IN THE SUPREME COURT OF NAMIBIA

CASE NO: SA 24/2013

DATE: 02 MARCH 2015

REPORTABLE

In the matter between:

MUNICIPAL COUNCIL OF
WINDHOEK...........................................................................Appellant

And

TELECOM NAMIBIA
LIMITED.......................................................................................Respondent

Coram: SHIVUTE CJ, DAMASEB DCJ and
MAINGA JA

Heard: 23 October 2014

Delivered: 2 March 2015

APPEAL JUDGMENT

SHIVUTE CJ (DAMASEB DCJ and MAINGA
JA concurring):

Introduction

[1] This appeal concerns the question
whether s 24 of the Posts and Telecommunications Act 19 of 1992
authorises the respondent to install public telephones and telephone
booths on the appellant’s land without its consent, and, if
indeed it does, whether this contravenes Art 16 of the Namibian
Constitution. Section 24 of the Posts and Telecommunications Act,
1992 (the Act) has since been repealed with effect from 18 May 2011
by s 134 of the Communications Act 8 of 2009. It is to be noted
however, that s 60 of the Communications Act, 2009 embodies a
provision similar to s 24.

[2] The appellant is the Municipal
Council of Windhoek, a local authority established under the Local
Authorities Act 23 of 1992. The respondent is a statutory body
corporate wholly owned by the State and established by s 2(1)(b) of
the Posts and Telecommunications Companies Establishment Act 17 of
1992.

[3] The powers and duties of the
respondent are set out in the Posts and Telecommunications Companies
Establishment Act, 1992. Its principal object is to conduct a
telecommunications service throughout Namibia. Towards this end, the
respondent is empowered to install and erect public pay telephones in
purpose-built telephone booths or cubicles (also referred to in the
Act as ‘cabinets’). Section 24 of the Act authorised the
respondent to enter upon any land, including any street, road,
footpath reserved for public purposes and to construct and maintain a
telecommunications line or any work including a telephone booth. The
word ‘street’ is defined in s 1 of the Local Authorities
Act, 1992 as meaning ‘any road, thoroughfare, pavement,
sidewalk or lane or right of way set apart for the benefit of
residents in a local authority area’.

[4] Over the years the respondent and
the State, being the respondent’s statutory predecessor, have
been responsible for establishing more than one thousand telephone
booths on the appellant’s property reserved for public use. It
is not contested that the erection of the majority of these phone
booths was carried out with the appellant’s consent.

Preliminary matters

[5] Two preliminary matters were
considered by this court at the outset of the hearing. First, counsel
for the appellant conceded that although the appellant had filed the
record within the time period prescribed by the rules of this court,
it was late in lodging its bond of security. This delay was
subsequently explained by the appellant, and the application for
condonation made in respect of the late filing was not opposed by the
respondent. A case having been made out for the grant of condonation,
the application was accordingly granted. Second, the respondent in
its written submissions stated that the power of attorney filed by
the appellant’s legal practitioners pursuant to rule 5(4)(a) of
the Rules of the Supreme Court (which authorises the institution of
this appeal) was executed by a Ms Ingrid Cupido as the nominee of the
appellant but did not state Ms Cupido’s position. On this
basis, the respondent submitted that no valid authority on behalf of
the appellant existed for the purpose of authorising the appeal. This
was remedied, however, by an affidavit deposed to by Ms Cupido on 22
October 2014 in which she stated that she was employed as Corporate
Legal Advisor by the City of Windhoek. Consequently, the opposition
to the filing of the power of attorney was not persisted with. Having
dealt with these preliminary matters, I now move on to the factual
background of the appeal.

