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[2021] ZAECPEHC 64
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Elderberry Investments (Pty) Ltd and Another v Department of Economic Development and Environmental Affairs and Others (2919/21) [2021] ZAECPEHC 64 (2 December 2021)
REPUBLIC
OF SOUTH AFRICA
THE
HIGH COURT OF SOUTH AFRICA
EASTERN
CAPE LOCAL DIVISION, PORT ELIZABETH
Not
reportable
Case
No:2919/21
ELDERBERRY
INVESTMENTS (PTY) LTD
First
Applicant
QCK
LEZMIN 4619
CC
Second
Applicant
and
DEPARTMENT
OF ECONOMIC DEVELOPMENT
AND
ENVIRONMENTAL AFFAIRS: PROVINCE
OF
THE EASTERN
CAPE
First
Respondent
MEC:
ECONOMIC DEVELOPMENT AND
ENVIRONMENTAL
AFFAIRS, EASTERN
CAPE
PROVINCE
Second
Respondent
KOUGA
LOCAL
MUNICIPALITY
Third
Respondent
JUDGMENT
Mfenyana
AJ
Introduction
[1] This
is an application in terms of which the Applicants seek an order
declaring that an Environmental Authorisation
(the Authorisation)
issued by the First Respondent to the Second Applicant on 12 March
2012, has not lapsed and is of legal force
and effect. The Applicants
also seek ancillary relief. The Authorisation was issued pursuant to
the provisions of the National
Environmental Management Act 107 of
1998 (NEMA) and the Regulations thereto- Environmental Impact
Assessment Regulations, 2010
(the Regulations)
[2] The
genesis of the dispute between the parties lies in the interpretation
of the terms of the said authorisation,
and as a result of which the
First Respondent avers that it has lapsed while the Applicants insist
that it has not.
[3] The
matter was brought on an urgent basis.
[4] Only
the first and Second Respondents have opposed the application.
Issue
for determination
[5] The
only issue for determination is whether the authorisation issued by
the Second Respondent has lapsed, within
the meaning and
contemplation of the Environmental Management Act and the attendant
Regulations. Linked to this issue is the question
whether the
construction of the filling station and associated infrastructure
commenced within a period of 12 months from the date
of issue of the
Authorisation, or 24 months from the date of signature of the Amended
Authorisation.
Factual
matrix
[6] The
facts leading up to the dispute are largely common cause. They are
summarized hereunder, to the extent
relevant for the determination of
the present application.
[7] The
First Applicant is the owner of immovable property situated within
the municipal area of the Third Respondent.
The said immovable
property was zoned for business use and thus the owner or a party
authorised by it, could, upon fulfilment of
the applicable
requirements, operate a service station thereon, inclusive of a
petrol filling station.
[8]
The
Second Applicant is a close corporation which applied, and in whose
name the Authorization was issued by the First Respondent.
The First
Applicant is also a member of the Second Applicant.
[9] The
First Respondent is the Department responsible for all environmental
affairs in terms of NEMA.
[10] The
Second Respondent is the MEC in the office of the First Respondent
who is responsible for environmental
affairs. The MEC is a
functionary of the state, who exercises political oversight in the
Department of Environmental Affairs.
[11] On
12 March 2012, following application by the Second Applicant
on
10 June 2011
for
inter alia
a ‘proposed
construction of a filling station’, the First Respondent
granted an Environmental Authorisation (the Authorisation)
under
authorisation number: EC08/LN1/13/11-43, to the Second Applicant.
[12] After
the Authorisation was issued what appears to be a lengthy process
ensued. This pertained to
inter alia
,
an objection to the proposed development, an appeal, the rejection of
the applications for the site and retail licences by the
relevant
authorities and review applications, all of which spanned a period of
approximately 7 years, from 2013 through to 2020.
[13] Despite
the project having been given the green light on 25 July 2014 when
the Gauteng Division of the High
Court reviewed and set aside the
decisions of the then Minister of Energy and the Controller of
Petroleum Products, effectively
granting the Applicants the site and
retail licenses applied for, the dispute in respect of the project
continued unhindered for
a further six years. In the same judgment of
the Gauteng Division, the court remitted the portion of the
application relating to
the internal appeal, to the First Respondent
for reconsideration. The court further ordered that in the event that
the Applicants
were unsuccessful in the internal appeal upon
remittance, they could approach the court directly on the same papers
duly supplemented.
[14] The
Applicants resubmitted the internal appeal and were again
unsuccessful. They approached the court, in
accordance with the order
of the court of 25 July 2014, this time seeking an order that the
court should substitute the Respondents’
decision for its own.
