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[2019] ZAGPPHC 287
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Minister of Environmental Affairs and Another v Arcelomittal South Africa Limited (A103/2019, 86171/2016) [2019] ZAGPPHC 287 (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 NO: A103/2019
27/6/2019
In
the matter between:
THE
MINISTER OF ENVIRONMENTAL AFFAIRS
FIRST APPELLANT
DEPUTY
DIRECTOR-GENERAL: LEGAL
AUTHORISATIONS,
COMPLIANCE,
AND ENFORCEMENT
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 judgemen.t
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 learn ed 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 NEM:WA and its
regulations as a
legislative
mechanism . That raises issues of public importance. On the
undisputed facts of this matter, the interpretation of NEM: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
(iii)
there is some
other compelling reason why the appeal should be heard, including
conflicting Judgments on the matter under consideration;
(a)
the decision sought on appeal
does not fall within the ambit of section 16(2)(a); and
(b)
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] In
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] It
seems inevitable therefore that we must defer to the court
o
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]
[15]
Proceeding to analyse the presence or absence of exceptional
circumstances, the court pointed out that
AMSA seeks the
implementation of the judgement and order so that it could continue
to sell BFO slag arising out of its operations
to downstream
consumers for road construction purposes and as agricultural lime.
[16] It is
necessary, so as to properly understand this consideration, to refer
to the application in respect
of which the order of 8 June 2018 was
given, being the main application . Although those papers were not
before us, It can be discerned
that in that matter AMSA had applied
to review and to set aside a directive of the second appellant, which
directive AMSA had appealed
to the Minister, but which app al was
dismissed. The effect of the directive was to prevent AMSA from
continuing to reclaim slag
that had been deposited in what may be
referred to for present purposes as the old slag site, and to sell It
downstream to its
customers .
[17] AMSA
had been carrying on this activity , that of reclaiming and selling
slag to downstream customers
for application as agricultural lime and
road surfacing, since the '70s. No one suggests that in doing so
during that period, AMSA
was acting unlawfully. Were it not for the
directive of the second appellant of 7 December 2015, AMSA would
likely have carried
on conducting this activity without objection
from the Department.
[18]
AMSA
accordingly applied to review that directive and the adverse appeal
decision, and it also applied for declaratory orders consequent
upon
a successful review of the Impugned directive. The declaratory orders
sought are identified in paragraph 2 of the judgement
of 8 June 2018
and can generically be described as affirming, positively, the legal
contentions that AMSA raised in support of
its review application.
[19]
As it happened, the court
a
quo
did not grant all the
declaratory relief sought by AMSA, but it granted the substantive
main relief sought, by reviewing and setting
aside the Minister's
decision of S July 2016, dismissing AMSA's appeal lodged on 6 January
2016 against the directive of the second
appellant dated 7 December
2015.
[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 ore
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] do
not agree. It seems to me that what the court
a
qua
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 AMSA' 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
o
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]
I
n
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 respondent s:
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@macrobert.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.