Background

[6] As noted above, the respondent
provides telecommunications services throughout Namibia. The Posts
and Telecommunications Establishment Act, 1992 provides that the
State is the sole shareholder of the respondent, and from 1994 the
Government has entered into performance agreements with the
respondent to ensure that it pursues its statutory purpose of
providing the widest possible access to communication services
throughout the country. In pursuit of this purpose, the respondent
has installed pay telephones and booths throughout the country and,
of relevance to this matter, in the city of Windhoek. The location of
some of these pay phones and the booths themselves predate the
establishment of the respondent, and were erected by its predecessor,
although in some cases, the respondent has replaced pre-established
telephones and booths with modern versions.

[7] According to the respondent, these
telephones and booths are set up at various strategic locations in
order to provide access to telecommunications services to members of
the public who would not otherwise have access to such services
(either in the form of their own residential home telephone or a
mobile telephone), or are temporarily unable to use their usual
mobile or home telephone. Many of these pay phones are operated on an
uneconomic basis, and according to the respondent have nonetheless
been installed for the purpose of providing the greatest possible
access to telecommunications services to the people of Namibia.

[8] The matter presently before the
court originates from a dispute between the parties relating to five
lease agreements signed between 1997 and 2000 to facilitate the
installation of several telephone booths on the appellant’s
property. These leases relate to only a small number of the phone
booths constructed by the respondent during this period. It is common
cause that a substantial number of booths were also erected around
this time without the agreement or notification of the appellant.

[9] Initially, the respondent complied
with its obligations under the lease agreements, but then stopped the
payments owed under the terms of those agreements. In several
letters, the appellant notified the respondent that it intended
cancelling the lease agreements in the event that the respondent did
not resume the lease payments. In a letter of response dated 13 March
2013, the respondent said that it had been advised by its lawyers
that s 24 ‘bestow[ed] upon Telecom Namibia a statutory
servitude’ that gave the respondent the right of free use over
public land, and prevented others from charging the respondent to
obtain a right of use already granted to it by statute. The appellant
countered in a letter dated 18 March 2003 that such an interpretation
of s 24 would render the provision unconstitutional. On 8 September
2003, the respondent informed the appellant that it had no intention
to make further payments in respect of the lease agreements. The
appellant then initiated legal proceedings in the High Court.

[10] After the initiation of
proceedings, the respondent was advised that it was in fact obliged
to honour the terms of the existing lease agreements (although
curiously the respondent denies that it was obliged to enter into the
leases in the first place). The respondent accordingly tendered to
pay all rental payments then in arrears in respect of the period up
to three years prior to the institution of proceedings. It also
tendered the appellant’s costs of the application up to the
date of the tender, in view of the fact that this could be considered
substantial success. The respondent also stated that although not
under any obligation to do so, it was prepared to provide the
appellant with a list of all telephone booths in the Windhoek area.
The appellant accepted that tender, although not in full and final
settlement of the dispute between the parties.

[11] In its application to the High
Court, the appellant (as applicant) sought the following relief:

1. A declaration that the respondent
has no right to keep public phone booths on the applicant’s
property without complying with the lease agreements entered into
between the parties;

2. A declaration that the respondent
has no right to erect and keep public phone booths on the applicant’s
property without the applicant’s agreement and without the
payment of compensation to the applicant;

3. In the alternative to paras 1 and 2,
a declaration that s 24 of the Act, insofar as its purports to confer
the right on the respondent to erect and keep phone booths on the
applicant’s property without its agreement and without payment,
contravenes the Constitution;

4. An order that the respondent comply
with the existing lease agreements entered into between the parties
by paying the amounts stated in each of the relevant agreements;

5. An order that the respondent provide
the applicant with a list indicating the location of each and every
telephone booth erected upon the applicant’s property and when
it was erected;

6. An order that the respondent enter
into agreements similar to the existing lease agreements for each and
every telephone booth erected on the applicant’s property
within 30 days of the date of the order, failing which the applicant
is authorised to remove the telephone booths; and

7. An order that the respondent pay the
costs of the application.

[12] Before the commencement of the
hearing of the application, the respondent conceded prayer 4 to a
certain extent and tendered payment for the existing lease
agreements. It also provided the list requested by prayer 5 (although
it made no admission that it was obligated to do so).

