About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Supreme Court of Appeal
SAFLII
>>
Databases
>>
South Africa: Supreme Court of Appeal
>>
2012
>>
[2012] ZASCA 138
|
|
Mobile Telephone Networks (Pty) Ltd v SMI Trading CC (603/2011) [2012] ZASCA 138; 2012 (6) SA 638 (SCA); [2013] 1 All SA 60 (SCA) (28 September 2012)
Links to summary
THE SUPREME COURT OF APPEAL OF
SOUTH AFRICA
JUDGMENT
Reportable
Case
No: 603/2011
In
the matter between:
MOBILE TELEPHONE NETWORKS (PTY) LIMITED
.....................................
Appellant
and
SMI TRADING CC
........................................................................................
Respondent
Neutral citation:
MTN v SMI
(603/2011)
[2012] ZASCA 138
(28 September 2012)
Coram:
Mthiyane DP, Malan, Tshiqi, Pillay JJA and
Plasket AJA
Heard:
7 September 2012
Delivered: 28 September 2012
Summary: Section 22 of the Electronic Communications
Act 36 of 2006 – s 25 of the Constitution – power of
licensee to
enter upon land, construct and maintain base station –
whether powers exercised ‘arbitrarily’ –
administrative
action – ‘decision’.
_________________________________________________________________________
ORDER
On appeal from:
the South Gauteng High Court,
Johannesburg (Coppin J sitting as court of first instance):
The appeal is dismissed with costs including the costs
of two counsel.
___________________________________________________________________
JUDGMENT
Malan JA (Mthiyane DP, Tshiqi, Pillay JJA and Plasket
AJA concurring):
[1] This is an appeal against the judgment and order of
Coppin J that the appellant, Mobile Telephone Networks (Pty) Ltd
(‘MTN’),
remove its base station on a farm belonging to
the respondent, SMI Trading CC (‘SMI’). The appeal is
with his leave.
[2] The appeal concerns the construction of s 22 of the
Electronic Communications Act 36 of 2005 (the ‘ECA’) and
whether
it infringes s 25 of the Constitution. A secondary question
is whether a monthly tenancy came into existence after a written
lease
agreement concluded with a previous owner of the farm came to
an end and, if so, whether SMI cancelled it.
[3] On 21 April 1998 MTN concluded an agreement for the
lease of a site with one of the previous owners, Sisal Landgoed CC,
of the
farm, Langgewacht, in the district of Vryheid on which its
base station is situated. Sisal sold the farm to Fynbosland 256 CC
and
the respondent, SMI, purchased it from the latter. Transfer of
the property to SMI was registered on 31 March 2008. The lease
expired
on 31 January 2008.
[4] The base station was constructed on a site on the
farm some 110 m
2
in extent. It consists of a mast, a
container room and equipment. The farm itself comprises 1090,4565
hectares. The lease was for
a period of 9 years and 11 months
commencing on 1 February 1998 renewable at the option of MTN by
giving 3 months’ notice
prior to its expiry. The agreement
entitled MTN to construct and maintain a base station on the property
and obliged it to pay
to the lessor an initial rental of R100 per
month, escalating at 10% per annum. MTN was entitled to enter onto
the farm so as to
gain access to the station. The lessor had to allow
MTN’s agents and employees 24 hour access per day but was
entitled to
require them to identify themselves. Clause 14 provided
that MTN indemnified the landlord from any liability for personal
injury
or damage to property arising from its occupation of the
property save where such arose from the intentional misconduct or
gross
negligence of the landlord, its employees or agents. MTN’s
equipment on the property was at its exclusive risk and the landlord
incurred no liability in respect of it save where any damage to it
was caused by its intentional misconduct or gross negligence
or that
of its employees or agents. MTN also accepted the responsibility for
any damage to the road giving access to the station
caused by its
agents or employees, whether intentionally or negligently. It was
expressly provided that the base station was a
‘movable’
which did not accede to the property, and by implication that it
would be removed on termination of the lease.
The lease, as I have
said, expired on 31 January 2008, MTN not having elected to renew it.
[5] In August 2008 MTN proposed that a new agreement of
lease be concluded. It was, at that time, under the impression that
the
previous owner of the property was still its owner. The attorney
acting for SMI suggested that the rental be fixed at R17 500
per
month with provision for escalation. This proposal was rejected and
in the period from 16 September 2008 to 25 June 2009 the
parties were
engaged in negotiations to agree on the terms, particularly the
rental, of a new lease. SMI’s offers fluctuated
from R17 500
to R12 000 and again to R14 000 per month. MTN offered
rentals of R54 000 per annum and R2 500
per month. It
substantiated its offers with tables setting forth comparable rentals
for other sites and an expert evaluation. A
new lease never
materialised and MTN was on 18 November 2008 requested to remove the
base station. It responded on 4 December 2008
that it had identified
a new site for the station and was in the process of obtaining the
necessary regulatory approval. SMI, however,
wanted to know what
compensation MTN proposed paying for the period since termination of
the initial lease and removal of the station.
