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[2016] ZASCA 156
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Minister of Water and Environmental Affairs and Another v Really Useful Investments No 219 (Pty) Ltd and Another (436/2015) [2016] ZASCA 156; [2017] 1 All SA 14 (SCA); 2017 (1) SA 505 (SCA) (3 October 2016)
THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Reportable
Case
No: 436/2015
In
the matter between:
THE
MINISTER OF WATER AND ENVIRONMENTAL
AFFAIRS FIRST
APPELLANT
MINISTER
OF LOCAL GOVERNMENT,
ENVIRONMENTAL
AFFAIRS AND DEVELOPMENT
PLANNING,
WESTERN
CAPE SECOND
APPELLANT
and
REALLY
USEFUL INVESTMENTS NO 219 (PTY) LTD FIRST
RESPONDENT
CITY
OF CAPE
TOWN SECOND
RESPONDENT
Neutral
Citation:
Minister of Water and Environmental Affairs v Really
Useful Investments
(436/2015)
[2016] ZASCA 156
(3 October 2016)
Coram:
Navsa, Wallis, Dambuza and Mocumie JJA and Dlodlo AJA
Heard:
17 August 2016
Delivered:
3 October 2016
Summary:
Environmental law – Interpretation and application of the
Environment Conservation Act 73 of 1989 (ECA) and the National
Environmental
Management Act 107 of 1998 (NEMA) – exemption
provisions in terms of s 37 of ECA and s 49 of NEMA not
applicable
to compensation provisions in terms of s 34 of ECA –
provisions of s 34 of ECA not applicable to a regulatory
directive
issued in terms of s 31A of ECA – landowner’s
particulars of claim accordingly not disclosing a valid cause of
action.
ORDER
On
appeal from
: The Western Cape Division of the High Court, Cape
Town (Savage J sitting as court of first instance).
1. The appeals of the
Minister and the MEC are upheld with costs including the costs
consequent upon the employment of two counsel.
2. Insofar as they relate
to the Minister and the MEC, paragraphs 2 and 3 of the order of the
court below are set aside and replaced
by the following:
‘
The
plaintiff’s claims against the second and third defendants are
dismissed with costs, such costs to include those consequent
upon the
determination of the separated issue and the costs of two counsel.’
3. It is declared that
the City’s exception to the plaintiff’s particulars of
claim should have been upheld.
4. The first respondent
is ordered to pay the second respondent’s costs of appeal such
costs to include those consequent upon
the employment of two counsel.
Judgment
Navsa
JA (Wallis, Dambuza and Mocumie JJA and Dlodlo AJA concurring.)
[1]
This is an appeal against a judgment of the Western Cape Division of
the High Court (Savage J) . In consolidated proceedings
she dismissed
an exception raised by the second respondent, the City of Cape Town
(the City), to the particulars of claim of the
first respondent,
Really Useful Investments No 219 (Pty) Ltd (RUI), and also dismissed
pleas raising the same point by the first
and second appellants, the
Minister of Water and Environmental Affairs (the Minister) and the
Minister of Local Government, Environmental
Affairs and Development
Planning, Western Cape (the MEC). The City, the Minister and the MEC
were ordered, jointly and severally,
to pay RUI’s costs.
[2]
The Minister and the MEC were granted leave to appeal to this court
by Savage J. The City did not apply for such leave because
it was
under a misapprehension that the order dismissing the exception was
not appealable. While that is ordinarily the case (
Wellington
Court Shareblock v Johannesburg City Council; Agar Properties (Pty)
Ltd v Johannesburg City Council
1995
(3) SA 827
(A) at 835A-C;
Maize
Board v Tiger Oats Ltd & others
2002
(5) SA 365
(SCA) para 13;
Charlton
v Parliament of the Republic of South Africa
2012
(1) SA 472
(SCA)) it is not inevitably so. Where it is
incontrovertible on the papers that the effect of the exception is,
so to speak, the
last word on the subject,
[1]
the dismissal of an exception is appealable. The dismissal of the
City’s exception rejected its special defence, which hinged
solely on the point taken therein. The City was, however, a party to
the appeal and argued the matter, without objection, as if
it was
arguing an appeal against the dismissal of its exception. I
accordingly proceed on that footing and will make allowances
for the
City’s position in the ultimate order.
Background
[3]
During May 2014, RUI instituted action against the City, the Minister
and the MEC, claiming payment of compensation in terms
of s 34 of the
Environmental Conservation Act 73 of 1989 (ECA), in an amount of R16
750 846 plus value added tax, alternatively
R2 818 422 plus
value added tax, on the basis that a directive issued by the City,
aimed at environmental preservation and
protection in relation to
land owned by RUI, and duly complied with by the latter, resulted in
a substantial diminution in the
value of the land. The relevant
statutory provisions will be dealt with in due course. The following
is the factual background,
drawn from the particulars of claim.
[4]
RUI owns 39 immovable properties in Hout Bay, Cape Town, located
immediately to the west of the Disa River, between Princess
Street
and the sea-shore.
[2]
The
properties are all subdivisions of Erf 1530. They were purchased by
RUI on 15 March 2007 at an auction, as a single lot, for
a purchase
price of R11 million, and are all undeveloped. Before the City’s
directive referred to above, all of the properties,
except three
erven, were zoned for residential use. Erf 7692 and Erf 7743 were
zoned for commercial use. Erf 7745 was zoned for
use as private open
space and for roads.
[5]
After rezoning and subdivision processes, RUI submitted development
plans for the properties that were approved by the City’s
predecessors. As RUI looked to develop the properties, it proceeded
to raise the height of the lower-lying properties to 4 metres
above
sea level
by dumping waste matter and fill in and
adjacent to the Disa River. This prompted
the City, acting in
terms of ss 31A(1) and (2) of ECA, to issue the directive referred to
above. It was dated 10 May 2011 and RUI
was directed to do the
following at its own expense, within 28 days of receipt thereof:
‘
2.1 [Survey] and
[demarcate] the 1:100 year flood line for future management.