[13] The learned judge a quo correctly
identified the two issues on which the application turned and as
already noted it is the same issues that should be decided on appeal:
first, whether s 24 authorised the respondent to erect phone booths
on the appellant’s land without its consent; and second, in the
event that the court found that s 24 did authorise the respondent to
erect phone booths on the appellant’s land without its consent,
whether this contravened Art 16 of the Namibian Constitution. The
court below granted prayers 1, 4 and 5 and dismissed prayers 2 and 3
with costs.

[14] The appellant appeals against the
dismissal of prayers 2 and 3 and the respondent cross-appeals against
the order granting prayers 1 and 5 of the notice of motion. The
appellant also submits that although the learned judge a quo did not
express any views on prayer 6, it can be assumed that he meant to
dismiss prayer 6, and so this prayer should also be considered and
decided by this court.

The appellant’s submissions

[15] The appellant submits that the
High Court erred in four respects. First, it is submitted that the
judge incorrectly applied the principle that a court may only read
words into a statute by implication if effect cannot be given to the
statute as it stands without such action; second, that the judge a
quo mistakenly found that it was not necessary for the respondent to
obtain the appellant’s agreement to erect public telephone
booths on the appellant’s land; third, that the learned judge
incorrectly found that s 24 did not infringe the appellant’s
Art 16 rights (and also failed to address the question of whether s
24 is consistent with Art 22 of the Constitution); and fourth, that
the judge a quo failed to address the appellant’s contention
that the respondent’s interpretation of s 24 would mean that
the respondent is the only public utility that has the right to enter
on to the property of others without the consent of the owner thereby
breaching Art 10(1) and Art 5 of the Constitution, which afford equal
protection before the law.

[16] On the question whether s 24
authorised the respondent to erect phone booths on the appellant’s
land without consent, counsel for the appellant argues that it is
clear that the legislator intended, without explicitly saying so,
that the respondent would provide telecommunications services by
agreement with whoever wants the service. Where it is the public that
wants the service, the relevant agreement must be made with the
person or entity that owns the property on which the service is to be
erected. Counsel contends that although the need for agreement is not
explicitly spelled out in s 24, this intention is made plain by the
overall context of the Act. In particular, counsel drew the court’s
attention to ss 26 and 27 of the Act (both now also repealed), which
he argued contemplated the agreement of – and notice to –
a local authority in respect of the provision of a telecommunications
service. Section 26 provided that:

‘(1) Where the telecommunications
company and a local authority have come to an agreement that in a
particular area electricity supply and telecommunications services
shall be provided by means of underground cable, such local authority
may, when installing a cable for the underground electricity supply
line . . . provide a conduit pipe or other facilities for the
installation of an underground telecommunications service line . . .
.

(2) The costs of the provision of such
conduit-pipe or other facility shall be payable to the local
authority in question and shall for the purposes of any law be deemed
to be fees payable by the owner of the premises in question to the
local authority in respect of the installation of the electricity
supply line’.

[17] Section 27 insofar as it is
relevant to the appellant’s argument provided as follows:

‘(1) The Telecommunications
company may after reasonable notice in writing to any local authority
or a person owning or having control and care of any street, road or
footpath, construct and maintain in the manner specified in the
notice any telecommunications lines, pipes tunnel or tube required
for telecommunications purposes under any such street, road or
footpath . . . .’

[18] Counsel also argued that if s 24
did authorise the respondent to erect phone booths on the appellant’s
land without its consent, it would be in contravention of Art 16 of
the Constitution.

[19] The respondent accepts that the
application of s 24 constitutes a limitation of the appellant’s
property rights, but argues that such limitations are in certain
cases permissible, especially where they are in the public interest.
By contrast, counsel for the appellant submits that limitations of
this nature are required to comply with Art 22 of the Constitution,
which provides that any limitation of constitutional rights shall be
of general application, and must specify the extent of the relevant
limitation and identify the constitutional provisions on which the
authority to make such limitations is based.

