Aquila Steel (South Africa) Limited v Minister of Mineral Resources and Others (72248/15) [2016] ZAGPPHC 1071; 2017 (3) SA 301 (GP) (22 November 2016)

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[2016] ZAGPPHC 1071
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Aquila Steel (South Africa) Limited v Minister of Mineral Resources and Others (72248/15) [2016] ZAGPPHC 1071; 2017 (3) SA 301 (GP) (22 November 2016)

IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
DIVISION, PRETORIA
22/11/16
CASE
NO: 72248/15
Reportable:
No
Of
interest to other judges: No
In
the matter between:
AQUILA
STEEL (SOUTH AFRICA)
LIMITED
Applicant
and
MINISTER
OF MINERAL
RESOURCES
First

Respondent
DIRECTOR-GENERAL:
DEPARTMENT OF
MINERAL
RESOURCES
Second

Respondent
DEPUTY
DIRECTOR-GENERAL: MINERAL
REGULATION
DEPARTMENT
OF
MINERAL
RESOURCES
Third

Respondent
REGIONAL
MANAGER: NORTHERN CAPE REGION
DEPARTMENT
OF MINERAL RESOURCES
Fourth

Respondent
PAN
AFRICAN MINERAL DEVELOPMENT
COMPANY
(PTY)
LIMITED
Fifth

Respondent
ZIZA
LIMITED
Sixth

Respondent
JUDGMENT
Tuchten
J
:
1.
The applicant (Aquila) applies to review certain decisions of the
first to fourth respondents (the government respondents) and
for
certain declaratory relief. Although the government respondents did
not give notice of intention to oppose, they submitted
an explanatory
memorandum and appeared at the hearing to oppose the relief sought by
the applicant. Where it is not necessary to
distinguish between the
different actors within the Department of Mineral Resources, I shall
simply refer to the Department as
the DMR. The relief sought is also
opposed by the fifth and sixth respondents, whom I shall call
collectively PAMDC and Ziza. Aquila,
the government respondents and
PAMDC and Ziza were respectively represented at the hearing before me
by counsel.
2.
The review is brought under the Promotion of Administrative Justice
Act, 3 of 2000 (PAJA) but I need not identify the precise
provisions
of PAJA under which the applicant seeks review relief because it was
implicit in the oral arguments that if the issues
identified and
argued by the respondents are decided against them, review relief
must issue.
3.
The facts are straightforward and in the main not in dispute but
despite that Iat least found the issues arising from those facts

difficult to resolve. Counsel for Aquila put up a chronology of the
main facts relevant to the case which I think all concerned
found
most helpful during the argument. I shall therefore attach a copy of
the applicant's chronology as an appendix to this judgment.
Counsel
for the respondents accepted the accuracy of the chronology although
they submitted that there were one or two matters
that should have
been included in the chronology.
4.
Aquila is a
subsidiary of an Australian resources company. In 2006, Aquila was
granted a prospecting right over a piece of land
in the Northern Cape
(portion 114)
[1]
and a further
twelve properties (all collectively the relevant properties). In the
exercise of that right, it spent R156 million
on prospecting
activities and found a significant manganese reserve. Aquila now
wishes to mine that reserve.
5.
Ziza had
its genesis in land grants made by the government of the Cape Colony
to Cecil John Rhodes in the late 19th century. Ziza
was incorporated
in the United Kingdom on 24 May 1893 under the name The Bechuanaland
Railway Company Limited,
[2]
and
is now owned by the governments of Zimbabwe and Zambia. No doubt its
present name is made up of the first two letters of those
countries.
Part of Ziza's patrimony apparently involved mineral rights over
land. The land itself had long before been alienated.
6.
The Mineral
and Petroleum Resources Development Act, 24 of 2008 (the MPRDA), was
promulgated in 2002 and came into force on 1 May
2004. It represented
a fundamental shift in the regulation of mineral rights in South
Africa. It vested privately-owned mineral
rights in the State (as
custodian of these rights) and enforced the "use it or lose it"
principle. It abolished the entitlement
of a right-holder to
sterilise the mineral rights in question unless and until it was
ready to mine.
[3]
7.
It will immediately be seen that the MPRDA represented in its sphere
as ringing a break with the past as did the Constitution.
Its
preamble declares that the nation's mineral (and petroleum) resources
belong to the nation with the State as their custodian;
affirms the
need to protect the environment, ensure sociologically sustainable
development of these resources and promote economic
and social
development; recognises the need to promote development and community
upliftment, to eradicate discriminatory practices
in the industry and
redress past racial discrimination. The preamble proceeds to reaffirm
the State's commitment to guaranteeing
security of tenure in respect
of prospecting and mining operations and to emphasise the need to
create an internationally competitive
administration and regulatory
regime. The effect of the MPRDA was to remove the ability of the
owners of minerals to prevent the
exploitation of their minerals
simply by reference to their ownership. Under the previous statutory
regime, exploitation only be
achieved with the owner's consent. Under
the MPRDA regime, owners of minerals could no longer sterilise their
exploitation by simply
relying on their ownership.
8.
Recognising that some consideration had to be given to the position
of mineral owners under the earlier regime, the MPRDA in
Schedule II
enacted a regime of transitional arrangements. For the purpose of Sch
II, Ziza was the holder of what the measure calls
an unused old order
right. Item 8 of Sch 11 provides for preferential treatment for
holders of old order rights, of which an unused
old order right is
one, provided they exercise certain rights conferred upon them by the
measure within a specified period. It
was common cause that this
period expired on 30 April 2005.
9.
Three fundamental principles enacted through the MPRDA are relevant
to this dispute. Firstly, subject to the transition provisions,
the
common law owner of such minerals cannot sterilise their exploitation
by reference only to their ownership.
10.
Secondly in relation to the applications for prospecting and mining
rights for which the MPRDA provides, there is a queuing
system.
Broadly, the applicant first in the queue, a status which it achieves
by submitting its application to the regional manager
(RM) of the DMR
for the area into which the land in question falls, has the right to
have its application adjudicated first. Should
the application of the
applicant first in the queue be granted, the other applications
cannot be considered in relation to the
same land and the same
mineral. Should a second application be granted despite the existence
of a pending application of the applicant
first in the queue, then
the grant of the second application will be unlawful and susceptible
to being set aside.
11.
Thirdly, the queuing system is subject to certain exclusive rights
conferred by Sch II on the holders of old order rights. The
content
of this exclusivity is at the heart of this dispute.
12.
For a proper appreciation of the issues raised in the review, it is
important to emphasise the distinction drawn in the MPRDA
between the
acceptance
of an application for one of the rights which can
be conferred under the MPRDA and the
grant
of that right. In
the case of a prospecting right, an application containing certain
prescribed information must be submitted to
the RM of the DMR for the
area in which the land over which the right is sought falls.
13.
In this regard, s 16 of the MPRDA as it read at the time provided:
(1)  Any person who
wishes to apply to the Minister for a prospecting right must lodge
the application-
(a)
at the office of the Regional Manager inwhose region the land is
situated;
(b)
in the prescribed manner; and
(c)
together with the prescribed non-refundable application fee.
(2)  The Regional
Manager must accept an application for a prospecting right if-
(a)
the requirements contemplated in subsection (1) are met; and
(b)
no other person holds a prospecting right, mining right, mining
permit or retention permit for the same mineral and land.
(3)  If the
application does not comply with the requirements of this section,
the Regional Manager must notify the applicant
in writing of that
fact within 14 days of receipt of the application and return the
application to the applicant.
(4)  If the Regional
Manager accepts the application, the Regioal Manager must, within 14
days from the date of acceptance,
notify the applicant in writing-
(a)
to submit an environmental management plan; and
(b)
to notify in writing and consult with the land owner or lawful
occupier and any other affected party and submit the result
of the
consultation within 30 days from the date of the notice.
(5)  Upon receipt of
the information referred to in subsection (4) (a) and (b), the
Regional Manager must forward the application
to the Minister for
consideration.
14.
The
"prescribed manner" for the purposes of s 16(1)(b) includes
the obligation prescribed in reg 5(1) of the Mineral and
Petroleum
Resources Development Regulations
[4]
(the Regulations) to submit the plan contemplated in reg 2(2) to
which the application relates. Reg 2(2) requires that the application

must be accompanied by a plan of the land to which the application
relates, in accordance with generally accepted standards, containing

the coordinates and one of three named "spheroids".
[5]
15.
Under s 16(2), the RM to whom such an application is submitted had to
scrutinise it for compliance with the requirements in
s 16(1)(b) read
with the Regulations. He had also to determine whether any other
person held one of the rights administered under
the MPRDA including
a prospecting right in relation to the land and the mineral in
question.
16.
If the application did not pass muster ("comply with the
requirements of this section"), the RM was left with no
discretion. Within 14 days of receipt of the application, he had to
notify the applicant in writing of that fact and return the

