THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT

Not Reportable
Case No: 325/2021
In the matter between:
PIONEER FOODS (PTY) LTD

APPELLANT
and
ESKOM HOLDINGS SOC LIMITED

FIRST RESPONDENT
WALTER SISULU LOCAL MUNICIPALITY  SECOND RESPONDENT
NATIONAL ENERGY REGULATOR OF
SOUTH AFRICA

THIRD RESPONDENT

Neutral citation: Pioneer Foods (Pty) Ltd v Eskom Holdings SOC Limited &
Others (325/2021) [2022] ZASCA 171 (1 December 2022)

Coram:
VAN DER MERWE, MAKGOKA and HUGHES JJA and
BASSON and WINDELL AJJA
Heard:
8 November 2022
Delivered: 1 December 2022
Summary:  Appeal – section 16(2)(a)(i) of Superior Courts Act 10 of 2013 –
mootness of appeal – issues of law in appeal settled by an earlier judgment of this
Court – disputes overtaken by events – appeal  moot – no discrete legal issue of
public importance that would affect matters in the future.

________________________________________________________________
ORDER
________________________________________________________________
On appeal from: Gauteng Division of the High Court, Johannesburg (Mbongwe
AJ, sitting as a court of first instance):
1   The appeal is dismissed.
2   There is no order as to costs.
________________________________________________________________
JUDGMENT
________________________________________________________________

Makgoka JA (Van der Merwe and Hughes JJA and Basson and Windell AJJA
concurring):
[1] On 8 November 2022 when this matter was called, counsel for the
appellant, Pioneer Foods (Pty) Ltd (Pioneer) and for the first respondent, Eskom
Holdings Soc Limited (Eskom)1 were invited to address the Court on the
submission by Eskom in its heads of argument that the appeal had become moot.
Upon hearing counsel, this Court dismissed Pioneer’s appeal with no order as to
costs, and undertook to furnish reasons later. These are the reasons for the order,
which are premised on our finding that the appeal has become moot, and that
there is no basis to exercise this Court’s discretion to hear it. Section 16(2)(a)(i)
of the Superior Courts Act 10 of 2013 provides that:
‘When at the hearing of an appeal the issues are of such a nature that the decision sought will
have no practical effect or result, the appeal may be dismissed on this ground alone.’

[2] Pioneer appealed, with the leave of this Court, against the order of the
Gauteng Division of the High Court, Johannesburg (the high court) which

1 Both the second respondent, the Walter Sisulu Local Municipality and third respondent, the National Energy
Regulator of South Africa (NERSA) did not participate in the appeal.

dismissed its application to review and set aside certain decisions of Eskom to
implement intermittent electricity supply interruptions in the area of jurisdiction
of the second respondent, the Walter Sisulu Local Municipality (the
Municipality).

[3] Eskom supplies electricity to the Municipality, which, in turn, distributes
electricity to the end-users in its area of jurisdiction. The Municipality fell into
arrears with payment for electricity to Eskom. The arrears eventually amounted
to over R100m. As part of its measure to exert pressure on the Municipality to
pay the arrears, Eskom took decisions to implement intermittent electricity supply
interruptions in the area of jurisdiction of the Municipality between July 2017 and
January 2018 (the impugned decisions). The notices for the interruptions were
published by Eskom in local newspapers.

[4] Pioneer is a producer of food and beverages. It runs a maize mill located
within the area of the Municipality, and was as such affected by Eskom’s
electricity supply interruptions. After unsuccessful attempts to resolve the issue
with Eskom, Pioneer launched a two-part application in the high court in
January 2018. In Part A, which it brought on an urgent basis, it sought and
obtained, interim interdictory relief against Eskom from implementing its
decision of 2 January 2018 to interrupt the supply of electricity to Pioneer’s
business premises.