[20] In effect, so argues counsel for
the appellant, the actions of the respondent pursuant to s 24 amount
to expropriation as foreshadowed by Art 16(2). This is relevant
because where the State or a competent body is authorised by law to
expropriate property in the public interest, such action is subject
to the payment of just compensation.

[21] Furthermore, counsel argues that
the respondent having the powers set out in s 24 would potentially
violate Art 10(1) read with Art 5 of the Constitution on the basis of
unequal treatment before the law. This is because such an
interpretation of the section would give the respondent certain
powers and the right to infringe property rights. According to the
appellant, few other public utility entities (including the
appellant) in Namibia enjoy such privileges.

[22] Counsel also submits that the
respondent’s interpretation of s 24 gives rise to additional
problems, including a conflict with the Local Authorities Act, 1992.
Section 48(1)(b) of the Local Authorities Act, 1992 empowers the
appellant to let or grant the right to use a public space with the
approval of the Minister. According to the appellant, this
illustrates that the public land administered by it may only be dealt
with subject to the approval of the Minister. It is not clear that
the respondent should be able to override this requirement due to the
operation of s 24. In addition, it is submitted that if s 24 were
interpreted as the respondent contends, this would contravene s 51(b)
of the Local Authorities Act, 1992, which stipulates offences and
penalties for unauthorised construction in streets and public places.

[23] For these reasons, counsel for the
appellant argues that if faced with two possible interpretations of a
legislative provision, the court should favour the one that least
infringes the rights of others and the Constitution. Furthermore, so
emphasises counsel, the court must promote rather than undermine the
rights protected in the Constitution. In light of this, s 24 should
be ‘read down’ to incorporate the requirement for
agreement so that Art 16 is not violated. Counsel relies for this
proposition on the decision of the South African Constitutional Court
in Van der Merwe v Road Accident Fund and Another (Women’s
Legal Centre Trust as Amicus Curiae) 2006 (4) SA 230 (CC) para 20.

The respondent’s submissions

[24] Counsel for the respondent argues
firstly that s 24, properly construed, does indeed allow the
respondent to erect phone booths on the appellant’s land
without its consent. On a straightforward reading, s 24 requires no
‘agreement’, nor requires the respondent to pay
compensation to the relevant local authority. Counsel highlighted
that the respondent is statutorily required to promote ‘an
economically prosperous and efficient telecommunications system
conducted on sound business principles’.

[25] Counsel for the respondent
furthermore contends that the nature of the land referred to in s 24
and of its ownership is important: the public telephones on the
appellant’s property are on land reserved for public purposes
as defined in the Local Authorities Act, 1992. Despite being owned by
the Council of Windhoek, the land in issue should not be treated as
if it was privately owned - it is land specifically dedicated to the
use of the public. Streets and public places are only ‘owned’
and administered by the appellant in the sense that the purpose of
the property is a public one. In the submission of counsel, s 24
therefore allows the respondent to pursue a specific and essential
function designated to it by the Legislature, which regards the
construction of telephones in public areas to constitute an essential
and a vital service to the public.

[26] Second, so counsel contends, the
erection of telephone booths (and other limitations of property
rights as contemplated by s 24) constitutes a permissible limitation
of the appellant’s property rights, and neither does it amount
to expropriation nor does such an interpretation of the section
contravene Art 16 of the Constitution.

