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[2011] ZASCA 226
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Eye of Africa Developments (Pty) Ltd v Shear (863/2010) [2011] ZASCA 226; 2012 (2) SA 186 (SCA); [2012] 2 All SA 32 (SCA) (30 November 2011)
THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Case No: 863/2010
In the matter between:
EYE OF AFRICA DEVELOPMENTS
….................................................
Appellant
(PTY) LTD
and
NICOLA CAROLYN SHEAR
…...........................................................
Respondent
Neutral citation:
Eye of Africa v Nicola Shear
(863/10)
[2011] ZASCA 226
(30 November 2011)
Coram:
HEHER, MHLANTLA and SERITI JJA
Heard:
03 November 2011
Delivered:
30 November 2011
Summary:
Environmental authorisation –
amendment of authorisation – no power or authority to amend,
amendment ab initio invalid
–
s7
of the
Promotion of
Administrative Justice Act 3 of 2000
– section applies only to
administrative action – Review not appropriate procedure,
respondent should have approached
court for a declaratory order
__________________________________________________________________
ORDER
On appeal from:
South Gauteng High Court,
Johannesburg (Lamont J sitting as court of first instance):
(1) The appeal is dismissed with costs.
(2) The order of the court a quo is set aside and
replaced by the following:
‘
(i) The fourth respondent’s
purported amendment dated 25 July 2008 is declared of no force and
effect.
(ii) The first and fourth respondents are jointly and
severally to pay the costs of the application.’
__________________________________________________________________________
JUDGMENT
SERITI JA (JJA concurring):
Introduction
[1] The respondent approached the South Gauteng High
Court, Johannesburg by way of motion proceedings seeking an order
reviewing
and setting aside a decision of the Gauteng Department of
Agriculture, Conservation and Environment (the GDACE)
of
25 July 2008 allowing the appellant to use an alternative
source of water for the purposes of irrigating a golf course.
[2] The court a quo (Lamont J) granted the order sought
by the respondent. The matter is before this Court with leave of the
court
a quo.
Background Facts
[3] The respondent is the owner of Shearwood Farm which
is situated on the Remaining Extent of Portion 4 of the Farm
Alewynspoort
145 IR. The respondent, her husband and her five
children live on the farm. They keep animals and at the time of the
application
they had 35 horses, 11 dogs and one cat. They have four
employees. The respondent’s husband is a veterinary surgeon who
in
the course of his practice cares for sick and injured animals on
the farm.
[4] The respondent, her family, employees and their
animals are reliant on the water drawn from a borehole situated on
their farm,
which is its only source of water.
[5] The appellant is the owner of the neighbouring
property, Portion 159 of the same farm on which it is in the process
of laying
out a golf estate.
[6] The predecessor of the appellant, Pixley World
Investments (Pty) Ltd, before commencing work on the establishment of
the residential
golfing estate applied to the GDACE in terms of s 22
of the Environment Conservation Act 73 of 1989 (ECA) for
authorisation to
change the use of its land from ‘agricultural’
to a ‘mixed use development’ for business, retail,
residential,
educational, institutional uses, open space and
associated infrastructural services and other project activities that
included
development of a hotel, corporate lodge and conference
facilities and a sewerage plant.
[7] The application for authorisation contained various
forms and reports, including a scoping report. The golf course was
designed
to cover some 120 hectares. The scoping report stated that
the water required for the irrigation of the course would be obtained
from the ‘grey water’ derived from the sewerage plant. It
was envisaged at the time of the initial application for
authorisation that the estate would generate effluent which once
purified would be sufficient for the purpose throughout the year.
[8] In a letter dated 14 April 2005 the applicant was
advised that its application had not been successful. The relevant
letter
reads as follows: ‘REFUSAL OF AUTHORISATION FOR PROJECT
REFERENCE GAUT 002/04/05/1836. Please find attached the Record of
Decision in respect of your application for authorisation in terms of
Government Notice R1182 and R1183 (as amended) promulgated
under
sections 21, 22, 26 and 28 of the Environment Conservation Act, 1989
( Act 73 of 1989).
