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[2024] ZAFSHC 380
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Global Phashash Group (Pty) Ltd v Ngwathe Local Municipality (2269/2024) [2024] ZAFSHC 380 (25 November 2024)
IN THE HIGH COURT OF
SOUTH AFRICA
FREE STATE DIVISION,
BLOEMFONTEIN
Reportable / Not
reportable
Case
no: 2269/2024
In
the matter between
GLOBAL
PHASHASH GROUP (PTY) LTD
PLAINTIFF
and
NGWATHE
LOCAL MUNIPALITY
DEFENDANT
Neutral citation:
Coram: MAHLATSI
AJ
Heard:
08/11/2024
Delivered:
25/11/2024
Summary:
Exception – Wayleave agreement –
permission – cancellation thereof – administrative action
or repudiation
of contract .
ORDER
1.
The defendant’s exception is dismissed.
2.
The defendant is ordered to pay costs on attorney
and client scale.
JUDGMENT
Mahlatsi AJ
Introduction
[1]
Before this court is an exception to the
plaintiff’s particulars of claim. The exception relates to the
cause of action for
the alleged unlawful cancellation of a wayleave
right granted to the plaintiff. The defendant takes exception to the
plaintiff’s
claim on the basis that, it lacks averments
necessary to sustain a valid or recognised claim in law of contract
and therefore excipiable
in terms of rule 23 of the Uniform Rules of
Court.
[2]
The plaintiff opposed the application in that the
defendant is in a position to plead to the particulars of action as a
cause of
action is properly disclosed in those particulars of claim.
The plaintiff instituted an action against the defendant as a result
of the breach of obligations arising from the unlawful termination of
the wayleave agreement and or the subsequent repudiation
by the
defendant, plaintiff has lost income and profit and has suffered
damages in the amount of R43 851 000.00.
[3]
The defendant, having received the summonses
referred to above, noted an exception on the grounds that the
particulars of claim
lacks averments that sustain a cause of action,
or put differently, that the particulars of claim does not disclose a
cause of
action.
Backround
[4]
The plaintiff is a registered private company with
registration number 2022/531588/07. The plaintiff holds an individual
electronic
communications services licence issued by the Independent
Communications Authority of South Africa (ICASA), attached as
annexure
‘A’. By virtue of the this licence, the
plaintiff acquired rights and obligations as set out in terms of s
22(1)
(a)
,
(b)
and
(c)
of the
Electronic Communications Act 36 of 2005 (ECTA) read with item 2.3 of
the
TRH 27 South African Manual for
Permitting Services in Road Reserves
.
[5]
The defendant is Ngwathe Local Municipality, a
local sphere of government and an organ of state as envisaged in s
239 of the Constitution
of South Africa, 1996, and established as
such in terms of
s 12
of the
Local Government: Municipal Structures
Act 117 of 1998
.
[6]
During July 2022, the plaintiff’s director
made a presentation to the defendant, who was represented by its
Manager for Planning
and Housing. Thereafter, during August 2022, the
defendant’s Manager for Planning and Housing, together with the
Technical
Directors in a meeting. The Defendant called for written
proposal in support of an application for the wayleave. The plaintiff
obliged and submitted a written proposal, which is marked annexure
‘B’. The plaintiff’s application for a wayleave
was
made in accordance with the Standard Draft By-Laws for the Deployment
of Electronic Communications and Facilities issued in
terms of Local
Government: Municipal Systems Act 32 of 2002 (Municipal Systems Act).
[7]
On the 30 August 2022 the plaintiff was advised
that the defendant had granted consent and issued a wayleave to the
plaintiff, for
the installation of optic fibre across the towns under
the defendant’s jurisdiction with conditions as fully evidenced
in
annexure ‘C’. The defendant, in turn, would conduct an
inspection of its infrastructure prior and after commencement
of the
works including digging of trenches, in order to determine compliance
with the conditions associated with the wayleave agreement,
as well
as ensuring that the defendant’s infrastructure has not
suffered any damage resulting from or associated with the
plaintiff’s
own actions or that of its servants.
[8]
During subsistence of the aforesaid wayleave
agreement, on the 19 April 2023, the defendant complained about open
trenches, citing
safety concerns. The defendant placed the plaintiff
on terms to close the trenches, and undertook to visit the site to
inspect
the open trenches before its closing or backfilling, however,
it took several days for the defendant to actually show up. Despite
the failure to actually perform the inspection, the defendant
cancelled the wayleave agreement on the 18 May 2023 citing
inter
alia
failure to close trenches. See in
this regard annexure ‘E’.
