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[2010] ZAGPJHC 18
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Landev (Pty) Ltd v Black Eagle Project Roodekrans In re: Black Eagle Project Roodekrans v MEC Department Agriculture Conservation and Environment Gauteng Provincial Government and Others (6085/07) [2010] ZAGPJHC 18 (29 March 2010)
REPUBLIC OF SOUTH AFRICA
SOUTH GAUTENG HIGH COURT, JOHANNESBURG
CASE NO: 6085/07
In the matter between:
LANDEV
(PTY) LTD
Applicant
and
BLACK EAGLE
PROJECT, ROODEKRANS
Respondent
In re:
BLACK EAGLE
PROJECT, ROODEKRANS
Applicant
and
THE MEC: DEPARTMENT OF AGRICULTURE,
CONSERVATION AND ENVIRONMENT,
GAUTENG
PROVINCIAL GOVERNMENT
First Respondent
THE HEAD OF DEPARTMENT: DEPARTMENT
OF AGRICULTURE, CONSERVATION AND
ENVIRONMENT, GAUTENG PROVINCIAL
GOVERNMENT
Second Respondent
LANDEV
(PTY) LTD
Third Respondent
REASONS FOR JUDGMENT
SPILG, J
:
NATURE OF APPLICATION
[1] The third
respondent, Landev (Pty) Ltd, seeks an order directing Black Eagle
Project, Roodekrans (“
Black
Eagle
”),
the applicant in the main application, to provide security for costs
in the amount of R1,25 million alternatively directing
that the
Registrar determines the amount and manner of security to be
provided. Landev also applies for an order that the main
application
be stayed pending the provision of security if ordered.
[2] The
application for security for costs arises from proceedings brought by
Black Eagle to review and set aside the decision
of the MEC:
Department of Agriculture, Conservation and Environment, Gauteng
Provincial Government (“
the
MEC
”)
to dismiss the appeal brought by Black Eagle against a determination
by the Head of Department: Department of Agriculture,
Conservation
and Environment, Gauteng Provincial Government (“
the
HoD
”).
The HoD had authorised Landev, under section 28A of the Environment
Conservation Act 73 of 1989, to develop the remainder
of Phase 2,
Phase 5 and parts of Phases 3 and 4 of the proposed residential
development at Sugarbush Estate (“
Sugarbush
Estate Development
”).
Black Eagle also sought an order to substitute the MEC’s
decision with a court order upholding its appeal against
the HoD’s
decision.
[3] Landev
claims security for costs under Rule 47(1) and relies on the
provisions of section 13 of the Companies Act 61 of 1973.
[4] Section 13 reads:
“
13.
Security
for costs in legal proceedings by companies and bodies corporate. –
Where a
company or other body corporate is plaintiff or applicant in any
legal proceedings, the court may at any stage, if it appears
by
credible testimony that there is reason to believe that the company
or body corporate or, if it is being wound up, the liquidator
thereof, will be unable to pay the costs of the defendant or
respondent if successful in his defence, require sufficient security
to be given for those costs and may stay all proceedings till the
security is given.
”
[5] Black
Eagle is a corporation not for gain registered in terms of the
provisions of section 21 of the Companies Act. It is
therefore
subject to the provisions of section 13 of that Act.
[6] The issue is whether the provisions of section 13 of the
Companies Act ought to be invoked.
LANDEV’S GROUNDS FOR INVOKING SECTION 13
[7] Landev raises a number of grounds for seeking security for
costs. They may be summarised as follows:
Black Eagle
is unable to meet any adverse costs order;
Black Eagle
has litigated recklessly and its protagonists are shielding behind
the corporate veil;
Black Eagle
lacks
locus standi
to litigate.
BASIS OF BLACK EAGLE’S OPPOSITION
[8] Although
conceding that it would only be able to meet
an
adverse costs order from donor funding and disputing essential
averments relied upon by Landev, Black Eagle’s main contention
as to why it is not obliged to provide security is because there is
only a remote prospect of an adverse cost order. It argues
that this
is so because it is engaged in public interest litigation in which it
seeks to review the decisions of the MEC, and effectively
the HOD, on
constitutional grounds that rely on section 24 (environmental
rights), the environmental legislation implemented pursuant
to it,
and PAJA (which gives expression to section 33 (just administrative
action) of the Constitution).