On 16 January 2009 MTN
denied that SMI was entitled to any compensation but only to a rental
of some R694 per month. It also stated
that the removal of the base
station would take approximately 10 months. In its email message of
30 June 2009 MTN drew the attention
of MSI to the expert’s
report referred to above. The message referred to MTN’s being a
licensee in terms of the ECA
entitled to take the action set out in s
22(1). The message concluded:
‘
We therefore, wish to reiterate that we
will not be vacating the site due to the reasons furnished in our
letter dated 6
th
of May 2009. We are however, prepared to pay an amount of R2 500,00
as per the valuation report. We will therefore instruct our
leasing
department to continue to effect the payment as soon as possible.’
[The letter of 6 May 2009 was not before court
being part of the
without prejudice settlement negotiations.]
No agreement, however, materialised.
[6] On 25 June 2009 SMI gave notice of its intention to
commence these proceedings in view of the failure of the parties to
conclude
a new agreement of lease. MTN responded by referring to its
rights – perhaps more accurately described as its powers –
in terms of s 22 of the ECA stating that although it was under no
obligation to pay rental or compensation it had determined that
an
amount of R2 500 per month was fair and reasonable and would be
paid. This offer was rejected, SMI stating that all monies
paid would
be returned.
[7] Coppin J found that MTN was not entitled to remain
in occupation of the station whether by reason of s 22 or by virtue
of a
tacit lease. As far as the latter issue is concerned, I agree
with his finding that the facts do not support the coming into
existence
of a monthly lease after MTN had intimated that it was
moving its base station away from the property. There was never any
tacit
agreement of lease.
[8] Coppin J found that even if s 22 authorised some
form of deprivation of property –
‘
it most certainly does not authorise
arbitrary deprivation of property. Section 21 of the ECA clearly
envisages fair procedures
and processes to be put in place to
facilitate any action authorised by s 22(1). It is accepted that any
administrative deprivations
of property have to be fair and must
comply with the procedural prescripts of the relevant administrative
justice provision.’
He continued:
‘
Licensees are not confined to public state
organs but include private concerns which mainly have profit as a
motive. To interpret
s 22 to mean that such a private licensee may
enter upon and/or encroach on any land and construct and maintain its
communication
network or facilities on any private land of its own
will or its own behest, without a fair process and without taking
into account
the rights, inter alia, of the owner of that land in
terms of the applicable law, is draconian and allows for
arbitrariness which
the Constitution does not countenance. The
rationale for the proviso in s 22 is to prevent arbitrariness in the
action of licensees
in terms of s 22(1).’
…
’
The proviso contained in s 22(2)
ameliorates the crudeness of s 22(1) and brings s 22(1) in line with
the dictates of the Constitution.
The Constitution does not
countenance arbitrary action. Section 25(1) of the Constitution, for
example, provides explicitly that
there shall be no deprivation of
property except in terms of a law of general application and that no
law may permit arbitrary
deprivation of property.’
He concluded:
‘
Section 22 does not authorise occupation of
the property based simply on the will of a licensee. [MTN] has
provided no motivation
why the property, in particular, has to be
occupied and no other. Earlier on [MTN] appeared to be quite willing
to move the base
station from the property to an alternative
location. An arbitrary deprivation is illegal and cannot serve as a
defence against
the landowner’s enforcement of his rights.’
[9] The relevant provisions of the ECA are the
following:
‘
21. Guidelines for rapid
deployment of electronic communications facilities.—(1) The
Minister
must, in consultation with the Minister of Provincial and
Local Government, the Minister of Land Affairs, the Minister of
Environmental
Affairs, the Authority and other relevant institutions,
develop guidelines for the rapid deployment and provisioning of
electronic
communications facilities.
(2) The guidelines must provide procedures and processes
for—
(a) obtaining any necessary permit, authorisation, approval or other
governmental authority including the criteria necessary to
qualify
for such permit, authorisation, approval or other governmental
authority; and
(b) resolving disputes that may arise between an electronic
communications network service licensee and any landowner, in order
to satisfy the public interest in the rapid rollout of electronic
communications networks and electronic communications facilities.’
‘
22. 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.’
[10] The power to provide
telecommunication services originally vested in the State through the
General Post Office, and thereafter,
the Post Office which became the
Department of Post and Telecommunications. The telecommunications
enterprise of the State was
incorporated in 1991 as Telkom SA (Pty)
Ltd, a company wholly owned by the State. Telkom was given the
exclusive right to provide
telecommunication services although the
Department continued to regulate it. Telecommunication services were
regarded as a resource
entrusted to the State for the public good.
This led to earlier measures similar to those in s 22 of the ECA
entitling the telecommunications
service provider to enter onto land
and maintain and construct its telecommunications infrastructure.
1
Major changes were introduced by the
Telecommunications Act 103 of 1996
:
s 36
limited Telkom’s
exclusivity in the provision of telecommunication services to 5 years
and
s 37
granted MTN and Vodacom rights as licensees for the
provision of mobile cellular services.
Section 70(1)
provided for the
right of a fixed line operator to enter upon land but without
requiring that compensation be paid to the owner
(see also
ss 70
to
77
).
2
anc" HREF="#sdfootnote2sym">
2
Section 69
required the Independent
Communications Authority of South Africa, the regulator of the
telecommunications industry, to prescribe
regulations inter alia for
the procedure to be followed and consultations to be held between an
operator and any affected person
or authority. No regulations were,
however, made just as no ‘procedures and processes’ were
prescribed in terms of
s 21(2)(b)
of the ECA for ‘resolving
disputes that may arise between an electronic communications licensee
and any landowner’.
