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In a judgment handed down at the beginning of October in the matter of Msunduzi Municipality v Dark Fibre Africa (RF) (Pty) Limited [2015] JOL 33535 (SCA) the Supreme Court of Appeal had the opportunity to clarify the interpretation of section 22 of the Electronic Communications Act 36 of 2005 ("ECA").

The section in question reads as follows:

Entry upon and construction of lines across land and waterways

(1)  An electronic communications network service licensee may—

       (a)  enter upon any land, including any street, road, footpath or land reserved for public purposes, any railway and 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 any action in terms of subsection (1), due regard must be had to applicable law and the environmental policy of the Republic.

Dark Fibre Africa ("DFA") was planning to lay underground fibre optic cable along certain of the streets of Msunduzi Municipality DFA notified the Municipality of its intention to do so. As the relevant municipality, the Municipality would need to authorise the plan. When the Municipality refused repeatedly to grant approval, DFA commenced construction, regardless.

The Municipality brought an urgent application in the high court, for an interim interdict stopping the construction. DFA is the holder of an Electronic Communications Network Services licence ("ECNS") and an Electronic Communications Network licence ("ECN"), issued by the Independent Communications Authority of South Africa ("ICASA") in terms of the ECA.

The Municipality’s application included a request for a declarator that DFA had no entitlement to exercise any of the powers provided for in section 22 without the Municipality’s prior approval.

The High Court dismissed the application on the basis that DFA did not require permission from the Municipality to exercise its rights under section 22. The high court relied on findings in Mobile Telephone Networks (Pty) Ltd v SMI Trading CC [2012] JOL 29559 (SCA) in arriving at its decision, which found inter alia that the exercise by MTN of its powers in terms of section 22 under ECA constitutes administrative action, and as such those powers must be exercised lawfully, reasonably and procedurally fairly.

On appeal, the first argument raised was that the Court’s interpretation of section 22 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. It was argued secondly, that DFA’s decision to exercise its rights under section 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. Finally, the Municipality submitted that DFA failed to have regard to applicable law within the meaning of section 22(2) in executing its section 22 decision.

In this case, the court found that one of the Municipality’s contentions was that DFA’s attitude that its rights under section 22 were “absolute” was due to an overbroad statement in MTN, on the interpretation of the powers that licensees have under s 22. The nub of the MTN case was that licensees under section 22 are obliged to comply with applicable law, but such law cannot limit the very action that is authorised by section 22(1). In the circumstances, the Municipality conceded that if section 22 required the licensee to comply with applicable laws, as was held in MTN, the dictum complained of was not overbroad.

The Court also rejected the Municipality’s argument that a distinction must be drawn between private and state organ landowners. The Act does not provide for the differential treatment of landowners contended for by the Municipality.

The Municipality’s concession that the interpretation of section 22 in MTN was not overbroad meant that the basis for the declarator sought in the main relief fell away, because DFA did not have to obtain the Municipality’s approval to exercise its rights under section 22. All it had to do was to comply with applicable law when executing the works.

Given that DFA’s decision to commence construction constituted administrative action, it would be subject to review. The Municipality had not established any grounds for review in its papers.

On other grounds, the Municipality attempted to challenge the lawfulness of DFA’s conduct. The Municipality argued that DFA, in lodging its requests for approval, had submitted to the Municipality’s processes, raising a legitimate expectation in favour of the Municipality, that it would see those processes to finality before commencing with construction. The Municipality argued that DFA's unilateral decision to commence construction was unlawful. This submission was found by the Court to be without merit. Instead, the court found that DFA had attempted to engage with the Municipality in order to facilitate working with the Municipality, but it was not legally required to do so.

The Court’s conclusion was that 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 section 22. The appeal was dismissed with costs.

With thanks: LexisNexis Current Awareness Service

Adam Pike
Author: Adam Pike
Adam Pike holds BA, LLB and LLM degrees from the University of Cape Town. His LLM, attained from the School of Advanced Legal Studies at the University of Cape Town, focused on commercial and corporate law, particularly corporate governance and securities. Adam specialises in the implementation of corporate actions and transactions.

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