2.2 [Engage] the services
of an independent freshwater ecologist to determine the extent of the
wetland that has been filled, to
assess and evaluate the impacts of
the filling on the receiving environment and potential future
flooding and water quality as
a result of the filling and to make
detailed recommendations for rehabilitation.
2.3 [Survey] and [peg]
the wetland extent on the site under the supervision of the
freshwater ecologist.
2.4 [Remove] the soil,
general rubble and fill that was placed within the floodplain of the
Disa River to natural ground level as
it existed prior to filling
commencing, under the supervision of the freshwater ecologist.
2.5 [Provide] the reports
of the independent freshwater ecologist to the Environmental Resource
Management Department of the City
for review and approval prior to
any work being undertaken.
2.6 [Carry] out such work
at [their] expense to the satisfaction of the City.
2.7 [Submit] the
specialist’s verification that the necessary work has been
done, to the Environmental Resource Management
Department.’
As
stated above, these steps were duly taken.
[6]
RUI alleged that the directive prevented it from undertaking any
development on, (a) those of the properties below the 1:100
year
flood line as surveyed in terms of paragraph 2.1 of the directive;
and (b) in the case of those of the non-residential erven
referred to
in paragraph 4 above, parts of which are below the 1:100 year flood
line, on those parts of those erven. It was alleged
further that the
directive prevented RUI from undertaking any development on those of
the properties which are within the wetland
boundary as surveyed.
These allegations were denied in the pleas filed on behalf of the
Minister and the MEC.
[3]
[7]
I turn to consider, in greater particularity, the City’s notice
of exception. Para 1 of the Notice of Exception reads
as follows:
‘
The plaintiff’s
claim against the [City] is for the payment of compensation in terms
of section 34 of the Environment
Conservation Act 73 of 1989 . .
. , for loss allegedly incurred pursuant to the [City’s]
exercise of its powers and performance
of its duties under section
31A of the ECA in relation to certain immovable properties belonging
to the plaintiff.’
The
City then went on to rely on the provisions of s 49 of the National
Environmental Management Act 107 of 1998 (NEMA), which provides:
‘
49 Limitation
of liability
.
Neither the State nor any
other person is liable for any damage or loss caused by –
(a)
the exercise
of any power or the performance of any duty under this Act or any
specific environmental management Act; or
(b)
the failure to
exercise any power, or perform any duty under this Act
or any
specific environmental management Act
,
unless the exercise of
or failure to exercise the power, or performance of or failure to
perform the duty was unlawful, negligent
or in bad faith
.’
(My emphasis.)
The
City pointed out that in terms of s 1(1) of NEMA, ECA is a
specific environmental management Act contemplated in s 49
(a)
.
[4]
Its core contention was that since RUI had not alleged that the City,
in the exercise of its powers in terms of s 31A of ECA
had acted
unlawfully, negligently or in bad faith it followed, on the basis of
the provisions of s 49 of NEMA, that it was exempted
from liability
for any loss sustained by RUI. Based on the above, the City contended
that the particulars of claim did not disclose
a cause of action.
Paragraph 15.3 of the Minister’s plea was to the same effect,
as was paragraph 15.3 of the MEC’s
plea.
Judgment
of the court below
[8]
In adjudicating the exception and dealing with the similar parts of
the pleas of the Minister and the MEC, Savage J had regard
to the
applicable statutory provisions. First, s 31A of ECA, which
empowered the City to issue the directive
‘
31A Powers of
Minister, competent authority, local authority or government
institution where environment is damaged, endangered
or detrimentally
affected
(1) If, in the opinion of
the Minister or the competent authority, local authority or
government institution concerned, any person
performs any activity or
fails to perform any activity as a result of which the environment is
or may be
seriously damaged
,
endangered
or
detrimentally affected
, the Minister, competent authority,
local authority or government institution, as the case may be, may in
writing direct such person-
(a)
to cease such activity; or
(b)
to take such steps as the Minister, competent authority, local
authority or government institution, as the case may be, may deem
fit,
within a period specified
in the direction, with a view to eliminating, reducing or preventing
the damage, danger or detrimental
effect.
(2) The Minister or the
competent authority, local authority or government institution
concerned may direct the person referred
to in subsection (1) to
perform any activity or function at the expense of such person with a
view to rehabilitating
any damage
caused to the environment as
a result of the activity or failure referred to in subsection (1), to
the satisfaction of the Minister,
competent authority, local
authority or government institution, as the case may be.
. . .’ (My
emphasis.)
[9]
Second, s 34, which creates a right, in certain circumstances,
for the owner of property or the holder of a real right
to recover
compensation:
‘
34 Compensation
for loss
(1)
If in terms of the provisions of this Act
limitations are placed
on the purposes for which land may be used or on activities which may
be undertaken on the land, the owner of, and the holder of
a real
right in, such land shall have a right to recover compensation from
the Minister or competent authority concerned in respect
of actual
loss suffered by him
consequent upon the application of such
limitations
.
(2)
The amount so recoverable shall be determined by agreement entered
into between such owner or holder of the real right and the
Minister
or competent authority, as the case may be, with the concurrence of
the Minister of State Expenditure.
(3)
In the absence of such agreement the amount so to be paid shall be
determined by a court referred to in section 14 of the Expropriation
Act, 1975 (Act 63 of 1975), and the provisions of that section and
section 15 of that Act shall
mutatis mutandis
apply in
determining such amount.’ (My emphasis.)
[10]
Third, s 37, which, in essence, is a statutory exemption from
liability:
‘
37 Restriction
of liability
No person, including the
State, shall be liable in respect of anything done in good faith in
the exercise of a power or the performance
of a duty conferred or
imposed in terms of this Act.’
[11]
In addition, the court below had regard to s 24 of the Constitution,
which contemplates legislative measures for the protection
of the
environment for the benefit of present and future generations. Savage
J had regard to one such legislative measure, namely,
NEMA, and in
particular s 49
(a)
,
the provisions of which are set out in para 7 above. She noted that
as of 1 May 2005, s 49 of NEMA was amended to extend its application
to any ‘specific environmental management Act’, defined
in s 1(1) of NEMA to include ECA.