This is referred to as the second review application.
[15] The
second review application was heard on 17 to 19 October 2018.
Judgment was handed down on 8 March 2019,
setting aside the previous
decisions and effectively paving the way for the granting of the
licenses applied for by both the First
and Second Applicants. Further
internal appeals lodged by the Applicants against the refusal of the
licenses were ultimately successful,
and thus the site and retail
licenses were ultimately issued on 21 April 2021.
[16] As
part of the process, the Applicants are required to have building
plans approved. This took place from
October 2013 through to 6 April
2021 and at which latter stage the Third Respondent’s comments
on the application were still
outstanding, thus delaying the final
approval of the building plans.
[17]
On
8 April 2021 the Third Respondent raised a query with the Applicants,
suggesting that the Authorisation had lapsed, as it had
been issued
on 12 March 2012. In this regard the said Authorisation stipulates:
“
3.1.1
The construction of the filling station and associated infrastructure
… must commence within a period
of 12 (twelve) months from the
date of issue of this Authorisation. If commencement of the activity
does not occur within this
period, the Environmental Authorisation
lapses and a new application for environmental authorisation must be
made in order for
the activity to be undertaken.
3.1.2
Installation of the underground storage tanks to be completed within
six months of commencement.”
[18] In
an email dated 14 April 2021, the Applicants, through their appointed
agent, Mr Anton van Zijl responded
to the query, stating that site
preparation had indeed commenced in order to adhere to the condition
stipulated in 3.1.1 of the
Authorisation. In response thereto, the
Second Respondent, on 15 April 2021 confirmed that the Authorisation
had lapsed as the
Applicants’ explanation
was
not sufficient to constitute commencement
as contemplated in 3.1.1 and further that the
filling
station had not been constructed
.
[19] On
7 May 2021 the Applicants addressed a letter to the First Respondent
confirming that the 12-month period
would lapse on 12 April 2022 and
simultaneously requesting an extension for the completion of the
construction. In the said letter,
the Applicants informed the First
Respondent that certain problems relating to the Authorisation had
arisen, which would render
it impossible for the Applicants to
finalise the construction of the filling station within the
prescribed time and until the issues
relating to the Authorisation
had been fixed. In anticipation of their inability to comply with
this requirement, even before the
start of the construction, the
Applicants invoked the provisions of Regulation 24(2) and requested
an extension (for a period of
36 months). In terms of this provision,
the competent authority must request the Environmental Assessment
Practitioner amon other
things, to suggest, consider or comment on
feasible and reasonable alternatives.
The
Applicants’ case
[20] The
Applicants contend that the Authorisation has not lapsed. For this
contention they rely on two main premises,
which overlap to a large
extent, namely, (i) the interpretation of the provisions of the
Authorisation, and (ii) that the construction
of the filling station
had commenced within the period stipulated in the Authorisation. They
are dealt with hereunder.
[21] With
regard to the interpretation of the relevant provision the Applicants
aver that the 12 month period stipulated
in the Authorisation for the
commencement of the Activity, only started running from 21 April 2021
as it is only then that they
received the site and retail licenses.
This, according to the Applicants, means that the Authorisation
would, in terms of the original
Authorisation (12 March 2012) lapse
on 21 April 2022. If one factors in the Amended Authorisation, which
extended the period allowed
for commencement, to 24 months, this
would extend to 2023. Nonetheless, the Applicants do not deal with
this, presumably on the
understanding that the commencement period
has in any even not expired, whether it be 12 or 24 months. Even with
that understanding,
the Applicants further contend that because of
the delays occasioned by the litigation which ensued, following the
refusal of the
licences by the Controller of Petroleum Products and
the Minister of Energy, it would be difficult for the Second
Applicant to
commence with the
retail activities
within 12
months as the litigation had an impact in the finalisation and
approval of building plans. They communicated this to
the Respondents
in a letter dated 7 May 2021. The relevance of this scenario to the
validity of the Authorisation, the Applicants
further contend, lies
in the interpretation of the Authorisatiion and the conditions
attached thereto.
[22] Relying
on the decision of the Supreme Court of Appeal (SCA) in
Natal
Joint Municipal Pension Fund v Endumeni Municipality
[1]
,
the Applicants further aver that the Court must take the context in
which the provision appears, and the circumstances of the
matter into
account, and look at the document as a whole.
