Aerosat CC v Independent Communication Authority of South Africa and Others (ECJ 032/2005) [2005] ZAECHC 16 (10 May 2005)

FORM A

FILING SHEET FOR EASTERN CAPE JUDGMENT

ECJ NO: 032/2005

IN THE HIGH COURT OF SOUTH AFRICA

(SOUTH EASTERN CAPE LOCAL DIVISION)

PARTIES: AEROSAT CC Applicant

And

INDEPENDENT COMMUNICATION 1st Respondent

AUTHORITY OF SOUTH AFRICA

JACOBUS STEPHANUS ARNOLD 2nd Respondent

THE MAGISTRATE FOR THE DISTRICT

OF PORT ELIZABETH

REFERENCE NUMBERS -

Registrar: 1809/2004

DATE HEARD: 14 October 2004

DATE DELIVERED: 10 May 2005

JUDGE(S): SANDI J

LEGAL REPRESENTATIVES -

Appearances:

for the Applicant: HJ Van Der Linde SC and RK Pillay

for the Respondents: KD Moroka

Instructing attorneys:

Applicant: Lindoor and Nogcantsi

Respondents: Boqwana Loon and Connellan

IN THE HIGH COURT OF SOUTH AFRICA

(SOUTH EASTERN CAPE LOCAL DIVISION)

CASE NO.: 1809/2004

In the matter between:

AEROSAT CC APPLICANT

and

INDEPENDENT COMMUNICATION 1ST RESPONDENT

AUTHORITY OF SOUTH AFRICA

JACOBUS STEPHANUS ARNOLD 2ND RESPONDENT

THE MAGISTRATE FOR THE DISTRICT OF 3RD RESPONDENT

PORT ELIZABETH

JUDGMENT

SANDI, J:

[1] When these motion proceedings were brought before me ex parte and as a matter of urgency, I granted the following order:

“(a) That the applicant’s non-compliance with the rules of the above Honourable Court be condoned and that the applicant be permitted to bring this application forthwith as a matter of urgency in terms of the provisions of Rule 6 (12);

(b) That a rule nisi do issue calling upon the respondents to show cause, if any, on Thursday 29 July 2004 at 09:30 why the orders in the following terms should not be made:

(i) that the warrant issued by the third respondent on the strength of which first respondent seized inter alia the applicant’s non-radio apparatus equipment, namely the four personal computer towers from premises at Fairview House, Lelane and Park Sheraton, all in Port Elizabeth, on 18 June, 21 June and 23 June 2004 be set aside to the extent that seizure of the said apparatus was authorised therein;

(ii) that the first respondent be ordered to release the applicant’s non-radio apparatus equipment, namely the four personal computer towers seized by it from premises at Fairview House, Lelane and Park Sheraton, all in Port Elizabeth, on 18 June, 21 June and 22 June 2004 forthwith;

(iii) that first respondent be ordered to restore unencumbered possession of the four personal computer towers to applicant;

(iv) that first respondent be ordered to pay the costs of this application, including the costs of two counsel and that second respondent and third respondent be ordered to pay such costs jointly and severally with the first respondent only in the event of their opposing this application;

(c) that prayers (i), (ii) and (iii) supra operate as an interim interdict pending the return day herein;

(d) alternative relief.”

[2] On 29 July 2004 the matter was postponed to 14 October 2004 on which date it was argued before me. It was opposed by the first and second respondents.

[2.1] The applicant is Aerosat CC, a Close Corporation duly incorporated in accordance with the Laws of the Republic of South Africa, with its principal place of business at 204 Fairview House, Port Elizabeth. It commenced business in mid-2003.

[3] Bruce John Gie, Ryan Gavin Goss and Nicola Smith (Smith) are its only three members.

[4] The first respondent is the Independent Communications Authority of South Africa, a juristic person established in terms of the Independent Communications Authority of South Africa Act 13 of 2000, with its principal place of business at 63 Mangold Street, Newtown Park, Port Elizabeth. It is responsible for the administration of those aspects of the Telecommunications Act 103 of 1996 (“the Act”) relevant to the present application.

[5] The second respondent is Jacobus Stephanus Arnold, an employee of the first respondent and inspector appointed in terms of s 98 of the Act. No order of costs is sought against him save in the event of him opposing this application.

[6] The third respondent is the magistrate of Port Elizabeth. He is joined in the application in his official capacity and no costs order is sought against him.

[7] As appears hereunder this application concerns the interpretation of certain provisions of the Act and the regulations made thereunder.

[8] The crisp issue for decision is whether the first respondent was empowered by the warrant issued by the third respondent in terms of s 99 of the Act read together with ss 31 and 32 thereof to seize the apparatus belonging to the applicant.

