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[2015] ZAGPPHC 1148
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e.tv (Pty) Ltd v Minister of Communications and Others (26166/2015) [2015] ZAGPPHC 1148 (24 June 2015)
IN
THE HIGH COURT OF SOUTH AFRICA
/ES
(GAUTENG
DIVISION. PRETORIA)
CASE
NO: 26166/20I5
DATE:24/6/2015
Reportable:
No
Of
interest to other judges: No
Revised.
IN
THE MATTER BETWEEN
e.tv
(PTY)
LTD APPLICANT
AND
MINISTER
OF
COMMUNICATIONS 1
st
RESPONDENT
MINISTER
OF TELECOMMUNICATIONS
AND
POSTAL SERVICES
2
nd
RESPONDENT
INDEPENDENT
COMMUNICATIONS AUTHORITY
OF
SOUTH
AFRICA 3
rd
RESPONDENT
UNIVERSAL
SERVICE AND ACCESS AGENCY
OF
SOUTH
AFRICA 4
th
RESPONDENT
SOUTH
AFRICAN BROADCASTING
CORPORATION
SOC
LTD 5
th
RESPONDENT
ELECTRONIC
MEDIA NETWORK
LTD 6
th
RESPONDENT
ASSOCIATION
OF COMMUNITY TELEVISION
–SA 7
th
RESPONDENT
NATIONAL
ASSOCIATION OF MANUFACTURERS
OF
ELECTRONlC COMPONENTS (1
st
Groupjng) 8
th
RESPONDENT
SOUTH
AFRICAN COMMUNICATIONS
FORUM 9
th
RESPONDENT
SENTECH
SOC LTD
10
th
RESPONDENT
CELL C
(PTY) LTD
11
th
RESPONDENT
TELKOM
SOC LTD
12
th
RESPONDENT
TELLUMAT
(PTY) LTD
13
th
RESPONDENT
S.O.S.
SUPPORT PUBLTC BROADCASTING
COALITION 14
th
RESPONDENT
MEDIA
MONITORING SOUTH
AFRICA 15
th
RESPONDENT
NATIONAL
ASSOCIATION OF MANUFACTURERS OF
ELECTRONIC
COMPONENTS (PTY) LTD (2
nd
Grouping) 16
th
RESPONDENT
JUDGMENT
PRINSLOO,
J
[1]
This application came before me as one of urgency. The
record runs into some 1 440 pages. There were six legal teams
representing
the applicant and the first, fifth, sixth, eighth,
fourteenth, fifteenth and sixteenth respondents respectively. The
eighth, fourteenth
and fifteenth respondents made common cause and
were represented by the same team. There were fifteen counsel in all.
The hearing
lasted two days.
[2]
A day or two before the hearing, the sixteenth
respondent launched an application to intervene and be joined as the
sixteenth respondent.
The sixteenth respondent, bearing the same name
as the eighth respondent, is represented by another grouping from the
ranks of
the eighth respondent. Without being disrespectful, it is
fair to say that the eighth respondent has two opposing factions in
its
ranks. The first grouping, under the banner of the eighth
respondent, made common cause with the fourteenth and fifteenth
respondents
and supported the application. The sixteenth respondent
is represented by the second grouping, which is at arm's length with
the
first grouping, and opposes the application.
At
the commencement of the proceedings, I granted the joinder on an
unopposed basis. Counsel for the eighth and the sixteenth respondents
agreed that they would simply make their presentations (conflicting
as they are) and the right or standing of either faction to
represent
this particular organisation, as well as any costs flowing from the
intervention or joinder application, would stand
over for later
adjudication, if necessary, in a different court. An appropriate
order was made.
[3]
As to urgency, the first respondent (“the
Minister”) was the only respondent contending in her opposing
affidavit that
the application was not urgent. At the commencement of
the proceedings, I offered counsel for the Minister the opportunity
to address
me on urgency
in limine
but
he informed me that the Minister was no longer pressing the issue of
urgency. Consequently, the application was heard as one
of urgency.
In the circumstances, it is incumbent upon me to attempt to deliver
the judgment (which will not be as detailed as
it may have been under
“non-urgent” circumstances) as a matter of urgency.
Brief
synopsis of the case
[4]
This is a review application arising from a decision
taken by the Minister on or about 18 March 201 5 to enact certain
amendments
to the Broadcasting Digital Migration Policy for South
Africa (“the BDM policy”).
For
the sake of detail, I add that, following the 2014 national
elections, the Communications portfolio was split into two: a new
Department of Communications under the present Minister of
Communications (the first respondent or “the Minister”)
and the Department of Telecommunications and Postal Services (“the
DTPS”) under the Telecommunications Minister.
In
terms of a proclamation published in the
Government Gazette
of
15 July 2014, the administration of and the powers and functions
entrusted by the Electronic Communications Act, no 36 of 2005
(“the
ECA”) were transferred to the Telecommunications Minister.
However,
subsequently, in terms of a proclamation appearing in the
Government
Gazette
of 2 December 2014, the power to make broadcasting policy
in terms of section 3 of the ECA was transferred from the
Telecommunications
Minister to the Communications Minister (“the
Minister”). “Minister” is defined in the ECA as
meaning the
Minister responsible for Communications.
[5]
The BDM policy deals with a matter of considerable
significance for all South Africans - the digital migration process.
Simply put,
this process involves a technological shift from the
present analogue television broadcasting system to a digital
television broadcasting
system.
[6]
I briefly turn to some particulars on this subject, as
they emerged from detailed and well crafted papers presented by the
parties.
(i)
Terrestrial versus Satellite
[7]
At present in South Africa there are two ways in which
television may be broadcast:
(1)
First, television is broadcast
on the
terrestrial
spectrum.
This involves viewers receiving the television signal via their
aerials. Terrestrial television is directly relevant to
the present
application.
(2)
Second, television is broadcast
via satellite. This involves viewers receiving the television signal
via a
satellite dish
,
as is the case with MultiChoice's DStv. Satellite television is not
directly relevant to this application, although it is referred
to,
mainly for comparative purposes, from time to time in the papers.
[8]
This case concerns
terrestrial
television. This is how the vast majority of
people in South Africa receive television broadcasts at present and
how they are likely
to receive television broadcasts for the
foreseeable future. (The emphasis added through underlining, is that
of the drafter of
the papers, in this case the founding affidavit.
These technical details are, by and large, common cause between the
parties.)
[9]
At present there are a limited number of terrestrial
channels being broadcast in South Africa:
1.
There are four primary free
terrestrial television channels – SABC1, SABC2, SABC3 and e.tv.
(e.tv is, obviously, the applicant
and will be referred to as “e.tv”
or “the applicant” at times.)
Accordingly, SABC and e.tv are, together with certain
community broadcasters, referred to collectively as the free-to-air
or FTA
broadcasters.
2.
The other channel that is
currently broadcast via terrestrial television is M-Net. However, it
is not free. Rather, it is a subscription-based
service. lt is also
the sixth respondent which opposes this application.
[10]
For the sake of detail, I add that all five of these
channels - the SABC channels, e.tv and M-Net - can also be received
via satellite,
for example via DStv, for those who can afford access
to satellite broadcasts.
(ii)
Analogue v digital
[11]
At present, terrestrial television broadcasting uses
analogue
technology.
This entails the transmission of the television picture and sound
information to the viewer in its entirety - there
is no conversion of
the picture and sound, and none of the picture and sound information
is removed.
[12]
This is now set to change. Terrestrial television
broadcasts will shortly be broadcast using
digital
technology instead.
1.
Digital technology entails the
conversion of the television picture and sound into discrete digital
information which is then compressed
by removing unnecessary
information and it is then transmitted to the end-user as a digital
signal.
2.
Because of the nature of the
process, each television set will require a
set-top
box
(“STB”) in order to properly
receive and display the broadcast. At the receiving end, the digital
signal from the aerial
is first passed into the SIB which converts
the digital information back into the TV picture and sound
(obviously, for those millions
of TV viewers still using “old”
television sets equipped with “analogue” technology).
(iii)
The digital migration process
[13]
The process in terms of which this shift from analogue
to digital is taking place is often referred to as the “
digital
migration process” ,
because it means
that all terrestrial television viewers in South Africa will have to
“
migrate”
from
receiving such broadcasts in analogue form to receiving them in
digital form.
[14]
In short, the main purpose of the global migration from
analogue to digital is to release limited radio frequency spectrum,
which
is used for the purposes of both broadcasting and
telecommunications. Digital broadcasts only require a fraction of the
spectrum
required by analogue broadcasts. Therefore a shift from
analogue to digital means a more efficient use of available spectrum
(in
the ECA, “radio frequency spectrum” is defined as
meaning the portion of the electromagnetic spectrum used as a
transmission
medium for electronic communications and broadcasting).
[15]
South Africa co-ordinates its use of spectrum with other
countries to ensure that there is no interference between their
broadcasting
signals.
Analogue
broadcasting is currently protected from interference. In light of
certain decisions of the International Telecommunications
Union (“the
ITU”), South Africa is required to migrate from analogue to
digital terrestrial television.
South
Africa was expected to have
completed
the digital migration
process by I7 June 2015. After this date, it is not able to continue
relying on the ITU to protect its broadcasts
from interference by
other countries' broadcasting signals. South Africa has not yet
started with the digital migration process,
but may do so shortly,
and it is alleged, on behalf of the applicant, that no “calamitous”
effects will result from
South Africa missing this deadline. Indeed,
there are many countries who will not meet the deadline. Moreover,
because of South
Africa's geography and the limited interference
likely to come from its neighbours, the impact on members of the
public of missing
the deadline of 17 June 2015 is not severe. Sentech
SOC Ltd (the tenth respondent), which is responsible for the
transmission of
e.tv's broadcasts, estimates that only 3 600 people
receiving e.tv on terrestrial television will be likely to suffer
some form
of interference.
[16]
Because the conversion from analogue to digital
terrestrial television cannot occur overnight, otherwise millions of
viewers would
be left without any ability to watch television, it is
envisaged that there will be the migration process, referred to,
whereby
digital terrestrial television will begin in conjunction with
analogue terrestrial television, with the latter being “turned
off'' on a specified date.
I
add that in theory, it is possible to avoid the use of an STB by
purchasing an “integrated digital television” or
“iDTV”
- this is a television set with a built-in receiver which carries out
the functions of an STB. However, iDTVs
are not a practical option
for the vast majority of ordinary South Africans given that they are
not freely on sale in South Africa
and are very expensive.
[17]
The process of digital migration has been a complicated
and lengthy one. The BDM policy was first published in2008.
[18]
The Independent Communications Authority Of South Africa
(“ICASA”, which is also the third respondent), acting in
terms
of its regulation-making powers under section 4 of the ECA,
enacted various sets of draft and final regulations to regulate the
digital migration process. That process was completed on 14 December
2012 with the publication of the Digital Migration Regulations,
2012.
[19]
The government has made available substantial funds for
the digital migration process. It is estimated that over the period
2012
to 2018, these expenses or funds will come to some R4 billion.
(iv)
The need for Set-Top Boxes (“STB's”)
and the government subsidy
[20]
On the current (analogue) system, terrestrial television
viewers do not need an STB to receive the four FTA channels. They
simply
connect their television set to the aerial and can then
receive and watch the three SABC channels and e.tv for free.
[21]
This will change with the migration from analogue to
digital. Because of the nature of digital technology, viewers will
require
STB's to watch television. Every television will have to be
connected to both the aerial and the STB. Without this, the viewer
will be unable to watch terrestrial TV. Each terrestrial
television-viewing household or workplace will therefore have to
possess
an STB.
[22]
More than 8 million South African households rely solely
on aerials, and therefore terrestrial television to receive the four
FTA
channels. It is therefore envisaged that approximately 8 million
STB's will have to be manufactured in total in order to allow for
an
effective digital migration.
[23]
The average price of an STB is likely to be in the
region of R600,00. This is recognised to be out of reach of many
ordinary South
Africans who receive their television broadcasts via
terrestrial means. The government, quite appropriately, decided early
on that
it would commit to at least a partial subsidy to provide 5
million STB's to the poorest TV-owning households. This was
recognised
in the BDM policy from the outset Ultimately, it was
decided that these 5 million STB's would be fully subsidised and
therefore
provided for free to the poorest TV-owning households.
These STB's will be referred to as the “subsidised STB's”
or
the “free STB's”.
[24]
A tender to provide these 5 million STB's was issued in
November 2014.
[25]
The government will be investing billions of rand in
supplying the subsidised STB's. To ensure that this investment is
protected
they must be fitted with a control system (“the STB
control system”). A lack of control could result in the
subsidised
STB's being stolen and sold to South African households
which do not qualify for the subsidy or sold to people living in
neighbouring
countries. This theft could occur in high volumes during
the distribution process or on an individual basis.
(v)
STB control
[26]
The BDM policy has, from its enactment in 2008 to the
present, always recognised the need for an STB control mechanism.
[27]
For example, in the first version of the policy it was
stipulated that STB's would “have a control system to prevent
STB's
from being used outside the borders of South Africa and to
disable the usage of stolen STB's”. Later it was stipulated
that
STB's would have “capabilities to unscramble the encrypted
broadcast signal so that only fully compliant STB's made or
authorised
for use in South Africa can work .on a network”.
There was a 2012 stipulation that STB's will “have a robust STB
control
system that will also benefit the consumers by ensuring that
they do not have to own multiple boxes for both current and future
free-to-air broadcasting services”. Later reference was made to
a “national standard” which would “include
a robust
free-to-air STB control system to ensure that only conformant STB's
can work in the electronic communications network
in South Africa”.
[28]
The national standard was later issued by the SABS as
SANS 862:2012. It prescribes that the “main functional elements
specified
for security” are:
(1)
“
a secure over-the-air software and bootstrap
loader;
(2)
a mechanism to prevent SIB decoders from functioning in
non-RSA DTT networks; and
(3)
STB control system that will enable mass messaging. “
(Note:
DTT stands for Digital Terrestrial Television.)
The
standard specifies that FTA broadcasters are responsible for
determining security requirements and manufacturers of STB's can
obtain these security requirements from the FTA individual
broadcasting service licensees.
(vi)
Encryption
[29]
This subject emhodies the crux of the case: e.tv
wants the subsidised STB's to be fitted with a so-called “encryption
facility”
because e.tv wants to broadcast so-called “encrypted”
signals as an FTA broadcaster to the terrestrial TV users.
The
Minister, on the other hand, in her Ma rch 2015 policy amendment,
stipulated that subsidised STB's will not have “capabilities
to
encrypt broadcast signals”. The decision of the Minister to
prescribe, when making her policy, subsidised STB's without
the
encryption capability, is what is attacked on review in this
application. Relying, essentially, on the principle oflegality,
e.tv
contends that the Minister's decision was unlawful (she exceeded her
powers), irrational and that the procedure adopted to
enact the
amended policy was also unfair.
The
application is strenuously opposed by the Minister (the first
respondent or “no l”), no 5 (the SABC), no 6 (M-Net)
and
the newly joined no 16. No 8, and with it, no 14 and no 15, support
the application. None of the other respondents have entered
the fray,
although no 7 filed an affidavit supporting the opposition to the
application.
[30]
So much for a brief synopsis of the case.
The
Minister's amendments to the BDM policy which are under attack in
this review application (“the impugned amendments”)
[31]
The amendments were published in terms of the
Electronic
Communications Act, Act
36 of 2005 (“the ECA”) in
Government Gazette
no
38583 of 18 March 2015,
[32]
In an introductory paragraph to the amendments, Minister
Muthambi states that she amends the BDM policy issued initially by
Government Gazette
on
8 September 2008 and as amended by amendments published in a later
Government Gazette
of
1
7 February 2012, “to
the extent indicated below taking into consideration submissions made
by stakeholders on the amendments
proposed by the Department of
Communications on 6 December 2013”.
[33]
There are ten paragraphs containing amendments, but e.tv
is only challenging those contained in paragraph 8. These are new
paragraphs
inserted into the (already amended) policy. It is
convenient to quote paragraph 8:
“
8. Paragraphs 5.
l
.2(A),
(B) and (C) are inserted in the Policy:
'5.1.2(A) In keeping with the objectives of ensuring
universal access to broadcasting services in South Africa and
protecting government
investment in subsidised STB market, STB
control system in the free-to-air DTT will be non-mandatory.