application to the applicant. If the application did indeed pass
muster, the RM had equally no discretion. He had to
accept
the
application and call for certain information. Once that information
was furnished, the RM was then required to forward the application
to
the Minister for consideration. Section 17 describes the powers of
the Minister to grant or refuse an application for a prospecting

right.
17.
One of the issues of interpretation raised during argument before me
was the consequence in relation to an application for a
prospecting
right of notification that the application did not pass muster and
return of the application to the unsuccessful applicant.
This is
important because of the queuing system. The question at this level
is whether an applicant whose application did not pass
muster and was
returned to that applicant retained its place in the queue. There is
apparently no authority directly on point.
18.
The
argument advanced against Aquila was that s 16 does not provide for
the rejection of an application by a RM. On counsel's argument,
the
return of the application to the applicant would enable such an
applicant to supplement or correct its application at its leisure,

thereby preventing other aspirants in the queue from having their
applications considered.
[6]
19.
I cannot
accept this submission. If correct, it would result in the potential
sterilisation of the right to prospect for the mineral
and on the
land in question. An indolent applicant could delay for years the
potential exploitation of the mineral. So the interpretation

contended for would not advance the purposes of the MPRDA.
[7]
20.
The language of s 16 is against the interpretation contended for. The
interpretation would require that an application be treated
as
pending even though the DMR, having returned the application, had no
record of it other than, no doubt, entries reflecting the
dates on
which the application was received and returned. In such a case, it
would be very difficult, to say the least, for the
DMR to determine
whether a subsequent application related to the same land and mineral
as that which had been returned to the applicant.
21.
I therefore conclude that the return of an application by a RM under
s 16 was equivalent to the rejection of such an application.
It was
of course open to such an unsuccessful applicant to amend or amplify
its application and resubmit it. But then the application
would be
treated as a new application and given a place in the queue as such,
rather than as a pending application enjoying first
place in the
queue.
22.
This conclusion is regrettably not dispositive of the issue because
Ziza was the holder of an unused old order right. As such,
Ziza
enjoyed certain preferent rights under item 8. The issue before me
relates both to the content and to the duration of this
preferent
right. I shall deal with this question below.
23.
Ziza's
common law mineral rights in question had never previously been
exploited. Ziza's rights were therefore unused old order
rights.
[8]
When the predecessor to the MPRDA, the Minerals Act, 50 of 1991, was
repealed by the enactment and coming into operation of the
MPRDA,
Ziza could only exploit its rights under the MPRDA. In order to gain
any right to exploit its unused old order rights, Ziza
therefore had
to apply for prospecting or mining rights under Item 8. If Ziza did
nothing in this regard, its common law rights
would cease to exist.
This gave rise to certain steps on its part in the period February to
April 2005.
24.
A cabinet memorandum signed by the Director-General of Mineral
Resources (the DG) on 21 February 2005 and by the Deputy Minister
on
4 March 2005 recorded that "extensive discussions" had been
going on between the Minister and the relevant authorities
in Zambia
and Zimbabwe. These governments agreed with the government of South
Africa to "co-operate in exploring and possible
exploitation of
the resources". It was envisaged that a new company would be
formed and co-owned by the three governments,
in order to "take
over the prospecting and possible mining activities of Ziza in South
Africa". The company was in due
course incorporated and is the
fifth respondent (PAMDC.)
25.
The three governments entered into a memorandum of understanding on
24 March 2005. The memorandum records the parties' "intention
to
enter into agreement to facilitate process of co-operation to
facilitate the establishment of the Pan African Mineral Development

Company and to establish a Council of Ministers for cooperation".
All the mineral rights owned by Ziza would be transferred
to the yet
to be established PAMDC and Ziza would exist only for the purpose of
winding up its operations.
26.
PAMDC was incorporated on 26 November 2007. The three governments
entered into a shareholders' agreement to regulate their joint

venture in October 2008. But no mineral rights were ever transferred
from Ziza to PAMDC. So when the MPRDA came into operation,
any old
order mining rights still in existence in relation to the relevant
properties could not have vested in PAMDC.
27.
Ziza resolved on 25 March 2005, amongst other things, to submit
appropriate applications to secure prospecting licenses and

conversion of its old order mineral rights to new order mineral
rights in compliance with the 30 April 2005 deadline set by the

MPRDA. During April 2005, Ziza filed a number of applications in
respect of different agglomerations of land making up its total
1,7
million hectares of unused old order rights. These appear to have
been filed with the Northern Cape Province Regional Office
of the DMR
at Kimberley as well as with the North West Province Regional Office.
The specific application with which the present
review is concerned
is an application for a prospecting right which was filed on 19 April
2005 in Kimberley, and apparently related
to some 500 000 hectares of
land (collectively the Ziza properties).
28.
Ziza's application for a prospecting right was affected by certain
irregularities, set out in detail in the applicant's founding

affidavits. One of these defects was that in relation to the land or
area over which the right was sought, there were no "coordinated

maps". In addition, the Ziza application did not show the
required financial resources or technical ability on the part of

Ziza.
29.
The RM of
the DMR's Northern Cape Region was obliged to notify Ziza within 14
days of receipt of its application that it did not
comply with the
requirements of section 16 of the MPRDA and to return the application
to Ziza.
[9]
This did not take
place. Instead, after a delay of four months, the RM purported to
accept Ziza's application for a prospecting
right on 17 August 2005.
The explanation for the failure to return the application to Ziza
appears from an explanatory memorandum
dated 2 December 2013
submitted by an official within the DMR to its chief director: legal
services:
It is hereby acknowledged
that the ZIZA's application was not initially complete, however due
to extensively large area covered
by the application, it took a
significant time to follow all the necessary administrative processes
completely capture their application
on the internal system, hence
the application could not be rejected within the 14 days prescribed
in terms of the Act.
[T]he
only decision which could be taken after 14 days is to accept such an
application, whether defective or not and thereafter
apply the
provisions of ... PAJA.
[10]
30.
It is not in dispute that this decision (the acceptance decision) was
irrational and resulted in a sequence of events which
led to the
present dispute. The applicant attacked the acceptance decision in
the present review. The only defence to the attack
on the acceptance
decision is that raised by counsel for the government respondents,
that the applicant had not exhausted its internal
remedies in
relation to the acceptance decision.
31.
After acceptance, the Ziza application remained pending for a
considerable period before it was finally granted on 26 February

2008. Under s 19(2) of the MPRDA, the holder of a prospecting right
must lodge it for registration at the Mining Titles Office.

Registration of the right was under the MPRDA as it then read was of
no relevance to the relationship between the holder of the
right and
the DMR but affected the position of the holder in relation to third
parties.
32.
The prospecting right granted to Ziza was registered in the name of
PAMDC. But PAMDC had never applied for a prospecting right.
It is not
in dispute that the registration of the right in the name of PAMDC
was irregular and should never have been effected.
The applicant asks
that the registration be set aside. The only defence raised to this
prayer is that the registration is of no
consequence and ought
therefore to be ignored.
33.
The failure by Ziza to lodge various documents required by the DMR,
timeously or at all, continued right up to the time the
application
was granted. Various sections of the DMR reported negatively on the
Ziza application and recommended that it be rejected.
In a minute of
a meeting between officials of the DMR and PAMDC held on 8 September
2010, it was explained by the DMR that at the
time the rights had
been granted to Ziza, there were no "coordinated map plans".
This phrase refers to maps of the land
over which rights are applied
for with coordinates sufficient to enable the OMA to load the
identity of the land in question onto
its system. The application
form prescribed by regulation requires these maps with coordinates to
be submitted, for the obvious
reason that without them it is very
difficult to identify the land in question.
34.
It is not clear from the record why the DOG as the delegate of the
Minister was persuaded to grant the Ziza prospecting right

notwithstanding recommendations to the contrary. None of the
respondents has offered any justification for the acceptance of the

