Urgent
Chamber Application
MATHONSI
J:
After
hearing arguments from counsel on 7 May 2015, I granted the
provisional order and said the reasons would follow. These are they.
This
matter has got a chequered history indeed.
The
applicant is an incorporation which provides national cellular
telecommunications service in Zimbabwe, among other services, by
virtue of a licence issued in terms of the Postal and
Telecommunications Act [Chapter
12:05]
(the Act) by the first respondent, which is the statutory authority
established in terms of the Act to superintend the licencing and
regulation of telecommunication service in this country under the
watchful eye of the second respondent, the minister charged with the
administration of the Act.
The
applicant was initially issued with a national cellular
telecommunications licence in May 1998. It was issued with a revised
licence on 26 June 2002, a licence which in terms of its clause 4 was
valid for 15 years from the date of its signing. That licence
contains the terms and conditions under which the applicant is
required to provide the service.
I
have said that the relationship between the parties has had its fair
share of problems.
At
some point, because of the squabbles relating to the applicant's
shareholding which the regulatory authority insisted did not comply
with the country's indigenisation laws and, more importantly, with
the terms of the licence, the authority cancelled the licence on 9
August 2007.
The
applicant appealed that cancellation to the responsible minister in
terms of section 96 of the Act on 10 August 2007 and approached this
court by urgent application in HC4301/07 for interim relief. This
court, per Musakwa J, issued a consent order on 15 August 2007 to
wit:
“It
is hereby ordered that:
1.
Pending the determination of the appeal by the second respondent the
order cancelling the licence and directing the applicant to switch
off its telecommunications issued by the first respondent be and is
hereby suspended.
2.
There is no order as to costs.”
Just
as well the applicant had the presence of mind to seek the suspension
of the cancellation order, because it was not until 29 April 2010
that the Minister finalised the appeal, almost 3 years later.
The
Minister's decision communicated by the Secretary for Transport,
Communications and Infrastructural Development on that date is
helpful:
“RE:
TELECEL
ZIMBABWE LICENCE
Your
minute AM/mn/342/10 dated 28 April 2010 refers. The Ministry holds
the view that cancelling Telecel Zimbabwe's licence is not tenable
vis-a-vis
the thousands of subscribers the mobile operator now has and the many
negative messages such action would convey to potential investors
both in the sector and across the whole economy.
Thus,
at a meeting between Honourable Minister NT Goche (MP) and Telecel's
chief Mr Kia Uebech on 1 April 2010, government's requirement that
Telecel Zimbabwe reverts back to its original 60:40 position in
respect of its local: foreign shareholding was stated/indicated.
Telecel
undertook to address this challenge.
Clearly,
it will be difficult for the Government to support the renewal of the
licence come 2013 should Telecel fail to comply with Government's
pre-condition. In our view, the ball is now in Telecel Zimbabwe's
court.”
That
way the licence was reinstated on the understanding that the
shareholding would be regularised to meet government requirements.
Since
2010 the parties have been engaged in dialogue over the shareholding
which went on and on with no end in sight. A lot has happened
including an agreement signed by the parties on 6 August 2013.
However, not happy with what the applicant had done, the first
respondent again cancelled the applicant's licence on 28 April 2015
on the basis that the applicant had failed to comply with the Act.
It
then set about issuing a raft of provisions in its final regulatory
order which reads:
“11.
REGULATORY
ORDER
HAVING
REGARD to the provisions of the Act, Telecel licence conditions,
persistent compliance default, all relevant evidence and the
submissions made by Telecel Zimbabwe Limited, POTRAZ hereby makes the
following order in the exercise of its power under the Act.
11.1
Telecel's licence to provide National Cellular Telecommunications
Service is hereby cancelled with effect from the date of this order.
11.2
Telecel immediately notifies its subscribers and relevant
stakeholders of the termination of its licence upon receipt of this
order.
11.3
Telecel ceases to operate its cellular telecommunications network and
ceases to offer any communication service upon receipt of this order.
The
effect of the cancellation is as follows:
(a)
Radio frequency spectrum allocated to Telecel for the provision of
cellular telecommunication services are hereby withdrawn with effect
from the date of receipt of this order (see Annex 01
for the detailed spectrum information).