5.1.2(B) The STB control system for the free-to-air DTT
STB's shall -
(a)
not have capabilities to encrypt broadcast signals for
the subsidised STB's; and
(b)
be used to protect government investment in subsidised
STB market thus supporting the local electronic manufacturing sector,
5.1.2(C) Depending on the kind of broadcasting services
broadcasters may want to provide to their customers, individual
broadcasters
may at their own cost make decisions regarding
encryption of content.'“
[34]
5.l.2(C) is not attacked on review.
[35]
Apart from the “urgency clause”, and the
clause praying for costs against those respondents opposing the
relief sought,
the relevant paragraphs in the notice of motion
provide:
“
2. The decision of the First Respondent on 18
March 2015 to enact clauses 5.l.2(A) and 5.l.2(B)(a) of the
Broadcasting Digital Migration
Policy ('BDM policy') is reviewed and
set aside.
3. It is declared that clause 5.l.2(A) of the BDM policy
is unlawful and invalid and, to remedy the defect, clause 5.1.2(A) is
deemed
to read as though it provides as follows:
'In keeping with the objectives of ensuring universal
access to broadcasting services in South Africa and protecting
government
investment in subsidised STB market,
the use of the
STB
control system in the free-to-air DTT will be non-mandatory.'
4. It is declared that clause 5.1.2(B)(a) of the BDM
policy is unlawful and invalid.”
[36]
As far as the attack on 5.l.2(A) is concerned, e.tv
initially argued, in the founding papers, that it was the result of a
“drafting
error” and that the phrase “the use of”
should have been inserted.
I
debated this issue with Mr Budlender, for e.tv, and he conceded,
quite properly, that e.tv's attack on 5.l.2(A) is misplaced.
He
accepted that the proper meaning of 5.l .2(A), is that advanced on
behalf of the Minister and some of the other respondents.
It is this:
the amendment enacted by the Minister, also described by e.tv as “the
non-mandatory control amendment”
relates to the manner in which
control over STB's may be exercised . As far as the provision of
subsidised STB's is concerned (for
purposes of digital migration),
all STB's are going to be provided by the government. 5.l.2(A)
provides that “STB control
system in the free-to-air DTT will
be non-mandatory”, which, in simple terms, means that the “STB
control system”
will not be mandatory. On the other hand, in
terms of 5.l.2(B)(b) the STB control system shall “be used to
protect government
investment in subsidised STB market” and not
any other STB's, ie non-government STB's. The provision does not
apply to STB's
provided by broadcasters themselves or which are not
subsidised by the government. It applies to subsidised STB's because
those
which may be provided by broadcasters, such as
e.tv,
to
their customers (which they are free to do) do not need the
government's protection through the Policy. The policy is not
the appropriate instrument to provide whatever protection
broadcasters may need for their own issued STB's. The policy only
prescribes
an STB control system for the government subsidised STB's.
This is necessary to protect the government's investment, as
indicated.
I add that the inclusion of an encryption facility or
capability in the STB control system is not prescribed by the SABS
national
standard,
supra.
[37]
As a result of Mr Budlender's concession, the attack on
5.l.2(A) has, therefore, been abandoned for all practical purposes.
In fairness,
I add that Mr Budlender did mention that, as far as the
attack on 5.1.2(A) was concerned, he was still “left with the
procedural
challenge”. This is a reference to the so-called
“third leg” of a review in terms of the principle of
legality.
The others involve lawfulness and rationality. It is
difficult to understand why it would be necessary, or appropriate, to
launch
a “procedural challenge”, against an enactment
which, on the challenger's own concession, is in order.
More
about encryption: the pros and cons
[38]
A slightly more detailed discussion on this subject
appears to be appropriate because the only amendment to the policy
still under
attack, in this review application, is the so-called
“encryption amendment” which is to be found in
5.l.2(B)(a). It
deals with the policy stipulation that subsidised
STB's shall not have capabilities to encrypt broadcast signals.
[39]
“
Encryption” refers to the process in terms
of which a tv-signal is deliberately encrypted at the source before
being broadcast.
In the
Shorter Oxford English
Dictionary,
volume I on p822, “encrypt”
is described as follows: “convert into code, especially to
prevent unauthorised access;
conceal in something by this means”.
[40]
The encrypted television signal is then transmitted to
television households where it can only be decrypted by an STB that
has been
loaded with the right software, hardware and decryption
keys. The STB therefore “unlocks” the encrypted signal
for
viewing.
[41]
It is common cause between the parties that encryption
technology is used by all pay- TV operators - for example, DStv,
M-Net and
Top TV. In the context of pay-TV, it ensures that only
subscribers who have paid their fees are ordinarily able to watch the
encrypted
broadcast. This seems to fit into the dictionary
definition.
[42]
Encryption technology is not used by the FTA
broadcasters, including e.tv. e.tv is the only FTA broadcaster
contending for encryption
capability to be included in the control
system for subsidised STB's.
[43]
In the founding affidavit, e.tv, quite properly,
concedes that it was initially of the view that STB control was not
necessary for
DTT. In fact, it made lengthy submissions to the
Minister, during the earlier policy making process, to the effect
that encryption
is undesirable for purposes of FTA broadcasting. When
I confronted Mr Budlender with this, he reminded me, quite correctly,
that
everyone is entitled to change his or her or its mind.
[44]
In the founding affidavit, it is contended on behalf of
e.tv that the latter considers it essential that it be able to
encrypt its
broadcast signal. It considers this to be “critical
to its business” and the interest of the public for at least
two
reasons. Before I turn to these reasons, I point out that e.tv,
repeatedly, and properly, alleges that it would be in the interests
of its own business plan if subsidised STB's were to be provided with
encryption capability. Indeed, the main thrust of e.tv's
case is that
it laments the fact that, if there were to be no encryption facility
for subsidised STB's, and if it were to insist
on broadcasting
encrypted signals, e.tv would have to supply its own commercial STB's
to the 5 million odd subsidised terrestrial
viewers referred to. This
will be an expensive exercise. What e.tv fails to explain, or
adequately explain, is why it needs to
encrypt its signals for FTA
OTT purposes. It is the only FTA broadcaster that supports the idea
and it has not been doing so up
to now. Encryption is not necessary
for FTA broadcasting purposes (DTT) and, as
I
will illustrate, it appears to have more
negative features than positive ones. Some of these negative features
directly impact on
the interests of the impoverished 5 million soon
to be subsidised FTA viewers. This issue does not appear to be high
on the priority
list of e.tv.
[45]
In its founding affidavit, e.tv makes the following
introductory statement:
“
In particular, e.tv considers it essential that
it be able to encrypt its broadcast signal. It considers this to be
critical to its business
and
the interest of the public for at least two reasons.” (Emphasis
added.)
[46]
For the sake of brevity, I quote only portions of the
submissions made by e.tv with regard to these two reasons:
“1
. It would ensure compliance with a minimum set
of specifications for STB's within the country, preventing
non-compliant STB's from
receiving digital broadcast signals. Such
STB's would allow for FTA broadcasts to be received in the correct
format and with the
correct features, ensuring a uniform and reliable
viewer experience. ·
A failure to comply with the minimum set of
specifications would likely result in a weak experience for the
viewer ... This would
reflect negatively on FTA broadcasters, as
viewers would assume that the poor quality of the user experience was
the broadcasters'
fault ... This weak FTA offering would be
particularly damaging in a context where FTA broadcasters must
compete with a strong
incumbent pay-TV brand such as DStv.
2. Broadcasters such as e.tv would in the future likely
be unable to provide broadcasts in high definition ('HD') without a
fully
conformant platform enabled through STB control with
encryption. ... Preventing free-to-air broadcasters from broadcasting
in the
latest forms of technology will
seriously and irreparably
damage their business
as viewers will be forced to switch to
pay-TV in increasing numbers to achieve the desired viewing
experience.” (Emphasis
added.)
[47]
e.tv acknowledges that its views on this score are
strenuously contested by “certain interested parties”.
[48]
Remarkably, e.tv then contends that its case does not
rest on the court making a determination as to which of the contested
positions
is correct. It states that its case does not rest on the
court determining whether encryption of FTA broadcasts is good or bad
for broadcasters or the country as a whole. This statement is
perhaps not surprising given the vigorous opposition to the
submissions made by e.tv when singing the praises of encryption. I
also do not agree that information about the advantages and
disadvantages of encryption is to be disregarded: in my view, this is
a factor which could be taken into account when deciding
whether or
not the Minister's decision was rational.
[49]
An example of the strong opposition to e.tv's assertions
about the benefits of encryption for FTA broadcasting is to be found
inthe
opposing affidavit of M-Net, the sixth respondent:
“
17. e.tv wishes to encrypt its free-to-air
television broadcast signals in the DTT environment. It is the only
free-to-air television
broadcaster in South Africa which wishes to do
so, and its intention is at odds with the global trend. The
overwhelming majority
of free-to-air terrestrial television
broadcasters world-wide do not encrypt their broadcast signals.
18. The reasons which e.tv puts forward for wishing to
encrypt its free-to-air broadcast signals are based on flawed and
incorrect
assumptions which are contradicted by e.tv's own previous
statements.
19. Contrary to the misconceptions promulgated by e.tv
in its founding affidavit, and by recent commentators in the media,
encryption
of free-to-air broadcasting signals -
19.1 is
not
required to prevent piracy of
television broadcasting content. As I explain below, this objective
is met by the incorporation.
in the STB of High-bandwidth Digital
Content Protection (HDCP), a form of digital copy protection which
prevents unauthorised copying
of content. The standard developed by
the South African Bureau of Standards (SABS) for STB's, SANS 862:2013
Edition 2.1 (the National
Standard) explicitly requires the inclusion
of HDCP in STB's;
19.2 it is not required to enable free-to-air
broadcasters to obtain high definition content. As I explain below,
the majority of
free-to-air terrestrial broadcasters world-wide
broadcast their signals unencrypted and obtain and broadcast high
definition content.
These broadcasters include, in the United
Kingdom, the public broadcaster, the BBC, the public commercial
broadcasters ITV and
Channel 5; in the United States, the public
broadcaster PBS, and commercial broadcasters ABC, NBC and CBS; and in
Australia, the
public broadcaster ABC and commercial broadcasters
Seven Network, Nine Network, Network Ten and SBS. Leading
international program
suppliers do not require encryption of their
programs on free-to-air terrestrial networks; and
19.3 is not required to prevent the importation and sale
of cheap, poor quality STB's to the public. As I explain below, this
objective
will be addressed by a range of conformance measures to
protect consumers against poor quality products, including the
adoption
of the National Standard, the certification of compliant
products, and consumer education on the risks of purchasing STB's
which
are not certified.
20. At the heart of e.tv's challenge is the claim that
the encryption amendment will directly preclude free-to-air
terrestrial broadcasters
from encrypting their broadcast signals in
respect of the 5 million households which will have
government-subsidised STB's, and
indirectly preclude them from
deciding to encrypt their signals at all. Both parts of this claim
are unfounded and untrue.
21. What e.tv does not acknowledge or even disclose is
that it can itself fund the manufacture and provision of its own
customised
STB's with encryption capability for the households which
it wishes to reach. As a commercial broadcaster which, we are told,
has
identified the encryption of its signals as
'critical to its
business',
e.tv does not explain why it expects the cost of this
decision to be borne by government.
22. Also absent from e.tv's account is a recognition of
the transitory role which the STB is expected to play in the
terrestrial
television broadcasting landscape. It has always been
accepted that the STB will be a temporary feature of television
broadcasting.
It is attractive in the early stages of digital
migration as a low cost means of enabling an existing analogue
television set to
receive digital transmissions. Viewers already
using iDTVs when digital migration is concluded will not need to use
STB's at all.
When, as happened globally, iDTVs become more widely
available and affordable, the STB will become redundant.
23. If the government subsidised STB's were to
incoporate encryption capability to meet e.tv's needs, viewers would
be reliant in
perpetuity on STB's and STB's would have to be
manufactured, purchased and maintained indefinitely for e.tv's
commercial benefit.
Since digital tuners can and will be built into a
wide range of consumer products, including portable tv's, viewers
using all these
products would require STB's as well.
24. e.tv also does not deal with the other significant
implications of including encryption capability in STB's, which
include not
only the cost but also the technical complexity which it
will add to each STB, thus increasing the risk of STB malfunction and
giving rise to higher maintenance and repair costs for the consumer,
and a higher risk of replacement. As explained below, the inclusion
of encryption capability also has important implications for emerging
manufacturers of STB's in South Africa.
25. Evidently e.tv does not wish to make the investment
necessitated by its decision to encrypt its free-to-air broadcast
signals.
Instead, it wants encryption capability to be incorporated
in the control system in all the government-subsidised STB's. Having
failed to persuade government of the merits of its views for purposes
of the formulation of government policy, it now seeks to
achieve this
objective by way of judicial review. It seeks, in essence, to usurp
government policy for its own commercial advantage.
26. e.tv acknowledges that its views on the merits of
encrypting free-to-air broadcast signals are
'strenuously
contested
by
'certain interested parties ',
but asserts
that its case does not depend on the court determining whether
encryption of free-to-air broadcast signals is good or
bad for
broadcasters or the country as a whole.
27. In fact, e.tv's views on encryption are unsupported
by the facts, have no support among South African free-to-air
television
broadcasters, and are aberrant globally. In these
circumstances, e.tv's contention that it brings this application in
the public
interest is unsustainable. The application has
self-evidently been brought only in e.tv's commercial interest.
.Since the reasons
afforded by e.tv for wishing to encrypt its
free-to-air broadcast signals are groundless, it can only be assumed
that e.tv has
a different, undisclosed objective.”
[50]
So much for M-Net's views on encryption in respect of
FTA television broadcasting.
[51]
M-Net is in good company. The SABC (fifth respondent) is
equally scathing in its condemnation of encryption in the free-to-air
space.
The SABC highlights certain aspects of research and analysis
it has conducted over the past two to three years as part of
preparing
the various submissions that it has made during the DTT
migration process. For the sake of brevity, I will attempt a brief
summary
of the aspects listed by the SABC:
1.
One of the critical success
factors identified by the European Union in its migration process was
“low cost and widely available
set-top boxes”. It is
important, as already mentioned, to distinguish between the role
played by set-top boxes in the pay-Television
environment and in the
free-to-air environment. In the former, encryption is essential
because it is the only way for a broadcaster
to ensure that only
people who subscribe to, and pay for, its service will gain access to
it. In this environment, the additional
costs of facilitating
encryption are built into the broadcasters' costing, and are
justified because they are an essential component
of the business
model.
2.
On the other hand, in the
free-to-air environment, consumers are used to receiving their signal
for free. They do not want to pay
extra to receive a channel that
they have historically received for free. The European experience
therefore shows that the cheaper
the free-to-air STB, the greater
numbers of consumers are likely to migrate to DTI. In the FTA
environment, the STB's must therefore
be as affordable as possible.
3.
The SABC points out that e.tv, in
its founding affidavit, did not address the cost of enabling
encryption in set-top boxes. There
would be a significant cost
implication of a decision by government to procure STB's with
encryption capabilities:
(i)
There would be an immediate once
off cost of $2 per STB to equip each with encryption capability. This
would increase the cost of
subsidising 5 million STB's by about $10
million. SABC submits, correctly in my view, that where the use of
encryption in the FTA
environment is questionable, to put it mildly,
it is difficult to see why government should be expected to pay well
over RI 00
million for such a capability.
(ii)
SABC estimates that the
implementation of encryption of the free STB's would involve annual
costs of approximately R56 I ,9 million
to be borne by the
broadcasters. These costs would involve the annual royalties for the
encryption software, the additional business
systems needed to manage
and control STB's and consumer databases, the cost of operating call
centres and the regular maintenance
costs of the complicated
software.
(iii)
Because the necessary software in STB's that facilitate
encryption· is more complicated, it is inevitable that there
are
accessibility difficulties from time to time, when encryption is
used. This means, as is already the case in the pay-TV environment,
call centres will be needed to assist consumers with accessibility
problems. A number of call centres will be required to service
the
needs of approximately 12 million FTA consumers (this is the SABC
estimate). Consumers will have to pay to communicate with
these call
centres. All this means that consumers, who previously could simply
switch on and access FTA channels, will face the
extra step of having
to navigate, at their cost, accessibility difficulties. This is the
opposite of what is required in the digital
migration process, which,
to work properly, needs to introduce as few barriers to access as
possible.
(iv)
STB's with encryption capabilities will require the use
of software that increases the cost of STB's because of royalties
that must
be paid.
4.
The SABC emphasises the fact
that, throughout the world, the norm for FTA broadcasts is not to be
encrypted. For the government
to decide to pay extra to enable STB's
to encrypt signals in the FTA environment, would constitute a highly
unusual step.