[11] The ECA was passed in 2005 as a result of
developments in technology that made the convergence of different
types of communication
services, such as broadcasting and
telecommunication services, possible. The preamble to the ECA
provides explicitly that it is
enacted to –
‘
promote convergence in the
broadcasting, broadcasting signal distribution and telecommunications
sectors’.
The ECA deals with ‘electronic communications’
which is defined as
‘
the emission, transmission or reception of
information, including without limitation, voice, sound, data, text,
video, animation,
visual images, moving images and pictures, signals
or a combination thereof by means of magnetism, radio or other
electromagnetic
waves, optical, electromagnetic systems or any agency
of alike nature, whether with or without the aid of tangible conduct,
but
does not include content service’.
An ‘electronic communications network’ is
any system of electronic communications facilities including
satellite, fixed
and mobile systems and also fibre optic cables,
electricity cable systems and other transmission systems. An
‘electronic
communications service’ is
‘
any service provided to the public,
sections of the public, the State, or the subscribers to such
service, which consists wholly
or mainly of the conveyance by any
means of electronic communications over an electronic communications
network’ (excluding
broadcasting services).
These services may be provided only by the holders of
certain licences
(s 7).
The ECA granted the rights and privileges
that in the past belonged to the fixed line operators, such as
Telkom, to all electronic
communications network service licensees.
The rights contained in
ss 70
to
77
of the
Telecommunications Act
came
to be re-enacted as
ss 22
to
29
of the ECA. The purpose of the
older sections was to eliminate all possible constraints on the State
in its providing of communication
services. Due to the convergence of
these services and the introduction of competition in the
telecommunications industry the rights
and privileges that existed
under the older sections now had to be extended to persons other than
the State or the fixed line operator.
Hence the enactment of
ss 22
to
29
of the ECA.
[12] The primary object of the ECA is ‘to provide
for the regulation of electronic communications in the Republic in
the public
interest’
(s 2).
Two of its other objects are to
‘promote the universal provision of electronic communications
networks and electronic communications
services and connectivity for
all’
(s 2(c))
and to ‘promote an environment of open,
fair and non-discriminatory access to … electronic
communication networks
and to electronic communications services’
(s 2(g)).
The ECA mandates the Minister of Communications to ‘develop
guidelines for the rapid deployment and provisioning of electronic
communications facilities’
(s 21).
On behalf of the Minister
the statement was made that the purpose of this was to ‘provide
connectivity to all the people
in South Africa’. One of the
functions of the Universal Service and Access Agency of South Africa
established under s 58(1)
of the Telecommunications Act 103 of 1996
(see s 80(1) of the ECA) is to ‘promote the goal of universal
access and universal
service’ (s 82(1)(a)). The Minister
explained what ‘universal access’ meant –
‘
Universal Service for Electronic
Communications Services is provided where all persons, if they
require it, are able to obtain quality,
affordable and usable access
to a minimum set of electronic communications network service and
electronic communications service,
on either a household or
individual basis, including a voice and data electronic
communications service and, in the case of data,
including a
broadband connection, and access to emergency services using fee
calls and messaging, where all services are offered
on a
non-discriminatory basis.’
3
All licensees, including MTN, must
achieve an average of 95 per cent network availability over a period
of 6 months failing which
they may incur a penalty of R 5 000 000
and R 50 000 for every repeated offence.
4
[13] Section 22(1) empowers a licensee to enter upon
public and private land, construct and maintain its network or
facilities and
alter and remove them. Section 22(2) provides that in
taking these actions –
‘
due regard must be had to applicable law
and the environmental policy of the Republic’.
It was contended on behalf of MTN that there was no
reason to construe s 22 in such a way that a licensee had to have a
legal basis
such as a lease or servitude to be entitled to act in
terms of s 22. Such an interpretation would render s 22 unnecessary.
Section
22 had to be interpreted in a way that a licensee is allowed
all the rights specified in s 22(1) but requiring it, when exercising
those rights, to have regard to the applicable law. The latter
expression, it was submitted, meant all law that did not restrict
or
extinguish the rights created by s 22(1). Examples of the ‘applicable
law’ include planning laws, the law of delict,
nuisance etc.
The construction contended for indeed gives effect to the purposes of
the ECA and is also in harmony with other sections
in the ECA.
[14] 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. It
does not follow, counsel for SMI countered, that these operators may
appropriate significant
portions of land on which to construct
permanent or semi-permanent installations as part of their networks.
This is no doubt correct.
The power given by s 22 is understandable
in the case of a fixed line operator which would otherwise have to
negotiate with thousands
of land owners for permission to erect
telephone poles and suspend cables across their land.
5
In
Telkom
SA Ltd v MEC for Agricultural and Environmental Affairs,
Kwazulu-Natal & others
6
it was said:
’
By contrast, to lay cables on land would
require permission or servitudes from a huge number and variety of
owners. Hence the need
for an all-embracing permission such as is
contained in s 70 [now s 22].’