’
This letter
was signed by Dr ST Cornelius, Head of Department of Agriculture,
Conservation and Environment.
[9] Following an internal appeal to the Member of the
Executive Council (the MEC), Gauteng, the necessary authorisation was
issued
on 26 July 2005, and was also signed by Dr Cornelius. The
authorisation is termed Record of Decision (ROD). The authorisation
was
granted in terms of regulations R1182 and R1183 (as amended)
promulgated under ss 21, 22, 26 and 28 of the ECA. Condition 3.2.8
of
the authorisation
reads as follows: ‘The
applicant must obtain written confirmation from the Department of
Water Affairs and Forestry (DWAF)
with regard to the acceptability of
use of grey water from the envisaged sewage plant for irrigation of
the golf course as indicated
on page 86 of the scoping report. The
requisite confirmation must be submitted to the Department before
commencement of construction
activities on the site. In addition, the
applicant must submit a written confirmation before commencement of
construction activities
on the site to the effect that no alternative
sources of water e.g. use of boreholes, will be utilised for the
purposes of irrigating
the golf course since reliance thereto is
currently on the use of grey water as indicated above’.
[10] Apparently on 4 June 2006 the appellant applied to
DWAF for general authorisation to irrigate its property subject to
certain
conditions. The authorisation relates to the use of
wastewater for irrigation.
[11] The appellant partially
complied with the conditions contained in the
ROD
and
in a letter, apparently dated 17 October 2006, the GDACE authorised
the appellant to proceed with the development as planned.
[12] The residential development seemed to have taken
place at a much slower pace than anticipated. As a result the
appellant realised
that insufficient purified effluent was being
generated to meet its irrigation requirements. The appellant started
investigating
alternative water sources. On 7 July 2008, Seaton
Thomson & Associates, the appellants’ consultants,
addressed a letter
to the MEC, GDACE wherein they requested that
clause 3.2.8 of the authorisation be amended to allow the appellant
to utilise alternative
sources of water, eg use of boreholes on a
temporary basis until sufficient grey water became available. The
letter further states
that: ‘[i]n order to achieve this, an
application has been made to DWAF for the purposes of obtaining a
temporary licence
to abstract ground water for top up irrigation
water. DWAF have indicated that the application is supported in
principle on the
condition that the required abstraction volumes and
rates will not impact on the drawdown of the water table. This is
based on
the fact that required water will only be for “top up”
purposes and only for short duration of time until the full
development is achieved’.
[13] On 25 July 2008 Dr Cornelius addressed a letter to
the DWAF in which he notified it that his Department was agreeable to
amending
the ROD:
‘
RE: APPLICATION FOR TEMPORARY
LICENCE IRO THE FARM ALEWYNSPOORT 145 –IR: EYE OF AFRICA
The above matter has reference.
Please be advised that the Department is agreeable to
amending the Record of Decision issued on 22 July 2005 with the
inclusion
of condition 3. 2(8) as follows:
“
the applicant may use an
alternative source of water for the purposes of irrigating the golf
course for a temporary period. When
sufficient development would have
been achieved to allow for the utilisation of grey water.”
(sic)
Confirmation that your Department
has issued the temporary licence to abstract ground water for Top Up
Irrigation Water must be
submitted to
GDACE
by the applicant.
I trust you find the above in order.’
[14] On 16 January 2009 DWAF granted the appellant a
water use licence for which it had applied as long ago as June 2007.