5.
If STB's are to be supplied with
encryption facilities, software available only overseas will have to
be used. There are various
situations which could cause an overseas
contractor to terminate access to the software. The SABC, in
discharging its public
mandate, uses its signal to convey a variety
of important infonnation to the public. A simple example is
infonnation about electricity
supply and the implication of its use
for possible load-shedding. If public access to the SABC was shut
down, even on a temporary
basis, this could have disasterous
consequences for the country.
[52]
Later, I will briefly revert to the question as to
whether or not the Minister's decision (which is under attack) to
enact the “encryption
amendment” (5.J.2(B)(a)), was
rational, but the SABC, correctly in my view, submits that in the
light of the aforesaid discussion
about the use of encryption in the
FTA environment, a choice by government not to subsidise an
encryption capability in STB's is
entirely rational and reasonable.
Equally, so the SABC submits, a policy that allows individual
broadcasters to make their own
decisions about encryption, but
requiring those broadcasters to carry the costs of encryption
themselves if they opt for encryption
(amendment 5.I .2(C)) is
entirely rational and reasonable.
In
these circumstances, as already pointed out earlier, I disagree with
e.tv's submission that its case does not rest on this court
determining whether encryption of FTA broadcasts is “good or
bad for broadcasters or the country as a whole”. As I
mentioned, this issue is, in my view, an important one that should go
into the scale when judging the decision of the Minister
objectively.
[53]
Towards the end of its discussion on the use of
encryption in the FTA environment, the SABC also makes the following
submission,
which I find convenient to emphasise at this point, lest
it escapes me, as I consider it to be of particular relevance in the
present
case:
“
It is well-established that the deference that is
required in the context of all reviews of executive conduct is
particularly important
when the allocation of state resources is
involved.”
The
Minister, in her heads of argument, deals with the same subject by
referring to
National Treasury v Opposition to Urban Tolling
Alliance
2012 6 SA 223
(CC). It is useful to quote what was said
in that judgment at 24IE-H:
“
[67] The harm and inconvenience to motorists,
which the High Court relies on, result from a national executive
decision about the
ordering of public resources, over which the
executive government disposes and for which it, and it alone, has the
public responsibility.
Thus, the duty of determining how public
resources are to be drawn upon and recorded lies in the heartland of
executive-government
function and domain. What is more, absent any
proof of unlawfulness or fraud or corruption, the power and the
prerogative to formulate
and implement policy on how to finance
public projects reside in the exclusive domain of the national
executive subject to budgetary
appropriations by parliament.
[68] Another consideration is that the collection and
ordering of public resources inevitably call for policy-laden and
polycentric
decision-making. Courts are not always well suited to
make decisions of that order. It bears repetition that a court
considering
the grant of an interim interdict against the exercise of
power within the camp of government must have the
separation-of-powers
consideration at the very forefront.”
[54]
Still on the subject of opposition to introducing an
encryption facility for subsidised STB's, it is fair to refer briefly
to the
submissions made on behalf of the sixteenth respondent in
opposing the application.
[55]
The deponent of the opposing affidavit, speaking for
emerging black manufacturers of electronic components (in this case,
no doubt,
STB's, bearing in mind that there are indications on the
papers that all twenty tenderers, responding to the government tender
to manufacture STB's, received a share of the tender) advances some
arguments militating against the notion of allowing encryption
facilities. I will attempt a brief summary, for the sake of brevity:
1.
Black manufacturers will need to
be accredited by the foreign Conditional Access vendor companies (“CA
vendor”), who
hold the software licences necessary to produce
encrypted STB's. This accreditation would come at an unnecessary
significant cost
to the manufacturer.
2.
The manufacturing process will
then be subject to a decision by a CA foreign vendor which will serve
as a gate-keeper to manufacturers
as this software is only available
overseas.
3.
A CA vendor will essentially have
the unilateral powers to decide who eventually manufactures STB's in
South Arica.
4.
The manufacturers will be
hampered in their development costs because any applications that
need to be incorporated will be subjected
to integration costs that
the CA vendor charges.
5.
The incumbent manufacturers would
be the beneficiaries because they have already been accredited by CA
vendors.
6.
The costs that this system
introduces will have to be borne by the taxpayer.
7.
It is an undesirable system “that
has never been implemented as a government policy anywhere in the
world”.
[56]
The deponent on behalf of the sixteenth respondent then
records that a multi-stakeholder workshop was held on 16 April 2013
to discuss
whether or not encrypted STB's were the best option for
South Africa. At the workshop, a resolution was passed to the effect
that
the requirement for STB control/encryption should be scrapped
from government policy in its entirety.
The
resolution was jointly signed by the sixteenth respondent, the MK
Military Veterans' Association, the Progressive Woman's Movement
of
South Africa, the Congress of Traditional Leaders, the SA National
Civic Organisation, the Black Business Council and many other
organisations.
[57]
I tum, briefly, to the contribution of the seventh
respondent, the Association of Community Television - SA (also
referring to itself
as “ACT -SA”).
[58]
This association filed an “explanatory affidavit”
indicating that it would abide the decision of the court, but clearly
recording in this affidavit that it opposes the application.
[59]
ACT - SA is a voluntary association representing the
interests of community television in South Africa. It was established
in 20
J 3 when all of the existing community television licensees in
South Africa at the time, namely Soweto TV, Cape Town TV (CTV), Bay
TV, One KZN (l KZN), Tshwane TV, North West TV and Bara TV, signed a
joint memorandum of understanding creating ACT -SA and confirming
their membership of ACT - SA.
[60]
Community television broadcasters provide free-to-air
broadcasting services to their viewers. Their programming has a
particular
focus on local community content.
[61]
The deponent on behalf of ACT - SA states that for some
time, community broadcasters have been anxious about indications that
STB's
would be required to have a “control system” with
encryption technology. The concern is that encryption technology will
unnecessarily and unduly increase the cost of STB's, thus adversely
impacting on the accessibility of STB's for the people who
need these
devices the most, namely lower income South African households which
rely exclusively on free-to-air broadcasting services
and only have
analogue television sets.
[62]
The deponent states that a requirement that all
broadcasters, including free-to-air broadcasters, would be expected
to encrypt their
services, would be inimical to the very concept of
free-to-air broadcasting. “Free-to-air broadcasting is
underpinned by
the spirit of enhancing accessibility. Encryption is,
by its very nature, aimed at restricting accessibility.”
[63]
ACT - SA was therefore relieved that, as presently
formulated, the BDM policy does not require STB's to have encryption
capability,
and specifically provides that government subsidised
STB's shall not have encryption capability. “We notice
specifically
that the BDM policy does not prohibit broadcasters from
encrypting content at their own cost.”
[64]
I has consistently been ACT - SA's position that an
encryption capability requirement for government subsidised STB's
would be adverse
to the public interest and would serve to
marginalise access to information for the poorest members of society.
[65]
Government should not have to bear the cost of
facilitating the private, commercially motivated objectives of
individual broadcasters,
particularly where those objectives run
counter to the public interest.
[66]
Encryption technology is a costly extra for STB's. It is
noteworthy that the deponent then adds that “indeed, e.tv had
itself
effectively high lighted this concern in previous
representations to the Department of Communications”. I have
referred to
this before, indicating that e.tv, for a reason which I
still do not quite understand, then changed its mind. The deponent
submits
that the inclusion of this technology (encryption) will
significantly increase the cost of STB's through software and
subscriber
management costs. In addition, the technical complexity
added by the inclusion of encryption technology in STB's will result
in
higher maintenance and repair costs and a higher risk of needing
to replace STB's.
[67]
It is clear that ACT - SA opposes the application. I
consider it unnecessary to dwell any further on the contents of the
“explanatory
affidavit”.
[68]
It is proper to record that the application is supported
by the eighth respondent, in turn supported by the fourteenth and
fifteenth
respondents. These three respondents also filed a joint
answering affidavit.
[69]
I mentioned at the outset, that the eighth respondent,
the National Association of Manufacturers of Electronic Components or
“NAMEC”,
is the same organisation as the sixteenth
respondent, which opposes the application and with whose submissions
I have dealt. I
mentioned at the outset that the eighth and the
sixteenth respondents are respectively represented by what can be
described as
opposing factions or groupings of NAMEC. The eighth
respondent grouping supports the application, and the sixteenth
respondent
grouping opposes the application. The one grouping
maintains that the other grouping does not have the necessary
standing or authority
to represent NAMEC. This leads to the somewhat
unusual result that it can be said that NAMEC both supports and
opposes the application.
[70]
The fourteenth respondent, SOS Support Public
Broadcasting Coalition (“SOS”) is a civil society
coalition that comprises
a broad range of non-governmental
organisations and individuals, including the fifteenth respondent,
Media Monitoring Africa (“MMA”).
SOS and MMA campaign for
open, competitive and high quality public broadcasting that is in the
public interest. They are clearly
not broadcasters themselves. It
is useful to note that all three these organisations have previously
expressed their views
regarding the various iterations of the BDM
policy and have previously made submissions to the Minister's
predecessors in this
regard.
[71]
The main thrust of the argument of
these organisations, represented by Mr
Chaskalson
SC and Mr Kelly, if I understand it correctly, was that
the Minister's enactment of the BDM policy was unlawful by virtue of
her
failure to comply with the provisions of section 3(5) of the ECA
that obliged her to publish the BDM policy in a draft form for
comment by the Independent Communications Authority of South Africa
(“ICASA”), the third respondent and Universal Service
and
Access Agency of South Africa (“USAASA”), the fourth
respondent, and interested parties such as these three organisations.
Counsel argued that the Minister's suggestion that the prior notice
and comment procedure of one of her predecessors, Minister
Carrim,
discharged this obligation, is incorrect.
[72]
As I have mentioned, a version of the BDM policy was
first enacted in 2008 by the then Minister. The last amendments to it
were
enacted by Minister Pule in 2012. On 6 December 2013, Minister
Carrim published proposed amendments to the BDM policy for public
comment. One of these was that subsidised and non-subsidised STB's
would have to include an “STB control system” that
would
have the capability to “decrypt” encrypted broadcast
signals. See my later remarks on this point. It was also
proposed
that broadcasters could elect whether or not to utilise the STB
control system, as its use would be non-mandatory. The
costs
associated with STB control technology would be covered by
government, and would be recovered from broadcasters that elected
to
utilise the STB control system.
SOS
made submissions in support of the amendments proposed by Minister
Carrim. It also issued a press statement after the proposed
amendments were published, noting,
inter a/ia,
that “STB's
would have the capacity to have a control mechanism through encrypted
television signals, but this potential would
only be implemented if
broadcasters wish to do so”. Of course, we know that the only
broadcaster interested in broadcasting
encrypted signals in the FTA
DTT environment, is e.tv, which approach is at odds with the attitude
of the remaining broadcasters
and, for that matter, the world-wide
trend in this regard.
[73]
It is also useful to note that Minister Carrim did not
enact any of the proposed amendments. He was replaced by the current
Minister
Muthambi after the 2014 general elections.
[74]
Counsel for these three respondents indicated that their
heads of argument were confined “to the lawfulness of the
process
followed by the Minister in enacting the BDM policy, and the
significant public interest issues that arise from the clauses that
are the focus of e.tv's challenge”. I have pointed out that the
one leg of the e.tv challenge bas all but fallen away, namely
the
challenge aimed at 5.l.2(A). The reasons I have dealt with.
[75]
As to the first leg of the argument of counsel, it
involves the subject of procedural fairness. Indeed, it is argued
that the process
followed by the Minister in enacting this amended
BDM policy was procedurally unauthorised and procedurally unfair.
[76]
The argument that it was “procedurally
unauthorised” is based on submissions that the Minister, in
enacting these provisions,
failed to comply with the requirements of
section 3 of the ECA. It was argued that, in terms of this section,
the Minister was
obliged, not only to consult with ICASA and USAASA,
but also to obtain the views of “interested persons”
through the
publication of the BDM policy in the
Government
Gazette.
It was argued that the Minister did
not publish the BDM policy for public comment with the result that
parties such as e.tv and
these three respondents did not have the
opportunity to comment on the BDM policy. It was also pointed out
that there is no evidence
before the court that the Minister
consulted with!CASA and USAASA.
[77]
It was also argued that there is no evidence as to the
identity of the stakeholders the Minister claims to have consulted
regarding
the BDM policy.
[78]
At this point in the judgment, it seems to me to be
appropriate and convenient to turn to the subject of procedural
fairness, which
is one of the central issues when it comes to a
review attack of this nature. I will do so under a few subheadings.
(i)
Are the impugned amendments
(or
the remaining one) reviewable
under PAJA, or the principle of legality or not at all?
[79]
Mr Budlender, who appeared for the applicant with Mr
Berger and Mr Tshetlo, argued that the amendments are reviewable both
under
PAJA and in terms of the principle of legality. These counsel,
however, did not focus their submissions on a “PAJA review”
but only on a “legality review”.
Mr
Maenetje SC who, with Mr Tsatsawane, appeared for the Minister,
conceded that the amendments were reviewable under the principle
of
legality. The same goes for Mr Unterhalter SC, who, with Ms Norton,
appeared for M-Net, Mr Chaskalson SC, who, as I have said,
appeared
with Mr Marriott and Mr Kelly for the eighth, fourteenth and
fifteenth respondents and Mr Solomon SC, who appeared, with
Mr Gumbi,
for the sixteenth respondent.
Mr
Bhana SC who, with Mr Ramaepadi and Mr Friedman, appeared for the
SABC, argued that the amendments are not reviewable at all
at this
time.
[80]
As far as a PAJA review is concerned, I find myself in
respectful agreement with Mr Unterhalter's submission that the
Minister has
decided that, as a matter of national policy, the
government-subsidised STB's will have a control system which does not
include
encryption capability. This decision falls within the
Minister's powers under section 3(1) of the ECA and section 85(2)(b)
of the
Constitution. So much for the submission.
The
relevant portion of section 85 of the Constitution reads as follows:
“
85. Executive authority of the Republic. –
(1)
The executive authority of the Republic is vested in the
President.
(2)
The President exercises the executive authority,
together with the other members of the Cabinet, by –
(a)
implementing national legislation except where the
Constitution or an Act of Parliament provides otherwise;
(b)
developing and implementing national policy:
(c) …
(d)
preparing and initiating legislation;
(e)
performing any other executive function provided for
in the Constitution or in National legislation.” (Emphasis
added.)
The
relevant portions of section 3(1) of the ECA read as follows:
“
3.
Ministerial policies
and policy directions.
(1)
The Minister may make policies
on matters of national policy applicable to the JCT sector,
consistent with the objects of this Act
and of the related
legislation in relation to -
(a)
the radio frequency spectrum;
(b)
universal service and access
policy;
(c)
the Republic's obligations and
undertakings under bilateral, multilateral or international treatise
and conventions, including technical
standards and frequency matters;
(d)
the application
of new technologies pertaining to electronic
communications services,
broadcasting services and
electronic communications network services
;
(e)
…
(f)
the promotion of universal
service and electronic communications services in under-serviced
areas;
(g)
…
(h)
…
(i)
any other policy which may be
necessary for the application of this Act or the related
legislation
.” (Emphasis added.)
The
relevant portion of the definition of “administrative action”
in terms of section 1 of PAJA, reads as follows:
“
'Administrative action'
means
any decision taken, or any failure to take a decision, by -
(a)
an organ of state, when –
(i)
exercising a power in terms of the Constitution o a
provincial constitution; or
(ii)
exercising a public power or performing a public
function in terms of any legislation; or
(b)
a natural or juristic person ...
which adversely affects the rights of any person and
which has a direct, external legal effect, but does not include -
(aa)the executive powers or functions of the National
Executive, including the powers or functions referred to in sections
79(1)
and (4), 84(2)(a), (b), (c), (d), (f), (g), (h), (i) and (k),
85(2)(b), (c), (
d
) and
(e), ... of the Constitution.” (Emphasis added.)
From
the aforementioned, it is clear that the Minister was exercising her
powers in her official capacity as a member of the executive
authority of the Republic when making policy within the ambit of the
provisions of section 3(1) of the ECA and, as such, her actions
fall
outside the ambit of “administrative action'' as defined in
PAJA.
For
these reasons, I have come to the conclusion that this is not a PAJA
review, neither was it argued that it was, except that
Mr Budlender
submitted that the review could resort under PAJA, but he did not
press the point before me. For present purposes,
and given the
urgency of the matter, I accept that the review does not resort under
PAJA.