[5]
[12]
Savage J considered that s 34(1) of ECA provided a right to claim
compensation in specific circumstances, namely, actual loss
suffered
by a claimant arising from the limitations placed on the purposes for
which land may be used, or in relation to activities
that may be
undertaken on the land. She saw this remedy as distinct from the
right to recover damages in delict. She reasoned that
in providing
for compensation s 34(1) of ECA operated similarly to an
expropriation claim.
[13]
Section 31A, referred to above, came into operation during 1992 and
ss 34 and 37 of ECA were not amended thereby, nor by the
provisions
of NEMA. The court below took the view that this pointed to a
legislative intent to keep intact the statutory right
embodied in s
34. Savage J concluded that neither s 37 of ECA nor s 49 of NEMA,
could be read to limit the right to compensation
provided for by
s 34.
[14]
The court below thought it significant that s 49 did not limit other
statutory rights to compensation, such as that set out
in s 36 of
NEMA, which provides for compensation in the event of expropriation
for environmental purposes. It reasoned that this
was especially so,
given the constitutional imperative in s 25(2) of the Constitution,
that there be no expropriation without compensation,
and went on to
say the following (para 12):
‘
[T]here
can be no doubt that compensation under s 36 is therefore not limited
to circumstances in which wrongfulness, unlawfulness
or bad faith
exists.’
The
court noted that s 34(3) of ECA provides that the amount of
compensation, in certain circumstances, is to be determined by a
court referred to in s 14 of the Expropriation Act 63 of 1975.
[15]
In para 13 of the judgment the following appears:
‘
Section 34
contemplates the lawful exercise of public power. Given that the
exercise of public powers is only legitimate where it
is lawful, a
right to compensation under s 34 could not have been intended to
arise only when public power has been exercised unlawfully
in that
the exercise of the power would in such cases be illegitimate by
virtue of its unlawfulness.’ (Footnote omitted)
[16]
It was accepted by Savage J that the environment was held in public
trust for beneficial use in the public interest and must
be
protected. However, she went on to state (para 20):
‘
[L]egislative
prescripts which protect the environment from unlawful activity and
hold responsible those who harm it cannot be construed
to limit or
restrict other statutory entitlements, such as provided in s 34,
unless this is apparent from the language of the statute
read in
context.’
[17]
The following paragraph of the judgment contains, in succinct terms,
the ratio for the orders dismissing the exception and
striking out
the relevant parts of the pleas (para 22):
‘
A statutory right
to recover compensation is clearly provided in s 34 and is one
neither limited nor restricted by s 37 [of ECA]
or s 49 [of NEMA]
which are provisions whose purpose it is to provide a defence to a
claim in delict. To find differently would
be to strain at an
interpretation that does not accord with the language of the
provision read in context and the statute as a
whole. It follows that
[RUI’s] particulars of claim as it stands discloses a cause of
action and does not lack averments
which are necessary to sustain an
action within the contemplation of rule 23(1).’ (Footnote
omitted)
Discussion
[18]
I now turn to consider whether the court below was correct in its
reasoning and conclusions. A convenient starting point is
an
appreciation that ECA found its way into the statute books about five
years before the advent of our constitutional democracy.
[6]
Even the apartheid regime understood the need for a studied approach
in relation to the protection and controlled utilisation of
the
environment.
[7]
[19]
It is necessary to explore the relevant constituent parts of ECA in
its original form. Section 2 empowered the Minister of
Environment
Affairs to determine, after consultation with the Council for the
Environment; the then Administrator of each province;
each Minister
charged with the administration of any law which in the opinion of
the Minister of Environmental Affairs related
to a matter affecting
the environment; as well as with the Minister of Finance and the
Minister of Economic Affairs & Technology,
the general policy to
be applied with a view to:
[8]
‘
(a)
the
protection of ecological processes, natural systems and the natural
beauty as well as the preservation of biotic diversity
in the natural
environment;
(b)
the promotion
of sustained utilization of species and ecosystems and the effective
application and re-use of natural resources;
(c)
the protection
of the environment against disturbance, deterioration, defacement,
poisoning or destruction as a result of man-made
structures,
installations, processes or products or human activities; and
(d)
the
establishment, maintenance and improvement of environments which
contribute to a generally acceptable quality of life for the
inhabitants of the Republic of South Africa.’
[20]
Section 16 of ECA empowered an Administrator, in appropriate
circumstances, to declare an area to be ‘a protected natural
environment’. Section 16(1) set prerequisites for such a
declaration, the relevant part of which read as follows:
‘
Provided that such
protected natural environment may only be declared –
(a)
if
in the opinion of the Administrator there are adequate grounds to
presume that the declaration will substantially promote the
preservation of specific ecological processes, natural systems,
natural beauty or species of indigenous wildlife or the preservation
of biotic diversity in general; and
(b)
after
consultation with the owners of, and the holders of real rights in,
land situated within the defined area. . . .’
[21]
Section 16(2) authorised the Minister to issue directions in respect
of land or water in a protected natural environment, in
order to
achieve the general policy and objects of ECA, and s 16(3) made the
owner or holder of a real right in land situated within
a protected
natural environment subject to such directions. Section 16(4) gave
the Administrator the power to direct the Registrar
of Deeds to make
an entry in the deeds registry, of the directions in question.
Section 16(5) was significant:
‘
The Administrator
may with the concurrence of the Minister of Finance out of money
appropriated by Parliament for that purpose and
subject to such
conditions as he may determine, render financial aid by way of grants
or otherwise to the owner of, and the holder
of a real right in, land
situated within a protected natural environment in respect of
expenses incurred by the owner or holder
of the right in compliance
with any direction issued in terms of subjection (2).’