This took
place in terms of Chapter 4 of the
National Water Act 36 of
1998
. The licence was valid for ten years. Some of the conditions of
the licence read as follows:
‘
2.1 This licence authorises the taking of a
maximum quantity of four hundred and ninety thousand cubic metres
(490 000m³) of
water per annum from borehole EA-3 located on
portion 159 of the farm Alewynspoort 145 IR, for the irrigation of
some 40 hectares
grass…
2.2 The taking of water must be metered and records must be kept per
month…
2.4 The above mentioned volume abstracted, must be reduced with the
same amount that the volume of the grey water increases and
that
after ten years or if the development is finished within ten years
time, the abstraction from the boreholes must be zero…
2.13 The Licensee must negotiate an agreement with the owner of the
property Alewynspoort 145 IR/4, in which the Licensee undertake
in
his own cost either to deepen the existing borehole SW1 on that
property and/or to provide a metered water connection from the
Rand
Water water supply system or any other alternative for usage by that
owner (and any extra pumping cost to take the water from
the deepened
borehole or water taken through the connection should be for the
account of the owner of that property), provided
that if such an
agreement could not be concluded within 60 days after the date of
issuing this licence, the Licensee must inform
the DWAF thereof with
the particulars of the negotiation and the result thereof, and the
DWAF may then release the Licensee from
complying with the provisions
of this clause or include further conditions to address and (sic) any
adverse impact of the water
use. Both parties are to act in good
faith.’
[15] On 23 January 2009 the respondent lodged an appeal
to the Water Tribunal against the grant of the licence to the
appellant.
The appeal was lodged in terms of
s 148(1)
of the
National
Water Act. On
30 November 2010 the Water Tribunal ruled that the
respondent lacked locus standi to lodge an appeal with the Water
Tribunal and
dismissed the appeal.
[16] On 19 June 2009 the present respondent initiated
the present proceedings. She applied on motion for an order reviewing
and
setting aside the GDACE’s decision to grant the amendment
of the ROD. The relief was claimed against the appellant, the Premier
of Gauteng Province (as second respondent), the MEC, GDACE (as third
respondent), the GDACE (as fourth respondent) and the Minister
of
Environmental Affairs and Tourism (as fifth respondent). After filing
of answering affidavits the present respondent joined
DWAF as sixth
respondent. DWAF filed a notice of intention to defend, but apart
from the appellant, only the fourth respondent
filed an answering
affidavit (by Dr Cornelius) in which it asked for the dismissal of
the application with costs.
[17] In her founding affidavit the present respondent
referred to the letter of Dr Cornelius dated 25 July 2008 to DWAF and
said
that clause 8 of the initial authorisation was amended by the
inclusion of clause 8(a) quoted above. In the answering affidavit
Dr
Cornelius admitted that his letter dated 25 July 2008 amended clause
8 of the initial authorisation. Also in the answering affidavit,
Mr
Mark McGovern, the Project Director of the appellant, accepted that
the letter of Dr Cornelius dated 25 July 2008 constituted
an
amendment to clause 8 of the original authorisation. He stated that
the letter of Dr Cornelius was a reaction to the advice
that Dr
Cornelius received from DWAF rather than the letter from Seaton
Thomson & Associates dated 7 July 2008 and addressed
to the MEC,
Gauteng Provincial Government in which it appears to have applied for
an amendment authorising the use of groundwater
for irrigation
purposes.
[18] The appellant and the respondent prepared their
Heads of Argument on the premise that the letter of Dr Cornelius
dated 25 July
2008 had the effect of amending the authorisation
granted to the appellant on 22 July 2005. In the court a quo, the
same approach
was adopted by all the parties involved. Prior to the
launching of the application in the court a quo all the parties had
assumed
that the initial authorisation was amended.
[19] In his reasons for the
decision to amend the initial authorisation Dr Cornelius stated: ‘
I
set out hereunder, the primary reasons for amending the Record of
Decision (“ROD”) dated 22 July 2005 in terms of
Regulation 44
of National Environment Management Act,107 of 1998
(“NEMA”). In arriving at my decision as recorded in the
ROD, I had
regard to and was guided by my mandate and obligations as
contained in the Constitution of the Republic of South Africa, 1996
and
the other relevant statutes, including the Act and regulations
promulgated there under, the
Development Facilitation Act 67 of 1995
and the National Environment Management Act 107 of 1998.
