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[2014] ZASCA 139
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Bengwenyama-Ya-Maswazi Community and Others v Minister for Mineral Resources and Others (783/2013) [2014] ZASCA 139; 2015 (1) SA 197 (SCA); [2014] 4 All SA 539 (SCA) (26 September 2014)
THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
CASE
NO: 783/2013
Reportable
In
the matter between:
BENGWENYAMA-YA-MASWAZI
COMMUNITY
....................................................
First
Appellant
BENGWENYAMA-YA-MASWAZI
TRIBAL COUNCIL
.......................................
Second
Appellant
MIRACLE
UPON MIRACLE INVESTMENTS (PTY)
LTD
...................................
Third
Appellant
and
MINISTER
FOR MINERAL
RESOURCES
.............................................................
First
Respondent
SIZANE
NKOSI
.......................................................................................................
Second
Respondent
NKOTOLA
SAM
NKOSI
...........................................................................................
Third
Respondent
GENORAH
RESOURCES (PTY)
LTD
..................................................................
Fourth
Respondent
Neutral
Citation:
Bengwenyama-ya-Maswazi
Community v Minister for Mineral Resources
(783/2013)
[2014] ZASCA 139
(26 September 2014).
Coram:
Navsa ADP, Brand, Shongwe & Majiedt
JJA and Schoeman AJA
Heard:
22 August 2014
Delivered:
26 September 2014
Summary:
Competing applications for preferent community prospecting rights in
terms of
s 104
of the
Mineral and Petroleum Resources Development Act
28 of 2002
– consideration of whether corporate vehicle can be
used by community to apply for such right – control of company
by community discussed – traditional leadership structures
considered – provisions of
Traditional Leadership and
Governance Framework Act 41 of 2003
examined – held that the
corporate vehicle could rightly be said to be the community for the
purposes of the MPRDA –
held that appellants satisfied the
qualifying criteria set out in the MPRDA and that the Tribal Council
had an existence in law
and that in the circumstances of the case it
was the authoritative voice of the community – held that a
minimum threshold
shareholding satisfied the requirements of the
MPRDA in relation to community benefit and control – held that
concerns expressed
by Constitutional Court in
Bengwenyama
Minerals (Pty) Ltd v Genorah Resources (Pty) Ltd
2011 (4) SA 113
(CC) not heeded by the Department and the respondents
– held that decision to grant mineral rights in part to
respondents
liable to be set aside – held that substituted
order justified.
ORDER
On
appeal from
: The North Gauteng High
Court, Pretoria (Makgoka J sitting as court of first instance).
The
following order is made:
1.
The appeal is upheld.
2.
The conditional cross appeal is dismissed.
3.
The order of the court a quo is substituted with an order in the
following terms:
‘
(i)
It is declared that the Traditional Council of the
Bengwenyama-ya-Maswazi Community is the only authorised
representative of
the first applicant in its dealings with the first
respondent.
(ii)
The prospecting right purportedly issued by the first respondent to
the first applicant on 31 March 2011 is set aside.
(iii)
The first respondent is directed to issue to the third applicant a
full and exclusive prospecting right in respect of the
property
Nooitverwacht 324 KT against proof by the third applicant that it has
amended its shareholders agreement by substituting
the words “74.1
% (seventy four point one per cent)” for the words “70 %
(seventy per cent)” in clause
12.2 of that shareholders’
agreement.
(iv)
The second to fourth respondents are ordered jointly and severally to
pay the applicants’ costs on the attorney and client
scale
including the costs of two counsel.’
4.
The second to fourth respondents are ordered to pay 90 per cent of
the appellants’ costs of appeal on the attorney and
client
scale, including the costs of two counsel.
5.
The fourth respondent is ordered to pay 90 per cent of the
appellants’ costs of the cross appeal on the attorney and
client
scale, including the costs of two counsel.
JUDGMENT
Navsa
ADP (Brand, Shongwe & Majiedt JJA, Schoeman AJA concurring):
[1]
This is one of two related appeals involving contested claims for
preferent prospecting rights to be afforded a community under
section
104 of the Mineral and Petroleum Resources Development Act 28 of 2002
(the MPRDA). The community in question is the Bengwenyama-Ya-Maswazi
Community (the BYMC or the community). This case concerns prospecting
rights on the farm Nooitverwacht (Nooitverwacht) in Sekhukhuneland,
Limpopo Province. The related appeal concerns prospecting rights on
the farm Eerstegeluk (Eerstegeluk), Limpopo Province. The two
appeals
were heard together. There is a degree of overlap and what is stated
in the one judgement will largely apply to the other.
Where there is
a distinction it will be explicitly stated and dealt with. The core
question in both appeals is as follows: Who
is entitled to represent
the BYMC in applying for and holding the prospecting right in
question? Put differently, and perhaps a
little more accurately, in
respect of the present dispute: Is it competent, in terms of s 104 of
the MPRDA, for a company to apply
for and be awarded a preferent
community prospecting right? This involves a consideration of
whether, for the purposes of the MPRDA,
the third appellant, Miracle
Upon Miracle (Pty) Ltd (MUM), can be considered to be a community. An
allied question is whether the
second appellant, the
Bengwenyama-Ya-Maswazi Tribal Council (the Tribal Council), which was
the driving force behind the application
by MUM, has statutory
underpinning. Put differently, the question is whether the Tribal
Council exists in law and, if the answer
is in the affirmative,
whether it can be considered to be the authoritative voice of the
BYMC. A further question, the answer of
which depends on the answers
to those aforementioned, is whether the BYMC exercises sufficient
control over MUM to ensure that
the prescripts of s 104 of the MPRDA
are met. More particularly, whether the benefits contemplated in
affording the preferent prospecting
right will result in real and
tangible benefits for the BYMC.
[2]
There was preceding litigation involving the Tribal Council and the
first and fourth respondents, the Minister for Mineral Resources
(the
Minister) and Genorah Resources (Pty) Ltd (Genorah) respectively,
which culminated in the judgment of the Constitutional Court
in
Bengwenyama Minerals (Pty) Ltd & others v Genorah Resources
(Pty) Ltd & others
2011 (4) SA 113
(CC). In that case, a
decision in 2006 by the Minister to grant Genorah prospecting rights
on the two properties involved in the
present appeals, namely
Nooitverwacht and Eerstegeluk, was set aside. The basis for that
order by the Constitutional Court was
that there had been a lack of
consultation with the BYMC and there had been a failure by the
Minister to provide the appellant
company in that case, which at the
time purported to represent the BYMC’s interests, with an
opportunity to make an application
for a preferent prospecting right.
I shall say more about that case and the parties’ respective
contentions in relation thereto.
The background to the present
dispute is set out hereafter.
[3]
During November 2010, in anticipation of a favourable outcome in the
Constitutional Court case referred to in the preceding
paragraph,
applications for a preferent community prospecting rights in respect
of both Nooitverwacht and Eerstegeluk were prepared
at the instance
of the Tribal Council, using a corporate vehicle, namely MUM. The
applications were then submitted on the same
day that the
Constitutional Court handed down its judgment. The applications were
in MUM’s name and were purportedly brought
in terms s 104(1) of
the MPRDA, which reads as follows:
‘
Any
community who wishes to obtain the preferent right to prospect or
mine in respect of any mineral and land which is registered
or to be
registered in the name of the community concerned, must in terms of
section 16 or 22 lodge such application to the Minister.’