[9]
Black
Eagle also seeks to rely on Landev’s delay in applying for
security.
[10
]
It is appropriate to set out first the way in which the
Constitutional Court and the SCA have been prepared to apply section
13 of the Companies Act.
APPLICATION OF SECTION 13 OF THE COMPANIES ACT
[11] In my
view the decisions in
Giddey
NO v J C Barnard and Partners
[2006] ZACC 13
;
2007 (5) SA 525
(CC),
Kini
Bay Village Association v Nelson Mandela Municipality
[2008] ZASCA 66
;
2009 (2) SA 166
(SCA) and
Zietsman
v Electronic Media Network Ltd and Others
2008 (4) SA 1
(SCA) are to be applied. These cases hold that:
(a)
The
main purpose of section 13 is to discourage vexatious litigation or
litigation where there is no prospect of success by companies
that
are “
…
not effectively at risk of an adverse costs order if unsuccessful
”
because they are unlikely to be able to pay costs thereby resulting
in “
unnecessary
and irrecoverable legal expense
”
by the other party (
Giddey
at para [7].
(b) In
determining whether security for costs is to be provided, a court
must “
…
balance the potential injustice to a plaintiff if it is prevented
from pursuing a legitimate claim
”
should it be required to provide security against the “
…
potential injustice to a defendant who successfully defends the claim
and yet may well have to pay all its own costs in
the litigation
”
(
Giddey
at para [8]).
(c) T
he
party applying for security must demonstrate that the plaintiff or
applicant will probably be unable to pay the costs while the
latter
must demonstrate that “
…
the order for costs might well result in its being unable to pursue
the litigation and should indicate the nature and importance
of the
litigation to rebut a suggestion that it may be vexatious or without
prospects of success
”
(
Giddey
at para [8]).
If a party is
not “
effectively
at risk of an adverse costs order if unsuccessful
”
(as per
Giddey
at p 530C) then the main purpose of section 13 is not triggered.
This situation would also arise where it is unlikely that an
adverse
costs order will be made even though the plaintiff does not appear
to have sufficient financial resources to satisfy
such an order
(
Zietsman
at
paras [19] and [20]).
In exercising
its
discretion as to whether or not to direct security for costs the “
…
mere possibility that an order for security would effectively put an
end to the litigation, which seemingly was the intended
and
inevitable result of section 13,
(is)
not sufficient reason for its refusal
”
(
Kini
Bay
at para
[12]).
Accordingly while a court will
have regard to the litigant’s constitutional right of access
to courts the possibility that
requiring security would effectively
put an end to litigation is “
…but
one of the factors (there is no closed list) a court will consider
in the exercise
[of
its discretion]
, which
involves weighing the potential injustice to the plaintiff or
applicant if it is prevented from pursuing a legitimate
claim,
against the potential injustice to the opposing party if it succeeds
in its defence but cannot recover its costs
”
(
Kini Bay
at
para [12]).
Where the claimant contends that
it is financially sound then a failure to produce financial
statements or other satisfactory
evidence regarding its financial
affairs in order to demonstrate an ability to meet an adverse costs
order (whether out of its
own resources or those it can access) is
likely to weigh against it (
Kini
Bay
at para [15]).
[12] In my view where a public
interest body claims the infringement of a constitutionally protected
right in a case where it is
entitled to litigate, and does not
institute proceedings “
…
vexatiously or in circumstances where they have no prospects of
success
” (
Giddey
at para [7]), good grounds must exist before security ought to be
ordered.
[13] My reasons are twofold.
Firstly, a genuine constitutional challenge, even if unsuccessful, is
unlikely to result in any adverse
costs order (unless the litigation
was frivolous or vexatious) precisely because the default situation
is the innumerable statements
by the Constitutional Court that costs
order should not be awarded against an unsuccessful party who raises
a
bona fide
constitutional issue. Secondly, and being the foundational basis for
the first, is that in order to give effect to the principles
enunciated in the Constitution and to render it a living document by
providing real protection,
bona
fide
litigation by
public interest bodies should not be discouraged through the risk of
adverse costs orders. It is the intervention
by public interest
groups that have contributed enormously to a body of constitutional
law and more particularly to give content
to those rights in the
lives of vulnerable sectors of our society.
