S (on application by RAISE 1996 (Private) Ltd v Malawi Communications Regulatory Authority (Judicial Review Cause 1 of 2023) [2023] MWHCCiv 44 (1 December 2023)

IN THE HIGH COURT OF MALAWI CIVIL DIVISION LILONGWE DISTRICT REGISTRY JUDICIAL REVIEW CAUSE NO.1 OF 2023 BETWEEN THE STATE on application by RAISE 1996 (PRIVATE) Ltd…. CLAIMANT MALAWI COMMUNICATIONS REGULATORY AND AUTHORITY………………………………………………………DEFENDANT CORAM : Honorable Justice William Y. Msiska Mr. W. Kita and Mr. M. Mmeta, of Counsel, for the Claimant Mr. B. Ndau and Mr. E. Dzimphonje, of Counsel, for Defendant Ms. Nyalaya Court Reporter Mrs. G. Chirwa, Court Clerk JUDGMENT (ABRIDGED) Introduction [1] This is a synopsis or summary of the judgment in this proceeding. The full judgment will be shared with the parties in due course. [2] The facts of the case are not in dispute, and are were known to the parties. Suffice to state that the claimant sought in this Court the review of the following decisions of the defendant— (a) the decision of the defendant of finding the claimant to have violated section 74 (1) of the Communications Act and Clause 11.2 of the Individual Content Service Licence for the provision of Subscription Management Services in Malawi direct to home (DTH) (the SMS Licence) by adjusting tariffs for DStv services effective 15th July, 2022 without prior approval of the defendant when it is not the claimant who has adjusted the said tariffs and it is not the claimant that provides DStv Service in Malawi; (b) the decision of the defendant ordering the claimant to credit its customers per bouquet between the pre-adjustment price for its bouquet and the actual implemented price for the whole period the unapproved tariffs have been in force when neither the customers nor the bouquet packages referred to are in in any way under the control of the claimant whether in terms of its contract with the provider of the DStv Service or the scope of the services the claimant is licensed to provide, which do not extend to contracting with customers or providing them a broadcasting service; (c) the decision of the defendant ordering the claimant to submit its subscriber database to the defendant when the subscribers are not the claimant’s subscribers but are the subscribers of the provider of the DStv service; (d) the decision of the defendant ordering the claimant to pay a fine of K10,000,000 to the defendant within 30 days; and (e) the decision of the defendant ordering the claimant to immediately cease and desist from implementing the unapproved tariffs which tariffs fall outside the scope of the claimant’s Licence and the claimant has no capacity to carry out such an order. [3] Consequently, the claimant sought the following reliefs— (a) declaration that the defendant acted ultra vires in regulating the claimant for an activity that it does not undertake and that is beyond the scope of its Licence; (b) declaration that the tariffs referred to in section 74 (1) of the Communications Act applies to services that claimant “provides to the public”, namely subscription management services and not services provided by the third party namely DStv service and applicable tariffs imposed by that third party; (c) declaration that the ‘tariff’ referred to in clause 11.1 of the SMS Licence issued by the defendant to the claimant on 21st August, 2020 relate only to in so far as it relates to any fees or charges that the claimant itself levies (if any) to members of the public for the subscription management services that it has been licensed to provide; (d) declaration that ‘services’ referred to in Clause 11.1 of the SMS Licence issued by the defendant to the claimant on 21st August 2020 relate only to the services which the claimant is licensed to provide as set out in Clause 3.3 of the Licence issued to the claimant, namely, subscription management services; (e) declaration that the defendant has acted unlawfully and irrationally in the Wednesbury unreasonable sense in making a decision that is not rationally related to the purpose for which the claimant was licensed nor the services which it provides under that Licence and in requiring the claimant to seek approval for tariffs that are set and charged by a third party to its customers who have subscribed to DStv service that the third party provides directly to its customers and interpreting these tariffs as falling within the claimant’s obligations in Clause 11.1 and 11.2 of the Licence issued to the claimant when the provision of that service and the tariffs charged to view neither falls within the scope of the claimant’s Licence nor is provided by the claimant; (f) declaration that the defendant has acted in bad faith in imposing obligations on the claimant which are not borne out their Licence; (g) declaration that the defendant’s decision is irregular for want of a hearing accorded to the claimant by the defendant Board or the Authority; (h) declaration the defendant cannot delegate its quasi-judicial functions to its Legal and Administration