Ziza application or its grant. But it is clear that Ziza never
attempted to exploit the prospecting right and that the prospecting

right was never executed in the name of Ziza.
35.
It was not suggested that Ziza ever acquired the required financial
resources or technical ability. Indeed Ziza never contemplated

prospecting or mining. It was instead going to transfer its rights to
PAMDC. But in fact it never did so.
36.
On 18 April 2006 Aquila submitted an application (the Aquila
application) for a prospecting right to the DMR. This was almost
a
year after the Ziza application was submitted but before the grant of
the prospecting right to PAMDC. It is not suggested that
the Aquila
application was defective. The Aquila application was accepted on 2
May 2006, within the statutory period of 14 days.
37.
Whether the Ziza application in fact overlapped with the Aquila
properties ought to depend on a comparison between the properties

identified in the respective applications for prospecting permits.
Counsel for Aquila submit in their heads of argument that because
of
the defective way in which the Ziza application was compiled, there
is uncertainty about the extent of what Ziza applied for,
what it was
granted in February 2008 and whether what itwas granted overlapped
with the Aquila properties and that there was no
way in which the RM
could have determined, as at 18 April 2006, and comparing the two
applications with each other, that there
was an overlap.
Consequently, it is submitted, even if Ziza intended to apply for a
right that overlaps with that of Aquila, that
intention was never
carried into effect because its application did not evidence that
intention. This submission was not pressed
in argument and I shall
assume for present purposes against Aquila that the overlap exists
and treat the case as one of double
grants.
38.
On 28 February 2007, the DMR executed a prospecting right infavour of
Aquila. It was registered in the Mineral and Petroleum
Titles
Registration Office on 17 July 2007. The Aquila prospecting right
covers the relevant properties. These properties include
portion 114
and cover about 37 000 hectares in the Kuruman district in the
Northern Cape Province. On the strength of its prospecting
right,
Aquila performed extensive prospecting and drilling operations
between 28 February 2007 and 13 December 2010 on the relevant

properties.
39.
Through its prospecting activities, Aquila identified a large
manganese resource, estimated to amount to over 140 million tonnes,

worth many billions of rands, on the Aquila properties. A manganese
reserve of 20,2 million tonnes was identified on portion 114.
Since
December 2010, Aquila has been ready and able to mine the manganese
reserve on portion 114. It submitted an application for
a mining
right to the DMR on 14 December 2010. The DMR accepted the Aquila
mining right application in a letter dated 22 December
2010.
40.
On 9 November 2010 Ziza was dissolved and deregistered. Counsel for
the applicant submit that the effect of the dissolution
and
deregistration was that any rights in relation to pending mineral
right applications which Ziza had held thereby lapsed and
ceased to
exist in terms of s 56(c) of the MPRDA. This provision reads:
Any right, permit,
permission or licence granted or issued in terms of this Act shall
lapse, whenever-
(a)…
(b)…
(c) a company or close
corporation is deregistered in terms of the relevant Acts and no
application has been made or was made to
the Minister for the consent
in terms of section 11 or such permission has been refused.
41.
In its letter accepting Aquila's mining right application sent on 22
December 2010, the DMR assured Aquila that it would consider
Aquila's
mining right application by 31 December 2011. But the DMR did not
consider Aquila's application for a mining right until
July 2015, and
then only after Aquila had compelled it to do so by bringing a
mandamus application. The mandamus application occurred
against the
following background.
42.
During the course of 2009, PAMDC or Ziza furnished to the DMR further
information, including the maps and coordinates which
ought to have
formed part of Ziza's 2005 application. When these maps and
coordinates were processed, the DMR apparently discovered
that Aquila
already held a prospecting right over some of the properties
identified on them. According to PAMDC, the DMR informed
them around
April 2010 that there had been a double grant. There were extensive
negotiations and discussions between PAMDC and
the DMR in relation to
the issue during 2010 from which Aquila was excluded.
43.
On 14 December 2010, Aquila applied for a mining right for manganese
and other minerals on Portion 114. The application for
the Aquila
mining right was accepted on 22 December 2010. After or during a
prolonged process of negotiation with the DMR, Aquila
was informed
orally that its application for a mining right would not be granted.
Aquila tried through its attorneys without success
to get written
confirmation that its application for a mining right had been
rejected. The final attempt to get this confirmation
was made in a
letter dated 22 October 2013.
44.
Aquila was first informed of the double grant on 28 January 2011, in
the course of a meeting with the DMR on the processing
of its mining
right application. The DMR cited the double grant as a reason not to
consider the mining right application. Throughout
the period from
that date to October 2013, Aquila tried to gather information on the
alleged double grant and achieved limited
success by October 2013.
Such success as Aquila did achieve was only through the use of
requests in terms of the Promotion of Access
to Information Act, 2 of
2000.
45.
Unbeknown to Aquila, and unexplained on the documents compiled as
part of the record, moves were afoot during 2011 to execute
a
prospecting right in favour of PAMDC (not Ziza). Dr Thibedi Ramontja
had been a director and the chairman of PAMDC since October
2008.
According to the DMR, he resigned from PAMDC before he was appointed
as the DG of the DMR on 12 October 2011. Although the
DMR promised
Aquila a copy of his resignation letter, it was never produced.
46.
In any event, Dr Ramontja had been in office as DG for a month when a
prospecting right was executed in favour of PAMDC on 19
November
2011. The prospecting right states that it covers "various
farms" in the "magisterial/administrative districts
of
Kuruman and Vryburg" measuring 576 873 hectares.
47.
There was no basis on which such a prospecting right could have been
granted to PAMDC. A prospecting right had been granted
to Ziza and
had not been transferred to PAMDC. The prospecting right granted to
Ziza had lapsed. And at the time the DMR purported
to grant PAMDC a
prospecting right, Aquila already held a prospecting right over the
relevant properties.
48.
PAMDC appeared to accept that these defects were insurmountable.
PAMDC submitted a fresh application for a prospecting right
over the
relevant properties on 20 July 2015. PAMDC states that it has not
received any notification of an acceptance of the application
and the
record does not reveal such an acceptance. To date, PAMDC has made no
attempt to engage in prospecting on portion 114 or
any of the other
relevant properties.
49.
After what Aquila describes as a frustrating process of engagement
with the DMR and PAMDC, culminating in two PAIA requests,
Aquila
eventually received documents in August and October 2013 including
the grant letter of February 2008 to Ziza and the executed

prospecting right in favour of PAMDC. On the strength of these
documents, it launched an internal appeal against the decisions

evidenced in the documents it received in August and October 2013
(the Aquila appeal).
50.
The exact nature of the internal appeal launched by Aquila was the
subject of close scrutiny in argument. The Aquila appeal
was launched
by a notice of appeal in a letter dated 29 October 2013. The subject
of the appeal was set out in paragraph 1.2 of
the notice and was
squarely directed against the grant of the prospecting right to Ziza
(the Ziza prospecting right grant decision).
51.
Paragraph 1.3 then proceeds to set out the grounds of appeal. The
remainder of the notice sets out further grounds of appeal,
factual
allegations and argument. Paragraph 1,3,2, read with paragraphs 2.4,
3.22, 4.3.4.2, 6.1.2, 6.4 and 6.6.2 however make it
plain that while
there was no formal appeal against the acceptance decision itself,
one of the grounds upon which the Ziza prospecting
right
grant
decision was attacked was that the Ziza prospecting right
acceptance
decision was irregular.
52.
This procedural matter is of some importance in the present review
because as I shall show later, the Ziza prospecting right
acceptance
decision is the subject of Aquila's first prayer for relief. This is
important for Aquila because it contends that success
in its attack
on the Ziza prospecting right acceptance decision will affect
Aquila's place in the queue for prospecting rights
over Portion 114.
It is important for the government respondents because they contend
that because there was no appeal to the Minister
against the Ziza
prospecting right acceptance decision, Aquila has not exhausted its
internal remedies in that regard and this
court should not entertain
the review against the Ziza prospecting right acceptance decision
because of the provisions of s 7 of
PAJA. The government respondents
further submit that the review has been brought out of time. Section
7 of PAJA reads:
(1) Any proceedings for
judicial review in terms of section 6 (1) must be instituted without
unreasonable delay and not later than
180 days after the date-
(a) subject to subsection
(2) (c), on which any proceedings instituted in terms of internal
remedies as contemplated in subsection
(2) (a) have been concluded;
or
(b) where no such
remedies exist, on which the person concerned was informed of the
administrative action, became aware of the action
and the reasons for
it or might reasonably have been expected to have become aware of the
action and the reasons.
(2)(a) Subject to
paragraph (c), no court or tribunal shall review an administrative
action in terms of this Act unless any internal
remedy provided for
in any other law has first been exhausted.
(b) Subject to paragraph
(c), a court or tribunal must, if it is not satisfied that any
internal remedy referred to in paragraph
(a) has been exhausted,
direct that the person concerned must first exhaust such remedy
before instituting proceedings in a court
or tribunal for judicial
review in terms of this Act.
(c) A court or tribunal
may, in exceptional circumstances and on application by the person
concerned, exempt such person from the
obligation to exhaust any
internal remedy if the court or tribunal deems it in the interest of
justice.
53.
In response to this challenge, Aquila in the first place submits that
in substance, the issues raised by its notice of internal
appeal
included an attack on the Ziza prospecting right acceptance decision.
In the second place, to the extent necessary, Aquila
asks for
exemption under s 7(2)(c) of PAJA and, if it has been found that its
review of the Ziza prospecting right acceptance decision
has been
brought out of time, an extension of time under s 9(1)(b) of PAJA.
54.
By letter dated 31 January 2014, PAMDC gave notice of its intention
to oppose the Aquila appeal and further cross-appealed.
The cross-
appeal (the PAMDC cross-appeal) was directed in terms against both
the decision of 2 May 2006 to accept Aquila's application
for a
prospecting right and the decision of 11 October 2006 to grant a
prospecting right to Aquila.
55.
Although Dr Ramontja was the appropriate delegated appeal authority,
the DMR conceded in November 2013 that he was conflicted
and the
parties agreed that the Minister would decide the appeal.
56.
PAMDC eventually delivered its final submission in the internal
appeals on 27 October 2014. PAMDC had apparently delayed its
answer
for months in order to resurrect Ziza from its deregistration in 2010
in England with effect from 14 October 2014.
57.
The internal appeal process took more than twenty months to be
concluded. At the outset, the DMR had promised Aquila that the
appeal
would be decided by 13 January 2014. Eventually, and only after being
compelled to do so by Aquila's mandamus application,
the Minister
decided the Aquila appeal and the PAMDC cross-appeal as well as
Aquila's mining right application on 2 July 2015.
Why the
administrative adjudication process took so long, when reg 74(9) of
the Regulations provide that the decision must be made
within 30 days
after the completed appeal papers are placed before the functionary
considering the appeal, is not explained. The
Minister had, when he
decided the appeal, the advice of his own most senior legal adviser
as well as that of senior counsel. The
Minister was advised to uphold
the Aquila appeal and dismiss the PAMDC cross-appeal.
58.
But the Minister rejected the Aquila Appeal, granted the PAMDC
cross-appeal, and refused Aquila's mining right application.
The
Minister gave reasons for the three decisions embodied within his
ruling. I reproduce those reasons below in full:
The prospecting right
application of Ziza Limited was lodged and accepted during a period
which afforded it exclusivity in terms
of the transitional provisions
of the MPRDA. The gra[n]ting of a prospecting right in its favour was
therefore lawful.
As a consequence, the
prospecting right application of Aquila Steelwas unlawfully accepted,
processed and granted during the aforesaid
period which afforded
exclusivity to the application of Ziza,
Accordingly, I am also
not in a position to grant the mining right application in favour of
Aquila Steel, because of the existence
of a prospecting right in
favour of Ziza.
59.
It seems however that there is still a measure of confusion in the
minds of the functionaries in the DMR dealing with this fraught,
as
it has become, situation. The applicant applied for a renewal of its
prospecting permit on 20 July 2015. One would have thought
that once
the Minister had pronounced that the earlier prospecting right in
favour of Ziza had been lawfully accepted and granted,
this would
have led to the refusal of the application for renewal. Not so; the
Aquila renewal application was granted on 20 July
2015 and is now the
subject of a pending internal appeal.
60.
The Minister's adverse decisions on the internal appeals and the
mining right application led to the institution of the present