Applicable Law
[9]
Rule 23 provides:
‘
(1) Where any
pleading is vague and embarrassing, or lacks averments which are
necessary to sustain an action or defence, as the
case may be, the
opposing party may, within the period allowed for filing any
subsequent pleading, deliver an exception thereto
and may apply to
the registrar to set it down for hearing within 15 days after the
delivery of such exception: Provided that—
(a) where a party intends
to take an exception that a pleading is vague and embarrassing such
party shall, by notice, within 10
days of receipt of the pleading,
afford the party delivering the pleading, an opportunity to remove
the cause of complaint within
15 days of such notice; and
(b) the party excepting
shall, within 10 days from the date on which a reply to the notice
referred to in paragraph (a) is received,
or within 15 days from
which such reply is due, deliver the exception.
(2) Where any pleading
contains averments which are scandalous, vexatious, or irrelevant,
the opposite party may, within the period
allowed for filing any
subsequent pleading, apply for the striking out of the aforesaid
matter, and may set such application down
for hearing within five
days of expiry of the time limit for the delivery of an answering
affidavit or, if an answering affidavit
is delivered, within five
days after the delivery of a replying affidavit or expiry of the time
limit for delivery of a replying
affidavit, referred to in rule
6(5)(f): Provided that—
(a) the party intending
to make an application to strike out shall, by notice delivered
within 10 days of receipt of the pleading,
afford the party
delivering the pleading an opportunity to remove the cause of
complaint within 15 days of delivery of the notice
of intention to
strike out; and
(b) the court shall not
grant the application unless it is satisfied that the applicant will
be prejudiced in the conduct of any
claim or defence if the
application is not granted.
(3) Wherever an exception
is taken to any pleading, the grounds upon which the exception is
founded shall be clearly and concisely
stated.
(4) Wherever any
exception is taken to any pleading or an application to strike out is
made, no plea, replication or other pleading
over shall be
necessary.’
[10]
In the
case of
Inzinger
v Hoffmeyer and Others
,
[1]
it was
said that:
‘
An
exception that a pleading is vague and embarrassing strikes at the
formulation of the cause of action and its legal validity.
It is not
directed at a particular paragraph within a cause of action but at
the cause of action as a whole, which must be demonstrated
to be
vague and embarrassing. As was stated in Jowell v
Bramwell-Jones and Others 1998 [1] SA 836 W at 905E-H: “I must
first ask whether the exception goes to the heart of the claim and,
if so, whether it is embarrassing to the extent that the defendant
does not the claim he has to meet”.’
[2]
[11]
When an exception is raised against the pleadings on the basis that
it lacks averments necessary
to disclose a cause of action, this
implies that even if one were to accept the factual averments as set
out in the pleading is
correct, these factual averments do not
justify the conclusion of law or the relief the pleader intents to
reach. It therefore
follows that the defendant cannot plead the
defence to a cause of action which does not exist or otherwise
precluded on any lawful
ground. The same position was restated in the
constitutional case in the matter of Pretorius and Another v
Transport Pension Fund
and Others:
[3]
‘
In
deciding an exception the court must accept all the allegations of
fact made in the particulars of claim is true, and may not
have
regard to the extraneous facts or documents, it may uphold the
exception to the pleading only when the excipient has satisfied
the
court that the cause of action or conclusion of law in the
pleading cannot be supported on every interpretation that
can be put
on the facts. The purpose of an exception is to protect litigants
against claims that are bad in law or against an embarrassment
which
is so serious as to merits costs even those of an exception. It is
useful procedural tool to weed out bad claims at an early
stage, but
an overly technical approach must be avoided’.
[4]
[12]
Furthermore, as to the pleadings which do not disclose the course of
action, Griessel J stated
in
Frank
v Premier Hangers CC
[5]
that:
‘
In
order to succeed in its exception, the plaintiff has the onus to
persuade the court that, upon every interpretation which the
defendant’s plea and counter claim can reasonably bear, no
defence or cause of action is disclosed. Failing which, the exception
need not be upheld.’
[6]
This applies with equal
force to an exception raised by a defendant to the plaintiff’s
particulars of claim.
[13]
In
Vermeulen
v Goose Valley Investment (Pty) Ltd
[7]
Marais
JA stated:
‘
It
is trite law that an exception that a cause of action is not
disclosed by a pleading cannot succeed unless it can be shown ex
facie the allegations made by the plaintiff and any document upon
which his cause of action may be based, the claim
is
(not
may be) bad in law’.
[8]
[14]
Both counsels submitted their heads of arguments and supplemented
their view points on the issues.
The defendant’s exception is
based on the ground that, the particulars of claim does not disclose
a cause of action on the
contention that, the wayleave agreement is
not contractual, but a by-product of administrative decisions. The
decision to grant
the plaintiff wayleave permission and withdrawal
thereof, were made in terms of the enabling by-laws. Furthermore, the
plaintiff’s
action is limited to exhausting internal remedies
in terms of s 62 of the Municipal Systems Act, alternatively if s 62
is not appropriate
remedy, review in terms of the Promotion of
Administrative Justice Act 3 of 2000 (PAJA) or grounds based on
principle of legality.
[15]
In order to properly contextualise the gravamen of the defendant’s
grounds in the exception.