The same need does not exist with regard to sites
required to build base stations such as those of MTN and Vodacom. The
phrase ‘due
regard must be had to applicable law’ did not
appear in s 70 of the repealed Act. Stricter requirements than before
were
thus introduced for the exercise of the powers now given by s
22(1).
[15] Counsel submitted that a
purposive construction of s 22 would not authorise a licensee to
occupy
the land indefinitely but that s
22(2), by emphasising that the actions in terms of s 22(1) must be
taken ‘with due regard
for applicable law’, also referred
to private land ownership. A proper, constitutional, interpretation
thus meant that the
consent of the land owner had to be obtained for
an exercise of the rights in terms of s 22(1). I find this
interpretation ‘unduly
strained’.
7
It cannot be correct simply because
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. It is no
answer to suggest
that because no provision is made for, for example,
the delictual liability of the licensee, limitations on the liability
of the
land owner and responsibility to maintain access roads, an
agreement of lease or other agreement is required. It seems to me
that
the general provisions of the law are sufficient to provide for
these eventualities. The words ‘with due regard’
generally
means ‘with proper consideration’
8
and, in the context, imposes 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 the 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).
[16] Section 25 of the Constitution provides:
‘
(1) No one may be deprived of property
except in terms of law of general application, and no law may permit
arbitrary deprivation
of property.
(2) Property may be expropriated only in terms of law of general
application –
(a) for a public purpose or in the public interest; and
(b) subject to compensation, the amount of which and the time and
manner of payment of which have either been agreed to by those
affected or decided or approved by a court.’
[17] Property includes ‘the
bundle of rights that make up ownership such as the right to use
property or to exclude other
people from using it or to derive income
from it or to transfer it to others.’
9
The ‘deprivation’ of
property entails the limitation in respect of the acquisition, use of
and control over property,
10
or, as it has been expressed, –
11
‘
any interference with the use, enjoyment or
exploitation of private property involves some deprivation in respect
of the person
having title or right to or in the property concerned.
If s 25 is applied to this wide
genus
of interference, “deprivation”
would encompass all species thereof and “expropriation”
would apply only
to a narrower species of interference.’
A ‘substantial interference or
limitation that goes beyond the normal restriction on property use or
enjoyment found in an
open and democratic society’ is
required.
12
The parties have accepted that the
actions of MTN complained of do not amount to ‘expropriation’
but constitute a ‘deprivation’.
To my mind they are
correct.
[18] Expropriation can be
distinguished from other forms of deprivation in that it involves a
‘real’ taking away of
the property from the owner and its
transfer to the State or a third party.
13
In
Harksen
v Lane NO & others
14
it was said:
‘
The distinction between expropriation (or
compulsory acquisition as it is called in some foreign jurisdictions)
which involves acquisition
of rights in property by a public
authority for a public purpose and the deprivation of rights in
property which fall short of
compulsory acquisition has long been
recognised in our law.’
The present case does not involve an
acquisition or ‘taking’ of rights. It concerns
deprivation by regulatory measures
to ‘enable the State to
regulate the use of property for public good without the fear of
incurring liability to owners of
property affected in the course of
such regulation.’
15
Our courts have left open the
question whether the doctrine of constructive expropriation should be
part of our law.
16
Due to the seriousness of
expropriation, property may only be expropriated subject to the
payment of compensation.
17
There is no such requirement in the
case of deprivation. However, compensation or the offer of
compensation may well take the action
complained of out of the realm
of arbitrariness.
18
[17] SMI did not challenge the constitutionality of s
22. Its objections were more limited. It submitted that MTN’s
reliance
on s 22 was misconceived, first, because it did not and does
not occupy the base station by virtue of s 22 (and s 22 does not by
operation of law render its occupation lawful) and, secondly, because
the manner in which it invoked s 22 was in violation of s
25 of the
Constitution.
[18] The regulation of property to
protect the common good must not amount to arbitrary deprivation.
‘The idea is not to protect
private property from all State
interference, but to safeguard it from illegitimate and unfair State
interference.’
19
The nature of the arbitrariness
enquiry was summarised in
Reflect-All
:
20
‘
Central to the arbitrariness enquiry is the
relationship between the law in question, the ends it seeks to
achieve and the impact
restrictions have on the use and enjoyment of
property. In some instances a deprivation will escape arbitrariness
if a rational
connection between the means adopted and the ends
sought to be achieved is present. In other instances, however, the
means adopted
will have to be proportional to the ends in order to
justify the deprivation in question. Marginal deprivations of
property will
ordinarily not be arbitrary if they are rationally
connected to a legitimate purpose. More severe deprivations will
ordinarily
have to be shown to be proportionate. In this case, the
deprivations are sufficiently serious to require a proportionality
analysis.
For present purposes, therefore, the following questions
arise: does s 10(3) protect the hypothetical road network and if it
does,
is it proportional? In determining that, a court must have due
regard to the purpose of the law in question, the nature of the
property involved, the extent of the deprivation and the question
whether there are less restrictive means available to achieve
the
purpose in question.’
[19] Any decision by MTN in terms of
s 22 is, counsel correctly submitted, administrative action.
21
In the
Promotion of Administrative
Justice Act 3 of 2000
, ‘Administrative action’ is defined
in terms of ‘a decision taken’.
22
The kind of action that will
constitute a ‘decision’ is a matter of construction in
the context of the case.
