THE SUPREME COURT OF APPEAL OF SOUTH AFRICA

JUDGMENT

Case no: 20119/2014
Reportable

In the matter between:

MSUNDUZI MUNICIPALITY

APPELLANT

and

DARK FIBRE AFRICA (RF) (PTY) LIMITED

RESPONDENT

Neutral citation: Msunduzi Municipality v Dark Fibre Africa (20119/14) [2014]
ZASCA 165 (01 October 2011)

Coram:
Lewis, Cachalia and Swain JJA and Fourie and Dambuza AJJA

Heard:
19 September 2014

Delivered: 01 October 2014

Summary: Interpretation – s 22 of Electronic Communications Act 36 of 2005 –
no permission required from landowner for an electronic network
services licensee to exercise rights in terms of  s 22 – landowner
includes state organs – licensees must comply with applicable laws –
applicable law cannot be used to limit  the very act authorised in the
licence - exercise of rights under s 22 constitutes administrative action
and subject to PAJA constraints.

ORDER

On appeal from:  Kwazulu-Natal High Court, Pietermaritzburg (Steyn J sitting as
court of first instance)

The appeal is dismissed with costs, including the costs of two counsel.
__________________________________________________________________

JUDGMENT
__________________________________________________________________

DAMBUZA AJA (Lewis, Cachalia and Swain JJA and Fourie AJA
concurring)

[1] This is an appeal, with leave of the court below, against an order of the
Kwazulu-Natal Division of the High Court, Pietermaritzburg (Steyn J) dismissing
an application to have the respondent interdicted from conducting construction
work on municipal land within the area of jurisdiction of the appellant.

[2] The appellant is a local municipality established in terms of the Municipal
Systems Act 32 of 2000. It controls land and public spaces in the Pietermaritzburg
area.

[3] The respondent is a private company. It holds an
Electronic
Communications Network Services licence (ECNS) and an Electronic
Communications Network licence (ECN) both issued by the Independent
Communications Authority of South Africa in terms of the Electronic
Communications Act 36 of 2005 (ECA).

[4] The background facts to this appeal are: in July 2012 the respondent notified
the appellant of its intention to construct an underground fibre optic cable network
along certain streets within Pietermaritzburg. Over the following 16 months, it
made numerous attempts to obtain the appellant‟s approval for its construction
implementation plans (the wayleaves). The respondent refused to grant such
approval. On 9 September 2013 the respondent advised the appellant that if the
approval was not granted by 17 September 2013, it would proceed with
construction. On 12 November 2013 the respondent commenced construction. On
25 February 2014 the appellant instituted proceedings in the high court, on an
urgent basis, seeking an interim interdict stopping the construction. The interim
interdict was sought on the basis that the court would grant, as final relief, a
declarator that the respondent had no entitlement to exercise any of the powers
provided for in s 22 without the appellant‟s prior approval. The appellant
contended that, as an alternative to the declaratory order, the respondent‟s decision
to exercise rights under s 22 should be reviewed and set aside. It also sought an
order that the respondent be permanently interdicted from entering land owned by
the appellant and from constructing an electronic communications network or
facility thereon. A further anticipated order was that the respondent remove its
equipment on land owned by the appellant. The appellant‟s case was that the
respondent had failed to obtain permission from it to commence construction.

[5] In dismissing the application, the high court followed the decision of this
Court in Mobile Telephone Networks (Pty) Ltd v SMI Trading CC1 (MTN) and
found that the respondent did not require permission from the appellant to exercise

1 Mobile Telephone Networks (Pty) Ltd v SMI Trading CC 2012(6) SA 638 (SCA)

its rights under s 22. That court also found that the appellant had not made out a
proper case for review of the respondent‟s decision to commence construction.

[6] In MTN, a private licensee (MTN) invoked s 22 to justify its continued
occupation, after expiry of its lease, of a base station located on the respondent‟s
land. On appeal this court found that a licensee does not require the permission of a
landowner to exercise its rights under s 22.

[7] Section 22 provides:
‘22. Entry upon and construction of lines across land and waterways.
(1) An electronics communications network licensee may –
(a)
enter upon any land, including any street, road, footpath or land reserved for public
purposes, any railway or any waterway of the Republic;
(b)
construct and maintain an electronic communications network or electronic
communications facilities upon, under, over, along or across any land, including any
street, road, footpath or land reserved for public purposes, any railway and any waterway
of the Republic; and
(c)
alter or remove its electronic communications network or electronic communications
facilities, and may for that purpose attach wires, stays or any other kind of support to any
building or other structure.
(2) In taking action in terms of subsection (1), due regard must be had to applicable law and the
environmental policy of the Republic.‟

[8] Malan JA said:
„The powers given by s 22 are, as I have said, required to enable the providers of both fixed-line
and wireless telecommunications operators to achieve their objectives….
…the reason for the powers given by s 22(1) would fall away if consent of the owner were to be
a requirement. Section 22(1) specifically dispenses with the need to obtain the owner‟s

consent…..The words “with due regard” generally mean “with proper consideration” and, in the
context, impose a duty on the licensee to consider and submit to the applicable law. This duty
arises only when the licensee is engaged “in taking any action in terms of subsection (1)”: the
“action” referred to by s 22(1) is entering, constructing and maintaining, altering and removing.
These actions are authorised. It is “in their taking” that due regard must be had to the applicable
law. A fortiori the “applicable law” cannot limit the very action that is authorised by s 22(1).‟2
(My emphasis.)