[4]
Despite MUM’s application for an exclusive preferent community
prospecting right the Minister chose, in respect of Nooitverwacht,
to
award ‘the Community’ a 50 per cent share in the
prospecting right alongside MUM. The Minister’s Department,
on
the other hand, issued a prospecting right to ‘the
Bengwenyama-Ya-Maswazi Community’ and made it subject to an
agreement in terms of which Genorah would play a major role. The
second and third appellants are adamant that the Minister and her
Department acted in this manner because Dr Sizane Nkosi, a medical
practitioner, and Mr Nkotola Sam Nkosi, the second and third
respondents respectively, with the full knowledge of Genorah,
fraudulently procured the prospecting right by holding out that they
represented the Bengwenyama-Ya-Maswazi Royal Council as well as the
Tribal Council. In addition, the second and third appellants
claimed
that there was an improper relationship between Genorah and the
Minister’s Department. The relevant part of the document
in
terms of which the preferent prospecting right was granted by the
Department reads as follows:
‘
In
the furthering of the objects of this Act, the Holder is bound by,
where applicable, the provisions of an agreement or arrangement
dated
20
th
December 2011 entered into between the Holder/empowering partner and
Bengwenyama-Ye-Maswati (70%) and Genorah Resources (Pty) Ltd
(30%)
(the empowerment partner) which agreement or arrangement was taken
into consideration for purposes of compliance with the
requirements
of the Act and or Broad Based Economic Empowerment Charter developed
in terms of the Act and such agreement shall
form part of this
right.’
[5]
Significantly, it is unchallenged that the Minister communicated the
decision to award the preferent community prospecting right
in
respect of Nooitverwacht, in the terms referred to in the preceding
paragraph, inter alia to MUM, which in its application made
no
reference to, nor in fact wanted to be involved in any relationship
with Genorah in relation to the prospecting right, or indeed
in
respect of anything else. This is particularly so because of the
preceding litigation culminating in the Constitutional Court
judgment
referred to above, which had a long, troubled and antagonistic
history. As can be seen from what is set out above, Genorah’s
application that was set aside by the Constitutional Court was made
several years before the application presently in contention.
[6]
Following on the grant by the Department of the prospecting right in
the terms set out in paragraph 4, representations were
made to the
Minister by the Tribal Council and MUM to have the prospecting right
granted to MUM exclusively. The Department refused
to accede to a
request by the Tribal Council and MUM for the latter to be afforded
the exclusive preferential prospecting right.
It is that refusal that
led to applications by the three appellants in the North Gauteng High
Court for an order:
(i)
declaring the Tribal Council to be the only authorised representative
of the Community in its dealings with the Minister and
the
Department;
(ii)
preventing Dr Nkosi and Mr Nkosi from continuing fraudulently to pass
themselves off as proper representatives of the Community;
and
(iii)
providing the Department with a clear directive that it should deal
with the first applicant and its chosen representatives
in relation
to the prospecting rights of the Community over Nooitverwacht.
[7]
Furthermore, the appellants sought an order that an exclusive and
undivided prospecting right over Nooitverwacht be awarded
to MUM,
which they assert is the vehicle through which the Tribal Council had
elected to exercise the prospecting rights. In addition,
an order was
sought setting aside the prospecting right purportedly issued by the
Department to ‘the Community’ in
the disputed terms set
out above. In essence, what was sought was an order reviewing and
setting aside the decision of the Minister
to award the Nooitverwacht
prospecting rights jointly to the BYMC and MUM or to ‘the
Community’ and substituting that
decision with a decision to
award the sole prospecting rights over Nooitverwacht to MUM.
[8]
The following can be distilled from the affidavits filed on behalf of
the appellants. First, an application for an exclusive
prospecting
right in terms s 104 of the MPRDA was made by MUM, in which the
Community is the majority shareholder. The applications
for preferent
prospecting rights on both Nooitverwacht and Eerstegeluk were brought
in MUM’s name, subsequent to the favourable
judgment by the
Constitutional Court in the case referred to earlier. As will become
apparent, the extent of the community’s
shareholding in MUM is
material, and will be dealt with later in this judgment.
[9]
Second, the application was brought with the full support of the
Community and its leadership structures. In substantiation,
it was
pointed out that the Community’s Royal Council passed a
resolution in favour of the application using MUM as a vehicle,
as
did the Tribal Council. It is common cause that the Royal Council is
a community structure which has an advisory role. Twenty
nine of the
30 members of the Tribal Council supplied confirmatory affidavits in
relation to the resolution referred to above.
[10]
Third, there was extensive community consultation by the Tribal
Council in relation to the application for a preferent prospecting
right on behalf of the Community. In this regard, a great deal of
detail is supplied by the Tribal Council and MUM, the essence
of
which was not seriously challenged by the second, third or fourth
respondents.
[11]
Fourth, in order to procure a preferent community prospecting right,
Dr Nkosi and Mr Nkosi, whom the appellants referred to
as impostors,
together with Genorah, supplied a number of documents to the
Department in which the impression was created that
their
application was sanctioned by legitimate and representative community
structures. So, for example, they fraudulently furnished
a
shareholders’ agreement in support of their application which
purported to be one by an entity interchangeably described
as the
Tribal Council or Traditional Council. In support of that
application, which purported to be one by the Community, a
‘Subscription
and Shareholders’ Agreement’ was
provided which claimed to be one involving ‘the
Bengwenayama-Ye-Maswati Tribal
Council’, ‘Genorah
Resources (Pty) Ltd’ and ‘Nkosi Platinum (Pty) Ltd’.
Clause 2.2 of that agreement
provided that Nkosi Platinum would
‘become the corporate entity by means of which, the
Bengwenyama-Ye-Maswati Traditional
Community shall exercise all its
rights under the provisions of section 104 of the MPRDA’.
Clause 5.1 of the agreement contained
two suspensive conditions:
‘
5.1.1
Bengwenyama-Ye-Maswati Traditional Community obtains a preferent
right to prospect under the provisions of section 104 of
the MPRDA.
5.1.2
Genorah Resources (Pty) Ltd becomes the technical and financial
partner in relation to the preferent right referred to in
5.1.1.’
On
the last page of what the Tribal Council and MUM describe as the
fraudulent agreement, it was signed by Dr Nkosi on behalf of
‘Bengwenyama-Ye-Maswati Traditional Council’.
[12]
Furthermore, the ‘impostors’ attached a document in
support of their application, entitled ‘Genorah Resources
(Pty)
Ltd’, purporting to provide information about Genorah and in
which the following statements are made:
‘
Genorah
Resources is a Black owned South African company with a broad base of
South African shareholders which include Local Tribal
Authorities in
the Limpopo province and the Women’s Agricultural Association.
.
. .
Genorah
Resources
supports the legitimate Tribal Structures
in the
areas that they are prospecting and in favor of creating sustainable
opportunities for equity participation by all its communities.’