23
Administrative action which adversely
affects the rights or legitimate expectation of any person must be
procedurally fair.
Section 3(2)(b)
of PAJA contains detailed
prescriptions concerning advance notice of any proposed
administrative action to be taken and of the
right to be heard before
such decision is taken. The taking of a decision must be procedurally
fair. Procedural fairness –
24
‘
is concerned with giving people an
opportunity to participate in the decisions that will affect them,
and – crucially –
a chance of influencing the outcome of
those decisions. Such participation is a safeguard that not only
signals respect for the
dignity and worth of the participants, but is
also likely to improve the quality and rationality of administrative
decision-making
and to enhance its legitimacy.’
[20] It was contended that the manner
of MTN’s reliance on
s 22
and its reasons for so doing amounted
to an arbitrary deprivation of property in violation of s 25 of the
Constitution. For deprivation
not to be arbitrary it must be both
substantively and procedurally fair.
25
Procedural fairness is ‘a
flexible concept and … the requirements that must be satisfied
to render an action or a law
procedurally fair depends on all the
circumstances.’
26
Arbitrary action is conduct which is
‘capricious or proceeeding merely from the will and not based
on reason or principle.’
27
Arbitrariness is inconsistent with
the ‘values which underlie an open and democratic society based
on freedom and equality’.
28
[21] As Coppin J remarked in the
court below, s 22 does not mean that a private licensee ‘may
enter upon and encroach on any
land and construct and maintain its
communication network or facilities … of its own will or its
own behest, without a fair
process and without taking into account
the rights … of the owner of that land’. While it is
correct that MTN took
occupation of the site in 1998 in terms of a
lease, the lease had expired. Its continued occupation of the base
station was thus
unlawful and could only be justified by s 22. But s
22 is concerned with public power the exercise of which must not be
arbitrary.
After expiry of the lease MTN unilaterally held over and
remained in occupation. When asked to vacate the site it agreed to do
so but subsequently refused to leave. It explained its decision to
remain only in the answering affidavit with the laconic statement
that, although an alternative site had been identified, ‘nothing
has materialised with regard thereto’. There is no
evidence
that the objects of the ECA cannot be achieved without depriving SMI
of its property. There was no intimation to SMI that
MTN was no
longer negotiating in order to reach agreement on the rental but was
enforcing its statutory right. It was only when
threatened with
eviction proceedings that MTN sought to invoke s 22 and, again
unilaterally, determined that it could remain in
occupation without
paying compensation. This is an abuse of a statutory power amounting
to conduct that is arbitrary.
29
[22] But there is another, decisive,
reason why the appeal should be dismissed. MTN’s original entry
upon the site, its construction
and maintenance of the base station
took place pursuant to a commercial lease. Section 22 came into force
only thereafter. These
actions at that time could not have amounted
to a ‘decision’. The question is rather whether MTN,
after expiry of the
lease agreement, took a ‘decision’ to
invoke its statutory rights to justify its continued occupation of
the base station.
There is no evidence that it did so. Not even its
email message of 30 June 2009 referring to MTN’s being a
licensee in terms
of the ECA and entitled to take the action set out
in s 22(1) can be construed as a ‘decision’ to exercise
its statutory
powers: at best it is a threat to invoke them in
future. Section 22 does not solely by operation of law render MTN’s
continued
occupation lawful. Absent a ‘decision’ a
judicial review is not possible.
30
But without a ‘decision’
having been taken lawfully, reasonably and procedurally fairly, MTN
has no right to occupy
SMI’s property: it has not exercised its
powers to do so in terms of s 22 of the ECA either properly or at
all.
[23] In the result the appeal should be dismissed.
The appeal is dismissed with costs including the costs
of two counsel.
_____________
F R Malan
Judge of Appeal
C Plasket (Mthiyane DP, Malan, Tshiqi and Pillay JJA
concurring):
[24] I have read the judgment of Malan JA and agree with
both his reasoning and his conclusion that the appeal must be
dismissed
with costs. I wish to add my comments on one issue dealt
with by Malan JA, namely that the invocation of s 22 of the ECA by a
licensee
who is not an organ of state constitutes administrative
action for purposes of the Promotion of Administrative Justice Act 3
of
2000 (the PAJA). This is, I believe, necessary because the issue
as to when a private body exercises administrative power is a
difficult one that has created definitional problems here and in
comparable jurisdictions.
[25] As Malan JA has indicated in his judgment, MTN is a
private company licenced to provide electronic communications
services
in terms of chapter 3 of the ECA. Being a licensee, it
enjoys the powers set out in s 22(1) – the powers to enter upon
land,
construct and maintain electronic communications networks or
facilities and alter or remove those networks or facilities. The ECA,
in this way, vests in MTN the power to deprive people of their
property, a power that s 25 of the Constitution only countenances
if
it is effected by a law of general application and is not arbitrary,
both substantively and procedurally.
[26] Section 1 of the PAJA defines administrative action
in two distinct ways. In the first instance, it defines
administrative
action when the actor is an organ of state and
secondly it defines administrative action when the actor is not an
organ of state.
This case concerns this second aspect of the
definition. It provides that administrative action means:
‘
. . . any decision taken, or any failure to
take a decision, by –
(a) . . .