Committee. Hence, any purported hearing by its Committee on allegations against the claimant for purportedly raising the DStv tariffs without the defendant’s approval is null and void; (i) declaration that a decision emanating from the Authority’s exercise of its quasi-judicial function should be made by the same forum that conducted a hearing and this should be the Authority itself and not the Authority’s committee; (j) a like order of certiorari quashing all the decisions of the defendant contained in its letter of 27th December, 2022 and Determination dated the 24th December, 2022; and (k) order for costs on the indemnity basis. [4] The Court has considered carefully and in detail all the evidence (both sworn statements and oral), skeleton arguments and submissions of the parties and has identified that the main issues for determination are: (a) whether the defendant acted ultra vires section 74(1) and clause 11.2 of the Licence in relation to the claimant or whether the claimant can be regulated for an activity that it does not undertake and which is beyond its scope. (b) whether the defendant acted in a procedurally fair manner when coming up with the Determination; and (c) other ancillary matters that the Court need to clarify are: (i) whether the application for judicial review is res judicata; and (ii) whether the claimant had an alternative remedy under the Licence which it did not exhaust. Law and Analysis [5] The starting point is the Courts (High Court) (Civil Procedure) Rules, 2017. Order 19 rule, 20 provides for grounds on which a person can apply for judicial review. It states as follows— (1) Judicial review shall cover the review of— (a) a law, an action or decision of the Government or a public officer for conformity with the Constitution; or (b) a decision, action or failure to act in relation to the exercise of a public function in order to determine— (i) its lawfulness; (ii) its procedural fairness; (iii) its justification for the reasons provided, if any; or (iv) bad faith, if any, where a right, freedom, interests or legitimate expectation of the applicant is affected or threatened. [6] It will be recalled that both parties correctly reminded the Court and as stated in many judicial pronouncements that judicial review is aimed at reviewing the decision making process and not the merits of the decision itself. See Jamadar v Attorney General [2000-2001]MLR 175 at pp 179-180; Blantyre City Assembly v Kam’mwamba and Others [2008] MLR 21 at 24. [7] Judicial review is not an appellate procedure in which a judge reverses the substantive decision of an administrative body because of the sole ground that the merits are in the favour of the applicant. Rather, it is a supervisory procedure whereby a judge is called upon to rule on the lawfulness of a decision, or the manner in which such decision was reached. The question for review, therefore, is whether the decision was lawful or unlawful; the question of appeal by contrast is whether, the decision was right or wrong. See P. Craig, Administrative Law, 5th edition (Sweet & Maxwell, 2003) at p 9. [8] It is the duty of the decision maker to comply with the law in coming to its decision. It is for that reason therefore that judicial review is neither more nor less than the enforcement of the rule of law over the actions of public authorities or officers. It is the means by which public authorities and institutions are prevented from exceeding the powers and functions assigned to them by law. [9] In the case of case of Pastoli v Kabale District Local Government Council and Others [2008] 2 EA 300, while citing the case of Council of Civil Unions v Minister of Civil Service [1985] AC 2 and An Application by Bukoba Gymkana Club [1963] EA 478 it was held that— “In order to succeed in an application for judicial review, the applicant has to show that the decision or act complained of is tainted with illegality, irrationality and procedural impropriety ... Illegality is when the decision-making authority commits an error of law in the process of taking or making the act, the subject of the complaint. Acting without jurisdiction or ultra vires, or contrary to the provisions of a law or its principles are instances of illegality. It is, for example, illegality, where a Chief Administrative Officer of a District interdicts a public servant on the direction of the District Executive Committee, when the powers to do so are vested by law in the District Service Commission... Irrationality is when there is such gross unreasonableness in the decision taken or act done, that no reasonable authority, addressing itself to the facts and the law before it, would have made such a decision. Such a decision is usually in defiance of logic and acceptable moral standards... Procedural Impropriety is when there is a failure to act fairly on the part of the decision-making authority in the process of taking a decision. The unfairness may be in non-observance of the Rules of Natural Justice or to act with procedural