CONSTITUTIONAL LITIGATION AND COSTS
[14] The general principles
which a court is obliged to apply in respect of costs in
constitutional litigation has been authoritatively
put to bed in
Trustees For The Time
Being Of The Biowatch
Trust v Registrar,
Genetic Resources and Others
[2009] ZACC 14.
[15] I respectfully believe that
the following principles, relevant to the present enquiry, can be
distilled from the decision
of Sachs J on behalf of the court:
(a) The fundamental concern with
regard to cost orders in constitutional litigation is the effect it
may have in advancing or impeding
constitutional justice (at para
[16]).
(b) Whether or not
constitutional justice will be advanced is not to be considered by
reference to the litigant but rather to the
nature of the issue.
Accordingly the ability of the unsuccessful litigant who has
instituted proceedings on his or her own behalf
and who is readily
able to finance litigation is not a relevant consideration to direct
the payment of costs. Conversely a public
interest group cannot
avoid the consequences of an appropriate sanction in the form of an
adverse cost order if its conduct has
been “
…
vexatious, frivolous, professionally unbecoming or in any other
similar way abusive of the processes of the court
”
(at paras 16 to 18).
(c) The intervention of public
interest groups
has
led to significant decisions that have secured rights and protection
for vulnerable sectors of the public as well as pioneering
constitutional jurisprudence (at para 19).
(d) As a
general rule an unsuccessful party in constitutional litigation
against the State ought not to be ordered to pay costs.
See para 21
supporting the earlier decision of
Affordable
Medicines Trust and Others v Minister of Health and Another
[2005] ZACC 3
;
2006 (3) SA 247
(CC).
(
e)
If government is unsuccessful in a constitutional case then it
should pay the costs of the other side. See para 22 relying
again on
Affordable
Medicines Trust
.
If government is successful then each party bears its own costs (at
para 22 and the cases cited at footnote 26).
(f
)
Where a constitutional issue arises between private parties as a
consequence of an administrative or regulatory role performed
by the
State (such as tender awards or the grant of licences) it does not
mean that the litigation “
should
be characterised as being between the private parties. In essence
the dispute turns on whether the government agencies have
failed
adequately to fulfil their constitutional and statutory
responsibilities
”.
Generally costs should be governed by the fundamental principle of
not discouraging the pursuit of constitutional claims
irrespective of
the number of private litigants involved (at para 28).
(
g)
Where the correct characterisation of the issue is that of private
parties with competing interests seeking a determination
of whether
the State has “
appropriately
shouldered it constitutional and statutory responsibilities
”
then, if the State did not, it should bear the costs of successful
litigants. Ordinarily there should be no costs order
against any
private litigant who became involved. The reason is that such an
approach “
…
locates the risk for costs at the correct door – at the end of
the day, it was the State that had control over its
conduct
”.
See para 56.
(h) However
an unsuccessful party in constitutional litigation should be
appropriately sanctioned with an adverse costs order if
its conduct
has been “
vexatious,
frivolous, professionally unbecoming or in any other similar abusive
of the process of the Court
”.
See para 18.
[16
]
Accordingly, provided the case brought by Black Eagle in substance
involves the determination of constitutional issues and provided
its
conduct is not vexatious or otherwise potentially deserving of
sanction, a court applying the law regarding costs as settled
in
Biowatch
is enjoined not to make a costs award against Black Eagle even if it
is unsuccessful.
[
17] Landev
argues both that the application brought by Black Eagle does not
involve constitutional issues and that it is litigating
vexatiously.
I also understand Landev’s argument that Black Eagle lacks
locus
standi
to institute these proceedings to mean that in doing so Black Eagle
is acting either in a manner abusive of the processes of the
court or
legally is not entitled to litigate. I proceed to deal with these
issues.
NATURE OF BLACK EAGLE’S APPLICATION
[1
8] In
the course of argument and in order to meet Black Eagle’s
reliance on the
Biowatch
case,
Mr
Daniels
appears to contend that the main issue could not be categorised as
involving constitutional litigation. I disagree for the reasons
set
out in the following paragraphs.
