Johannesburg City Council v Administrator, Transvaal, and Another

• Judge: Hiemstra J
• Judgment Date: 07 January 1969
• Citation: 1969 (2) SA 72 (T)
• Court: Transvaal Provincial Division

H Hiemstra, J.:

The applicant in this matter is the City Council of Johannesburg. The Administrator of the Transvaal is the first respondent and the Electricity Supply Commission (hereinafter called Escom) is the second respondent. The City Council wants to erect an electrical power station on the farm Liefde en Vrede, a site of which it is the owner. Whenever a local authority intends to enlarge its existing rated generating capacity of electricity by more than 10 per cent, it is in terms of sec. 39 of the Electricity Act, 40 of 1958, obliged to apply

Hiemstra J

to the Administrator of the Province for his approval thereto. The application must be supported by a full report from its consulting engineers. The City Council applied for approval as far back as 22nd April, 1966.

A Before considering the application the Administrator is in terms of sec. 39 (2) of the Electricity Act obliged to call upon the Electricity Supply Commission for a report on the proposals. The local authority is in terms of the same sub-section under a duty to supply Escom with such information as it may require for the purpose of drawing up its report. The Administrator duly called for a report by Escom, but before B furnishing it, Escom made an offer to supply the necessary electricity itself. This offer was contained in two letters respectively dated 21st November, 1966 and 9th December, 1966. It will be convenient to state that these two documents are exhs. 'C1' and 'C2' on the papers. The Council's reaction to this offer was a request to Escom to bind C itself contractually for 15 years to the rates for bulk supply set out in the offer. Escom refused to bind itself, and there is some disagreement as to the legality of doing so for a lengthy period.

Escom thereupon, on 17th August, 1967, furnished the report to the Administrator as required by sec. 39 (2). This report must be in accordance with sec. 39 (3). An important part of the present issue depends upon the correct interpretation of sec. 39 (3).

D The report opened the present dispute, which is a factual one, namely which source of supply will be the more advantageous to the ratepayers and consumers - bulk supply by Escom or local generation by the Council itself. Various documents setting out the arguments of Escom and E the Council were placed before the Administrator, but he went beyond this information and in addition asked for the comments of the Secretary for Industries. This comment was received on 30th November, 1967 and in it the Administrator was urged to refuse the Council's application so that Escom could supply the power. The Minister of Economic Affairs, on F 4th December, 1967 also exerted pressure in favour of supply by Escom. Thereafter, on 8th January, 1968, the Administrator rejected the Council's application on the ground that it would be in the national interest that Escom supply the power rather than that a new power station be erected by the Council.

The letters written by the Secretary for Industries and the Minister of G Economic Affairs were not submitted to the Council but have been made available to the Court in terms of Rule 53 (1) (b) as part of the 'record of the proceedings'.

On 28th February, 1968 the Council applied to Court to have the Administrator's decision set aside and for an order upon him to reconsider the Council's application. This application was based on the H grounds (i) that the procedure offended against the dictates of natural justice in that the Council was not afforded an opportunity to deal with the comments of the Secretary for Industries; (ii) that matters extraneous to those enumerated by sec. 39 were taken into account; and (iii) that no reasonable man could properly have come to the conclusion reached by the Administrator. By consent of both respondents, that is the Administrator and Escom, this Court, on 19th March, 1968, set the decision aside and directed the Administrator to reconsider.

Hiemstra J

A further report by Escom was asked for and was furnished on 5th July, 1968 to the Administrator through the Director of Local Government. A copy thereof was supplied to the Council. It contained...