[81]
Mr Shana and his team, in their argument that the
amendments are not reviewable at all, recognised the constitutional
exclusion,
in section 85(2)(b), of executive powers or functions of
the National Executive from “administrative action” as
defined
in PAJA. Nevertheless, they argue that “for present
purposes, the relevant aspect of the definition is 'which adversely
affects
the rights of any person and which has a direct, external
legal effect'“.
Counsel
then proceed to deal, by referring to case-law, with the proper
meaning of the term “direct, external, legal effect”.
For
example, counsel referred to
Grey's Marine Hout Bay (Pty) Ltd and
others v Minister of Public Works and others
[2005] ZASCA 43
;
2005 6 SA 313
(SCA).
This, as I understand it, was a PAJA review. It involved a decision
by the Minister to lease a portion of a property to
the third
respondent. It was held that the Minister's decision was made
in the exercise of a public power confirmed by legislation
in the
ordinary course of administering the property of the state with
immediate and direct legal consequences (at least for the
third
respondent), and that it constituted administrative action - at
325C-E. This does not appear to be the type of executive
function
foreshadowed in section 85 of the Constitution, such as “developing
and implementing national policy” which,
as I have pointed out,
is excluded from the definition of administrative action.
This
conclusion, it appears to me, is fortified by what the learned Judge
of Appeal said in
Grey's Marine
at 323F-324B:
“
[24] Whether particular conduct constitutes
administrative action depends primarily on the nature of the power
that is being exercised
rather than upon the identity of the person
who does so. Features of administrative action (conduct of 'an
administrative nature')
that have emerged from the construction that
has been placed on section 33 of the Constitution . are that it does
not extend to
the exercise of legislative powers by deliberative
elected legislative bodies, nor to the ordinary exercise of judicial
powers,
nor to the formulation of policy or
the initiation of legislation by the executive
,
nor to the exercise of original powers conferred upon the President
as head of State. Administrative action is rather, in general
terms,
the conduct of the bureaucracy (whoever the bureaucratic functionary
might be) in carrying out the daily functions of the
State, which
necessarily involves the application of policy, usually after its
translation into law, with direct and immediate
consequences for
individuals or groups of individuals.”
(Emphasis added.)
[82]
Counsel for the SABC nevertheless persist, for purposes
of their argument, to enquire into whether the Minister's conduct in
enacting
the amendments has a direct, external, legal effect, an
approach which, in my view, is more appropriate in the case of a PAJA
review,
where one has to determine whether or not certain conduct
amounts to administrative action as intended by the PAJA section 1
definition.
In
the course of their enquiry as to whether or not the BDM policy has a
direct, external legal effect, counsel submitted that it
was
necessary “to consider what the courts have said about the
making of policy”. They referred me to
Akani Garden Route
(Pty) Ltd v Pinnacle Point Casino (Pty) Ltd
2001 4 SA 501
(SCA).
This case involves an application to review the decision by the
Western Cape Gambling and Racing Board to refuse an application
for a
gambling licence. There is no reference to PAJA which only came into
effect a few months before this case was decided. There
is also no
reference to a so-called legality review. The case involves the
constitutional imperative of the separation of powers
between the
Executive and the Legislature, in this case at provincial level. It
was held that the executive (or provincial cabinet)
had issued a
so-called policy determination which amended, diluted or led to the
undoing of a legislative act by the Board. It
was held,
therefore, that by an executive act, a legislative act had been
amended, diluted or undone. This had been beyond the
power of the
cabinet -at 510F-H.
[83]
Counsel for the SABC point out that in explaining this
approach, the learned Judge of Appeal said the following in
Akani
at 509B-F:
“
The word 'policy' is inherently vague and may
bear different meanings. It appears to me to serve little purpose to
quote dictionaries
defining the word. To draw the distinction between
what is policy and what is not with reference to specificity is, in
my view,
not always very helpful or necessarily correct. For example,
a decision that children below the age of 6 are ineligible for
admission
to a school can fairly be called a 'policy' and merely
because the age is fixed does not make it less of a policy than a
decision
that young children are ineligible, even though the word
'young' has a measure of elasticity in it. Any course or program of
action
adopted by a government may consist of general or specific
provisions. Because of this I do not consider it prudent to define
the
word either in general or in the context of the Act. I prefer to
begin by stating the obvious, namely that laws, regulations and
rules
are legislative instruments, whereas policy determinations are not.
As a matter of sound government, in order to bind the
public, policy
should normally be reflected in such instruments. Policy
determinations cannot override, amend or be in conflict
with laws
(including subordinate legislation). Otherwise the separation between
Legislature and Executive will disappear.”
[84]
In developing their rather complicated argument (namely
that the impugned amendments are not reviewable) counsel for the SABC
also
referred me to the case of
The Minister
of Education v Harris
2001 4 SA 1297
(CC). As
far as I can make out, this has nothing to do with a PAJA review or
the question of administrative action as intended
by the PAJA
definition. The case was decided a few months after
Akani.
It also has to do with the separation of
powers between the executive and the legislature. Broadly speaking,
the Minister of Education
is empowerd by
section 3(4)(i)
of the
National Education Policy Act 27 of 1996
to determine national policy
for “the determination of the age of admission to schools”.
It was held that the
Minister was not empowered by the Act to
require provinces to adopt national policy to amend provincial
legislation in conformity
with national policy.
Counsel
urged me to bear in mind that the Constitutional Court, at 1304B-E,
emphasised the distinction between the determination
of guiding
policy, on the one hand, and its translation into legally binding
enactments, on the other.
[85]
It is with all this in mind, that counsel argue that the
impugned amendments are not reviewable under PAJA. I have already
come
to the same conclusion by simply referring to the exclusion of
the Minister's executive action in making the policy in terms of
section 3(1) of the ECA, from the PAJA definition of administrative
action.
Nevertheless,
the main thrust of counsel's argument appears to be this: in terms of
section 3(4) of the ECA, ICASA, in exercising
its powers and
performing its duties in terms of the ECA and the related
legislation, must consider policies made by the Minister
in terms of
section 3(1) and policy directions issued by the Minister in terms of
section 3(2).
Counsel
submit that the making of policies in terms of section 3(1) of the
ECA does not adversely affect the rights of the public
and does not
have a direct external, legal effect. They argue -
“
A policy does not take the form of a legislative
instrument. !CASA may choose to follow some of what is in the policy,
but not other
parts. At the time when a policy is made, therefore, it
cannot be said that it impacts directly and immediately on members of
the
public. Only if ICASA decides to make regulations in
respect of the subject-matter of the policy will there be any direct
impact on the public or any party.”
Counsel
for the SABC argue that in this case, e.tv has presented no facts to
suggest that the policy has a direct external legal
effect.
[86]
It is on this basis, essentially, as I have formulated
the argument on behalf of the SABC, that only if ICASA decides to
make regulations
in respect of the subject-matter of the policy will
there be any direct impact on the public or any party. Consequently,
at least
at this stage where no regulations have been promulgated,
the conduct of the Minister falls outside the ambit of the PAJA
definition
of administrative action, so that the impugned amendments
do not fall to be reviewed in terms of PAJA.
[87]
Where I have already found that this is not a PAJA
review because of the exclusion, in terms of section 85(2)(b) of the
Constitution
in particular, from the PAJA definition of
administrative action, the impugned amendments are not reviewable
under PAJA, it is
not necessary, at this point, to decide the
argument advanced on behalf of the SABC. I will revert to this
argument when dealing
with the question whether or not· the
amendments are reviewable in terms of the principle of legality. I
now tum to that
subject, but before doing so, and in conclusion on
this particular point, it is useful to take notice of what the
learned author
Cora Hoexter,
Administrative
Law in South Africa,
2nd edition, has to say
about executive powers and functions at pp235-237, and her remark
that the section 85(2) powers (with the
exception of those listed in
section 85(2)(a)) resort under executive powers and functions.
[88]
When considering whether the exercise of executive
powers is reviewable on the principle of legality, it is useful, in
my view,
to record at the outset that there is no requirement that
the action under attack must “adversely affect the rights of
any
person” and “have a direct, external legal effect”,
which requirement forms the basis of counsel's argument that
a PAJA
review is not applicable.
[89]
It is also useful to quote the words of
Hoexter,
op cit
at p122:
“
But legality also has a wider meaning that goes
beyond
administrative
action, and this is probably the more common usage of the term today.
Here it refers to a broad
constitutional
principle of legality that governs the use of
all
public power
rather than the narrower realm of administrative action. This
principle of legality (or 'legality and rationality')
is an aspect of
the rule of law, a concept implicit in the interim Constitution and a
founding value of our constitutional order
in terms of section 1(c)
of the 1996 Constitution. The fundamental idea it expresses is that
'the exercise of public power is only
legitimate where lawful'. Its
detailed content has to be worked out from the Constitution as a
whole, and this is a continuing
process that the Constitutional Court
embarked on in a series of cases involving non-administrative
action.”
For the
sake of brevity J refrain from quoting the authorities listed by the
learned author in the footnotes.
[90]
It seems that the legality principle has been extended
by the courts to include the requirement of procedural fairness, the
subject
which I am now attempting to decide.
[91]
It appears that procedural fairness can be considered as
part of the rationality element of the legality enquiry, or even as
part
of the lawfulness requirement or, even as a requirement on its
own.
Hoexter,
p123,
puts it as follows:
“
More recently, in
A/butt v
Centrefor the Study of Violence and Reconciliation
(my
note: the reference is
2010 3 SA 293
(CC)), the Constitutional Court
further expanded the principle of legality by treating procedural
fairness as a requirement of
rationality.
In
this important case, which concerned a special dispensation for
pardoning politically motivated offenders, the court held that
it
would be irrational for the President to exercise his pardoning power
without first hearing the victims of the offences. It
is worth
pointing out that it is also possible for aspects of procedural
fairness to be brought in via the requirement of lawfulness,
as was
done for instance in
Competition Commission of
SA v
Telkom SA Ltd,
(my
note
: the reference is [2010)
2 All SA 433
(SCA)) or indeed for procedural fairness to be acknowledged as a
requirement in its own right. Natural justice is, after all, an
accepted part of the rule of law.”
[92]
In arguing that the impugned amendments are also not
reviewable in terms of the principle of legality, and while
recognising that
the notion of “direct, external legal effect”
is not encompassed in the doctrine of legality, counsel for the SABC
submit that “our courts have long accepted that the issue of
ripeness is applicable to judicial reviews of all varieties”.
Counsel
point out that the SCA (in
Chairman, State Tender Board v Digital
Voice Processing (Pty) Ltd
2012 2 SA 16
(SCA) at paragraph (17])
has approved the following characterisation of the test given by the
author
Baxter:
“
The appropriate criterion by which the ripeness
of the action in question is to be measured is whether prejudice has
already resulted
or is
inevitable,
irrespective
of whether the action is complete or not.” (The emphasis is
that of counsel.)
They
emphasise that the constitutional court has also recognised the
importance of ripeness when it comes to the appropriateness
of the
court hearing a constitutional matter
(National Coalition for Gay
and Lesbian Equality and others v Minister of Home Affairs and others
2000 2 SA 1
(CC) at paragraph [21]). Any review in terms of the
doctrine of legality, counsel correctly point out, is a
constitutional matter.
[93]
Counsel then submit that, for the same reasons as
advanced in respect of PAJA, a review in terms of the doctrine of
legality is
not now ripe for determination. “The considerations
leading to the conclusion that the impugned amendments have no
direct,
external, legal effect, also demonstrate that the impugned
amendments are not ripe for review under the doctrine of legality”,
so they argue.
Counsel
point out that it appears from the papers that the Minister indicated
in her answering affidavit that she intends to issue
an instruction
not to use encryption to the manufacturers of STB's, taking part in
the tender which has been set in motion. Counsel
also repeat the
earlier argument that ICASA has not yet made regulations and that
there is “no reasonable expectation”
that it will do so
before the STB manufacturing process commences.
The
closing argument of counsel on this point is then crafted as follows:
“
If the Minister issues any instruction to Set-top
box manufacturers in due course, then it will be necessary to decide,
at that
stage, whether her instruction amounts to administrative
action. If it does not, then it will no doubt be reviewable under the
doctrine of legality because, at that stage (and not now), prejudice
to e.tv's interests will have arisen or be inevitable. Since
it is
unclear now what the instruction, if any, will be, that stage cannot
yet be said to have arisen.”
[94]
I have the following difficulties with this argument:
(1)
As pointed out, the requirement
of “direct, external, legal effect”, is not a
pre-requisite for a legality review. This
much is conceded by
counsel. Yet, counsel appear to persist with its reliance on the
alleged importance of this notion when they
seem to marry it to the
issue of ripeness in this particular case. I repeat what they said in
their heads of argument:
“
The considerations leading to the conclusion that
the impugned amendments have no direct, external, legal effect, also
demonstrate
that the impugned amendments are not ripe for review
under the doctrine of legality.”
(2)
In any event, on
Baxter'
s
criterion by which the ripeness of the
action in question is to be measured, I am of the view that at least
on e.tv's version which
still has to be tested, prejudice has already
resulted or is inevitable: the Minister has, in mandatory terms,
published an amendment
to the policy to the effect that government
subsidised STB's shall not have an encryption facility, and it is
common cause that
a tender process is under way. Cabinet has
approved this policy. The BDM process must also get under way as a
matter of urgency,
and is something that affects the whole country,
for the reasons mentioned. Against this background, I consider the
argument by
counsel that e.tv must wait until the Minister issues an
instruction to STB manufacturers before e.tv can launch a review
application,
to be artificial and unconvincing in these particular
circumstances.
(3)
As far as the ICASA regulations
are concerned, this is governed by the provisions of section 4 of the
ECA. As I read this section,
it provides that 1CASA
may
make regulations “with regard to any matter which
in terms of this Act or the related legislation must or may be
prescribed,
governed or determined by regulation”. I find no
provision that ICASA
m
ust
make regulations (emphasis added). This is also in line with
submissions made by counsel for the SABC and, in later supplementary
heads of argument, by counsel for M-Net. It must follow that ICASA
may elect never to make regulations on this subject of government
subsidised STB's. On counsel's argument, which I am revisiting, that
“only if ICASA decides to make regulations in respect
of the
subject-matter of the policy will there be any direct impact on the
public or any party”, it means that there may
never be the
required “direct, external, legal effect” opening the
door for a review challenge. This approach appears
to me to be
unsustainable: I cannot see how it can be understood that the
Minister and cabinet can be held to ransom as it were
by an
indecisive communications authority when a matter of national
importance, such as the production of government subsidised
STB's,
has to be attended to urgently.
I understood all counsel before me to subscribe to the
view that the Minister was acting in terms of section 3(1) of the ECA
which
empowers her to “make policies on matters of national
policy applicable to the JCT sector ...” The JCT sector stands
for Information, Communications and Technology sector. I add
immediately that this does not mean that she was “issuing”
a policy because she was, in real terms, only “amending”
the existing policy. I will revert to this point at a later
stage.
Nevertheless, it appears to be common cause between all the parties
that she was acting in terms of section 3(1) and that
she was
empowered to do so. See my later remarks about “make”,
“issue” and “amend”.
Moreover, section 3(4) of the ECA only provides
that!CASA and USAASA, as the case may be, in exercising their powers
and performing
their duties in terms of the Act and the related
legislation (of course, in terms of the Act, ICASA has the power to,
if it so
chooses, issue regulations) must consider policies made by
the Minister in terms of section 3(1) and policy directions issued by
her in terms of section 3(2). I do not read this to mean that either
ICASA or USAASA are empowered to shoot down in flames a policy
made
(or amended) by the Minister, with the approval of cabinet, with
regard to the make up of government subsidised STB's.
I add that in terms of the Independent Communications
Authority of South Africa Act no I3 of 2000 (“the ICASA Act”),
and more particularly section 4 thereof it is also provided that
!CASA
may
make regulations on any matter consistent with the
objects of this Act and the underlying statutes or that are
incidental or necessary
for the performance of the functions of the
Authority (emphasis added)- see section 4(3)0).
(4)
I also have difficulty in
determining the relevance of counsel's apparent reliance on the issue
of the Separation of Powers (as
in
Akani
and
Harris).
I do not see
this as a case of an executive act amending, diluting or undoing a
legislative act. The executive member, herself,
initiated the
legislation. It appears to be common cause that the Minister acted in
terms of section 3 of the ECA. Both the Minister
and JCASA exercise
their powers in terms of the same legislation (with the latter also
operating in terms of the ICASA Act, as
I have mentioned).
