22 are, as I have said, required to enable the
providers of both fixed-line and wireless telecommunications
operators to achieve their objectives….
…
the
reason for the powers given by s 22(1) would fall away if consent of
the owner were to be a requirement. Section 22(1) specifically
dispenses with the need to obtain the owner’s consent…..The
words “with due regard” generally mean “with
proper
consideration” and, in the context, impose a duty on the
licensee to
consider
and submit to the applicable law.
This duty arises only when the licensee is engaged “in taking
any action in terms of subsection (1)”: the “action”
referred to by s 22(1) is entering, constructing and maintaining,
altering and removing. These actions are authorised. It is “in
their taking” that due regard must be had to the applicable
law. A fortiori the “applicable law” cannot limit
the
very action that is authorised by s 22(1).’
[2]
(My emphasis.)
[9]
Thus this court, in
MTN
, expressly rejected the argument that
the consent of a landowner is required to exercise rights under s
22(1). It further held
that licensees are obliged to comply with
applicable law, an issue to which I shall revert.
[10]
The appeal was based on three grounds:
(a)
that this court’s interpretation of s 22 of the ECA in
MTN
was incorrect in that the court did not take into account the rights
and duties of organs of state in their administrative role;
(b)
that the respondent’s decision to exercise its rights under s
22 did not meet the requirements of legality or of lawful
administrative action in terms of the Promotion of Administrative
Justice Act 3 of 2000 (PAJA);
(c)
that the respondent failed to have regard to applicable law within
the meaning of s 22(2) of the ECA in executing its s 22 decision.
[11]
The appellant contended that its delay in approving the respondent’s
wayleaves was justified in view of the respondent’s
attitude
that its rights under
s
22 were ‘absolute’. This the appellant attributed to an
overbroad statement in
MTN
, on the interpretation of the
powers that licensees have under s 22. The argument was that in
MTN
this court found that licence holders were only obliged to ‘have
due regard to applicable laws’ but did not necessarily
have to
comply with them. As already shown above, the court explained, in
MTN
, that licensees under
s
22 are obliged to comply with applicable law, but such law cannot
limit the very action that is authorised by section 22(1).
[3]
Counsel for the appellant conceded that if s 22 required the licensee
to comply with applicable laws, as in my view was undoubtedly
held in
MTN
,
the dictum complained of was not overbroad.
[12]
In so far as the appellant argued that a distinction must be drawn
between private and state organ landowners, that argument
also falls
to be rejected. The appellant’s argument was essentially that
because of the public order or benefit role that
state organs play,
the regard that must be had to applicable law is that the law must be
complied with, not only in respect of
the execution of a decision but
also in the taking thereof.
[13]
There is, however, no scope, in the ECA, for the differential
treatment of landowners contended for by the appellant. Express
mention, in s 22(1)(
a
) of ‘…any land, including
any street, road, footpath or land reserved for public purposes, any
railway and any waterway
of the Republic’ can only mean that s
22(1) is applicable to land held by state organs as it is to land
held by private persons.
[14]
Once counsel for the appellant conceded that the interpretation of s
22 in
MTN
was not overbroad, the basis for the declarator
sought in the main relief fell away, because the respondent did not
have to obtain
the appellant’s approval to exercise its rights
under s 22. All that the respondent had to do was to comply with
applicable
law when executing the works. No case was made that it had
not done so.
[15]
The review could also never have succeeded. Indeed, as was held in
MTN
,
the respondent’s decision to commence construction constituted
administrative action. It was therefore subject to review
on the
grounds listed in s 6 of PAJA.
[4]
But, as submitted on behalf of the respondent, PAJA is exhaustive on
the grounds upon which the respondent’s decision can
be
challenged; the legality principle is not available as a separate
basis for doing so. And even if the decision could be challenged
on
the legality principle, rationality, on which a legality challenge
should be brought, is a much narrower basis than the grounds
available under PAJA, which the appellant failed to prove.
[16]
The appellant’s argument on legality was not based on
rationality. Its argument was that, for the respondent’s
decision to meet the legality requirement, the respondent had to
accept the appellant’s standard terms and conditions or
such
other conditions as would have the effect of protecting public
interest. This was simply another way of imposing a consent
requirement on the appellant. If the ECA did not require consent for
the exercise of rights under s 22, failure to accept the appellant’s
conditions before taking the decision could not be unlawful and
unreasonable.