(My emphasis.)
This
document is admitted and strikingly, neither the second, third or
fourth respondents in their answering affidavits provide
a more
precise description or explanation of the Tribal Authorities referred
to, nor do they provide further details of the ‘legitimate
Tribal Structures’ that they refer to.
[13]
In yet another document attached to the application of the
‘impostors’ is a document entitled ‘Strategy for
Rural and Community Development and Upliftment’ which, on its
very first page, creates the impression that the application
has the
approval of the Royal Council. Genorah’s response to the
allegations that this document, like the others, is part
of the
fraudulent scheme by the ‘impostors’ is telling:
‘
As
appears from paragraph 141 of the second and third respondents’
answering affidavit, they allege that they do have the
support of
members of the royal council. I again point out that although
references are made repeatedly in the founding affidavit
to the
“tribal council”, the royal council and the traditional
council, and although it is evident that there was a
level of
confusion regarding the legal status of these various bodies, it is
evident that everything done by the second and third
respondents was
done by them for and on behalf of the Bengwenyama community and
resulted in the award of prospecting rights, not
to the second and
third respondents, but to the Bengwenyama community as principal for
whom they acted, as agent.’
[14]
Dr Nkosi and Mr Nkosi for their part, in their answer to the
appellant’s allegations concerning their fraudulent behaviour
and without providing the details and specifics that are supplied on
behalf of the second and third appellants, say in general
terms that
they have the support of the Royal Council.
[15]
In similar vein, so say the Tribal Council and MUM, the ‘impostor’
applicants made a presentation to the Department
in support of their
application for a preferent community prospecting right. The
following appears on the second page in large
font and in bold:
‘
BENGWENYAMA
– YE – MASWATI
ROYAL
COUNCIL
BENWENYAMA-YE-MASWATI
TRIBAL COUONCIL
in
partnership with
GENORAH
RESOURCES (PTY) LTD
Application
for a Preferent Right to Prospect in terms of Section 104 of the
MPRDA, 2002 (Act 28 of 2002) on the Farms:
Eerste
Geluk 327KT
(Portion 2 and Remaining
Extent)
Nooitverwacht
324KT
(Portion 1 and 2);
Greater
Tubatse Municipality, Sekhukhune Region, Limpopo Province’
[16]
In his response to the first and second appellants’ charge that
this document was part of the fraudulent scheme, Dr Nkosi,
once again
without relying on any specifics or decisions by the Royal Council,
reiterates that he has its support. Inter alia,
he said the following
about the reference in the document to the Tribal Council:
‘
144.6
. . . As far [as] a reference to Bengwenyama-Ye-Maswati Tribal
Council is concerned this was an error which I would have rectified
if I had seen it prior.
144.7
The application was at all times a community application.’
[17]
Likewise, in an environmental management plan the ‘impostors’
submitted in support of their application, the applicant
is indicated
as follows:
‘
Bengwenyama-Ye-Maswati
Royal Council and Traditional Council.’
Under
the heading ‘Biographic Details of the Applicant’, the
full name of the Applicant for the prospecting right was
supplied as
follows:
‘
Bengwenyama-Ye-Maswati
Royal Council and Traditional Council.’
Importantly,
under the heading ‘UNDERTAKING’ which appears in capital,
large font and in bold the following is stated:
‘
I,
Dr S. Nkosi, on behalf of the applicant (Bengwenyama-Ye-Maswati Royal
Council) for a Preferent / prospecting Right hereby declare
that the
above information is true, complete and correct. I undertake to
implement the measures as described in Sections F and
G hereof. I
understand that this undertaking is legally binding and that failure
to give effect hereto will render me liable for
prosecution in terms
of Section 98 (b) and 99(1)(g) of the Mineral and Petroleum Resources
Development Act, 2002 (Act 28 of 2002).
I am also aware that the
Regional Manager may, at any time but after consultation with me,
make such changes to this plan as he/she
may deem necessary.’
[18]
Dr Nkosi’s response to that document is the same as his earlier
responses. I return to the other material assertions
on behalf of the
appellants.
[19]
Fifth, the ‘impostors’ knew they had no authority to
represent the Community or the Tribal Council and that Genorah
must
have been aware of the fact, particularly since the machinations
resorted to by the ‘impostors’, in collusion
with
Genorah, occurred shortly after the decision by the Constitutional
Court case referred to above, from which it is clear that
it would be
unlikely for the Community or the Tribal Council to be involved with
Genorah. Put succinctly, the suggestion by the
Tribal Council and MUM
is that the application by the ‘impostors’ was
opportunistic and was a blatant attempt to circumvent
the
Constitutional Court judgment.
[20]
Sixth, the Department unquestioningly accepted the application of the
‘impostors’ and Genorah. The Tribal Council
and MUM
accused the Department of having an improper relationship with Dr
Nkosi, Mr Nkosi and Genorah, which they say is evident
from
documentation produced, with the obvious assistance of Genorah for
the Australian Securities Exchange, after the Constitutional
Court
case referred to above, indicating clearly that they expected their
impugned application to be fast-tracked by the Department
and for it
to be granted.
[21]
Seventh, the ‘impostors’ failed to consult with the
recognised leadership structures within the Community, and
any
consultations they assert they were involved in with the Community in
general, were, in contradistinction to the consultation
by the Tribal
Council and MUM, at best, cursory and negligible. Such details as are
provided by Dr Nkosi, Mr Nkosi and Genorah
concerning a community
consultation process pale into insignificance when compared to what
was asserted by the Tribal Council and
MUM regarding
their
consultative efforts.
[22]
Eighth, despite trenchant criticism of the Minister and his
department by the Constitutional Court in the earlier case concerning
their treatment of the Bengwenyama-Ya-Maswazi Community and its then
corporate vehicle, Bengwenyama Minerals (Pty) Ltd, the Department’s
behaviour continued unabated, to the detriment of the BYMC in the
present case. In this regard, at para 73 of the Constitutional
Court
judgment the following appears:
‘
It
seems to me that these provisions of the Act create a special
category of right for these communities, in addition to their rights
as owners of the land, namely to apply for a preferent right to
prospect on their land. It is only where a prospecting right has
already been granted on communal land that the preferent right may
not be granted. It therefore appears to me that any application
for a
prospecting right under s 16 of the Act that might have the effect of
disentitling a community of its right to apply for
a preferent
prospecting right under s 104 of the Act, materially and adversely
affects that right of a community. Before a prospecting
right in
terms of s 16 may be granted under those circumstances, the community
concerned should be informed by the department of
the application and
its consequences, and it should be given an opportunity to make
representations in regard thereto. In an appropriate
case that would
include an opportunity to bring a community application under s 104
prior to a decision being made on the s 16
application.’
[23]
The Tribal Council and MUM allege that the Department continued to
treat them abysmally, despite numerous attempts by them
to engage the
Department in discussion. I interpose to state that the Department,
notwithstanding the emphatic attack on its integrity
and modus
operandi by the Tribal Council and MUM, chose not to participate in
the present litigation – an aspect to which
I will revert in
due course.
