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IN THE HIGH COURT OF SOUTH AFRICA REPORTABLE

(SOUTH EASTERN CAPE LOCAL DIVISION)

Case No.: 1936/07

Date delivered: 4.4.08

In the matter between:

DIRECTORY SOLUTIONS CC Applicant

and

TDS DIRECTORY OPERATIONS (PTY) LTD First Respondent

TELKOM SOUTH AFRICA LIMITED Second Respondent

MINISTER OF COMMUNICATIONS Third Respondent

THE INDEPENDENT COMMUNICATIONS

AUTHORITY OF SOUTH AFRICA Fourth Respondent

JUDGMENT

JANSEN, J:

The applicant is a close corporation, duly incorporated, which conducts the business of an independent directory consultant and agent to consumers who intend to place their entries in numerous telephone directories published by the first respondent in the various regions of South Africa. The first respondent is a company with limited liability and a fully owned subsidiary of Telkom, second respondent. Telkom is also a company with limited liability and is furthermore an Organ of State as envisaged in section 239 of the Constitution of the Republic of South Africa Act No. 108 of 1996. The third respondent is the Minister responsible for communications. The fourth respondent is the Independent Communications Authority of South Africa (ICASA) established in terms of section 3 of the Independent Communications Authority of South Africa Act No. 13 of 2000 and as defined in section 1 of the Electronic Communications Act No. 36 of 2005.

The services offered and rendered by the applicant against payment of a stated fee include inter alia advice to consumers on the most efficient and appropriate manner to place their entries in the white pages of the telephone directories; to submit a draft entry to the prospective consumer to enable such consumer to effect the corrections and amendments thereto to its satisfaction; to provide an undertaking that entries submitted to the first respondent for publication in the relevant directories are correct and thereafter to submit approved entries to the first respondent for publication. The applicant contends that the aforesaid services are of considerable value to consumers.

It is common cause that the first respondent, in accepting entries for publications in directories and publishing the entries in the directories, is exercising the rights, powers and duties imposed on it in terms of a licence issued to Telkom by the Minister. Licence Condition 5.1.1 provides that the licensee (the first respondent) shall provide or make available free of charge printed directories to each customer, the form and content of which shall be determined by the licensee from time to time. Licence Condition 5.1.2 provides that the aforesaid directories shall include at a minimum for each of the customers in the relevant areas their names and addresses and telephone numbers. It further provides that the licensee may not charge for publishing the relevant data about the customer in a directory, but may charge for advertising and providing enhanced directory listings. It is common cause that certain entries in the directories, for example enhanced or centre block entries, are indeed billable or chargeable. It is further common cause that the primary method in terms of which the first respondent secures payment for billable entries is to bill the particular customer on its telephone account with the second respondent.

The applicant inter alia advises customers to convert entries from the free light type publication in the directories to chargeable bold types in order to display the entries more prominently and thus to promote such customer’s particular businesses. This ensures that the particular customer’s details are more visible in the relevant directories and more accessible to those particular customer's individual commercial clients.

The first respondent provides a similar service to its own customers. It also publishes certain entries in the directories in enhanced or centre block style. The first respondent itself concedes that the charges claimed by the first respondent for processing and publishing such entries are billed on a particular customer’s telephone account. According to the applicant the main difference between the methodology of the first respondent and the applicant is that the applicant forward written proof of the entries to be published to each individual customer and afford such customers the opportunity to proof read it and to affect any amendments thereto prior to publication. This, according to the applicant, gives rise to greater accuracy and leaves little room for misunderstanding or errors. It is the applicant’s case that there is an ongoing need for such services since significant errors occur year after year in the directories published by the first respondent. It is clear that there is a competition as far as the enhanced entries are concerned between the applicant and the first respondent. It was not disputed that the applicant is entitled in law to offer and render the services which it does. In terms of judgments in the Transvaal Provincial Division of the High Court of South Africa, attached to the applicant’s founding affidavit, it was held that the applicant would be entitled to render the services, provided that it did not unlawfully interfere with any current contractual relationship between any telephone consumer and the first respondent or Telkom, and provided that it did not act unlawfully in any other way. It is the applicant’s case that it has a customer base of some 200 000, from which fact an inference can be drawn that the applicant provides an important and valuable service to consumers in the country.