Moreover, I have difficulty with the argument that the
enacted amendments are not binding. I revisit the words of the
learned Judge
of Appeal in
Akani:
“
I prefer to begin by stating the obvious, namely
that laws, regulations and rules are legislative instruments, whereas
policy determinations
are not. As a matter of sound government, in
oder to bind the public, policy should normally be reflected in such
instruments.”
It seems to me, where this policy was made (or amended)
in terms of section 3(1) of the ECA, a step falling within the powers
of
the Minister, and duly promulgated and published, the amendments
have become “legislative instruments”, and are not
mere
“policy determinations”. As such, they seem to me to
“bind the public”.
(This, of course, is subject to the question as to
whether or not the requirement of procedural fairness has been met.)
Unfortunately, the terms “policy
determination” or “policy direction” or “policy”
are not defined in the ECA.
(5)
e.tv Based its case on the three
pillars on which a legality review is to be conducted: lawfulness,
rationality and procedural
fairness, as previously
pointed out. In my view this opens the door, for all the reasons
mentioned, for a legality review
to be launched under these
particular circumstances. Put differently, the impugned amendments
(or the remaining one) is reviewable
in terms of the principle of
legality.
[95]
I now revert to the main issue of procedural fairness
before turning to the subjects of lawfulness and rationality.
(ii)
Was e.tv consulted before the amendments were
enacted?
[96]
In the founding affidavit, the fourth (and last) review
ground offered by e.tv is that “the impugned amendments were
made
pursuant to a process that was not procedurally fair”.
[97]
It is submitted by e.tv that the proposed amendments to
the BDM policy, in respect of which comments were invited by former
Minister
Carrim in December 2013, were not adopted. Instead, so it is
argued, and without embarking on any further public consultation
process,
the present Minister published . the BDM policy with
amendments that are “so different from what was proposed over
fifteen
months ago (ie in December 2013) that a further public
consultation process was required”. It is argued that the
making of
such a policy must take place in a manner that is
procedurally fair and allows for public comments to be made and taken
into account.
In
this
regard,
e.tv relies on the provisions of section 4 of PAJA (which I have
found not to apply) and section 3(5)(b) of the ECA and
“the
principle of procedural rationality that applies to the exercise of
all public power”.
[98]
I will return hereunder to a more detailed discussion of
the provisions of section 3 of the ECA.
[99]
The main thrust of e.tv's complaint appears to be that
what the present Minister published, was so “markedly
different”
from that which Minister Carrim published for public
comments, that a further process of public consultation ought to have
been
launched before the Minister enacted the impugned amendments.
[100]
I turn to “the process under Minister Carrim”
as it is referred to by e.tv.
In
the first place, of course, Minister Carrim's proposals were never
enacted because he was replaced by the present Minister, as
I have
pointed out. The process under Minister Carrim is therefore different
from what happened in the 2008 published policy providing
that STB's
would have “capabilities to unscramble the encrypted broadcast
signal so that only fully compliant STB's made
or authorised for use
in South Africa can work on a network”, and the published
amendments of 2012 in terms of which encryption
capabilities were
expressly excluded and it was only provided that STB's will “have
a robust STB control system that will
also benefit the consumers by
ensuring that they do not have to own multiple boxes for both current
and future free-to-air broadcasting
services”. It is therefore
not clear what the status of the “Carrim proposals” are,
given the fact that they
were never enacted.
The
proposed amendments of Minister Carrim, which is hailed by e.tv as
“internally consistent and co-herent policy”
represented,
according to e.tv, “the compromise sought by requiring STB's to
be able to allow for the encryption of broadcast
signals, but leaving
broadcasters free to decide whether to encrypt their signals and make
use of the STB control system contemplated
by the unamended BDM
policy”. Of course, the Minister's proposed amendment 5.1.2(C),
which is not under attack in the review
application, contains a
similar provision namely “depending on the kind of broadcasting
services broadcasters may want to
provide to their customers,
individual broadcasters may at their own cost make decisions
regarding encryption of content”.
In
the record, I cannot find a basis for e.tv suggesting that Minister
Carrim's proposed amendments “was the compromise sought
by
requiring STB's to be able to allow for the encryption of broadcast
s
ignals, but leaving broadcasters free ...” (emphasis
added): the actual proposed amendments of Minister Carrim, of 6
December
2013, appearing in
Government Notice
no 37120,
contain the following statements (I do not quote the actual paragraph
numbers for the sake of brevity):
·
“
To
avoid challenges in implementing the Digital Migration program,
caused mainly by differences between broadcasters and also between
some manufacturers, the use of a control system is not mandatory.
However, the STB's will have a control system to protect government's
investment in the subsidised SIB market and the local electronics
industry and, with rapid technological changes, for future use
by
broadcasters who might not want to use it on implementation.”
(This appears to me to be very much in line with what
the present Minister enacted.)
·
“
In
order for households to continue to receive television services on
their current analogue TV sets after the analogue signal is
switched
off, Set-Top-Boxes (STB's) which convert the digital signals into
analogue signals, are required.” (Nothing to do
with
encryption.)
·
“
To
avoid subscription broadcasters unfairly benefiting from the STB
control system, government's investment in the STB control system
will be recovered from those subscription broadcasters that choose to
make use of the SIB control system.”
(This appears to be aimed at the subscription
broadcasters and not at FTA broadcasters.)
·
“
Have
a robust STB control system that –
(a)
is not mandatory for use by
broadcasters in the transmission and management of their broadcasting
services;
(b)
can be used to ensure that
consumers do not have to own multiple boxes for both current and
future broadcasting services; and
(c)
can provide long term benefits
to the broadcasting industry as a whole.”
·
“
Enable
access to a secure bootloader mechanism to ensure access to the STB
control system by broadcasters on the DTT platform that
choose to
make use of the STB control system.”
(As I understand the position, the “bootstrap
loader” is part of the STB control system proposed by the SABS,
already
mentioned, for subsidised STB's and has nothing to do with
encryption.)
The
Minister's amendment proposals, as published, appear to be based on
submissions by the South African and Communications Forum,
ostensibly
attached to the Department of Communications, dated December 2013.
Similarly, I could find nothing in those proposals,
neither was I
referred to anything specifically, that suggest that STB's should
contain encryption capabilities. I add that, in
its submission, this
Forum (“SACF”) points out that it represents six STB
manufacturers in its Industrial Development
Working Group, all of
which have significant black ownership and are certified at level 2
or 3 for BEE rating. SACF points out
that it has engaged vigorously
to ensure that emerging manufacturers who would like to participate
are not shut out of the government
order for subsidised STB's as well
as any commercial opportunities. I mention this, because it is clear
from, for example, the
argument advanced by the sixteenth respondent,
representing a number of influential black organisations, that the
black manufacturers
are united in their opposition to the idea of
introducing an encryption facility to the STB's. Against this
background, it is unlikely
that the SACF would have supported the
introduction of such encryption capabilities for the subsidised
STB's.
In
the founding affidavit, e.tv relies on a statement issued by Minister
Carrim on 20 December 2013 in which, according to e.tv,
the Minister
“set out the basis upon which the STB control requirement was
to be retained and its use made non-mandatory”.
The statement
is attached to the founding papers. The Statement, dated 20 December
2013, goes under the heading “Digital
Television: on Set Top
Box Issues”. Much of what is stated in this document is a
repetition of what is contained in the published
proposed amendments
from which 1 have quoted. These are two extracts from the statement
which I consider to be of some significance
for present purposes:
·
“
We
have not made a decision about the
management
of a control system. Nor do we refer at all
to conditional access
or encryption
as methods of implementing STB control. We are saying
that broadcasters are
free
to
decide whether they want to use control or not. There is no
compulsion. So we cannot see how we are going against the court order
(
my note
: this is a
reference to the so-called 'e.tv judgment' to which 1 will later
refer). Furthermore, we have proposed generic control,
which refers
to any system which can be used to control the functions of a STB. We
are not proposing a particular or specific system.”
(Emphasis
added.)
·
Under
a subheading “SABC-MultiChoice agreement”, the following
is said:
“
The
SABC does not want to use a control system. So the agreement with
MultiChoice will not be affected. Our advice is that the commercial
agreement only deals with the
encrvption
of
SABC · channels and not with whether the STB's that are used
for viewing SABC
services have a control
system or n
ot. So the SABC is free not to use
the control system in the transmission and management of its
channels, and its agreement with
Multi Choice will not be affected.”
(Emphasis added.)
It
is clear from my earlier discussion on the SABC's submissions, that
the latter is directly opposed to the introduction of an
encryption
facility for the STB's subsidised by the government.
Against
this background, I see nothing in Minister Carrim's 20 December 2013
statement (ostensibly relied upon by e.tv) which could
have brought
e.tv or any of the other role players under the impression that
government subsidised STB's were to be provided with
an encryption
capability.
Finally,
and what may have been Minister Carrim's last throw of the dice on
this particular subject, one finds, attached to the
founding papers,
a presentation by the Communications Department, dated 18 February
2014, on the “Broadcast Digital Migration
Amendments Gazetted
on 6 December 2014”. This is quite a lengthy document, but I
find nothing in this presentation which
would suggest the provision
of encryption capabilities for government subsidised STB's. The
presentation is one to the Portfolio
Committee on Communications. The
following statements in this presentation appear to me to be
significant for present purposes:
·
The
Portfolio Committee was reminded that the 2008 BDM policy stated that
the STB's would have a control system to:
“
(i) protect government's investment in subsidised
STB's;
(ii) protect consumers from low quality non-confonnant
STB's;
(iii)
unscramble encrypted s
ignals;
(iv) stimulate local electronic manufacturing industry;
(v) prevent the STB's from being used outside South
Africa and to disable stolen STB's;
(vi) allow for mass and 1111ique messaging,
inter-activity with government.” (Emphasis added.)
The presentation then goes on to state:
“
In 2012, an amendment to the BDM policy was
gazetted to soften the use of the STB control system. For example,
encryption was dropped
but
STB control maintained to ensure that STB's conform to SABS (South
African Bureau of Standards) standards.” (Emphasis
added.)
·
Nowhere
in this presentation (which was launched under the watch of Minister
Carrim) do I find any indication to the effect that
“encryption
was re-introduced” or something similar. The last mention of
encryption, as far as I can see, was the announcement
that
“encryption was dropped”. This is also in line with what
Minister Carrim said in his 20 December 2013 statement
that
“
We have not made a decision about the
management
of a control system. Nor do we refer at all
to conditional access or encryption as methods of implementing STB
control ...”
[101]
Against this background, I have difficulty in finding
such a “marked difference” between Minister Carrim's
proposals
and what is contained in the impugned amendments that it
necessitated a further public participation process before the
impugned
amendments could be enacted. This conclusion is perhaps
fortified by the fact that a number of role players made submissions
to
the Minister, mainly in January 2014, following the proposals of
Minister Carrim. For example, in their lengthy submission
dated
5 January 2014, e.tv,
inter alia,
makes
the following statement:
“
The SABC went on to say that 'the SABC, e.tv and
other free-to-air broadcasters may independently and individually
decide how they
wish to manage their STB's'. This could perhaps have
been better put by substituting the words 'manage their STB's' with
the words
'manage their signal'. That is in fact the position that
the department has now arrived at - free-to-air broadcasters can now
decide
how they wish to manage their signal and whether that signal
will be encrypted. e.tv Can see no reason why those broadcasters
opposing
encryption, having been given the right to choose whether or
not to encrypt their signals, should continue to object to STB
control.”
At
the risk of repetition, I repeat what was said in the impugned
amendment 5.l.2(C), which is not subject to the review attack,
that
individual broadcasters may at their own cost make decisions
regarding encryption of content.
In
their submission, e.tv also says the following:
“
For the record, e.tv states that it will be
making use of the STB Control system to encrypt its DTT channels
irrespective of whether
other free-to-air channels choose to do so.”
This
is fighting talk. The only difficulty I have with this statement is
that e.tv, for the reasons mentioned earlier, now appears
to insist
on the government funding the encryption facility for the sake of
e.tv's own business plans and financial well-being.
For a court to
support such a stance, in the face of the National Executive's
decision about the ordering of public resources,
and not paying for
an encryption facility for subsidised STB's, would, of course, be at
odds with what was said by the Constitutional
Court in
National
Treasury, supra,
as illustrated in the passages already quoted.
Some
of the other role players who made written submissions to the
Minister, mainly in January 2014, include: the SABC, M-Net, ACT-SA
(seventh respondent), NAMEC (this appears to be the NAMEC faction
constituting the sixteenth respondent, which opposes the idea
of
encryption), SACF, already referred to, SENTECH, Cell C, Telkom,
Tellumat and SOS.
The
question of encryption was dealt with in a number of these
submissions, in addition to, of course, those made by e.tv. As can
be
seen from the list of these role players, it includes a number of the
respondents now before the court who oppose the idea of
encryption
for FTA broadcasters in the DTT environment.
[102]
I mention this because of e.tv's complaint that it was
not fully consulted and given the opportunity to make further
submissions
before the impugned amendments were enacted. This is the
basis of the fourth review ground, namely that the process preceding
the
amendments was not procedurally fair. In her opposing affidavit,
the Minister deals with the subject as follows:
“
3.3.5 In its January 2014 written submissions to
the Minister, the applicant made submissions relating to the
mandatory or non-mandatory
use of the control system on STB's. In
paragraphs 3.3 to 3.11 thereof, the applicant again made extensive
submissions relating
to the encryption of its broadcast signals.
13.36 In paragraphs 3.3 to 3.11 of its written
submissions, the applicant made the same grounds in support of
encryption as are
contained in its . present founding affidavit. In
the premises, J respectfully submit that there was no obligation upon
the Minister
to again consult with the applicant on issues in respect
of which the applicant had already made extensive written
submissions.
The suggestion that the Minister ought to have again
consulted with the applicant in respect of such issues is
unsustainable.”
It
is correct that the submissions by e.tv on encryption in those
paragraphs mentioned by the Minister are, indeed, extensive, and
largely correspond with the submissions in the founding affidavit,
made in support of the benefits of encryption. Of course, those
submissions are comprehensively criticised by,
inter a/ia,
M-Net
and the SABC, as J have explained.
[103]
At this point, it is convenient to record that it was
common cause before me that, where the applicant seeks final relief
on affidavit,
the well-known “rule in
Plascon
Evans”
applies. This, of course, is a
reference to
Plascon-Evans Paints v Van
Riebeeck Paints
I 984
3 SA 623
(AD) where the
following is said at 634E-1 with reference to,
inter
alia,
the following
dictum
from
Stellenbosch
Farmers' Winery Ltd v Stellenvale Winery (Pty) Ltd
1957
4 SA 234
(C) at 235E-G which is quoted with approval:
“
... where there is a dispute as to the facts a
final interdict should only be granted in notice of motion
proceedings if the facts
as stated by the respondents together with
the admitted facts in the applicant's affidavits justify such an
order ... Where it
is clear that facts, though not formally admitted,
cannot be denied, they must be regarded as admitted.”
The
Appellate Division, as it then was, also re-affirms that this rule
applies not only to interdicts but other forms of final relief
sought
on affidavit in motion proceedings. Consequently, it was common cause
before me that the case made out by the respondents
on the merits (or
lack thereof) of encryption in the FTA DTT environment is to be
accepted and the case presented by the applicant
rejected.
[104]
I return briefly to some further submissions made by the
Minister with regard to the fourth review ground, namely that based
on
alleged procedural unfairness. For the sake of brevity, I will
briefly summarise some of the submissions: as far as the encryption
amendment is concerned, provision for encryption capability was
removed from the policy as far back as February 2012. e.tv Did
not at
that stage approach the court to complain about the removal of the
encryption capability from the policy in 2012. What the
Minister did
in March 2015, was to clarify the government's position due to the
fact that extensive written submissions on encryption
had already
been made (as I described earlier). The Minister denies that
there was no proper consultation with e.tv on the
subject. The fact
that Minister Carrim may have intended to reach a compromise as far
as allowing STB's to have encryption capability
is concerned
(something which, as explained, I could not find support of in the
record). The Minister was not bound to agree with
FTA broadcasters
that government subsidised STB's will have encryption capability. The
government decided as far back as in 2012
that it will not finance
encryption capability on government subsidised STB's. The Minister
denies e.tv's submission that the present
amendments differ markedly
from the previous state of affairs. e.tv Did not raise anything new
in its founding affidavit that had
not been raised in the written
submissions of January 2014. The Minister submits that she is not in
law bound to accept each and
every proposal made to her by interested
parties. She was only in law required to consider the written
submissions made to her.
This she has done. It is not suggested in
the founding affidavit that the Minister did not consider and apply
her mind to the proposals
that were submitted in January 2014 by all
interested parties.