[
19] Firstly
as pointed out initially in
Ms
Southwood’s
heads of argument, Black Eagle seeks to review and set aside
decisions made by state officials because they failed to comply or
act within the four corners of the applicable legislation, but rather
acted
ultra
vires
environmental legislation including the National Environmental
Management Principles contained in section 2 of the National
Environmental
Management Act 107 of 1998 (“
NEMA
”)
and the Environmental Conservation Act 73 of 1989 (“
ECA
”).
Black Eagle also relies on what it contends to be an inexplicable
volte
face
by the authorities who previously had declined to give consent and
that there appears to be no new factors to have justified the
change
in position.
[
20] Black
Eagle contends that, as an environmental organisation, it is entitled
to challenge the decision under the provisions of
section 32(2) of
NEMA which read:
“
(1)
Any person or group of persons may seek appropriate relief in
respect of any breach or threatened breach of this Act, including
a
principle contained in Chapter 1, or any other statutory provision
concerned with the protection of the environment or the use
of
natural resources –
in that person’s or group of person’s own interest;
in the interest of, or on behalf of, a person who is, for
practical reasons, unable to institute such proceedings;
in the interest of or on behalf of a group or class of persons
whose interests are affected;
in the public interest; and
in the interest of protecting the environment.
(2) A
court may decide not to award costs against the person who, or group
of persons which, fails to secure the relief sought
in respect of any
breach or threatened breach of any provision including a principle of
this Act or any other statutory provision
concerned with the
protection of the environment or the use of natural resources if the
court is of the opinion that the person
or group of persons acting
reasonably out of a concern for the public interest when the interest
of protecting the environment
and had made due efforts to use other
means reasonably available for obtaining the relief sought.
”
[2
1] Although
NEMA itself is not a constitutional provision, it is the legislation
contemplated in section 24(b) of the Constitution
which provides that
everyone has the right to the protection of the environment for both
present and future generations “
…
through reasonable legislative and other measures
”
that secure the objectives set out in its subsections.
[2
2] In
any event the application of Black Eagle to review the decision
allowing Landev to develop certain phases of the Sugarbush
Estate is
brought under
section 6(2)(d)
of the
Promotion of Administrative
Justice Act 3 of 2000
which similarly constitutes national
legislation contemplated by section 33(3) of the Constitution. See
Bato
Star Fishing (Pty) Ltd v Minister of Environmental Affairs and
Tourism and Others
[2004] ZACC 15
;
2004 (7) BCLR 687
(CC) at para
[22]
and the long title contained in
PAJA.
[2
3] In
Bato
Star
the
court confirmed at para [22] that the control of public power “
is
always a constitutional matter
”.
[2
4] Both
NEMA and PAJA constitute legislation required by the Constitution in
order to secure the protection or advancement of the
respective
rights contained in the Bill of Rights. NEMA and PAJA are each the
legislative articulation of foundational constitutional
principles.
The issues raised in the main application are pre-eminently
constitutional issues.
[
25] I
am satisfied that the issues raised by
Ms
Ternent
on behalf of Black Eagle intrinsically involve constitutional
litigation. Accordingly, unless there is any reason to sanction
the
way it litigates, there ought to be no order for costs granted
against it if it is ultimately unsuccessful. Moreover section
32 of
NEMA, which came into effect prior to the solidification of the body
of law regarding costs in constitutional matters, seeks
to discourage
costs being awarding costs against an unsuccessful public interest
group where it acted reasonably and out of a concern
for the public
interest or in the interest of protecting the environment. The last
proviso to section 32(2) can hardly apply. The
only realistic
recourse against an administrative decision where the authority
persists in its position after internal appeal procedures
have been
exhausted is to proceed by way of review under PAJA to the High
Court.
CONDUCT OF BLACK EAGLE
[26] Landev
has two basic grounds for complaining about the way that Black Eagle
has pursued its application. The basis of the
first complaint is
that Black Eagle is litigating in an entirely reckless and casual
manner with scant regard to the costs that
Landev is obliged to incur
while the controlling minds of Black Eagle are able to avoid the
consequences of their conduct by hiding
behind a corporate entity.