application to court on 7 September 2015.
61.
The issues raised by the respondents have given rise to technical
issues (an expression which I do not use pejoratively) and
the
applicant has perforce attacked these in a series of intricate
prayers for relief, contained in a second amended notice of
motion as
amended again by an unopposed application from the bar during the
course of argument which was later embodied in a written
amendment. I
set out below the substantive relief in which at this stage of the
proceedings the applicant persists:
1. Reviewing and setting
aside the decision of the fourth respondent to accept the sixth
respondent's application for a prospecting
right with reference
number NC 30/5/1/1/2/179PR, which decision was taken on or about 17
August 2005;
1A. To the extent
necessary, exempting the applicant in terms of section 7(2)(c) of the
Promotion of Administrative Justice Act
3 of 2000 ("PAJA")
from the obligation to exhaust its internal remedies in respect of
the order sought in paragraph 1
above;
1B. To the extent
necessary, extending the 180-day time period for institution of
judicial review proceedings contemplated in section
7(1) of PAJA so
as to terminate one day after the institution of this application in
respect of the order sought in paragraph 1
above;
2. Reviewing and setting
aside the decision of the third respondent to grant a prospecting
right with reference number NC 30/5/1/1/2/179PR
to the sixth
respondent, which decision was communicated by means of a letter
dated 26 February 2008 and substituting this decision
with the
following: the sixth respondent's application for a prospecting right
with reference number NC 30/5/1/1/2/179PR is refused;
3. Reviewing and setting
aside the decision of the third respondent taken on or about 17
November 2011 to execute a prospecting
right with reference number NC
30/5/1/1/2/179PR in favour of the fifth respondent;
4. Reviewing and setting
aside the execution of a prospecting right with reference number NC
30/5/1/1/2/179PR by the fourth respondent
in favour of the fifth
respondent on or about 19 November 2011, and the registration of such
right in the Mineral and Petroleum
Titles Registration Office;
5. Reviewing and setting
aside the following decisions of the first respondent, which
decisions were communicated by means of a
letter dated 2 July 2015:
5.1. the decision to
dismiss the appeal by the applicant under section 96(1) of the
Mineral and Petroleum Resources Development
Act 28 of 2002 ("the
Aquila Appeal");
5.2. the decision to
uphold the cross-appeal by the fifth respondent under section 96(1)
of the Mineral and Petroleum Resources
Development Act 28 of 2002
("the PAMDC Cross­ Appeal");
5.3. the decision to
reject the applicant's application for a mining right (with reference
number NC 30/5/1/2/2/295MR) in respect
of iron ore, pyroxenite,
copper ore, zinc ore, manganese ore, ferrous and base metals on
portion 114 ("the Aquila Mining Right
Application");
7. Substituting the first
respondent's decision in respect of the Aquila Appeal with the
following: the Aquila Appeal is upheld,
the grant of a prospecting
right with reference number NC 30/5/1/1/2/179PR to the sixth
respondent is set aside and the sixth respondent's
application for a
prospecting right with reference number NC 30/5/1/1/2/179PR is
refused;
8. Substituting the first
respondent's decision in respect of the PAMDC Cross-Appeal with the
following: the PAMDC Cross­ Appeal
is dismissed;
9. Substituting the first
respondent's decision in respect of the Aquila Mining Right
Application with the following: the Aquila
Mining Right Application
is granted subject to conditions to be determined by the first
respondent within thirty calendar days
of the date of this court
order;
Alternatively to
paragraph 10 above: remitting the Aquila Mining Right Application to
the first respondent and ordering the first
respondent to make a
decision in respect of the Aquila Mining Right Application within
sixty calendar days of the date of this
court order;
10A. Declaring that the
prospecting right granted to the sixth respondent with reference
number NC 30/5/1/1/2/179PR lapsed with
effect from 9 November 2010;
11. Ordering the second
respondent to remove from the records of the Mineral and Petroleum
Titles Registration Office the prospecting
right with reference
number NC 30/5/1/1/2/179PR and any reference to the registration of
the  prospecting  right
with  reference number
NC 30/5/1/1/2/179PR;
62.
The first issue, raised only by PAMDC and Ziza in counsel's heads of
argument, is whether any of the relief is moot. During
argument
before the court. Counsel confined their mootness argument to the
prayer for the setting aside of the notarial deed of
prospecting
grant in favour of PAMDC. I do not agree that any of the relief
sought is moot. Firstly, substantial parts of the relief
in question
are opposed by the government respondents. Secondly, the path to the
key relief sought by the applicant, the orders
directed at compelling
the Minister to grant the applicant a mining right, is obstructed by
components of the relief said to be
moot. Because decisions of this
kind generally remain valid despite their defects unless upset by an
order of court, it is in the
interests of justice that the position
in relation to such decisions be clarified by court order rather than
left to confuse the
relationship between the parties in the future.
Thirdly, and generally, this is a procedurally complex situation.
These complexities
have caused considerable confusion in the
administration of the government respondents. The case was argued
before me over the
better part of three days and even with the
guidance of three sets of counsel, I found that the administrative
intricacies made
it exceptionally difficult to appreciate the big
picture. Fourthly, such is the complexity of the picture that as the
argument
went on, counsel raised new legal issues not initially
advanced. In one such case, raised after reply by counsel for Aquila,
I
declined to allow argument on the new legal issue. The more that
situation is clarified by appropriate orders of court, the better.
63.
This is not the type of case in which an applicant has sought to
circumvent the internal appeal procedure. On the contrary,
the
present litigants extensively presented and argued their cases before
the Minister. The regularity of the Ziza prospecting
right acceptance
decision was one of the issues in the appeal, not because that
decision was specifically the subject of the appeal
but because the
Ziza prospecting right grant decision, of which the acceptance
decision was a component, was the subject of the
appeal. One of
Aquila's main grounds and arguments in the appeal was that because
the Ziza prospecting right acceptance decision
was irregular, it
followed that the Ziza prospecting right grant decision was
irregular.
64.
Up to the time the Minister finally gave his decision on the appeal,
Aquila had no access to the record which had served before
the DMR
when the decisions presently under attack were made. It was compelled
to make its case on the strength of such documents
as it was able to
accumulate. The record which served before the DMR and the Minister
when they made their decisions which are
under attack before me has
for the most part been produced. It runs to over 2 000 pages. This
record was essential to enable Aquila
to build and present its case.
But there is evidence that shows that other documents relevant to the
decisions in question are
for whatever reason unavailable.
65.
In
Koyabe
and Others v Minister for Home Affairs and Others (Lawyers for Human
Rights
as
Amicus
Curiae)
[11]
paras 36-38, the court pointed to the purposes of the requirement
that internal remedies be exhausted before a court is approached
on
review. Among these purposes are the needs to preserve the autonomy
of the administrative process, to restrict the risk of the
court's
trespassing on the terrain allocated to the executive and to allow
such bodies to use their own skills and experience in
areas where
administrators may have greater knowledge and expertise than that of
the courts. This will be particularly so where
specialised knowledge
of a technical or practical nature is required.
66.
The extent of the failure to exhaust the internal remedy suggested by
counsel for the government respondents is not that the
issue was not
before the Minister: it is merely that the Minister was not asked
specifically to deal with the issue on the basis
that the Ziza
prospecting right acceptance decision was a decision separate from
the Ziza prospecting right grant decision.
67.
I do not think that the result would have been any different if the
Minister had been asked specifically to consider the Ziza
prospecting
right acceptance decision. In reaching the conclusion that the Ziza
prospecting right grant decision had been lawfully
made, the Minister
had to consider whether the Ziza prospecting right acceptance
decision had been lawfully made. In coming to
the conclusion that the
grant decision had been lawfully made, the Minister must have
concluded that the acceptance decision had
been lawfully made.
68.
One can test the proposition by asking what the position would be if
the Minister were now asked, in the light of the reasons
given, to
consider the Ziza prospecting right acceptance decision as a separate
appeal. The response of the Minister must inevitably
be that the
issue had been determined in the appeal. It is difficult to think
how, in a further appeal to the Minister, Aquila
could resist the
contention that it is issue estopped from challenging the propriety
of the Ziza prospecting right acceptance decision
in the light of the
decision on appeal. A further challenge before the Minister of the
acceptance decision would be a mere empty
formality.
69.
For these reasons, I think that Aquila complied in substance if not
in form with its duty to exhaust internal remedies. But
if it did
not, I conclude on much the same grounds that it ought to be afforded
the relief it seeks under both ss 7(2)(c) and 9(1)
of PAJA.
Exceptional circumstances are required for the exercise of the power
of the court under s 7(2)(c) while the extension
of time under s 9(1)
requires merely that the extension be required in the interests of
justice.
70.
In my view,
both these tests have been met. The case is of great commercial
importance to the parties. Aquila has in good faith
spent R156
million to put itself into a position to exploit the opportunity
which arose from the prospecting activities it carried
out in good
faith. I think an aphorism expressed in relation to the law of
prescription is appropriate on these facts: the requirement
to
exhaust internal remedies was designed to penalise inaction, not
legal ineptitude.
[12]
The
omission from paragraph 1.2 of the notice of appeal was far from
demonstrating ineptitude on the part of Aquila or its lawyers
and it
cannot be suggested that there was any inaction on their part.
Indeed, the record demonstrates that a most difficult and
complex
case was pursued diligently. There can be no prejudice to the
Minister or any of the government respondents if the review
of the
Ziza prospecting right acceptance decision is allowed to proceed. To
hold otherwise would be to place the full ventilation
of Aquila's
case at risk for no more than a technical quibble, devoid of
substance. And finally, the determination of the disputes
raised in
the first instance through what counsel for the government
respondents described as administrative errors has been inordinately