[105]
On this subject of consultation, it is useful to mention
that counsel for M-Net, Mr Unterhalter and Ms Norton, in
supplementary
heads of argument, and on the subject of procedural
fairness, referred me to some English cases namely that of
R
v Shropshire Health Authority and Secretary of State ex parte Duffus
cited with approval in
R
(Smith) v East Kent National Health Service Trust
[2002]
EWHC 2640
(Admin) where it was pointed out that a consultation
procedure will inevitably yield new proposals and there must be a
limit to
the repetition of consultation, among other things because
there will be parties with a legitimate expectation that a decision
will be taken. The following was said by the English courts:
“
A consultation procedure, if it is to be as full
and fair as it ought to be, takes considerable time and meanwhile the
underlying
facts and projections are changing all the time. It is not
just a question of an iterative process, which can speedily be run
through
a computer. Each consultation process if it produces any
changes has the potential to give rise to an expectation in others,
that
they will be consulted about any changes. If the courts are to
be too liberal in the use of their power of judicial review to compel
consultation on any change, there is a danger that the process will
prevent any change - either in the sense that the authority
will be
disinclined to make any change because of the repeated consultation
process which this might engender, or in the sense
that no decision
gets taken because consultation never comes to an end. One must not
forget there are those with legitimate expectations
that decisions
will be taken.”
In
my view, this approach is particularly compelling where it is a
matter of urgency for the digital migration process to get under
way
and to reach a conclusion. It is a matter of national importance.
Encryption has been on the table at least since the 2008
publication
of the policy. Many role players, including e.tv, have made
substantial submissions on the pros and cons. Indeed, e.tv,
at an
earlier stage, even made written submissions condemning encryption.
In this regard, it is useful to quote the following extract
from
M-Nct's answering affidavit:
“
37. In submissions to the Department of
Communications dated 17 March 2008 (the 2008 e.tv submissions annexed
as KW1) e.tv furnished
the following reasons for its opposition to a
control system with encryption (which it called a 'CA system'):
37.1
CA is a subscription television concept and is
'wholly unsuited to free-to-air television';
37.2
the inclusion of CA in the basic free-to-air STB
'raises critical constitutional, economic,
financial and competition issues'
and
'infringes on the right of viewers to freedom
of expression';
37.3
the inclusion of CA in the basic STB would add
'complexity and expense'
to
the entire digital migration process;
37.4
'the use of CA in a free-to-air environment is
Mghly unusual and untested in comparable jurisdictions ';
37.5
'it would
...
cause
unnecessary complications down· the line, especially when
integrated digital TV-sets are introduced into the market'
.
(As is evident from its founding affidavit, e.tv now
holds a position which directly contradicts the views it expressed in
2008.
It does not offer any meaningful explanation as to why its
position has changed.)”
Of
course, as I indicated earlier, Mr Budlender, correctly, reminded me
that anyone is entitled to change its mind.
In
its opposing affidavit, M-Net also, in later paragraphs, quote from
the e.tv 2008 submissions where it laments the extra costs
that will
arise from the implementation of CA in the basic free-to-air STB. For
the sake of brevity, 1 will not repeat the quotation
(paragraph 69 of
the M-Net affidavit) but will quote what is said in paragraph 70 by
M-Net:
“
At the time these submissions were made, e.tv
anticipated that these costs would impact adversely on the future of
its business:
'4.1.1.4
e.tv is deeply concerned that the addition of extensive operating
costs by the unnecessary inclusion of CA in the basic free-to-air
STE
will be passed to broadcasters. As a free-to-air broadcaster which is
entirely dependent on advertising revenue
and which has no
access to public or state fending e.tv is concerned at the
implications on the fature of its business of the unnecessary
inclusion of CA in the basicfree-to-air STB.'“
I
consider it unnecessary to deal with further extracts, presented by
M-Net, from e.tv's 2008 submissions.
[106]
In conclusion, e.tv has had a full bite at the cherry.
It should not be seen to complain about a lack of consultation. It
has made
full use of its ample opportunity to express its views. It
did so over a period of some seven years, covering both sides of the
coin.
Each
case must be considered on its own facts. In my view, the
“consultation requirement” such as it may be, has been
met in this particular case by the Minister and her predecessors.
(iii)
Was there compliance with the provisions of section 3(5) and other
subsections of
section 3 of the ECA?
[107]
Mr Chaskalson, for the eighth, fourteenth and fifteenth
respondents who support the application, presented argument on the
question
of procedural fairness.
[108]
Before turning to Mr Chaskalson's submissions with
regard to compliance with section 3(5) of the ECA, and other
subsections, I deal
with another aspect of his argument, which
overlaps with the section 3 argument. It is this:
“
... where an organ of state is obliged to publish
an instrument for public comment before promulgation, if it proposes
to make far-reaching
changes to the instrument following receipt of
those comments, it must be re-published for comment before
promulgation.”
In
this regard, counsel relies on the judgment in
Kouga Municipality
v Bellingan
2012 2 SA 95
(SCA) at 99F-I. This involved the
publication by a municipality of a proposed by-Jaw advertised in
2004, and another (amended)
by-law advertised in 2006. It was held
that the later changes to the draft by-Jaws made available pursuant
to the first publication
in 2004 were far-reaching. The learned Judge
of Appeal then observes, at 99G,
“
As the court
a quo
correctly held, not every change has to be
advertised otherwise the legislative process would become difficult
to implement; but
here the two sets of proposed by-laws were so
markedly different that republication of the revised draft was
necessary to meet
the legislative requirements of the Constitution
and the Systems Act.”
The
central submission of counsel, in developing this argument, is the
issue which I have already dealt with at some length, namely
that the
impugned amendments reveal a marked change from what was suggested by
Minister Carrim. Of course, the argument rests on
the submission that
Mr Carrim provided for subsidised STB's to be fitted with an
encryption facility, whereas the impugned amendment
decrees the
opposite.
In
his comprehensive heads of argument, counsel summarises the
amendments proposed by Minister Carrim, as counsel sees them, and
states the following:
“
First, subsidised and non-subsidised Set-top
boxes ('STB's') would have to include an
'STB
control system'
that would have the
capability to 'decrypt' encrypted broadcast signals.”
The
authority for this statement, which counsel relies on in his footnote
14, reads as follows: “See the amendment proposed
to paragraph
5.l.2.7(a), volume 7, page 590.” I have already dealt with this
document but take the liberty to revisit the
passage quoted by
counsel, which forms part of Minister Carrim's proposed amendment
published on 6 December 2013, as I have illustrated
earlier:
“
Amendment of paragraph 5.1.2.7 of the Policy
Paragraph 5.1.2.7 of the Policy is amended -
(a)
by the substitution for
paragraph 5.J .2.7 of the following paragraph:
'5.1.2.7
have a robust STB control system that -
a)
is not mandatory for use by
broadcasters in the transmission and management of their broadcasting
services;
b)
can be used to ensure that
consumers do not have to own multiple boxes for both current and
future broadcasting services; and
c)
can provide long term benefits to
the broadcasting industry as a whole;”
I fail
to see any suggestion in this subparagraph relied upon by counsel to
the effect that the STB control system, of subsidised
and
non-subsidised STB's, “would have the capability to 'decrypt'
encrypted broadcast signals”.
There
is also a subparagraph (b), which counsel does not appear to rely on,
but which may be of relevance:
“
(b) by the insertion after paragraph 5.1.2.7 of
the following paragraph:
'5.l.2.7(A)
To avoid subscription broadcasters unfairly benefiting from the STB
Control System, government's investment in the STB
Control System
will be recovered from those subscription broadcasters that choose to
make use of the STB Control System.”'
It
may be, although no such submission was ever made to me, that the
involvement of subscription broadcasters, who generally, it
seems,
make use of encryption procedures, as pointed out earlier in this
judgment, could suggest that an encryption facility may
be available.
This is speculation. It was never illustrated to me where the
Minister decrees that subsidised STB's will be fitted
with an
encryption facility. This I have dealt with at some length. In any
event, if there was a hint of encryption in this publication
dated 6
December 2013, which I still cannot find, it would have been put in
realistic perspective by the 20 December 20 l3 statement
by Minister
Carrim, which I have also dealt with, where he says,
inter alia:
“
We have not made a decision about the
management
of a control system. Nor do we refer at all
to conditional access
or encryption
as
methods of implementing STB control. We are saying that broadcasters
are
free
to decide
whether they want to use control or not. There is no compulsion ...”
[109]
To fortify his submission that the differences between
the proposed 2013 amendments and the BDM policy (presumably a
reference to
the impugned amendments) “are so stark” that
the Minister was required to follow the procedure prescribed in
section
3(5)(b), namely that the intention to amend had to be
published in a gazette with an invitation to interested parties to
submit
written submissions, counsel makes the following further
points:
(i)
the “STB control
amendment” (the one that has been abandoned) provides for the
manufacture and use of STB's
without
any
STB control system. This is clearly incorrect, It is obvious, from a
reading of 5.1.2(A), with 5.1.2(B)(b) that the subsidised
STB's will
be fitted with an STB control system to protect the government
investment in the subsidised STB's; and
(ii)
the BDM policy (presumably
including the impugned amendments) “does not provide for STB's
to have technology to enable them
(to) provide a government messaging
service to users via
(sic)”.
It
is suggested that the 2012 pnlicy provided for individual STB's to be
“addressable”, ie to facilitate government
messaging
services. This is also, with respect, clearly wrong: the SABS
national standard, to which Ihave referred, and which,
it is common
cause, will be applicable to the subsidised STB decoders, will have
the following main functional elements specified
for security:
“
a)
a secure over-the-air software and bootstrap loader;
b)
a mechanism to prevent SIB decoders from functioning in
non-RSA DTT networks;
c)
STB control system that will enable mass messaging
.”
(Emphasis added.)
[110]
Against this background, I am not persuaded that this
case falls inside the ambit of the rule in
Kouga,
where the new enactments are so “markedly
different” that republication of the revised document was
necessary. This
conclusion, in my view, must also be fortified by the
fact that most, if not all, of the role players made detailed and
lengthy
written submissions to the Minister in January 2014 after the
December 2013 publication of the planned policy changes. The Minister
also states unequivocally that she considered all these submissions
before deciding on the impugned amendments.
[111]
It is also useful, at this point, to refer to an
argument offered on this subject by counsel for M-Net. Without
quoting all the
judgments referred to, the argument can be summarised
as follows: an interpretation of statutory procedural requirements in
respect
of policy formulation must take account of the central
constitutional principle ·of the separation of powers. Section
85(2)(b)
of the Constitution accords the executive the power to make
policy, and the courts have recognised that a measure of deference is
required in respect of the exercise of power. A key consideration is
that the executive should not be unduly limited in the formulation
of
policy. Counsel then quote the following passage from
Premier,
Mpumalanga v Association of State-Aided Schools
1999
2 SA 91
(CC) at 109H-l 1OB:
“
In determining what constitutes procedural
fairness in a given case,
a court should be
slow to impose obligations upon government which will inhibit its
ability to make and implement policy effectively
(a
principle well recognised in our common law and that of other
countries). As a young democracy facing immense challenges of
transformation,
we cannot deny the importance
of the need to ensure the ability of the Executive to act efficiently
and promptly
.” (The emphasis is that of
counsel.)
It
should be recorded, however, that, in the same passage, the learned
Judge cautions against flouting the important principle of
procedural
fairness. It seems that every case must, in this regard, be judged on
its own facts. As counsel for M-Net put it, a
proper balance has to
be struck between the duty to consult and the need for decisions to
be taken by government. It is also at
this point of their argument,
that counsel for M-Net mentioned the English authorities, to which I
have referred, that courts must
be slow to compel consultation on any
change, and guard against the situation where “consultation
never comes to an end”.
The details have been mentioned.
[112]
As already pointed out, the eighth respondent (or at
least one of the two factions) and the fourteenth and fifteenth
respondents
have both made submissions to the Minister on this
subject. The fourteenth respondent even issued a press statement. I
have dealt
with the opportunities given to e.tv to make submissions.
Given the circumstances of this particular case, and the urgency and
importance of the matter, I have come to the conclusion that the
“consultation requirement” has been properly met.
[113]
I turn to the provisions of section 3(5) and other
subsections.
[114]
Section 3(5) provides:
“
(5) When
issuing
a
policy under subsection (!) or a policy direction under subsection
(2) the Minister –
(a)
must consult the Authority (read lCASA) or the
Agency (read USAASA), as the case may be; and
(b)
must, in order to obtain the views of interested
persons, publish the text of such policy or policy direction by
notice in the
Gazette –
(i)
declaring his or her intention
to
issue
the policy or policy direction;
(ii)
inviting interested persons to submit written
submissions in relation to the policy or policy direction in the
manner specified
in such notice in not less than thirty days from the
date of the notice;
(c)
must publish a final version of the policy or policy
direction in the
Gazelle.”
(Emphasis
added.)
It is worth noting that subsection (5) was only inserted
by legislation (section 3 of Act 1 of 2014) with effect from 21 May
2014,
which was well after the 2008 publication of the policy, the
2012 published amendments and the December 2013 published intention
of further amendments. It was also well after most of the role
players made their written submissions during or about January 2014.
[115]
Mr Chaskalson and his team argued that the Minister
failed to comply with the provisions of section 3(5): there is no
clear indication
on the papers that she consulted with!CASA and
USAASA, and it is common cause that she did not publish an invitation
to interested
persons to submit written submissions in relation to
the amendments before enacting them. Counsel described this perceived
failure
as “fatal”.
[116]
I have already, at some length, dealt with the
Minister's response in her answering affidavit. She referred to the
extensive submissions
already made by e.tv and others, also on the
question of encryption. She denies that she did not consult with
interested parties,
although she does not specifically mention ICASA
and USAASA. She pleads that she was not in law required to consult on
the exact
wording of the intended amendment. She was only required to
consult about the issues in respect of which amendments were sought
to be enacted, and these were covered in the December 2013
invitation. She pleads that the question whether she consulted with
e.tv in relation to the impugned amendments must also be answered
with reference to the policy published on 8 September 2008, the
amendment published on 7 February 2012, another amendment published
on 17 February 2012 and the December 2013 invitation to comment.
She
pleads that e.tv did not have to be consulted
again
(her emphasis) about encryption capability
because encryption capability had already been removed from the
policy in February 2012
and e.tv had made written representations in
relation to encryption as set out in her answering affidavit (details
of these I have
quoted). To this can perhaps be added the
clarification contained in the December 20 statement by Minister
Carrim and the contents
of the written submission to the Portfolio
Committee.
In
addition, the Minister pleads that she met with various stakeholders
on aspects of the policy in an attempt to reach an agreement
but no
agreement materialised. She argues that it is not relevant whether
e.tv took part in these meetings because consultation
had already
taken place as mentioned. She also argues that “it is not
entirely clear that section 3 places an obligation
to consult each
time there is an amendment to the BDM policy”. I will revert to
this subject.
[117]
In view of the rule in
Plascon-Evans,
I must accept the Minister's version that she
consulted with interested parties, considered all the written
submissions and also
consulted with stakeholders in an attempt to
facilitate an agreement, and that she did all this before the March
2015 enactment
of the amendments.
[118]
I turn to making a few observations about section 3(5):
1.
The subsection prescribes what
the Minister must do when
issuing a policy
under subsection (1) or a policy direction
under subsection (2). (Emphasis added.)
2.
I first deal with the issuing of
a policy direction under subsection (2), because, in my view, it is
not applicable for present
purposes.
Subsection (2) was only enacted with effect from 21 May
2014. It stipulates that “The Minister may, subject to
subsections
(3) and (5),
issue to the Authority
(read ICASA)
or, subject to subsection (5),
issue to the Agency
(read
USAASA) policy directions consistent with the objects of this Act,
national policies and of the related legislation in relation
to –
(a)
the undertaking of an enquiry in
terms of section 4(B) of the ICASA Act ...;
(b)
the determination of priorities
for the development of electronic communications networks and
electronic communications services
or any other service contemplated
in chapter 3 (chapter 3 concerns the licensing framework);
(c)
the consideration of any matter
within the Authority's or the Agency's jurisdiction reasonably placed
before it by the Minister
for urgent consideration;
(d)
guidelines for the determination
by the Authority of spectrum fees; and
(e)
any other matter which may be
necessary for the application of this Act or the related
legislation.” (Emphasis added.)