[9] The third respondent contends that it was empowered to do so while the applicant contends that it was not. Of the apparatus seized the applicant seeks the return of the four computer towers only.

[10] There is a dispute between the parties as to whether or not the apparatus seized by the first respondent is a radio apparatus within the meaning of s 1 of the Act. The applicant’s case is that the apparatus is not a radio apparatus and that its seizure is unlawful.

[11] In presenting the applicant’s case, Smith says that the applicant has been advised to limit the ambit of the application to the seizure of the apparatus only and not to sketch the background which gave rise to this application. Because criminal investigations had been commenced against the applicant for allegedly contravening the provisions of s 32 of the Act, she says that she has been advised to exercise her right to remain silent and not deal with those allegations relating to the pending charge.

[12] On 24 June 2004, Smith and other members of the applicant were advised by members of the South African Police Service that the first respondent had lodged a complaint against her and other members of the applicant on the basis that they were contravening the provisions of s 32 of the Act.

[13] On 16 and 29 March 2004 the third respondent issued three warrants of inspection to the first respondent in terms of s 99 of the Act. These warrants authorise the inspectors of the first respondent to enter the premises described therein and inspect any radio apparatus and telecommunication facility. In addition thereto each warrant authorises the seizure of apparatus in terms of the provisions of s 31(3) of the Act.

[14] Acting in terms of these warrants, on 24 March 2004, employees of the first respondent, accompanied by members of the South African Police Service, went to Summerstrand Village Complex, Shop 18 and Boardwalk Internet Café – addresses mentioned in the warrants – and sealed certain equipment of the applicant. The said equipment was handed back to Smith in a sealed bag together with a permit to possess the same. Smith says that to date of the application this equipment was still sealed.

[15] On 30 March 2004 and acting on the strength of the warrant issued by the third respondent on 29 March 2004, first respondent’s employees, accompanied by police officers, went to the addresses described in the warrant as Lelane Flats and Fairview House, Ring Road, Greenacres and there sealed certain equipment of the applicant. On this occasion as well the sealed equipment was handed back to Smith in a sealed bag together with a permit authorising possession of the equipment.

[16] On 27 May 2004 the third respondent issued a further warrant which was executed by the second respondent and two employees of the first respondent at Fairview House, Ring Road, Greenacres on 28 June 2004. According to Smith the second respondent seized from the premises inter alia a personal computer tower and two PCMCIA cards.

[17] On the same day the second respondent seized inter alia a personal computer tower at Lelane Flats.

[18] On 21 and 22 June 2004, at Park Sheraton and at Lelane flats a personal computer tower and two PCMCIA cards were seized by the second respondent from each of these premises. In respect of each of these seizures the second respondent issued a confiscation certificate recording the apparatus removed. The certificate issued in respect of Lelane flats mentions, among other things, two antennae. Each certificate states that the apparatus shall be held by the first respondent until it is dealt with by the Court at criminal proceedings in terms of s 102 of the Act.

[19] Smith says the following in her affidavit:

“The said personal computer towers are stand alone units. They function independently of the PCMCIA cards. These cards are separate and distinct add-ons which can run on any computer. The personal computer towers by themselves are incapable of transmitting or receiving any signal by radio. The personal computer towers are used for end-user computing to drive any computer function for example word processing, web designing, software development, control systems, general management, server function and the like.

The personal computer towers referred to above which were seized by the second respondent (and the two said gentlemen) by themselves do accordingly not fall within the definition of “radio apparatus” in section 1 of the Act. The possession thereof by the applicant is accordingly not subject to the provisions of section 31 of the Act.”

[20] Smith states that the applicant has entered into negotiations with JQE Technical CC for the sale of its business to that entity and that the computer towers referred to above will form part of this sale.

[21] The applicant’s Attorney, Mr Rhode, states in his affidavit that on 21 June 2004, he, Smith, Junior Counsel and the other two members of the applicant held a meting with the first respondent’s regional manager, Mr Johns in an attempt to secure the release of applicant’s equipment “as listed in the annexure to the affidavit of Ms Smith”. Rhode refers herein to the property set out in the confiscation certificates issued by the second respondent. Such property comprises the personal computer towers, the antennae and the PCMCIA cards.

[22] Rhode says that the apparatus does not constitute “radio apparatus” for the purposes of Government notice R25594 of 16 October 2003 and that, in any event, the equipment has been type approved and lawfully possessed by his client. I shall return to this aspect of the matter later in this judgment.

[23] Rhode states further that at that meeting Mr Johns agreed to return the seized equipment on condition that an undertaking was given that the equipment would not be used in a manner that is prohibited by the Act. He said that his client readily gave such undertaking.

