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[2023] ZAFSHC 45
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Botha and Others v Eskom Holdings SOC Ltd; Van Zyl and Others v Eskom Holdings SOC Ltd (3878/2021) [2023] ZAFSHC 45; 2024 (2) SA 322 (FB) (15 February 2023)
FLYNOTES:
NOTICE
TO ORGANS OF STATE AND ESKOM
CIVIL
PROCEDURE – Organs of state – Notice – Whether
notice required for Eskom as an organ of State –
Not a
functionary or institution exercising a power or performing a
function in terms of the Constitution – Not an
organ to
which Act applies – Plaintiffs not required to have given
notice –
Institution of Legal Proceedings Against Certain
Organs of State Act 40 of 2002
,
s 3(1).
IN
THE HIGH COURT OF SOUTH AFRICA,
FREE
STATE DIVISION, BLOEMFONTEIN
Case
number: 3878/2021
Reportable:
YES/NO
Of
Interest to other Judges: YES/NO
Circulate
to Magistrates: YES/NO
In
the matter between:
LOUIS
JOHANNES
BOTHA
1
st
Plaintiff
HENDRIK
FRANCOIS
NAUDE
2
nd
Plaintiff
WESDAN
BOERDERYE (PTY)
LTD
3
rd
Plaintiff
GOUEVELD
BOERDERY (PTY)
LTD
4
th
Plaintiff
CHRISTOFFEL
PETRUS SCHEEPERS
5
th
Plaintiff
And
ESKOM
HOLDINGS SOC
LTD
Defendant
Case
number: 1019/2022, 1020/2022, 1021/2022, 1022/2022, 1023/2022,
1024/2022, 1025/2022, 1026/2022, 1027/2022, 1028/2022, 1029/2022,
1030/2022, 1031/2022, 1032/2022, 1033/2022, 1034/2022 & 1035/2022
In
the matter between:
M.
VAN
ZYL
1
st
Plaintiff
T.
JANSE VAN
RENSBURG
2
nd
Plaintiff
LENA HOENDER BOERDERY
(EDMS) BPK
3
rd
Plaintiff
C.
A.
BOSHOFF
4
th
Plaintiff
L.
M.
SWART
5
th
Plaintiff
EARLY
LIGHT TRADING 130 (EDMS) BPK
6
th
Plaintiff
P.
H.
FERREIRA
7
th
Plaintiff
THALWI
BOERDERY
BPK
8
th
Plaintiff
P.
J.
MEYER
9
th
Plaintiff
PRINSTO
INVESTMENTS
BK
10
th
Plaintiff
DIE
HUMAN
TRUST
11
th
Plaintiff
J.
A.
BARNARD
12
th
Plaintiff
WHITFIELD
WEGE BOERDERY (EDMS) BPK
13
th
Plaintiff
N.
VAN
JAARSVELDT
14
th
Plaintiff
DIABLO
TRADING 221 (EDMS) BPK
15
th
Plaintiff
H.
J.
HUMAN
16
th
Plaintiff
R.
VAN
BILJON
17
th
Plaintiff
And
ESKOM
HOLDINGS SOC
LTD
Defendant
HEARD
ON:
15 NOVEMBER 2022
JUDGEMENT
BY:
LOUBSER, J
DELIVERED
ON:
The judgment was handed down
electronically by circulation to the parties’ legal
representatives
by email and released to SAFLII on 15 FEBRUARY 2023.
The date and time for hand-down is deemed to be 15 FEBRUARY 2023 at
12:00
[1]
The crisp question to be decided in the actions instituted under all
the above case
numbers is whether the defendant (“Eskom”)
enjoys the notice protection afforded by
section 3
of the
Institution
of Legal Proceedings Against Certain Organs of State Act
>
[1]
(“the Act”). This section stipulates,
inter
alia
,
that no legal proceedings for the recovery of a debt may be
instituted against an organ of state unless the claimant has given
the organ of state in question notice in writing, within six (6)
months from the date on which the debt/claim became due, of his
or
her intention to institute the legal proceedings in question.
[2]
The plaintiffs in all the cases
instituted action against Eskom for damages they suffered
on their
farms in fires allegedly caused by the negligence of Eskom. The
action under case number 3878/2021 relates to a fire in
the Heilbron
district during September 2018, and the actions under case number
1019/2022 to 1035/2022 relate to a fire in the district
of Lindley
during August 2020. In all these cases Eskom raised a special plea
based on the fact that the plaintiffs had failed
to give it the
required notice in terms of
section 3(1)
of the Act. It is common
cause between the parties that the required notice was not given by
any of the plaintiffs. All the plaintiffs
subsequently filed a
replication to the effect that the provisions of the Act do not apply
to Eskom, and that they were therefore
not required to give the
notice.