It was necessary in the circumstances to accommodate demands brought
by impact on socio-economic circumstances and it was in the
interest
of the public to meet those demands.
This decision was taken in terms of Regulation 44 of NEMA which
provides that the competent authority may on own initiative amend
an
environmental authorization if it is necessary or desirable to, inter
alia, accommodate demands brought about by impacts on
socio-economic
circumstances and it is in the public interest to meet those demands.
Regulation 45(1)(c) provides that if necessary a conduct of public
participation may be appropriate. Sub-regulation (3) provides
that
public participation should not be conducted if environmental
authorisation is amended in non-substantive manner.’
Validity of the Amendment
[20] Regulations 40, 41, 44 and 45 of the regulations
promulgated in terms of the
National Environmental Management Act 107
of 1998
published in Government Notice No. R385 on 21 April 2006 read
as follows:
‘
Part 1:
Amendments on application by
holders of environmental authorisations
Applications for amendment
40. The holder of an environmental authorisation may at anytime apply
to the relevant competent authority for the amendment of
the
authorisation
Submission of
applications for amendment
41. (1) an
application in terms of
regulation 40
must be --
(a) on an official
application form published by or obtainable from the competent
authority; and
(b) accompanied by
the prescribed application fee, if any.
(2) The competent
authority must, within 14 days of receipt of an
application,
acknowledge receipt of the application, in writing.
…
.
Part 2:
Amendments on initiative of competent authority
Purposes for
which competent authority may amend environmental authorisations
44. The relevant
competent authority may on own initiative amend an environmental
authorisation if it is necessary or desirable
-
(a) to prevent
deterioration or further deterioration of the environment;
(b) to achieve
prescribed environmental standards; or
(c) to accommodate
demands brought about by impacts on socio-economic
circumstances and it
is in the public interest to meet those demands.
Process
45. (1) If a
competent authority intends amending an environmental authorisation
in terms of
regulation 44
, the competent authority must first --
(a) notify the
holder of the environmental authorisation, in writing, of the
proposed amendment;
(b) give the holder
of the environmental authorisation an opportunity to submit
representations on the proposed amendment, in writing;
and
(c) if necessary,
conduct a public participation process as referred to in
regulation
56
or any other public participation process that may be appropriate
in the circumstances to bring the proposed amendment to the attention
of potential interested and affected parties, including organs of
state which have jurisdiction in respect of any aspect of the
relevant activity.
(2) The process
referred to in sub-regulation (1) must afford an opportunity to –
(a) potential
interested and affected parties to submit to the competent authority
written representations on the proposed amendment;
and
(b) the holder of
the environmental authorisation to comment on any representations
received in terms of paragraph (a) in writing.
(3) Subregulations (1)(c) and (2) need not be complied with if the
proposal is to amend the environmental authorisation in a
non-substantive
way.’
[21] The parties’ reliance on the letter of Dr
Cornelius dated 25 July 2008 as an amendment of the authorisation
issued on
the 26 July 2005 is unsustainable. The letter was addressed
to the DWAF and, apparently copied to a certain Ms Judy Johnston. On
the papers it is not clear who the latter person is or that the copy
was sent or received. In the said letter Dr Cornelius does
not state
that he is amending the ROD issued on 22 July 2005, but merely states
that the Department is agreeable to do so. The
letter purports to
refer to an application for a temporary licence, but Dr Cornelius
would have us to believe that he acted on
his own initiative and does
not explain why he used such a heading.
[22] The appellant in its answering affidavit alleges
that it made an application to the GDACE for the variation of the ROD
by addressing
a letter dated 7 July 2008. But the appellant further
alleges that the letter of Dr Cornelius’s under consideration
was a
reaction to the correspondence received from the DWAF rather
than a response to the letter of Seaton Thomson & Associates
dated
7 July 2008. This implies that there was no application for an
amendment as envisaged in
regulation 40.