[17]
The appellant contended further that the taking of the decision was
procedurally unfair because the respondent had failed to
give due
notice of the imminent construction to members of the public, refused
to agree to the appellant’s conditions for
the construction and
abandoned the negotiation process it had started with the appellant.
Again, as submitted on behalf of the
respondent, the appellant failed
to demonstrate that the exercise of the rights had a detrimental
effect on members of the public.
Further, it did not prove any right
to challenge the respondent’s decision on behalf of persons
other than itself.
[18]
Moreover, regarding the procedural unfairness the respondent had,
over a period of approximately 16 months, attempted to prevail
upon
the appellant to approve its wayleave requests, to no avail. Attempts
at reaching agreement on the conditions that the appellant
sought to
impose failed because of the failure, by the appellant’s
officials, to cooperate with the respondent.
[19]
Further, the appellant had, as far back as late 2012, taken a
unilateral decision to impose a moratorium on new and pending
wayleave requests. This was only communicated to the respondent in
December 2013, after construction had commenced. At the hearing
of
the appeal counsel for the appellant readily conceded that he could
not make any submissions regarding the moratorium. In the
end there
was never going to be finality in respect of approval of the
wayleaves and settlement on conditions of implementation
as the
appellant had precluded itself from engagement with the respondent.
[20]
On lawfulness, the appellant contended that the respondent, in
lodging its requests for wayleave approval, had submitted to
the
appellant’s processes, raising a legitimate expectation in
favour of the appellant, that it would see those processes
to
finality before commencing with construction. In the light of that,,
it was argued, its unilateral decision to commence construction
was
unlawful. This argument has no legal basis. The respondent was not
required by law even to engage in a process of obtaining
wayleaves.
It did so only to facilitate working together with the appellant, and
not because it was legally required to do so.
Although the appellant
argued that it had become practice for licensees to apply for
wayleaves, and that the respondent was accordingly
obliged to do so,
this cannot be so. It would defeat the very object of s 22 which is
to enable a licensee to enter upon land and
perform its work without
first obtaining the consent of the landowner. But the argument must
in any event fail because, on the
appellant’s version, it had
put a moratorium in place which would have precluded the respondent
from even applying for wayleaves.
And in addition, the argument fails
to take into account the numerous failures by the appellant itself to
cooperate with the respondent.
[21]
A further argument by the appellant on the unlawfulness of the
respondent’s decision was that the respondent had not
complied
with applicable law as required under s 22(2) in that it had failed
to comply with By-Law 32 of the Motor Vehicle and
Road Traffic
Regulation By-Laws, which prohibits digging on the appellant’s
roads and thoroughfares without permission from
the City Engineer.
Apart from the fact that this contention was made only in the
appellant’s reply, it falls foul of the
principle that
applicable law may not be used to limit the very act authorised under
s 22.
[22]
As to the complaint, by the appellant, that in executing the works
the respondent failed to comply with applicable laws, standards
and
procedures in executing the works, the correct procedure would have
been for the appellant to seek a court order compelling
the
respondent to comply with such laws.
[23]
In summary, the application was misconceived in that it was based
upon an erroneous interpretation of the Act, namely that
the consent
of a public authority was required before a licensee could take the
action envisaged by s 22. In addition, no case
was made out for a
review of the decision in terms of PAJA. Although a public authority
would be entitled to challenge the manner
in which a licensee takes
the action contemplated in s 22, which does not comply with the
‘applicable law’, that was
not the challenge raised in
this case
[24]
On the question of costs, there is no reason to fear that an award of
costs against the appellant might have a chilling effect
on
constitutional litigation. Accordingly the usual rules as to costs
must apply.
[25]
Consequently, the appeal is dismissed with costs, including the costs
of two counsel.
N
Dambuza
Acting
Judge of Appeal
APPEARANCES:
For
Appellant: AJ Dickson SC (with him HS Gani)
Instructed
by:
Matthew
Francis Inc., Pietermaritzburg
Rossouw
Attorneys, Bloemfontein
For
Respondent: DN Unterhalter SC (with him J Wilson)
Instructed
by:
Roestof
& Kruse Attorneys, Pretoria
Symington
& De Kok, Bloemfontein
[1]
Mobile
Telephone Networks (Pty) Ltd v SMI Trading
CC
2012(6)
SA 638 (SCA)
[2]
Paragraphs
14 and 15.
[3]
Paragraph
15
[4]
Section
6(2) of PAJA;
MTN
supra,
paras
21, 24 and 35.