[24] However, according to Mr Rhode, Mr Johns reneged on the agreement and on 22 June 2004 Mr Rhode addressed a letter to Mr Johns which reads inter alia as follows:

“We confirm that on 21st instant you undertook to return our client’s computer tower and hard-drives provided that we remove radio transmitting facilities from the same and give you an undertaking that the computers will not be used in conduct which is in contravention with (sic) the Act.”

[25] Mr Rhode says that at the request of the first respondent’s legal officer, Mr Ngxingo, he forwarded the following written undertaking to the first respondent:

“We confirm that our clients have instructed us without any admission of criminal liability under section 101 of the Telecommunications Act, to give you an undertaking that all equipment which was seized under warrants issued on 18th June 2004 and thereafter will not be used for the transmission by radio, of data via the internet.

We trust that the undertaking meets your requirements and we shall be pleased if you could release the goods seized as aforesaid forthwith.”

[26] Thereafter at about 14h15 a telephonic discussion between Mr Rhode and the first respondent was held on 23 June 2004 during which a heated argument ensued. Among other things, Mr Ngxingo, the first respondent’s legal officer, advised Mr Rhode that the undertaking was not sufficient. This was followed by a letter from Mr Ngxingo advising that in view of the acrimonious discussion between him and Mr Rhode it would not be feasible to attempt to settle the matter amicably.

[27] In his answering affidavit Mr Johns confirmed the meeting he had with Mr Rhode and Junior Counsel. He says Junior Counsel threatened legal action against employees of the first respondent. He confirms though that he had been instructed to advise the applicant that the first respondent would be prepared to release the computer towers provided that a written undertaken was given that the applicant would desist from using them illegally.

[28] The second respondent, a Control Technical Officer: operations, and first respondent’s inspector appointed in terms of s 98 of the Act, points out in his answering affidavit that the applicant has failed to disclose material aspects of the matter to the Court. In this regard he annexes correspondence and documents exchanged between the parties.

[29] In annexure “JA4” thereto the following is said by the applicant:

“Technical overview

We currently have 4 “High Sites” (Access Points) situated around the Port Elizabeth area. They are located in strategic locations on top of buildings and provide the backbone of our operation. The tower itself is a linux machine with 2X PCMCIA wireless network adapters. The 1st of which connects to an omni directional antenna and the 2nd one links the tower to our office. … We realised from the start that the 2.4 GHz band was an unregulated band and this meant that there was no license available for it. For this reason, we saw no reason to believe that what we were doing would cause a problem. When we were approached by ICASA and informed that we did in fact require a license to continue our efforts, we made no hesitation in providing all information requested to the ICASA staff and are keen to work with them to resolve the issues of our licensing.”

[30] The second respondent also annexes a technical drawing of the apparatus that was used by the applicant. The correctness of this drawing has been admitted by Mr Van der Linde SC who, together with Mr Pillay, appear for the applicant.

[31] The drawing depicts a computer tower fitted with two PCMCIA WLAN cards. It has a LAN cable connector which is used for connecting it to internet feed. The computer tower has two antennae attached to it. One is an omni directional antenna used to supply end-users around the main sites. The other one is a directional antenna used between main sites, across the roads and suburbs.

[32] It is common cause that when all these components are connected together they constitute a radio apparatus which is capable of transmitting or receiving any signal by radio within the meaning of s 1 of the Act.

[33] The second respondent also annexes to his affidavit a letter addressed by the applicant to the first respondent dated 30 March 2004. This letter was prompted by the sealing of the applicant’s apparatus pursuant to an inspection warrant issued in terms of the Act. In the said letter the applicant says that in using the apparatus that had been sealed it acted in the bona fide belief that it did not require a licence to operate wireless. It says that “(w)e sought an opinion from Senior Counsel in Port Elizabeth who, after lengthy consultation, advised that we may very well require to apply for the requisite licence as we are adding value to a Telkom service as provided for in the Act. A lot of money and other resources have been invested in the enterprise, on the mistaken belief that we did not require to apply for the required licence. The sealing of our equipment have the effect of paralysing our service and will cause our users to abandon us thereby rendering any future granting of a licence to ourselves a nullity and therefore useless.” In the letter the applicant asks the first respondent to grant it a period of grace of at least three months in order for it to compile a proper application as provided for in Government notice R1384 of 1 October 2003 and apply for an interim licence to operate in order that it may maintain the client base it has built up.

[34] On 20 February 2004 the first respondent addressed a letter to the applicant in response to its letter of 3 February 2004. The letter reads inter alia as follows:

“Your letter confirms that the entity “Aerosat” is providing internet services. Your letter further confirms that in providing internet services to third parties, wireless means are being used. Our records further confirm that Aerosat is not in possession of a value-added network service licence, which is required for the provision of internet services.”