[27] In counsel’s submission, the
appellant has not made it clear exactly how any of its existing
rights have been compromised. Counsel argues furthermore that the
issue of expropriation does not arise for several reasons: first, the
ownership of the land does not change; second, no rights belonging to
the appellant are taken away, i.e. the appellant never had the right
to conduct telecommunication services on the land and such right
could therefore not be expropriated from it; third, the land is
public land, remains public land, and one more use for the public is
included and added to the existing use; fourth, s 24 relates solely
to the regulation of the use of the land and does not affect the
appellant’s ownership; and lastly counsel argues that apart
from not placing a constraint on the exercise of the appellant’s
ownership, the use of the land pursuant to s 24 is in the public
interest, reasonable, and for a legitimate objective. The
establishment of public telephones is in the public interest, which
is consistent with the nature of the ownership of the land involved.
The powers granted in terms of s 24 thus do not interfere with the
nature of the land. They simply add a further public purpose for
which the land may be used. According to counsel for the respondent,
the appellant has overlooked the nature of its ownership, which is
for a public purpose and the enjoyment of the public in its local
authority area.

Does s 24 allow the respondent to
install public telephones and booths without the consent of the
appellant?

[28] One of the key issues in this
appeal concerns how s 24 of the Act should be interpreted. Section 24
reads as follows:

‘24 Right of entry and to
construct lines across any land

The telecommunications company may for
the purposes of this Act and conducting of its telecommunications
service enter upon any land, including any street, road, footpath or
land reserved for public purposes, and any railway, construct and
maintain a telecommunications line or any work (including any pay
phone cabinet) upon, under, over, along or across any land, street,
road, footpath or waterway or any railway, and alter or remove the
same, and may for that purpose attach wires, stays or any other kind
of support to any building or other structure.’

[29] The purpose of s 24 is clearly to
facilitate the respondent being able to construct and maintain
infrastructure essential for the maintenance of a country-wide
telecommunications networks. Like the provision of other public
services such as electricity and water, the provision of
telecommunications is absolutely essential for individuals and
businesses as well as the State as a whole. In that sense, the
services that the respondent provides are public in nature and aim at
providing direct benefits to all inhabitants of Namibia. In addition,
the provision of public pay phones is an exceptionally important
service as it allows those individuals who are unable to afford a
home phone or mobile phone to access means of communication. The
importance of the services provided by the respondent was noted by
this court in M-Web Namibia (Pty) Ltd v Telecom Namibia Limited and
Others 2011 (2) NR 670 (SC). In that case, Chomba AJA writing for the
court, remarked that:

‘[T]he function assigned to
[Telecom] was to be carried out countrywide, by virtue of its being
the successor to the Post Office. Namibia is by no means a small
country geographically and therefore that assignment was an enormous
and costly responsibility . . . Telecom had to perform the
telecommunication services countrywide per force of law, not by
preference, and irrespective of profitability prospects.’

[30] The nature and importance of the
responsibility referred to by Chomba AJA reflects the Legislature’s
very understandable concern that it must ensure that the respondent
has the authority to carry out necessary activities in the pursuit of
its overall statutory mandate to provide a telecommunications system
throughout Namibia. The Legislature did not qualify the authority
provided in s 24 by making the consent or agreement of the relevant
local authority necessary. As rightly noted by the judge a quo, the
courts have adopted the approach that words cannot be read into a
statute by implication unless the implication is a necessary one in
the sense that without it effect cannot be given to the statute as it
stands: Rennie NO v Gordon and Another NNO 1988 (1) SA 1 (A) at
22E-H. Section 24 is sufficiently clear in its terms and purpose that
it is not necessary to assume that the respondent is only able to act
with the consent of the appellant. Such a result could lead to very
difficult situations where, for instance, urgent repairs to
telecommunications infrastructure established on public land were
required but the respondent was unable to obtain the consent of the
appellant.

[31] Furthermore, I do not agree with
the submission that the above interpretation of s 24 necessarily
conflicts with certain provisions of the Local Authorities Act, 1992.
Those provisions in the Act and the Local Authorities Act relied upon
by the appellant either as examples of the requirement of an
agreement or stipulations rendering the section to be in conflict
with the Local Authorities Act cater for considerations different
from those addressed in s 24. Had the Legislature intended to have an
agreement entered into between the respondent and the owner of the
land reserved for public use before the respondent could enter upon
such land and construct a telecommunications service thereon, it
should have expressly said so. For the reasons stated earlier such a
requirement cannot be read into the section.

