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[2019] ZAGPPHC 262
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Minister of Environmental Affairs and Another v Arcelomittal South Africa Limited (86171/2016, A103/2019) [2019] ZAGPPHC 262 (27 June 2019)
REPUBLIC OF SOUTH AFRICA
IN THE HIGH COURT OF SOUTH
AFRICA
GAUTENG DIVISION, PRETORIA
(1)
REPORTABLE:
NO
(2)
OF
INTEREST TO OTHER JUDGES: NO
(3)
REVISED
CASE
NO : 86171/2016
APPEAL
CASE N O: A103/2019
In
the matter between:
THE
MINISTER OF ENVIRONMENTAL AFFAIRS
FIRST APPELLANT
DEPUTY
DIRECTOR-GENERAL: LEGAL AUTHORISATIONS,
COMPLIANCE,
AND ENFIORCEMENT
SECOND APELLANT
and
ARCELOMITTAL
SOUTH AFRICA LIMITED
RESPONDENT
Judgment
Van
der Linde. J:
[1] This is an
automatic, urgent, appeal brought by the first appellant ("the
Minister")
and the second appellant against the respondent
("AMSA") under section (18) (4) (ii) of the Superior Courts
Act 10 of
2013 (" the Act"). That section provides as
follows:
"18.
Suspension of decision pending appeal
(1)
Subject to subsections (2) and (3),
and unless the court under exceptional circumstances orders
otherwise, the operation and execution
of a decision which is the
subject of an application for leave to appeal or of an appeal, is
suspended pending the decision of
the application or appeal.
(2)
Subject to subsection {,3} unless the
court under exceptional circumstances orders otherwise, the operation
and execution of a decision
that is an interlocutory order not having
the effect of a final judgment, which is the subject of an
application for leave to appeal
or of an appeal , is not suspended
pending the decision of the application or appeal.
(3)
A court may only order otherwise as
contemplated in subsection (1) or (2), if the party who applied to
the court to order otherwise,
in addition proves on a balance of
probabilities that he or she will suffer irreparable harm if the
court does not so order and
that the other party will not suffer
irreparable harm if the court so orders.
(4) If a court orders
otherwise, as contemplated in subsection (1)
(i)
the court must immediately record its
reasons for doing so;
(ii)
the
aggrieved party has an automatic right of appeal to the next highest
court;
(iii)
the court hearing such an appeal must
deal with it as a matter of extreme urgency; and
(iv)
such order will be automatically
suspended, pending the outcome of such appeal.
(5) For the purposes of
subsections (1) and (2), a decision becomes the subject of an
application for leave to appeal or of an appeal,
as soon as an
application for leave to appeal or a notice of appeal is lodged with
the registrar in terms of the rules".
[2] The immediate
precursor to the appeal is a judgement and order of Molefe, J on 14
March 2019 in
which the learned judge granted to the appellants leave
to appeal to the Supreme Court of Appeal against the whole of her
judgement
and order of 8 June 2018; but, more pertinent for present
purposes, in which the learned judge directed in terms of section
18(1)
of the Act, that the order of 8 June 2018
"shall
operate and be executed, pending the outcome of the appeal to the
Supreme Court of appeal."
The
appellants now appeal against this latter order. AMSA resists the
appeal.
[3] It is
necessary to begin by saying something about the basis upon which the
learned judge
granted leave to appeal to the two appellants. This is
dealt with in paragraphs 2 to 7 of her judgement. In paragraphs 2 to
6 of
her judgement, the learned judge dealt with the merits of the
legal submissions made on behalf of the appellants in support of
their application for leave to appeal. These were concerned with the
asserted retrospective operation of the Environmental Conservation
Act, 59 of 2008, and with the interpretation of certain provisions
(including section 80(4)) of the National Environmental Management:
Waste Act ("NEM:WA") 59 of 2008. Having dealt with these
submissions by counsel for the appellants, the learned judge
concluded in paragraph 4 that these grounds of appeal had no
reasonable prospect of success, for the reasons set out in paragraphs
19 to 35 of her judgement.