(b)
Radio frequency spectrum allocated to Telecel for the establishment
of Microwave Fixed Links in 7, 8, 13, 18, 22 and 23 GHz bands are
hereby withdrawn with effect from the date of receipt of this order.
(c)
Radio frequency spectrum allocated to Telecel for the establishment
of a C-band VSAT Earth Station are hereby withdrawn with effect from
the date of receipt of this order.
(d)
The number resources used by Telecel Zimbabwe Limited to offer
telecommunication services are hereby withdrawn with effect from the
date of this order.
12.
SPECIAL DISPENSATION TO TELECEL
NOTWITHSTANDING
the provisions of subparagraphs 11.2 and 11.3 above, however, and
being mindful of the disruptive effect of an immediate cessation of
operations upon the subscribers and other stakeholders of Telecel,
POTRAZ hereby grants a special dispensation to Telecel for it to
continue with its operations for a period of thirty (30) days from
the date of receipt of this order. The purpose of the dispensation
will be to afford Telecel an opportunity, among other things to:
12.1 Facilitate
the migration of subscribers from Telecel to other licenced
telecommunications operators.
12.2 Notify
its employees and agents of the cancellation of its operating
licence.
12.3 Notify
its stakeholders in the mobile financial services sector of the
cancellation of its licence.
12.4 Notify
the general public of the cancellation of its licence.
12.5 Begin
the process of decommissioning its telecommunications equipment which
process has to be completed within ninety (90) days calculated from
the date of receipt of this order.”
Hence
on the stroke of the pen and by Regulatory decree, scores of
employees had lost employment and a number of subscribers had lost a
service, never mind other stakeholders and never mind the labour laws
of this country dealing with notice of termination of employment.
The
applicant has now come to court on an urgent basis seeking the
following relief:
“TERMS
OF FINAL ORDER SOUGHT
That
you shall show cause to this Honourable Court why a final order
should not be made in the following terms:
1.
That pending determination of the finalisation of the appeal by the
applicant pursuant to the provisions of section 96 of the Posts and
Telecommunications Act Chapter 12:05 that Regulatory Order No.1 of
2015 and special licence and concomitant dispensations imposed by the
Postal and Telecommunications Regulatory Authority of Zimbabwe
(POTRAZ) be and are hereby suspended.
2.
That pending finality to the appeal process as provided by the Posts
and Telecommunications Act Chapter 12:05 applicant shall not dispose
of any movable assets or infrastructure without notice to the 1st,
second and third respondents.
3.
That there be no order as to costs.
INTERIM
RELIEF (GRANTED)
Pending
determination of this matter the applicant is granted the following
relief:
(a)
That first to third respondents be and are hereby interdicted from in
any way of (sic)
interfering with the normal business activities of the applicant
pursuant to the provision of its telecommunication services and
related business activities to the public and its subscribers in
Zimbabwe.
(b)
The dispensation time periods mentioned in Regulatory Order No.1 of
2015 and the cancellation of applicant's licence be and are hereby
suspended until such time as there has been a final determination of
(sic)
a final order sought in terms of this application.”
In
its founding affidavit deposed to by Angeline Vere its General
Manager, the applicant states that after all its attempts to reduce
its foreign shareholding to a level acceptable to the first
respondent were rejected by the latter, which retains the exclusive
right of approval in terms of clause 12 of the licence, the first
respondent resorted to the drastic action of cancelling the licence
on terms set out in the regulatory order aforesaid.
Clause
12 of the licence provides:
“12.1
Ownership
12.1.1 Foreign
Investment and Shareholding Structure
1.
The holder of this licence must be incorporated in Zimbabwe. The
licencee shall ensure that the foreign ownership shall be limited to
forty nine percent (49%).
2.
Changes
in the shareholding structure at any stage must be approved by the
Authority before it is effected.
3.
In the event that the licencee's initial shareholding structure
does not conform to the provisions of clause 12.1.1.1 the licencee
shall within five (5) years from date of signing of the licence
ensures (sic)
that the foreign ownership is reduced to forty nine percent (49%.).”
(The underlining is mine.)