The applicant was required to desist from its conduct.

[35] In response to the applicant’s letter of 30 March 2004 requesting a period of grace to apply for a licence, the first respondent wrote to the applicant on 12 May 2004 pointing out the following:

“The investigations revealed that all the sites that were previously sealed are now up and operational. This implies that the seals of the previous apparatus and the antennas have been broken. This constitutes a transgression of section 31 of the Act as you are now in possession of apparatus without the necessary permit or licence.”

[36] The applicant did not disclose the above information at the time it applied for and was granted an interim order.

[37] The second respondent avers therefore that after the sealing of the apparatus on the occasions referred to above the first respondent’s inspectors monitored the sites in question and discovered that the applicant was again providing wireless internet services to third parties: seals previously used had been broken and/or new equipment was being used.

[38] For that reason further warrants of inspection were applied for and obtained on 27 May 2004, 4 June 2004 and 22 June 2004. The second respondent says that on these occasions the first respondent sought an order to confiscate the apparatus in order to prevent its continued illegal usage. These warrants were executed on 18, 21 and 22 June 2004 and radio apparatus belonging to the applicant was seized.

[39] The second respondent denies that the personal computer towers are stand alone units and that they function independently of the PCMCIA cards. Though he admits that the PCMCIA cards can be used on personal computer towers fitted with a plug-in adapter, he denies that the cards in question were “configured as separate and distinct units”. He avers that the PCMCIA cards, the antennae and the personal computer towers were being “used as an inter–connected unit to provide a wireless telecommunication service.” He says that “(t)he applicant has so configured the link between the personal computer towers, the PCMCIA cards and the antennae in such a way that they operate as one radio apparatus for the rendering of a telecommunication service by the applicant.”

[40] The first respondent has made two allegations against the applicant, namely that (a) it was found in possession of a radio apparatus without being in possession of a permit to do so (in contravention of s 31 (1)) and, (b) that it provided a telecommunication service without a licence (thereby contravening s 32 (1)).

[41] Mr Van der Linde argued that the second respondent (the inspector appointed in terms of s 98) whose powers are circumscribed by s 99 of the Act is not empowered by the provisions of s 32 of the Act to seize an apparatus. According to Counsel seizure of an apparatus by the second respondent is only permitted by the Act in the case of possession of a radio apparatus without a permit. He argued that it is not apparent from the provisions of s 32 that the second respondent was permitted to seize an apparatus in the case of provision of a telecommunication service without a licence. He submitted that in that event the duty of an inspector would be to enter premises, inspect an apparatus and gather information. If the inspector discovered that a telecommunication service was being provided without a licence, the matter would have to be referred to the police who have the powers to search and seize property in terms of the provisions of Chapter 2 of the Criminal Procedure Act 51 of 1977.

[42] Counsel submitted further that s 31 of the Act does not say which of the officials of the first respondent is empowered to seize a radio apparatus.

[43] He submitted that a public official who exercises statutory authority must do so strictly within the four corners of the enabling legislation.

[44] On the other hand, Ms Moroka SC, Counsel for the respondents submitted that the applicant was in possession of a radio apparatus in contravention of s 31 of the Act from which it provided a telecommunication service in contravention of the provisions of s 32: without the radio apparatus the applicant would not be able to provide a telecommunication service. She submitted therefore that the seizure of the radio apparatus is authorised by s 31 (1) of the Act. According to Ms Moroka it was the possession of the radio apparatus that enabled the applicant to provide a telecommunication service.

[45] Regarding the interpretation of Statutes Innes CJ said the following in Venter v R 1907 TS 910 at 913:

“[I]n construing the statute the object is, of course, to ascertain the intention which the legislature meant to express from the language which it employed. By far the most important rule to guide the courts in arriving at that intention is to take the language of the instrument … as a whole, and, when the words are clear and unambiguous, to place upon them their grammatical construction, and give them their ordinary effect.”

In Stellenbosch Farmers’ Winery Ltd v Distillers Corp. (SA) Limited 1962 (1) SA 458 (A) at 476E-F Wessels AJA put the position as follows:

“In my opinion it is the duty of the Court to read the section of the Act which requires interpretation sensibly, i.e. with due regard, on the one hand, to the meaning or meanings which permitted grammatical usage assigns to the words used in the section in question and, on the other hand, to the contextual scene, which involves consideration of the language of the rest of the statute as well as the ‘matter of the statute, its apparent scope and purpose, and, within limits, its background.’”