Each year the first respondent determines what is referred to as “opening canvass” and “closing canvass” dates for the sale of entries in its various directories in South Africa. The opening canvass date is the date from which the first respondent starts accepting applications from the general public and businesses for publication of the entries in the next edition of the directory in a particular region. The closing canvass date is the last date upon which the first respondent accepts an application from a consumer for publication in the next edition of that particular telephone directory. As the applicant’s present business activity is geared at assisting customers for future publication issues, it is of critical importance to the applicant to be made aware of the first respondent’s respective opening canvass dates in the various regions.

The applicant has various complainants against the first respondent. The first respondent refuses to accept instructions obtained by the applicant from numerous consumers and refuses to publish the authorised entry details of such consumers in future telephone directories. The first respondent essentially purports to do so for two reasons. It firstly requires that the applicant itself pay to the first respondent in advance the full amount relating to every intended publication of an individual customer’s entries (in batches) when their respective written requests with the necessary authority are forwarded on behalf of individual customers by the applicant to the first respondent. It secondly requires the applicant’s soliciting notifications to its potential customers to be amended to indicate that the applicant is neither affiliated to the first or second respondents nor authorised to act on their behalf, and that such qualification to the notification must be sufficiently prominent in capital bold letters. A further complaint of the applicant is that the first respondent refuses to advise it timeously of the opening and closing canvass dates. A further complaint is that the first respondent refuses to publish the applicant’s own entry in the local telephone directory.

The applicant now approaches this Court for an order in the following terms:

1. Declaring that the conduct of the first respondent in refusing to accept and publish in telephone directories published by it any telephone directory entry requests received from consumers through the agency of the applicant, is unlawful and is consequently reviewed and set aside;

2. Declaring that the first respondent’s refusal to accept and publish the applicant’s own application for entry in the Port Elizabeth and Eastern Cape country telephone directory published by the first respondent, is unlawful and is reviewed and set aside;

3. Declaring that the first respondent is obliged to accept applications for the publication in future directories lawfully forwarded to it by the applicant on its own behalf and on behalf of its consumer principals;

4. Directing that first respondent in respect of each successive year in the future disclose in writing to the applicant the respective opening canvass dates for entries in future telephone directories published by the first respondent in all regions of the Republic of South Africa, such written disclosure to take place at least one month before each such opening canvass date;

5. That the first respondent and any of the respondents opposing this application, pay the costs of this application.

Only the first respondent opposes the application.

At this stage I want to state categorically, albeit obiter, that, in my view, the requirement by the first respondent that the applicant in its notification to customers insert in bold capital letters in a prominent location that note should be taken that the applicant is neither affiliated to nor authorised to represent Telkom SA Limited or Telkom Directory Services (Pty) Ltd, is not unreasonable. The further requirement that the statement in the applicant’s notification that a possible misleading statement in the notice to the effect that the first respondent’s telephone directory is currently being updated for the subsequent edition be deleted, is also not unreasonable. However, the insistence by the first respondent that the applicant pays in advance the full amount for each and every request submitted by the applicant on behalf of any customer to the first respondent, is grossly unfair and it amounts to unfair discrimination. I am also of the view that the first respondent’s decision not to publish the applicant’s own telephone particulars in its directory is a decision contrary to the obligations imposed upon the first respondent in terms of its license. Furthermore, if regard is had to the competitive nature of the applicant’s business with that of the first respondent, I am of the view that first respondent’s decision not to supply the opening and closing canvass dates to the applicant as it demands, is not unreasonable. My views, expressed above, which was formed on a consideration of all the facts placed before me, are, however, of no assistance to the applicant.

