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[2014] ZAGPPHC 11
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Mawetse SA Mining Corporation (Pty) Ltd v Minister of Mineral Resources and Others (3081/12) [2014] ZAGPPHC 11 (30 January 2014)
REPUBLIC
OF SOUTH AFRICA
IN THE NORTH GAUTENG HIGH COURT
PRETORIA
CASE NO: 3081/12
DATE: 30 JANUARY 2014
NOT REPORTABLE
NOT OF INTEREST TO OTHER JUDGES
In
the matter between:
MAWETSE
SA
MINING CORPORATION (PTY) LTD.
……………………
Applicant
and
TH
E
MINISTER OF MINERAL RESOURCES
……………………..
First
Respondent
DIRECTOR-GENERAL: DEPARTMENT OF
MINERAL RESOURCES
………………………………………....
Second
Respondent
DEPUTY DIRECTOR-GENERAL:
MINERAL DEVELOPMENT, DEPARTMENT
OF MINERAL
RESOURCES
………………………………………………………
.
Third
Respondent
REGIONAL MANAGER: LIMPOPO
REGION,
DEPARTMENT OF MINERAL RESOURCES
………………….
Fourth
Respondent
DILOKONG CHROME MINE (PTY) LTD
………………………….
Fifth
Respondent
JUDGMENT
MASIPA, J
:
INTRODUCTION
[1]
This is a review
application brought in terms of Rule 53 of the Uniform Rules of
Court. The applicant ("Mawetse") seeks
the following
relief:
1.
A review and setting
aside of the grant of a prospecting right to the fifth respondent
("Dilokong"). (I pause to state
that the prospecting right
was granted in respect of Chrome ore (base metals) on the farm
Driekop 253 KT to Dilokong).
1.2
The applicant also seeks
an order that the decision referred to in paragraph 1 is substituted
with a decision in the following terms:
"Dilokong's application
for a prospecting right in respect of Chrome ore (base metals) in
respect of the farm Driekop 253 KT
is refused."
1.3
Alternatively to
paragraphs 1 and 2, that the fifth respondent does not hold a valid
prospecting right in respect of Ch
rome on the Farm Driekop 253
KT
1.4
Further alternatively to
paragraphs 1 and 2 that the prospecting right purportedly granted to
the fifth respondent in respect of
Driekop 253 KT has lapsed and no
longer constitutes a bar to considering the applicant's application
for a prospecting right;
1.5
The decision of the
fourth respondent of 27 October 2009 refusing the applicant’s
application for a prospecting right in respect
of Driekop 253 KT is
set aside insofar as fourth respondent refused the application;
1.6
The
applicant's application for prospecting rights in respect of Driekop
253 KT is remitted to the Third Respondent for consideration
in the
light of the above within 30 days.
GROUNDS
OF REVIEW
[2]
In terms of the
Promotion of Administrative Justice Act, Act 3 of 2000 (PAJA),
alternatively the principle of legality, the applicant
seeks to
review and set aside the prospecting right granted to fifth
respondent on the following grounds:
2.1
The decision maker who
purported to award the prospecting right was not authorized to do
so;
2.2
The fifth respondent's
application for a prospecting right was fatally defective in that,
inter alia,
the fifth
respondent lacked the required Black Economic Empowerment (BEE)
status at the time that it applied;
2.3
No prospecting right has
been lawfully awarded to fifth respondent in respect of the property;
2.4
If a prospecting right
had been awarded to fifth respondent it has now lapsed;
2.5
The reasons for
upholding the award of the prospecting right to fifth respondent
were inadequate, irregular and unlawful.
[3]
In its answering
affidavit Dilokong opposes the application. In addition it filed a
counter-application in which it seeks an order
against the first to
fourth respondents compelling them to execute the prospecting right
in question. For convenience I shall refer
to the first to the fourth
respondents collectively as the DMR respondents and individually as
the first, second, third and fourth
respondents respectively. The DMR
respondents are not opposing the counter-application. Mawetse,
however, is opposing the relief
sought by Dilokong in its
counter-application. (I pause to state that the relief sought by
Dilokong in its counter-application
is inextricably linked to the
relief sought by Mawetse by way of review.)