fairness towards one to be affected by the decision. It may also involve failure to adhere and observe procedural rules expressly laid down in a statute or legislative instrument by which such authority exercises jurisdiction to make a decision.” [10] Turning to the present case and in dealing with the first issue i.e. whether the defendant acted ultra vires section 74(1) and clause 11.2 of the Licence, it would be appropriate to reproduce the two provisions in full. Section 74 (1), provides as follows— “Subject to this Act, a licensee may, with the approval of the Authority, set or revise tariffs for the services that it provides to the to the public.” The word licensee is not defined under the Act. However, based on its ordinary meaning in the context of the Act, it means a person who holds a Licence issued under the Act to provide any electronic communications service, broadcasting services or postal services. These categories of services are what is broadly referred to as communications service. (see section 3) Clause 11 of the Licence provides— “11.1 The licensee shall before providing the services, submit to the authority for approval its proposed tariffs for the services. 11.2 The licensee shall not change its approved tariffs without prior written approval of the Authority. 11.3 The licensee shall publish the approved tariff on its website within 7 days of their coming into operation.” The word ‘licensee’ under clause 1 of the Licence is defined to mean a person issued with a Content Services Licence for the provision of Subscription Management Services (DTH). [11] Pausing here, it should be acknowledged that one of the functions of the defendant under Part XIII of the Act is to regulate content services. Section 97 provides that the Authority shall regulate content services in accordance with the Act. The term “content services” is not defined under the Act. It has been defined under clause 1 of the Licence in the following manner— “content services means broadcasting services consisting of electronic media including sound, data, text or images for general reception by the public.” From this definition, it is clear that content services are broadcasting services. More so when the word “broadcasting” is defined as any form of transmission of content intended for reception by the public whether conveyed by means of radio or electronic communications; and the word “content” is defined as information in the form of sound, data, text or images, whether still or moving except where transmitted in private communications. Similarly, “subscription content service” which means a content service provided under a subscription contract (see section 3) is one and the same as a subscription broadcasting service. [12] Both parties are in agreement from their evidence that DStv is a subscription broadcasting (content) service provided by MCA to which members of the public subscribe through the payment of a subscription fee. However, the point of departure is whether or not under the SMS Licence, the claimant is providing to the public subscription broadcasting (content) services (DStv services). On the one hand, the claimant has maintained that it is only providing subscription management services and not subscription broadcasting service because the two are different. The text of the Licence in many clauses uses language that confirms that it is not a subscription broadcasting service provider but that it is licensed to provide services that support subscription broadcasting services. [13] On its part, the defendant has argued that the claimant provides subscription broadcasting services for which it sets tariffs because that was a mutual understanding reached during negotiations and that the Licence was issued to the claimant in a particular context. The defendant has also relied on past dealing when in 2019, 2020 and 2021 the claimant sought approval for tariffs. [14] Upon consideration of the two arguments in light of the law, this Court finds that subscription broadcasting services and subscription management services are not one and the same thing. The former is a broadcasting (content) service which is accessible to the public on payment of subscription fees for which tariffs are set or revised by the subscription broadcasting service provider. The two are different though the provision of each one of them to the public requires licensing. In the same vein, this Court finds that in the provision of its subscription management services under the Licence, the claimant is authorized under clause 3 to collect subscription fees from subscribers; provide subscriber support services; sell associated equipment; provide technical support services to subscribers; and perform any other activity associated with the support of subscribers of subscription broadcasting services. It is these services that if the claimant was charging or setting tariffs that it would be subject to section 74 (1) and clause 11.2 of the Licence. Clearly, the services under clause 3 