The applicant’s whole case was based on the premise that the first respondent’s conduct constitutes administrative action as envisaged in the Promotion of the Administrative Justice Act No. 3 of 2000 (PAJA) which falls to be judicially reviewed and set aside. As already said above, it is common cause that the second respondent is an organ of State. I agree with the submission on behalf of the applicant that the first respondent similarly qualifies as an organ of State in terms of section 239 of the Constitution in that an organ of State is inter alia any other functionary or institution exercising a public power or performing a public function in terms of any legislation. In publishing the Telkom directories a public and statutory function is fulfilled by the first respondent. “Administrative action”, as defined in section 1 of PAJA means inter alia any decision taken or a failure to take a decision by an organ of State when exercising a public power or performing a public function in terms of any legislation which adversely affects the right of any person and which has a direct external legal effect. In the same context “decision” is defined as meaning any decision of an administrative nature made, proposed to be made, or required to be made, as the case may be, under an empowering provision, including a decision relating to imposing a condition or restriction, making a declaration demand or requirement, or refusing to do any other act of an administrative nature, and a reference to a failure to take a decision must be construed accordingly. The first respondent derives both its powers and its duty to print and publish telephone directories exclusively from Licence Condition 5 referred to above, which in turn exclusively derives its origin and existence from national legislation. Therefore, if the applicant seeks to set aside the first respondent’s conduct, its cause of action is the provisions of PAJA which Act is a codification of the grounds of judicial review of administrative actions. The cause of action for the judicial review of administrative action now ordinary arises from PAJA and not from the common law as in the past. (See Transnet Ltd and Others v Chirwa 2007 (2) SA 198 (SCA) at 207B-E.)

The provisions of PAJA place two insurmountable hurdles on the track of the applicant.

Section 7(1) of PAJA provides that any proceedings for judicial review in terms of section 6(1) must be instituted without unreasonable delay and not later than 180 days after the date on which the person concerned was informed of the administrative action, became aware of the action and the reasons for it or might reasonably have been expected to have become aware of the action and the reasons. The requirements, which the applicant claims to be an administrative action, referred to above, were set out in a letter dated 8 June 2006, written by the first respondent’s attorney to the applicant’s attorney. This letter was marked “RS4” in the court record. The decision to process applications provided by the applicant on the conditional basis as set out in annexure “RS4” was taken after a lengthy process of engagement with the applicant and the decision was conveyed to the applicant on 8 June 2006 as per “RS4”. The applicant’s reply to “RS4” is contained in a letter marked “RS14” dated 13 July 2006 by the applicant’s attorney to the first respondent’s attorney. It specifically refers to “RS4” dated 8 June 2006. The last four lines of this letter reads as follows:

“... and as your client has in no uncertain terms indicated that they refuse to publish the entries, we have instructed counsel to prepare an application to compel. ICASA and the Competition Commission will be joined as respondents. The application will shortly be served on your client.”

This letter prompted a reply from the first respondent’s attorneys, dated 17 July 2006, informing the applicant’s attorney that they have been authorised to accept service on behalf of the first respondent at their Pretoria offices of any proceedings which the applicant may wish to institute. It is common cause that this application was only launched in September 2007. It is the applicant’s case that despite the early threat by its attorney during 2006 to have the dispute between the parties adjudicated upon by a court of law, it made a last attempt at amending its soliciting notification in order to meet the requirements of the first respondent during April 2007 and that this was conveyed to the first respondent per letter on 11 April 2007. The letter of 11 April 2007 is nothing more than a long narrative setting out the position of the various parties and the history of the matter and ends with a request that the first respondent should confirm that it will forthwith process and publish all submissions for publications made by the applicant. Another threat to launch an application was made. In reply to that the first respondent’s attorneys directed a letter dated 11 June 2007 to the applicant’s attorneys confirming their view on the matter and advising them that the first respondent would not comply with the applicant’s demands. I agree with the submission on behalf of the first respondent that it is incorrect that the first respondent conveyed its final decision to the applicant only on 11 June 2007, as the applicant contends in reply. The first respondent simply confirmed its decision on 11 June 2007, which decision had been conveyed to the applicant way back on 8 June 2006 as per annexure “RS4”.

