Directory Advertising Cost Cutters v Minister for Posts, Telecommunications and Broadcasting and Others

• Judge: Van Dijkhorst J
• Judgment Date: 29 February 1996
• Citation: 1996 (3) SA 800 (T)
• Docket Number: 7221/95
• Counsel: D Unterhalter SC (with him J Kentridge) for the applicant. No appearance for the first and second respondents. P Ginsberg SC (with him D A Preiss) for the third respondent. G Farber SC for the fourth respondent.
• Court: Transvaal Provincial Division

Van Dijkhorst J:

The relief sought by the applicant in its notice of motion is for an order I in the following terms:

1.

Reviewing and setting aside the refusal by the third respondent to provide the information sought by the applicant in its letter dated 25 November 1994.

2.

Ordering the respondents to provide the applicant with access to all resources, information and procedures relevant to the placing of J advertisements in any directory published by or on behalf of the

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A respondents, including all and any information relating to the price or cost of such publication or advertisement in any directory.

3.

Ordering those respondents who oppose the application to pay the costs hereof.

B The first respondent is the Minister for Posts, Telecommunications and Broadcasting ('the Minister') and the second respondent the Department of Posts and Telecommunications ('the department'). These respondents do not oppose the relief sought and abide the decision of the Court. The third respondent is Telkom South Africa C Ltd (Telkom) and the fourth respondent Maister Directories (1981) (Pty) Ltd (Maister).

In the letter of 25 November 1994 referred to in the first prayer, the attorneys for the applicant set out a number of requests for information which the applicant seeks from Telkom. They can be summarised as follows:

1.

D The applicant wishes to have its services advertised in the various directories published by Telkom. If this request is refused reasons for the refusal are required.

2.

The applicant wants to know:

2.1

when each directory will be published and the region where the directory will be published;

2.2

E specific detail as to all relevant pricing structures in order to enable the applicant to advise its clients of all advertising options open to them and the cost thereof. The pricing structures pertaining to the white pages, the yellow pages and the electronic yellow pages are required. Should this F information be refused, reasons for the refusal are required.

3.

In view of Telkom's refusal to supply the information, reasons are required why Telkom 'is like any other company' and why Telkom concluded that the information requested is 'confidential business information'.

4.

G The applicant requires access to records of installation of new telephones by Telkom and if this is refused, the reasons for the refusal.

5.

The applicant requires to be paid a commission on the sale of space for advertisements as it is inequitable that Maister and its accredited agents are H paid such commission and the applicant not.

6.

The applicant wants to be advised as to whether it may submit documentation on behalf of its clients to Maister and represent its clients' interests in all spheres of the production process of advertisements, as it is Maister's practice to reject an application for placement should it emanate from the I applicant. Should Telkom refuse to permit the applicant to represent its clients in all spheres of the production process, reasons for such refusal are required.

7.

Maister has in various directories and publications warned the public against so-called 'private contractors'. Telkom is required to state whether the J applicant is in its view a 'private contractor'

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A and give reasons for such view, as well as reasons for its conclusion that members of the public should be warned against 'private contractors'.

8.

The applicant states that its activities as a consultant in no way erode the rights B bestowed upon Maister. Telkom is required to advise whether or not the applicant may carry on business as a consultancy and, if not, what Telkom's reasons are for such conclusion.

9.

Applicant was advised that Maister was granted the sole rights bestowed upon it following state tender board procedures. Particulars of these tender board procedures are requested.

C The letter concludes with the statement that Telkom is an organ of the State and as such the applicant is entitled to the information requested.

In view of the fact that the information sought in the letter of 25 November 1994 covers a vast terrain, I requested counsel for the applicant at the commencement of his argument to D set out exactly what was required and from whom.

On behalf of the applicant it was then stated that relief was only sought against Telkom, not against Maister, which had been joined merely as it has an interest, and that the relief sought was limited to the following:

1.

Information as to when directories will be published.

2.

E The price list with the cost of advertisements.

3.

Records of the installation of new telephones.

This is a drastic curtailment of the relief itself and the respondents against whom the relief is sought. It was therefore not surprising that when the turn came for counsel for Maister to address me, I was informed that they abide the decision of the Court and merely claim F their costs. To this Maister is entitled in the circumstances.

The dispute is therefore between the applicant and Telkom. Some factual background is necessary for a proper perspective of this case.

The applicant provides a consulting service to members of the public as to how best they might advertise in various directories. Telkom publishes 25 telephone directories annually. G Each of the directories have to be published by a given cut-off date. Prior to that cut-off date advertising space in the directories must be marketed and sold. Thereupon the relevant information gathered from advertisers is collated and prepared for the printers. Once printed the directories are distributed to members of the public via post offices and H through Telkom's customer service branches.

The ordinary directories are in the papers referred to as the 'white pages', to distinguish them from the 'yellow pages' which do not contain the names of ordinary subscribers who do not wish to advertise. The white pages also contain bold type for those subscribers I who wish to have their entries so printed.

Since 1952 Maister has carried out the sales and collation function in respect of the yellow pages and the bold type sales in the white pages and has produced the copy material. Telkom carries out the sales function in respect of the light type in the white pages and prepares the copy material for the white pages. Maister enjoys the exclusive right to canvass and secure advertising for publication in the telephone directories and J carries

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A out the functions of collation, lay-out and the preparation of copy for the directories. It carries out its functions pursuant to an agreement concluded between the department and Maister on 8 August 1980. The agreement has been amended from time to time. Telkom became vested with the rights and obligations flowing from the agreement.

B Relevant provisions in the agreement are, inter alia: the preamble states that the post office requires the canvassing for and acceptance of advertisements and bold face and classified entries for publication in the telephone directories for the Republic of South Africa and auxiliary publications. Maister shall have the sole right to canvass for and C secure advertising matter for publication in the telephone directories and shall lay out and prepare copy therefor. Maister is entitled to a commission calculated as a percentage of the total revenue for all advertising matter in the telephone directories and the post office is guaranteed certain revenue streams. The post office is given a veto power in respect of charges for advertisements. Provision is made for commission to be paid to D advertising agents who place advertisements with Maister. The papers contain an example of the charging structure as initially agreed upon and this shows that for the different advertisements in bold and light face, in white and yellow pages, in one or more columns and of varying sizes, different rates are set which rates also vary according to the area where the directory is published.

E Pursuant to its right to canvass for advertising matter for publication in the directory, Maister employs in-house sales persons to sell space and also accredited agencies who earn commission. Maister determines who will be accredited agents. Telkom has placed its stamp of approval on this system. Maister claims that it has the right to determine accreditation and Telkom plays no role therein.

F The applicant, which is not accredited with Maister, is a consultant to advertisers and prospective advertisers. It advises clients on the layout of advertisements, scrutinises quotations...