[23] Further,
pertaining to the context in respect of the present dispute, the
Applicants submit that the Court
must look at the definition of the
word ‘commence’ in relation to Chapter 5 of NEMA, which
deals with intergrated environmental
management, and as defined in
NEMA. NEMA defines ‘commence’ as follows:
“
when used in
Chapter 5, means the start of any physical implementation in
furtherance of listed activity, including site preparation
and any
other action on the site or the physical implementation of the plan,
policy, program a process, but does not include any
action required
for the purposes of investigation or feasibility study as long as
such investigation of feasibility study does
not constitute a listed
activity or specified activity…”.
[24] Thus
the Applicants aver that site preparation includes the ‘start’
of any physical activity in
furtherance of the listed activity, the
listed activity being the filling station. They further aver that the
word ‘start’
is ignored by the Respondents. In essence,
the Applicants contend that they have commenced with the activity as
required in terms
of the Authorisation. In this regard they state
that such activity as stipulated in the Authorisation includes a
retail area, parking
bays and petrol tanks.
[25] As
far as the licenses go, the Applicants state that there is no dispute
that the Applicants could not take
any steps in relation to the
construction, prior to othe licenses being issued. This is also the
reason why the Applicants requested
an extension to complete the
construction even before it started. This request, the Applicants
argue, has no bearing on the commencement
of other aspects of the
project, including site preparation, as it only relates to the
construction.
[26] Another
reason advanced by the Applicants for their contention that the
Authorisation has not lapsed, is that
the activity, being the
construction of the filling station, did in fact commence. In this
regard they aver that
they placed pegs on the
property, strung a rope along the pegs, cleared vegetation and evened
out the ground as early as 2014. They
also applied for filling
station licenses immediately after being granted the Authorisation.
Though not through a fault, of their
own, the process of obtaining
the licences was marred by numerous hinderances which resulted in the
licenses only being issued
after seven years during the course of
2020/1. They further contend that the Respondents were aware of these
challenges and left
them to carry on with the process, only to tell
them at this late stage that the Authorisation has lapsed.
[27] The
Applicants state that they would be prejudiced if the Authorisation
should lapse as this would mean that
the licenses would lapse and
they would be required to start all over again. They contend that the
Authorisation must be interpreted
within the context that accords
with section 41 of the Constitution, that state departments are
enjoined to co-operate with each
other. The Applicants submit that
the Respondents were all aware of the provisions of the Petroleum
Products Act (which requires
them to apply for licences). In this
regard I interpose to state the provisions of paragraph of the
Authorisation, which states:
3.3.4
the authorization is subject to the applicant's compliance with all
other relevant legislation, particularly
that relating to the
handling and storage of hazardous materials occupational health and
safety and pollution of groundwater.
Respondents’
case
[28] The
Respondents contend that the Authorisation has lapsed. For this
proposition they rely
inter alia
,
on the definition of commencement as contained in the Authorisation.
In terms of the Authorisation, this means:
“
Any
physical activity on the site that can be viewed as associated with
the installation of the underground steel tanks inclusive
of site
preparation.”
[29] Paragraph
3.1.1 of the Authorisation goes further to state that if commencement
of the activity does not occur
within the specified period, (the)
environmental authorisation lapses and a new application for
environmental authorisation must
be made in order for the activity to
be undertaken. Activity is defined under Detailed Description of
Activity as follows:
“
Detailed
Description of Activity
The
project entails the construction of a filling station on the corner
of St Francis Drive and Outeniqua Drive in Jeffreys Bay,
within the
Kouga Municipal Area. The proposed development will consist of the
following components:
·
A Retail area;
·
Parking bays;
·
(Diesel tank, and Petrol tanks)”.
[30] The
Respondents aver that the placing of pegs with a rope constitutes a
physical activity associated with
the installation of the underground
steel tanks nor does it include site preparation.
[31] The
Respondents further contend that the request for an extension (which
was subsequently granted) by the
Applicants is indicative of the fact
that the construction had not commenced. It is necessary at this
point to consider the Applicants’
request as contained in the
letter dated 12 April 2014. The relevant posrtion reads:
“
My
client has requested me to inform you that he intends commencing with
the development within the next 10 days. He further requests
that he
be granted an extension of 36 months for the full construction of the
facility.”
[32] In
the answering affidavit deposed to by Dayalan Govender (Govender), on
behalf of the First and Second Respondents,
the following explanation
is offered:
(a)
that
the description of activity in section 2 of the authorization relates
to the construction of a filling station with various
components such
as a retail area, parking bays, diesel tanks, premium tanks and
unleaded tanks.
(b)
that
the dispute between the parties is whether the construction of the
filling station and associated infrastructure commenced
within the 12
month -period stated in the authorization and which was later amended
to 24 months.