(b) a natural or juristic person, other than an organ of state, when
exercising a public power or performing a public function
in terms of
an empowering provision
which adversely affects the rights of any person and which has a
direct, external legal effect . . .’
[27] The invocation of s 22 in any particular case would
entail the taking of a decision, the effect of which would involve
‘the
imposing of a condition or restriction’ as envisaged
by paragraph (d) of the definition of a decision, also in s 1 of the
PAJA. As stated above, MTN is a private company. It is not an organ
of state. It therefore qualifies as a ‘natural or juristic
person, other than an organ of state’. When it invokes its s 22
powers, it does so in terms of an empowering provision, namely
the
ECA. I shall return to whether it exercises a public power or
performs a public function. Finally, in my view, there can be
no
doubt that when MTN invokes its s 22 powers it adversely affects the
rights of the landowner whose land it wishes to utilise
and that
exercise of power also has a direct, external legal effect.
31
[28] I return now to whether the invocation of s 22 by
MTN would constitute the exercise of a public power. (I shall refer
no further
to the performance of a public function, because it seems
to me that, in s 22, one is dealing with the exercise of a power.) It
is notoriously difficult to define with any precision what is meant
by a public power. Indeed, the concept is probably incapable
of
precise definition.
32
Furthermore, it is not static but changes over time as
different forms of public administration are implemented.
33
(This case is a good example of how the administration
of tele-communications has changed over time, from an organ of state
providing
the service, to a state-owned enterprise doing so, to both
state-owned and privatised, but regulated, service providers doing
so.)
[29] In
Police and Prisons Civil
Rights Union & others v Minister of Correctional Services &
others
,
34
I tried to capture the essence of the concept of public
power as follows:
‘
In my view, however, the elusive concept of
public power is not limited to exercises of power that impact on the
public at large.
Indeed, many administrative acts do not. The
exercise of the power to arrest is a good example of an
administrative action that
would only have a significant impact on
the arrestee and, perhaps, the complainant. Another example would be
a decision by the
Amnesty Committee of the erstwhile Truth and
Reconciliation Commission to grant a person amnesty from the civil
and criminal consequences
of his or her politically motivated crimes.
In these instances what makes the power involved a public power is
the fact that it
has been vested in a public functionary who is
required to exercise it in the public interest, and not in his or her
own private
interest or at his or her own whim. This is articulated
clearly in the dissenting judgment of Schreiner JA in
Mustapha
and Another v Receiver of Revenue, Lichtenburg, and Others
,
now considered to be correct, in which he held that where a minister
exercised a statutory power having a “contractual aspect”
he acted “as a State official and not as a private owner, who
need listen to no representation and is entitled to act as
arbitrarily as he pleases, so long as he breaks no contract”.
Instead, the minister, because he received his powers from
the
statute, could only “act within its limitations, express or
implied”. This passage encapsulates the essential difference
between public and private power.’
[30] Although the
POPCRU
matter concerned an organ of state, the essential
enquiry as to whether the power exercised by a private actor is a
public power
is similar. Does the power have to be exercised in the
public interest? It was on that basis that Goldstone J, in 1983, held
the
Johannesburg Stock Exchange to a public law duty to act in
accordance with its own rules in
Dawnlaan
Beleggings (Edms) Bpk v Johannesburg Stock Exchange & others
35
when he held:
‘
Strictly
speaking, a stock exchange is not a statutory body. However, unlike
companies or commercial banks or building societies
formed under
their respective statutes, the decisions of the committee of a stock
exchange affect not only its own members or persons
in contractual
privity with it, but the general public and indeed the whole economy.
It is for that reason that the Act makes the
public interest
paramount. To regard the JSE as a private institution would be to
ignore commercial reality and would be to ignore
the provisions and
intention of the Act itself. It would also be to ignore the very
public interest which the Legislature has sought
to protect and
safeguard in the Act.’
[31] I am of the view that the power conferred on MTN by
s 22 is indeed a public power. It is a power that is central to the
attainment
of the primary object of the ECA, namely ‘to provide
for the regulation of electronic communications in the Republic in
the
public interest’.
36
There can be no doubt that, even if MTN is motivated by
the making of profit from providing its service, it is required by
the ECA
to provide that service in the public interest.
[32] It has been held in this court, in
Calibre
Clinical Consultants (Pty) Ltd & another v National Bargaining
Council for the Road Freight Industry & another
37
that the enquiry centres on whether the power in
question is of the nature of a governmental power, the reasoning
being that governmental-type
powers are quintessentially subject to a
requirement of accountability. It is not necessary to comment on
whether that approach
has the potential to cast the net of
accountability too narrowly because in this case we are dealing with
what Hoffmann LJ in
R v Disciplinary Committee
of the Jockey Club, ex parte Aga Khan
38
described as ‘a privatisation of the business of
government itself’ in which the private body has been
‘integrated
into a system of statutory regulation’.
Coercive powers to enter land, and even to deprive owners of the use
of land, for
public purposes is a typical governmental power that is
provided for in democracies such as ours precisely in order to
further
the public interest.