[32] It is also significant that s 24
empowers the respondent only to perform certain acts on ‘land
reserved for public purposes’, which in terms of the provision
includes ‘any street, road, or footpath’. The section
does not give the respondent the authority to access privately owned
land. This is so, because as already observed the purpose of entering
public land was to facilitate the provision of a public service. I
agree with the respondent that although the land is formally owned by
and registered in the name of the appellant, it is by definition set
apart for the benefit of residents and thus statutorily reserved for
public purposes. Whilst certain rights accrue in respect of that
property to the appellant, it is relevant that the purpose of the
local authority is – like the respondent - to provide services
to the public.

[33] Nevertheless, despite the fact
that the respondent is not obliged to obtain the agreement of the
appellant pursuant to s 24, I am of the view that it is implied in s
24 that in its endeavour to access land reserved for public use for
the purpose set out in the section, the respondent is required to act
reasonably. It cannot, for instance, construct a row of ten telephone
booths down the centre of Independence Avenue in Windhoek. As a
statutory body, the respondent is subject to the requirements of
administrative law and like other public decision-makers must ensure
that its decisions are reasonable. If a local authority considers
that any of the respondent’s actions in accessing land reserved
for public use in its area of jurisdiction for the purposes set out
in the Act are manifestly unreasonable or otherwise contravene
administrative legal standards, it is open to such a local authority,
if so advised, to pursue legal action on that basis. This is,
however, not the basis upon which the appellant approached the High
Court in this matter.

Does s 24 contravene the
Constitution?

[34] As has been pointed out by the
South African Constitutional Court in S v Mhlungu and Others 1995 (3)
SA 867 (CC) at 894I, legislation will only be struck down as
unconstitutional if such a course is absolutely necessary and
required ‘by the precise facts to which it is applied’.
It will be recalled that the appellant relies, amongst others, on Art
16 of the Namibian Constitution for the contention that the
interpretation of s 24 proffered above renders the provision to be in
conflict with that Article. The Article provides that:

Article 16 - Property

(1) All persons shall have the right in
any part of Namibia to acquire, own and dispose of all forms of
immovable and movable property individually or in association with
others and to bequeath their property to their heirs or legatees:
provided that Parliament may by legislation prohibit or regulate as
it deems expedient the right to acquire property by persons who are
not Namibian citizens.

(2) The State or a competent body or
organ authorised by law may expropriate property in the public
interest subject to the payment of just compensation, in accordance
with requirements and procedures to be determined by Act of
Parliament.

[35] It is trite that the right to
property is not absolute. Moreover, regulation of the use of property
does not generally amount to expropriation, as has been explained by
Strydom ACJ in Namibia Grape Growers and Exporters Association and
Others v The Ministry of Mines and Energy and Others 2004 NR 194 (SC)
at 210J–211G as follows:

‘The owner of property has the
right to possess, protect, use and to enjoy his property. This is
inherent in the right to own property. It is, however, in the
enjoyment and use of property that an owner may come into conflict
with the rights and interests of others, and it is in this sphere
that regulation in regard to property is mostly needed and in many
instances absolutely necessary. Such regulation may prohibit the use
of the property in some specific way or limit one or other individual
right without thereby confiscating the property and without thereby
obliging the State to pay compensation. There are many such examples,
where, to a greater or lesser degree, the use or enjoyment of
property, be it movable or immovable, is regulated by legislation and
which would, on the argument of Mr Barnard, constitute a limitation
on the right of ownership which will then render such legislation
unconstitutional and can be challenged by anyone against whom such
legislation is enforced . . .

