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[2016] ZAGPPHC 297
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Scholes and Another v Minister of Mineral Resources (50642/2015) [2016] ZAGPPHC 297 (3 May 2016)
HIGH COURT OF SOUTH
AFRICA
(GAUTENG DIVISION,
PRETORIA)
3/5/2016
Case no. 50642/2015
Not reportable
Not of interest to other
judges
Revised.
In the matter between:
JH
Scholes
First
Applicant
Malan Scholes
Incorporated
Second
Applicant
and
Minister of Mineral
Resources
Respondent
JUDGMENT
RABIE J
1. This is an application
in terms of Rule 11 of the Rules of this court for the consolidation
of the application of The Chamber
of Mines of South Africa v The
Minister of Mineral Resources and another, case number 50642/15 (the
Chamber application) and the
application of JH Scholes and another v
Minister of Mineral Resources, case number 41661/15 (the Scholes
application).
2. The Chamber
application was referred to me, sitting in the Special 3rd Motion
Court, by the Deputy Judge President for hearing
on 15 and 16 March
2016. The parties to this application was informed of the enrolment
during November 2015. Subsequently the Scholes
application as well as
the application for consolidation were also referred to me by the
Deputy Judge President. The parties to
these applications were
informed of this fact on 1 March 2016.
3. In both the Chamber
application and the Scholes application an
amicus curiae
applied
for permission to be heard in the applications. These applications
were granted.
4. The application for
consolidation was opposed by the Chamber of Mines as well as the
Minister of Mineral Resources. It should
also be mentioned that due
to the time consumed by the hearing of the consolidation application,
the parties eventually agreed
that, whatever the outcome of the
consolidation application, there would not be sufficient time for the
Chamber application to
be heard. The consequence was that the chamber
application, which was set down for hearing, had to be postponed
sine
die.
5. The background to the
aforesaid applications is briefly the following: On 26 March 2015 the
Chamber of Mines (the Chamber) proposed
to the Minister of Mineral
Resources (the Minister) that the disputes between them be referred
to Court in order to obtain clarity
thereon. On 31 March 2015 the
Chamber and the Minister agreed to approach the Court for a
declaratory order in respect of,
inter alia,
the
interpretation of a number of provisions of the Minerals and
Petroleum Resources Development Act, Act 28 of 2002 (the Act),
and
other documents published in terms of the Act.
6. The Chamber launched
the application during the beginning of June 2015. Two months later,
on 6 August 2015 the Minister filed
his answering affidavit.
Approximately one month later on 11 September 2015, the Chamber filed
its replying affidavit. Two months
later on 11 November 2015 the
parties met with the Deputy Judge President for the allocation of a
court date for the hearing of
the application. The dates of 15 and 16
March 2016 were specifically chosen to allow the party sufficient
time to file full written
argument.
7. The Scholes
application was launched at the end of June 2015. On 1 October 2015
the Minister filed his answering affidavit. It
would seem that the
replying affidavit of the applicant was filed during November 2015.
8. Rule 11 of the Rules
of Court provides that "where separate actions have been
instituted and it appears to the court convenient
to do so, it may
upon the application of any party thereto and after notice to all
interested parties, make an order consolidating
such actions ...".
The provisions of this rule are applicable to applications by virtue
of the provisions of Rule 6 (14).
In Erasmus, Superior Court
Practice, it is stated by the learned authers that the purpose of a
consolidation of actions is to have
issues which are substantially
similar tried at a single hearing so as to avoid the disadvantages
attendant upon a multiplicity
of trials. The paramount test in regard
to consolidation is convenience. This not only relates to expedience
or ease, but also
appropriateness. Consolidation will in general be
ordered in order to avoid multiplicity of actions and attendant costs
and also
in order to avoid two courts having to decide on the same
facts and/or the same legal questions. Consolidation would not
generally
be ordered where there is substantial prejudice to one of
the parties.
9. On behalf of the
Chamber it was,
inter alia,
submitted that a consolidation
would cause a delay which would be unjustified and that if the
applicants in the Scholes application
had acted expeditiously, they
could have avoided delaying the Chamber's application. It was further
submitted that those applicants
failed to bring the consolidation
application timeously and failed to explain why they did so. For
these reasons, it was submitted,
that it would not be convenient or
in the interests of justice to consolidate the two applications.
10. It was further
submitted on behalf of the Chamber that the applicant in the Scholes
application had failed to show that there
is a sufficient overlap of
issues to warrant consolidation. It was submitted that the applicants
in the Chamber and Scholes applications
have fundamentally different
objectives which informed how they approached their applications and
the relief they seek. It was
submitted that these differences are
significant and any attempt to resolve them in a single consolidated
hearing would be cumbersome,
result in unjustifiable delays and would
cause all the parties to incur additional unnecessary costs.
11. It was further
submitted that the fact that different judges may pronounce
differently in the two applications in respect of
the same issues,
would not be unusual and that differences can be resolved by either
the Supreme Court of Appeal or the Constitutional
Court.
