THE SUPREME COURT OF APPEAL OF SOUTH AFRICA

JUDGMENT

Reportable

Case No: 599/2015

In the matter between:

ESKOM HOLDINGS LIMITED
APPELLANT

and

DEREK ANTHONY HALSTEAD-CLEAK
RESPONDENT

Neutral citation:  Eskom Holdings Limited v Halstead-Cleak ZASCA 150
(30 September 2016)

Coram:
Lewis and Willis JJA and Schoeman, Fourie and
Makgoka AJJA

Heard:
13 September 2016
Delivered:
30 September 2016

Summary: Section 61 of the Consumer Protection Act 68 of 2008 does not
create strict liability on the part of a supplier of electricity if the plaintiff is
not a consumer vis-à-vis it.

ORDER

On appeal from: Gauteng Division of the High Court of South Africa
(Pretoria) (Baqwa J sitting as court of first instance): judgment reported sub
nom Halstead-Cleak v Eskom Holdings Ltd 2016 (2) SA 141 (GP)
The appeal is upheld with costs.
The order of the court below is replaced with the following:
„1
(a)
The defendant is not liable to the plaintiff in terms of the
provisions of s 61 of the Consumer Protection Act 68 of 2008.

(b)
The plaintiff‟s claim, based on those provisions, is dismissed,
with costs, those costs to include 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 the
determination of the remaining issues in the action.‟

JUDGMENT

Schoeman AJA (Lewis and Willis JJA and Fourie and Makgoka
AJJA concurring)

[1] The central question in this appeal is whether the appellant, Eskom
Holdings Ltd (Eskom), can be held strictly liable in terms of s 61 of the
Consumer Protection Act 68 of 2008 (the Act) for harm caused to the
respondent, Mr Derek Anthony Halstead-Cleak, by a low hanging power
line which was not supplying or required to supply electricity to anyone.

The background
[2] On 11 August 2013 the respondent, one of a group of four cyclists,
came into contact with a low hanging live power line spanning a footpath
they were cycling on. He sustained severe electrical burns and issued a
summons against Eskom for the damages he had suffered.

[3] The respondent‟s claim is based on (a) Eskom‟s role as the sole
supplier or producer of electricity on the national grid and its control of
all power lines not falling under the control of any local authority or
municipality; (b) the strict liability of Eskom as the producer or supplier
of electricity provided for in terms of s 61 of the Act; and in the
alternative (c) delict, in that Eskom negligently and wrongfully caused
the respondent‟s damages.

[4] The parties agreed that the limited issue pertaining to whether
Eskom was liable in terms of s 61 of the Act would be separately
adjudicated with the remaining issues to stand over for later
determination, if necessary. It was so ordered in terms of Uniform rule
33(4).

[5] The Gauteng Division of the High Court of South Africa (Pretoria)
(to which I shall refer for the sake of convenience as the high court)
found that Eskom was 100 per cent liable for the respondent‟s injuries in
terms of the provisions of s 61 of the Act. The appeal is with the leave of
the high court.

The pleadings
[6] The claim, based on s 61 of the Act, avers that Eskom was a
producer or supplier of electricity or a „service‟ in terms of the Act while

the production or generation of electricity constituted „supply‟ and
„market‟ as defined in the Act. The respondent was a person mentioned in
s 61(5) of the Act, that is a natural person who had been injured, or a
„consumer‟, and had suffered injuries which constituted harm as
envisaged in ss 61(1) and 61(5) of the Act due to the alleged supply of
unsafe goods and/or defective goods, or a hazard in the goods resulting in
the injuries sustained. The goods were the electricity generated, supplied
and permitted to be present in the lines spanning the footpath.

