(l ) REPORTABLE: \'l.0
IN THE HIGH COURT OF SOUTH AFRICA
GAUTENG DIVISION, PRETORIA
(2) OF INTEREST TO OTHER JUDGES: h\ ()
(3)
(4) Dote:#
CASE NO.:89542/2019
In the matter between:
MOBILE TELEPHONE NETWORKS (PTY) LTD
and
INDEPENDENT COMMUNICATIONS AUTHORITY
OF SOUTH AFRICA
CHAIRPERSON OF THE INDEPENDENT COMMUNICATIONS
AUTHORITY OF SOUTH AFRICA
COMPLAINS AND COMPLIANCE COMMITTEE OF THE
INDEPENDENT COMMUNICATIONS AUTHORITY
OF SOUTH AFRICA
Applicant
First Respondent
Second Respondent
Third Respondent
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CHAIRPERSON OF THE COMPLAINTS AND COMPLIANCE
COMMITTEE OF THE INDEPENDENT COMMUNICATIONS
AUTHORITY OF SOUTH AFRICA
Kumalo J
INTRODUCTION
JUDGMENT
Fourth Respondent
[1]. This is a review application in which the Applicant seeks to review and set
aside the decisions of the First and Third Respondents. The Third Respondent
made a finding that the Applicant knowingly contravened regulation 9(1 )(b) of
the Standard Terms and Conditions for Individual Electronic Communications
Services, 2010 of the Electronic Communications Act, and the First
Respondent upheld said decision.
[2]. The Applicant was fined with a penalty of RS million imposed in terms of
regulation 12(1), of which R3 million was paid and R2 million suspended for a
period of three years.
[3]. The Applicant's review application is based on PAJA and the principle of
legality and alleges an unlawful approach to the evidence and a material error
of law.
[4]. The Respondents oppose the application and argue that neither an unlawful
approach to the evidence nor a material error of law was committed.
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[5]. In 2018, the Applicant introduced a 1GB WhatsApp bundle for R10.00. There
was an immediate , substantial demand for the bundle, which, according to the
Applicant, resulted in an unforeseeable and unprecedented increase in
network traffic.
[6]. The traffic growth was exponential and posed a material risk that the
Applicant's core network could collapse, with catastrophic consequences.
[7]. The Applicant states that it considered infrastructure upgrades and attempted
various technical solutions, none of which could reduce the risk to its network.
It therefore opted to increase the price of the bundle from R10.00 to R30.00
to reduce demand.
[8]. In terms of regulation 9(1 )(b) of the Standard Terms and Conditions for
Individual Electronic Communications Services, 2010 ('the Regulations') , a
price increase of this nature may not be implemented unless it has been filed
with ICASA (the "First Respondent"), at least seven working days before the
increase.
[9]. On 12 July 2018, the Applicant filed with the First Respondent its intention to
increase the bundle tariff to R30. Its initial intention was to give effect to the
increase on 21 July 2018. However, because of the immense operational
difficulties it faced and the attendant risk of network failure, it stated that it was
essential that the price increase be effected as soon as possible to alleviate
the strain on the network. It implemented the tariff adjustments on 16 July
2018.
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[1 0]. The Compliance and Consumer Affairs ("CCA") then commenced the
proceedings, which resulted in a referral of the matter to the Third Respondent
("the CCC") and the decisions that are the subject of this review.
[11]. The hearing was held on 4 March 2019, and the Applicant presented the
evidence of two witnesses, a Mr. Zoltan Miklos, its General Manager for
Network Planning. Mr Miklos is allegedly an expert with an MSC in Electrical
Engineering (Telecommunications).
[12]. The second witness was Divyesh Joshi, the General Manager: Financial
Planning, Analysis, and Reporting.
[13]. The purpose of this judgment is not to regurgitate their evidence. It suffices to
state that the Respondents did not lead any evidence to dispute the evidence
of the Applicant's witnesses.
[14]. CCC made its recommendation to the First Respondent to dismiss the
Applicant's consent defence on its interpretation that neither the relevant
regulations, the Electronic Communications Act, nor the ICASA Acts grant the
CEO of ICASA or the Council of ICASA the authority to grant an exemption to
the regulations applicable.
[15]. Further, it concluded that the special offer made by the Applicant caused the
crisis and that the Applicant should have foreseen it. The defence of necessity
was also dismissed on the basis that the crisis was self-created and due to
the Applicant's failure to foresee the consequences of the lower rate.
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[16]. Before implementing the increase, the Applicant wrote to the First Respondent
seeking permission to implement the price increase before the regulatory
prescribed seven-day period had lapsed. The First Respondent did not
respond.
[17]. The Applicant proceeded to implement the increase despite the First
Respondent's failure to respond to its request.
[18]. The First Respondent's Compliance and Consumer Affairs complained to the
Complaints and Compliance Committee. The complaint was that the Applicant
increased its price without providing the First Respondent with the required
seven-day notice before implementation.