The
contemplated financial assistance appears to have been based on the
largesse of the State rather than it being compelled to
render it. It
is important to bear in mind that the ‘financial assistance’
was in relation to expenses incurred by
a holder of a real right in
complying with a directive.
[22]
In addition to the creation of a protected natural environment, s 18
of ECA empowered the Minister to declare areas to be ‘special
nature reserves’. However, this could only be done in respect
of land that was owned by, or under the exclusive control of,
the
State.
[9]
From 1992 it could
also be done at the request of the owner of the land.
[10]
[23]
Significantly, s 23, which bore the title ‘limited development
areas’, empowered the Minister to declare a defined
area a
‘limited development area’. Section 23(2) read as
follows:
‘
No person shall
undertake in a limited development area any development or activity
prohibited by the Minister by notice in the
Gazette
or cause
such development or activity to be undertaken unless he has on
application been authorized thereto by the Minister or a
local
authority designated by the Minister in the notice, on the conditions
contained in such authorization.’
Sections
23(3) and (4) provided for representations to be made by interested
or affected parties concerning the influence of any
proposed activity
on the environment. Section 27 of ECA entitled a competent authority
to make regulations regarding limited development
areas. Such
regulations could impose restrictions on the nature and extent of the
development or activities in connection with
development. It could
also provide for a procedure to be followed for permission to be
obtained for development in such an area.
[24]
Section 20 of ECA, on the other hand, dealt with waste management and
prohibited the operation of a disposal site without a
permit by the
Minister of Water Affairs. That Minister was empowered to issue
directions with regard to the control and management
of disposal
sites. Section 21 empowered the Minister to identify activities which
might have had a substantial detrimental effect
on the environment.
Section 22 of ECA prohibited activities listed in section 21 without
written authorisation by the Minister.
[25]
The provisions of s 21 and the relevant part of s 22 appear
hereafter:
‘
Identification
of activities which will probably have detrimental effect on the
environment
21.
(1) The
Minister may by notice in the
Gazette
identify those
activities which in his opinion may have a substantial detrimental
effect on the environment, whether in general
or in respect of
certain areas.
(2) Activities which are
identified in terms of subsection (1) may include any activity in any
of the following categories, but
are not limited thereto:
(a)
Land use and transformation;
(b)
water use and disposal;
(c)
resource removal, including natural living resources;
(d)
resource renewal;
(e)
agricultural processes;
(f)
industrial processes;
(g)
transportation;
(h)
energy generation and distribution;
(i)
waste and sewage disposal;
(j)
chemical treatment;
(k)
recreation.
.
. .
Prohibition of
undertaking of identified activities
22.
(1) No person
shall undertake an activity identified in terms of section 21(1) or
cause such an activity to be undertaken except
by virtue of a written
authorization issued by the Minister or a local authority or an
officer designated by the Minister by regulation.
. . .’
[26]
As can be seen, sections 20, 21 and 22 of ECA were regulatory in
nature. They provided for oversight of activities, undertaken
on
property, that were potentially hazardous and might have proven
environmentally harmful. The provisions of s 31A, set out in
para 8
above, were inserted in 1992.
[11]
Those provisions contain regulatory authority extending beyond listed
activities and broadened the powers of an environmental authority.
Regulatory actions could be directed against ‘any activity’
or the failure to perform ‘any activity, as a result
of which
the environment is or may be seriously damaged, endangered or
detrimentally affected’. An interesting feature of
s 31A
was that the regulatory powers it contained could be exercised not
only by the Minister and the MEC, but also by a local
authority and
by designated government bodies.
[12]
That then is the statutory architecture of ECA in its original and
amended form before the advent of NEMA.
[27]
Even at common law no person could use property owned by him or her
in a manner that harmed the rights of others. Nuisance
involves the
unreasonable use of property by one neighbour to the detriment of
another. Examples include repulsive odours, smoke
and gases drifting
over the plaintiff’s property from the defendant’s land,
water seeping onto the plaintiffs property,
leaves from the
defendant’s trees falling onto the plaintiff’s premises,
slate being washed down-river onto a plaintiff’s
land, causing
a disturbing noise, causing a common wall to become unstable by
piling soil up against it, overhanging branches and
foliage, an
electrified fence on top of a communal garden wall, blue wildebeest
transmitting disease to cattle on neighbouring
ground, and occupants
of structures on neighbouring land allegedly causing a nuisance.
[13]
[28]
In an increasingly ecologically sensitive world the emphasis shifted
beyond the interests of immediate neighbours to the protection
and
preservation of the environment for the benefit of present and future
generations. This shift has been given added emphasis
by our
Constitution.
[14]
That idea
was already evident, even if only in nascent form, in the provisions
of ECA, which dealt not only with the regulation
of dangers posed to
the environment but also provided for the declaration of protected
natural environments, special nature reserves
and limited development
areas.
[29]
NEMA was enacted after the advent of our new constitutional
order.
[15]
It is legislation
envisaged in s 24 of the Constitution. It almost completely replaced
ECA. Only certain provisions of ECA remain,
including ss 21, 22 and
23. Significantly, ss 31A, 34 and 37 also continue in existence.
[30]
NEMA was enacted to provide for co-operative environmental governance
by establishing principles for decision-making on matters
affecting
the environment, institutions that will promote cooperative
governance and procedures for co-ordinating environmental
functions
exercised by organs of state and to provide for certain aspects of
the administration and enforcement of other environmental
management
laws.
[16]
[31]
Section 2 of NEMA sets out applicable national environmental
management principles, inter alia, that environmental management
must
place people and their needs at the forefront of its concern, and
serve their physical, psychological, developmental, cultural
and
social interests equitably.
[17]
Section 2(3) of NEMA states that development must be socially,
environmentally and economically sustainable. Section 2(4)
(a)
provides,
amongst others, for the following factors to be taken into account
when considering what constitutes sustainable development:
‘
(i) That the
disturbance of ecosystems and loss of biological diversity are
avoided, or, where they cannot be altogether avoided,
are minimised
and remedied;
(ii) that pollution and
degradation of the environment are avoided, or, where they cannot
altogether be avoided, are minimised and
remedied;
. . .