[7] Eskom‟s plea was broadly that it was a licensee in terms of the
provisions of the Electricity Regulation Act 4 of 2006 and responsible for
the relevant power line through which it conducted electricity. Eskom
was made aware that the respondent had come into contact with the
power line on 11 August 2013 whilst riding a bicycle. Subsequently the
employees of Eskom inspected the power lines and discovered 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.
Eskom denied that, in the context of this particular accident, it was a
producer or supplier as defined in the Act or that the respondent was a
consumer as defined. Eskom denied that the incident arose as a result of
the supply of unsafe goods or a product failure, defect or hazard in any
goods or inadequate instruction or warnings. Furthermore, Eskom could
not have been expected to discover the state of the power line.

[8] In terms of the common law a manufacturer could not be held
strictly liable in delict for any harm caused. In Wagener v Pharmacare
Ltd; Cuttings v Pharmacare Ltd1 it was found that if the common law is

1 Wagener v Pharmacare Ltd; Cuttings v Pharmacare Ltd 2003 (4) SA 285 (SCA) para 38.

to be extended to make provision for strict liability, it is the Legislature‟s
duty to do so. That came to fruition with the promulgation of the Act.

The interpretation of the Act and s 61 in particular
The applicable definitions and tools of interpretation

[9] In interpreting the Act it is instructive to refer to the principles
enunciated in Natal Joint Municipal Pension Fund v Endumeni
Municipality2 and Novartis SA (Pty) Ltd v Maphil Trading (Pty) Ltd3 that
the interpetative process involves ascertaing the intention of the
legislature but considers the words used in the light of all relevant and
admissible context, including the circumstances in which the legislation
came into being. Furthemore, as was said in Endumeni „. . a sensible
meaning is to be preferred to one that leads to insensible or
unbusinesslike results. . .‟

[10] The long title of the Act provides that it is to promote a „. . . fair,
accessible and sustainable marketplace for consumer products and services and for
that purpose to establish national norms and standards relating to consumer
protection, to provide for improved standards of consumer information, to prohibit
certain unfair marketing and business practices, to promote responsible consumer
behaviour, to promote a consistent legislative and enforcement framework relating to
consumer transactions and agreements. . .‟

[11] The Green Paper discussion of the Act makes it clear that a broad
spectrum of consumers needed protection:
„Perhaps one of the greatest pitfalls in most consumer protection laws in South
Africa, is the absence of a uniform definition of "a consumer". This has

2 Natal Joint Municipal Pension Fund v Endumeni Municipality [2012] ZASCA 13; 2012 (4) SA 593
(SCA) para 18.
3 Novartis SA (Pty) Ltd v Maphil Trading (Pty) Ltd [2015] ZASCA 111; 2016 (1) 518 para 27.

resulted in a difficulty for enforcers to accurately identify individuals that the
State seeks to protect. Consumers must be defined broadly as individuals who
purchase goods and services, and must include third parties who act on behalf
of the consumer. . . .‟4

[12] In terms of the provisions of s 2(1), the Act must be interpreted in a
manner that gives effect to the purpose of the Act as set out in s 3. That
purpose is to promote and advance the social and economic welfare of
consumers, in particular vulnerable consumers, in South Africa.5 If there
is an inconsistency between the Act and any other legislation both Acts
apply concurrently, to the extent that it is possible. If it is not possible, the
provisions that extend the greater protection to a consumer prevail over
the alternative provision.

[13] Section 5 concerns the application of the Act. The relevant
provisions apply to every transaction occurring within South Africa for
the supply of goods or services or the promotion of goods or services.
Section 5(5) provides that if any goods are supplied within the Republic
to any person in terms of an exempt transaction, those goods and the
producer are nevertheless subject to s 61.

[14] A „transaction‟ is defined in s 1 as an agreement between two or
more persons for the supply of goods or services for consideration in the
ordinary course of business. The instances where consideration is not a
requirement for a transaction and deemed to be transactions are set out in
s 5(6) and include the supply of goods or services in the ordinary course

4 Draft Green Paper on the Consumer Policy Framework, GN 1957, GG 26774 of 9 September 2004.
5 The same purpose has been set out in the Preamble of the Act.

of business to members of a club, trade union, association, society or a
voluntary association of people for a common purpose.