[3]
It is also common cause between the parties that Eskom is an organ of
State. On behalf
of the plaintiffs, however, it is contended that
Eskom is not one of those organs of state to which the Act applies.
Since the
special plea raised by Eskom relate to all the plaintiffs,
and since the replication filed by all the plaintiffs is the same,
the
parties agreed to the consolidation of all the actions for
purposes of the adjudication of the special plea raised. They agreed
that the adjudication of the special plea should be dealt with first,
and that all other issues between the parties should stand
over for
later determination.
[4]
Insofar as it may be necessary to make an order in terms of Uniform
Rule 33(4)
accordingly, such an order is herewith made.
[5]
Now the question is simply whether the provisions of the Act do apply
to Eskom or
not. I was unable to find any direct authority on this
point, and neither could any of the counsel appearing at the hearing
of
the special plea refer me to any such authority. Consequently, the
Court will have to revert to the provisions of the Act and of
the
Constitution to determine the question.
[6]
As a starting point, it is clear that the Act does not apply to all
organs of state,
but only to certain organs of state. This is
apparent from the name of the Act and also from the preamble to the
Act. The opening
paragraph of the preamble, for instance, reads as
follow: “To regulate the prescription and to harmonise the
periods of prescription
of debts for which certain organs of state
are liable; to make provision for notice requirements in connection
with the institution
of legal proceedings against certain organs of
state in respect of the recovery of debt; to repeal or a amend
certain laws, and
to provide for matters connected therewith.”
[7]
The preamble then continues to recognise the position relating to
certain existing
laws, and I quote the following relevant paragraphs:
“Recognising that certain provisions of existing laws provide
for different
notice periods for the institution of legal proceedings
against certain organs of state in respect of the recovery of debts.”
“
And
recognising the need to harmonise and create uniformity in respect of
the provisions of existing laws which provide for different
notice
periods for the institution of legal proceedings against certain
organs of state for the recovery of a debt, by substituting
those
notice periods with a uniform notice period which will apply in
respect of the institution of legal proceedings against certain
organs of state for the recovery of a debt.”
“
And
recognising the need to provide for transitional arrangements to
ensure a smooth transition between the existing statutory provisions
regulating notice periods for the institution of legal proceedings
against certain organs of state in respect of the recovery of
debts
and the periods of prescription of such debts, and the provisions of
this Act.”
[8]
In
Madinda
v Minister of Safety and Security
[2]
the Supreme Court of Appeal had the following to say about the
purpose and the ambit of the Act (per Heher JA with
Navsa
and Mthiyane JJA concurring): “
The
Act is an omnibus statute which as the preamble states is intended
‘to regulate the prescription and harmonise the periods
of
prescription of debts for which certain organs of state are liable…
Thus, it brings together and rationalises under one
statutory
umbrella provisions which were previously scattered through many
statutes. (These are identified in the schedule of laws
amended and
repealed.)”
[3]
[9]
Altogether fourteen statutory
provisions of different Acts are listed in the schedule to
the Act to
which Heher JA referred. Interestingly enough, none of the statutory
provisions and Acts in the schedule applied to
Eskom at all. In
addition, and as far as could be determined, Eskom does not fall
under those entities generally that has had the
benefit of a
statutory notice provision before the coming of the Act. In my view,
this alone leaves the strong impression that
the Act was not designed
to include Eskom as one of those certain organs of state to which its
provisions apply.
[10]
The enquiry does not end there, however. This is so because the term
“organ of state”
is defined in section 1(1) of the Act.
It is therefore also necessary to consider this definition in order
to determine whether
Eskom in terms thereof perhaps qualifies as one
of those organs of state to which the Act applies. In terms of
section 1(1), “organ
of state” means –
(a)
any national or provincial department
(b)
a municipality contemplated in section 151 of the Constitution
(c)
any functionary or institution exercising a power or performing a
function in terms of the Constitution,
or a provincial constitution
referred to in section 142 of the Constitution
(d)
the South African Maritime Safety Authority established by section 2
of the South African Maritime Safety
Authority Act, 1998 (Act No. 5
of 1998)
(e)
The South African National Roads Agency Limited contemplated in
section 3 of The South African National
Roads Agency Limited and
National Roads Act, 1998 (Act No. 7 of 1998)
(f)
National Ports Authority Limited, contemplated in
section 4
of the
National Ports Act, 2005
, and any entity deemed to be the National
Ports Authority in terms of section 3 of the Act.
