Zvishavane Town Council v Zimbabwe Electricity Transmission and Distribution (Private) Limited

The respondent (ZETDC) sued the appellant (Zvishavane Town Council) for unpaid electricity bills totaling US$4,646,348.60 for the period ending 31 May 2016. The appellant admitted owing the amount but counterclaimed for unpaid way leave charges and rates totaling US$15,310,916.10 (including way leaves of US$4,750,167 plus VAT) incurred between 1 January 2011 and 30 June 2016. The appellant sought to set off the main claim and payment of the balance. The respondent disputed owing the way leave charges and alternatively pleaded prescription for one-half of the claim (US$2,375,083.50) relating to the period exceeding 3 years before service of the counterclaim. The parties agreed that the respondent owed US$720,984.53 in rates and other services. The way leave charges were levied in terms of by-laws promulgated under SI 68 of 2011 as amended by SI 33 of 2015 under the Urban Councils Act.

• Whether the by-laws imposing way leave charges were ultra vires the Urban Councils Act and the Electricity Act and therefore void ab initio
• Whether the doctrine of objective invalidity applies to subsidiary legislation beyond constitutional disputes
• Whether way leave charges prescribed after 3 years or 30 years under the Prescription Act
• Whether way leave charges constitute a tax
• Whether the court could apply the doctrine of objective invalidity to declare by-laws invalid without a formal review application

The appeal was dismissed with costs on the ordinary scale. The High Court order granting judgment to the respondent for US$3,889,835.35 (being the main claim less the agreed set-off) with interest from 1 June 2016, dismissing the counterclaim for way leave charges, and upholding the special plea of prescription was confirmed.

By-laws imposing way leave charges on electricity transmission entities are ultra vires and void ab initio where: (1) the matters for which by-laws may be made under section 227(1) of the Urban Councils Act are limited to those specified in the Third Schedule and matters incidental thereto, and way leaves are not so specified; (2) the Electricity Act grants way leaves as a statutory servitude subject only to the provisions of section 44 of that Act, including compensation payable under the Land Acquisition Act, and not subject to charges under other statutes; and (3) a local authority cannot use its by-law making power to impose charges on the exercise of statutory rights granted under sector-specific legislation where the enabling statute does not authorize such charges. The doctrine of objective invalidity applies beyond constitutional disputes to determine the validity of subsidiary legislation vis-à-vis primary statutes - a court does not create invalidity but merely declares the legal position that existed from the time of enactment. Legislation that is ultra vires is void ab initio and confers no legal rights.

The Court noted that the court a quo made gratuitous pronouncements not arising from the agreed facts that way leaves had always been treated as free statutory servitudes since colonial times. The Supreme Court disagreed, noting that a reading of section 35 of the Electricity Act of 1962 and section 44 of the current Act demonstrates that way leaves were not free statutory servitudes - the use of 'may' showed the exercise was optional, and section 44(3) subjected way leaves to compensation under the Land Acquisition Act. The Court also observed that while the appeal raised prescription issues (whether way leave charges prescribed after 3 or 30 years, whether they constituted taxes, whether a replication to the special plea was required), these issues became moot once the by-laws were found to be void ab initio. The Court noted that the contention that the appellant was entitled to a 6-year prescription period as part of the State was neither pleaded nor argued in the High Court and could not properly be raised on appeal.

This case is significant for establishing that: (1) the doctrine of objective invalidity, while commonly applied in constitutional matters, has universal application in resolving conflicts between statutes and between primary and subsidiary legislation; (2) subsidiary legislation that is ultra vires its enabling statute is void ab initio and confers no rights from inception; (3) local authorities cannot use by-law making powers under the Urban Councils Act to impose charges on statutory rights granted under sector-specific legislation like the Electricity Act where such charges are not authorized by the enabling statute; (4) way leaves under the Electricity Act are statutory servitudes that may attract compensation under the Land Acquisition Act but not charges under municipal by-laws; and (5) courts can apply the doctrine of objective invalidity to determine the validity of subsidiary legislation without requiring a separate review application. The case reinforces the principle that subsidiary legislation must remain within the scope of its enabling statute and cannot override rights created by sector-specific primary legislation.