[33] For the reasons set out above, I accordingly
conclude that the invocation of the power vested in MTN by s 22 would
constitute
administrative action. That being so it attracts the
fundamental rights that are vested in an affected landowner to
administrative
action that is lawful, reasonable and procedurally
fair. That, in turn, has two effects: first, on the macro-level,
because s 22
can only validly be exercised in accordance with
administrative justice rights, it insulates the ECA against
constitutional invalidity
by serving as a hedge against arbitrary
deprivation; and secondly, when a particular deprivation is
challenged, the requirements
of administrative justice determine
whether it was, on the micro-level, arbitrary or not.
___________________
C Plasket
Acting Judge of Appeal
APPEARANCES:
For Appellant: M Basslian SC
T Manchu
Instructed by:
Mashiane Moodley & Monama Inc
Johannesburg
Lovius Block AtTorneys
Bloemfontein
For Respondent: C Watt-Pringle SC
L Franck
Instructed by:
Eugene Marais Attorneys
Johannesburg
Symington & De Kock
Bloemfontein
1
Section
82 of the Post Office Administration and Shipping Combination
Discouragements Act 10 of 1911; s 80 of the Post Office
Act 44 of
1958;
s 70
of the
Telecommunications Act 103 of 1996
.
2
Section
70(1) of Act 103 of 1996 read: ‘A fixed line operator may, for
the purposes of provision of its telecommunications
services, enter
upon any land, including any street, road, footpath or land reserved
for public purposes, and any railway, and
construct and maintain a
telecommunications facility upon, under, over, along or across any
land, street, road, footpath or waterway
or any railway, and alter
and remove the same, and may for that purpose attach wires, stays or
other kind of support to any building
or structure. Section 70(2)
read: ‘In taking any action in terms of ss (1), due regard
must be had to the environmental
policy of the Republic.’
3
See
the
Determination issued under the Electronic
Communications Act, 2005 (Act No 36 of 2005) with regard to
universal access to and
the universal provision of electronic
communications services and electronic communications network
services
(
GN
85,
GG
32939, 8 February 2010).
4
Paras
4 and 7 of
GN
774,
GG
32431,
24 July 2009.
5
See
para 10 above.
6
2003
(4) SA 23
(SCA) para 30.
7
Investigating
Directorate: Serious Economic Offences & others v Hyundai Motor
Distributors (Pty) Ltd & others: In re Hyundai
Motor
Distributors (Pty) Ltd & others v Smit NO & others
[2000] ZACC 12
;
2001
(1) SA 545
(CC) para 24.
8
Cf
Joffin & another v Commissioner of
Child Welfare, Springs & another
1964
(2) SA 506
(T) at 508F-G where it was said that the words ‘have
regard to’ meant ‘bear in mind’ or ‘do not
overlook’. In
Perry v Wright
[1908] 1 KB 441
(CA) at 458 Fletcher
Moulton LJ, dealing with the expression ’regard may be had
to’, said that ‘the facts which
the Courts may thus take
cognizance of are to be a “guide, and not a fetter”’.
See also
Illingworth v Walmsley
[1900] 2 QB 142
(CA) at 144 where the phrase
‘regard shall be had to’ was said to mean ’bear in
mind and have regard’.
9
Geyser
v Msunduzi Municipality
2003 (3) BCLR
235
(N) at 249 cited by I M Rautenbach
Bill
of Rights Compendium
(Service Issue
17) para 1A73.1.
10
Rautenbach
para 1A73.2.
11
First
National Bank of SA Ltd t/a Wesbank v Commissioner, South African
Revenue Service & another; First National Bank of
SA Ltd t/a
Wesbank v Minister of Finance
[2002] ZACC 5
;
2002 (4)
SA 768
(CC) para 57 (hereafter referred to as
First
National Bank
).
See
Minister of Minerals and Energy v Agri
South Africa
2012 (5) SA 1
(SCA) paras
12 ff (herafter referred to as
Agri
South Africa
).
12
Mkontwana
v Nelson Mandela Metropolitan Municipality & another; Bisset &
others v Buffalo City Municipality & others;
Transfer Rights
Action Campaign & others v MEC, Local Government and Housing,
Gauteng, & others (Kwazulu-Natal Law Society
and Msunduzi
Municipality as Amici Curiae)
2005 (1)
SA 530
(CC) para 32 (hereafter referred to as
Mkontwana
)
where it was stated that ‘[w]hether there has been a
deprivation depends on the extent of the interference with or
limitation
of use, enjoyment or exploitation.’ See
Offit
Enterprises (Pty) Ltd & another v Coega Development Corporation
(Pty) Ltd & others
2011 (1) SA 293
(CC) para 39 (hereafter referred to as
Offit
).
13
Rautenbach
para 1A73.2. In
Harksen v Lane NO &
others
[1997] ZACC 12
;
1998 (1) SA 300
(CC) para 31 it
was stated that the word ‘is generally used in our law to
describe the process whereby a public authority
takes property
(usually immovable) for a public purpose and usually against payment
of compensation.’ See also paras 32
ff and
Agri
South Africa
paras 12-15.
14
[1997] ZACC 12
;
1998
(1) SA 300
(CC) para 32.
15
Reflect-All
1025 CC & others v MEC for Public Transport, Roads and Works,
Gauteng Provincial Government & another
2009
(6) SA 391
(CC) para 63 (hereafter referred to as
Reflect-All
).