(g)
any person for whose debt an organ or state contemplated in paragraph
(a) to (f) is liable.
[11]
The only definition that can conceivably apply to Eskom, is the one
in paragraph (c). Eskom is
certainly not a national or a provincial
department as referred to in paragraph (b), although it is a
state-owned entity. But could
it meet the definition of a
“functionary or institution exercising a power or performing a
function in terms of the Constitution”,
as set out in paragraph
(c)?
[12]
Mr Mullins, appearing for the applicants,
submitted that Eskom is not a functionary or institution exercising
a
power or performing a function in terms of the Constitution. To
qualify as such, it had to be referred to in the Constitution
either
by name or by function, which did not happen, he submitted. He
pointed out that Eskom performs its functions in terms of
the now
repealed Eskom Act 40 of 1987, and in terms of that Act’s
successor, the
Eskom Conversion Act 13 of 2001
, and to some extent,
in terms of the Electricity Regulation Act 4 of 2007. Eskom is also
not referred to in the Constitution by
name.
[13]
While dealing with the Constitution, it is apposite to refer to the
definition of an organ of
state as it is defined in section 239(b)(i)
and (ii). In terms of this subsection in the Constitution, “organ
of state”
means.
“
(b)
any other functionary or institution
(i)
exercising a power or performing a function
in terms of the Constitution or provincial constitution; or
(ii)
exercising a public power or performing a
public function in terms of any legislation…”
[14]
From this Constitutional definition it is clear that the definition
of an organ of state in the
Act is narrower than the definition in
section 239 of the Constitution. The material difference between the
two definitions is
that the definition in the Constitution includes a
functionary or institution that exercises a public power or performs
a public
function
in
terms of any legislation
.
The definition in the Act does not go that far.
[4]
For the rest, the definition in the Act as contained in clauses (a),
(b) and (c) is essentially the same as that set out in the
Constitution. As already pointed out, an organ of state is defined in
the Act (section 1(1)(c) as any functionary or institution
exercising
a power or performing a function
in terms of the Constitution
.
[15]
While Eskom may not be exercising a power or performing a function in
terms of the Constitution,
it certainly does so “in terms of
any legislation”. That is why Eskom is no doubt an organ of
state in terms of that
Constitution. At the same time, it is obvious
that Eskom is not an organ of state in terms of the Act, because the
words “in
terms of any legislation” do not appear in the
Act’s narrower definition.
[16]
In this respect the remarks of Olivier J in
Haigh
v Transnet Ltd
[5]
are informative. He had the following to say:
In paragraph [23]:
“
In
my view the legislature, in enacting the definition of an “
organ
of state
”
in
the Legal Proceedings Act, quite clearly chose to limit the group of
functionaries and institutions to which that Act would apply,
by not
including those that performed their functions and exercised their
powers in terms of legislation other than the Constitution
or a
provincial constitution… It must be kept in mind that the
Legal Proceedings Act came into being long after the proclamation
and
commencement of the Constitution and the legislature must be deemed
to have been aware of the wider definition of the term
“organ
of state
”
in
the Constitution when it enacted the Legal Proceedings Act”
In
paragraph [26]:
“
When
the legislature provided for the establishment of the National Ports
Authority Limited and for its inclusion in the definition
of the term
“organ of state
”
in
the Legal Proceedings Act … the legislature … had a
golden opportunity to also include Transnet into that definition,
had
it wished to do so… Under these circumstances it is completely
inconceivable that the legislature would … have
intentionally
overlooked Transnet Limited as a company which should also be
included within the definition of
“
organ
of state
”
in
the Legal Proceedings Act.”
In
paragraph [30]: “
A
requirement of notice like that contained in the Legal Proceedings
Act limits the fundamental right of access to courts
and,
insofar as the provisions of the Act may be open for interpretation,
it should be interpreted to avoid such effect.”
[17]
I am in full agreement with those sentiments expressed by Olivier J.
They are, broadly speaking,
also in line with what Lever AJ found in
the Nicor case
[6]
referred to earlier. In the present matter, Eskom is equally not
listed in the Act as one of the entities to which the Act applies.