[9] Thus this court, in MTN, expressly rejected the argument that the consent of
a landowner is required to exercise rights under s 22(1). It further held that
licensees are obliged to comply with applicable law, an issue to which I shall
revert.

[10] The appeal was based on three grounds:
(a)
that this court‟s interpretation of s 22 of the ECA in MTN was incorrect in
that the court did not take into account the rights and duties of organs of state in
their administrative role;
(b)
that the respondent‟s decision to exercise its rights under s 22 did not meet
the requirements of legality or of lawful administrative action in terms of the
Promotion of Administrative Justice Act 3 of 2000 (PAJA);
(c)
that the respondent failed to have regard to applicable law within the
meaning of s 22(2) of the ECA in executing its s 22 decision.

[11] The appellant contended that its delay in approving the respondent‟s
wayleaves was justified in view of the respondent‟s attitude that its rights under

2 Paragraphs  14 and 15.

s 22 were „absolute‟. This the appellant attributed to an overbroad statement in
MTN, on the interpretation of the powers that licensees have under s 22. The
argument was that in MTN this court found that licence holders were only obliged
to „have due regard to applicable laws‟ but did not necessarily have to comply with
them. As already shown above, the court explained, in MTN, that licensees under
s 22 are obliged to comply with applicable law, but such law cannot limit the very
action that is authorised by section 22(1).3 Counsel for the appellant conceded that
if s 22 required the licensee to comply with applicable laws, as in my view was
undoubtedly held in MTN, the dictum complained of was not overbroad.

[12] In so far as the appellant argued that a distinction must be drawn between
private and state organ landowners, that argument also falls to be rejected. The
appellant‟s argument was essentially that because of the public order or benefit
role that state organs play, the regard that must be had to applicable law is that the
law must be complied with, not only in respect of the execution of a decision but
also in the taking thereof.

[13] There is, however, no scope, in the ECA, for the differential treatment of
landowners contended for by the appellant.  Express mention, in s 22(1)(a) of
„…any land, including any street, road, footpath or land reserved for public
purposes, any railway and any waterway of the Republic‟ can only mean that s
22(1) is applicable to land held by state organs as it is to land held by private
persons.

3 Paragraph 15

[14] Once counsel for the appellant conceded that the interpretation of s 22 in
MTN was not overbroad, the basis for the declarator sought in the main relief fell
away, because the respondent did not have to obtain the appellant‟s approval to
exercise its rights under s 22. All that the respondent had to do was to comply with
applicable law when executing the works. No case was made that it had not done
so.

[15] The review could also never have succeeded. Indeed, as was held in MTN,
the respondent‟s decision to commence construction constituted administrative
action. It was therefore subject to review on the grounds listed in s 6 of PAJA.4
But, as submitted on behalf of the respondent, PAJA is exhaustive on the grounds
upon which the respondent‟s decision can be challenged; the legality principle is
not available as a separate basis for doing so. And even if the decision could be
challenged on the legality principle, rationality, on which a legality challenge
should be brought, is a much narrower basis than the grounds available under
PAJA, which the appellant failed to prove.

[16] The appellant‟s argument on legality was not based on rationality. Its
argument was that, for the respondent‟s decision to meet the legality requirement,
the respondent had to accept the appellant‟s standard terms and conditions or such
other conditions as would have the effect of protecting public interest. This was
simply another way of imposing a consent requirement on the appellant. If the
ECA did not require consent for the exercise of rights under s 22, failure to accept
the appellant‟s conditions before taking the decision could not be unlawful and
unreasonable.

4 Section 6(2) of PAJA; MTN supra, paras 21, 24 and 35.

[17] The appellant contended further that the taking of the decision was
procedurally unfair because the respondent had failed to give due notice of the
imminent construction to members of the public, refused to agree to the appellant‟s
conditions for the construction and abandoned the negotiation process it had started
with the appellant. Again, as submitted on behalf of the respondent, the appellant
failed to demonstrate that the exercise of the rights had a detrimental effect on
members of the public. Further, it did not prove any right to challenge the
respondent‟s decision on behalf of persons other than itself.

[18] Moreover, regarding the procedural unfairness the respondent had, over a
period of approximately 16 months, attempted to prevail upon the appellant to
approve its wayleave requests, to no avail. Attempts at reaching agreement on the
conditions that the appellant sought to impose failed because of the failure, by the
appellant‟s officials, to cooperate with the respondent.

[19] Further, the appellant had, as far back as late 2012, taken a unilateral
decision to impose a moratorium on new and pending wayleave requests. This was
only communicated to the respondent in December 2013, after construction had
commenced. At the hearing of the appeal counsel for the appellant readily
conceded that he could not make any submissions regarding the moratorium.  In
the end there was never going to be finality in respect of approval of the wayleaves
and settlement on conditions of implementation as the appellant had precluded
itself from engagement with the respondent.

