eBotswana (Pty) Ltd v Sentech (Pty) Ltd and Others

• Jurisdiction: South Africa

eBotswana (Pty) Ltd v Sentech (Pty) Ltd and Others
2013 (6) SA 327 (GSJ)

2013 (6) SA p327

Citation	2013 (6) SA 327 (GSJ)
Case No	11/16135
Court	South Gauteng High Court, Johannesburg
Judge	spilg J
Heard	November 12, 2013
Judgment	November 12, 2013
Counsel	JM Suttner SC (with P Cirone) for the first respondent.

Flynote : Sleutelwoorde G

Delict — Elements — Unlawfulness or wrongfulness — Liability for omission — Failure to securely encrypt satellite signal — Satellite signal carrying SABC's television channels spilling into Botswana and drawing Botswana H viewers from eBotswana's channels — Loss of viewers equating to loss of revenue for eBotswana — Signal provider failing to securely encrypt signal — Such wrongful.

Headnote : Kopnota

This case concerns Sentech (Pty) Ltd, which the state owns, and which provides I broadcasting signal for the country's broadcasters. Amongst the services it provides is satellite transmission, by which a satellite transmits a broadcaster's content to a viewer's satellite dish, and thence to the viewer's decoder and television. What occurred here is that the satellite used by Sentech spilt encrypted signal into the southern, most populated region of Botswana. There, viewers lawfully bought cheap decoders which coupled with a dish decrypted the signal and allowed them to view the content carried by J

2013 (6) SA p328

A Sentech for the South African Broadcasting Corporation (SABC). The problem was the SABC had no licence to broadcast in Botswana and Sentech had no right to make satellite transmissions into the country. There there were three licensed broadcasters: the state broadcaster, which was free; a pay service; and eBotswana (Pty) Ltd, which was also free. eBotswana B instituted proceedings in the South Gauteng High Court alleging Sentech owed it a duty to prevent pirate viewing in Botswana of the SABC 1, 2 and 3 signal carried on its satellite platform. It alleged further that Sentech had breached its duty and was liable to it for its losses. Those were alleged to have been caused by the SABC's free channels drawing viewers from eBotswana's free channels, in a setting where viewership determined advertising revenue, and where a decline in viewers equated to a loss in C revenue.

Held, as to wrongfulness, that society's boni mores determined whether there was a duty of care in particular circumstances, and that here the boni mores would be influenced by: Sentech's acceptance in its manifesto of a responsibility to securely encrypt its signals; South Africa's international obligations (inter alia under the Convention of the International Telecommunication D Union, to reduce radiation of satellite signals over other countries); Sentech's creation of the situation; Sentech's foresight that the decoders in question could decrypt its signals; the fact that the class of potential claimants was small; Sentech's acknowledgment that where encryption was inadequate there was a risk of decryption; Sentech's plan to provide more secure encryption; and Sentech's apparent acceptance of E responsibility by indicating it would remedy the problem. The court concluded that Sentech had a duty to securely encrypt its SABC signal, and that its failure to do so was wrongful. (Paragraphs [41] – [43], [45] and [49] – [56] at 338J – 339H, 340B and 340J – 342B.)

Held, further, that Sentech had been negligent, in that a reasonable man in its F position would have foreseen that such a signal broadcast into Botswana would be decrypted by means of the decoders, and that this would result in harm to a broadcaster in the position of eBotswana; and that a reasonable man would have taken steps to avoid transmitting into Botswana, or to prevent its signal being decrypted. (Paragraphs [58], [60] and [62] – [63] at 342F, 342I and 343C – D.)

Held, moreover, that factual and legal causation had been established, and that G viewers' purchases of decoders had been foreseeable, and did not constitute a novus actus interveniens. (Paragraphs [64] – [66] at 343D – G.)

Held, further, that eBotswana's loss of viewers would have resulted in its losing advertising revenue. (Paragraph [67] at 343H.)

Held, accordingly, that Sentech was liable to eBotswana for its damages as a result of Sentech's failure to prevent viewing of the SABC signal in Botswana. H (Paragraph [73] at 344G.)

Cases Considered

Annotations

Case law

Southern Africa

Administrateur, Natal v Trust Bank van Afrika Bpk 1979 (3) SA 824 (A): referred to I

Basson t/a Repcomm Community Repeater Services v Postmaster-General 1994 (3) SA 224 (SE): referred to

Cadac (Pty) Ltd v Weber-Stephen Products Co and Others 2011 (3) SA 570 (SCA): dictum in paras [10] – [15] applied

Callinicos v Burman 1963 (1) SA 489 (A): referred to J

2013 (6) SA p329

Carmichele v Minister of Safety and Security and Another (Centre for Applied A Legal Studies Intervening) 2001 (4) SA 938 (CC) (2002 (1) SACR 79; 2001 (10) BCLR 995; [2001] ZACC 22): referred to

Du Plessis v Road Accident Fund 2004 (1) SA 359 (SCA) (2003 (11) BCLR 1220): referred to

Durr v Absa Bank Ltd and Another 1997 (3) SA 448 (SCA) ([1997] 3 All SA 1): dictum at 463G – J applied B