In addition, the Supreme Court of Appeal held that a purposive approach to interpretation of statutes is permissible in South Africa. In Public Carriers Association and others v Toll Road Concessionaries (Pty) Ltd and others 1990 (1) SA 925 (A) at 943C-E it articulated the principle as follows:

“The notion of what is known as a ‘purposive construction’ is not entirely alien in our law. The dictum of Lord Diplock in Catnic Components Ltd and Another v Hill & Smith Ltd [1982] RPC 183 (HL) at 243 that patent specifications should be given ‘a purposive construction rather than a purely literal one derived from applying to it the kind of meticulous verbal analysis in which lawyers are too often tempted by their training to indulge has been favourably received by this Court in the realm of patent law…”

See also L Du Plessis Re-interpretation of Statutes (2000) Butterworths, Durban 118; Stopforth v Minister of Justice and others; Veenendaal v Minister of Justice and others 2000 (1) SA 115 (A) at para [21] where the following dictum by Innes CJ in Venter v R supra at 914 is approved:

“[I]t appears to me that the principle we should adopt may be expressed somewhat in this way – that when to give the plain words of the statute their ordinary meaning would lead to absurdity so glaring that it could never have been contemplated by the Legislature, or where it could lead to a result contrary to the intention of the Legislature, as shown by the context or by such other considerations as the Court is justified in taking into account, the Court may depart from ordinary effect of the words to the extent necessary to remove the absurdity and to give effect to the true intention of the Legislature.”

In applying the purposive method of constructing a statute the Court may look at a number of things:

(1) the preamble of the Act or other express indications in the Act as to the object the Act seeks to achieve;

(2) the various sections of the Act from which the purpose of the Act may be found;

(3) the mischief that the Act is intended to deal with;

(4) and draw logical inferences from the context of the enactment.

See E A Kellaway: Principles of Legal Interpretation of statutes, contracts and wills at (Butterworths, Durban, 1995) at 69; Jaga v Dônges NO and another; Bhana v Dônges NO and another 1950 (4) SA at 662; Re Bidie [1946] Ch 121; Aetna Insurance Co v Minister of Justice 1960 (3) SA 273 (A) at 284; R v Jones 1925 AD 117 at 129.

The preamble of the Act states, inter alia, that the Act aims:

“(t)o make new provision for the regulation of telecommunication activities other than broadcasting, and for the control of the radio frequency spectrum; and for that purpose to establish an independent South African Telecommunications Regulatory Authority and a Universal Service Agency…”

The objects of the Act are set out in s 2 thereof, the relevant ones being the following:

“The primary object of this Act is to provide for the regulation and control of telecommunication matters in the public interest, and for that purpose to –

(i) ensure compliance with accepted technical standards in the provision and development of telecommunication services;

ensure fair competition within the telecommunications industry;

(m) protect the interests of telecommunications users and consumers;

(p) ensure efficient use of the radio frequency spectrum.”

[46] With the above considerations in mind I now deal with the relevant provisions of the Act which are the subject of this application:

“31 Control of possession of radio apparatus.

Subject to section 30 (9), no person shall have in his or her possession any radio apparatus unless he or she is in possession of a permit issued by the Authority in terms of this section or a frequency spectrum or station licence issued in terms of section 30 authorising such possession, or unless he or she is a supplier registered in terms of section 56.

The procedure for obtaining a permit in terms of subsection (1), shall be as prescribed.

Where any radio apparatus is found in the possession of any person in contravention of the provisions of this section, the Authority may –

(a) seal or alter such apparatus or any part thereof in order to prevent the use of that radio apparatus for the purpose of transmission or reception, and issue to such person a permit for a limited or indefinite period authorising the possession of that apparatus on condition that it is not during such period used for such purpose;

(b) seize such apparatus, whether or not it is sealed as contemplated in paragraph (a), for disposal in terms of subsection (4).

(4) Radio apparatus seized under subsection (3) (b) shall be held by the Authority until –

(a) its possession is authorised in terms of subsection (1) or (3) (a); or

(b) it is dealt with by a court in terms of section 102 (2).

32 Prohibition on provision of telecommunication service without licence

Subject to the provisions of this Act, no person shall provide a telecommunication service except under and in accordance with a telecommunication service licence issued to that person in terms of this Chapter.

A licence shall confer on the holder the privileges and subject him or her to the obligations provided in this Act or specified in the licence.

98 Appointment of inspectors

The Council may appoint any person in the service of the Authority or any other suitable person as an inspector.

A person who is not in the full-time service of the Authority and who is appointed as an inspector shall be paid such remuneration as the Minister may determine with the concurrence of the Minister of Finance.

An inspector shall be provided with a certificate of appointment signed by or on behalf of the chairperson of the Council in which it is stated that he or she has been appointed an inspector in terms of this Act.