[5] In Part B, Pioneer sought the judicial review and setting aside of the
relevant Eskom decisions. It relied on various grounds including that Eskom was
not entitled to interrupt the supply of electricity to the Municipality solely for the
purpose of coercing the latter to pay its debt. Pioneer also contended that where
Eskom sought to interrupt the supply of electricity, it had to comply with the
substantive and procedural requirements of the Promotion of Administrative

Justice Act 3 of 2000 (the PAJA). Pioneer also sought an order that Eskom should
supply electricity to its business premises, alternatively to the Municipality. In the
further alternative, Pioneer sought orders: (a) compelling the Municipality to pay
the outstanding debt to Eskom; and (b) compelling Eskom and the Municipality
to agree to a payment plan to ensure uninterrupted supply of electricity to its
business premises.

[6] In response, Eskom raised a preliminary point that Pioneer’s application
was premature, based on the provisions of s 30 of the Electricity Regulation Act 4
of 2006 (the ERA). That section provides for the resolution of disputes by the
third respondent, the National Energy Regulator of South Africa (NERSA) in
relation to any dispute arising out of the ERA. Section 30(1)(b) reads:
‘[Nersa] must, in relation to any dispute arising out of this Act –
…
if it is a dispute between a customer or end user on the one hand and a licensee, registered
person, a person who trades, generates, transmits or distributes electricity on the other hand,
settle that dispute by such means and on such terms as [NERSA] thinks fit.’
[7] Eskom contended that since the PAJA was applicable to each of the
decisions which Pioneer sought to impugn, s 30 was the ‘internal remedy’
envisaged in s 7(2) of the PAJA which Pioneer had to first exhaust before
launching the review application.2 I refer to this as ‘the prematurity defence.’
Substantively, to justify the lawfulness of its decisions, Eskom relied on s 21(5)
of the ERA. The section, among other things, grants Eskom the right to reduce or
terminate the supply of electricity to a customer if the latter has ‘failed to honour,
or refuses to enter into, an agreement for the supply of electricity,’ or
‘contravened [its] payment conditions.’ I refer to this as ‘the s 21(5) defence.’

2 Section 7(2) of the PAJA reads: ‘[No] court or Tribunal shall review an administrative action in terms of this
Act unless any internal remedy provided for in any other law has first been exhausted.’

[8] Part B came before the high court in July 2020, and judgment was delivered
on 12 October 2020. The high court held that Pioneer, as a customer of the
Municipality, had no locus standi to seek the orders it did against Eskom, as the
electricity supply agreement was between Eskom and the Municipality. Despite
this finding, the high court proceeded to determine the merits of the application.
It upheld both of Eskom’s two defences referred to above. With regard to the
‘prematurity defence’, the high court stated that ‘the engagement of [NERSA] is
part of the internal problem resolution processes envisioned in section 7(2) of the
PAJA…’ and that the failure to comply with it, was fatal to Pioneer’s application.

[9] As to the s 21(5) defence, the high court, with reliance on Rademan v
Moqhaka Local Municipality3 held that Eskom was empowered by s 21(5) of the
ERA to interrupt the supply of electricity to a defaulting customer such as the
Municipality. The high court also held that Eskom had followed proper
procedures, including the PAJA and regulatory provisions, when it gave notices
to implement the electricity supply interruptions. Consequently, the high court
dismissed Pioneer’s application with costs.

[10] On 29 December 2020, judgment in Eskom v Resilient Properties and Two
Similar Matters4 (Resilient) was delivered. This Court provided clarity on two
issues raised in this appeal, namely, whether: (a) Eskom was in law entitled to
invoke s 21(5) of the ERA without a court order authorising it to do so; (b) s 30
of the ERA provides for an internal remedy envisaged in the PAJA which must
be exhausted before resorting to the courts.

3 Rademan v Moqhaka Local Municipality [2013] ZACC 11; 2013 (4) SA 225 (CC).
4 Eskom Holdings SOC Ltd v Resilient Properties (Pty) Ltd and Others; Eskom Holdings SOC Ltd v Sabie
Chamber of Commerce and Tourism and Others; Chweu Local Municipality and Others v Sabie Chamber of
Commerce and Tourism and Others [2020] ZASCA 185; [2021] 1 All SA 668 (SCA); 2021 (3) SA 47 (SCA)
(Resilient).