In
Reflect-All
the
Constitutional Court had to deal with the validity of ss 10(1) and
(3) of the Gauteng Transport Infrastructure Act 8 of 2001.
These
sections allowed for the deprivation of land falling within road
reserves. Nkabinde J said para 64: ‘It must be emphasised
that
s 10(3) does not transfer rights to the State. What it does is this:
it deprives the landowner of rights to exploit the
affected part of
the land within the road reserve and thus protects part of the
planning process which has economic value and
is in the long run in
the public interest.’ See
Steinberg
v South Peninsula Municipality
2001
(4) SA 1243
(SCA) para 4;
Agri South
Africa
paras 12-15.
16
Steinberg
v South Peninsula Municipality
2001
(4) SA 1243
(SCA) para 8;
Reflect-All
para 65.
17
Section
25(2)(b) of the Constitution.
18
Cf
Antonie Gildenhuis
Onteieningsreg
(2001) 2 ed at 24 ff.
19
Reflect-All
para 33 and see
Haffejee
NO & others v Ethekwini Municipality & others
2011
(6) SA 134
(CC) paras 30-1.
20
Reflect-All
para 49 and see
First
National Bank
[2002] ZACC 5
;
2002 (4) SA 768
(CC)
para 100.
21
Section
1 of PAJA defines administrative action to include ‘any
decision taken, or any failure to take a decision, by –
‘(b)
a natural or juristic person, other than an organ of state, when
exercising a public power or performing a public
function in terms
of an empowering provision’. See
Dawnlaan
Beleggings (Edms) Bpk v Johannesburg Stock Exchange & others
1983 (3) SA 344
(W) at 362F ff and
Cora Hoexter
Administrative Law in
South Africa
2 ed (2012) at 189 ff.
22
Section
1 of PAJA. See
Grey’s Marine Hout
Bay (Pty) Ltd & others v Minister of Public Works & others
[2005] ZASCA 43
;
2005 (6) SA 313
(SCA) para 22.
23
Bhugwan
v JSE Ltd
2010 (3) SA 335
(GSJ) para 7
ff. See the discussion of R C Williams ‘The Concept of a
“Decision” as the Threshold Requirement
for Judicial
Review in terms of the
Promotion of Administrative Justice Act’
PER/PELJ
2011
(14) 5.
24
Cora
Hoexter
Administrative Law in South
Africa
(2007) at 326-7 cited with
approval in
Joseph & others v City
of Johannesburg & others
2010 (4)
SA 55
(CC) para 42;
Zondi v MEC for
Traditional and Local Government Affairs & others
2005
(3) SA 589
(CC) para 112.
25
First
National Bank
para 100;
Mkontwana
para 65;
Reflect-All
paras 44 ff; cf A J van der Walt ‘Procedurally
Arbitrary Deprivation of Property’
2012
Stellenbosch
Law Review
1.
26
Mkontwana
para 65.
27
Beckingham
v Boksburg Licensing Board
1931 TPD
280
at 282. See further
Livestock and
Meat Control Board v R S Williams
1963
(4) SA 592
(T) at 598A-C;
First
National Bank
para 100;
Mkontwana
para 61 ff
.
28
S
v Lawrence; S v Negal; S v Solberg
1997
(4) SA 1176
(CC) para 33.
29
Unfortunately,
no procedures or processes have been prescribed in terms of
s
21(2)(b).
This case illustrates the need for prompt action by the
authorities in this regard.
30
See
Bhugwan v JSE Ltd
2010
(3) SA 335
(GSJ) paras 5 ff and authorities cited.
31
As
to the meaning to be attributed to these last two elements of the
definition of administrative action, see the judgment of
Nugent JA
in
Grey’s Marine Hout Bay (Pty) Ltd & others v Minister
of Public Works & others
[2005] ZASCA 43
;
2005 (6) SA 313
(SCA) para 23,
endorsed by the Constitutional Court in
Joseph & others v
City of Johannesburg & others
2010 (4) SA 55
(CC) para 27
and
Viking Pony Africa Pumps (Pty) Ltd t/a Tricom Africa v
Hidro-Tech Systems (Pty) Ltd & another
2011 (1) SA 327
(CC)
para 37.
32
See
the remarks of Du Plessis J in
AAA Investments (Pty) Ltd v Micro
Finance Regulatory Council & another
2004 (6) SA 557
(T) at
564B.
33
Paul
Craig ‘What is Public Power?’ in Hugh Corder and
Tiyanjana Maluwa (eds)
Administrative Justice in Southern Africa
(1997) at 25.
34
Police
and Prisons Civil Rights Union & others v Minister of
Correctional Services & others
2008 (3) SA 91
(E) para 53.
35
Dawnlaan
Beleggings (Edms) Bpk v Johannesburg Stock Exchange & others
1983 (3) SA 344
(W), 364H-365A.
36
ECA
s 2.
37
">
37
Calibre
Clinical Consultants (Pty) Ltd & another v National Bargaining
Council for the Road Freight Industry & another
2010 (5) SA
457
(SCA).
38
R
v Disciplinary Committee of the Jockey Club, ex parte Aga Khan
[1992] EWCA Civ 7
;
[1993] 1 WLR 909
(CA) at 931H-932A.