[
27] Mr
Daniels on behalf of Landev referred to Black Eagle’s haphazard
approach to the litigation by reference to it seeking
a postponement
to amend its memorandum and articles of association in order to meet
Landev’s challenge with regard to
locus
standi
but never took steps to effect the amendments. Attention was also
drawn to a further postponement that was granted at Black Eagle’s
request consequent on a firm of attorneys being instructed, yet it
was subsequently established that they did not act on behalf
of Black
Eagle.
[28] It is
difficult to appreciate how the application can be construed as
vexatious
or
otherwise subject to sanction if regard is had not merely to its
length (over 1 000 pages) but to the supporting affidavits of
certain
environmental experts and to the factual grounds relied upon, which
include a letter dated 15 October 2004 addressed by
the Gauteng
Department of Agriculture, Conservation and Environment (“
GDACE”)
dated
15 October 2004 to Landev’s environmental consultant . The
letter referred to the high conservation significance of
the area in
issue, the permanent loss of high agricultural soil potential and the
potential for urban sprawl, and concluded:
“
Based
on the above, and on the grounds of information currently available,
the Department does not support the proposed development.
”
[29] It is
also correct that Black Eagle blew hot and cold with regard to
whether or not it could meet an adverse costs order.
A previous
costs order was only paid once winding-up proceedings were brought.
Black Eagle’s resolve in pursuing the main
application is
demonstrated by the fact that it was able to raise the funds over a
period of time to meet that costs order which
was the basis of the
winding-up application.
[3
0] While
it is also correct that the interim relief sought by Black Eagle was
abandoned this is directly related to Landev not proceeding
with the
development.
[3
1] I
also cannot ignore the fact that Landev has sought to out litigate
Black Eagle through its various procedural challenges. It
eventually
delivered an answering affidavit to the main application in late May
2009 despite the proceedings being launched in
February 2007
[32] The
application for security for costs is brought on notice of motion.
Accordingly provided the explanations by Black Eagle
do not fall
within the exceptional categories identified in
Plascon-Evans
Paints (Pty) Ltd v Van Riebeeck (Pty) Ltd
1984 (3) SA 63
(A) they must be accepted. I find that Black Eagle’s
explanation that it did not act vexatiously or irresponsibly in
conducting
the litigation to be acceptable. Moreover the nature and
importance of the litigation is self-evident. If the authorities
within
the Gauteng Provincial Government failed to comply with their
statutory obligations then the only safeguard to secure the proper
implementation of environmental legislation relating to the area in
question is the present application.
[
33] I
am therefore satisfied that it remains unlikely that an adverse costs
order will be made against Black Eagle should it be
unsuccessful.
[3
4] The
second ground for contending that the application amounts to an
abusive process rests on whether or not Black Eagle has
locus
standi
to pursue an application initially launched by an entity known as
“
the
Sisulu Urban Wildlife Reserve
”
(subcommittee of the Black Eagle Project Roodekrans).
Want
of
locus
standi
is also relied upon to contend that Black Eagle is not entitled to
litigate at all yet it continues to do so. For present purposes
whether irresponsibility in litigating is a factor in requiring
security from a public interest group in these circumstances only
needs to be considered if I find that Black Eagle lacks
locus
standi
.
[
35] I
proceed to make a finding on Black Eagle’s
locus
standi
.
[
36] Mr
Daniels on behalf of Landev argued that Black Eagle’s
activities were limited by its main object and purpose, which
in
terms of its memorandum of association is “
…
to educate and inform the public about the Black Eagles residing in
the National Botanical Gardens, and raptors in general
”.
[
37] It
was contended that all ancillary objects were excluded by virtue of
clause 4 of the memorandum of association. In my view
this is not
the case. Clause 4 provides that the specific ancillary objects
referred to in section 33(1) of the Act which are to
be excluded from
the unlimited ancillary objects of the company are to be stated.
Black Eagle’s statement reads:
“
Any
ancillary objects which are not in accordance with the main object
are hereby excluded
.”
