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[2016] ZAGPPHC 326
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Scholes and Another v Minister of Mineral Resources (50642/2015) [2016] ZAGPPHC 326 (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 authors 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 a/ia,
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 facts 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