Section 9 of PAJA provides that the period of 180 days referred to in section 7 may be extended for a fixed period by agreement between the parties or, failing such an agreement, by a court or tribunal on application by the person or administrator concerned. It further provides that the court may grant an application to extend such a period where the interests of justice so require. It was contended on behalf of the first respondent in its opposing affidavit that the application had not been launched within the prescribed time period. In reply thereto it was stated on behalf of the applicant that there was an extended period during which the applicant engaged in discussions with the first respondent in an attempt to accommodate the first respondent in all reasonable manners which led to the ultimate decision by the first respondent not to accept annexure “RS3”, which was the proposed notice of the applicant to customers which did not comply with the requirements set by the first respondent, referred to above. It was further submitted on behalf of the applicant that it was this final decision of the first respondent that was attacked by the applicant. That was the decision conveyed to the applicant’s attorneys dated 11 June 2007. The deponent on behalf of the applicant then continues as follows:

“Insofar as it may be necessary condonation is sought from this Honourable Court, taking into account the background and correspondence and meetings between the parties, for any alleged delay in launching these proceedings.”

I agree with the submission on behalf of the first respondent that it is wholly untenable for any applicant to adopt such an attitude only in reply after a specific defence has been raised that the application was not brought within the time limit. For a Court to exercise the discretion contained in section 9 of PAJA it is necessary for an applicant to properly seek condonation and to set out the factual basis for such a relief. The applicant in this matter failed to do it.

It was in the alternative submitted on behalf of the applicant that the first respondent’s continued refusal to accept any submissions for entries to be published in the directories constitutes a continuous administrative wrong in respect of which the applicant remains entitled to approach this Court. There is no merit in this submission. A final decision not to publish it was taken on 8 June 2006. That was accepted by the applicant’s attorney with his letter dated 13 July 2006 where he indicated that an application to compel was about to be launched.

The applicant was well out of time with its application. It failed to apply for an extension of time in which to launch the application. On this ground alone the application must fail.

The second hurdle is even higher than the first one. Section 7(2) of PAJA provides as follows:

“(a) Subject to paragraph (c), no court or tribunal shall review an administrative action in terms of this Act unless any internal remedy provided for in any other law has first been exhausted.

2. Subject to paragraph (c), a court or tribunal must, if it is not satisfied that any internal remedy referred to in paragraph (a) has been exhausted, direct that the person concerned must first exhaust such remedy before instituting proceedings in a court or tribunal for judicial review in terms of this Act.

2. A court or tribunal may, in exceptional circumstances and on application by the person concerned, exempt such person from the obligation to exhaust any internal remedy if the court or tribunal deems it is in the interest of justice.”

Section 7(2) of PAJA limits the fundamental rights of access to a court by barring resort to judicial review until internal remedies provided by any law have been exhausted. By deferring resort to judicial review in this way section 7(2) restricts the jurisdiction of a Court to determine an otherwise justiciable issue before it. The section applies to internal remedies. A remedy, in this context, is defined in the New Shorter Oxford English Dictionary as a “means of counteracting or removing something undesirable, redress, relief; legal redress”. Inherent in this concept as it is used in its legal context is the idea that the remedy in order to qualify to be regarded as such, must be capable of providing what the Constitution terms appropriate relief. It must be an effective remedy. (Per Plasket J in Reed and Others v Master of the High Court of South Africa and Others 2005 (2) ALL SA 429 (E) at 435g-436b.)