Fourway Haulage SA (Pty) Ltd v SA National Roads Agency Ltd 2009 (2) SA 150 (SCA): dicta in paras [17] – [23] applied

Gore v Amalgamated Mining Holdings 1985 (1) SA 294 (C): referred to

Hidro-Tech Systems (Pty) Ltd v City of Cape Town and Others 2010 (1) SA 483 (C): dictum in para [81] applied

Hoechst Pharmaceuticals (Pty) Ltd v The Beauty Box (Pty) Ltd (in Liquidation) and Another C 1987 (2) SA 600 (A): dictum at 616I – 617C applied

Indac Electronics (Pty) Ltd v Volkskas Bank Ltd 1992 (1) SA 783 (A): referred to

International Shipping Co (Pty) Ltd v Bentley 1990 (1) SA 680 (A): referred to D

ITC 1726 64 SATC 236: referred to

ITC 1772 66 SATC 211: referred to

Lillicrap, Wassenaar and Partners v Pilkington Brothers (SA) (Pty) Ltd 1985 (1) SA 475 (A): referred to

McDonald's Corporation v Joburgers Drive-Inn Restaurant (Pty) Ltd and Another; McDonald's Corporation v Dax Prop CC and Another; McDonald's Corporation v Joburgers Drive-Inn Restaurant (Pty) Ltd and Dax Prop CC E 1997 (1) SA 1 (A) ([1996] 4 All SA 1): dictum at 26B – 27E applied

McIntosh v Premier, KwaZulu-Natal and Another 2008 (6) SA 1 (SCA) ([2008] 4 All SA 72): dictum in para [14] applied

Minister of Safety and Security v Van Duivenboden 2002 (6) SA 431 (SCA) ([2002] 3 All SA 741): referred to

Minister van Polisie v Ewels 1975 (3) SA 590 (A): referred to F

OK Bazaars (1929) Ltd v Standard Bank of South Africa Ltd 2002 (3) SA 688 (SCA): dictum in para [33] applied

Plascon-Evans Paints Ltd v Van Riebeeck Paints (Pty) Ltd 1984 (3) SA 623 (A): applied

President of the Republic of South Africa and Others v M&G Media Ltd 2011 (2) SA 1 (SCA) (2011 (4) BCLR 363): referred to G

R v Maharaj 1957 (1) SA 107 (A): referred to

Rail Commuters Action Group and Others v Transnet Ltd t/a Metrorail and Others 2005 (2) SA 359 (CC) (2005 (4) BCLR 301; [2004] ZACC 20): dicta in paras [76] – [88] applied

Replication Technology Group and Others v Gallo Africa Ltd 2009 (5) SA 531 (GSJ): referred to H

Road Accident Fund v Russell 2001 (2) SA 34 (SCA): referred to

Sea Harvest Corporation (Pty) Ltd and Another v Duncan Dock Cold Storage (Pty) Ltd and Another 2000 (1) SA 827 (SCA) ([2000] 1 All SA 128): dicta in paras [21] – [22] applied

Silva's Fishing Corporation (Pty) Ltd v Maweza 1957 (2) SA 256 (A): referred to I

Smith v KwaNonqubela Town Council 1999 (4) SA 947 (SCA) ([1999] 4 All SA 331): referred to

Stewart and Another v Botha and Another 2008 (6) SA 310 (SCA): referred to

Van Eeden v Minister of Safety and Security (Women's Legal Centre Trust, as Amicus Curiae) 2003 (1) SA 389 (SCA) ([2002] 4 All SA 346): dictum in para [9] applied. J

2013 (6) SA p330

United States A

Brunswick Corp v Spinit Reel Co 832 F 2d 513 (10th Cir 1987): referred to.

Case Information

S Budlender for the applicant.

JM Suttner SC (with P Cirone) for the first respondent.

B An application for declaratory and mandatory relief. The order is in para [73].

Judgment

Spilg J:

Introduction C

[1] The applicant (eBotswana) is the only licensed private television broadcaster in Botswana whose programmes may be watched by its citizens at no charge (termed 'free-to-air'). Under its national laws only two other television services are entitled to transmit in Botswana. The one is BTV which is the state-owned national free-to-air broadcaster. The D other is Multichoice Botswana which is a subscription-based service. It has some 27 000 subscribers.

[2] Accordingly within the national boundaries of Botswana they are the only two television services entitled to lawfully compete with eBotswana; and then it is only BTV which competes against it for viewers who do not E have to pay to watch television programmes.

[3] Countries limit the number of enterprises that may conduct business in a particular industry and regulate how they may carry on such business by way of issuing licences. The number of available operating licences may be limited by factors such as the available resource (such as F the frequency spectrum available in relation to telecommunications or broadcasting), the projected size of the market and the revenue that might be generated (effectively by advertising in the case of free-to-air television or radio), relative to the start-up, infrastructural, and operating costs involved to make the operation commercially viable for a corporation wishing to apply and pay for the initial licence.

G [4] The limited number of non-exclusive licences issued in a state- regulated industry effectively guarantees the holder a monopolistic environment affording protection from undue competition with the pace of...