(vi) that the
development, use and exploitation of renewable resources and the
ecosystems of which they are part do not exceed the
level beyond
which their integrity is jeopardised.
. . .
(viii) that negative
impacts on the environment and on people’s environmental rights
be anticipated and prevented, and where
they cannot be altogether
prevented, are minimised and remedied.’
[32]
Like ECA, NEMA sets out ‘listed activities’ that require
authorisation as well as the identification of an authority
to grant
it.
[18]
Section 24F of NEMA
prohibits the commencement of listed activities without the requisite
authorisation. Section 28 of NEMA provides
that persons who cause or
may cause significant pollution or degradation of the environment
must take reasonable measures to prevent
such pollution or
degradation from occurring, continuing or recurring, or, in so far as
such harm to the environment is authorised
by law or cannot
reasonably be avoided or stopped, to minimise and rectify such
pollution or degradation of the environment.
[19]
[33]
There are provisions in NEMA which oblige people engaged in
prospecting, exploration, mining or production to make provision
for
remediation of environmental damage.
[20]
Section 31L of NEMA empowers environmental management inspectors to
issue compliance notices. NEMA also has a number of enforcement
provisions.
[21]
[34]
What is clear from the regulatory provisions of ECA and NEMA set out
above, is that they are distinct provisions that regulate
the
activities of owners of land or of holders of real rights in land,
and are aimed at preventing such activities from causing
environmental harm. Sections 21 and 22 of ECA, which continue in
existence, are such measures.
[35]
Insofar as authorisations are required from environmental authorities
to engage in such activities, either in terms of ECA
or NEMA, these
are not unusual. There are other statutes that require authorisations
to undertake particular activities. Town planning
schemes and
legislation affecting particular undertakings, requiring licences and
specific authorisations, are examples.
[36]
Section 23 of ECA, as stated above, also remains in existence.
However, it deals with the creation of limited development areas.
Section 23 and the repealed sections, 16 and 18,
[22]
were not primarily regulatory but sought to preserve, for posterity,
areas considered to be ecologically important. When an authority
invoked its powers in terms of those sections, it curtailed real
rights in land. The invocation of those powers did not arise from
the
dangerous activities of the land owners or of persons having a real
right in the affected areas.
They
were invoked to protect and preserve the environment of South Africa
for the benefit of all its people and for that purpose
restricted or
subtracted from the rights of the owners of the land concerned and
others having real rights in it.
[37]
Section 34, dealing with ‘compensation for loss’, was
part of ECA from inception,
[23]
and continues in existence.
Its
purpose must be seen in the light of what follows.
Generally,
our law sets its face against confiscation of land rights without
compensation.
[24]
By way of
s 34 of ECA, the legislature saw fit to allow for compensation
for the curtailment of real rights in land flowing
from the
provisions of the erstwhile s 16 and the existing s 23.
[25]
Compensation as provided for in section 34 was on the basis of
advancing the public interest by creating what are effectively
ecological reserves.
[38]
Section 36 of NEMA, in similar vein, enables property to be acquired
by the State in the public interest. It reads as follows:
‘
36
Expropriation
(1) The Minister may
purchase or, subject to compensation, expropriate any property for
environmental or any other purpose under
this Act, if that purpose is
a public purpose or is in the public interest.
(2) The Expropriation
Act, 1975 (Act 63 of 1975) applies to all expropriations under this
Act and any reference to the Minister
of Public Works in that Act
must be read as a reference to the Minister for purposes of such
expropriation.
(3) Notwithstanding the
provisions of subsection (2), the amount of compensation and the time
and manner of payment must be determined
in accordance with s 25(3)
of the Constitution, and the owner of the property in question must
be given a hearing before any property
is expropriated.’
The
legislature saw fit to ensure that where environmental purposes would
be served by the State acquiring land there should be
compensation.
Accordingly, s 36(2) of NEMA makes the Expropriation Act applicable.
[39]
Section 34 of ECA could not, conceivably, have been directed at
providing compensation for actions taken under the repealed
s 20 or
the existing ss 21, 22 and 31A. As stated above, those provisions
were aimed at regulating harmful activities. It cannot
be so that in
instances in which potentially harmful activities on land are
restricted that compensation would inevitably be payable.
It is hard
to believe that a refusal of authorisation for activities which may
have a substantial detrimental effect on the environment,
related,
for example, to waste removal or chemical processes would
automatically entitle a holder of a right in land to compensation.
It
is difficult to comprehend that a person seeking to use his land,
contiguous to a residential area, for a manufacturing process
that
will emit noxious gases in the area, could claim compensation in the
event of a refusal of authorisation for him to do so.
Put
differently, it is difficult to conceive of a right to compensation
for restrictions rightly being put in place to prohibit
dangerous
processes.
[40]
To interpret and apply s 34 of ECA to allow for such compensation
would be to discourage environmental authorities from fulfilling
their constitutional obligation to protect the environment and to put
people first in applying the environmental management principles
set
out in NEMA. It would, perversely, encourage land owners to act in an
environmentally offensive manner so as to solicit compensation.
It
would fly in the face of the common law. And, finally, it would lead
to absurdity. The power under s 31A(2) to cause harmful
conduct to be
remedied is a power to compel the landowner to do so at its own
expense. It is incongruous in the extreme that having
done so at own
expense, it could then turn round and say that it is entitled to
compensation for loss suffered by it, which would
include that
self-same expense. Even if, as a result the land becomes less
valuable.
[41]
Insofar as s 23 of ECA is concerned, namely the creation of
limited development areas, the right to compensation is retained
by
the continued existence of s 34 of ECA. However, for s 23 to be
invoked and applied by environmental authorities, an extended
process
is prescribed. Before a limited development area can be proclaimed,
the processes set out in s 23(4) have to be followed.
[26]
Furthermore, s 23(2) allows for authorisation for development
activities to be conducted within a limited development area, subject
to such conditions as a competent authority might deem fit. As
demonstrated below, s 23 finds no application in the present dispute.