[15] The definition of „consumer‟ in s 1 is a person to whom goods or
services are marketed in the ordinary course of a supplier's business, or
who has entered into a transaction with a supplier in the ordinary course
of a supplier‟s business. The definition includes a person who is a user of
the goods or a recipient or beneficiary of the particular service
irrespective of whether that person was a party to a transaction
concerning the supply of the goods or services. This has the effect that
the recipient of a gift from a consumer would also be considered a
consumer in terms of the Act. The important features to note are that
there must be a transaction to which a consumer is party, or the  goods
are used by another person consequent on that transaction.

[16] From the definitions, the Preamble and purpose of the Act, it is
clear that the whole tenor of the Act is to protect consumers. A consumer
is a person who buys goods and services, as well as persons who act on
their behalf or use products that have been bought by consumers. There
are categories of persons who fall outside this definition, but they are
deemed to be consumers in terms of the provisions of s 5(6) as set out
above. These purchases are made by way of transactions. The Act must
therefore be interpreted keeping in mind that its focus is the protection of
consumers.

Section 61 of the Act
[17] Section 61 falls within Chapter 2 of the Act that deals with
„Fundamental Consumer Rights‟ and specifically Part H thereof, which
concerns the „Right to fair value, good quality and safety‟. Section 61(4)

deals with defences to a claim brought against a producer, or importer,
distributor or retailer in terms of s 61, but it is common cause that the
defences do not apply in this case. The salient provisions of s 61 are:
„Liability for damage caused by goods
(1) Except to the extent contemplated in subsection (4), the producer or importer,
distributor or retailer of any goods is liable for any harm, as described in subsection
(5), caused wholly or partly as a consequence of –
(a) supplying any unsafe goods;
(b) a product failure, defect or hazard in any goods; or
(c) inadequate instructions or warnings provided to the consumer pertaining to any
hazard arising from or associated with the use of any goods,
irrespective of whether the harm resulted from any negligence on the part of the
producer, importer, distributor or retailer, as the case may be.
(2) A supplier of services who, in conjunction with the performance of those services,
applies, supplies, installs or provides access to any goods, must be regarded as a
supplier of those goods to the consumer, for the purposes of this section.
(3) If, in a particular case, more than one person is liable in terms of this section, their
liability is joint and several.
(4)  . . .
(5) Harm for which a person may be held liable in terms of this section includes –
(a) the death of, or injury to, any natural person;
. . . and
(d) any economic loss that results from harm contemplated in paragraph (a), (b) or
(c).
(6) Nothing in this section limits the authority of a court to –
(a) assess whether any harm has been proven and adequately mitigated;
(b) determine the extent and monetary value of any damages, including economic
loss; or
(c) apportion liability among persons who are found to be jointly and severally liable.‟

[18] The words creating liability used in s 61(1) are defined in s 53(1):
„(1) In this Part, when used with respect to any goods, component of goods, or
services –

(a) „defect‟ means –
„(i)
any material imperfection in the manufacture of the goods or components, . . .
that renders the goods or results of the service less acceptable than persons generally
would be reasonably entitled to expect in the circumstances; or
(ii)
any characteristic of the goods or components that renders the goods or
components less useful, practicable or safe than persons generally would be
reasonably entitled to expect in the circumstances;
(b)
„failure‟ means the inability of the goods to perform in the intended manner or
to the intended effect;
(c)
„hazard‟ means a characteristic that –
(i)
has been identified as, or declared to be, a hazard in terms of any other law; or
(ii)
presents a significant risk of personal injury to any person, or damage to
property, when the goods are utilised; and
(d)
„unsafe‟ means that, due to a characteristic, failure, defect or hazard, particular
goods present an extreme risk of personal injury or property damage to the consumer
or to other persons‟

[19] Electricity is „goods‟ as defined in s 1 of the Act. Further
definitions that are relevant are:
(a)
„Supply‟ when used as a verb in relation to goods, includes sell,
rent, exchange and hire in the ordinary course of business for
consideration.
(b)
A „producer‟ with regard to particular goods is defined as a person
who generates or otherwise produces the goods within South Africa with
the intention of making them available for supply in the ordinary course
of business.
(c)
„Market‟ when used as a verb means to promote or supply any
goods or services.