When an inspector performs any function in terms of section 100, he or she shall have such certificate of appointment in his or her possession and show it at the request of any person affected by the performance of that function.

99 Powers of inspectors

An inspector appointed in terms of section 98 may, in order to determine whether the provisions of this Act or of any licence,

permit, certificate or other authority in terms of this Act or of any agreement for the interconnection of telecommunication systems or the making available of telecommunication facilities as contemplated in sections 43 and 44, respectively, are being complied with, at any reasonable time and without prior notice, on the authority of a warrant, enter the premises in question and –

inspect and make copies of or extracts from books, records or other documents;

demand the production of and inspect the relevant licence, permit, certificate or authority;

inspect any radio apparatus or other telecommunication facilities on the premises.

A warrant contemplated in subsection (1) shall be issued by a judge or a magistrate who has jurisdiction in the area where the premises in question are situated, and shall only be issued if it appears from information on oath that there are reasonable grounds for believing that the provisions contemplated in subsection (1) are being contravened on those premises.

No person shall –

fail to comply with a demand contemplated in subsection (1) (b);

hinder or obstruct an inspector in the exercise of his or her powers in terms of this section;

falsely hold himself or herself out as an inspector.”

[47] Section 101 makes it an offence to contravene the provisions of sections 31(1) or 32(1) of the Act.

[48] Section 102 provides penalties for contravening the provisions of the Act and gives the Court hearing any criminal matter arising from a contravention of the Act the power to declare any telecommunication facility or equipment by means of which an offence was committed forfeited to the Authority.

[49] The Authority referred to in the Act is the Independent Communications Authority of South Africa, the first respondent.

[50] In terms of s 31(3)(b) of the Act the power to seize an apparatus is conferred on the first respondent and not on members of the South African Police Service. Moreover s 19 of the Criminal Procedure Act 51 of 1977 acknowledges the existence of other powers contained in other laws to enter premises, search and seize property and to declare any property forfeited. In that event the powers conferred by such laws take precedence over the provisions of the Criminal Procedure Act 51 of 1977.

[51] It seems to me that according to the scheme of the Act the first respondent enforces the provisions of the Act through the medium of its employees appointed in terms of the provisions of s 14 of the Independent Communications Authority of South Africa Act 13 of 2000. Inspectors appointed in terms of s 98 thereof are also such employees. Section 99 of the Act empowers an inspector to determine “whether the provisions of the Act ... are being complied with” and may, for that purpose, enter premises on the authority of a warrant issued by a judge or magistrate (s 92(2)) “if it appears from information on oath” that the provisions of the Act are being contravened (s 99(1). Section 5(1) of the Independent Communications Authority of South Africa Act 13 of 2000 provides for the establishment of a Council consisting of seven councillors appointed by the President of the Republic of South Africa. The Council must establish its own administration to assist the first respondent in the performance of its functions. It appoints the Chief Executive Officer as well as other staff members it deems necessary to assist the first respondent in the performance of its functions.

[52] If the inspector finds a radio apparatus in the possession of any person without a permit, he or she may seal or alter such radio apparatus “to prevent the use of that radio apparatus for the purpose of transmission or reception” or he/she may “seize such apparatus, whether or not it is sealed”. Such radio apparatus shall be held by the first respondent until the finalisation of criminal proceedings as set out in s 102 of the Act.

[53] In this matter not only was the applicant not in possession of a permit to possess the radio apparatus concerned, it also provided a telecommunication service without a licence in contravention of s 32. Seizure of the apparatus therefore permitted by the provisions of s 31(3)(b) of the Act. It seems therefore that it was on the strength of the latter section that the second respondent, armed with a warrant, seized the radio apparatus concerned.

[54] I do not agree with Mr Van der Linde’s submission that, on the analogy of industrial accession, unless the personal computer towers were fitted to a huge transmitter so as to make them an inseparable unit, they do not constitute a radio apparatus. All the component parts of the radio apparatus belong to the applicant and I do not find that the principle of industrial accession applies in this matter. If it were so the Act would be rendered ineffective and flouted with ease by persons such as the applicant.

[55] Mr Van der Linde submitted that s 31 of the Act does not spell out which of the officers of the first respondent is imbued with the power to seize an apparatus and that the powers of first respondent’s inspectors are circumscribed by s 99 of the Act. Though legal argument has been advanced by both Counsel on this issue it is not foreshadowed in the applicant’s papers. It was raised for the first time in the applicant’s heads of argument. Indeed, in her argument Ms Moroka submitted that this is not part of the applicant’s case.