delayed by the administrative processes of the DMR and the Minister.
Sending the matter back to the Minister under these circumstances

would not advance the administration of justice.
71.
If substantively, the review in relation to the Ziza prospecting
right acceptance decision was not the subject of the appeal,
then the
present review was brought outside the period of 180 days
contemplated by s 9(1)(b) of PAJA, although all the other review

relief was brought in time. It is manifestly in the interests of
justice to extend the time period to allow what Aquila regards
as an
important component of its case to be ventilated.
72.
For these reasons, I intend to make orders in terms of prayers 1A and
1B of the amended notice of motion.
73.
I mentioned
above that Ziza's unused older rights were afforded special
protection under Sch II. The objects of Sch II are to ensure
the
protection of security of tenure in relation to ongoing operations
which are the subject of the MPRDA, to give the holder of
an old
order right
[13]
an opportunity
to comply with the MPRDA and to promote equitable access to the
resources administered under the MPRDA. Counsel
for PAMDC and Ziza
submitted that Sch II must prevail in the event of a conflict with
the body of the MPRDA. I shall accept that
this is so.
74.
Item 8 provided at the relevant time as follows:
(1)  Any unused old
order right in force immediately before this Act took effect
continues in force subject to the terms and
conditions under which it
was granted, acquired or issued or was deemed to have been granted or
issued for a period not exceeding
one year from the date on which
this Act took effect.
(2)  The holder of
an unused old order right has the exclusive right to apply for a
prospecting right or a mining right, as
the case may be, in terms of
this Act within the period referred to in subitem (1).
(3)  An unused old
order right in respect of which an application has been lodged within
the period referred to in subitem
(1) remains valid until such time
as the application for a prospecting right or mining right, as the
case may be, is granted and
dealt with in terms of this Act or is
refused.
(4)  Subject to
subitems (2) and (3), an unused old order right ceases to exist upon
the expiry of the period contemplated
in subitem (1).
75.
Item 8(2) confers in terms upon the unused old order right holder the
exclusive right to apply for a prospecting or a mining
right within
the one year period provided for in item 8(1). Counsel for PAMDC and
Ziza submitted that the language of item 8(3)
should be given its
full literal effect. What it meant in the present case, submitted
counsel, was that regardless of the defects
in any such application
and whether or not the right conferred was set aside on review or
appeal, the exclusivity conferred by
item 8(2) remained in existence
until the application had been granted and dealt with in terms of the
MPRDA or refused.
76.
If this were correct, thus counsel, then the Aquila application for a
prospecting right which was submitted during the period
after Ziza's
application for a prospecting right had been "lodged", the
term used in item 8(3), could not have lawfully
been placed in the
queue at all, let alone granted. This, it was submitted, was because
the
lodging
of an application for a prospecting right by an
unused old order right holder before the expiry of the one year
period of exclusivity
on 30 April 2005 precluded other aspirant
prospectors from joining the queue at all,
even after the expiry
of the one year period and effectively until the unused old order
right holder's application had been granted
or refused.
77.
I do not agree. The interpretation for which counsel contends would
potentially frustrate both the objects of the MPRDA and
those of Sch
II. The purpose articulated in item 2 of Sch II is to give the holder
of an old order right an opportunity to
comply
with the MPRDA.
For that purpose such a right holder was expressly given exclusivity
for a period of a year. No person other than
an old order right
holder is given by the MPRDA any exclusivity which prevents other
aspirant right holders from even joining the
queue. Only an old order
right holder is placed in the privileged position that no other
person might, during the year of exclusivity
even join the queue for
consideration whether rights should be conferred on it. If item 8
were to be interpreted as counsel submits,
equitable access to the
resource in question might be delayed almost indefinitely.
78.
In my view, the objects of the MPRDA would far better be achieved if
item 8 were interpreted to mean that the exclusivity ran
only until
30 April 2005. Thereafter other aspirant right holders might join the
queue. Counsel submitted that the contrary interpretation
would not
give effect to the notion in item 8(3) that the unused old order
right would
remain valid
until the application was granted and
dealt with in terms of the MPRDA or refused.
79.
I do not
think that the continued
validity
of the
unused old order right relates to its place in the queuing system
which originates from the provisions of the MPRDA. The
common law
mineral right enjoyed by Ziza entitled it to search for, mine and
dispose of minerals on its land for its own account.
[14]
The common law right did not regulate how the right was to be
exercised outside the statutory regime in place regulating that
topic. The regime under which that common law right might be
exercised passed from that under the Minerals Act, 1991 to that
provided
for under the MPRDA. The exclusivity was conferred for no
more than to enable the old order right holder to
apply
[15]
for a
prospecting or mining right
in
terms of the MPRDA.
80.
An old order right holder which exercised the right exclusively to
apply in terms of the MPRDA was then obliged to comply with
and be
subject to the MPRDA in relation to prospecting or mining rights. If
this were not so, absurd results would follow. For
example, an unused
old order right holder could submit a manifestly inadequate
application. Upon its return to the right holder
under s 16(3), the
old order right holder might take no action at all, ever. On the
interpretation proposed by counsel for PAMDC
and Ziza, the old order
right would remain valid forever because the application had been
lodged but neither granted nor refused.
81.
The contrary interpretation, on the other hand, would preserve the
exclusivity until 30 April 2006 and then permit the objects
of the
MPRDA to be achieved.
82.
Counsel
could not in my view refer me to any authority on this point. I was
referred to the judgments in
Rustenburg
Platinum Mines Ltd v Regional Manager, North-West Region and
Others
[16]
delivered
on 2 May 2012 and
Yakani
Resources v Nel and Others
[17]
delivered
on 24 February 2014. But they do not, in my view, decide the point.
Nor does, in my view, Dale
[18]
deal with the point. I must thus decide the issue without the
guidance afforded by other decisions.
83.
In my view, for the reasons I have given, the interpretation
restricting the exclusivity afforded to Ziza as the holder of an

