Eskom Holdings Limited v Halstead-Cleak

On 11 August 2013, the respondent, Derek Anthony Halstead-Cleak, was one of four cyclists who came into contact with a low-hanging live power line spanning a footpath. He sustained severe electrical burns. The power line was owned and controlled by Eskom Holdings Limited (the appellant). Subsequent inspection revealed that all three conductors of the power line had been vandalised by the theft of stay rods, which resulted in the power lines hanging in a low position. The power line was not supplying or required to supply electricity to anyone at the time. The respondent issued a summons against Eskom claiming damages based on: (a) strict liability under section 61 of the Consumer Protection Act 68 of 2008, and alternatively (b) delict based on negligence and wrongfulness. The parties agreed that the issue of liability under section 61 would be separately adjudicated under Uniform Rule 33(4), with remaining issues to stand over if necessary.

• Whether Eskom Holdings Limited could be held strictly liable under section 61 of the Consumer Protection Act 68 of 2008 for harm caused to the respondent by a low-hanging power line that was not supplying electricity to anyone
• Whether the respondent qualified as a 'consumer' vis-à-vis Eskom in the context of the accident
• Whether there was a supplier-consumer relationship necessary to invoke the strict liability provisions of section 61
• Whether the harm fell within the ambit of section 61(1) as being caused by supply of unsafe goods, product failure, defect or hazard
• Whether the separation of issues under Uniform Rule 33(4) was appropriate in the circumstances

1. The appeal was upheld with costs. 2. The order of the court below was replaced with the following: (a) The defendant is not liable to the plaintiff in terms of section 61 of the Consumer Protection Act 68 of 2008; (b) The plaintiff's claim based on those provisions is dismissed with costs, including the costs of the pre-trial conference of 19 February 2015 and the costs of the trial that commenced on 23 February 2015; (c) The plaintiff's action is remitted to the trial court for determination of the remaining issues in the action (i.e., the delictual claim based on negligence).

Section 61 of the Consumer Protection Act 68 of 2008 does not create strict liability on the part of a supplier of goods (including electricity) if the plaintiff is not a consumer vis-à-vis that supplier. For strict liability to arise under section 61: (1) there must be a supplier-consumer relationship; (2) the harm must be caused to a person in his or her capacity as a consumer; (3) the consumer must have entered into a transaction with the supplier as producer or supplier of the goods in the ordinary course of business, or must be utilizing the goods or be a recipient or beneficiary thereof consequent to such a transaction; and (4) the harm must be caused wholly or partly as a consequence of supplying unsafe goods, a product failure, defect or hazard in the goods, or inadequate instructions or warnings provided to the consumer. The Act must be interpreted keeping in mind that its focus is the protection of consumers in transactional contexts, and section 61 must be read in the context of Chapter 2 dealing with 'Fundamental Consumer Rights'.

The court made important observations about the separation of issues under Uniform Rule 33(4). While the rule is aimed at facilitating convenient and expeditious disposal of litigation, it should not be assumed that this result is always achieved by separating issues. Even where parties agree to separation of issues, before a court orders separation under rule 33(4), it must be satisfied that it is convenient and proper to adjudicate that issue separately. In this case, once the trial had commenced and evidence was presented, the court should in the ordinary course have determined all the bases of liability, especially the claim in delict. Determination of one issue only - on an unlikely interpretation of a statute - can only serve to prejudice the parties. The court also noted that electricity qualifies as 'goods' as defined in section 1 of the Consumer Protection Act.

This case is significant for establishing important limitations on the scope of strict liability under section 61 of the Consumer Protection Act 68 of 2008. The judgment clarifies that: (1) strict liability under section 61 only applies where there is a supplier-consumer relationship; (2) the Act's purpose is to protect consumers in transactional contexts, not to create general strict liability for all harm caused by goods; (3) a person injured by goods must be a 'consumer' vis-à-vis the supplier for section 61 to apply; (4) 'utilizing' goods has a specific meaning requiring practical and effective use of the goods; and (5) the harm contemplated in section 61 must be caused to a natural person in his or her capacity as a consumer. The case provides important guidance on statutory interpretation of consumer protection legislation and limits the potential expansion of strict liability beyond the Legislature's intended scope. It also provides guidance on the proper use of Uniform Rule 33(4) regarding separation of issues, cautioning that courts should not automatically agree to separate issues even when parties consent, but must consider whether it is truly convenient and serves the expeditious disposal of litigation.