[24]
At this stage, it is necessary to consider the bases of Dr Nkosi, Mr
Nkosi and Genorah’s opposition to the application
by the Tribal
Council and MUM for the orders set out in para 6 above. First, they
denied that the first appellant, described as
the
Bengwenyama-Ya-Maswazi Community, has any existence or capacity in
law. This probably flows from the amorphous nature of that
description. It is necessary to record that before us, counsel on
behalf of the Tribal Council and MUM accepted that the first
appellant, as described, is an amorphous entity and that it could
rightly be said that the description of the first appellant begs
the
question that falls for consideration and determination in the two
appeals. Counsel conceded that we could discount considering
the
first appellant as a party to the litigation but insisted that this
should in no way detract from the second and third appellants’
case. Second, they denied that the Tribal Council has an existence as
a legal person. This means that the Tribal Council’s
capacity
to litigate was brought into question. Third, the nature and extent
of the Tribal Council’s authority to determine
the affairs of
the BYMC to the exclusion of others is implicated. Fourth, MUM’s
standing to be awarded a community preferent
prospecting right in
terms of s 104 of the MPRDA was challenged. The question arises
whether the qualifying criteria set out in
s 104(2) were met by MUM.
Fifth, whether the substituted order sought was competent. Lastly,
whether the Tribal Council and MUM
provided a sustainable basis for
setting aside the award of the prospecting right in the terms
referred to in para 7 above.
[25]
Not content merely to resist the relief sought by the Tribal Council
and MUM, Genorah resorted to a counter application in
terms of which
it sought, inter alia the following orders:
‘
1.
Declaring that –
1.1
The third applicant, Miracle Upon Miracle Investments (Pty) Ltd, is
not a “community” as defined for purposes of
section 1
and 104 of the Mineral and Petroleum Resources Development Act, 28 of
2002 (“the MPRDA”);
1.2
The grant to the third applicant, of a preferent right to prospect
under section 104 of the MPRDA, is
ultra vires
the provisions
of section 104 of the MPRDA read with section 1 thereof;
2.
To the extent necessary, reviewing and setting aside the decision of
the first respondent, the Minister for Mineral Resources
(“the
Minister”), to grant to the third applicant a preferent right
to prospect over the farm Nooitverwacht, which
decision was taken by
the first respondent on or about 28 February 2012;
3.
In the event of the above honourable Court declining to grant the
relief sought in prayers 1 and 2 above and upholding any of
the
applicants’ claims to relief under the Notice of Motion dated
12 October 2011, reviewing and setting aside the decision
of the
Minister, taken on or about 28 February 2012, in which the Minister
granted jointly to the third applicant and to the Bengwenyama
Ye
Maswati Community a preferent prospecting right, in accordance with
section 104 of the MPRDA, for a period of five years in
respect of
the farm Nooitverwacht 324 KT; . . . .’
[26]
The high court (Makgoka J) did not pause to consider the Tribal
Council’s status as a legal person. It was content to
conclude
that the BYMC does not necessarily speak with one voice and
ultimately concluded that it could not come to the assistance
of the
Tribal Council and MUM, as they had failed to establish that the
latter was the sole representative of the community in
matters
concerning the award of prospecting rights on the farm. The high
court considered the provisions of ss 104(2)(
a
)-(
c
) of
the MPRDA, which outline certain preliminary issues to be considered
in the grant of a preferent right, and which read as follows:
‘
(
a
)
the right shall be used to contribute towards the development and the
social upliftment of the community;
(
b
)
the community submits a development plan, indicating the manner in
which such right is going to be exercised;
(
c
)
the envisaged benefits of the prospecting or mining project will
accrue to the community in question; . . . .’
[27]
The high court then concluded that it could see nothing wrong in
principle with the Minister’s decision to award the
prospecting
right jointly to MUM and ‘the community’. Makgoka J, at
para 19 of his judgment, stated the following:
‘
If
the applicants’ position that the community controls MUM is
sustainable, there should not be any difficulty in accepting
the
Minister’s decision. It should be borne in mind that the
Minister’s decision is not dependent on anything else
other
than the considerations referred to [in]
s 104(2),
key among which, is clearly the benefit of the
community from the exploitation of its natural resources. It is not
about commercial
enterprises like MUM or Genorah. In short, the fact
that the community has decided to pursue its application for
prospecting rights
through a corporate vehicle, does not divest the
Minister of her obligations to ensure that the objectives of the Act
are realised
when prospecting rights are awared.’
[28]
In respect of the Tribal Council’s allegations concerning the
‘impostors’, the court below readily accepted
the
ipse
dixit
of Dr Nkosi and Mr Nkosi that the agreement involving
Genorah was authorised by the Community and it was satisfied that
they had
the mandate of at least a section of the community to pursue
a s 104 application on their behalf. Makgoka J did, however, accept
that on the face of it, Dr Nkosi did not have the mandate of the
Traditional Council in whose name the agreement was signed, but
concluded that it did not detract from the fact that a sizeable
number of community members entrusted him with that mandate.
[29]
Insofar as the Minister’s lack of participation in the
litigation was concerned, Makgoka J noted that it was regrettable
that the Minister took no part, leaving some room for a measure of
speculation. He stated that the court could have benefited from
the
Minister’s participation, but concluded that it appears from
the terms of the prospecting right that the interests of
the
community weighed heavily with the Minister and the Department in
their decision. Notwithstanding the Minister’s lack
of
participation, the court below held that the Minister was correct in
awarding the prospecting rights to MUM
and
the Community,
particularly because there were divisions within the latter.
[30]
Makgoka J considered community shareholding in respect of the
corporate entities, namely, MUM and Genorah, to be essential.
He
thought it worth mentioning that the shareholding agreement involving
Genorah provided for 70 per cent of the shares to be held
by the
community whilst MUM afforded the community only 51 per cent. Makgoka
J dismissed the application by the Tribal Council
and, in respect of
Genorah’s counter application, concluded that there was ‘simply
no merit’ to it. He took the
view that the Constitutional
Court, in the judgment referred to above, had recognised the right of
the community to pursue its
own application through the use of a
corporate vehicle. He went on to reason that in an application for a
preferent community prospecting
right, the community has to show that
it has the technical and financial resources to pursue the right to
its conclusion. He consequently
dismissed the counter application.
[31]
It is against those orders that the present appeal by the Tribal
Council and MUM and the cross-appeal by Genorah are directed.
Legitimacy/Standing
of the Tribal Council
[32]
Since the application by MUM was driven by the Tribal Council, I
consider the question of its legitimacy the proper place to
start
answering the questions posed in the present appeal. Historically, by
means of individual proclamations, 774 traditional
authorities
(previously referred to as tribal authorities) were established for
traditional communities with the geographical jurisdiction
of each
being specifically defined. Traditional leaders were appointed by the
apartheid government and subsequently by homeland
governments. This
was the position when the Black Authorities Act 68 of 1951 was made
applicable to South Africa in its entirety.
This appears to a large
extent still to be the legislative context pertaining to traditional
leadership and institutions in our
country.