[11] As to the first issue, this Court concluded that s 21(5) of the ERA empowers
Eskom to reduce or terminate the supply of electricity to its customers in the
circumstances spelt out in the section. And that it may exercise that power without
prior authorisation by a court.5 As to the second issue, this Court rejected Eskom’s
contention that s 30 constituted an internal remedy envisaged in s 7 of the PAJA.
It explained that the section ‘cannot apply to a dispute where Eskom seeks to
interrupt bulk electricity supply to a municipality which, although willing to settle
its indebtedness, is unable to do so because it is not only facing financial crisis
but also contests Eskom’s right to interrupt electricity.’6

[12] Additionally, in Resilient, this Court also made another important finding
(which did not feature in the present case). It held that Eskom was obliged to
resolve its disputes with the municipalities to which it supplies electricity,
through the framework of the Intergovernmental Relations Framework Act 13 of
2005 (the IRFA). This Court alluded to the unique nature of the relationship
between Eskom and such municipalities. Eskom as an organ of state, and the
municipalities as local spheres of government, bear constitutional obligations to
provide communities with electricity, and any interruption thereof, implicates the
municipalities’ ability to discharge its obligations.7

[13] This brought the relationship within the purview of the IRFA.8 Therefore,
before taking the decision to interrupt electricity supply to the municipalities
failing to pay for the electricity supplied, Eskom is required to comply with ss 40
and 41(3) of the IRFA, which require organs of state to exhaust all other remedies
to resolve disputes before they approach a court.9 Thus, Eskom should bear in

5 Ibid para 55.
6 Ibid para 84.
7 Ibid para 80.
8 Ibid para 79.
9 Ibid para 81.

mind that terminating the supply of electricity to an entire municipality in the
circumstances provided for in s 21(5), would have the effect of collapsing the
entire municipality, rendering it unable to fulfil its constitutional and statutory
mandate to provide basic services.10

[14] The effect of this Court’s judgment in Resilient is that the jurisprudential
issues in this appeal, namely the application of s 21(5) and whether s 30
constitutes an internal remedy envisaged in s 7(2) of the PAJA, have now been
decided. This Court has also clarified Eskom’s obligation to comply with the
relevant provisions of the IRFA before it decides to interrupt electricity supply to
the municipalities. Furthermore, it is common cause that as an organ of state,
Eskom’s decision to interrupt electricity to municipalities, constitutes
‘administrative action’ envisaged in s 1 of the PAJA, and that accordingly, it must
in each instance comply with both the substantive and procedural fairness
requirements of the PAJA. In this Court, counsel for Eskom gave an assurance of
Eskom’s commitment in this regard.

[15] What then, is left of the dispute between the parties? The impugned
decisions, which were time-bound, have come and gone, and it is not possible for
Eskom to implement them again. Whether they were tainted by procedural and
substantive irregularities, as Pioneer asserted, is immaterial now. An order in
respect of those decisions would have no practical effect. If in future it needs to
implement electricity supply interruptions, Eskom would have to take new
decisions, which would have to comply with the relevant provisions of the IRFA
and the PAJA.

10 Ibid para 58.

[16] Viewed in light of the above, the appeal has become moot, and it must
therefore be dismissed on this basis alone in terms of s of 16(2)(a)(i) of the
Superior Courts Act. However, this Court has a discretion to enter into the merits
of an appeal, notwithstanding the mootness of the issue as between the parties
when ‘a discrete legal issue of public importance arose that would affect matters
in the future’ and on which adjudication of this Court is required.11 In the present
case, no such issue arises. For all these reasons, the appeal was dismissed. With
regard to costs, we deemed it fair that there should not be any order in respect
thereof.

______________________
T MAKGOKA
JUDGE OF APPEAL

11 Qoboshiyane NO and Others v Avusa Publishing Eastern Cape (Pty) Ltd and Others [2012] ZASCA 166; 2013
(3) SA 315 (SCA) para 5.

APPEARANCES:
For appellant:
JPV McNally SC (with him BL Manentsa)
Instructed by:
Webber Wentzel, Johannesburg
Honey Attorneys Inc., Bloemfontein

For first respondent: SL Shangisa SC (with him L Rakgwale)
Instructed by:
Ngeno & Mteto Inc., Pretoria
Kramer Weihmann & Joubert Attorneys, Bloemfontein.