[20] On lawfulness, the appellant contended that the respondent, in lodging its
requests for wayleave approval, had submitted to the appellant‟s processes, raising

a legitimate expectation in favour of the appellant, that it would see those
processes to finality before commencing with construction. In the light of that,, it
was argued, its unilateral decision to commence construction was unlawful. This
argument has no legal basis. The respondent was not required by law even to
engage in a process of obtaining wayleaves. It did so only to facilitate working
together with the appellant, and not because it was legally required to do so.
Although the appellant argued that it had become practice for licensees to apply for
wayleaves, and that the respondent was accordingly obliged to do so, this cannot
be so. It would defeat the very object of s 22 which is to enable a licensee to enter
upon land and perform its work without first obtaining the consent of the
landowner. But the argument must in any event fail because, on the appellant‟s
version, it had put a moratorium in place which would have precluded the
respondent from even applying for wayleaves. And in addition, the argument fails
to take into account the numerous failures by the appellant itself to cooperate with
the respondent.

[21] A further argument by the appellant on the unlawfulness of the respondent‟s
decision was that the respondent had not complied with applicable law as required
under s 22(2) in that it had failed to comply with By-Law 32 of the Motor Vehicle
and Road Traffic Regulation By-Laws, which prohibits digging on the appellant‟s
roads and thoroughfares without permission from the City Engineer. Apart from
the fact that this contention was made only in the appellant‟s reply, it falls foul of
the principle that applicable law may not be used to limit the very act authorised
under s 22.

[22] As to the complaint, by the appellant, that in executing the works the
respondent failed to comply with applicable laws, standards and procedures in
executing the works, the correct procedure would have been for the appellant to
seek a court order compelling the respondent to comply with such laws.

[23] In summary, the application was misconceived in that it was based upon an
erroneous interpretation of the Act, namely that the consent of a public authority
was required before a licensee could take the action envisaged by s 22. In addition,
no case was made out for a review of the decision in terms of PAJA. Although a
public authority would be entitled to challenge the manner in which a licensee
takes the action contemplated in s 22, which does not comply with the „applicable
law‟, that was not the challenge raised in this case

[24] On the question of costs, there is no reason to fear that an award of costs
against the appellant might have a chilling effect on constitutional litigation.
Accordingly the usual rules as to costs must apply.

[25] Consequently, the appeal is dismissed with costs, including the costs of two
counsel.

____________
N Dambuza
Acting Judge of Appeal

APPEARANCES:

For Appellant:

AJ Dickson SC (with him HS Gani)

Instructed by:

Matthew Francis Inc., Pietermaritzburg

Rossouw Attorneys, Bloemfontein

For Respondent:

DN Unterhalter SC (with him J Wilson)

Instructed by:

Roestof & Kruse Attorneys, Pretoria

Symington & De Kok, Bloemfontein

SUPREME COURT OF APPEAL OF SOUTH AFRICA

MEDIA SUMMARY – JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL

FROM

The Registrar, Supreme Court of Appeal

DATE

01 October 2014

STATUS

Immediate

Please note that the media summary is intended for the benefit of the media and does
not form part of the judgment of the Supreme Court of Appeal.

MSUNDUZI MUNICIPALITY V DARK FIBRE AFRICA (RF) (PTY) LIMITED (20119/14)
[2013] ZASCA 165 (01 October 2014)

Today the Supreme Court of Appeal handed down judgment confirming an order of the
Kwazulu Natal High Court, Piermaritzburg in which an application brought by the Msunduzi
Municipality to interdict Dark Fibre Africa (DFA) from proceeding with installation of an
underground electronic communications cable network in some parts of Pietermaritzburg.

The Municipality had contended that DFA was obliged to obtain its permission to commence
with construction and that it (DFA) was obliged to consent to the municipality’s terms and
conditions of construction. Its case was that distinction had to be drawn between private and
state organ landowners in that to exercise their rights under s 22 of the Electronic
Communications Act (ECA) licensees under that Act had to obtain permission from
landowners in respect where exercise of the rights related to land held by state organs;
whereas such permission is not required in respect of land held by private entities.

In dismissing the appeal the SCA held that licensees under the Electronic Communication Act
(ECA) do not require permission from a local authority to exercise their rights under s 22 of
the ECA.  This is so when licensees seek to exercise their rights under both privately owned
land and land owned by State organs. Licensees are, however obliged to comply with
applicable law when implementing decisions taken in terms of s 22.  But in this case the
municipality had not made out any case that DFA had failed to comply with laws, practices
and procedure applicable in the construction underway. The case brought by the municipality
had been directed at DFA’s decision to commence construction.

The municipality had also contended that the decision by DFA to commence construction
should be reviewed and set aside as it did not comply with the requirement of legality and was
procedurally unfair, unreasonable and unlawful. The court held that there was no evidence to
support the contention by the municipality’s challenge based on legality, procedural
unfairness, unreasonableness and unlawfulness. It was, in fact the municipality that had
repeatedly refused to cooperate with DFA for approval of the plan of construction, including
agreement on conditions on which construction would proceed.

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