are not subject to tariff regulation under section 74. [15] Furthermore, it is trite that a document speaks for itself. There is no clause in the Licence stating that the claimant will provide DStv services as it business or on behalf of someone and therefore subject to the tariff approval regime. The defendant can therefore not rely on a mutual understanding or any particular context that was reached during the negotiations which did not form part of the Licence. Similarly, the defendant cannot as well rely on past dealing when in 2019, 2020 and 2021 the claimant sought approval of the tariffs based on the claimant’s misapprehension of the provisions of the law or under the wrong impression that it was required to seek approval under section 74. This Court seriously doubts, and is of the considered opinion that past dealing could not override a statutory provision to the detriment of the rights of the claimant. [16] The defendant also called on this Court to employ the purposive approach to interpretation of section 74 because a strict interpretation would lead to absurdity in light of the objects of the statute. Indeed, purposive interpretation will only be used when literal words used in a statute create an ambiguity. In the case of Pepper v Hart [1992] 3 WLR 1032, Lord Griffiths made the following observation— “Purposive approach to legislative interpretation has evolved to resolve ambiguities in meaning. In this regard, where literal words used in a statute create an ambiguity, the court is not to be held captive to such phraseology. Where the court is not sure of what the legislature meant, it is free to look beyond the words themselves and consider the historical context underpinning the legislation” However, upon consideration of section 74 (1), this Court holds that there is no ambiguity in section 74(1) requiring the aid of a purposive interpretation of the provision. The words used in section 74(1) are precise, certain and unambiguous leaving the court with no option but to assign to those words their ordinary meaning. [17] Section 74(1) is applicable only to some licensees who set or revise tariffs for the services that those licensees provide to the public. Certainly, the claimant is not one of such licensees. The Court therefore holds that the defendant acted ultra vires the provisions of section 74(1) and clause 11.2 of the Licence. [18] The next issue the Court will deal with is whether or not the defendant acted in a procedurally fair manner in coming up with the Determination. Related to this issue is whether the Board can delegate its quasi-judicial functions to the Legal and Administration Committee. It should be recalled that in cases of judicial review, procedurally impropriety or unfairness will arise in circumstances where rules of natural justice have not been observed by the decision maker. see Council of Civil Unions v Minister of Civil Service [1985] AC 2. [19] The claimant argued that it attended a hearing on 28th November, 2022 before the Legal and Administration Committee and not the full Board of the defendant. According to the claimant, it was never heard by the full Board. As such the decision making process was flawed. The claimant also relied on section 26 of the Act which gives the Board power to delegate some of its functions to the Director General which does not include the exercise of quasi-judicial powers. See Professor Arthur Peter Mutharika and Electoral Commission vs Dr. Saulosi Klaus Chilima and Dr. Lazarus McCarthy Chakwera MSCA Constitutional Appeal No 1 of 2019 which is authority that the Board cannot delegate quasi-judicial powers. On its part the defendant contended that the Determination was made in a procedurally fair manner as the claimant was invited and attended the hearing before a duly and legally constituted Legal and Administration Committee of the defendant where it made oral representations. The claimant also made additional representations in writing (exhibit AN13b). The Board in coming up with its Determination considered the representations and the recommendations of the Legal and Administration Committee. It was also argued that it has power to delegate any functions to any committee under section 15. On that account the Professor Arthur Peter Mutharika and Electoral Commission vs Dr. Saulosi Klaus Chilima and Dr. Lazarus McCarthy Chakwera MSCA Constitutional Appeal No 1 of 2019 case cannot be relied upon. [20] It is, at this point, pertinent to examine the relevant provisions of the Act on functions, duties and powers of the Board (Authority) and delegation thereof. Section 6 states as follows— (1) The Authority shall regulate and monitor the provision of communications services and ensure that, as far as it is practicable, reliable and affordable communication services are provided throughout Malawi and are sufficient to meet the demand for such services in accordance with the principles of transparency, certainty, market orientation, efficiency, and consumer satisfaction. (2) Notwithstanding