[1]
It appears to be generally accepted that this type of recognition of
traditional leadership was an attempt by colonial and apartheid
governments to manipulate and control the institutions of traditional
leadership. The Traditional Leadership and Governance Framework
Act
41 of 2003 (the TLGFA) provides for the recognition of traditional
communities, traditional councils and leadership. It is
in line with
ss 211 and 212 of the Constitution. Section 211 provides:
‘
(1)
The institution, status and role of traditional leadership, according
to customary law, are recognised, subject to the Constitution.
(2)
A traditional authority that observes a system of customary law may
function subject to any applicable legislation and customs,
which
includes amendments to, or repeal of, that legislation or those
customs.
(3)
The courts must apply customary law when that law is applicable,
subject to the Constitution and any legislation that specifically
dealt with customary law.’
Section
212 reads as follows:
‘
(1)
National legislation may provide for a role for traditional
leadership as an institution at local level on matters affecting
local communities.
(2)
To deal with matters relating to traditional leadership, the role of
traditional leaders, customary law and the customs of communities
observing a system of customary law –
(
a
)
national or provincial legislation may provide for the establishment
of houses of traditional leaders; and
(
b
)
national legislation may establish a council of traditional leaders.’
[33]
Section 2 of the TLGFA is of importance and stipulates:
‘
(1)
A community may be recognised as a traditional community if it –
(
a
)
is subject to a system of traditional leadership in terms of that
community’s customs; and
(
b
)
observes a system of customary law.
(2)(
a
)
The Premier of a province may, by notice in the
Provincial
Gazette
, in accordance with provincial legislation and after
consultation with the provincial house of traditional leaders in the
province,
the community concerned, and, if applicable, the king or
queen under whose authority that community would fall, recognise a
community
envisaged in subsection (1) as a traditional community.
(
b
)
Provincial legislation referred to in paragraph (
a
) must –
(i)
provide for a process that will allow for reasonably adequate
consultation with the community concerned; and
(ii)
prescribe a fixed period within which the Premier of the province
concerned must reach a decision regarding the recognition
of a
community envisaged in subsection (1) as a traditional community.
(3)
A traditional community must transform and adapt customary law and
customs relevant to the application of this Act so as to
comply with
the relevant principles contained in the Bill of Rights in the
Constitution, in particular by –
(
a
)
preventing unfair discrimination;
(
b
)
promoting equality; and
(
c
)
seeking to progressively advance gender representation in the
succession to traditional leadership positions.’
[34]
Section 3 of the TLGFA reads as follows:
‘
(1)
Once the Premier has recognised a traditional community, that
traditional community must establish a traditional council in
line
with principles set out in provincial legislation.
(2)(
a
)
A traditional council consists of the number of members determined by
the Premier by formula published in the
Provincial Gazette
,
after consultation with the provincial house, in accordance with the
guidelines issued by the Minister by notice in the
Gazette.
(
b
)
At least a third of the members of a traditional council must be
women.
(
c
)
The members of a traditional council must comprise –
(i)
traditional leaders and members of the traditional community selected
by the senior traditional leader concerned who is an
ex officio
member and chairperson of the traditional council, for a term of five
years aligned with the term of office of the National House
of
Traditional Leaders, in terms of that community’s customs,
taking into account the need for overall compliance with paragraph
(
b
); and
(ii)
other members of the traditional community who are democratically
elected for a term of five years aligned with the term of
office of
the National House of Traditional Leaders and who must constitute 40%
of the members of the traditional council.
(
d
)
Where it has been proved that an insufficient number of women are
available to participate in a traditional council, the Premier
concerned may, in accordance with a procedure provided for in
provincial legislation, determine a lower threshold for the
particular
traditional council than that required by paragraph (
b
).
(3)
The Premier concerned must, by notice in the
Provincial Gazette
and in accordance with the relevant provincial legislation, recognise
a traditional council for that traditional community within
a defined
area of jurisdiction.’
The
Limpopo Traditional Leadership and Institutions Act 6 of 2005 (the
Limpopo Act), in the case of the BYMC, is the envisaged provincial
legislation. Section 3(1) of the Limpopo Act contemplates that a
community envisaged by s 2(1) of the TLGFA may apply to the Premier
in writing for recognition as a Traditional Community.
[35]
It was submitted on behalf of Genorah and Dr Nkosi and Mr Nkosi that
within the TLGFA and the Limpopo Act there is no entity
such as a
Tribal Council, which is the description of the second appellant. The
Tribal Council and MUM’s response to this
assertion is that it
is merely a case of imprecise nomenclature. It was pointed out that,
as recorded in the Constitutional Court’s
Bengwenyama
judgment, the Community has lived on Nooitverwacht for more than a
century. It asserted that it has always functioned as a ‘Traditional
Council’ as contemplated by the TLGFA and the Limpopo Act and
that it has at all material times operated with the recognition
of
the Limpopo Provincial Government as the BYMC’s Traditional
Council, and that it is chaired by the Regent. What is unchallenged
is that the BYMC has maintained its status as a traditional
community.
[36]
The respondents asserted that in order for a traditional council as
envisaged in the legislation to be established, the prescripts
of s
2(2)(
a
) of the TLGFA set out above must be observed. More
particularly there must be a notice in the Provincial Gazette, in
accordance
with provincial legislation and after consultation with
the provincial House of Traditional Leaders, the community concerned,
and
if applicable, the king or queen under whose authority the
community would fall. None of this, they contend, has occurred. The
submissions on behalf of the respondents failed to take into account
s 28 of the TLGFA, which deals with transitional arrangements.
Subsections 28(1)-(4) provide:
‘
(1)
Any traditional leader who was appointed as such in terms of
applicable provincial legislation and was still recognised as a
traditional leader immediately before the commencement of this Act,
is deemed to have been recognised as such in terms of section
9 or
11, subject to a decision of the Commission in terms of section 26.
(2)
A person who, immediately before the commencement of this Act, had
been appointed and was still recognised as a regent, or had
been
appointed in an acting capacity or as a deputy, is deemed to have
been recognised or appointed as such in terms of section
13, 14 or
15, as the case may be.
(3)
Any “tribe” that, immediately before the commencement of
this Act, had been established and was still recognised
as such, is
deemed to be a traditional community contemplated in section 2,
subject to –
(
a
)
the withdrawal of its recognition in accordance with the provisions
of section 7; or
(
b
)
a decision of the Commission in terms of section 26.
(4)
A tribal authority that, immediately before the commencement of this
Act, had been established and was still recognised as such,
is deemed
to be a traditional council contemplated in section 3 and must
perform the functions referred to in section 4: Provided
that such a
tribal authority must comply with section 3(2) within seven years of
the commencement of this Act.’
[37]
In their replying affidavit, the Tribal Council and MUM stated that,
within the BYMC, the authoritative body that spoke on
behalf of the
community was always known as the Tribal Council. In this regard,
they refer to the manner in which the ‘impostors’
and
Genorah themselves used the expressions ‘Tribal Council’
and ‘Traditional Council’ interchangeably.