Over
the years the applicant has tried to comply by introducing a new
partner to assume ownership of the 11 per cent balance of the 60 per
cent shareholding held by the foreign partner Telecel International
Limited (TIL) but the first respondent either rejected the proposed
partner or insisted it had to be approved by the Minister.
At
one stage the applicant was told the 11 per cent shareholding could
only be sold to the fourth respondent which holds the other 40 per
cent stake.
The
applicant introduced an employees share ownership scheme (ESOP) in
terms of which its employees would own the 11 per cent shares
currently in the hands of TIL in order to move the shareholding to
indigenous people.
This
was rejected.
It
proposed listing on the Zimbabwe Stock Exchange as another option
which was also rebuffed.
Instead
the first respondent cancelled the licence.
The
reason given for the cancellation appears in paragraph 1 of the first
respondent's “judgment” of 28 April 2015 which reads:
“1.
INTRODUCTION
This
case concerns Telecel Zimbabwe Limited (hereinafter referred to a
'Telecel') non compliance with licence conditions, provisions of
the Postal Telecommunications Act [Chapter 12:05] (hereinafter
referred to as 'the Act') as read with Indigenisation and
Economic Empowerment laws. The Postal Telecommunications Regulatory
Authority of Zimbabwe (hereinafter referred to as 'POTRAZ') has
to determine whether the licence issued to Telecel to provide
National Cellular Telecommunication Services should be cancelled or
not and issue an appropriate order.”
The
applicant stated that following the cancellation and the “appropriate
order” it has appealed to the second respondent, the responsible
Minister but meanwhile the regulatory order remains extant as the
appeal does not have the effect suspending the order appealed
against.
Whichever
way, it is unlikely that the Minister will dispose of the appeal
before the expiration of the period of 30 days it has been given to
close shop, a period which is unreasonable in the circumstances given
that it employs more than 700 direct employees (at the hearing
counsel for the employees corrected that figure, there are 820 direct
employees) whose employment contracts would have to be terminated.
In
addition, in terms of the Act, they are entitled to 28 days during
which to lodge an appeal. The applicant therefore craves the interim
relief aforesaid.
While
the other respondents did not oppose the application, in fact Mr
Mlothhwa
for the fourth respondent supported it and Ms Dube
for
the second and third respondents had no submissions to make except
that the Minister would await the appeal, the first respondent
surprisingly opposed the application vehemently as if everything
depended on the cancellation of the licence and the closure of the
applicant.
Mr
Muzangaza
for the first respondent contested the validity and urgency of the
application. He submitted that the application does not comply with
Rule 241(1) of the High Court Rules, 1971 in that the purported Form
29B does not contain a summary of the grounds on which the
application is brought. For that reason there is no application at
all before me.
Mr
Girach
who
appeared for the applicant conceded the omission of the grounds which
he however said are contained in the founding affidavit. He submitted
that I should condone what he called “a minor omission.”
I
take the view that the rules of court are there to assist the court
in the discharge of its day to day function of dispensing justice to
litigants. They certainly are not designated to impede the attainment
of justice.
Where
there has been a substantial compliance with the rules and no
prejudice is likely to be sustained by any party to the proceedings,
the court should condone any minor infraction of the rules.
In
my view to insist on the grounds for the application being
incorporated in Form 29B when they are set out in abundance in the
body of the application, is to worry more about form at the expense
of the substance.
Accordingly,
by virtue of the power reposed to me by Rule 4C of the High Court
Rules, I condone the omission.
Mr
Muzangaza
was not done.
He
submitted that the applicant should not be entertained on an urgent
basis because the matter is simply not urgent, in fact this is
self-created urgency.
The
applicant was aware of the intention to cancel its licence as at 5
March 2015 when the first respondent advised it of that intention by
letter of that date. It should have taken remedial action then
instead of waiting until 30 April 2015 to file this application. For
that reason, the matter is not urgent and the applicant should be
turned away for that reason alone.
In
my view there is no merit whatsoever in that point in
limine.