[33] The
Respondents reject the Applicants’ assertion that they had
given notice to the Respondents that
they were to commence with the
activity, and aver that it is obligatory that such notice should
include a date on which the activity
will commence. They argue that
the Applicants did not do this, and on that basis alone the
application is misguided. I do not agree.
In terms of Regulation 37,
the Respondents are given powers to direct the course of the
application for environmental authorisation,
so to speak, and impose
whatever conditions the deem necessary. In any event, it is arguable
whether the Applicants’ assertions
that they
intend
commencing with the development within the next 10 days,
(
evidently from date of the said notice) amounts to a date. In my
view, this aspect alone is not sufficient to dispose of the
Applicants’ case.
Has
the Authorisation lapsed?
[34] In
answering this question, what needs to be determined is whether the
construction of the filling station and associated
infrastructure has commenced within the prescribed period.
In
making that determination regard must be had to the applicable
provisions, particularly the Act (NEMA) and the Authorisation
itself.
[35] The
Authorisation defines ‘commencement’ as- “Any
physical activity on site that can be
viewed as associated with the
installation of the underground steel tanks inclusive of site
preparation.” NEMA defines ‘commence’
within the
context of Chapter 5, which deals with integrated environmental
management, and includes in it “
any
physical implementation in furtherance of listed or a specified
activity, including site preparation and any other action on
the
site
…”
[36]
In
terms of the Authorization, the applicants were permitted to
undertake certain activities specified therein under the caption
‘Detailed Description of Activity’. In summary, these
activities / Activity
as specified in the Authorization comprise the following:
(a)
a retail area;
(b)
parking bays;
(c)
a diesel tank;
(d)
two premium tanks; and
(e)
two unleaded tanks.
[37] In
essence these components make up the filling station. The definition
in NEMA is inclusive and permits in
it any activity that may further
the listed activity.
[38] The
Authorisation goes further to define “Listed Activity” as
follows:
“
The
construction of facilities or infrastructure for the storage, or for
the storage and handling, of a dangerous good, where such
storage
occurs in containers with a combined capacity of 80 but not exceeding
500 cubic metres.”
[39] Of
necessity, a further enquiry in relation to what constitutes ‘the
filling station and associated
infrastructure’ should be
embarked on.
[40] Mr
Beyleveld, counsel for the Respondents submits that extraneous facts
which prevent the commencement of
the activity are irrelevant. This
is not accurate. What the Applicants aver is that they commenced with
the activity as required
in the Authorisation in so far as they
placed pegs, strung lines and cleared vegetation in preparation for
the listed activity.
This was done within the permitted timeframe in
2014. What the refusal of licenses is concerned, what this prevented
or delayed,
is the construction, specifically of the petrol tanks and
the retail space. Even so, section 24L empowers environmental and
other
related authorities to issue joint authorisations where
warranted.
[41] I
do not believe that the construction of the underground tanks as a
listed activity necessarily excludes
the external infrastructure, or
framework or even the set-up. All of these comprise the filling
station. To the extent that it
may be argued that they are so
excluded, they can, in my view, be considered to be infrastructure
associated with that construction.
It should therefore follow that
any activity associated with any of the components of the listed
activity, no matter how mundane
it may seem, should be considered to
part of that construction.
[42] It
was submitted on behalf of the Respondents that the Applicants’
reliance on other authorisations
and permits which could not be
obtained and which prevented the construction are of no assistance to
the Applicant. This submission
is problematic. The courts are
enjoined, in interpreting documents to consider the language of the
provision which must be read
in context and with regard to the
purpose and background of the document’s preparation and
production.
[2]
The context in
this matter is that the Authorisation was granted within a broader
framework of integrated environmental authorisations
as provided for
in section 24L of NEMA.
[3]
This
provision in respect of both Acts, envisages an alignment of
environmental authorisations, where it is apparent that the carrying
out of a listed activity is also regulated by another law. In that
case, the authorisation in respect of that activity may be issued
jointly.
[43] Mr
Beyleveld referred the Court to the decision of the SCA in
Esquire
Consulting an Marketing CC & Others v Sea Glades Holdings (Pty)
Ltd
[4]
in
support of the proposition that activity undertaken by the Applicants
could be equated to the situation in
Esquire
.
I do not agree with this proposition. Esquire is markedly
distinguishable from the present application. More importantly, the
SCA dismissed the appeal. There was in any event no suggestion by the
Respondents that the Applicants had deserted the site or
the project
at any stage. To the contrary, from the date of issuing of the
Authorisation, the Applicants were involved in the matter
through to
the present stage. The Respondents were made aware of the
developments and the challenges faced by the Applicants as
early as
in 2015. It can therefore not be said that the site had not been
utilized at any stage.