[38]
In
my view, as long as an ancillary object is in accordance with the
main object of educating and informing the public about black
eagles
residing in the Witwatersrand National Botanical Gardens and about
raptors in general the company is able to pursue these
objects and
exercises its capacity to do so. Moreover section 34 of the Act
expressly provides that every company has all the
powers required to
enable it to realise its objects (i.e. plenary powers) and in the
case of Black Eagle, these are only limited
by the exclusion of the
powers referred to in paragraphs (f), (j), (k), (l), (m), (p), (q)
and (s) of Schedule 2 to the Act. These
exclusions are not material
to the issue before me.
[39] If black
eagles or raptors in general become extinct within the Witwatersrand
National Botanical Garden then the purpose of
the company would have
failed.
One of the complaints about this phase of the Sugarbush development
is that it endangers the survival of raptors in the
area including
the Witwatersrand National Botanical Garden and expert testimony has
been submitted on behalf of the applicant in
that regard. This would
at the least put Black Eagle’s
substratum
at
risk of failure, a risk it is entitled to protect itself against.
[
40] In
any event one should be able to interpret the ancillary and plenary
powers accorded by reference to the organisation and
its purpose and
function. The right of a public interest group to litigate in respect
of a breach or threatened breach of the provisions
of NEMA is
provided for in section 32(1) of that Act. I have already referred
to its provisions. In my view, section 32(1) of
NEMA confers
locus
standi
to approach a court for relief in respect of any breach or threatened
breach of NEMA either because it is in that group of persons’
own interest or in the interest of or on behalf of the person who is
for practical reasons unable to institute such proceedings
or if it
is in the public interest or in the interests of protecting the
environment.
[41
] The
nature of the applicant’s main object is consistent with the
advancement of the protection of the raptor’s environment
in
and around the Witwatersrand National Botanical Gardens.
[42]
Under
Roman-Dutch law
locus
standi
was extended to persons who could show that their activities or what
they stood for was adversely affected by the particular conduct
complained of. See
Wood
and Others v Ondangwa Tribal Authority and Ano
1975 (2) SA 294
(A) and
Jacobs
en ń Ander v Waks en Andere
[1991] ZASCA 152
;
1992 (1) SA 521
(AD). In my view there is a sufficient bond between
the interests that can be legitimately undertaken by Black Eagle
under its
memorandum of association and the potential adverse effect
on raptors within the area of Black Eagle’s interests to accord
it
locus
standi
to protect that interest.
[4
3] The
Roman-Dutch law extension of
locus
standi
has been enhanced and entrenched by section 38 of the Constitution
which allows anyone acting in its own interest or anyone acting
in
the public interest to approach a competent court alleging that a
right in the Bill of Rights has been infringed or threatened.
Once
again with reference to
Biowatch
,
unnecessary impediments should not be put in the way of hindering the
advancement of constitutional justice. This would be the
case if an
overly limited view was taken of the plenary powers that are to be
accorded to this public interest group under section
34 of the
Companies Act where its main objects are clearly concerned with the
protection of raptors in the area through the medium
of education. A
good illustration of the need to recognise such ancillary or
plenary powers in respect of a public interest
group is to be found
in
Ditshwanelo
Botswana Centre for Human Rights v
Attorney
General & Another,
[1999] 2
B.L.R.
59
where a human
rights NGO concerned with the general rights of indigenous people in
the Central Kalahari was accorded
locus
standi
to bring a
stay of execution to protect two men from within that area who had
been sentenced to death. These men were unaware
of the application
because communication with them had been precluded. The consequences
had the court not accorded
locus
standi
is self
evident.
[44] It is
clear that very view environmental protection groups would pursue
litigation as a main object. However, where the interests
they seek
to protect are threatened then in order to protect the long-term
realisation of the main object, the legal entity must
have the
ancillary right to litigate against a threatened invasion of the very
right which it seeks to protect or advance or for
which it stands. It
seems hardly likely that according rights to public interest
organisations to litigate in the interests of
protecting a threatened
invasion of a constitutional right can be precluded by an unduly
restricted interpretation of what does
and does not constitute
ancillary powers
intra
vires
the corporation. In my view the constitutional extension of
locus
standi
must inform what is to be understood as constituting ancillary powers
of a public interest organisation that has incorporated itself
as a
section 21 company.