[42]
As already noted, the obligation to pay compensation under s 34
rests on a ‘competent authority’ as defined
and that
extends only to the Minister and the MEC. These are the very people
who are empowered to act under ss 16 and 23 respectively.
It is
significant that in introducing s 31A and conferring powers on
local authorities and designated government bodies the
definition of
‘competent authority’ was not extended to include these
bodies. That is a clear indication that it was
not thought that the
exercise of the powers under s 31A would create a situation
contemplated under s 34. The distinction
between the authorities
referred to in ss 31A and 34 is an aspect to which I shall return in
due course.
[43]
Before returning to the pleadings it is necessary to turn our
attention to the provisions of s 37 of ECA and s 49 of NEMA.
The
provisions of s 37, which are set out in para 10 above, state that no
person, including the State, shall be liable in respect
of anything
done in good faith in the exercise of a power or the performance of a
duty conferred or imposed in terms of the Act.
It is a conventional
exemption provision. It follows almost exactly the wording of s 8 of
the then Forest Act 122 of 1984, considered
by this court in
Simon’s
Town Municipality v Dews & another
[1992] ZASCA 165
;
1993 (1) SA 191
(A). In
that case this court said that such a clause has to be interpreted
against the background of the law relating to statutory
authority as
a defence to a delictual claim because:
‘
Conduct which
would otherwise give rise to delictual liability may be justified and
rendered lawful by the fact that it consists
of the exercise of a
statutory power.’
[27]
[44]
In
Dews
this court went on to say the following (at
195I-196C):
‘
Whether a
particular statutory enactment in fact authorises interference with
or the infringement of the rights or interests of
another depends
upon the intention of the Legislature, which is determined in
accordance with the usual canons of statutory interpretation.
Of
especial significance in this connection is whether the statutory
provision is directory or permissive in character. . .
A further important
principle is that, even where the statute does authorise interference
with the rights of others, the person
or authority vested with the
power is under a duty, when exercising the power, to use due care to
take all reasonable precautions
to avoid or minimise injury to
others.’
Thus,
liability would attach if an affected party could show that by using
different methods the extent of the infringement of the
rights and
damage could have been avoided or restricted and damages would be
payable or an interdict granted to the extent of the
excessive injury
occasioned by the authority.
[45]
A provision such as s 37 can only be relied
on where the power in question was exercised or the duty performed in
good faith
and without negligence and within statutorily prescribed
constraints. That does not mean that it is without practical effect.
Dismissing
an argument that this rendered the provision nugatory,
Corbett CJ pointed out that:
‘
It
was submitted by appellant's counsel that if s 87 be interpreted in
this way, it in effect adds nothing to the common law and
is
redundant. This would suggest that this was not the legislative
intent. I do not think that this argument is sound. As I have
indicated, a party relying on statutory authority as a defence must
first establish that the statutory enactment under which he
acted
authorises interference with or the infringement of the rights or
interests of others. This is a matter of interpretation.
The effect
of s 87 is to dispense with any such enquiry as far as powers or
duties conferred or imposed by or under the Act are
concerned. At the
same time s 87 introduces as a positive element the requirement of
good faith, the
onus
of establishing which would be on the party claiming immunity. It is
thus not correct to say that the interpretation which has
been placed
on s 87 renders it redundant. But even if it does, this would not be
the first time that a legislative provision was
declaratory of the
common law or was inserted
ex
abundanti cautela.
’
[28]
[46]
Sections 34 and 37 were part of ECA when it was first enacted and
continue in existence. On ordinary principles of interpretation
they
ought not to be regarded as being in conflict. As pointed out above,
they can be reconciled and are coherent within the scheme
of ECA and
NEMA.
In
Panamo Properties (Pty) Ltd & another v Nel &
others NNO
[2015] ZASCA 76
;
2015 (5) SA 63
(SCA) para 27, this
court said the following:
‘
When a problem
such as the present one arises the court must consider whether there
is a sensible interpretation that can be given
to the relevant
provisions that will avoid anomalies. In doing so certain
well-established principles of construction apply. The
first is that
the court will endeavour to give a meaning to every word and every
section in the statute and not lightly construe
any provision as
having no practical effect. The second and most relevant for present
purposes is that if the provisions of the
statute that appear to
conflict with one another are capable of being reconciled then they
should be reconciled.’ (Footnotes
omitted)
[47]
As pointed out above, s 34 of ECA provides a statutory right to
compensation in restricted circumstances. Section 37 of ECA,
on the
other hand, provides protection against liability to pay damages in
delict arising out of the proper exercise of powers
or functions
under ECA. The protection does not extend to acts that are performed
negligently or in bad faith or outside the terms
of the statute, as
such actions are by definition not lawful. It follows that s 37 had
no application in relation to situations
falling within s 34 and did
not operate to exclude the right of any landowner or holder of a real
right in land to claim compensation
under that section.
[48]
I now turn to deal with the provisions of s 49 of NEMA, set out in
para 7 above. It expressly incorporates the common law requirements
of lawfulness, good faith and absence of negligence in order to enjoy
protection against liability. The protective cloak is arguably
wider
than s 37 of ECA, because of the reference to damage ‘caused
by’ the exercise of a power or the performance of
a duty. It
also appears to place the onus on a claimant to show that the act was
performed unlawfully, negligently or in bad faith.
Other than those
differences, its purpose is no different from that of s 37 of ECA.
[49]
There is no reason to construe s 49 in the manner suggested on behalf
of the City, namely, that it excludes claims for compensation
under s
34 where the interference with the owner’s rights occurred as a
result of lawful, non-negligent acts undertaken in
good faith, but to
afford such a claim where the interference is unlawful, negligent or
undertaken in bad faith. As demonstrated
above, s 34 provides a
holder of a real right in land with a right to compensation as a
result not of regulatory interference,
but because of the creation of
protected environmental areas. The interpretation contended for by
the City would have the effect
of nullifying the right to
compensation that has existed since the enactment of ECA.