the generality of, and subject to the principles referred to in, subsection (1), the Authority shall— (i)…………. (j) monitor the activities of licensees to ensure compliance with the Act and the terms and conditions of their Licences; (n) receive and investigate complaints relating to communications services and to take necessary action; (m)…………. [21] Sections 15 (1) deals with delegation of functions by the Authority to any committee of the Authority and section 26 deals with delegation of some of its functions to the Director General. Section 15 (1) reads— “The Authority may, for the purposes of performing its functions under this Act, establish committees of the Authority and delegate to any such committees any of its functions as it considers necessary.” Section 26 reads as follows— “(1) The Authority may delegate some of its functions under this Act to the Director General, any member of the Authority, or any member of staff of the Authority. (2) The Director General of the Authority may, with the approval of the Authority, delegate any power or function assigned to him under this Act, to any member of staff of the Authority. A consideration of section 15 (1) points to the fact that the Authority is permitted to establish committees to assist it in the performance of its functions and delegate to such committees any of its functions as and when it is appropriate. The import of this provision is that there is no restriction on the functions that the Authority can delegate. The emphasis is placed on the word “any” which has been said to exclude limitation. In the case of Gondwe v David Whitehead & Sons [1987-89] 12 MLR 358 at 366, citing the case of Clarke- Jervoise v Scout [1920] 1 Ch. 388, the court held that “‘any’ is a word with very wide meaning, and prima facie the use of it excludes limitation.” The Authority is, therefore free to delegate any of its functions to any committee as long as those functions fall within its competence. There is no restriction or limitation on the functions that can be delegated to a committee. [161] While section 15 (1) does not restrict or limit functions that the Authority can delegate to any committee of the Authority, section 26 deals with delegation by the Authority to the Director General some of its functions. It should be observed that section 26 uses the word ‘some’ meaning that the Authority may delegate a few or certain of its functions to the Director General. [22] This Court recognizes that statutory delegation of functions is not a new or unique phenomenon. It is actually the focal point for decision making in public or statutory institutions. The law makes little difficulty over this provided the one to whom the functions are delegated merely makes a report and recommendations, leaving the legal act of decision making to the body specifically empowered. See Hall v Manchester Corporation (1915) 79 JP 385 (HL). [23] Placing the two opposing positions of the parties in light of the law, this Court associates itself with the submission of the defendant. The claimant was accorded a hearing before the duly constituted Legal and Administration Committee which made a report and recommendations to the full Board which was the final decision maker. This is evident from the resolution of the Board as contained in the Determination. Accordingly, this Court holds that the decision making process was not flawed. The reliance by the claimant on section 26 to support its contention is misconceived. As has been noted, section 26 deals with delegation of functions by the Authority to the Director General; also delegation of functions by the Director General to any employee of the Authority subject to the approval of the Authority. [24] This Court also holds that the case of Professor Arthur Peter Mutharika and Electoral Commission vs Dr. Saulosi Klaus Chilima and Dr. Lazarus McCarthy Chakwera MSCA Constitutional Appeal No 1 of 2019 is not applicable to the present proceeding. That case involved the power of the Electoral Commission to resolve complaints which is a judicial or quasi-judicial power and therefore cannot be delegated. The present proceeding is dealing with the regulator investigating breach of the Act, Regulations or terms and conditions of a Licence by regulated entity with the objective of enforcing compliance. This function or power of the defendant is in no way a judicial or quasi-judicial power as it does not deal with complaints or dispute resolution. Rather it is a regulatory administrative power which under section 15 can be delegated to any committee of the Authority. The Court holds that the decision making process cannot be faulted. The defendant acted in a procedurally fair manner when coming up with the Determination. Ancillary Issues [25] The defendant also contended that the application for judicial review is res judicata the High Court having initially dismissed the application for permission to apply for judicial review. The defendant in its skeleton arguments in support of