I
find myself having to repeat what I stated in The
National Prosecuting Authority v Busangabanye & Anor
HH427/15 at p3:
“In
my view this issue of self-created urgency has been blown out of
proportion. Surely a delay of 22 days cannot be said to be inordinate
as to constitute self-created urgency. Quite often in recent history
we are subjected to endless points in
limine
centered on urgency which should not be made at all. Courts
appreciate that litigants do not eat, move and have their being in
filing court process. There are other issues they attend to and where
they have managed to bring their matters within a reasonable time
they should be accorded audience. It is no good to expect a litigant
to drop everything and rush to court even when the subject matter is
clearly not a holocaust.”
I
agree with Mr Girach
that
raising the issue of urgency by respondents finding themselves faced
with an urgent application is now a matter of routine.
Invariably
when one opens a notice of opposition these days, he is confronted by
a point in
limine
challenging the urgency of the application which should not be made
at all. We are spending a lot of time determining points in
limine
which do not have the remotest chance of success at the expense of
the substance of a dispute.
Legal
practitioners should be reminded that it is an exercise in futility
to raise points in
limine
simply as a matter of fashion.
A
preliminary point should only be taken where:
(i)
firstly it is meritable; and
(ii)
secondly it is likely to dispose of the matter.
The
time has come to discourage such waste of court time by the making of
endless points in
limine
by litigants afraid of the merits of the matter or legal
practitioners who have no confidence in their client's defence
viz-a-viz
the substance of the dispute, in the hope that by chance the court
may find in their favour.
If
an opposition has no merit it should not be made at all.
As
points in
limine
are usually raised on points of law and procedure, they are the
product of the ingenuity of legal practitioners.
In
future, it may be necessary to rein in the legal practitioners who
abuse the court in that way, by ordering them to pay costs de
bonis propiis.
A
matter is urgent if, when the need to act arises, the matter cannot
wait. That is the simple test for urgency.
While
there is a catena of authorities pronouncing on urgency, it all boils
down to the remarks of MAKARAU JP (as she then was) in Document
Support Centre (Pvt) Ltd v Mapuvire
2006 (1) ZLR 232 (H) 243G; 244A-C where the learned judge pronounced:
“Some
actions, by their very nature, demand urgent attention and the law
appears to have recognized that position. Thus, actions to protect
life and liberty of individuals, or where the interests of minor
children are at risk, demand that the courts drop everything else
and, in appropriate cases, grant interim relief protecting the
affected rights. The rationale of the courts acting swiftly where
such interests are concerned is, in my view, clear.….. It is now
accepted that in some cases, even purely commercial interests can be
protected urgently in appropriate cases.
In
Silvers
Trucks (Pvt) Ltd & Anor v Director of Customs & Excise
1999 (1) ZLR 490 (H), SMITH J considered the matter of the release of
certain attached imports on the basis that the applicant would face
bankruptcy and its 67 employees would lose their jobs as a result.
In
my view, the reasoning adopted by SMITH J in this regard is still in
line with the objective test that had the courts waited, there would
have been no need for the court to act subsequently. The applicant
would have been liquidated and the return to it of the attached
imports would not have reversed the effect of non-timeous action by
the court. It would be of no further benefit to the applicant to
pursue the legal interest.
In
my view, urgent applications are those where if the courts fail to
act, the applicants may well be within their rights to dismissively
suggest to the court that it should not bother to act subsequently as
the position would have become irreversible and irreversibly so to
the prejudice of the applicant”.
(The underlining is mine)
See
also Triple
C Pigs & Anor v Commissioner General, Zimbabwe Revenue Authority
2007 (1) ZLR 27 (H) 30G; 31A-B.
It
is not factually correct for Mr Muzangaza
to suggest that the applicant did not do anything from 5 March 2015.
On
that date the first respondent gave notice of an intent to cancel the
licence and invited the applicant to make representations as to why
such cancellation should not be effected.
This
was as it should have been in terms of the procedure set out in
section 43(2) of the Act. The applicant made those representations
which did not find favour with the first respondent and it duly
cancelled the licence on 28 April 2015 issuing an order which ignored
completely the applicant's right of appeal to the Minister.
In
my view, the need to act arose when the applicant received the notice
of cancellation dated 28 April 2015.
It
obliged by filing this application on 30 April 2015, 2 days later.
There
can be no possibility of self-created urgency. For that reason I
dismissed the point in
limine
as being fanciful and without merit.