The Telecommunications Act No. 103 of 1996 read with the Independent Communications Authority of South Africa Act No. 13 of 2000 provides for certain internal remedies available to an aggrieved party. Section 95 of the Electronic Communications Act No. 36 of 2005 provides inter alia that the regulations made under the Telecommunications Act No. 103 of 1996 remain in force until they are amended or repealed in terms of the Electronic Communications Act No. 36 of 2005. The regulations made in terms of the Telecommunications Act and published in Government Notice R346 in Government Gazette 18734 of 6 March 1998 have not been amended or repealed. Regulation 2 provides that any party aggrieved by an alleged contravention or failure to comply with the provisions of the licence (it is the applicant’s case that the first respondent failed to comply with Licence Condition 5.1.2) or agreement, may lodge a complaint in writing with the authority (ICASA, the fourth respondent) setting out in full the nature of the alleged contravention or non-compliance, the extent to which such alleged contravention or non-compliance had impact on the complainant, and the relief sought as a result of such an alleged contravention or non-compliance. After due consideration of all the evidence and reports placed before the authority it is obliged to make an appropriate order of determination, or issue an appropriate directive including a direction to the licensee to desist from any further failure or contravention, and a direction to the licensee to take such remedial and other steps as may be determined by the authority. Regulation 6(a) refers specifically to inter alia sections 53 and 100 of the now repealed Act of 1996. The fact that this Act had been repealed does not affect the powers conferred upon the authority in terms of Regulations not repealed. Section 53 provides that if it appears to the authority that the holder of the telecommunication licence is taking any action which is likely to have the affect of getting an undue preference to, or causing undue discrimination against any person or category of persons, the authority may direct the licensee to cease or refrain from taking such action. The applicant in casu is specifically complaining about acts of discrimination taken by the licensee, the first respondent, against the applicant. Section 100 deals with offences by licensees. It obliges the authority to investigate any alleged contravention of or failure by a licensee to comply with a provision of a relevant licence. It further provides that the authority after investigation, if it finds that the licensee concerned had been responsible for a failure or contravention contemplated in subsection (1) (for example a failure to comply with a licence) may direct the licensee to desist from further failure or contravention, and/or may direct the licensee to pay a fine and/or may direct a licensee to take remedial steps, and may even revoke the licensee’s licence in case of a repeated contravention of the conditions of the licence. Subsection (4) provides that any person affected by an order contemplated in subsection (3) may apply to a competent court to have the order set aside. It is therefore clear that it was always the intention of the Legislature that internal remedies should first be exhausted before a competent court is approached for relief. In Nichol and Another v Registrar of Pension Funds and Others 2008 (1) SA 383 (SCA) at 390B Van Heerden JA said “it is now compulsory for the aggrieved party in all cases to exhaust the relevant internal remedies unless exempted from doing so by way of a successful application under section 7(2)(c) (of PAJA)”. It is further required that the person seeking exemption must satisfy the Court of two matters. First, that there are exceptional circumstances and, second, that it is in the interest of justice that the exemption be given. (See Earthlife Africa (Cape Town) v Director-General Department of Environmental Affairs and Tourism and Another [2005] ZAWCHC 7; 2005 (3) SA 156 (C).)