unused old order right to queue for rights under the MPRDA expired on
30 April 2005. From that date, Ziza had to be treated like
any other
applicant and other applicants might lawfully join the queue for
rights under the MPRDA.
84.
The effect of this conclusion is that if the Ziza prospecting right
acceptance decision and the Ziza mining right acceptance
decision are
set aside, then the position is as if the Ziza application for a
prospecting right had never been made. No substantive
grounds were
advanced by the respondents in defence of these decisions. It follows
that the relief sought in relation to these
decisions, prayers 1 and
2, must be granted.
85.
It similarly follows that the decision to register a prospecting
right in favour of PAMDC must be set aside. The relief sought
in this
regard, prayers 3 and 4, must be granted.
86.
There is a further ground upon which Aquila attacks the contention
that Ziza's queuing exclusivity had a bearing on the validity
of the
Aquila prospecting right acceptance decision. This attack arises from
the facts of Ziza's deregistration on 9 November 2010
and its
subsequent restoration to the companies register of England and Wales
on 14 October 2014.
87.
This point arises because during the almost four year period of
Ziza's deregistration, Aquila applied for the grant of a mining
right
on 14 December 2010 and its application for the grant of a mining
right was accepted on 22 December 2010.
88.
There can be no doubt that
at the time
Aquila applied for the
grant of the mining right and its grant application was accepted, any
prospecting right which Ziza might
have previously held had lapsed.
This is because the MPRDA specifically legislates for a lapse of any
such right upon the deregistration
of the right holder in s 56.
Section 56 provides:
Any right, permit,
permission or licence granted or issued in terms of this Act shall
lapse, whenever-
(a) it expires;
(b) the holder thereof is
deceased and there are no successors in title;
(c) a company or close
corporation is deregistered in terms of the relevant Acts and no
application has been made or was made to
the Minister for the consent
in terms of section 11 or such permission has been refused;
(d) save for cases
referred to in section 11 (3), the holder is liquidated or
sequestrated;
(e) it is cancelled in
terms of section 47; or
(f) it is abandoned.
89.
No consent was sought under s 11. So upon the deregistration of Ziza
on 9 November 2010, the Ziza prospecting right lapsed pursuant
to s
56(c). While Ziza was deregistered, Aquila was, entirely lawfully if
my conclusion in relation to Ziza's old order right exclusivity
is
correct, granted a prospecting right for the same minerals and over
the same land as had been the subject of the Ziza prospecting
right.
90.
One might
then have thought that Ziza's restoration to the company register
could have had no effect on the legality of the right
which Aquila
had obtained during the period in which Ziza was deregistered. How
could subsequent events turn something that was
legal into something
that was illegal? Because, submitted counsel for PAMDC and Ziza, of
the consequences of
Palaia
Resources (Pfy) Ltd v Minister of Mineral Resources and others.
[19]
91.
Palala was granted a prospecting right, to endure until 19 May 2011.
On 16 July 2010 Palala's company registration was cancelled
for
failure timeously to file its company returns. Its registration was
restored on 13 September 2010. In the interim Hectocorp
lodged an
application for the same rights previously held by Palala.
Hectocorp's application was rejected by the DMR on the ground
that
the rights sought by Hectocorp had already been issued to Palala. In
October 2010, Palaia applied for the renewal of its prospecting

right. In response to Palala's application for the renewal of its
projecting right, the DMR told Palaia that its right had lapsed
due
to Palala's deregistration. Against this decision, Palaia lodged an
administrative appeal which was upheld. But a further appeal
to the
Minister by Hectocorp was successful. Palala sought the review and
setting aside of the Minister's decision. The review
failed in the
High Court. But on appeal to the SCA, the review was upheld.
92.
The decision of the SCA turned on a resolution of the tension between
s 56(c) of the MPRDA and s 73(6A) of the old Companies
Act, 61 of
1973. Section 73(6A) read:
Notwithstanding
subsection (6), the Registrar may, if a company has been deregistered
due to its failure to lodge an annual return
in terms of section 173,
on application by the company concerned and on payment of the
prescribed fee, restore the registration
of the company, and
thereupon the company shall be deemed to have continued in existence
as if it had not been deregistered: Provided
that the Registrar may
only so restore the registration of the company after it has lodged
the outstanding annual return and paid
the outstanding fee in respect
thereof.
93.
The SCA in
Palala
referred
with approval to and followed an earlier decision in that court,
Newlands
Surgical Clinic (Pty) Ltd v Peninsula Eye Clinic (Pty) Ltd.
[20]
Newlands Surgical Clinic
dealt
with the position under s 82(4) of the new
Companies Act, 71 of 2008
,
which reads:
If the Commission
deregisters a company as contemplated in subsection (3), any
interested person may apply in the prescribed manner
and form to the
Commission to reinstate the registration of the company.
94.
The court
in
Palala,
following
Newlands
Surgical Clinic,
held
[21]
that restoration to the register both revested the company with its
property and validated its corporate activities during the
period of
its deregistration.
95.
The court
in
Palala
did not
overlook the manifest injustice that the logic of its reasoning could
cause to third parties. But that had to be viewed,
thus the court,
against the clear language of the legislative scheme, the potential
for prejudice to third parties if the contrary
position were to
prevail and the proposition that it was not "strictly
correct"
[22]
to compare
the deregistration of a company with the death of a natural person
because deregistered companies sometimes continue
to carry on
business as if deregistration had never occurred and while third
parties are unaware of the deregistration.
96.
The court
in
Palala
went
on
[23]
to hold:
There is nothing in the
scheme of the MPRDA which buttresses the conclusion that
s 73(6A)
does not retrospectively revive rights which had lapsed in terms of
s
56(c).
The court a quo reasoned that a retrospective revival of
rights would undermine the purpose and objectives of the MPRDA, since
'the Department would be compelled in every case where a company is
deregistered to treat its MPRDA rights as frozen'. I disagree.
As
stated, third parties are at risk in their dealings with a
deregistered company, even where they have no knowledge of such
deregistration. Restoration of registration operates retrospectively
and
ex post facto
validates all the company's corporate
activities (including its mineral prospecting rights), even to the
detriment of third parties.
The legislature is presumed to know the
law and when it enacted
s 56(c)
of the MPRDA it must have been aware
that companies andclose corporations that had been deregistered could
be restored to the register
with automatic retrospective effect. Yet
it did not qualify its reference to 'whenever a company or close
corporation is deregistered'
as a trigger for the lapsing of mineral
rights, by saying that the right would not be restored if the company
or close corporation
was restored to the register. Had it wished to
ensure the finality of the lapsing of a mineral right on
deregistration, it could
easily have done so. The legislature could
have excluded mineral rights from the rights restored to a company or
close corporation
on being restored to the register.
97.
But, the
court proceeded to say:
[24]
On the facts of this case
a relatively short period had elapsed between Palala's deregistration
and its restoration (16 July 2010
to 13 September 2010). The