[4] The
court then analysed the remaining grounds of appeal. These are set
out in paragraphs
5.1 to 5.6 of the learned judge's judgement. The
court held that these remaining grounds of appeal
"likewise
have no prospect of success for the reasons set out in the judgment."
In other words, the court dealt with
all of the grounds of appeal advanced by the appellants and held that
none of them had any
prospect of success.
[5]
However, the court then went on in paragraph 7 to consider whether
leave to appeal should
nonetheless be granted because there were
other compelling reasons why leave should be granted. The learned
judge continued : "It
is evident that the issues for
determination in this matter turn particularly on the interpretation
of the NEN:WA and its regulations
as a
legislative
mechanism. That raises issues of public importance. On the undisputed
facts of this matter, the interpretation of NEN:WA
is critical to the
outcome of the matter and will have impact on future matters of this
nature and therefore requires a definitive
judgement by the SCA."
[6] It was
on that basis that the learned judge granted leave to appeal, under
section 17 (1)
(a)
(ii)
of the Act. That section provides
as follows (emphasis supplied) :
"17.
Leave to appeal
(1)
leave to appeal may only be given
where the judge or judges concerned are of the opinion that-
(a)
(i)
The appeal would have a reasonable
prospect of success;
or
(ii)
there is some other
compelling reason why the appeal should be heard, including
conflicting judgments on the matter under consideration;
(b)
the decision sought on appeal does
not fall within the ambit of section 16(2)(a); and
(c)
where the decision sought to be
appealed does not dispose of all the issues in the case, the appeal
would lead to a just and prompt
resolution of the real issues between
the parties."
[7] The
disjunctive
“
or”
between
paragraphs 17{1)(a)(i) and 17(1)(a)(ii) implies that the court has
the power to grant leave to appeal (when
"there is some other
compelling reason"),
even where there is no reasonable
prospect of success on appeal. And here that is precisely what
Molefe, J did . The learned judge
expressly held that there were no
prospects of success on appeal. The learned judge expressly granted
leave on the alternate ground,
that there was another compelling
reason to grant leave, being the public importance of the matter.
[8] This
observation is relevant, because the parties before us were agreed -
as was held by the Supreme
Court of Appeal in UFS v Afriforum and
Ano,
[1]
that
the prospects of success of the anticipated appeal by the appellants
is a relevant consideration relevant to the success of
the present
appeal before us. The weight that should be attached to it, is not
defined or circumscribed in the judgements that
are reported on this
topic.
[9] It would
seem self-evident though that if the prospect of success on the
merits were good,
this would favour the suspension of the order being
appealed, but also vice versa: if there are no prospects, there is no
point
in permitting the suspension of the operation and execution of
the order. In the present matter the court
of
quo
concluded that there were no
prospects of success on appeal and therefore this is, as I see it, an
important consideration militating
against the success of the present
appeal.
[10] But the matter
does not end there. The parties were also agreed that in the section
18 application before the court
a
quo,
the onus
was on AMSA to persuade the court that
"exceptional
circumstances"
were
present militating in favour of the court order not being suspended;
further, that Amsa was equally onus laden to prove on
a balance of
probabilities
that
it will suffer irreparable harm if the court does not order the
lifting of the suspension; and, conversely, that the appellants
will
not suffer irreparable harm if the court
does
order the
lifting of the suspension.
[11] ln considering
these three issues so identified , the parties were also agreed that
the issues are properly characterised
as factual issues. This has the
implication that the appeal before us cannot succeed, if the
deference that is required to be accorded
to factual findings of a
court
a quo
is
applied. That deference entails that the factual findings of a court
of first instance are not upset on appeal, unless the appellant
is
able to illustrate that the court
a
quo
misdirected
itself in regard to the factual findings to which it came.
[12] I accept that
this proposition is usually applied to appeals from trial matters ,
because the court
a
quo
will have
had the advantage of seeing witnesses testify in person, and
assessing their credibility and demeanour. But here this
court is, in
a sense, similarly challenged : we do not have the papers in the main
application as part of the appeal record before
us, and we are
constrained to decide the appeal on the basis of the relatively slim
material of the section 18 application papers
only.