[20] „Ordinary course of business‟ is not defined in the Act but it has
been the subject of interpretation in respect of, inter alia, insolvency

matters. In Van Zyl & others NNO v Turner & another NNO6 Brand J,
when discussing whether a disposition was made in the „ordinary course
of business‟, found that the test is an objective one and that regard must
be had to all the circumstances, including the actions of both parties to
the transaction.

[21] Taking into account all the definitions and the wording of s 61, the
respondent had to establish that, first, in respect of that incident, the
respondent came to harm and secondly that Eskom was a producer of
electricity. Furthermore, that the harm was caused wholly or partly as a
consequence of Eskom selling unsafe electricity in the ordinary course of
business, for consideration, or there was a product failure, defect or
hazard in the electricity. Taking into consideration that s 61 is a section in
Chapter 2 of the Act dealing with „Fundamental Consumer Rights‟ it is
clear that the harm envisaged in s 61 must be caused to a natural person
mentioned in s 61(5)(a), in his or her capacity as a consumer. This is the
only businesslike interpretation possible. The reason why reference is
made to a „natural person‟ is clearly to distinguish it from „person‟ which
may include a „juristic person‟ or „consumer‟ which may also include a
„juristic person‟.

The facts
[22] The high court determined that „. . . the wording of Section 61(5)
makes it clear that liability arises not only in respect of “consumers” as
defined in the CPA [the Act] or consumers in the general sense, but to
“any natural person” . . . . The plaintiff need not, therefore be a
“consumer” in the contractual sense as defined in order for the Defendant
to be liable to him.‟ However, this loses sight of the fact that there should

6 Van Zyl & others NNO v Turner & another NNO 1998 (2) SA 236 (C) para 34.

be a supplier and consumer relationship for Eskom to be strictly liable for
harm, as the Act‟s purpose is to protect consumers. In this instance the
respondent is not a consumer vis-à-vis Eskom as: (a) the respondent did
not enter into any transaction with Eskom as a supplier or producer of
electricity in the ordinary course of Eskom‟s business; and (b) the
respondent was not utilising the electricity, nor was he a recipient or
beneficiary thereof.7

[23] The supply of unsafe electricity also presupposes that Eskom sold
the electricity in the ordinary course of business for consideration.
Similarly, where s 61(1)(c) provides that inadequate instructions
pertaining to any hazard attracts liability, it is restricted to inadequate
instructions to a consumer who has entered into a transaction with
Eskom. The respondent and Eskom were not in a consumer, producer or
supplier relationship in respect of the electricity that caused the harm to
the respondent.

[24] Section 61(1)(b) makes provision for liability due to a product
failure, defect or hazard in any goods. As stated, it is clear in the context
of the Act that it is restricted to a supplier and consumer relationship. In
any event it cannot be found that the harm the respondent suffered was as
a result of the electricity itself failing, or that the electricity had a defect.
Failing in this context would be if the electricity were unable to perform
in the intended manner. This was not the case. The electricity, in the
context of the case did not suffer from a material imperfection in the
manufacture of the goods. Likewise, the electricity did not have a
characteristic that rendered it less useful or safe than a person would
generally expect in the circumstances. The same applies to the electricity

7 The Concise Oxford Dictionary 12 ed (2011) defines „utilise‟ as „make practical and effective use of‟.

not possessing a characteristic that presented a significant risk of injury to
any person when the goods are utilised. It is clear that the respondent was
not utilising the electricity when he was harmed.

