Dark Fibre Africa (Pty) Ltd v City of Cape Town

JurisdictionSouth Africa
Citation2019 (3) SA 425 (SCA)

Dark Fibre Africa (Pty) Ltd v City of Cape Town
2019 (3) SA 425 (SCA)

2019 (3) SA p425


Citation

2019 (3) SA 425 (SCA)

Case No

195/2018
[2018] ZASCA 168

Court

Supreme Court of Appeal

Judge

Lewis JA, Cachalia JA, Seriti JA, Molemela JA and Rogers AJA

Heard

November 30, 2018

Judgment

November 30, 2018

Counsel

JJ Gauntlett SC QC (with FB Pelser) for the appellant.
G Budlender SC
(with R Paschke) for the respondent.

Flynote : Sleutelwoorde

Telecommunication — Fibre optic network — Construction — City imposing requirements on — Lawfulness thereof — Electronic Communications Act 36 of 2005, s 22. C

Headnote : Kopnota

In a High Court, Dark Fibre Africa (Pty) Ltd, a licensee under the Electronic Communications Act 36 of 2005, attacked the validity of a permission and requirements imposed by the City of Cape Town as prerequisites to trench fibre optic cables. (See [4], [6] and [14].)

The permission and consents stemmed from s 11(1) of the City of Cape Town D By-Law Relating to Streets, Public Places and Prevention of Noise Nuisances 2007, which provides that '(n)o person shall . . . dig . . . a trench in a . . . road (a) except with . . . written permission of the City; and (b) otherwise than in accordance with . . . requirements prescribed by the City'. (See [10].)

The requirements were (1) payment of a trenching deposit (if a trench was dug, E the deposit would be forfeited; if no trench was dug, it would be returned); (2) payment of a trench reinstatement deposit (if there was unsatisfactory reinstatement of the road, it was forfeited; if satisfactory, returned); (3) agreement to the City reserving the right to charge for use of its property; and (4) agreement to pay the relocation costs if the City required it to relocate. (See [46] and [52] – [54].)

The High Court dismissed the challenge, and Dark Fibre appealed to the F Supreme Court of Appeal. (See [2].)

The permission

Dark Fibre's assertion was that the requiring of consent was a thwarting of the power it was given by s 22 of the Act. The section allows a licensee to 'enter upon any land' and 'construct . . . an electronic communications network' G (s 22(1)), but with 'due regard . . . to applicable law' (s 22(2)). (See [3], [10], [15] and [28] – [29].)

The SCA held that two consents could be distinguished: consent to lay cable; and consent as to the manner in which this was done. Imposition of a moratorium on, or flat refusal of consent to lay cable, would be to thwart H the s 22 power. Here, there was no moratorium, but merely a requirement of consent to the manner in which cable would be laid. (See [18], [20] and [31].)

Moreover, in terms of Maccsand, [*] the requirement of this consent permissibly coexisted with the s 22 authorisation. (See [33], [35] and [37].)

The trenching deposit I

Dark Fibre's first attack was sprung from s 75A of the Local Government: Municipal Systems Act 32 of 2000. The section provides that 'A

2019 (3) SA p426

municipality A may levy and recover . . . tariffs in respect of any function or service . . . .' Dark Fibre's assertion was that the section did not provide a basis for levying the tariff. This in that it was not a user of services, and so the City had no power to tariff it.

Held, that provision of roads was a service, and that Dark Fibre used the roads that the City provided. Moreover, at common law, the City's B ownership of the land entitled it to compensation for its use. (See [44] – [46].)

Dark Fibre's second attack was that the deposit prevented the expeditious construction of the network. Held, that there was no evidence of this. (See [47].)

The third attack was that a regulatory charge could not be used to C disincentivise harmful conduct. Held, that there was authority that this was permissible. (See [48].)

The fourth, was that there was no proportionality between the tariff and the damage anticipated. Held, that Dark Fibre had provided no evidence to substantiate this; nor any suggestion of what would be proportionate; and that in any event, the City had provided a basis that it was proportionate. (See [43] and [49] – [51].)

The D trench reinstatement deposit

Held, that it was rational: there was a reasoned basis to impose it. (See [52].)

The City's reservation of the right to charge for use of its property

Held, that the City's entitlement to compensation for use of its property could be E sourced in its common-law right of ownership of the land concerned. (See [6] and [53].)

The condition that if the City asked a licensee to relocate, the licensee would do so at its own cost

Held, that Dark Fibre appeared to have agreed to this condition. (See [6] and [54].)

Appeal F dismissed. (See [57].)

Cases cited

Anglo Operations Ltd v Sandhurst Estates (Pty) Ltd 2007 (2) SA 363 (SCA) ([2007] 2 All SA 567; [2006] ZASCA 118): referred to

Dark Fibre Africa (Pty) Ltd v Cape Town City G 2018 (4) SA 185 (WCC): upheld on appeal

Goldberg and Others v Minister of Prisons and Others 1979 (1) SA 14 (A): distinguished

Hollmann and Another v Estate Latre 1970 (3) SA 638 (A): referred to

Johannesburg Stock Exchange and Another v Witwatersrand Nigel Ltd and Another H 1988 (3) SA 132 (A): dictum at 150D applied

Maccsand (Pty) Ltd and Another v City of Cape Town and Others 2011 (6) SA 633 (SCA): referred to

Maccsand (Pty) Ltd v City of Cape Town and Others 2012 (4) SA 181 (CC) (2012 (7) BCLR 690; [2012] ZACC 7): applied

Maledu and Others v Itereleng Bakgatla Mineral Resources (Pty) Ltd and Another I 2019 (2) SA 1 (CC) ([2018] ZACC 41): referred to

Mobile Telephone Networks (Pty) Ltd v SMI Trading CC 2012 (6) SA 638 (SCA) ([2012] ZASCA 138): referred to

Msunduzi Municipality v Dark Fibre Africa [2014] ZASCA 165: referred to

South African Reserve Bank and Another v Shuttleworth and Another 2015 (5) SA 146 (CC) ([2015] ZACC 17): applied

Telkom SA Soc Ltd v Kalu NO [2018] ZAWCHC 53: J referred to

2019 (3) SA p427

Tshwane City v Link Africa and Others 2015 (6) SA 440 (CC) (2015 (11) BCLR 1265; A [2015] ZACC 29): considered.