[44] As
part of the conditions specific to the project, in paragraph 3.3.4 of
the authorization, it is stated that
the authorization is subject to
the applicant's compliance with all at the relevant legislation
particularly that relating to the
handling and storage of hazardous
materials, occupational health and safety and pollution of
groundwater. To this end the applicants
submitted the relevant
applications for licenses applicable to the construction of a filling
station.
[45] In
the answering affidavit deposed to on behalf of the First and Second
Respondents, Govender states that
in terms of regulation 37 the
authorised activity may not commence before specified conditions are
complied with. It appears therefore
that based on this
interpretation, the Respondents are of the view that the activity had
not commenced as certain conditions as
listed by Govender in his
answering affidavit had not been complied with. This is however not
what Regulation 37 states.
Regulation 37(2) in particular
states that an environmental authorisation may provide that the
authorised activity may not commence
before specified conditions are
complied with, require peridic reports to be submitted, including
audit reports, provide proof
of compliance, and impose any condition
it considers necessary for the protection of the environment. Mr
Wagenaar, acting on behalf
of the Applicants submitted that the
Respondents did none of these. He further submitted that the
Respondents cannot turn around
at this late stage, after the
Applicants have expended financial and other resources, with the
Respondents’ knowledge.
[46] There
was a further suggestion that there was a dispute of fact in respect
of whether the Applicants had cleared
the vegetation, presumably as
part of site preparation. This aspect was not seriously contended or
pursued during argument. It
is also in my view, not a material
dispute or one that can be regarded as a genuine dispute. Accordingly
I do not deem it necessary
to deal with that aspect further.
Conclusion
[47] While
I do not agree with the Applicants that application for licenses
constitutes commencement within the
meaning and contemplation of NEMA
and the Authorisation, any physical activity in furtherance of the
listed activity, does. It
seems to me that even the demarcation of a
parking lane within the property would constitute commencement, to
the extent that it
can be characterised as physical activity in
furtherance of a listed activity or any activity associated
therewith.
[48] On
the strength of the trite principles of interpretation of documents,
as more aptly articulated in
Endumeni
,
it is imperative that this Court prefers a interpretation that is
sensible and businesslike taking into consideration ‘the
language used in light of the ordinary rules of grammar and syntax,
the context in which the provision appears, the apparent purpose
to
which it is directed, and the material known to those responsible for
its production.’
[5]
Costs
[49] The
Applicants seek costs on attorney and client scale on the tariff of
senior counsel, all costs associated
with preparation, travel time
and travel costs. The Applicants were represented by their attorney
of record in these proceedings.
[50] It
is trite that costs are within the discretion of the court which
discretion must be exercised judicially.
Once an attorney puts on the
hat of counsel, they forgo certain aspects they would otherwise be
entitled to as an attorney, including
costs relating to travel time
and travel costs. There seems to be no justification to deviate from
this principle. Neither can
this Court confer a silk status for
purposes envisaged by the Applicants. Such is not to say that the
Court may not show its displeasure
in the lackadaisical manner in
which the Respondents have conducted themselves in the matter. That
in my view can be adequately
compensated by an appropriate cost
order.
Order
[51] In
the result I make the following order:
1. The
provisions of the Rules in respect of forms and service are dispensed
with and any non- compliance with
the Rules in respect of timeframes
is condoned.
2. It
is declared that the Environmental Authorisation issued by the First
Respondent to the Second Applicant,
under Authorisation Notice
Register Number EC08/LN1/13/11-43, and dated 12 March 2012 in respect
of the property situated at the
corner of St Francis Drive and
Outeniqua Drive, Jeffreys Bay, Eastern Cape has not lapsed how do use
of full force and effect.
3. The
First and Second Respondents are to pay the costs of this application
on a scale as between attorney and
client jointly and severally, the
one paying the other to be absolved.
S.
M. MFENYANA
ACTING
JUDGE OF THE HIGH COURT
Appearances
Attorney
for the Applicants: Mr
G Wagenaar
Counsel
for the 1
st
& 2
nd
Respondents: Mr
A Beyleveldt
Instructed
by: The
State Attorney, Port Elizabeth
Date
Heard: 02
November 2021
Date
Delivered: 02
December 2021
[1]
2012
(4) SA 593
[2]
Natal Joint Municipal Pension Fund, supra
[3]
See also: Act 62 of 2008
[4]
(1315/2016)
[2017]
ZASCA 167
(30 November 2017)
[5]
At
593