[18]
Mr Snyman, appearing for the Defendant, submitted
that Eskom is an organ of state within the meaning of
paragraph (a)
and (c) of the definition of an organ of state in the Act by reason
of the fact that it has to fulfil a task or a
purpose of the
Constitution, namely the provisions of bulk electricity on the
national grid. He relied heavily on the unreported
judgment of this
court in
Pegma
Thirteen Investments (Pty) Ltd v Free State Development
Corporation
[7]
where Rampai J found that the Free State Development Corporation
(FDC) was an organ of state within the meaning of the mentioned
paragraph (a) and (c) of the Act. In that case, the plaintiff also
contained, as in the present matter, that the FDC was not an
organ of
state within the meaning of the Act, since it did not exercise a
power or perform a function in terms of the Constitution
or a
provincial constitution.”
[19]
Mr Snyman further contended that this Court is
bound by the rules of
stare decisis
to follow the conclusion
reached in the Pegma-case, since it cannot be said that Rampai J was
clearly, plainly or palpably wrong
in his reasoning.
[20]
In his judgment, Rampai J mentioned that the Free State Provincial
Government is the sole shareholder
of all the shares of the FDC. The
MEC responsible for the provincial Department of Finance effectively
controls the FDC, he further
pointed out. In such circumstances, he
found that the FDC is an extension of the provincial Department of
Finance, which brings
it within the ambit of paragraph (a) of the
definition of an organ of state in section 1(1) of the Act.
[21]
In this respect, the Pegma matter is clearly distinguishable. There
is no indication in the present
matter that Eskom is controlled by
any national or provincial department and that it is therefore an
extension of such a department.
It is an independent entity created
by the legislation referred to earlier. Although it appears as if the
finding of Rampai J on
this point was the primary ratio for his
conclusion that the FDC was an organ of state within the meaning of
the Act, he went further
to find that this was also the position as
far as paragraph (c) is concerned.
[22]
On the facts and on the evidence before him,
Rampai J concluded that the FDC has been performing public
functions
in terms of the national Constitution. “By virtue of the
obvious public functions the corporation performs for
the general
population of the province, I am inclined to find that the defendant
was indeed an institution as contemplated in the
second segment, in
other words, paragraph (c) of the definition,” he found.
[23]
At the same time, Rampai J acknowledged that the statutory definition
of “organ of state”
(in the Act) is more restrictive than
the constitutional definition. On this point he then remarked that
“However, that does
not necessarily demonstrate that the
lawmaker intended to restrict the constitutional provision by way of
a statutory provision”.
[24]
In my view, Rampai J did not make a sufficient distinction between
the concept of an organ of
state generally, as defined in the
Constitution, and an organ of state as defined in the Act. In the
present matter Eskom is indeed
an organ of state in terms of section
239(b)(ii) of the Constitution because it performs a public function
in terms of “any
legislation”. The Act, on the other
hand, requires it to perform its functions in terms of the
Constitution. While Eskom
is under a Constitutional obligation to
provide electricity for the economic and social wellbeing of people,
it does not perform
its functions in terms of the Constitution,
because the Constitution does not refer to Eskom and it does not
provide for its existence.
This is done in terms of other
legislation. For instance, the Judicial Service Commission is a
functionary or institution in terms
of the Constitution because it
owes its composition to section 178(1) of the Constitution.
[8]
[25]
In the premises, I am not persuaded that Eskom qualifies under
paragraph (c) of the definition
of an organ of state in section 1(1)
of the Act. As a result, it was not necessary for the plaintiffs in
the present matter to
give the required notice in terms of section 3
of Act 40 of 2002.
[26] The
following order is made:
1.
The special pleas are dismissed.
2.
The defendant is ordered to pay the plaintiffs’ costs in the
various action in relation
to the special pleas, inclusive of the
costs of the plaintiffs employing senior counsel.
P.
J. LOUBSER, J
For
the Plaintiffs:
Adv.
J. F. Mullins SC
Instructed
by:
Honey
& Partners
Bloemfontein
For
the Defendant:
Adv.
C. Snyman
Instructed
by:
Phatshoane
Henney Attorneys
Bloemfontein
[
1]
Act 40 of 2002
[2]
2008 (4) SA 312 (SCA)
[3]
Par 7 of the judgement
[4]
See Nicor IT Consulting (Pty) Ltd v North West Housing Corporation
2010(3) SA 90 (NWM) par 7
[5]
2012(1) SA 623 (NCK)
[6]
Supra
[7]
Case number 2681/2006 dated 18 September 2008
[8]
Cape Bar Council v Judicial Service Commission
2012 (4) BCLR 406
(WCC) par 15, 17