It is in my opinion inconceivable that
the founding fathers of our Constitution were unaware of the vast
body of legislation regulating the use and exercise of rights
applicable to ownership or that it was their intention to do away
with such regulation. Without the right to such control it seems to
me that it would be impossible for the Legislature to fulfil its
function to make laws for the peace, order and good government of the
country, in the best interest of the people of Namibia (Art 63(1) of
the Constitution). It therefore seems to me that, like the right to
equality before the law (Art 10(1) of the Constitution), the right to
ownership in property is not absolute, but subject to certain
constraints which, in order to be constitutional, must comply with
certain requirements’.

[36] On the facts of this appeal, it
should be pointed out that what is contemplated under s 24 is not
such an encroachment on the appellant’s right to property that
it amounts to expropriation. Expropriation is the compulsory
acquisition of property or a right in property. Generally,
expropriation refers to the action of the State or a public authority
in compulsorily acquiring land from a private owner in the public
interest. In this case, the appellant has not demonstrated that the
actions of the respondent pursuant to s 24 dispossess the appellant
of its land or extinguish any right held by the appellant attaching
to the relevant property. They simply limit the use and enjoyment of
such right, but such limitation is justified on the basis that the
land upon which the telephone booths were erected is reserved for
public use, the very same category of people the telephone booths
were meant to serve. Such a construction is entirely consistent with
the statutory function of the respondent to provide
telecommunications services to the public.

[37] On the basis of the above legal
principles and considerations, I conclude that s 24 does not
contravene Art 16. In my view, any limitation of property rights
brought about by s 24 in respect of land reserved for public purposes
would be in the public interest and would not be in conflict with Art
22 of the Namibian Constitution. Nor do I consider the powers
authorised by s 24 to be so expansive that they lead to breaches of
Articles 5 and 10(1), which provide for protection of fundamental
rights and freedoms as well as for equal treatment before the law
respectively. In the light of the conclusion arrived herein, it would
be otiose to address prayer 6 of the notice of motion, more so
because no appeal has been lodged against the order granting this
prayer. In my respectful view the appeal ought to be dismissed.

Issues in the cross-appeal

[38] One of the issues raised in the
cross-appeal concerns the prescription period that should be of
application on the facts of this case. Counsel for the respondent
argues that the court a quo mistakenly found that the respondent had
conceded prayer 4 and thus granted that prayer. The respondent did
concede that it was liable to pay to the appellant all amounts due 3
years prior to the service of the application (all the amounts which,
in the view of the respondent, had not prescribed) and tendered to
pay these amounts, but contended that it was not prepared to make
payments arising more than 3 years before this. Prayer 4 on the other
hand sought to have the respondent ordered to pay ‘the amounts
stated in each of the relevant agreements’.

[39] The respondent submits that if the
court finds that the tender was accepted, the question of which
prescription period is applicable does not arise. I note that
although the deponent to the appellant’s affidavit indicated
that he was authorised to accept the tender, he did at the same time
insist on the payment of the full amount owed in respect of each of
the lease agreements and had duly noted that the tender was not in
full and final settlement of this aspect of the dispute. Thus, the
tender was not accepted in the terms it was made and it has become
necessary to deal with the respondent’s second leg of the
argument.

[40] The respondent argues furthermore
that if it is found that the tender was not accepted, the respondent
is in any event not liable to pay any more than that which it
tendered (i.e. payments due only from up to 3 years before the
service of the application). According to the respondent, this is
because the appellant does not form part of the ‘the State’
for the purpose of s 11(b) of the Prescription Act 68 of 1969, as is
argued by the appellant.

[41] Ordinarily, a period of three
years applies to prescription periods, but the appellant argues that
s 11(b) of the Prescription Act, 1969 finds application. The
subsection provides for a period of:

‘. . . fifteen years in respect
of any debt owed to the State and arising out of an advance or loan
of money or a sale or lease of land by the State to the debtor,
unless a longer period applies in respect of the debt in question in
terms of paragraph (a)’.