[56] First respondent’s inspectors are appointed by its Council in terms of s 98 of the Act and the Act grants the first respondent the power to delegate some of its powers in terms of s 91 of the Act. The papers were drawn on the assumption that the second respondent is an inspector of the first respondent empowered to seize radio apparatus falling within the definition of s 1 of the Act. I have no doubt that had the propriety of the second respondent to act in terms of s 31 of the Act been raised as an issue, it would have been dealt with in the respondents’ answering affidavit.

[57] The next point raised by Mr Van der Linde was that the personal computer towers seized do not constitute radio apparatus as defined in s 1 of the Act.

[58] Section 1 defines a radio apparatus as “a telecommunication facility which is capable of transmitting or receiving any signal by radio.” Telecommunication is defined as “the emission, transmission or reception of a signal from one point to another by means of electricity, magnetism, radio or other electromagnetic waves, or any agency of a like nature, whether with or without the aid of tangible conductors”, and, telecommunication facility “includes any wire, cable, mast, or other thing which may be used for or in connection with telecommunication.”

[59] To single out a personal computer tower among the equipment seized by the first respondent as a non-radio apparatus, as has been submitted by applicant’s Counsel, would result in absurdity not intended by the Legislature and such a narrow interpretation would have the effect of frustrating the purpose for which the Legislature enacted this piece of legislation. One may ask: What about the antennae and the PCMCIA cards? Applying the interpretation advocated by Mr Van der Linde a Court would be bound to find that the equipments taken individually do not qualify as radio apparatus.

[60] Sight must not be lost of the fact that these component parts form the core of the applicant’s business. And it must be remembered that, on applicant’s own admission as evidenced by the documents referred to above, it was in possession of the radio apparatus without a permit and such apparatus was used for the provision of a telecommunication service without a licence.

[61] If applicant’s classification of the personal computer towers as non-radio apparatus is to be accepted, it would be open to anyone contravening the provisions of ss 31 and 32 of the Act – once certain components of the radio apparatus were either sealed or seized - to break the seals or, if not, acquire other equipment to replace the sealed or seized equipment in contravention of the Act and without attracting any liability therefore.

[62] In the light of the facts of this case, it is not difficult to imagine why the applicant limited the ambit of its application to the return of the personal computer towers and why the applicant chose not to disclose the history of the apparatus to the Court as has been revealed by the second respondent in his answering affidavit.

[63] Such background history as was not disclosed by the applicant would have brought to my attention the nature of the business undertaken by the applicant, the purpose for which the computers were used, the admissions made in respect of the apparatus, the request made for a period of grace to apply for a licence and the warning by the first respondent that the applicant was contravening the Act.

[64] Mr Rhode’s affidavit together with the written undertaking made by him on behalf of the applicant make it clear that what was sought by the applicant in those negotiations was the release of “all the equipment seized” by the first respondent and not only the computer towers. This evidence also contains the admission that the equipment seized was “used for the transmission by radio, of data via the internet.”

[65] On the issue of the applicant’s failure to disclose material facts, Ms Moroka submitted that the interim order should not have been granted by the Court because the applicant did not place before it the material facts set out above which might have influenced it to grant or refuse the application.

[66] Dealing with the issue of non-disclosure of material information Herbstein and Van Winsen, The Civil Practice of the Supreme Court of South Africa, 4th edition (Juta & Co, Cape Town, 1997) at page 367, state the legal position as follows:

“Although, generally, an applicant is entitled to embody in his supporting affidavits only allegations relevant to the establishment of his right, when he is bringing an ex parte application in which relief is claimed against another party he must make full disclosure of all the material facts that might affect the granting or otherwise of an order ex parte. The utmost good faith must be observed by litigants making ex parte applications in placing material facts before the court, so much so that if an order has been made upon an ex parte application and it appears that material facts have been kept back, whether wilfully and mala fide or negligently, which might have influenced the decision of the court whether to make an order or not, the court has a discretion to set the order aside with costs on the ground of non-disclosure. It should, however, be noted that the court has a discretion and is not compelled, even if the non-disclosure was material, to dismiss the application or set aside the proceedings.”

[67] In Schlesinger v Schlesinger 1979 (4) SA 342 (W) at 349A-B, the Court, after quoting the above excerpt from the second edition of the same book and considering the other reportable judgments referred to therein, summed up the legal position regarding non-disclosure of material information in an ex parte application as follows:

“(1) in ex parte applications all material facts must be disclosed which might influence a Court in coming to a decision;

(2) the non-disclosure or suppression of facts need not be wilful or mala fide to incur penalty or rescission; and

the Court, apprised of the true facts, has a discretion to set aside the former order or to preserve it.”