[50]
It is now necessary to return to the pleadings. In its particulars of
claim, RUI
claimed that the directive set out in para 5 above,
was issued as a result of the exercise by the City of its powers in
terms of
ss 31A(1) and (2) of ECA. That directive was regulatory.
It
focused primarily on (a) preventing pollution of the flood plain
of the Disa River, (b) preventing future flooding, and
(c) preventing
water and soil contamination. As discussed above, landowners or other
holders of real rights in land, were not,
at common law, permitted to
engage in activities on that land that were harmful to others. In
exercising its powers under this
subsection, the City was complying
with its constitutional and statutory obligations to prevent harm to
the environment.
[51]
Paragraph 2.3 of the directive required RUI to survey and peg the
wetland extent on the site under supervision of a freshwater
ecologist. It will be recalled that RUI asserted, in its particulars
of claim, that the directive prevented it from undertaking
any
development within the wetland boundary and below the flood line. As
pointed out above, this was denied by the Minister and
the MEC in
their respective pleas. Furthermore,
RUI did not assert that
the Minister had declared RUI’s property a limited development
area in terms of s 23 of ECA. As stated
earlier, s 23 envisages
an extended process which RUI does not contend was embarked upon. If
those processes had been followed,
it would have been open to RUI to
make representations in regard thereto and take such legal steps as
it might have been advised.
Nowhere in RUI’s particulars of
claim will one find reliance placed on the powers of the Minister,
the MEC or the City in
terms of ECA and NEMA to set aside an
ecological zone, which, on the analysis referred to earlier, might
have triggered a claim
for compensation.
[52]
To sum up, it is clear from paras 5 to 15 of RUI’s particulars
of claim that its claim was erroneously based on a purported
entitlement to compensation arising from the City’s actions
taken under s 31A(1) of ECA. A claim based on such actions can
only
succeed if that power was exercised unlawfully, negligently or in bad
faith. The error was compounded by the Minister, the
MEC and the
City’s acceptance that, but for the exemptions provided for in
s 37 of ECA and s 49 of NEMA, RUI’s
claim would have been
competent. The question that arises is whether these incorrect
assumptions of the parties preclude us from
deciding the matter on
the basis set out above. For the reasons that follow, I think not.
[53]
The interpretation and application of the provisions of ECA and NEMA,
referred to above, were extensively argued before us
and relevant
permutations as to outcomes were fully debated. More than a hundred
years ago, this court, in
Cole v Government of the Union of South
Africa
1910 AD 263
at 272-273 warned of confirmation of a
decision clearly wrong, in circumstances where the issues were fully
aired and there was
no unfairness to any party. More recently, the
Constitutional Court in
CUSA v Tao Ying Metal Industries &
others
[2008] ZACC 15
;
2009 (2) SA 204
(CC) para 68 reiterated
that principle.
[54]
I am mindful of the care that should be taken in framing an exception
and that the aim of the exception procedure is to avoid
the leading
of unnecessary evidence and to dispose of a case in whole or in part
in an expeditious and cost effective manner.
[29]
As set out in the preceding paragraph, no further evidence was
contemplated and all the issues in relation to the application and
interpretation of the statutory provisions have been fully aired. It
would not be in the interests of justice to avoid a decision
because
of the incorrect assumption by all concerned. To do otherwise would
also serve no useful purpose.
[55]
For all the reasons set out above, it is clear that RUI’s case
as pleaded disclosed no cause of action. RUI’s case
was
erroneously premised on regulatory action taken in terms of s 31A(1)
of ECA on the part of the City
and contending that this gave
rise to a claim for compensation
in terms of s 34
of ECA.
Once that assumption was fallacious its claim was
nothing more than a claim for compensation in respect of compliance
with a directive
under s 31A(1).
Perhaps even
more fundamental in relation to RUI’s claim for compensation
against the City is the distinction referred to
in para 42 above,
between the authorities implicated in relation to s 31A and s 34. A
claim in terms of s 34 to recover compensation
may only be brought
against ‘the Minister or competent authority concerned’.
That does not include a local authority.
RUI’s claim in terms
of s 34 against the City was thus not sustainable. The convoluted
assertions in para 21 of RUI’s
particulars of claim, based on
the unconstitutionality of the aforesaid distinction, do not overcome
the obstacles that follow
from the conclusions reached in the
preceding paragraphs. If anything, the distinction reinforces the
findings aforesaid.
[56]
The finding by the court below that s 37 of ECA and s 49 of
NEMA do not apply to compensation claims under s 34 of
ECA was
correct. However, the question it did not address was whether the
circumstances were such as to fall within s 34. As discussed
above
the actions taken by the City in issuing a directive in terms of
section 31A does not fall within the purview of s 34. The
relevant
parts of the pleas of the Minister and the MEC, and the City’s
exception, that the particulars of claim did not
disclose a cause of
action ought therefore to have been upheld. The court below erred in
dismissing the exception and striking
out the relevant parts of the
pleas of the Minister and the MEC.
[57]
For all the reasons set out above, the following order is made:
1. The appeals of the
Minister and the MEC are upheld with costs including the costs
consequent upon the employment of two counsel.
2. Insofar as they relate
to the Minister and the MEC, paragraphs 2 and 3 of the order of the
court below are set aside and replaced
by the following:
‘
The
plaintiff’s claims against the second and third defendants are
dismissed with costs, such costs to include those consequent
upon the
determination of the separated issue and the costs of two counsel.’
3. It is declared that
the City’s exception to the plaintiff’s particulars of
claim should have been upheld.
4. The first respondent
is ordered to pay the second respondent’s costs of appeal such
costs to include those consequent upon
the employment of two counsel.
______________________
M
S Navsa
Appearances:
Counsel
for Appellant: P B J Farlam SC (with him M Bishop) (Heads prepared by
P B J Farlam SC, M Bishop and N Pakade.)