inference is irresistible that the deregistration was as a result of
an administrative oversight. No
sound reason exists why insuch
circumstances Palaia should lose a potentially valuable mineral
prospecting right, even though its
other assets and other rights are
revested upon restoration. In the circumstances and for the reasons
set out above, the court
a quo
erred in its finding that
Palala's restoration had not retrospectively restored its mineral
prospecting right.
98.
Counsel for Aquila submitted that the situation in
Palala
should
be distinguished from the present case because
at the date of
Ziza's restoration to the register,
the Ziza prospecting right
had lapsed due to the expiry of the time for which it had been
granted while the right in
Palala
was still current. Counsel
for the respondents submitted that the legal consequence of a
restoration was that the exclusivity that
Ziza's prospecting right
would have conferred on Ziza, had the deregistration not taken place,
must also be restored.
99.
I think the
answer to this conundrum lies in the identification of the content of
the concept of
revesting
of the company's property.
[25]
To illustrate my reasoning, take this example: a company is on the
date of its deregistration the owner of a sack of potatoes and
a tin
of paint. During the period before the company is restored to the
register, the potatoes are consumed and the paint is used
to coat a
third party's property, movable or immovable. The legislative deeming
provision, which counsel for the respondents told
me required the law
to treat as true that which is untrue, cannot in my judgment require
the law to treat the potatoes or the paint,
which have ceased to
exist except at the atomic level, as revesting in the company upon
its restoration to the company register.
100.
So too, in my view, in the case of a prospecting right which has
lapsed by effluxion of time. A prospecting right when granted
gives
rise in the hands of the grantee to a complex of rights. None of
those rights can survive the expiry of the period for which
the
prospecting right was granted. The passage of time has put the rights
previously enjoyed by the company as far beyond the reach
of the
company as did the consumption of the company's potatoes or the use
of its paint. Moreover, as I have said, the atoms of
consumed
potatoes or paint which has been used at least continue to exist. A
prospecting right, as an incorporeal, does not. Finally
on this
topic,
s 56(a)
of the MPRDA gives effect, I think, in terms to the
principle which I have tried to articulate: when a prospecting right
expires,
it lapses.
101.
I therefore conclude that the restoration of Ziza to the company
register did not have the effect of revesting it with the
Ziza
prospecting right. The restoration therefore had no legal effect on
the Aquila prospecting right.
102.
The decisions of the Minister form the subject of prayer 5. Prayer
5.1 deals with the decision to grant a prospecting right
to Ziza. I
have found that this grant was unlawful. It follows that the Minister
was wrong in coming to this decision. The relief
sought in prayer 5.1
must be granted.
103.
So too must the relief in prayer 5.2 be granted. That prayer is
directed at the decision to set aside Aquila's prospecting
right and
the acceptance decision which preceded it. As I have found that the
prior existence of the unlawfully accepted and granted
Ziza
prospecting right application affords no impediment to the legality
of the decisions regarding the Aquila prospecting right,
the
Minister's decision in this regard cannot stand.
104.
Prayers 7 and 8 are merely consequential to the conclusion that the
appeal in relation to the Ziza and Aquila prospecting rights
ought to
have gone the other way. That relief will be granted.
105.
Prayer 11 raises a question of substance. The Minister found that the
existence of the Ziza prospecting right precluded the
grant of the
Aquila mining right. This was the only ground upon which the Minister
found that the Aquila's application for a mining
right should not be
granted. The issue at this level is whether I should merely set aside
the decision on appeal and remit the
matter to the Minister to decide
the question afresh or whether I should, as Aquila asks, substitute
the decision of the court
for that of the Minister to the extent that
I direct that the Minister grant Aquila the mining right for which it
applied and direct
the Minister to determine, within a specified
time, appropriate conditions to which the mining right should be
subject.
106.
This
question raises the important principle of separation of powers. The
decision to confer or withhold mining rights has in the
first
instance been vested in the executive, not the courts. A court should
be slow indeed to use its powers to make a decision
of this nature.
This question is regulated by
s 8(1)(c)(ii)(aa)
of PAJA. The court
can only exercise its power to substitute its decision for that of
the administrator when exceptional circumstances
are present and it
would be fair Oust and equitable) to do so. If these factors are not
established, the court must defer to the
constitutionally mandated
functionary and allow that administrator to try to make a correct
decision with such guidance as the
judgment of the court might
provide. In
Trencon
Construction (Pty) Ltd v Industrial Development Corporation of South
Africa Ltd and Another,
[26]
the Constitutional Court set out
[27]
certain factors which in this enquiry inevitably should carry greater
weight. These are firstly whether the court is in as good
a position
as the administrator to make the decision; and secondly whether the
decision of the administrator is a foregone conclusion.
Thereafter
the court should consider other relevant factors, including delay,
bias or the incompetence of the administrator. The
ultimate
consideration is whether a substitution order is just and equitable.
This will involve a consideration of fairness to
all implicated
parties. The exceptional circumstances enquiry requires an
examination of each matter on a case by case basis which
accounts for
all relevant facts and circumstances.
107.
Aquila dealt extensively in its affidavits with its case for
substitution. It pointed out in its first founding affidavit that
the
sole ground for the Minister's decision was that the Ziza prospecting
right application was validly granted. It pointed to
the inordinate
delays that had obstructed its attempts to ventilate its case
administratively and begin the process of mining which
alone would
enable Aquila to begin trying to recoup its R156 million investment.
It pointed out that it had to go to court to compel
the Minister to
decide the appeal. It dealt with complications which will arise, if
further delays are experienced, in relation
to the allocation of rail
capacity to take off the ore it mines. It dealt with complications in
relation to its negotiations to
buy the surface rights of the ground
which have already been caused by the delay and the increased costs
in that regard which the
delay has occasioned. The delay has had a
negative impact on Aquila's application to the water authorities in
the Northern Cape
for the allocation of water for the purpose of
mining. Its application for an allocation of water in this arid
region has already
been returned with the remark that Aquila should
first resolve its issues with the DMR. If other parties are in the
interim granted
water licenses, this may seriously prejudice Aquila.
108.
A further factor upon which Aquila relied in argument before me was
the existence of institutional bias against Aquila. I think
however
that counsel for the respondents are correct on this issue: some of
the decisions made in the DMR went in favour of Aquila.
This alone,
in my view, puts paid to Aquila's submission. If the DMR and the
Minister were institutionally biassed against Aquila,
I would expect
them to display consistent bias.
109.
But neither of the respondents has put up any factual material to
contradict the factual foundation of Aquila's case for substitution