[13] lt seems
inevitable therefore that we must defer to the court
a
quo' s
factual
findings, given that these were made not only on the basis of the
affidavits in the section 18 application, but with the
advantage of
the background knowledge deriving from the main application papers.
[14] The first of the
remaining three issues is then the question of
"exceptional
circumstances" .
In
that regard the court
a
quo
informed
itself, correctly with respect, of the applicable test. It considered
that
"exceptional
circumstances "
signify
"something
out of the ordinary and of an unusual nature that justifies a
deviation from the norm in a given matter and that
which is
exceptional is dependent on an assessment of the facts and
circumstances of each case."
[2]
[20] The court did however
issue a declaratory order in the following terms:
"That
the existing basic oxygen furnace ("BOF") slag disposal
site which the applicant operated since the late 1970s,
did not
require a disposal waste management licence in terms of the National
Environmental Management Waste Act 59 of 2008 ("NEM:WA"
)for its lawful operation".
[21] Certainly, there does
not appear to have been any counter-application in the main
application by the appellant
for an order declaring that even absent
the directive, AMSA would still be acting unlawfully in reclaiming
slag from the old site
and selling it downstream to customers for
agricultural lime and road surfacing. In fact, the appellants before
us conceded that
such conduct does not constitute unlawful conduct on
the part of
AMSA;
they
contended that the unlawfulness lay with the buyers of the slag that
were not licenced to do so. But of course, the buyers
were not before
us, and one does not know whether they could put up a defence to the
asserted unlawfulness.
[22] Against this background
it is then possible to return to the analysis and consideration by
the court
a quo
of
the
"exceptional circumstances".
The court recounted that AMSA had
submitted that the prohibition of selling slag to consumers had an
adverse financial impact on
it, and that if the directive of the
second appellant were to remain operative pending the appeal to the
SCA, that prohibition
and the adverse financial impact would endure.
[23] The financial loss
suffered since the directive was imposed was R49 million at the time
of the section 18
application; and AMSA stood to lose a further R1,3
million per month until the matter was resolved. Further, AMSA
submitted that
an even greater and unquantifiable loss was the injury
to its goodwill, and this also constituted irreparable harm, since
AMSA
would have no legally sound cause of action against the
appellants for its loss of sales and profits.
[24] Having considered those
submissions the court
a quo
concluded
in these terms:
"I have
carefully considered the submissions by the applicants' counsel as to
why the orders should not be implemented, inter
alia that the BOF
slag is a secondary product and not AMSA's primary source of income
and that the economic value thereof cannot
constitute exceptional
circumstances. I have come to the
conclusion that the circumstances of this case are out of the
ordinary and exceptional and that
the orders should be implemented
for the reasons as set out in the judgement."
[25] The court went on
to remark that the appeal process might take a considerable period of
time and that, in the view
of the court, also constituted irreparable
harm to AMSA.
[26] Although the
appellants submitted before us that the circumstances were not
exceptional, their argument was based
on the proposition that AMSA's
revenue from the sale of reclaimed slag was a secondary economic
activity; and that the circumstances
could not be regarded as
exceptional unless this was AMSA's main source of income.
[27] I do not agree.
It seems to me that what the court
a
quo
did was to
consider that, on the facts of the present case, the considerable
economic loss to AMSA constituted exceptional circumstances.
There
are two reasons why I do not believe that this court can conclude
that that conclusion is a misdirection or, for that matter
, why this
court would have come to a different conclusion than did the court
a
quo.
[28] The first reason
is that it is well-known, and this court can take judicial cognizance
of the fact, that this country
is currently in dire economic
circumstances. A prohibition against economic activity of the size
indicated by
AMSA
is injurious not
only to
AMSA's
balance sheet,
but axiomatically also to the people it employs. It takes little
reflection to appreciate that the chilling effect
of the prohibition
of economic activity cannot be afforded in the current climate. For
this reason it seems to me to be quite irrelevant
whether the
particular economic activity is AM SA' s largest; the consideration
just mentioned applies nonetheless.