[19]. The Applicant raised the defence of necessity in the circumstances to avert a
catastrophic network failure, that the First Respondent had tacitly consented
to the early implementation of the price increase, and that its conduct
amounted to substantial compliance with its duties in terms of the regulations
and the Electronic Communications Act.
[20]. The CCC rejected the Applicant's defence on the basis that the Applicant was
at fault for creating the crisis and should have foreseen the extent of the
demand for the bundle. Further, it concluded that two working days fell
substantially short of the seven working days required by regulation 9(1 )(b).
[21]. The CCA recommended a fine of R500 000.00. However, the Third
Respondent recommended a fine of R5 million.
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[22]. It is alleged that the Third Respondent did so without affording the Applicant a
proper or fair hearing in the circumstances where none of the evidence before
it justified such a severe and disproportionate sanction.
[23]. The Applicant has set out various grounds of review, which it has
compartmentalised into two, namely, the unlawful approach to evidence and
the material error of law.
[24]. The unlawful approach to evidence is premised on its substantial compliance
and necessity defences, which it argued ought to have been decided in its
favour because the evidence it led at the hearing was uncontested and should
have been accepted.
[25]. With respect to substantial compliance , it intended to comply with its statutory
obligations under the Act. It was argued on its behalf that the purpose of the
regulation is merely to afford the First Respondent proper notice of a tariff
change, and the regulation does not require the Applicant to obtain the First
Respondent's consent for the tariff change. Its conduct, accordingly,
constituted a substantial compliance with its duties in terms of the Regulations.
[26]. The CCC found that the evidence of its experts supported the contention that
the Applicant was at fault for creating the demand which led to the crisis. Its
experts stated that the crisis arose from the WhatsApp's special offer.
[27]. The Applicant alleges that the CCC's decision is reviewable in terms of s6
(2)(e)(iii) of PAJA because irrelevant considerations were considered. I am
unable to agree with the Applicant's submissions in this regard. The record
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suggests that CCC did consider all relevant facts and even relied on the
evidence provided by the Applicant.
[28]. There is also no merit in the argument based on s6(2)(f)(ii) that the decision is
not rationally connected. The fact that the Applicant could not persuade the
CCC that the launch of the WhatsApp R10 offer did not cause the crisis with
which it was confronted does not mean that the CCC did not properly consider
all the evidence before it.
[29]. The dismissal of the defence of substantial compliance cannot, in my view, be
held to have been unreasonable in the circumstances. The relevant regulation
requires a minimum of seven working days' waiting period, and the Applicant
waited two days. It must also be considered that the letter addressed to the
First Respondent requesting an indulgence was sent only on Friday after
business hours, and that on Monday, the Applicant went ahead and
implemented the tariff change without further attempts to engage the First
Respondent. That does not put the Applicant in good standing.
[30]. Whilst I do not agree with the Respondent's interpretation that the CEO or the
First Respondent does not have the power to condone the non-compliance
with the prescripts of the regulations in question, I am of the view that the
decision of the CCC in the circumstances can't be faulted.
[31]. My comments above are also applicable in relation to the Applicant's second
ground of review regarding what the Applicant perceived as a material error
of law. The Applicant had suggested that the First Respondent's failure to
respond to its letter of 13 July 2018, wherein it requested the First Respondent
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to waive the seven-day notice period, entitled it to assume that the First
Respondent had acceded to its request.
[32]. As mentioned above, the letter was sent on a Friday after business hours and
was apparently received by ICASA on 14 July 2018, which was a Saturday.
The Applicant implemented the increase on 16 July 2018, having not received
a response to its 13 July 2018 letter.
[33]. Whilst it may be that the matter was urgent, I am of the view that the conduct
of the Applicant was unreasonable in these circumstances and agree with the
Respondents ' submission that a reasonable approach would have been for
the Applicant to follow-up on its request rather than going ahead with the
implementation taking into account that its letter of the 13th of July was sent
after business hours. Surely, it could not have expected a response over the
weekend or early Monday.
[34]. To assume under those circumstances tacit consent was misplaced. Thus, the
decision of the Respondents cannot be faulted and is not reviewable under
any of the grounds raised by the Applicant.
[35]. However, this is not the end of the matter. The Applicant raised a procedural
challenge to the sanction imposed on it.
[36]. It is common cause that ICASA's Council did not give MTN any hearing or the
opportunity to make representations before taking its decision. Despite this
failure , ICASA endorsed the CCC's recommendation that increased the
sanction recommended by the CCA tenfold. The CCA had recommended a
fine of R500 000.00.
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[37]. This Court is of the view that the Council ought to have allowed the Applicant
to be heard in circumstances where it intended to increase the proposed fine
tenfold. Its failure to do so rendered the sanction unfair and unlawful.
[38]. The Applicant argued that the increase was grossly disproportionate to the
offence committed. It was further argued that the increase was based on
material errors made by the Council, namely that the Applicant had acted
deliberately and that it was at fault for creating the emergency and had profited
from the situation.
[39]. Section 3(2)(b)(iii) of PAJA requires an administrator to give a person affected
by its administrative action a clear statement of the administrative action that
it intends to take.