On behalf of
the Tribal Council it was pointed out that it was established and
recognised as the Bengwenyama-Ya-Maswazi-Elulu Tribal
Authority
(later re-named the Traditional Authority) on 26 June 1964, in terms
of s 2 of the Black Authorities Act 68 of 1951 and
that Chieftainess
Alice Namawene Nkosi was recognised as the traditional leader of the
community. In substantiation, reliance was
placed on GNR 948 of 26
June 1964 in terms of which the Bengwenyama Tribal Authority was to
comprise, in addition to the Chief
of the tribe, not less than 15 and
not more than 21 councillors.
[38]
According to the Tribal Council, councillors together with the
Chieftainess continued to tend to the affairs of the community.
In
1982 a new Kgosi was appointed and officially recognised. So, the
Tribal Council stated, that when the TLGFA came into force
on 24
September 2004, the BYMC, in terms of s 28 of that Act, continued to
enjoy the recognition it had been afforded earlier.
Section 3(2) of
the TLGFA, set out in para 34 above, which seeks to ensure that
governance of traditional communities is progressively
in line with
constitutional prescripts, dictates measures to ensure a degree of
democratic elections to traditional councils as
well as increasing
gender representivity. Section 28(4) of the TLGFA, set out above,
makes it mandatory for those measures to be
implemented within seven
years of the commencement of that Act. The Tribal Council and MUM
insist that those measures have been
taken within the stipulated
timeframe. Unsurprisingly, no opportunity was sought by and on behalf
of Genorah and Dr Nkosi and Mr
Nkosi to counter any of these factual
assertions.
[39]
I agree with the submissions made on behalf of the Tribal Council and
MUM that the former’s description does not detract
from the
fact that it is a constitutional and statutorily established
institution. Section 4 of the TLGFA sets out the functions
of a
traditional council, which principally is to administer the affairs
of the traditional community in accordance with custom
and tradition.
In terms of s 4(1)(
g
) a traditional authority has the function
of ‘participating in development programmes of municipalities
and of the provincial
and national spheres of government’. In
terms of s 4(1)(
h
) a traditional council is empowered to
promote the ideals of co-operative governance, integrated development
planning, sustainable
development and service delivery. As pointed
out in
Lawsa
above para 14, customary institutions such as the
Royal Council and general meetings of the community have by and large
remained
intact within traditional societies, notwithstanding the
absence of legislative sanction. Section 10 of the Limpopo Act
renders
a traditional council responsible for liaising with other
organs of state in relation to a community’s interests and
affairs.
That Act also makes clear that property vested in a
traditional community is controlled by that community’s
traditional council,
by stipulating that:
‘
24.
Funds of a traditional council consists of –
.
. .
(
c
)
all monies derived from any property in possession of the traditional
community concerned; . . . .’
[40]
Having regard to the legislative underpinning referred to above, and
to the extensive community consultation process the appellants
demonstrated that they had embarked upon, in relation to the
circumstances of this case I can hardly think of a more authoritative
voice for the community than the Tribal Council. In my view the
Tribal Council and MUM have demonstrated the Tribal Council’s
de facto
existence for a century and have proven its legal
existence for much of that time.
Legislative
framework underpinning preferent prospecting rights
[41]
I turn to a consideration of s 104 of the MPRDA as the background
against which MUM’s competence to apply for a preferent
community prospecting right is to be adjudicated. I reproduce s
104(1) here for ease of reference. It reads:
‘
(1)
Any community who wishes to obtain the preferent right to prospect or
mine in respect of any mineral and land which is registered
or to be
registered in the name of the community concerned, must in terms of
section 16 or 22 lodge such application to the Minister.’
[42]
Section 104(2) sets out the prerequisites for the grant of such a
right. It reads as follows:
‘
(2)
The Minister must grant such preferent right if the provisions of
section 17 or 23 have been complied with: Provided that –
(
a
)
the right shall be used to contribute towards the development and the
social upliftment of the community;
(
b
)
the community submits a development plan, indicating the manner in
which such right is going to be exercised;
(
c
)
the envisaged benefits of the prospecting or mining project will
accrue to the community in question; and
.
. .
(
e
)
section 23(1)(
e
) and (
h
) is not applicable.’
[43]
Section 17(1)(
a
) of the MPRDA, in turn, provides, inter alia:
‘
(1)
The Minister must within 30 days of receipt of the application from
the Regional Manager, grant a prospecting right if –
(
a
)
the applicant has access to financial resources and has the technical
ability to conduct the proposed prospecting operation optimally
in
accordance with the prospecting work programme; . . . . ’
[44]
Likewise, ss 23(1)(
b
) and (
c
) of the MPRDA, which are
specifically referred to in s 104, provide:
‘
(1)
Subject to subsection (4), the Minister must grant a mining right if-
.
. .
(
b
)
the applicant has access to financial resources and has the technical
ability to conduct the proposed mining operation optimally;
(
c
)
the financing plan is compatible with the intended mining operation
and the duration thereof; . . . .’
Whether
MUM is entitled to exercise preferent prospecting rights
[45]
Resorting to modern language, it was submitted on behalf of the
Tribal Council and MUM, that in the real world of commerce
and high
finance, it was naïve to imagine that a traditional community
would, without more, be able to raise sufficient finance
and gather
the required technical expertise in order to properly utilize a
prospecting right. In order for a viable commercial
enterprise to
materialise, collaboration with commercial institutions is
inevitable. It was pointed out that even the Constitutional
Court in
the
Bengwenyama
matter recognised Bengwenyama Minerals (Pty)
Ltd as a legitimate vehicle through which the community could
exercise the rights
afforded in terms of s 104 and be granted
preferent prospecting rights.
[46]
In the present case, that objective was sought to be met by a
resolution by the Tribal Council that MUM be the vehicle through
which the application for a preferent prospecting right should be
made. Whether the prescripts of ss 104(2)(
a
) to (
c
)
have been met does in some measure depend on the degree of
shareholding by the community in MUM and whether it is adequate to
meet the envisaged objectives.
[47]
That leads us to the issue pertinently raised on behalf of the
respondents, namely that the MUM shareholders’ agreement
proves
that the BYMC does not control the company and furthermore that,
properly explored, such interest as the community has,
can
effectively be diluted to the point where it can be outvoted and the
financial benefit accruing to it will be negligible. As
I understand
the submissions, it means not only that the BYMC does not exercise
control over MUM, but that the shareholders’
agreement has the
effect that the prescripts of s 104(2)(
a
) to (
c
) of the
MPRDA are not met.
[48]
The MUM shareholders’ agreement indicates that Nurinox (Pty)
Ltd (Nurinox) holds 51 per cent of the shares in MUM and
Atlantic
Nominees (Pty) Ltd (Atlantic) 49 per cent. The sole shareholder in
Nurinox is the BYMC. Superficially at least, the BYMC
appears to be
the majority shareholder. However, in respect of control and voting
rights the following must be noted: First, both
Atlantic and Nurinox
are each entitled to appoint a maximum of three directors to the
Board. Each director has a single vote. Resolutions
are passed by
simple majority vote. In the event that a majority is not obtained,
the resolution shall be deemed to have failed.
That notwithstanding,
there are deadlock breaking mechanisms, namely that a matter shall
then be put to the shareholders. In the
event of a deadlock ensuing
at that level, mediation is provided for.
