City of Tshwane Metropolitan Municipality v Link Africa (Pty) Limited and Others

Link Africa, a private company, sought to install fibre-optic cable infrastructure in the City of Tshwane's underground infrastructure (sewage systems) pursuant to its electronic communications network service licence under the Electronic Communications Act 36 of 2005 (the Act). Initial engagement occurred in 2011, with various City officials approving the proposal. However, the City Manager later requested Link Africa halt installation pending investigation. Following the Supreme Court of Appeal's judgment in MTN v SMI Trading, which held that landowner consent was not required under section 22 of the Act, Link Africa gave PAJA notice and proceeded with installation. The City then challenged the constitutionality of sections 22 and 24 of the Act, arguing they required landowner consent and constituted arbitrary deprivation of property in violation of section 25(1) of the Constitution. Link Africa had already completed phase one of installation when the City brought interdict proceedings.

• Whether sections 22 and 24 of the Electronic Communications Act require landowner consent before a licensee may exercise rights to enter land and construct electronic communications networks
• Whether sections 22 and 24 of the Act permit arbitrary deprivation of property in violation of section 25(1) of the Constitution
• Whether PAJA applies to decisions taken by licensees under section 22 of the Act
• The proper interpretation of 'due regard to applicable law' in section 22(2) of the Act
• Whether the City, as an organ of state, is a bearer of property rights under section 25(1) of the Constitution
• Whether the Act's provisions are consistent with municipal powers under Chapter 7 of the Constitution

The appeal was dismissed. Leave to appeal was granted. The City of Tshwane was ordered to pay the costs of Link Africa. Sections 22 and 24 of the Electronic Communications Act were held to be constitutionally valid.

Sections 22 and 24 of the Electronic Communications Act do not require prior landowner consent but are subject to 'applicable law' which includes the common law of servitudes. The common law requires that servitudes imposed by statute must be exercised civiliter modo, which incorporates requirements of reasonable notice, consultation about access and manner of exercise, compensation proportionate to advantages gained and disadvantages suffered, and judicial resolution of disputes where agreement cannot be reached. When these principles are applied, there is no arbitrary deprivation of property under section 25(1) of the Constitution because: (1) there are compelling public interest reasons for the limitations (promoting electronic communications infrastructure for economic development, education, and public service delivery); (2) adequate procedural safeguards exist through common law requirements; and (3) substantive protections include compensation and civiliter modo exercise of rights. Legislation must be interpreted, where reasonably possible, to preserve constitutional validity. The Expropriation Act also provides additional protection where network licensees are juristic persons requiring expropriation. Municipalities are not bearers of section 25(1) property rights as organs of state, but licensees must comply with valid municipal by-laws regulating the manner (not requiring consent) of exercising statutory powers.

The majority judgment left open the question of whether PAJA applies to decisions by licensees under section 22, noting that the common law principles provide sufficient safeguards making it unnecessary to determine this issue. The minority would have held that PAJA does not apply because: (1) no administrative decision is required before section 22 rights are exercised; (2) the licensee's commercial decision to choose locations does not constitute administrative action; (3) the decision-maker (licensee) has a commercial interest creating bias issues incompatible with administrative justice. The Court noted concerns about sections 22 and 24 potentially conflicting with municipal powers under sections 151, 155, and 156 of the Constitution, but did not decide this issue as it was not fully pleaded or argued. The majority observed that South Africa's lack of broadband infrastructure has negatively impacted economic development and competitiveness, and that civil works and negotiations with municipalities account for approximately 80% of network construction costs and delays. Cameron J and Froneman J expressed that the minority judgment's approach adopts an 'outdated, over-rigid and absolute notion of ownership' that is alien to constitutional and common law conceptions of property.

This case is significant for establishing that: (1) Statutes must be interpreted, where reasonably possible, in a manner that preserves their constitutional validity; (2) The common law of servitudes applies to statutory rights of entry and construction under the Electronic Communications Act through the reference to 'applicable law' in section 22(2); (3) Property rights under section 25(1) are not absolute and must be balanced against public interest objectives such as promoting electronic communications infrastructure; (4) The civiliter modo principle requires licensees to exercise statutory rights respectfully, with notice, consultation, and compensation; (5) Organs of state are not bearers of property rights under section 25(1) of the Constitution; (6) The case demonstrates the Constitutional Court's approach to balancing economic development imperatives with property rights protection; (7) It provides guidance on when deprivation of property is not arbitrary - where there are sufficient reasons for the deprivation and adequate procedural and substantive safeguards; (8) The case illustrates tensions between national legislation and municipal powers under the Constitution.