Subsection (3) stipulates that “no policy made by
the Minister in terms of subsection (I) or policy direction issued by
the
Minister in terms of subsection (2) may be made or issued
regarding the granting, amendment, transfer, renewal, suspension or
revocation
of a licence, except as permitted interms of this Act”.
This is clearly not applicable for present purposes.
In the matter now before me, there is nothing on record
about “policy directions” issued by the Minister to
either ICASA
or USAASA or both. It is also doubtful whether any of
the examples mentioned in subsection (2), about what policy
directions may
be issued about, directly apply to this case. In any
event, it is not even clear what exactly a “policy direction”
is, because it is not defined in the Act.
Subsections (6), (7) and (8) also appear to be confined
to provisions relating to policy directions. Subsection (6)
stipulates that
the provisions of subsection (5) do not apply in
respect of any amendment by the Minister of a policy direction
contemplated in
subsection (2) as a result of representations
received and reviewed by him or her after consultation or publication
in terms of
subsection (5). Subsection (7) stipulates that subject to
subsection (8) a policy direction issued under subsection (2) may be
amended, withdrawn or substituted by the Minister. Subsection (8)
provides that except in the case of an amendment contemplated
in
subsection (6) the provisions of subsection (3) and subsection (5)
apply, with the necessary changes, in relation to any such
amendment
or substitution of a policy direction under subsection (7).
Consequently, it appears that the provisions of
subsections (6), (7) and (8) are confined to the amendment,
withdrawal or substitution
of policy directions contemplated in
subsection (2), which I have found not to be directly applicable to
this case.
3.
I now re(um to what I consider to
be the main issue for consideration when deciding whether or not
there was compliance with subsection
(5). Subsection (5) instructs
the Minister what to do “
when issuing a
policy under subsection (1)
”
(emphasis
added):
(i)
Of course, the reference to
subsection (I) is important. It stipulates that the Minister may
make
policies on matters of national policy
applicable to the JCT sector (emphasis added).
(ii)
In my view, the Minister
already took the step to
make
the
policy in 2008.
The “contents” stipulation on the second
page of
Government Gazelle
no 31408 of 8 September 2008 only
refers to one item: “
Electronic Communications Act (36/2005
):
Broadcasting Digital Migration Policy”.
On page 3, the introductory paragraph is short and
sweet:
“
I, Dr Ivy Matsepe-Casaburri, Minister of
Communications, hereby in terms of section 3(1) of the Electronic
Communications Act, 2005
(Act no 36 of 2005),
make
the Broadcasting Digital Migration Policy in the
schedule.”
The “schedule” is simply the main document
entitled Broadcasting Digital Migration Policy for South Africa and
dated
August 2008.
The policy is a comprehensive affair: it contains a list
of acronyms, a foreword by the Minister, acknowledgements and an
executive
summary as well as an introduction. Then follows a number
of subjects under particular headings in the table of contents as
well
as a conclusion.
This document is far removed from anything resembling
the amendments which came about in 2012 and 2015, let alone Micyister
Carrim's
notification of proposed amendments (which were, in any
event, never enacted).
(iii)
In my view it is clear that
what Minister Matsepe-Casaburri did in September 2008, namely to
make
the policy, is exactly what the legislature
had in mind when enacting subsection (5). The subsection states, in
clear and unequivocal
terms, what the Minister must do when issuing a
policy under subsection (1), which has to do with the making of the
policy like
the Minister did in 200S. The use of the word “make”
in subsection (1) is even more clear and unequivocal. There is
no
need to look for an alternative word.
The
Concise Oxford Dictionary
defines “issue”
as “send forth; publish, put into circulation, (notes,
newspaper, etc)”. This would seem
to represent the initial act
of launching or “creating” the notes or the newspaper.
The same dictionary defines “make” as
“construct, frame, create, from parts of other substances”
and, later,
“cause to exist, bring about” and, later,
“establish, enact (distinctions, rules, laws)”.
This is a far cry from the definition of “amend”
in the same dictionary: “correct error in (document); make
proposed
minor improvements in (motion etc. under discussion); make
better; minor improvement in document, eg added article in US
Constitution”.
I
also compared the definitions for the same words in volume I of the
Shorter Oxford English Dictionary,
which is a much more
voluminous affair. The relevant definitions are comparable. “Amend”
for example is “correct
(a textual error); better, improve;
make minor improvements in (a parliamentary bill, a motion etc under
discussion)”. This
is not what the Minister did in 2008 or what
the legislature had in mind when enacting subsection (I) and
subsection (5). It is
what the Minister did in March 2015.
(iv)
Subsections (I) and (5) are
completely silent on the subject of amending the policy. Why
should the act of
amending
the
policy (what the Minister did in 2015) be read into the act of
making
or issuing (the same act, because the two
subsections must be read together) the policy?
If the legislature had wanted to prescribe to the
Minister what to do when (or before)
amending
the policy, it
could have said so: it had no difficulty to provide for the
issue
of a
policy direction
, and then to prescribe what had to
happen (or need not happen) in the event of the amendment of a policy
direction. See subsections
(6), (7) and (8). Indeed, in subsection
(8) the legislature makes an amendment of a policy direction (barring
an amendment in terms
of subsection (6)) subject to the requirements
of subsection (5). The legislature does nothing of the sort when it
comes to a
policy
(as opposed to a policy
direction
)
because the legislature, as pointed out, is completely silent on the
subject of the
amendment
of a
policy
.
The legislature's determination to limit the provisions
of subsection (5) to the
issue
of the policy (which, for
reasons mentioned, is the same as
making
the policy) is
evident from the provision in subsection (5)(b)(i) which only links
the
issue
of the policy to the required publication in the
Gazette
declaring the Minister's intention to
issue
the
policy and to call for submissions. Not a word about an
amendment
to the policy. (The underlining, in each instance, is obviously
my own).
The author J R de Ville,
Constitutional and Statutory
Interpretation
says the following on page 51:
“
8.
Statutory
interpretation
8.1.
The approach of the Courts
Venter
v
R
(the reference is
1907 TS 910
at 913) is
still regarded as the
locus classicus
insofar
as the approach of interpretation of statutes by the courts is
concerned. The aim of interpretation was there stated as
being - 'to
ascertain the intention which the legislature meant to express from
the language which it employed. By far the most
important rule to
guide courts in arriving at that intention is to take the language of
the instrument, or of the relevant portion
of the instrument as a
whole; and, when the words are clear and unambiguous, to place upon
them their grammatical construction
and to give them their ordinary
effect.”'
(v)
I have already expressed the
view that the wording employed by the legislature in subsections (1)
and (5) (and in subsections (6),
(7) and (8) for that matter) are
clear and unambiguous. The legislature gave unequivocal instructions
as to the rules to be applied
when it comes to the amendment of a
policy direction
but
remained completely silent with regard to an amendment to the policy.
(vi)
For all these reasons, I have
come to the conclusion, and I find, that the provisions of subsection
(5) do not apply to the amendments
to the policy which form the
subject of this case. In view of the authority referred to, I find
that such a conclusion is in harmony
with the intention of the
legislature, when enacting subsections (!), (5), (6), (7) and (8).
Indeed, it is also in harmony with
the provisions of subsection (4):
“
The Authority (read ICASA) or the Agency (read
USAASA), as the case may be, in exercising its powers and performing
its duties in
terms of this Act and the related legislation must
consider policies
made
by
the Minister in terms of subsection (I) and policy directions issued
by the Minister in terms of subsection (2).” (Again,
my
emphasis.)
4.
There is no complaint before me
by the applicant that the Minister did not meet the requirements of
subsection (5) when she made
the policy in 2008, about seven years
ago. This is not the case of the applicant.
It is also not the applicant's case that the Minister
failed to consult with!CASA and USAASA when making the policy in
2008, as
required by subsection (5)(a).
It is, in any event, clear from a general reading of the
papers that CASA and USAASA were involved in the process at all
relevant
times. The following references bear testimony to this:
(i) On 14 December 2012 ICASA promulgated the Digital
Migration Regulations in
Government Gazette
no 36000 dated 14
December 2012. The introductory paragraph reads as follows:
“
I, Doctor Stephen Mncube, chairperson of the
Independent Communications Authority of South Africa ('the
Authority') hereby approve
and publish the Digital Migration
Regulations set out in the Schedule and made by the authority in
terms of sections 30(2)(c) and
(d) read with sections 4(l )(a), (b)
and (d) of the Electronic Communications Act, 2005 (Act no 36 of
2005). The Broadcasting Digital
Migration policy for South Africa
which was issued by the Minister of Communications in terms of
section 3(1) of the Act and published
under
Government
Notice
958 and
Government
Gazette
31408 of 8 September 2008 (as amended
and published under
Government Notice
124
in
Government Gazette
35051
of 17 February 2012)
has been considered by
the authority
.” (Emphasis added.)
(ii) On the strength of the powers vested in it by the
ECA, USAASA issued the tender for the manufacture of STB's. On 6
January
2015, it issued a press statement, a copy of which is
attached to the founding papers, which reads as follows:
“
The agency (read USAASA) further informed the
Committee that in the interest of time it thought it was prudent to
initiate the tender
process calling for quotation for both encryption
and non-encryption Set-top-boxes system.
USAASA was mindful of the fact that a Policy decision
had not been conC!uded, but was concerned about its ability to meet
the deadline
of 17 June 201 5 as set by the International
Telecommunications Union.
In consultation with the Executive Authority, USAASA
issued an invitation to tender that sought quotations for both
control and
non-control set-top-boxes. This was done to ensure that
by the time a Policy Directive is finalised by Cabinet, time
consuming
administrative processes would also been concluded
(sic).”
Indeed, even if I am wrong in concluding that subsection
(5) does not apply to this case, it appears from the aforegoing, on
the
probabilities, that 1CASA and USAASA were involved in the process
at all relevant times, so that, to that extent, there would have
been
at least substantial compliance with the requirements of subsection
(S)(a).
AB
to subsection (S)(b), I have found, for
reasons mentioned, that the “consultation requirement”
had,
in any event, been met.
[119]
For all these reasons
1
have
come to the conclusion, and I find, that the impugned amendments were
made pursuant to a process that was procedurally fair.
It follows
that the fourth ground of review cannot be sustained. It also
means that one of the three “legs” on
which a legality
review is based, namely a lack of procedural fairness, has not been
proved by the applicant. See the remarks
by
Cora
Hoexter
(already quoted) on page 123 of her
work.
[120]
I turn to the remaining two “legs” or
requirements to be proved for a successful legality review. These are
the issues
oflawfulness and rationality.
Lawfulness
[121]
I earlier dealt with the author
Cora
Hoexter' s
overview of the subject when she
said “the fundamental idea it expresses is that 'the exercise
of public power is only legitimate
where lawful”'. She
submitted that “its detailed content has to be worked out from
the Constitution as a whole and
this is a continuing process that the
Constitutional Court embarked on in a series of cases involving
non-administrative action”
(the author refers to the principle
of legality). She then point out that “in the frrst of these,
Fedsure Life Assurance Ltd
v
Greater Johannesburg Transitional Metropolitan
Council
(the reference is
1999 1 SA 374
(CC))
the court identified the principle of legality and described it as an
aspect of the rule of law”.
In
Fedsure,
the learned Judge says the following at 400D-F:
“
It seems central to the conception of our
constitutional order that the Legislature and Executive in every
sphere are constrained
by the principle that they may exercise no
power and perform no function beyond that conferred upon them by Jaw.
At least in this
sense, then, the principle of legality is implied
within the terms of the interim Constitution. Whether the principle
of the rule
of Jaw has greater content than the principle of legality
is not necessary for us to decide here. We need merely to hold that
fundamental
to the interim Constitution is a principle of legality.”
The
central issue is that a body exercising public power (in the case of
Fedsure,
a municipality making original legislation in the
form of budgetary resolutions), had to act within the powers lawfully
conferred
on it.
[122]
In the present case, it is clear that the Minister, when
enacting the impugned amendments, did so on the strength of the
authority
vested in her in terms of section 3(1) of the ECA. This
also appears from
Government Notice
no
38583 of 18 March 2015 in which the amendments were published. In
this sense, it seems to me that the requirement mentioned in
Fedsure
has been met by the Minister.
[123]
The issue of lawfulness forms the basis of e.tv's first
ground of review which is labelled as follows in the founding
affidavit:
“The encryption amendment is
ultra
vires
the Minister's powers.”
[124]
Significantly, e.tv's case as far as this review ground
is concerned is based entirely on what it considers to have been held
in
the so-called “e.tv judgment” to which I will refer
hereunder.
It is
convenient, for illustrative purposes, to quote the relevant
paragraphs from the founding affidavit:
“
116. e.tv's First ground of review relates to the
lawfulness of the Minister's decision. e.tv Contends that the
impugned amendment
(this is the encryption amendment) is
ultra
vires
the Minister's powers.
117. This is made clear by the e.tv judgment. In the
case, the South Gauteng High Court held at paragraph [37) that
'the
Minister does not have the power to prescribe to FTA broadcasters how
they should manage STB's'.
It held at paragraph [50) that neither
does she have the power
'to make or prescribe binding decisions
relating to STB control
...
120. I am advised to submit that:
120.1 it is an elementary principle of the rule of law
and principle of legality that members of the executive may exercise
no power
and perform no function beyond that conferred upon them; and
120.2 a decision can be unlawful because either its
purpose or effect is unlawful.
121. In the present case, whatever the intent of the
Minister, the effect of her amendment is plainly
ultra vires
her
powers.
122. On this basis alone, the Minister's decision to
enact clause 5.l.2(B)(a) is unlawful. This is so both under sections
6(2)(a)(i)
and 6(2)(f)(i) of PAJA and under the principle of
legality.”
I
have held that this is not a PAJA review.
[125]
What is glaringly absent from e.tv's case on the
question of lawfulness is any reference whatsoever to section 3(1) of
the ECA.
This is where one finds the power conferred upon the
Minister to legislate as she did.
[126]
I turn to the “e.tv judgment”.
It
is (unreported) case no 34694/2012 heard by Pretorius AJ in the South
Gauteng High Court on 22 October 2012. The judgment is
dated December
2012. It is the case
of:
E. TV (PTY)
LTD
APPLICANT
AND
MINISTER OF COMMUNICATIONS
1
st
RESPONDENT
SENTECH
LTD
2
ND
RESPONDENT
INDEPENDENT COMMUNICATIONS AUTHORITY
OF SOUTH AFRICA (“ICASA”)
3
rd
RESPONDENT
SOUTH AFRICAN BROADCASTING CORPORATION
LTD
(“SABC')
4
th
RESPONDENT
[127]
The case involves an attack on the then Minister's
decision to instruct Sentech Ltd to assume responsibility for the STB
control
system for FTA digital terrestrial television.
[128]
The relief sought in the notice of motion was:
''2. The decision of the Minister of Communications of
10 May 2012 to instruct Sentech Ltd to assume responsibility for the
set-top-box
control system for free-to-air digital terrestrial
television is declared to be unlawful and of no force and effect and
is reviewed
and set aside;
3. it is declared that e.tv (Pty) Ltd and the South
African Broadcasting Corporation Ltd and other free-to-air
broadcasters are
responsible for the set-top-box control system for
free-to-air digital terrestrial television.”
[129]
The relief granted was along the lines of the prayers in
the notice of motion. The second paragraph was made subject to
the
regulatory powers of ICASA.
[130]
The reasoning of the learned Judge is based to a large
extent, if not entirely, on the distinction between the roles, in
terms of
the ECA, of the Minister on the one hand and ICASA on the
other. The learned Judge says the following:
“
[32] The ECA makes a clear distinction between
roles, power and of the Minister and ICASA. The Minister's role is
limited to the
development of policy. ICASA regulates.”
And -
“
[37] If one has regard to the clear distinction
in the ECA between the authority and power of the Minister to make
policy, and the
power and obligation of ICASA to consider such policy
when regulating the broadcasting industry, it is clear to me that the
Minister
does not have the power to describe
(sic,
should read prescribe) to
free-to-air broadcasters how they should manage their
set-top-boxes. Even if she had
such powers, her decision would have
been administrative action as part of policy execution rather than
policy formulation.”
In this
regard, the learned Judge refers,
inter alia,
to
Grey's
Marine,
which I have dealt with. The learned Judge also states:
“
[50] I have already found that the fact that the
Broadcasting Digital Migration Policy has been published, does not
give the Minister
the right to prescribe to free-to-air broadcasters
who should manage set-top-box control. The only authority that
may regulate
this, is ICASA ...”