[42] The appellant relies on the
decision of the South African Supreme Court of Appeal in Greater
Johannesburg Transitional Metropolitan Council v Eskom 2000 (1) SA
866 (SCA), which found that a local authority is part of the State
for the purposes of the Eskom Act, 1987. Counsel for the respondent
disagrees that the appellant forms part of the ‘the State’
for the purpose of s 11(b) of the Prescription Act. In particular,
counsel for the respondent relies on Holeni v Land and Agricultural
Development Bank of South Africa (266/08) [2009] ZASCA 9 for that
proposition. In that case, Navsa JA writing for the court found that
‘the State’ did not encompass the Land and Agricultural
Development Bank of South Africa, and therefore that a three-year
period (rather than a 15-year period) of prescription was of
application.

[43] It is well-established in law that
the meaning of ‘the State’ in legislation has no fixed
meaning. The interpretation of the term depends on the specific piece
of legislation being considered. In Holeni v Land and Agricultural
Development Bank of South Africa, Navsa JA at para 11 observes that:

‘Its precise meaning always
depends on the context within which it is used. Courts have
consistently refused to accord it any inherent characteristics and
have relied, in any particular case, on practical considerations to
determine its scope. In a plethora of legislation no consistency in
meaning has been maintained.’

[44] His Lordship also cautions that in
considering a statutory provision that provides for a 15-year
prescription period, the meaning of ‘the State’ should be
restricted. This was particularly relevant in Holeni v Land and
Agricultural Development Bank of South Africa, which concerned the
question whether a bank could be said to be part of ‘the State’
for the purposes of the legislation. In the present appeal, the facts
are quite different. The entity in question here is a local
authority, which embodies many public and State-like characteristics.
Local authorities are established under Chapter 12 of the Namibian
Constitution. The procedures for electing mayors and members of local
authorities are extensively set out in the Local Authorities Act,
1992. The Minister responsible for Regional and Local Government and
Housing exercises oversight of local authorities. Local authorities
are largely financed through taxes and rates, exist for the purposes
of providing public goods to the communities that they govern, and
provide a framework for community participation in the political
process. For these reasons, I consider that a local authority may be
said to constitute ‘the State’ for the purposes of s
11(b) of the Prescription Act.

[45] One other issue raised by the
respondent in the cross-appeal is in connection with the order
granted in terms of prayer 5. The respondent did provide a list of
phone booths to the appellant (although the list did not specify when
each telephone booth was erected, as demanded in prayer 5), but never
conceded that it was under any obligation to do so. The appellant
subsequently acknowledged the provision of the list and took the
matter no further. A perusal of the heads of argument that were part
of the record shows that the appellant did not persist with prayer 5
in its heads of argument in the High Court. Furthermore, counsel for
the appellant told that court in oral arguments that the appellant
was no longer seeking an order in terms of that prayer. I agree with
counsel for the respondent that on this basis, the court a quo should
not have granted prayer 5. The cross-appeal ought therefore to
succeed on this score.

Order

[46] The following orders are made:

1. The appeal is dismissed with costs,
such costs to include the costs of one instructing and two instructed
counsel;

2. The cross-appeal against the order
granting prayer 1 in the court a quo is dismissed with costs, such
costs to include the costs of one instructing counsel and one
instructed counsel.

3. The cross-appeal against the order
granting prayer 5 of the notice of motion is allowed with costs, such
costs to include the costs of one instructing counsel and one
instructed counsel.

4 The order of the court a quo in
relation to prayer 5 is set aside and substituted for the following
order:

‘No order in respect of prayer 5
is made’.

SHIVUTE CJ

DAMASEB DCJ

MAINGA JA

APPEARANCES

APPELLANT: G Coleman

Instructed by Kirsten & Co Inc

RESPONDENT: T J Frank SC (with him
R L Maasdorp)

Instructed by LorentzAngula Inc