[4
5] In
this regard it may be observed that in order to gain the benefits of
partial exemption from income tax enjoyed by a public
benefit
organisation (PBO) under the Income Tax Act, the undertaking or
activity concerned must be integral and directly related
to its sole
or principle object. In order for this to occur the activity “
…
must be directly connected, linked and associated with the approved
public benefit activity conducted by the (PBO)
”.
Equally
fundamental to obtaining partial tax exemption (which is vital for
the continued existence of a public interest group dependent
on
public funds), is the requirement that the organisation must be
incorporated as a company not for profit under section 21 of
the Act
or must be a trust or an association of persons duly incorporated,
formed or established with a written constitution and
that the sole
or principle object is to carry on at least one of the public benefit
activities listed in Part A of the Ninth Schedule
of the Income Tax
Act 58 of 1962 (IT Act), or as otherwise gazetted by the Minister of
Finance. See generally section 30 read with
section 10(1)(c) and
section 18A of the IT Act.
[46] In order
to obtain partial tax exempt status the tendency is for PBOs to
identify their activities in a way that matches
those listed in the
Ninth Schedule of the IT Act. Paragraph 7 of the Ninth Schedule
deals with conservation, environment and animal
welfare. The only
applicable provision for Black Eagle would be subparagraph (c) which
lists: “
the
promotion of, and education and training programmes relating to,
environmental awareness, greening, cleaning up or sustainable
development projects
”
as an activity of an acceptable philanthropic or benevolent nature.
If regard is had to the other public benefit activities,
excluding
the promotion or advocacy of human rights and democracy, it is
unlikely that any public interest group, which of necessity
requires
tax exempt status as a PBO, would be able to undertake the
constitutional litigation either as contemplated under section
38 of
the Constitution or under section 32(1) of NEMA if its ancillary and
plenary powers did not include a right to litigate on
the very issues
with which it is concerned and involved, if not best informed.
[
47] I
therefore find that Black Eagle enjoys
locus
standi
and to the extent necessary, also has the capacity to institute
proceedings
intra
vires
its memorandum of association.
THE
OTHER
ISSUES
[48
] My
findings make it unnecessary to deal with the question of whether or
not Black Eagle is able to meet any adverse costs order
by reference
to its financial circumstances. I find that on the papers before me
no case is made out that a reasonable possibility
exists that an
adverse costs order will or might be made against Black Eagle having
regard to the legal principles enunciated in
Biowatch
.
[4
9] It
is also unnecessary to refer to the argument presented by Black Eagle
that Landev had unduly delayed in bringing its application
for
security for costs.
COSTS
[50
] The
issue in the main application is whether or not the decisions of the
MEC and HoD ought to be reviewed and effectively set
aside. While
Landev may be a developer it nonetheless is relying on the regulatory
or administrative decisions taken by these
authorities. Only a court
hearing the merits of the matter will be in a position to determine,
if the decisions are to be set aside,
whether they were in part due
to any sanctionable conduct by Landev or whether only the Gauteng
Provincial Government is to bear
the costs.
[51
] In
so far as Black Eagle has successfully opposed this application, the
final outcome of the main hearing will determine whether
or not it is
the successful party and whether the Gauteng Provincial Authorities
ought to be responsible for their costs.
ORDER
[52
] I
accordingly make the following order:
The
application to order the respondent, Black Eagle Project,
Roodekrans, to provide security for costs and further relief
contained
in
the
Notice of Motion dated 5 November 2008 is dismissed.
2. All costs,
including all costs of 25 May 2009, are reserved for determination in
the main application brought by Black Eagle
Project, Roodekrans.
_____________________________
B
S SPILG
JUDGE OF THE SOUTH GAUTENG
HIGH COURT, JOHANNESBURG
DATES
HEARINGS:
2
/
11/2009 AND 3/11/2009
ORDER:
1/03/2010
LEGAL
REPRESENTATIVES
APPLICANT;
ADV
P DANIELS
STRAUSS SCHER INC
RESPONDENT
ADV
T TERNENT (1
st
set of Heads of argument
by
ADV PMG BELTRAMO and ADV P LAZERUS.
2
nd
set by ADV F SOUTHWOOD)
BELL
DEWAR