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Commercial Law news

Not in my back yard

A recent decision by the Supreme Court of Appeal (SCA) in the matter of Mobile Telephone Networks Limited (Pty) Ltd vs SMI Trading CC [2012] ZASCA 138 SCA on the powers of electronic communications network service licensees to enter private land to construct and maintain networks may well give private landowners, particularly those with large tracts of land, cause for concern.
The principal issue before the SCA in MTN vs SMI was the interpretation of s22 of the Electronic Communications Act, No 36 of 2005 (Act). The section gives electronic communications network service licensees the right to enter private land to construct and maintain electronic communications networks, but this right is, according to s22, subject to "applicable law". When the issue of what constitutes "applicable law" was considered in the High Court (court), the judge found that "applicable law" included common law and, accordingly, private landowners could refuse to allow licensees onto their land, notwithstanding the provisions of s22. On the facts before the court, the judge found that MTN did not have the right to continue to occupy SMI Trading's land in the absence of a lease agreement and MTN was ordered to remove its base station.

Reasons different to the judge's

MTN took the decision of the court a quo on appeal. The SCA found against MTN, but for reasons different to those of the judge. The SCA held that "applicable law" in s22 does not include common law to the extent that it would permit a landowner to refuse to allow an electronic communications network service licensee access to its land, thus defeating the purpose of s22.

Significantly for private landowners, the SCA found that an electronic communications network service licensee could indeed enter private land for the purposes of constructing and maintaining networks. The court was of the view that a decision by a licensee to enter private land amounted to administrative action on the part of the licensee to which the provisions of the Promotion of Administrative Justice Act, No 3 of 2000 (PAJA) would be applicable.

The SCA found against MTN because it was of the view that MTN had acted arbitrarily and that, in any event, MTN had not in fact made a "decision" within the meaning of PAJA.

The implication of the SCA judgment is that a licensee may enter private land provided the licensee acts reasonably and not arbitrarily, and provided that the decision to enter the land is taken in a procedurally fair manner, which would include consulting with the landowner. Issues such as the compensation offered, the availability of other sites and the type of electronic communications infrastructure to be located on the land would be relevant to the reasonableness of the decision. Certainly, in the case of a mobile network operator's base station where there is more flexibility as to where that station can be located, a private landowner would be in a stronger position to resist the location of that network infrastructure on his land.

Guidelines have not been developed

Section 21 of the Act allows for the development of so-called guidelines for the resolution of disputes between landowners and licensees. These guidelines have not been developed and even if these guidelines were in existence the legal force and effect of "guidelines" is questionable. The recent draft amendments to the Act propose that ICASA develops regulations to deal with disputes between landowners and licensees, but it will be some time before the amendments to the Act are effected and an even longer period of time before regulations will be passed if the amendment is carried.

For the foreseeable future, the only recourse available to landowners dissatisfied with a decision taken by licensee to enter upon their land will be to approach the court to review and set aside the decision of the licensee concerned.
    
 

About the author

Kathleen Rice is director and Nomsa Msibi candidate attorney, technology media and telecommunications practice of Cliffe Dekker Hofmeyr.
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