This
is a matter which cannot wait at all because the operation of the
regulatory order started immediately and in 30 days the applicants
would have to close with all the attendant consequences.
What
the applicant seeks is a temporary, interim or interlocutory
interdict.
HOLMES
JA set out the requirements for the grant of such an interdict in
Ericksen
Motors (Welkon) Ltd v Proten Motors, Warrenton and Anor
1973 (3) SA 685 (A) 619C–G (quoted with approval by SANDURA JA in
Charuma
Blasting and Earthmoving Services (Pvt) Ltd v Njainjai and Ors
2000 (1) ZLR 85 (S) 89E-H) as:
“The
granting of an interim interdict pending an action is an
extraordinary remedy within the discretion of the court. Where the
right it is sought to protect is not clear, the matter of an interim
interdict was lucidly laid down by INNES JA in Setlogelo
v Setlogelo 1914
AD 221 at p227. In general the requisites are:
(a)
a right which 'though prima
facie
established, is open to some doubt'.
(b)
a well-grounded apprehension of irreparable injury.
(c)
the absence of ordinary remedy.
In
exercising its discretion, the court weighs inter
alia
the prejudice to the applicant if the interdict is withheld against
the prejudice to the respondent if it is granted. This is sometimes
called, the balance of convenience. The foregoing considerations are
not individually decisive, but are interrelated, for example, the
stronger the applicant's prospects of success the less the need to
rely on prejudice to himself. Conversely, the more the element of
'some doubt' the greater, the need for the other factors to
favour him…… Viewed in that light, the reference to a right which
'though prima facie established is open to some doubt' is apt,
flexible and practical, and needs no further elaboration.”
See
also Bozimo
Trade and Development Co (Pvt) Ltd v First Merchant Bank of Zimbabwe
Ltd & Ors
2000 (1) ZLR 1 (H) 9F-G.
In
respect of the establishment of a prima
facie
right
Mr Girach
alluded
to section 96 of the Act which gives the applicant a right to appeal
the decision of the first respondent to the Minister and to section
71 of the Constitution of Zimbabwe relating to the right to
protection of property.
On
the other hand, Mr Muzangaza
submitted that the applicant would not possibly have any right, prima
facie
or
otherwise, when it has been operating outside the law, that is
without compliance with the indigenization laws of this country,
which Mr Girach
countered
by submitting that the Indigenization and Economic Empowerment Act
[Chapter
14:33]
only came into effect in April 2008 long after the licence had been
issued on 26 June 2002.
Mr
Mlotshwa
for the fourth respondent brought a new dimension to the issue.
He
submitted that to the extent that the cancellation is premised on
indigenization laws as stated in the first respondent's “judgment”
the cancellation is invalid because the first respondent is not the
enforcement authority of that Act, the Minister of Youth, Empowerment
& Indigenisation is in terms of section 5 thereof. It is him who
initiates the process of cancellation for want of compliance with
that Act.
It
is not necessary for me to determine all those issues because that is
the province of the second respondent when dealing with the appeal. I
am sitting only be decide whether a case had been made for an interim
interdict.
I
think it has been.
Section
96(1) of the Act provides:
“Subject
to this section, any person who is aggrieved by -
(a)
a decision of the Authority not to issue a licence or certificate; or
(b)
any term or condition of a licence issued to him, or a refusal by the
Authority to specify a term or condition in a licence; or
(c)
a refusal by the Authority to review a licence or certificate; or
(d)
any amendment of a licence or a refusal by the Authority to amend a
licence; or
(e)
the suspension or cancellation of a licence; or
(f)
the grant or refusal to grant any approval or authority in terms of
this Act; or
(g)
the outcome of any mediation by the Authority of a dispute between
licensees; or
(h)
such decision of the Authority as may be prescribed;
may,
within twenty eight days after being notified of the decision or
action of the Authority concerned, appeal in writing to the Minister,
submitting with his appeal such fee as may be prescribed;
Provided
that such appeal shall not suspend the operation of any licence or
certificate issued by the Authority.”
After
cancelling the applicant's licence, the first respondent issued a
special licence effective from 28 April 2015 to 26 May 2015 to
facilitate only the winding up of the applicant's operations
presumably including the termination of the employment contracts of
820 employees.