[29] The second
consideration, not mentioned by the court
a
quo,
is that it
is not only AMSA's economic activity which will be curtailed if the
impugned directive were allowed to operate pending
the appeal : it is
also the economic activity of the businesses (and their employees)
that purchase the slag for application as
agricultural lime and road
surfacing. In other words, there is a prejudicial economic impact on
parties who are not before the
court, but which impact clearly must
play a role in considering whether exceptional circumstances have
been shown. The conclusion
is thus inevitable that the presence of
exceptional circumstances as found by the court
a
quo
has not been
disturbed by the appellants.
[30] That brings one to
consider whether AMSA succeeded before the court
a
quo
in showing that it will suffer
irreparable harm. In this regard the court
a
quo
pointed to the inability of AMSA
to claim damages for its loss from the appellants and its officials,
given that it could not be
said that their conduct was not
bona
fide.
The appellants submitted that
the harm is not irreparable, because AMSA can always sell the slag in
due course, if it wins the appeal.
But the appellants had no answer
to AMSA' s argument that there was no guarantee at all that the
market would some time down the
line respond favourably to AMSA's
offer of slag when AMSA would have won the appeal. The harm is
therefore irreparable, so the
court
a
quo
found.
[31] Again, I do not see a
misdirection on the part of the learned judge, nor any basis on which
this court would
have come to a different conclusion. That AMSA will
suffer harm is clear - it will not be able to sell its product. That
the harm
is irreparable is, if not equally clear, then at least
probable.
[32] That leaves the question
whether AMSA succeeded before the court
a
quo
in proving on a balance of
probabilities that the appellants will suffer no harm if the
suspension brought about by the appeal was
lifted. AMSA argued that
there could not conceivably be any harm on the part of the appellants
and no facts are before the court
on which a contrary conclusion -
that there would be harm - could be reached. Against that , the
appellants argued that the statutory
regulatory function vested in
the appellants is harmfully compromised, irreparably so, if the
directive is suspended pending the
appeal, and it should later turn
out that the appellants are successful on appeal.
[33] The difficulty with that
submission is that the court
a quo
has found that prospects of success
on appeal do not exist. That being so, it seems axiomatic that
AMSA
has shown
"on
a balance of probabilities"
that
the appellants
"will not suffer
irreparable harm if the court so orders",
as
envisaged in section 18 (2)(b).
[34] In the result
this court should conclude not only that no misdirection by the court
a quo
has
been illustrated, but that in any event this court would have come to
the same conclusion as did that court .
[35] I propose the
following order:
The appeal is dismissed with
costs, including the costs consequent upon the employment of two
counsel.
Date
argued: Friday, 21 June 2019
Date
judgment: 27 June 2019
WHG
van der Linde
Judge,
High Court
Pretoria
I
agree, and it is so ordered.
N Ranchod
Judge, High Court
Pretoria
I agree.
E M Kubushi
Judge, High Court
Pretoria
For
the appellants:
Adv I Ellis, SC
Adv F Patel
Instructed by:
The
State Attorney: Pretoria
Appellants'
attorneys
SALU
Building
316 Thabo Sehume Street
Pretoria
Ref:
7855/2016/252/mc
M
Makhubela
Tel:
012 - 3091630
For
the respondents:
Adv
NH Maenetje, SC
Adv
BL Makola Instructed by:
Macrobert
Incorporated
Respondent's
attorneys
Macrobert
Building
1062
Jan Shoba Street
Brooklyn
Pretoria
Ref: KC/wn/00040145 Tel: 012 -
4253522
kcameron@macrobert.co.za
;
wnxasana@mac
robert .co.za
[1]
2018 (3)SA428 at [13].
[2]
Compare lncubeta Holdings (Pty) Ltd and Ano v Ellis and Ano,
2014{3)SA189{GJ) at 156H -157C.