[25] Accordingly the respondent was not a consumer that was entitled
to the protection of Part H of Chapter 2 of the Act. Furthermore, the
circumstances of this case clearly fall outside the ambit of a consumer –
supplier relationship to which the Act applies. Therefore, the appeal
should succeed.

The separation of issues
[26] There is another matter that needs to be addressed. An order was
made by agreement that there be a separation of issues and the
applicability of s 61 of the Act be dealt with separately. The procedure in
rule 33(4) is aimed at curtailing litigation if a question of fact or law may
be conveniently decided separately. In Denel (Edms) Bpk v Vorster 8
Nugent JA said:
„Rule 33(4) of the Uniform Rules – which entitles a Court to try issues
separately in appropriate circumstances – is aimed at facilitating the convenient
and expeditious disposal of litigation. It should not be assumed that that result
is always achieved by separating the issues. In many cases, once properly
considered, the issues will be found to be inextricably linked, even though, at
first sight, they might appear to be discrete. And even where the issues are
discrete, the expeditious disposal of the litigation is often best served by
ventilating all the issues at one hearing, particularly where there is more than
one issue that might be readily dispositive of the matter. It is only after careful
thought has been given to the anticipated course of the litigation as a whole that

8 Denel (Edms) Bpk v Vorster 2004 (4) SA 481 (SCA) para 3.

it will be possible properly to determine whether it is convenient to try an issue
separately.‟

[27] Even though the parties to the litigation may agree to a separation
of issues, before a court orders separation in terms of rule 33(4), it must
be satisfied that it is convenient and proper to adjudicate that issue
separately. In this matter, the obvious issue for determination was
whether there was liability in delict. 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 the unlikely interpretation of a
statute – can only serve to prejudice the parties.

[28] In the result the following order is made.
The appeal is upheld with costs.
The order of the court below is replaced with the following:
„1
(a)
The defendant is not liable to the plaintiff in terms of the
provisions of s 61 of the Consumer Protection Act 68 of 2008.

(b)
The plaintiff‟s claim, based on those provisions, is dismissed,
with costs, those costs to include 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 the
determination of the remaining issues in the action.‟

______________________
I Schoeman
Acting Judge of Appeal

APPEARANCES

For Appellants:
J F Mullins SC (and L East)
Instructed by:
Mothle Jooma Sabdia Inc., Pretoria
Matsepes Inc., Bloemfontein

For Respondent:
W P de Waal SC
Instructed by:
Joseph‟s Inc., Pretoria
McIntyre & Van der Post, Bloemfontein
SUPREME COURT OF APPEAL OF SOUTH AFRICA

MEDIA SUMMARY – JUDGMENT DELIVERED IN THE SUPREME COURT
OF APPEAL

FROM

The Registrar, Supreme Court of Appeal

DATE

30 September 2016

STATUS

Immediate

Eskom Holdings Limited v Derek Anthony Halstead-Cleak (599/2015)
ZASCA 150 [30 September 2016]

Please note that the media summary is intended for the benefit of the media
and does not form part of the judgment of the Supreme Court of Appeal.

The SCA today upheld an appeal with costs against a judgment of the
Gauteng Division of the High Court of South Africa (Pretoria) that found
Eskom strictly liable, in terms of the provisions of s 61 of the Consumer
Protection Act 68 of 2008, for damages Mr Halstead-Cleak had suffered.

Mr Halstead-Cleak, one of four cyclists, came into contact with a low hanging
power line, spanning a footpath and in the process sustained severe electrical
burns. The power line was not supplying or required to supply electricity to
anyone.

The SCA held that Mr Halstead-Cleak was not a consumer as circumscribed
in the Act and the facts and circumstances of the case fell outside the ambit of
the Consumer Protection Act.

The effect of the finding by the SCA was that the issue concerning the
delictual liability of Eskom still had to be determined by the trial court.

The effect of the order by the SCA is that the case is remitted to the trial court
for determination of the remaining issues in the action.