12. The Minister also
opposed the application for consolidation. Firstly, it was submitted
that a consolidation holds a real risk
that the Chamber's application
would be postponed and that would cause prejudice to the parties and
the mining industry. It was
also submitted that the scope and ambit
of the Scholes application is much wider than that of the Chamber
application. It was submitted
that the parties in the Chamber
application have narrowed their dispute to one that can be resolved
expeditiously.
13. It was also submitted
in limine
by the Minister that the applicants in the Scholes
application do not have
locus standi
to bring the application,
that they have failed to join the Chamber to the application, that
the applicant's are merely seeking
an opinion from the court and,
lastly, that Rule 16A had not been complied with.
14. It is appropriate to
briefly refer to the Act which forms the backdrop to both
applications. The objects of the Act are diverse
but include the
object of promoting equitable access to the nation's mineral and
petroleum resources to all the people of
South Africa; to
substantially and meaningfully expand opportunities for historically
disadvantaged persons, including women and
communities, to enter into
and actively participate in the mineral and petroleum industries and
to benefit from the exploitation
of the nation's mineral and
petroleum resources; to promote employment and advance the social and
economic welfare of all South
Africans; and to ensure that holders of
mining and production rights contribute towards the socio-economic
development of the areas
in which they are operating.
15. Section 100 of the
Act under the heading "Transformation of minerals industry",
provides in subsection (2) (a) and
(b) as follows:
"To ensure the
attainment of the Government's objectives of redressing historical,
social and economic inequalities as stated
in the Constitution, the
Minister must within six months from the date on which this Act takes
effect develop a broad-based socio
economic empowerment Charter
that will set the framework for targets and time table for effecting
the entry into and active participation
of historically disadvantaged
South Africans into the mining industry, and allow such South
Africans to benefit from the exploitation
of the mining and mineral
resources and the beneficiation of such mineral resources.
(b) The Charter must set
out, amongst others, how the objects referred to in section 2 (c),
(d), (e), (f) and (i) can be achieved."
16. In respect of the
granting of a mining right the Act, in section 23, provides that the
Minister must grant a mining right if,
inter alia,
"(h)
the granting of such right will further the objects referred to in
section 2 (d) and (f) and in accordance with the charter
contemplated
in section 100 and the prescribed social and labour plan."
17. It appears that in
the main the mining industry cooperated towards achieving the
constitutional commitment to equality as contemplated
in the Act. The
Minister, in consultation with industry stakeholders, developed a
charter during 2003. This charter contained the
mutual undertakings
to which all industry stakeholders agreed to. The undertakings were
aimed at creating an enabling environment
for the empowerment of
historically disadvantaged South Africans (HDSA). The stakeholders
undertook, among other things, to reach
a target of 26% HDSA
ownership of mining industry assets over a period of 10 years.
18. In 2010 the Minister
published a new charter. This charter contained new rules of BEE
ownership, and gave the Minister new enforcement
powers to compel
compliance with the new rules. According to the Minister he is
entitled to act in terms of section 47 of the Act
which included the
right to cancel or suspend any mining right, or other right if an
entity is conducting any mining operation
in contravention of the
Act. One of the main issues of dispute between the parties resulted
from a situation where a company complied
with the 26% requirement
but had then, through no fault of its own, fallen below the 26% mark
due to, for example, a sale of shares
by an HDSA owner to a non-HDSA
purchaser.
19. The contents of the
2010 charter and the views of the Minister resulted in a number of
disputes between the government and mining
companies about,
inter
alia,
the interpretation of the ownership rules in the charter
and about government's powers to enforce those rules.
20. The main disputes
which have to be determined according to the Chamber application are
the following: whether a mining company
as a perpetual and
recurring obligation, has to meet a 26% ownership target after the
grant of a mining right or the conversion
of an old order mining
right; Whether the Minister can use the enforcement powers in the Act
to compel compliance with the 26%
target; How compliance with the 26%
HDSA target is to be calculated; And whether the contested provisions
of the 2010 charter are
ultra vires
and void.
21. It goes without
saying that in order to adjudicate the aforesaid disputes, a number
of issues, including issues of interpretation
of numerous sections of
the Act, have to be decided in the process.
22. The Scholes
application arose against the same backdrop of facs and disputes
mentioned in the Chamber application and referred
to above.
However, the approaches of the parties in the Chamber application and
the applicants in the Scholes application
in addressing the disputes,
are vastly different. This is clear from a mere reading of the relief
sought in the respective applications.
23. In the main, the
parties in the Charter application seek clarity on certain issues
that plague the effective implementation
of the Charter and the
achievement of the transformational goals of the Act. In order to
achieve this goal the applicant and the
respondent in the Chamber
application have gone to great lengths in order to reach
agreement, prior to approaching the court,
on narrowing the issues
between them. According to these parties this not only resulted from
a common wish to avoid wasteful litigation
but also from the
particular relationship between them as the main industry
stakeholders. The Chamber not only represents mining
rights holders
but is in itself a signatory to the Original Charter that is the
subject of the disputed interpretation and regards
itself as the
government's partner in the "shared vision" for the mining
industry that forms the backdrop to the Charter.