[49]
The respondents, in substantiation of their submissions referred to
in para 47 above, point to clause 12.2 of the MUM shareholders’
agreement, juxtaposed against clause 17.4. Clause 12.2 provides:
‘
12.2
Neither the Shareholders, nor the directors of the Company, as the
case may be, shall be entitled to decide,
resolve or act on any of
the matter in Appendix 1 without the prior written consent of the
Shareholders holding not less than 70
% (seventy percent) of the
entire issued Share Capital of the Company.’
Clause
17.4 reads as follows:
‘
17.4
To the extent that the Issued Shares are at any time offered to the
existing Shareholders of the Company. In accordance with
clauses 17.3
and 17.4 above, the Parties undertake to ensure that HDSA’s
shall at all times hold:
17.4.1
at least 26% of the shares in the issued share capital of the
Company, or;
17.4.2
the minimum percentage of shares in the issued share capital of the
Company as stipulated in the Mining Charter and the MPRDA
from time
to time;
whichever
percentage is the greater.’
[50]
The Tribal Council and MUM contend that clause 12.2 ensures a veto
right by the BYMC, which effectively means that it can block
any
resolution not in the BYMC’s interest. The respondents on the
other hand contend that, since it is at least notionally
possible in
terms of clause 17.4 for the BYMC’s shareholding to dilute to
below 30 per cent, the safety measure in clause
12.2 contended for by
the Tribal Council and MUM is effectively nullified.
[51]
Recognising the submissions on behalf of the respondents set out in
the preceding paragraph as presenting a legitimate concern,
counsel
on behalf of the Tribal Council and MUM suggested a substituted order
in relation to clause 12.2 in the following terms:
‘
Directing
the first respondent to issue to the third applicant a full and
exclusive prospecting right in respect of the property
Nooitverwacht
324KT against proof by the third applicant that it has amended its
shareholders agreement by substituting the words
“74.1%
(seventy four point one percent)” for the words “70%
(seventy percent)” in clause [12.2] of that
shareholders’
agreement.’
I
believe this amendment adequately addressed the respondents’
concerns, and safeguards the share-holding of the BYMC in MUM.
[52]
It is now necessary to deal with one further submission on behalf of
the respondents, namely that in adjudicating the question
of MUM’s
entitlement to apply for a prospecting right in terms of s 104 of the
MPRDA, this court should bear in mind an established
principle, being
that companies have an existence distinct from that of their
shareholders. In this regard reliance was placed
on
Goldberg NO v
P J Joubert Ltd
1960 (1) SA 521
(T), more particularly the
following at 525C-D:
‘
It
is therefore clear that in law neither the applicant as a shareholder
in the respondent company, nor for that matter the respondent
itself
as the owner of all the shares in the subsidiary company which owns
the manufacturing or producing business or undertaking,
has any
proprietary or legal interest in that business. If the business makes
a profit, and if it is decided that the subsidiary
should pay a
dividend out of such profit to its shareholders, the respondent
company would become entitled to its due share of
the dividend
declared; of course in its case, it may be the whole dividend.’
[53]
In my view the latter submission misses the point. The question must
surely be whether, adopting a purposive approach, the
BYMC can
rightly be said to be applying for the preferent community
prospecting right, in terms of s 104 of the MPRDA, through
MUM? The
Constitutional Court in
Bengwenyama
, after setting out the
objects of the MPRDA, said the following in paras 30 and 31:
‘
When
interpreting a provision of the Act any reasonable interpretation
which is consistent with the objects of the Act must be preferred
to
one that is inconsistent with the object of the Act, and to the
extent that the common law is inconsistent with the Act, the
Act
prevails.
In
broad terms the Act seeks to attain its transformation and
empowerment aims by making the State the custodian of the country’s
mineral and petroleum resources, and by placing control of the
exploitation of these resources under the control of the State,
acting through the minister. Various provisions in the Act then seek
to give specific effect to the object of expanding opportunities
in
the industry to historically disadvantaged persons. Of particular
relevance to this matter are the provisions giving preference
in the
consideration of applications for prospecting rights to historically
disadvantaged persons and to communities who wish to
prospect on
communal land.’
[54]
I agree that in the real world of high finance – in the present
case billions of rands are required for a viable mining
enterprise –
one can hardly imagine a community such as the BYMC being able to
engage in mining without the necessary technical
and financial
assistance that the MPRDA requires it to demonstrate. This fact was
taken into consideration by the Minister and
her Department. In my
view, the Tribal Council and MUM have demonstrated that the BYMC has
overwhelmingly endorsed an application
for a prospecting right using
MUM as a vehicle. That being so, and keeping in mind the context
provided by the Constitutional Court
as set out in the preceding
paragraph, one is led to the compelling conclusion that the
application in terms of s 104 by MUM is
in substance one by the BYMC.
The Department was not averse to the use of MUM and at least engaged
the Tribal Council concerning
the extent of the community’s
shareholding.
[55]
Of necessity, the acquisition by the BYMC of the necessary financial
and technical assistance requires a certain quid pro quo,
in the
present case in the form of the shareholding by corporate entities as
set out in the shareholders’ agreement referred
to earlier with
concomitant participation rights.
[56]
Insofar as control of MUM is concerned, it appears to me that the
concerns about the BYMC being outvoted on major issues, or
of share
dilution to such an extent that it renders the community shareholding
nugatory, are met by the proposed substituted order
presented on
behalf of the Tribal Council and MUM. This amended majority
shareholding ensures that the prescripts of s 104(2) are
met.
Conclusions
[57]
To sum up, the Tribal Council has a legal existence and locus standi.
On a conspectus of the evidence presented on behalf of
the Tribal
Council and MUM and detailed earlier in this judgment, and which
remains largely unchallenged, it is clear that the
Tribal Council
should be considered to be the sole and authoritative voice of the
BYMC. In my view, the opposing affidavits on
behalf of Genorah and Dr
Nkosi and Mr Nkosi are deliberately vague, even opaque and, to say
the least, disingenuous. MUM, in the
circumstances of the present
case, was entitled to apply for and be granted a preferent community
prospecting right. The BYMC interests
are protected in the
shareholders’ agreement (in the suggested amended form) and the
prescripts of s 104(2) of the MPRDA
have been met.
[58]
I am particularly concerned that dicta of the Constitutional Court in
the prior
Bengwenyama
case were not heeded by Genorah and by
the Minister and her Department in their conduct subsequent thereto.
In that judgment, Froneman
J was concerned, right at the outset,
about the contemporary effects of past racially discriminatory laws.
In para 3 of that judgment
the following was stated:
‘
The
Constitution also furnishes the foundation for measures to redress
inequalities in respect of access to the natural resources
of the
country. The
Mineral and Petroleum Resources Development Act (Act
)
was enacted amongst other things to give effect to those
constitutional norms. It contains provisions that have a material
impact
on each of the levels referred to, namely that of individual
ownership of land, community ownership of land, and the empowerment
of previously disadvantaged people to gain access to this country’s
bounteous mineral resources.’