[131]
As far as I can make out, this case does not deal with
subsidised
STB's. It
most certainly does not deal with the power of the Minister, as a
member of the Executive, to make policy that will determine
the
technical make-up of the subsidised STB's, and to decide how the
government's funds will be spent in this regard. It is useful
to
revisit what was said in
National Treasury
at
241 F-H:
“
Thus, the duty of determining how public
resources are to be drawn upon and recorded lies in the heartland of
executive-government
function and domain. What is more, absent any
proof of unlawfulness or fraud or corruption, the power and the
prerogative to formulate
and implement policy on how to finance
public projects reside in the exclusive domain of the national
executive subject to budgetary
appropriations by parliament.”
[132]
The “terms of reference” which the Minister
had in mind for Sentech (and which was successfully challenged on
review)
is contained in a letter which the Minister wrote on IO May
2012 to the SABC chairperson. She states that her office investigated
technologies required to perform STB control functions in the OTT
network. The recommendations she received included the need for
robust STB control in the OTT network to confirm the BOM policy, the
appointment of Sentech which had “an existing STB control
system used on their satellite transmission network, which can also
meet the STB control requirements needed in the OTT network”
and that the existing system at Sentech meets the requirements needed
for the OTT project, so that a completely new system was
not
required. The subject of the financing of subsidised STB's did not
arise.
[133]
I find myself in respectful agreement with the
submissions by counsel for M-Net, which I take the liberty to
summarise: the Minister
has not breached any binding
ratio
of the e.tv judgment. In the e.tv judgment,
which did
not
concern
policy
made by the
Minister under section 3(1) of the ECA, but a decision made by the
Minister to appoint an entity to “
assume
responsibility “
for STB control, the
narrow issue before the court was whether the Minister was entitled
to determine who should “
manage”
the control system in STB's (where, on the
facts before the court, STB control “
management”
involved the selection and appointment of a
suitable STB control vendor).
e.tv
Relies on the court's statements that the Minister does not have the
power to prescribe to free-to-air broadcasters how they
should manage
STB's, has no legal power to prescribe or make binding decisions
relating to STB control and JCASA is the only authority
that may
regulate who should manage STB control.
Counsel
then make the following point: the Minister, in deciding, as a matter
of policy, that the government subsidised STB's will
not contain
encryption capability, made no binding decisions relating to STB
control, did not prescribe to free-to-air broadcasters
how they
should “
manage”
STB's and did not purport to
regulate who should “
manage”
STB control. (The
emphasis is that of counsel.)
[134]
Counsel for the SABC also pointed out that the learned
Judge, in the e.tv judgment, specifically emphasised that the
Minister may
make policy decisions on the subject. Nothing in the
judgment undermines the clear text of section 3 of the ECA. Jn
particular,
nothing in the judgment serves to undermine the power of
the Minister to make policy on “the application of new
technologies
pertaining to ... broadcasting services” and “any
other policy which may be necessary for the application” of
the
ECA and the related legislation. On the contrary, the reasoning in
the judgment affirms this power.
[135]
In all the circumstances, it is clear, in my view, that
the argument advanced by e.tv to the effect that the Minister's
actions
were unlawful, is misplaced: it is clear that she acted in
terms of the powers conferred upon her by the ECA and, in that way,
met the standard of lawfulness required in terms of the principle of
legality. Consequently, the first review ground has to fail.
[136]
I have dealt with the fourth review ground (procedural
fairness) and the third review ground is based on the (abandoned)
argument
involving 5. l.2(A) which has to be read with 5,1.2(B)(b).
In this, third, ground of review e.tv attacks the “non-mandatory
STB control amendment”, which features the argument about the
“drafting error”. 1 have dealt with this aspect
and the
fact that it was abandoned. I pay no further attention to the third
ground of review.
[137]
I turn to the only remaining ground of review which is
labelled “the encryption amendment is irrational and
unreasonable”.
Is
the encryption amendment irrational and unreasonable?
[138]
As I understand the
Hoexter
overview, this is the only remaining
requirement to be taken into account when deciding whether or not the
legality standard has
been met.
[139]
What falls to be decided, is whether the Minister's
decision to enact the “encryption amendment”
(5.1.2(B)(a)), was
rational and reasonable.
[140]
I already touched on this subject in paragraph (52) of
this judgment, when dealing with the argument by the respondents
(which version
I have to accept) that the use of an encryption
facility in the FTA DTT environment is to be condemned in the
strongest terms,
and also flies in the face of the world-wide
approach. It is against this background that the SAB submits, and 1
agree with the
submission, that a choice by government (and the
Minister) not to subsidise an encryption capability in STB's is
entirely rational
and reasonable. Equally, so the SAB submits as I
have pointed out, a policy that allows individual broadcasters to
make their own
decisions about encryption, but requiring those
broadcasters to carry the costs of encryption themselves if they opt
for encryption
(amendment 5.l.2(C)) is entirely rational and
reasonable.
[141]
I can do no better than to summarise an extract from the
argument submitted on behalf of the SABC:
1.
Citizens should not be placed in
a worse position after digital migration than they were before it. It
should be possible, therefore,
for them to receive the broadcasts
that they received before migration, after migration.
2.
Because the majority of the
population will not be able to afford the STB's that will allow this
to happen, government has decided
to provide 5 million STB's for
free. It has made this decision within the budgetary constraints that
it operates under and subject
to competing demands for state
resources.
3.
Because of the expense involved
in government's commitment, it has decided to use a control system to
protect its investment.
4.
The SABS standard that gives
effect to the control system does not specify encryption as an
element of the security system. It is
the government's view that
encryption is unnecessary to protect its investment and to ensure
smooth migration (to this may be added
the compelling and wide
ranging criticism of the use of encryption in the FTA OTT environment
which criticism, no doubt, the Minister
took into account because she
states emphatically, and l must accept her version, that she
considered the submissions made in January
2014 after Minister
Carrim's invitation was published), and also consulted with role
players.
5.
Encryption software is very
expensive. Using it will require subscriber management, which would
give rise to financial and human
resources costs for government.
[142]
Counsel for the SABC also, correctly in my view,
reminded me of what was said in
Albutt, supra,
at 313C-E, on the test for rationality:
“
What must be stressed is that the purpose of the
enquiry is to determine not whether there are other means that could
have been
used, but whether the means selected are rationally related
to the objective sought to be achieved. And if, objectively speaking,
they are not, they fall short of the standard demanded by the
Constitution.” .
In this
case, as counsel submitted, the means selected by government are
indeed rationally related to the objective sought to be
achieved.
[143]
In all the circumstances, I am satisfied that the
decision taken by the Minister, and the executive action she
performed, were reasonable
and rational so that this ground of review
(the second ground in terms of the founding affidavit) is also not
sustainable, and
falls to be rejected.
[144]
I add that, in their heads of argument, counsel for e.tv
sought to introduce new grounds of review which, as pointed out by Mr
Unterhalter,
they were not allowed to do. The grounds for any review
as well as the facts and circumstances upon which the applicant
wishes
to rely have to be set out in the founding affidavit - see
Telcordia Technologies Inc v Telkom SA Ltd
[2006] ZASCA 112
;
2007
3 SA 266
(SCA) at 287A-B.
[145]
In any event, I am not persuaded that these “new”
grounds have any merit. They are summarised by Mr Unterhalter and Ms
Norton in supplementary heads of argument:
1.
The Minister misunderstood the
effect of the encryption amendment. I see no basis for this argument:
the Minister stated that she
studied and considered all the written
submissions made, including those dealing with encryption. She
consulted a variety of role
players. This evidence of the Minister
must be accepted, in view of the rule
in
Plascon-Evans.
2.
The encryption amendment is not
rationally connected to the purpose the Minister sought to achieve.
This argument I have just dealt
with.
3.
The encryption amendment
increases the possibility of the wastage of public funds. On the
version which I have to accept, the opposite
is true.
4.
The encryption amendment is not
rationally connected to the information before the Minister. I see no
basis for this argument. Counsel
for M-Net also, correctly, point out
that each of these “new grounds” rests on factual
allegations which have not been
canvassed in the respondents' papers
because they were not raised in e.tv's founding affidavit.
Conclusion
[146]
In all the circumstances, and for the reasons mentioned,
I have come to the conclusion, and I find, that the application
cannot
be sustained, and falls to be dismissed,
Costs
[147]
Mr Budlender argued that in the event of e.tv being
unsuccessful, it should not be ordered to pay the costs of the
respondents.
He argued that this is a “constitutional matter”
and referred me to the case of
Biowatch Trust
v
Registrar, Genetic
Resources, and others
2009 6 SA 232.
Mr
Budlender also argued, surprisingly, that in the event of e.tv being
successful, the respondents ought to be ordered to pay
e.tv's costs.
Mr Budlender made these submissions at the end of his address in
reply, and did not deal with the subject in any
detail. I consulted
some of the authorities.
[148]
In
Biowatch,
the
constitutional court stated the following at 245C-246A:
“
In
Affordable Medicines
(the full reference is
Affordable
Medicines Trust and others
v
Minister
of Health and others
[2005] ZACC 3
;
2006 3 SA 247
(CC) at
paragraph
[139))
this Court held that as a general rule in
constitutional litigation, an unsuccessful litigant in proceedings
against the State
ought not to be ordered to pay costs. In that
matter a body representing medical practitioners challenged certain
aspects of a
licensing scheme introduced by the government to control
the dispensing of medicines. Ngcobo J said the following;
'The award of costs is a matter which is within the
discretion of the Court considering the issue of costs. It is a
discretion that
must be exercised judicially having regard to all the
relevant considerations. One such consideration is the general rule
in constitutional
litigation that an unsuccessful litigant ought not
to be ordered to pay costs. The
rationale
for this rule is
that an award of costs might have a chilling effect on the litigants
who might wish to vindicate their constitutional rights
. But
this is not an inflexible rule. There may be circumstances that
justify departure from this rule such as where the litigation
is
frivolous or vexatious. There may be conduct on the part of the
litigant that deserves censure by the Court which may influence
the
Court to order an unsuccessful litigant to pay costs. The ultimate
goal is to do that which is just having regard to the facts
and the
circumstances of the case. In
Motsepe
v
Commissioner for
Inland Revenue
(the citation is
[1997] ZACC 3
;
1997 2 SA 898
(CC) at 91I E-912A)
this Court articulated the rule as follows: “One should be
cautious in awarding costs against litigants
who seek to enforce
their constitutional right
against the State,
particularly
where the constitutionality of the statutory provision is attacked
,
lest such orders have an unduly inhibiting or ““chilling'“'
effect on other potential litigants in this category.
This cautious
approach cannot, however, be allowed to develop into an inflexible
rule so that litigants are induced into believing
that they are free
to challenge the constitutionality of statutory provisions in this
Court, no matter how spurious the grounds
for doing so may be or how
remote the possibility that this Court will grant them access. This
can neither be in the interests
of the administration of justice nor
fair to those who are forced to oppose such attacks.”“'
(Emphasis added.)
[149]
In
Motsepe,
the
applicant, who had been involved in a sequestration application,
sought a referral of certain sections of the Income Tax Act,
58 of
1962, to the Constitutional Court, as the applicant was challenging
the constitutionality of those sections. The application
was
dismissed with costs - see the judgment at 912A-G.
[150]
As I mentioned earlier, Mr Budlender's submission on
costs, which I referred to, came right at the end of the proceedings,
so that
I did not have the benefit of argument on this issue by any
counsel. Counsel for e.tv did not ventilate the subject in their
heads
of argument and opposing counsel all asked simply for the
application to be dismissed with costs, including the costs of two
counsel.
Mr
Chaskalson, for the eighth, fourteenth and fifteenth respondents, who
support the application, pointed out that NAMEC is an industry
body
established to promote the local electronics industry, and in
particular the involvement of black owned small and medium
enterprises in the digital migration process. SOS is a civil society
coalition that comprises a broad range of non-governmental
organisations and individuals including the MMA (the fifteenth
respondent) and they campaign for open, competitive and high quality
public broadcasting that
is
in the public interest.
Consequently, as public interest bodies, these three respondents are
not seeking costs, irrespective of
the outcome of the application,
and are also asking for no costs orders to be made against them. 1
will respect the request. On
the other hand, counsel for the
sixteenth respondent, which is a faction of the eighth respondent,
asked for costs against the
applicant, in the event of the latter
being unsuccessful. Although this is a most unusual situation, with
the one faction asking
for costs and the other not, I can see no
reason, in principle, why the request of the sixteenth respondent
should not be respected,
in the event of a favourable result from its
point of view.
[151]
Without having had the benefit of argument on the
subject, it still seems to me that the enquiry, in this case, will be
whether
there are circumstances that justify a departure from the
“general rule” in constitutional litigation that an
unsuccessful
litigant ought not to be ordered to pay the costs
-
Biowatch
at 245E-G.
It
also seems to me that the following remarks of the learned Judge in
Motsepe,
just before he pointed out that the rule was not
inflexible, and went on to dismiss the application with costs, may
also be of relevance
in this particular case:
“
One should be cautious in awarding
costs against litigants who seek to enforce their constitutional
right against the state. particularly
where the constitutionality of
the statutory provision is attacked
...”
(Emphasis added.)
Motsepe
at 91lE-G.
Although
this case does, in a strict sense, involve “constitutional
litigation” because one has to consider a legality
review, I
have difficulty in recognising a “constitutional right against
the state” in favour of e.tv, in terms of
which the latter can
claim such a ·- constitutional right to insist on the
subsidised STB's being fitted with an encryption
facility. There is
also no question of the constitutionality of any statutory provision
being attacked.
As
I attempted to illustrate earlier, the application appears to be
inspired by pure commercial motivation. This much appears from
e.tv's
own allegations in the founding affidavit, which also contains no
proper explanation why e.tv cannot simply dispense with
encryption in
the FTA environment, like all its opponents and most FTA broadcasters
around the world, and like it has been doing
up to now.
e.tv
Also states in the founding affidavit that it was, at all relevant
times, aware of the opposition to the notion of introducing
encryption in the FTA DTT environment. e.tv Nevertheless elected to
forge ahead with this application, on affidavit, with the spectre
of
Plascon-Evans
looming in the background.
[152]
In giving e.tv the benefit of the doubt, I shall refrain
from holding that the litigation is “frivolous or vexatious”
or that the application is based on spurious grounds.
[153]
Nevertheless, after due reflection, I have come to the
conclusion that this is an appropriate case to deviate from the
“general
rule”, inasmuch as it may be applicable to the
present circumstances, and to order that the costs should follow the
result
so that the unsuccessful litigant has to pay the costs.
It
remains to be added that, although the seventh respondent filed the
“explanatory affidavit” referred to, and also
had the
benefit of Ms Pillay holding a watching brief, it did not actively
take part in the proceedings, and also indicated in
the explanatory
affidavit, as I have mentioned, that it “neither supports nor
opposes the relief sought by e.tv”. In
these circumstances it
appears to me that it will be inappropriate to grant costs in favour
of the seventh respondent.
The
order
[154]
I make the following order:
1.
The application is dismissed.
2.
The applicant is ordered to pay
the costs of the first, fifth, sixth and sixteenth respondents which
will include the costs flowing
from the employment of two counsel.
________________________________
W
R C PRINSLOO
JUDGE
OF THE GAUTENG DIVISION, PRETORIA
HEARD
ON: 26 & 27 MAY 2015
FOR THE
APPLICANT: S BUDLENDER,
ASSISTED
BY J BERGER AND R TSHETLO
INSTRUCTED
BY: NORTON ROSE FULLBRIGHT
FOR THE
1
st
RESPONDENT: H MAENETJE SC
ASSISTED
BY K TSATSAWANE
INSTRUCTED
BY: GILDENHUYS MALATJI INC
FOR THE
5
TH
RESPONDENT: A R BHANA SC
ASSISTED
BY M RAMAEPADI AND A FRIEDMAN
INSTRUCTED
BY: BAFANA NCUBE INC
FOR THE
6
TH
RESPONDENT: D UNTERHALTER SC
ASSISTED
BY M NORTON
INSTRUCTED
BY: WERKSMANS ATTORNEYS
FOR THE
7
TH
RESPONDENT: Ms PILLAY (WATCHING BRIEF)
INSTRUCTED
BY: WEBBER WENTZEL ATTORNEYS
FOR THE
8
TH
, 14
TH
AND 15
TH
RESPONDENTS: M
CHASKALSON SC
ASSISTED
BY G MARRIOTT AND L KELLY
INSTRUCTED
BY: NORTONS INC
FOR THE
16
TH
RESPONDENT: R A SOLOMON SC
ASSISTED
BY M GUMBI
INSTRUCTED
BY: MOTA ATTORNEYS