For this reason the
parties to the Chamber application agreed to approach the court for
the effective and narrow relief that would
resolve the disputes
between them.
24. According to the
Chamber, and this is also evident from the relief claimed by it in
the Chamber application, the scope and nature
of the Chamber
application is informed by the role of the parties to the application
as negotiation parties committed in the very
text of the Original
Charter to reviewing the Charter's ability to achieve its
transformational aims, and to participating in processes
of
monitoring Charter implementation, developing new strategies, to
promote interaction in respect of the Charter's objectives
and to
exchange problems and creative solutions and to arrive at joint
decisions in this regard.
25. The Scholes
application, on the other hand, has a totally different approach
which is evident from the relief claimed in that
application. There
are certain areas of overlap with the Chamber application but in the
main the Scholes application is aimed at
the destruction of the
Original and Amended Charter. According to the relief claimed the
applicants in the Scholes application
challenge the constitutionality
of both the Charters, the conduct of the Minister, the exercise of
ministerial powers, the conduct
of departmental officials and the
lawfulness of acts of Parliament. Furthermore, and in addition to the
declaratory relief regarding
the proper interpretation of the Act the
application seeks orders declaring unconstitutional parts of the
legislation; suspended
orders of invalidity; orders for Parliament to
rectify those defects; orders deeming ministerial powers to be put in
place pending
those corrections; orders setting aside both Charters
under the Constitution; orders reviewing ministerial decisions under
PAJA
and extending time periods under PAJA; orders that preserve the
validity of mining rights granted under the unconstitutional
provisions
of the Act and the Charters; and declaratory orders
deeming mining rights holders to have been compliant with those
Charters.
26. It is clear from the
aforesaid that the scope and ambit of the Scholes application is much
wider than the Chamber application
and that to adjudicate these
issues in one application with the issues raised in the Chamber
application, would not only be cumbersome
but would result in
especially the Chamber having to incur additional costs and for the
parties in the Chamber application to suffer
a much longer delay than
would otherwise have been the case. This is primarily so because the
Chamber, who wishes to uphold the
Charters, would find itself in a
position of a respondent in the Scholes application, at least in
respect of the relief which seeks
the destruction of the Charters.
The material allegations made in the Scholes application go beyond
the scope of the Chamber application
and,
inter alia,
bring to
the fore constitutional challenges that do not form part of the
Chamber application. In effect, the material part
of the Scholes
application comprise a very different case to that brought by the
parties in the Chamber application. The
Chamber would
consequently have to file opposing papers to a significant portion
of the Scholes application. This would not
only result in additional
costs for the Chamber but would be inconvenient to both the parties
in the Chamber application. The Chamber
and the Minister would be
dragged into an expansive and more complex dispute, not of their
making and which they took every care
to avoid. To approach the court
as part of such an application, which would inevitably result in a
protected hearing, would be
contrary to the basis of the agreement to
approach the court on certain limited issues. Apart from the approach
to the matter and
the differences in the relief claimed, the issues
relating to the
locus standi
of the applicants in the Scholes
application would exacerbate the situation.
27. Furthermore, the time
which it would take for such a consolidated application to be finally
heard would be vastly different
than the time within which the
Chamber application, which is ripe for hearing, can be heard. This
issue is of particular importance
having regard to what both parties
in the Chamber application have put forward as the reasons why the
adjudication of their application
should not be further delayed. This
aspect is not only in the interest of the parties to the Chamber
application but to the industry
as a whole.
28. I have considered the
submissions on behalf of the applicants in the Scholes application
which moved the application for consolidation,
but in my view they do
not trump the substantial prejudice and inconvenience that would be
suffered by the parties to the Chamber
application. It may be so that
if the Scholes application were to be heard separately, that court
would in all probability have
to adjudicate certain issues which the
court would have adjudicated in the Chamber application. However,
such issues do not seem
to be the material issues of either
application but rather subsidiary issues which are incidental to the
relief ultimately sought,
which is substantially different. Even if
some of them could be said to be material, the applicants in the
Scholes application
would suffer very little prejudice, if any, by
having another court having to rule on such issues again. It might
even curtail
the proceedings in the Scholes application.
29. Consequently, apart
from the issues of prejudice and inconvenience, I am of the view that
the two applications pursue different
objectives and that the
questions of fact and law implicated in both applications are not
substantially the same for purposes of
consolidation.
30. As far as costs are
concerned there is no reason why costs should not follow the event.
In my view such costs should also include
the costs of two counsel.
31. In the result the
following order is made:
1. The application for
consolidation is dismissed with costs which costs shall include the
costs of two counsel.
_________________________
C.P. RABIE
JUDGE OF THE HIGH
COURT