See also MV Rizcun Trader (4); MV Rizcun Trader v Manley Appledore Shipping Ltd 2 000 (3) SA 776 at 793H-794A and 799E-F; Cometal-Mometal SARL v Corlana Enterprises (Pty) Ltd 1981 (2) SA 412 (W) at 414C-H; Godlonton NO v Ryan Scholtz & CO (Pty) Ltd 1978 (4) SA 84(E) at 86H-87F; Ex Parte Madikiza et uxor 1995 (4) SA 433(TK) at 436J-437D.

[68] Smith does not deny the materiality of the information not disclosed nor the effect it might have had on the Court had it been so disclosed. She merely refers to her founding affidavit where she states that the application is not intended to deal with the allegations that the applicant or its members have committed offences under the Act. She says that they have been advised to remain silent in so far as the charges are concerned. According to her the application concerns the sealing or seizure of applicant’s equipment which does not fall under the definition of radio apparatus.

[69] The reason for non-disclosure is less than satisfactory and the materiality of the information kept back from the Court is obvious.

[70] Had I been apprised of the fact that the applicant was in possession of a radio apparatus without a permit; that it operated a telecommunication service without a licence by using the said radio apparatus; that it had sought an extension of time to apply for the relevant licence; that Senior Counsel had advised that it needed a licence; that it applied for a period of grace to obtain the necessary licence which application was refused by the first respondent; that despite Counsel’s advice and warning from the first respondent it persisted to provide a telecommunication service, I would not have granted the interim order.

[71] In my view the applicant has violated the rule to disclose information of a material nature.

[72] However, the matter does not end there because I must decide whether, in the exercise of my discretion, the interim order should be set aside on this basis alone. My view is that it should. The violation of the rule is a flagrant one. This is more so in the absence of a satisfactory and acceptable explanation from the applicant as to why the information was not disclosed.

[73] In the applicant’s affidavit Smith mentions that the applicant was engaged in negotiations with JQE Technical CC to sell part of its business together with the computer towers which form the subject of this application.

[74] I was aware of this allegation when I granted the interim order. However, I was not informed that the purpose of the interim order was to gain the release of the computer towers so that they could be sold to the entity referred to above before the finalisation of the application. The interim order granted by me is not capable of such interpretation and Mr Van der Linde conceded that this is so.

[75] Quite strangely, on 28 June 2004 Mr Rhode addressed a letter to the respondents’ attorneys in which he advised that the applicant had sold its business assets to JQE Technical CC, a corporation which holds a Value Added Network Licence.

[76] This was done by the applicant in spite of the fact that the application was still pending. The respondents’ Attorneys brought to the attention of Mr Rhode that the interim order did not bring this matter to finality.

[77] The next submission made by Mr Van der Linde is that Government Gazette no. 1790 dated 17 November 1995 has since been replaced by Government Gazette no. 26193 of 24 March 2004 and submitted that in terms of the latter regulation the applicant no longer requires a permit to possess a radio apparatus.

Government Gazette no. 26193 dated 24 March 2004 provides, inter alia, as follows:

“Categories of radio apparatus which shall not require radio frequency spectrum licence, certificate, authority or permit.

2. The use or possession of the radio apparatus listed in Column B of the annexure shall not require a radio frequency spectrum licence, certificate, authority or permit.

Circumstances in which certain radio apparatus shall not require radio frequency spectrum licence, certificate, authority or permit.

3 The circumstances in which the use or possession of the radio apparatus referred to in clause 2 shall not require a radio frequency spectrum licence, certificate, authority or permit are the following:

…

…

…

…

…

…

…

…

…

…

The radio apparatus may not be used to provide a telecommunication service to another person without a telecommunication service licence and in a manner that contravenes the provisions of the Act.”

[78] Paragraph 4 of the Government Gazette states that the radio apparatus must be used on single sites e.g. “in an office complex in the 2, 4-2, 5 GHz (ISM) band”.

[79] Paragraph 4(d) of the Government notice stipulates that:

“LAN’s shall be confined to the same premises/buildings.”

[80] Before the withdrawal of Government notice no. 1790 of 17 November 1995 the applicant was contravening the provisions of the Act and the said Government notice.

[81] The current position is that the radio apparatus may not be used to provide telecommunication to another person without a licence. It also says that Local Area Networks (LAN’s) should be confined to the same premises/buildings which the applicant did not adhere to in this matter.

[82] Mr Van der Linde conceded that if the applicant contravened the provisions of the Act, before the withdrawal of Government notice no. 1790 of 17 November 1995 it cannot now benefit from the provisions of Government notice no. 26193 of 24 March 2004.

[83] In my view the application is devoid of merit and cannot succeed.

In the result I make the following order:

The rule is discharged with costs.

_____________

B. SANDI

JUDGE OF THE HIGH COURT