as I have summarised it above. In particular, the neither the
Minister nor PAMDC and Ziza presented any factual material to cast

any doubt on the case made at that level by Aquila.
110.
Neither PAMDC nor Ziza has ever conducted any prospecting activities
on the ground over which they ostensibly obtained rights.
PAMDC has
not made the slightest move to create the substantial infrastructure
and incur the substantial costs which even prospecting,
let alone
mining, have been shown to require. Their purpose in this litigation
has been to obstruct the exercise by Aquila of the
rights which it
has acquired and seeks to acquire, no doubt in the hope that its
capacity to obstruct will drive Aquila commercially
to cut PAMDC or
one or more of those associated with PAMDC into its operation or to
pay PAMDC a sum of money to stop obstructing
the process.
111.
While I have found that institutional bias has not been established,
in my view Aquila has established a high degree of institutional

incompetence on the part of the government respondents and a lack of
energy in resolving the issues which arose from that very

incompetence. The DMR delayed its decision whether to accept Ziza's
application and then concluded entirely irrationally that its
delays
had exempted Ziza from complying with the MPRDA. The Minister too was
content to let the appeal process drag on for years
while PAMDC
positioned itself to take advantage of the restoration of Ziza to the
company register, something they did only in
an attempt to strengthen
their position against Aquila. And then when the Minister made his
decision, he did so without any attempt
to provide proper reasons for
his conclusions even though the parties provided full argument and
the Minister had called for and
was given carefully drawn opinions by
his own internal legal advisor and by counsel who was briefed to
furnish an opinion. The
Minister did not do justice to the case he
was called upon to decide. I say this not because the Minister was
wrong but because
he made no attempt to give proper reasons for the
conclusions to which he had come.
112.
The absence of any suggestion from the respondents in the papers in
these proceedings that there is any issue of substance
which might be
raised to deny Aquila the grant of the mining right it seeks leads me
to conclude that this court is in as good
a position as the Minister
to make the decision. Had the Minister, or any other respondent,
advanced facts which suggested that
during any negotiations between
the Minister around appropriate conditions might result in the
refusal of the mining right, I might
well have come to a different
conclusion. But no attempt at all has been made in that regard. From
this it follows too that the
grant of the mining right to Aquila is,
or ought to be, a foregone conclusion.
113.
I have pointed to the tardiness of the government respondents.
Delaying the grant of Aquila's mining right any longer than
is
necessary will not advance the declared aim in the preamble to the
MPRDA to build an internationally competitive administration
and
regulatory regime.
114.
Regard being had to these considerations, Aquila has in my judgment
established its case for substitution. Aquila submitted
in its first
founding affidavit that a period of 60 calendar days would be long
enough to enable the Minister to formulate an appropriate
set of
conditions. There was no answer to this contention. I propose to err
on the side of caution and afford the Minister three
months for this
purpose.
115.
In prayer 10A, Aquila seeks a declaratory order that the Ziza
prospecting right lapsed with effect from 9 November 2010, the
date
of Ziza's deregistration. I have found that the Ziza prospecting
right, and the application which gave rise to it, fall to
be set
aside. That means they must be treated as for present purposes never
having been made. It is a consequence of my conclusions
on the
revesting argument that if I am wrong in holding that the Ziza
prospecting right, and the application which gave rise to
it, should
be set aside, then an order under prayer 10A would be appropriate.
But as I have found that these decisions should be
set aside, it
would be confusing if not contradictory to make an order on prayer
10A. I therefore decline to make any order on
that prayer.
116.
Prayer 11 seeks to correct the incorrect impression arising from the
registration of the prospecting right in favour of PAMDC
from the
records of the Mineral and Petroleum Titles Registration Office. This
registration was not suggested to be appropriate.
PAMDC did not hold
any such prospecting right. I have said that I do not think that this
issue is moot.
117.
Finally, as to costs: Aquila asked for a punitive costs order. But
the respondents have raised arguable issues before me. I
do not think
such a costs order is warranted. There can be no dispute that costs
of two counsel are justified.
118.
I make the following order:
1
(prayer 1)
Reviewing and setting aside the
decision of the fourth respondent to accept the sixth respondent's
application for a prospecting
right with reference number NC
30/5/1/1/2/179PR, which decision was taken on or about 17 August
2005;
2
(prayer 1A)
To the extent necessary,
exempting the applicant in terms of section 7(2)(c) of the
Promotion of Administrative Justice Act
3 of 2000 ("PAJA")
from the obligation to exhaust its internal remedies in respect of
the order sought in paragraph
1 above;
3
(prayer 1B)
To the extent necessary,
extending the 180-day time period for institution of judicial
review proceedings contemplated in
section 7(1) of PAJA so as to
terminate one day after the institution of this application in
respect of the order sought
in paragraph 1 above;
4
(prayer 2)
Reviewing and setting aside the
decision of the third respondent to grant a prospecting right with
referebce number NC 30/5/1/1/2/179PR
to the sixth respondent,
which decision was communicated by means of a letter dated 26
February 2008 and substituting this
decision with the following:
the sixth respondent's application for a prospecting right with
reference number NC 30/5/1/1/2/179PR
is refused;
5
(prayer 3)
Reviewing and setting aside the
decision of the third respondent taken on or about 17 November
2011 to execute a prospecting
right with reference number NC
30/5/1/1/2/179PR in favour of the fifth respondent;
6
(prayer 4)
Reviewing and setting aside the
execution of a prospecting right with reference number NC
30/5/1/1/2/179PR by the fourth respondent
in favour of the fifth
respondent on or about 19 November 2011, and the registration of
such right in the Mineral and Petroleum
Titles Registration
Office;
7
(prayer 5)
Reviewing and setting aside the
following decisions of the first respondent, which decisions were
communicated by means of
a letter dated 2 July 2015:
7.1
(prayer 5.1)
the decision to dismiss the
appeal by the applicant under section 96(1) of the Mineral and
Petroleum Resources Development
Act 28 of 2002 ("the Aquila
Appeal");
7.2
(prayer 5.2)
the decision to uphold the
cross-appeal by the fifth respondent under section 96(1) of the
Mineral and Petroleum Resources
Development Act 28 of 2002 ("the
PAMDC Cross-Appeal");
7.3
(prayer 5.3)
the decision to reject the
applicant's application for a mining right (with reference number
NC30/5/1/2/2/295MR) in respect
of iron ore, pyroxenite, copper
ore, zinc ore, manganese ore, ferrous and base metals on portion
114 ("the Aquila Mining
Right Application");
8
(prayer 7)
Substituting the first
respondent's decision in respect of the Aquila Appeal with the
following:
The Aquila Appeal is upheld, the
grant of a prospecting right with reference number NC
30/5/1/1/2/179PR to the sixth respondent
is set aside and the
sixth respondent's application for a prospecting right with
reference number NC 30/5/1/1/2/179PR is
refused;
9
(prayer 8)
Substituting the first
respondent's decision in respect of the PAMDC Cross-Appeal with
the following: The PAMDC Cross-Appeal
is dismissed;
10
(prayer 9)
Substituting the first
respondent's decision in respect of the Aquila Mining Right
Application with the following: The Aquila
Mining Right
Application is granted subject to conditions to be determined by
the first respondent within three months of
the date on which this
court order is made;
11
(prayer 10A)
No order is made on this prayer;
12
(prayer 11)
Directing the second respondent
to remove from the records of the Mineral and Petroleum Titles
Registration Office the prospecting
right with reference number NC
30/5/1/1/2/179PR and any reference to the registration of the
prospecting r ig h t  w
i t h  r e f e r e n c e  n
u m b e r NC 30/5/1/1/2/179PR.
13
Directing the respondents to pay
the applicant's costs in this application including the costs
arising from the employment
by the applicant of both senior and
junior counsel. The respondents' liability for costs will be joint
and several.
____________________
NB
Tuchten
Judge
of the High Court
21
November 2016
For
the applicant:
Adv
A Cockrell SC and Adv D Smit
Instructed
by Webber Wentzel
Johannesburg
For
the first to fourth respondents:
Adv
V Maleka SC and Adv L Gumbi
Instructed
by the State Attorney
Pretoria
For
the first to fourth respondents:
Adv
C Loxton SC and Adv A Friedman
Instructed
by Edward Nathan Sonnenbergs
Johannesburg
APPENDIX
21/11/16
Date
Where in pleadings or Rule 53
record (pagination top right)
Where in core bundle (pagination
bottom right)
Event
19 April 2005
Annexure MH13 pages 190-294
1-105
ZIZA applies for a prospecting
right
30 April 2005
Expiry of one-year period of
exclusivity in items 8(1) and (2) of Schedule II to the MPRDA
17 August 2005
Supplementary Rule 53 record
pages 1 to 3
106-108
Acceptance of ZIZA’s
application for a prospecting right
18 April 2006
Founding affidavit para 37 page
31 (the application does not form part of the papers)
Not included in core bundle
Aquila applies for a prospecting
right
2 May 2006
Annexure MH14 page 295
109
Acceptance of Aquila’s
application for a prospecting right
11 October 2006
Annexure MH5 page 137-138
110-111
Grant of prospecting right to
Aquila
28 February 2007
Annexure MH6 page 139-167
112-140
Prospecting right executed in
favour of Aquila
26 Novemner 2007
Annexure MH18 page 345
141
PAMDC is incorporated
26 February 2008
Annexure MH3 page 121-122
142-143
Grant of prospecting right to
ZIZA
9 November 2010
Annexure MH25 page 419-428
144-159
ZIZA is deregistered
14 December 2010
Annexure MH7 page 168-171
160-163
Aquila applies for the mining
right
22 December 2010
Annexure MH26 page 429-430
164-165
Acceptance of Aquila’s
application for a mining right
17 November 2011
Rule 53 record page 146-153
166-173
DDG makes decision to execute a
prospecting right in favour of PAMDC
19 November 2011
Annexure MH4 page 123-136
174-187
Prospecting right executed in
favour of PAMDC
December 2011
Founding affidavit para 68 page
48 (the renewal application does not form part of the papers)
Not included in core bundle
Aquila submits an application to
renew its prospecting right
28 February 2012
Annexure MH35 page 489
188
Acceptance of Aquila’s
application for renewal of prospecting right
25 February 2013
ZIZA/PADMC heads of argument
para 6.2.2
Not included in core bundle
The ZIZA prospecting right
expires, according to ZIZA/PAMDC
14 October 2014
Founding affidavit para 95.7.2
Not included in core bundle
ZIZA is restored to the register
of the UK Companies House
2 July 2015
Annexure MH8 page 172-173
189-190
Minister dismisses the Aquila
appeal, upholds the PADMC cross-appeal and refuses to grant the
Aquila mining right
10 July 2015
Rule 53 record pages 1251 to
1292
191-192
PAMDC applies for a new
prospecting right
31 July 2015
Annexure MH 36 page 491-492
193-194
Renewal of Aquila’s
prospecting right
[1]
The full description is portion 114 (a portion of portion 107) of
farm no. 703 in the district of Kuruman, Northern Cape Province.
[2]
The area in question fell into what was then called British
Bechuanaland and later incorporated into the Cape Province of the

Union of South Africa. British Bechuanaland should not be confused
with Bechuanaland Protectorate, the modern Botswana.
[3]
Agri SA v Minister for Minerals and Energy
2013 4 SA 1
CC paras 1-3
and Minister of Mineral Resources v Mawetse (SA) Mining Corporation
(Pfy) Ltd
2016 1 SA 306
SCA paras 16 & 20
[4]
Published in Gazette no. 26275 on 23 April 2004
[5]
I was told by counsel that a spheroid is a fixed point determined by
a process understood by the surveying profession.
[6]
See in this regard s 9 of the MPRDA.
[7]
See s 4 of the MPRDA.
[8]
An unused old order right is defined in item 1 of Sch II to the
MPRDA to mean any right, entitlement, permit or licence listed
in
Table 3 to the Schedule in respect of which no prospecting or mining
was being conducted immediately before the MPRDA took
effect.
Category 1 of Table 3 relates to a mineral right under the common
law for which no prospecting permit or mining authorisation
was
issued in terms of the Minerals Act, 50 of 1991.
[9]
Section 16(3) of the MPRDA, as it read before 7 June 2013.
[10]
Own emphasis
[11]
2010 4 SA 327
CC
[12]
Mazibuko v Singer
1979 3 SA 258
W 266A
[13]
And one other existing right not relevant to the present enquiry
[14]
Agri SA, supra, para 7
[15]
Items 2(b) and 8(3) of Sch II
[16]
Case no. 26396/2006 in this court
[17]
Case no. 25017/2012 in the South Gauteng High Court.
[18]
Dale et al, South African Mineral and Petroleum Law
[19]
[2016] 3 All SA 441
SCA
[20]
2015 4 SA 34
SCA
[21]
Para 7
[22]
Para 9
[23]
Para 11
[24]
Para 12
[25]
Newlands Surgical Clinic para 29
[26]
2015 5 SA 245
CC
[27]
Para 47