Instructed
by:
The
State Attorney, Cape Town
The
State Attorney, Bloemfontein
Counsel
for First Respondent: A M Breitenbach SC (with him A Erasmus and A
Christians)
Instructed
by:
DHM
Du Plessis Hofmeyr Malan c/o Van der Spuy & Partners, Cape Town
Webbers,
Bloemfontein
Counsel
for Second Respondent: G M Budlender SC (with him P S van Zyl)
Instructed
by:
Smith
Ndlovu Summers, Cape Town
Rosendorff
Reitz Barry, Bloemfontein
[1]
See
Makhothi
v Minister of Police
1981
(1) SA 69 (A).
[2]
The Erven are 7681 to 7705, 7717 to 7722, 7726 to 7731, 7743 and
7745, Hout Bay.
[3]
See para 8 of the pleas of each of the Minister and the MEC. These
are identical and record that the relevant party:
‘
8.1 denies that
the Directive constituted a limitation on the purposes for which the
properties could be used, within the meaning
of s 34 of the
ECA;
8.2 denies that the
Directive prevented the Plaintiff from undertaking development on
the properties.
[4]
Section 1(1) of NEMA is a definition section, and ECA is defined as
being one of several ‘specific environmental management
Acts’.
[5]
The amendment was made in terms of the
National Environmental
Management Amendment Act 46 of 2003
which came into force on 1 May
2005.
[6]
ECA came into operation on 9 June 1989.
[7]
See the long title of ECA.
[8]
The policy was given effect by publication in the
Government
Gazette
.
[9]
See
s 18(2)
of ECA.
[10]
Section 18(2)
was amended by s 7 of the Environment Conservation
Amendment Act 79 of 1992 and s 18(2)
(bA)
was inserted.
[11]
Section 31A was inserted by s 19 of the Environment
Conservation Amendment Act 79 of 1992 and amended by Proclamation
R43 of 8 August 1996.
[12]
On 23 August 1996 the National Parks Board (SANParks) was designated
in terms of this provision.
[13]
See J Neethling
et
al Law of Delict
5
ed (2006) at 107 – 108 and 336 and the cases there cited.
[14]
Section 24 of the Constitution provides:
‘
24 Environment
Everyone has the right –
(a)
to an
environment that is not harmful to their health or wellbeing; and
(b)
to have the
environment protected, for the benefit of present and future
generations, through reasonable legislative and other
measures that
–
(i) prevent pollution
and ecological degradation;
(ii) promote
conservation; and
(iii) secure
ecologically sustainable development and use of natural resources
while promoting justifiable economic and social
development.’
[15]
It was assented to in 1998 and most of its provisions came into
operation on 29 January 1999.
[16]
See the long title of NEMA.
[17]
See s 2(2) of NEMA.
[18]
See s 24 of NEMA.
[19]
See s 28(1) of NEMA.
[20]
See s 24P of NEMA.
[21]
See ss 31N, 31O, 33, 34, 34C and 34D of NEMA. These include the
revocation of permits or authorisations, private prosecutions,
criminal proceedings and the forfeiture of items.
[22]
Section 16 of ECA was amended in 1992 and finally repealed in 2003.
The financial assistance provided for in that section was
thus
abolished. Section 18 of ECA was also repealed in 2003.
[23]
An amendment by way of Proclamation R43 of 8 August 1996 is, for
present purposes, inconsequential.
[24]
See
Arun
Property Development (Pty) Ltd v Cape Town City
[2014] ZACC 37
;
2015 (2) SA 584
(CC), para 34.
[25]
For present purposes, there is no need to get involved in the
complex questions raised and left unanswered in
Minister
of Minerals and Energy v Agri South Africa
[2012] ZASCA 93
;
2012 (5) SA 1
(SCA) para 15; and
Reflect-All
1025 CC v MEC for Public Transport, Roads and Works, Gauteng
Provincial Government & others
[2009] ZACC 24
;
2009 (6) SA 391
(CC) para 65, concerning the
development of a doctrine of constructive expropriation. In the
United States of America, a radical
curtailment of a landowner’s
freedom to make use of his or her land may entitle him or her to
compensation, under their
doctrine of ‘regulatory takings’.
This is described in the title on ‘Eminent Domain’ by
Francis C Amendola
et al in the
Corpus
Juris Secundum
(2007) Vol. 29A §84 as follows:
‘
It is within the
power of governmental entities to regulate property to some extent,
but if the regulation goes too far it will
be recognized as a
taking. A “regulatory taking,” also known as “inverse
condemnation,” occurs when the
purpose of the government
regulation and its economic effect on the property owner render the
regulation substantially equivalent
to an eminent domain proceeding
and, therefore, require the government to pay compensation to the
property owner. . .
When the government
condemns or physically appropriates property, the fact of a taking
is typically obvious and undisputed, but
when the owner contends a
taking has occurred because a law or regulation imposes restrictions
so severe that they are tantamount
to a condemnation or
appropriation, the predicate of a taking is not self-evident, and
the analysis is more complex.’ (Footnotes
omitted)
See
also the title on ‘Eminent Domain’ by David K Allen et
al in
American Jurisprudence
2 ed (1996) Vol. 26 §10
et seq.
[26]
Section 23(4) reads as follows:
‘
(4) A limited
development area shall not be declared unless the competent
authority –
(a)
has
given notice in the
Official Gazette
and in not fewer than
one English and one Afrikaans newspaper circulating in the area in
question of his or her intention to
declare such area as a limited
development area;
(b)
has
permitted not fewer than 60 days for the submission to the
Director-General of the provincial administration concerned, of
comment on the proposed declaration;
(c)
has
considered all representations received in terms of such notice; and
(d)
has
consulted each Minister charged with the administration of any law
which in the opinion of the competent authority relates
to a matter
affecting the environment in that area.’
[27]
At 195I-J.
[28]
At 197B-E.
[29]
See Andries Charl Cilliers et al
Herbstein
& Van Winsen’s
The
Civil Practice of the High Courts and the Supreme Court of Appeal of
South Africa
5 ed (2009) at 630.