It is clear from the wording of subsection 7(2)(a) of PAJA that a substantial application for exemption from the directive provisions of paragraph (a) must be brought. Such an application should set out what the exceptional circumstances are upon which the application is based. It should further set out why it would be in the interest of justice if the person is allowed to approach a Court for relief without the internal remedy first being exhausted. No such an application was made by the applicant in this case. The matter was first raised on behalf of the first respondent in its opposing affidavit. In reply the applicant vaguely contends that the regulations constitute an optional remedy available to the applicant and that the applicant in the past has attempted to utilise this particular remedy, but to no avail. It was further alleged that the fourth respondent had never constituted a proper hearing nor properly dealt with complaints by the applicant, without giving any particularity of any previous complaint lodged by the applicant. It was further stated on behalf of the applicant that the first respondent “has done all within its power to frustrate the proceedings before the authority”, again without giving any particularity as to what the first respondent was alleged to have done. It was further stated on behalf of the applicant that it lost all confidence in the ability of the authority to determine a dispute. Again no particularity was given. It was then concluded on behalf of the applicant that, in any event, this Court should not be deterred by “legal niceties” relating to procedure or the exhaustion of alleged internal remedies. It is clear to me that the applicant did not apply its mind to the provisions of section 7 of PAJA when that statement was made. Despite the peremptory wording of paragraph (a) no application in terms of paragraph (c) for exemption from the obligation to exhaust the applicant’s internal remedies has been made. No exceptional circumstances were shown to be present. Exceptional circumstances are circumstances that are out of the ordinary, which render it inappropriate for the court to require the applicant first to pursue the available internal remedies. The circumstances must be such as to require the immediate intervention of the court rather than resort to the applicable internal remedy. See Nichol’s case at p. 390D. A vague statement that the first respondent has somewhere in the past done something to frustrate proceedings before the authority which resulted in a loss of confidence in the ability of the authority can never constitute an exceptional circumstance (compare Nichol’s case). The authority ICASA acts through its council. In terms of the now repealed Telecommunications Act No. 103 of 1996 councillors had to be persons who are committed to fairness, openness and accountability on the part of those entrusted with the governance of a public service. Councillors were required to be persons who, when view collectively, represent a broad cross-section of the population of the Republic and persons who possess qualifications, expertise and experience in the fields of, amongst others, telecommunications policy and technology, frequency band planning, law, economics, business practice and finance. The chairperson and other members of the council had to be appointed by the president on the advice of the Parliamentary Committees on Communications. ICASA is now established in terms of section 3 of the Independent Communications Authority of South Africa Act No. 13 of 2000. ICASA also acts through its council. The council consists of a chairperson and eight other councillors appointed by the Minister upon the approval by the National Assembly. Persons appointed to the council must be persons who are committed to fairness, freedom of expression, openness and accountability on the part of those entrusted with the governance of a public service. They must also be representative of a broad cross-section of the population of the Republic. Persons so appointed is required to possess suitable qualifications, expertise and experience in the fields of, amongst others, broadcasting, electronic communications and postal policy or operations, public policy development, electronic engineering, law, marketing, journalism, entertainment, education, economics, finance or any other relevant expertise or qualifications. A councillor must before he or she begins to perform his or her functions take an oath or affirm that he or she is committed to fairness, freedom of expression, openness and accountability; and will uphold and protect the Constitution and the laws of the Republic. It was not shown that the available internal remedy would not provide the applicant with effective redress for its complaint. It was not shown that the remedy would not be effective. I agree with the submission on behalf of the first respondent that the applicant should in view of its failure to exhaust the internal remedies be non-suited.

The applicant amended its notice of motion to include a prayer for a declarator (I have renumbered and rearranged the amended notice of motion as it was admittedly wrongly numbered in the amended notice of motion). It was submitted on behalf of the applicant that the relief sought in terms of paragraph 3 of the amended notice of motion is not only a review in terms of PAJA but is in fact an interdict or mandamus compelling the first respondent to do something. The essence of the relief sought, however, in my view, did not change. The same relief was available to the applicant had it made use of the internal remedy. The authority has the power to direct the first respondent to desist inter alia from any further failure to accept applications for the publication in future directories lawfully forwarded to it by the applicant on its own behalf and on behalf of its consumer principals.

During replying arguments on behalf of the applicant it was submitted that I should not on the ground that the applicant failed to exhaust the internal remedy dismiss the application but that I should rather refer the matter to ICASA to adjudicate upon it. Even if it is accepted that I have the authority to make such an order, this is in my view not a case where I should do that. It is clear from the stance adopted by the applicant that it very well knew of the existence of ICASA and the internal remedy available to it, but deliberately decided not to lodge a complaint with ICASA, and to approach this Court with an argument that the Court should not “be deterred by legal niceties relating to procedure or the exhaustion of alleged internal remedies”. Section 7(2)(b) of PAJA is not applicable at this stage. A direction to exhaust the internal remedy can in terms thereof only be made prior to instituting proceedings in a court. Paragraph (b) is subject to paragraph (c). An order in terms of paragraph (b) can only be made subject to an application in terms of paragraph (c).

In the result, the application is dismissed with costs.

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J C H JANSEN

JUDGE OF THE HIGH COURT

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