It is important to firstly look at
definition of wayleave:
(i) In
terms of Regulation 1 Standard Draft By-Laws,
[9]
a
‘wayleave’ is defined as ‘a document issued to a
person setting out the terms and conditions upon which that
person
may deploy and maintain electronic communication facilities within a
Road Reserve, excluding Street Furniture.’ This
regulation
describes a wayleave document as a bilateral agreement with terms and
conditions.
(ii)
Davis J, in
Dark
Fiber Africa (Pty) Ltd v The City of Cape Town
,
[10]
set
out the nature, description and definition of a wayleave as follows:
‘
In
order to understand the context of the City’s action, it is
necessary to define a wayleave which is central to impugned
decision
of the City. It is “a right of way granted by the landowner,
generally in exchange of payment and typically for
the purpose such
as the erection of telegraph wires or laying of pipes”. Thus it
is, in essence, a contract which reflects
a landowner’s
agreement that a licensee may use its land for which it may specify
the conditions attached to such agreement.’
[11]
This decision is relevant
in this matter. I align myself with the dictum.
[16]
The plaintiff’s counsel referred
this court to the minority judgement by Jafta J and Tshiqi
AJ in
City
of Tshwane Metropolitan Municipality v Link Africa (Pty) Ltd &
Others
[12]
(
City
of Tshwane
):
‘
The
legal difficulties identified in this judgement , as standing in the
view of applying PAJA to the s 22 procedures, were not
considered by
the Supreme Court of Appeal in
MTN
and
Msunduzi
.
That Court merely proceeded from the premise that any decision taken
in terms of section 22 constitutes an administrative action,
without
any analysis of whether the section confers rights or public power.
Not all the decisions taken in terms of the statute
amount to an
administrative action. Put differently, it is not the exercise of
every power conferred by a statute that leads to
administrative
action. But in our view section 22 does not even confer power.
Instead, it creates statutory rights enjoyed by licensees.
These
licensees bear no administrative obligation to develop electronic
communications facilities. They do so purely as a commercial
business. No member of the public may demand that the licensee must
built infrastructure, even on that member’s property.
The
decision to build infrastructure and where it must be constructed is
that of the licensee. That decision is informed by the
licensee’s
internal commercial interests and nothing else. Section 22 leaves
it to the whims of each licensee to determine
whether it wishes to
build the electronic communication infrastructure.’
[13]
[17]
The majority decision in the City of Tshwane matter above expressed
doubt on the section 22
and thus left the issue opened. The minority
decision is the one that dealt with the issue. I agree with the
plaintiff’s
counsel that the minority judgement is persuasive
and, I align myself with it.
[18]
Having noted the above authorities on
the exception, the exception is erratically based on the
ground that,
the plaintiff’s particulars of claim do not disclose a cause of
action. A wayleave document issued by the defendant
to the plaintiff
is a contract
[14]
with
terms and conditions reflecting the agreement between the parties.
[19]
Furthermore, it seems from the defendant argument that, cause of
action is shown by the plaintiff,
but it is subject to internal
remedies or review. This ground of attack is misplaced. It follows,
therefore, that the defendant’s
exception stands to be
dismissed.
Costs
[20]
I do not see the reason why the costs should not follow the result.
Order
[21]
In the result, the following orders are made:
1.
The defendant’s exception is dismissed.
2.
The defendant is ordered to pay costs on attorney
and client scale.
MAHLATSI AJ
Appearances
For
the Plaintiff:
Adv.
PT Masihleho
Instructed
by:
Thabo
Malgas Attorneys Inc
For
the Defendant:
Adv.
Motebang Ramaili SC et
Adv.
Ntando Dludla Mosia
Instructed
by:
Tsotetsi
Mchunu Attorneys
[1]
Inzinger v Hofmeyr
and Others
[2010]
ZAGPJHC 104.
[2]
Ibid para 2.
[3]
Pretorius
and Another v Transport Pension Fund and Others
[2018]
ZACC 10; [2018] 7 BLLR 633 (CC); 2019 (2) SA 37 (CC).
[4]
Ibid para 15.
[5]
Frank v Premier
Hangers CC
[2007]
ZAWCHC 21; 2008 (3) SA 594 (C).
[6]
Ibid para 22.
[7]
Vermeulen v Goose
Valley Investment (Pty) Ltd
[2001]
ZASCA 53; [2001] 3 All SA 350 (A).
[8]
Ibid para 7.
[9]
See
in this regard the Local Government: Municipal Systems Act, 2002
GG46920 Notice No 2489.
[10]
Dark Fibre Africa
(Pty) Ltd v City of Cape Town
[2017]
ZAWCHC 151; 2018 (4) SA 185.
[11]
Ibid para 23.
[12]
City
of Tshwane Metropolitan Municipality v Link Africa (Pty) Ltd and
Others
[2015]
ZACC 29; 2015 (6) SA 440 (CC).
[13]
Ibid para 75-76.
[14]
Footnote 11.