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
MEDIA SUMMARY

FROM:
The Registrar, Supreme Court of Appeal

DATE:
1 December 2022
STATUS:
Immediate
Please note that the media summary is for the benefit of the media and does not form part of
the judgment of the Supreme Court of Appeal.

Pioneer Foods (Pty) Ltd v Eskom Holdings SOC Limited & Others (325/2021) [2022] ZASCA 171
(1 December 2022)
Today the Supreme Court of Appeal handed down a judgment in which it furnished reasons for an order
made on 8 November 2022 dismissing the appeal of the appellant, Pioneer Foods (Pty) Ltd (Pioneer)
with no order as to costs. In its reasons, the Court concluded that the appeal had become moot for the
following reasons.
Pioneer had challenged Eskom’s decisions made between July 2017 and January 2018 to implement
intermittent electricity supply interruptions in the Walter Sisulu Municipality between July 2017 and
January 2018. Pioneer, as an end-user, was affected by Eskom’s decisions.  In its review application
against Eskom, Pioneer had raised two legal issues, ie whether: (a) Eskom was in law entitled to invoke
s 21(5) of the ERA without a court order authorising it to do so; (b) s 30 of the Electricity Regulation
Act 4 of 2006 (the ERA) provides for an internal remedy envisaged in the Promotion of Administrative
Justice Act 3 of 2000 (the PAJA) which must be exhausted before resorting to the courts.  The Gauteng
Division of the High Court, Johannesburg (the high court) had dismissed Pioneer’s review application.

While Eskom’s appeal was pending, judgment in Eskom Holdings SOC Ltd v Resilient Properties (Pty)
Ltd and Others; Eskom Holdings SOC Ltd v Sabie Chamber of Commerce and Tourism and Others;
Chweu Local Municipality and Others v Sabie Chamber of Commerce and Tourism and Others [2020]
ZASCA 185; [2021] 1 All SA 668 (SCA); 2021 (3) SA 47 (SCA) (Resilient), was delivered. This Court
provided clarity on two issues raised by Pioneer in the appeal. As to the first issue, this Court concluded
that s 21(5) of the ERA empowers Eskom to reduce or terminate the supply of electricity to its customers
in the circumstances spelt out in the section. And that it may exercise that power without prior
authorisation by a court. As to the second issue, this Court rejected Eskom’s contention that s 30
constituted an internal remedy envisaged in s 7 of the PAJA, holding that it did apply in the
circumstances.

Additionally, in Resilient, this Court also made another important finding (which did not feature in the
present case). It held that Eskom was obliged to resolve its disputes with the municipalities to which it
supplies electricity, through the framework of the Intergovernmental Relations Framework Act 13
of 2005 (the IRFA). Therefore, before taking the decision to interrupt electricity supply to the

municipalities failing to pay for the electricity supplied, Eskom was required to comply with ss 40 and
41(3) of the IRFA, which require organs of state to exhaust all other remedies to resolve disputes before
they approach a court.

Given the above, this Court concluded that in the light of the Resilient judgment, the issues of law which
Pioneer sought clarity on, had been decided. As to Eskom’s decisions to implement electricity
interruptions made in period July 2017 – January 2018, the Court pointed out that those were time-
bound. They had come and gone, and it was not possible for Eskom to implement them again. Whether
they were tainted by procedural and substantive irregularities, as Pioneer asserted, was immaterial now.
An order in respect of those decisions would have no practical effect. If in future it needs to implement
electricity supply interruptions, Eskom would have to take new decisions, which would have to comply
with the relevant provisions of the IRFA and the PAJA.
Accordingly, the Court held that the appeal had become moot, and had to be dismissed on this basis
alone in terms of s of 16(2)(a)(i) of the Superior Courts Act. However, the Court also considered
whether it should exercise its discretion to enter into the merits of an appeal, notwithstanding the
mootness. This it can do, when a discrete legal issue of public importance arose that would affect matters
in the future and on which adjudication of the Court is required. It concluded that no such issue arose
in the present matter, hence the dismissal of the appeal. With regard to costs, the Court deemed it fair
that there should not be any order in respect thereof.

*END*