the application to discharge the order granting permission for judicial review urged the Court that the present proceeding should not be dismissed as it is caught by the principle of res judicata and therefore an abuse of the court process. This Court does not agree with this argument. The Court, dismissed the application for permission to apply for judicial review on the understanding that the claimant rushed to court before Determination had been made by the defendant. The claimant in that case hurried in approaching the court before a final Determination was made by the Board. A preliminary finding of breach following an investigation was not a decision subject to challenge by way of judicial review. The court, generally, arrived at its decision to dismiss the application for permission to commence judicial review proceedings mindful of the case of Air Malawi Limited v Ombudsman MSCA Civil Appeal No. 1 of 2000. In any event the did not pronounce itself on the substantive judicial review proceeding. In the considered view of this Court, the dismissal of an application for permission for judicial review would not, in the circumstances of that case, amount to res judicata. The present proceeding, therefore, is not an abuse of court process. The present proceeding is not caught by the principle of res judicata. For a lucid articulation and detailed exposition of the principle of res judicata see the case of Democratic Progressive Party v Attorney General (on behalf of the President of the Republic of Malawi Constitutional Referral No. 3 of 2021. [26] The defendant also submitted that the claimant had recourse to arbitration as an alternative remedy under the Licence which it did not exhaust before commencing this proceeding. Again, this Court does not agree with this argument. First, under section 196 of the Act, a licensee who is aggrieved by a decision of the Authority made under the Act may, within thirty days of receiving the order, apply to the High Court for judicial review of the decision. Second, it is the understanding of this Court that the alternative remedy envisaged under the general scheme of judicial review should be that which the relevant or particular statute has provided as a mechanism of dispute resolution before resorting to High Court by way judicial review. For example, such a mechanism could be a statutory appeal to a body established for the Act. Nothing of that sort exists under the Communications Act. Therefore, the argument that the claimant did not exhaust an alternative remedy cannot stand. Conclusion [27] In conclusion, this Court grants the claimant the following reliefs— (a) a declaration that the defendant acted ultra vires in regulating the claimant for an activity that it does not undertake and that is beyond the scope of its Licence; (b) a declaration that the tariffs referred to in section 74 (1) of the Communications Act applies to services that claimant “provides to the public”, namely subscription management services and not services provided by the third party namely DStv service and applicable tariffs imposed by that third party; (c) a declaration that the ‘tariff’ referred to in clause 11.1 of the SMS Licence issued by the defendant to the claimant on 21st August, 2020 relate only to in so far as it relates to any fees or charges that the claimant itself levies (if any) to members of the public for the subscription management services that it has been licensed to provide; (d) a declaration that ‘services’ referred to in Clause 11.1 of the SMS Licence issued by the defendant to the claimant on 21st August 2020 relate only to the services which the claimant is licensed to provide as set out in Clause 3.3 of the Licence issued to the claimant, namely, subscription management services; (e) a declaration that the defendant has acted unlawfully and irrationally in the Wednesbury unreasonable sense in making a decision that is not rationally related to the purpose for which the claimant was licensed nor the services which it provides under that Licence and in requiring the claimant to seek approval for tariffs that are set and charged by a third party to its customers who have subscribed to DStv service that the third party provides directly to its customers and interpreting these tariffs as falling within the claimant’s obligations in Clause 11.1 and 11.2 of the Licence issued to the claimant when the provision of that service and the tariffs charged to view neither falls within the scope of the claimant’s Licence nor is provided by the claimant; (f) a declaration that the defendant has acted in bad faith in imposing obligations on the claimant which are not borne out their Licence; and (j) an order quashing all the decisions of the defendant contained in its letter of 27th December, 2022 and Determination dated the 24th December, 2022. costs on the indemnity basis. [28] Costs are for the claimant to be assessed if not agreed. Delivered in Open Court at Lilongwe this 1st day of December, 2023. W. Y. Msiska JUDGE 19