Legislation cited

The Electronic Communications Act 36 of 2005, s 22: see Juta's Statutes of South Africa 2017/18 vol 1 at 1-77. B

Case Information

JJ Gauntlett SC QC (with FB Pelser) for the appellant.

G Budlender SC (with R Paschke) for the respondent.

An appeal against a decision of the Western Cape Division (Dark Fibre Africa (Pty) Ltd v Cape Town City 2018 (4) SA 185 (WCC)). C

Order

The appeal is dismissed with the costs of two counsel.

Judgment

Lewis JA (Cachalia JA, Seriti JA, Molemela JA and Rogers AJA concurring): D

[1] This appeal turns on the legal implications of s 22 of the Electronic Communications Act 36 of 2005 (the ECA). The section gives to entities which have been licensed under the Act the power to enter upon land and construct electronic communications networks on privately or state owned property. The section has given rise to considerable litigation and E there is some confusion as to how it is to be interpreted. This court has pronounced upon it (Mobile Telephone Networks (Pty) Ltd v SMI Trading CC 2012 (6) SA 638 (SCA) ([2012] ZASCA 138) (MTN) and Msunduzi Municipality v Dark Fibre Africa [2014] ZASCA 165) and so has the Constitutional Court (Tshwane City v Link Africa and Others 2015 (6) SA 440 (CC) (2015 (11) BCLR 1265; [2015] ZACC 29)). F

[2] Despite this, the parties in this appeal dispute the powers that the section confers on a licensee. Their dispute was determined by Davis J in the Western Cape Division of the High Court (referred to for convenience as the High Court) to which Dark Fibre Africa (Pty) Ltd G (Dark Fibre), the appellant, applied for an order that the City of Cape Town, the respondent, desist from imposing conditions on its use of public roads owned by the City. The High Court found that the City was entitled to impose the conditions, all relating to the payment of moneys for working and trenching on municipal roads. Dark Fibre appeals with the leave of the High Court. H

[3] Section 22 of the ECA reads:

'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 I 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, and railway and any waterway of the Republic; and J

2019 (3) SA p428

Lewis JA (Cachalia JA, Seriti JA, Molemela JA and Rogers AJA concurring)

(c)

A 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.'

[My emphasis.] B

The legal implications of s 22 of the ECA

[4] Dark Fibre maintains that it has statutory consent in terms of s 22(1) to lay fibre-optic cable throughout the City and that it accordingly does C not need the City's consent to do so. In particular, the City may not prevent it from doing so and may not require that Dark Fibre make payments to it, either in the form of refundable or non-refundable deposits, nor constrain its activities in the exercise of its power. As it states, in its heads of argument before this court:

'A D local authority like the City may not impose (through wayleaves or otherwise) a requirement on statutorily-authorised service providers to obtain prior consent to fulfill the...

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2 practice notes
  • Dennegeur Estate Homeowners Association and Another v Telkom SA SOC Ltd
    • South Africa
    • Invalid date
    ...Cases cited Bon Quelle (Edms) Bpk v Munisipaliteit van Otavi 1989 (1) SA 508 (A): E applied Dark Fibre Africa v City of Cape Town 2019 (3) SA 425 (SCA) ([2018] ZASCA 168): referred Minister of Justice and Constitutional Development and Others v Southern Africa Litigation Centre and Others 2......
  • Dennegeur Estate Homeowners Association and Another v Telkom SA SOC Ltd
    • South Africa
    • Supreme Court of Appeal
    • 29 March 2019
    ...ZACC 29). See also Dark Fibre Africa v City of Cape Town [2018] ZASCA 168 (since reported as Dark Fibre Africa v City of Cape Town 2019 (3) SA 425 (SCA) ([2018] ZASCA 168) — [4] Paragraph 140. [5] Paragraph 152. [6] Bon Quelle (Edms) Bpk v Munisipaliteit van Otavi 1989 (1) SA 508 (A). [7] S......
2 cases
  • Dennegeur Estate Homeowners Association and Another v Telkom SA SOC Ltd
    • South Africa
    • Invalid date
    ...Cases cited Bon Quelle (Edms) Bpk v Munisipaliteit van Otavi 1989 (1) SA 508 (A): E applied Dark Fibre Africa v City of Cape Town 2019 (3) SA 425 (SCA) ([2018] ZASCA 168): referred Minister of Justice and Constitutional Development and Others v Southern Africa Litigation Centre and Others 2......
  • Dennegeur Estate Homeowners Association and Another v Telkom SA SOC Ltd
    • South Africa
    • Supreme Court of Appeal
    • 29 March 2019
    ...ZACC 29). See also Dark Fibre Africa v City of Cape Town [2018] ZASCA 168 (since reported as Dark Fibre Africa v City of Cape Town 2019 (3) SA 425 (SCA) ([2018] ZASCA 168) — [4] Paragraph 140. [5] Paragraph 152. [6] Bon Quelle (Edms) Bpk v Munisipaliteit van Otavi 1989 (1) SA 508 (A). [7] S......

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