[59]
In respect of the conduct of the Department in relation to the prior
Bengwenyama
case, the Constitutional Court at para 74 said the
following:
‘
The
department was at all times aware that the community wished to
acquire prospecting rights on its own farms. It gave advice to
the
community over a long period of time in this regard, to the extent of
requiring better protection for the community in the
investment
agreement. It continued dealing with the community and Bengwenyama
Minerals in relation to their application brought
on prescribed
s 16
forms without informing them of the fact that approval of that
application would end their hopes of a preferent prospecting right.
There is no explanation from the department for this strange
behaviour. The department had an obligation, founded upon
s 3
of
PAJA, to directly inform the community and Bengwenyama Minerals of
Genorah’s application, and its potentially adverse
consequences
for their own preferent rights under s 104 of the Act. This
obligation entailed, in the circumstances of this case,
that the
community and Bengwenyama Minerals should have been given an
opportunity to make an application in terms of s 104 of the
Act for a
preferent prospecting right, before Genorah’s s 16 application
was decided. None of this was done.’
[60]
There may be some force in the contention on behalf of the
respondents that the prior
Bengwenyama
case was not
dispositive of all the issues presently in contention as they were
not pertinently raised, debated and decided in
that matter. However,
the Constitutional Court’s concerns about land dispossession
and redress and that communities deserved
to be assisted to claim
what is rightfully theirs cannot be discounted.
[61]
I have already alluded to the Department’s conduct in failing
to heed the concerns of the Constitutional Court. Inexplicably,
it
compounded its reprehensible conduct by not taking the high court
into its confidence and providing a basis for what can only
be
described as a startling decision to lump together two applicants and
Genorah in the award of the preferent prospecting right,
knowing full
well the bitter battle that had ensued leading up to the
Bengwenyama
decision in the Constitutional Court. It is clear that the decision
to award the prospecting right jointly, and including Genorah,
meant
that the Constitutional Court’s concerns were not heeded and
that the relevant issues of community consultation and
authorisation
were not properly considered. In addition, one is ineluctably drawn
to the conclusion that the inclusion of Genorah
and the lumping
together of antagonistic parties was capricious. It also appears that
the qualifying provisions of the empowering
statute, namely s 104(2)
of the MPRDA were not properly considered. Lastly, by grouping MUM
with Genorah without affording the
former and the Tribal Council an
opportunity to make representations thereon, the Department acted in
a manner that was procedurally
unfair.
[62]
Counsel on behalf of the Tribal Council and MUM, in understated
fashion, submitted that he had given careful thought to the
repeated
allegations made by and on behalf of his clients of fraud on the part
of Genorah and Dr Nkosi and Mr Nkosi, and that he
ultimately
considered them to be justified. In my view, the evidence presented
on behalf of the Tribal Council and MUM referred
to earlier in this
judgment, demonstrates opportunistic and reprehensible behaviour on
the part of those three respondents calculated,
in my view, to
circumvent the concerns expressed by the Constitutional Court in the
earlier
Bengwenyama
case. I would, however, stop short of
labelling it fraudulent, but I nevertheless impose an appropriate
costs order to show this
court’s displeasure at the manner in
which they behaved. The submission made by counsel on behalf of Dr
Nkosi and Mr Nkosi
that, although he could not show approval by
statutorily sanctioned tribal or customary institutions for the
application submitted
by them in the record, nor point to a
resolution properly taken to show substantial community support even
approximating that shown
by the Tribal Council and MUM, his clients
should at least be considered to have acted in the interest of the
BYMC and not have
to suffer the same fate of a punitive costs order,
is without factual foundation or legal basis. On the contrary, as
demonstrated
above, they were an integral part of a contrived
application; ostensibly on behalf of the BYMC, but not actually so.
The contention
on their behalf that they ought not to have been
parties to the present litigation can also rightly be rejected,
because of what
is set out earlier in this paragraph.
[63]
For all these reasons the impugned decision falls to be set aside.
[64]
One final aspect now requires consideration, namely whether the
application by MUM ought to be referred back to the Minister
and her
Department for consideration or whether the substituted order sought
by the Tribal Council and MUM ought to be granted.
It was submitted
on behalf of Genorah and Dr Nkosi and Mr Nkosi that a decision on an
application for a preferent community prospecting
right is within the
domain of the Minister and her Department, and that it is not for the
court to arrogate to itself the right
to make that decision. It is
however clear in our law that where the original decision maker has,
as in this case, twice exhibited
bias or incompetence, the reviewing
court can correct that decision itself.
[2]
Thus the order that follows does award that right to MUM, as per the
intention of the recognised and legitimate representative
of the
BYMC.
[65]
In line with the conclusions referred to above, the appeal must
succeed and the conditional cross-appeal must fail. Finally
there is
the question of the record being more extensive that it ought to have
been. To his credit, counsel on behalf of the Tribal
Council and MUM
accepted that there should be a small percentage taken off the costs
his clients would be entitled to.
[66]
The following order is made:
1.
The appeal is upheld.
2.
The conditional cross appeal is dismissed.
3.
The order of the court a quo is substituted with an order in the
following terms:
‘
(i)
It is declared that the Traditional Council of the
Bengwenyama-ya-Maswazi Community is the only authorised
representative of
the first applicant in its dealings with the first
respondent.
(ii)
The prospecting right purportedly issued by the first respondent to
the first applicant on 31 March 2011 is set aside.
(iii)
The first respondent is directed to issue to the third applicant a
full and exclusive prospecting right in respect of the
property
Nooitverwacht 324 KT against proof by the third applicant that it has
amended its shareholders agreement by substituting
the words “74.1
% (seventy four point one per cent)” for the words “70 %
(seventy per cent)” in clause
12.2 of that shareholders’
agreement.
(iv)
The second to fourth respondents are ordered jointly and severally to
pay the applicants’ costs on the attorney and client
scale
including the costs of two counsel.’
4.
The second to fourth respondents are ordered to pay 90 per cent of
the appellants’ costs of appeal on the attorney and
client
scale, including the costs of two counsel.
5.
The fourth respondent is ordered to pay 90 per cent of the
appellants’ costs of the cross appeal on the attorney and
client
scale, including the costs of two counsel.
________________________
MS
NAVSA
ACTING
DEPUTY PRESIDENT
APPEARANCES:
FOR
APPELLANTS: Adv M Chaskalson S.C. (with him I Goodman)
Instructed
by:
Cheadle,
Thompson & Haysom Inc., Johannesburg
McIntyre
& van der Post, Bloemfontein
FOR
SECOND AND THIRD
RESPONDENTS:
Adv. F J Nalane
Instructed
by:
Makaula
Zilwa Inc., Johannesburg
Bahlekazi
Attonreys, Bloemfontein
FOR
FOURTH RESPONDENT: Adv. B E Leech S.C. (with him J Babamia)
Instructed
by:
Werksmans
Attorneys, Sandton
Lovius
Block, Bloemfontein
[1]
NJJ
Olivier, J Church, RB Mqeke, JC Bekker, L Mwambene, C Rautenbach &
W du Plessis ‘Indigenous Law’ in Joubert
LAWSA
vol 32 (2 ed, 2009) para 14.
[2]
C
Hoexter
Administrative
Law in South Africa
2ed
(2012) at 555 and the core decisions there cited.