Such
termination would ordinarily require 3 months notice where there are
good grounds in terms of the labour laws of this country.
The
applicant cannot lawful employ those employees after 26 May 2015.
All
that against the backdrop of the applicant's right of appeal to the
Minister which right subsists until the expiration of 28 days on 28
May 2015 if one includes weekends and public holidays.
By
the time the applicant's right of appeal expires, the applicant
would have closed down in terms of the regulatory order.
What
that means therefore is that the regulatory order effectively
obliterates the applicant's right of appeal reposed to it by
section 96 of the Act.
Clearly
therefore that regulatory order is not only unreasonable in the
extreme in its effect, it also infringes upon the right of appeal
given to the applicant by the Act. That right has been taken away.
More
importantly, there is the possibility that the Minister may take a
while to determine the appeal. There is no time limit given by the
Act for him to determine an appeal.
Subsection
(3) of section 96 only requires him to make an order on appeal “after
due and expeditious inquiry.”
A
precedent has already been set in that regard.
When
the applicant appealed another cancellation by the first respondent
in August 2007, the Minister took almost 3 years to determine the
appeal.
In
terms of section 68 of the Constitution the applicant has a right to
administrative conduct that is lawful, prompt, efficient, reasonable,
proportionate, impartial and both substantively and procedurally
fair.
In
terms of section 69 it has a right to a fair hearing in the
determination of its civil rights. Those rights cannot be derogated
from at the whim of an impatient and overzealous regulatory
authority.
The
concept of administrative justice is now embedded in our
constitution. It provides the skeletal infrastructure within which
official power of all sorts affecting individuals must be exercised.
The elements are:
1.
Lawfulness in that official decisions must be authorised by statute,
prerogative or the constitution.
2.
Rationality in that official decisions must comply with the logical
framework created by the grant of power under which they are made.
3.
Consistency in that official decisions must apply legal rules
consistently to all those to whom the rules apply.
4.
Fairness in that official decisions should be arrived at fairly, that
is, impartially in fact and appearance giving the affected persons an
opportunity to be heard.
5.
Good faith in the making of decisions in that the official must make
the decision honestly and with conscientious attention to the task at
hand having regard to how the decision affects those involved.
Where
an administrative authority makes a decision which renders nugatory
the right of the affected party to appeal, that decision cannot be
said to accord with the dictates of administrative justice which I
have set out above. It cannot be rational neither can it be fair and
in fact borders on unlawfulness.
I
therefore entertain no doubt that the requirements of an interdict
have been met.
The
applicant does have a prima
facie
right to appeal which has been curtailed, if not negated. There has
been an infringement of that right which, if allowed to perpetuate
would adversely prejudice the applicant and its employees. It would
have to close before it has exhausted remedies available to it.
In
weighing the balance of convenience as I am required to do, I can
conceive of no prejudice that may be sustained by the first
respondent except for a wounded ego which perhaps is the only reason
why it chose to oppose the application.
It
is a truism that the first respondent has acted in an overzealous and
precipitate manner without regard to the rights of stakeholders in
this matter. It has in fact proceeded rough-shod over the rights of
those that it is sworn to superintend and in so doing it has created
a train smash of gigantic proportions.
It
is for these reasons that I granted the provisional order as amended,
the interim relief of which is in the following:
“INTERIM
RELIEF GRANTED
Pending
determination of this matter the applicant is granted the following
relief:
(a)
That first to third respondents be and are hereby interdicted from in
any way interfering with the normal business activities of the
applicant pursuant to the provision of its telecommunication services
and related business activities to the public and its subscribers in
Zimbabwe.
(b)
The dispensation time periods mentioned in Regulatory Order No.1 of
2015 and the cancellation of applicant's licence be and are hereby
suspended until such time as there has been a final determination or
a final order sought in terms of this application.”
Messrs
Honey & Blackenburg,
applicant's legal practitioners
Messrs
Muzanagaza, Mandaza & Tomana,
1st
respondent's legal practitioners
Attorney
General's Office,
2nd
and 3rd
respondents legal practitioners
Messrs
GN Mlotshwa & Company,
4th
respondent's legal practitioners