[40]. The SCA in Esau and Others1 has held that this section of PAJA requires that
adequate notice of the intended administrative action be given to facilitate
procedural fairness and the right to be heard:
"While 'no specific, all-encompassing test can be laid down for determining
whether a hearing is fair, two fundamental requirements need to be satisfied
before a hearing can be said to be fair, namely, there must be notice of the
contemplated action and a proper opportunity to be heard'. "
1
Esau and Others v Minister of Co-Operative Governance and Traditional Affairs and Others 2021 (3)
SA593 (SCA) para 92
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[41]. It is well established that procedural fairness entails that the person be given
such information as is necessary to make their right to make representations
meaningful.
[42]. I agree with the Applicant's contention that, without being informed that the
CCC and Council were considering increasing by tenfold the quantum of a fine
that the CCA recommended and being allowed to make representations on
the appropriateness of that tenfold increase in quantum, MTN's right to
procedural fairness was fatally impaired.
[43]. The Constitutional Court2 has found that procedural fairness, of which the audi
alteram partem principle is an incident, is not only a requirement of fairness,
but also conduces to better decision making:
"Procedural fairness... is concerned with giving people an opportunity to
participate in the decisions that will affect them, and - crucially - a chance of
influencing the outcome of those decisions. Such participation is a safeguard
that not only signals respect for the dignity and worth of the participants but is
also likely to improve the quality and rationality of administrative decision
making and to enhance its legitimacy."'
[44]. In Kadalie v Hemsworth3, the court described how the failure to provide all
relevant information would render the hearing futile:
22 See Joseph and Others v City of Johannesburg and Others 2010 (4) SA 55 (CC).
3 Kadelie v Hensworth NO 1928 TPD 495
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"A man cannot meet charges of which he has no knowledge; a man who has
to give evidence that he is of a respectable and deserving character is merely
beating the air if the tribunal before which he goes declines to give any
indication of the points against him which have to be met."
[45]. The principles of fairness require that a decision-maker "should not, so to
speak, 'keep anything up his sleeve', but should, on the contrary, put fairly to
the persons concerned any points against them".4
[46]. In this matter, the Applicant was left in the dark as to the risk that there would
be a tenfold increase in the sanction recommended by the CCA and was never
allowed to make representations on the proportionality or appropriateness of
that increase.
[47]. Where there is a right to be heard, the failure to afford a hearing vitiates the
decision entirely.
[48]. Our highest courts have stressed that there is no scope for an argument that
a hearing would have made no difference.
[49]. This Court accepts that the First Respondent's Council's members
deliberations proceeded based on a material factual error.
[50]. It proceeded on the premise that the Applicant profited from its alleged
contravention of the regulations. No such evidence was led in the tribunal or
before the CCC. The evidence before the CCC was that the Applicant lost
money because of the early implementation of the price increase.
4 Sullivan v Wheat Industry Control Board 1946 TPD 194
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[51]. The First Respondent's answering affidavit accepted that Councillors moved
from the premise that the Applicant profited but asserted that this did not
matter.
[52]. I agree with the Applicant's submission that the allegation that the false
premise was immaterial or did not matter is unsustainable . It featured
prominently in Council members' deliberations and was a significant factor the
Council considered in justifying the R5m fine, which was a tenfold increase on
the CCA's recommendation.
[53]. The law is clear: "If an administrative body takes into account any reason for
its decision which is bad or irrelevant, then the whole decision, even if there
are other good reasons for it, is vitiated."
[54]. Considering the above conclusions , this Court is of the view that it need not
address the remainder of the issues raised by the parties in their papers.
[55]. The following order is made:
1. The decision of the First Respondent and/or the Third Respondent,
dated 3 September 2019 , that the Applicant contravened Regulation
9(1 )(b) of Schedule 3 of the Standard Terms and Conditions for
Individual Electronic Communications Services Regulations, 201 O, as
amended, is confirmed ;
2. The decision of the First and Second Respondents imposing the
following sanctions on the Applicant:
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2.1 a fine of R5 million Rand of which R2 million is suspended for three
years;
2.2 The fine of R3 million be paid to ICASA within ninety working days;
2.3 A desist order, effective for three years, is reviewed and set aside.
3. The matter is remitted back to the First Respondent to afford the
Applicant a hearing in relation to an appropriate sanction for its failure to
comply with the relevant regulation that is the subject of this matter; and
4. The costs of this application are to be paid jointly and severally by the
First and Third Respondents on a party and party scale "C", including
costs of two counsels.
Judge of the High Court, Pretoria
Delivered: This judgment is handed down electronically by uploading it to the electronic
file of this matter on Caselines.
Appearances:
For the applicant: Adv G Marcus SC, Adv N Ferreira & Adv M Phalane
Instructed by: Webber Wentzel Attorneys
For the respondents: Adv W Mokhare SC & Adv N Makhaye
Instructed by: Motsoeneng Bill Attorneys Incorporated
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