Neither Dr Cornelius nor the
appellant testifies to a notification from GDACE of the amendment
allegedly brought about by Dr Cornelius’
‘decision’.
Seaton Thomson & Associates in a supporting affidavit denies ever
receiving a reply to its application.
[23]
Regulation 41
deals with the submission of an
application for amendment by the holder of an existing authority. The
regulation states that an
application must be on an official
application form and accompanied by a prescribed application fee if
any. The facts set out in
the previous paragraph leave no doubt that
regulation 41
was not complied with. Nor does Dr Cornelius or the
appellant contend otherwise.
[24]
Regulation 45
was also not complied with. Dr
Cornelius did not notify the appellant of the approval of the
so-called amendment and failed to
give the appellant an opportunity
to submit representations on the proposed amendment as required by
regulation 45(1)(
b
).
[25] In writing the letter of 25 July 2008, Dr Cornelius
responded to some inquiry by DWAF. He was not initiating any
amendment.
It seems that he subsequently chose to regard this as a
‘decision’ in terms of
regulation 44
notwithstanding a
total absence of any foundation in the regulatory framework. This is
no doubt why he was also unable (and perhaps,
unwilling) to identify
the ‘demand’ referred to in
regulation 44(c)
and the
‘impact on socio-economic circumstances’ and why also he
could not (or would not) explain how the public interest
was
implicated in his ‘decision’ to allow the golf course to
be irrigated by means other than grey water. Nor did he
succeed in
his rather feeble attempt to justify (as he had to) the failure to
comply with
regulation 45(1)(c)
on the basis that the permission was
merely ‘temporary’. Having regard to the duration of the
purported permit and
the volume of groundwater to be extracted to
meet the irrigation needs, one has no option but to conclude that
reliance on
regulation 44
was simply an ex post facto pretext to
justify the ‘amendment’ of the authorisation, a reliance
that contained no substance
in fact or in law.
[26] In
Kimberley Junior School v Head, Northern Cape
Education Department
2010 (1) SA 217
(SCA) para 11, Brand JA
said: ‘[u]nder common law, necessary preconditions that must
exist before an administrative power
can be exercised, are referred
to as “jurisdictional facts”. In the absence of such
preconditions or jurisdictional
facts, so it is said, the
administrative authority effectively has no power to act at all (see
eg
Paola v Jeeva NO and Others
[2003] ZASCA 100
;
2004 (1) SA 396
(SCA) ([2003]
4
All SA 433)
paras 11, 14 and 16).’ In
Ferndale Crossroads
Share Block (Pty) Ltd v Johannesburg Metropolitan Municipality
2011 (1) SA 24
(SCA) para 22, the same principle was enunciated by
Mpati P who said: ‘[i]n the absence of the necessary
jurisdictional fact
the respondent could not validly exercise the
power, with the result that the lease element of the agreement was ab
initio invalid’.
Applying the principle enunciated in these
cases Dr Cornelius had no power or authority to amend the
environmental authority in
the manner in which he did. Even if there
had existed an intention to amend which I have found there did not
the purported amendment
would have been ab initio invalid.
Failure to exhaust internal Remedies
[27] The appellant contended that the respondent has
failed to exhaust internal remedies as required by s 7 of the
Promotion of
Administrative Justice Act 3 of 2000 (PAJA). This
submission is without merit. Section 7 applies only to administrative
action.
Section 1 defines an administrative action as:
‘
any decision taken, or any failure to take
a decision, by-
(a) an organ of state, when -
exercising a power in terms of the Constitution or a provincial
constitution, or
exercising a public power or performing a public function in terms
of any legislation; or
a natural or juristic person, other than an organ of the state, when
exercising a public power or performing a public function
in terms
of an empowering provision, which adversely affects the rights of
any person and which has a direct, external legal
effect...’
[28] The letter written by Dr Cornelius on 25 July 2008
cannot be an administrative action as it was not an exercise of
public power.
It was no more than an internal communication between
government departments. His action had no direct external legal
effect and
did not affect the rights of any person. There was no need
for the appellant to exhaust internal remedies.
Appropriate Relief
[29] As stated earlier, all the parties herein accepted
that the purported amendment of the authorisation was properly
effected
and they acted in accordance with such a belief. In order to
protect her rights, the respondent who had no personal or direct
knowledge
of the circumstances surrounding the ‘decision’
of Dr Cornelius was entitled to approach the court for relief. A
review
procedure was not an appropriate procedure as the letter
written by Dr Cornelius did not constitute an administrative decision
and was without legal effect on her rights. Section 19(1)(
a
)(iii)
of the Supreme Court Act 59 of 1959 states that a provincial or local
division shall have power ‘in its discretion
and at the
instance of any interested person, to enquire into and determine any
existing, future or contingent right or obligation,
notwithstanding
that such a person cannot claim any relief consequential upon the
determination’.
[30] When dealing with this section Jafta JA in
Cordiant
Trading CC v Daimler Chrysler Financial Services (Pty) Ltd
2005
(6) SA 205
(SCA) para 16 said: ‘[a]lthough the existence of a
dispute between the parties is not a prerequisite for the exercise of
the power conferred upon the High Court by the subsection, at least
there must be interested parties on whom the declaratory order
would
be binding. The applicant in a case such as the present must satisfy
the Court that he/she is a person interested in an “existing,
future or contingent right or obligation” and nothing more is
required...’. See also
Langa CJ v Hlophe
2009 (4) SA 382
(SCA) para 28 and
Trinity
Asset Management (Pty) Ltd v Investec Bank Ltd
2009
(4) SA 89
(SCA) para 62.
[31] In this matter the respondent has a material
interest in the determination of the validity of the purported
amendment of the
authorisation issued to the appellant on 26 July
2005. It is clear that the extraction of groundwater over a period of
ten years
presented a potentially serious threat to the respondent’s
continued use of her property.
[32] The respondent formally applied in terms of s22(a)
of the Supreme Court Act 59 of 1959 for the admission of further
evidence
in the form of a letter written on her behalf to Dr
Cornelius enquiring about internal appeal procedures which she might
follow
in order to set aside his ‘decision’ concerning
the amendment of the ROD, together with an affidavit confirming that
no reply to that letter had been received.
[33] The ostensible reason for such evidence was to
justify the respondent’s failure to exhaust such internal
remedies and,
presumably, to enable the court to condone such
behaviour.
[34] In the light of my finding that the ‘decision’
was not an ‘administrative action’ as contemplated in
PAJA the evidence is now of no relevance. However it is necessary to
determine liability for the costs of the application.
[35] Although the appellant’s misplaced reliance
on PAJA provoked the application, it seems to me that the proposed
evidence
fell short of providing any satisfactory explanation for why
the respondent did not either insist on a reply or pursue other means
to investigate the steps required of her. In the circumstances her
application would not have succeeded because her new evidence
was
neither weighty nor material:
Colman v Dunbar
1933 AD 141
at 162. A fair resolution of the cost issue
would be, I think, to make no order on the application and leave each
party to bear
its own wasted costs in that regard.
[36] In the result:
(1) The appeal is dismissed with costs.
(2) The order of the court a quo is set aside and
replaced by the following:
‘
(i) The fourth respondent’s
purported amendment dated 25 July 2008 is declared of no force and
effect.
(ii) The first and fourth respondents are jointly and
severally to pay the costs of the application.’
__________________
W L SERITI
JUDGE OF APPEAL
APPEARANCES:
For Appellant: R Stockwell SC
E Van Vuuren
Instructed by:
Werksman Attorneys
For Respondents: GI Hulley
Instructed by:
KeesVerhage Attorneys