[4]
Before I deal with each
ground of review it is convenient to briefly set out the background
to this application.
FACTUAL
BACKGROUND
[5]
In November 2006
Dilokong applied for a prospering right in respect of chrome over the
Farm Driekop 253 KT in the Magisterial District
of Sekhukhune. The
application was made in terms of Section 16(1) of the Mineral and
Petroleum Resources Development Act of 2002
("MPRDA" or
"the Act").
[6]
On 6 December 2006 the
fourth respondent accepted the application and conveyed such
acceptance to Dilokong by letter the body of
which stated the
following:
"
2.
In
terms of section 14(4) of the MPRDA you are therefore required:
2.1
To
submit an environmental management plan in or before 4 February 2007
but not before the date mentioned in (b) below;
2.2
To
notify in writing and consult with the landowner or lawful occupier
and any other affected party and submit the result of such
consultation to this office;
2.3
To
consult with the Department of Land Affairs if the land is
state-owned and in the event that the land is subject to land
restitution
to consult the office of the Commission on restitution of
land rights and submit the result of such consultation to this office
on or before the 05 January 2007.
3. You are further requested in
terms of section 17(4) of the Act to give effect to the object
referred to in section 2(d) of the
Act. In
this regard you are required to
submit by no later than 04 February 2007, the following documents:
3.1
Duly
signed shareholders agreements;
3.2
Share
certificates and shareholders registers;
3.3
Articles
and Memorandum of Association of the company;
3.4
Details
relating to funding (all relevant agreements); and
3.5
Any
other agreement or documents relating to the agreement
[7]
On 21 June 2007 Mr JF
Rocha, in his capacity as the Deputy Director General ("DDG"),
signed a power of attorney in favour
of the Regional Manager, Limpopo
Region, empowering the latter to sign a prospecting right in favour
of Dilokong according to the
approval signed by him on the same day.
[8]
Paragraph 5 of annexure
"PWM 13" reads thus:
"ASSESSMENT OF CHARTER
COMPLIANCE
5.1
Compliance
with section 17(4)
The Shareholders Agreement
and/or Share Certificates were not submitted."
[9]
Paragraph 6 of the
approval recommends that a prospecting right to Dilokong Chrome Mine
should be granted in accordance with section
17(1) of the Act for a
period of 4 years subject to
–
"(i) The applicant, where
applicable , submitting (before execution) all other outstanding
information and documentation (including
shareholders agreement with
a BEE entity not holding less than 26% of equity in the operation and
financial guaranteeing the amount
of R15 000,00); and
6.1.2
Signed
the attached power of attorney, authorizing the Acting Regional
Manager, Limpopo Region, to sign on your behalf the prospecting
right
to be granted to Dilokong Chrome Mine in this regard
[10]
On 18 July 2007, in
Annexure "PWM4", Rocha confirmed the grant to Dilokong
thus:
"1. This is to confirm
that your above mentioned application for the prospecting of Chrome
Ore (Base Metals) in respect of
the above mentioned properties has
been granted in terms of the Mineral and Petroleum Resources
Development Act, 2002 (Act 28 of
2002) ...
2. Take note that the Regional
Manager will approve the environmental management plan on the date
of signing the right.''
[11]
It is common cause that
the prospecting right granted to Dilokong was to be signed and
notarially executed by the Regional Manager:
Limpopo Region on 14
November 2007. However, the right was never executed.
[12]
In September 2009
Mawetse applied for a prospecting right in respect of two farms,
namely Mooihoek and Driekop 253 KT.
[13]
On 27 October 2009,
Mawetse was informed in Annexure "PMW2" that its
application in respect of Driekop had been rejected
because that
prospecting right had already been granted to another entity. It is
common cause that the entity concerned is Dilokong.
[14]
In October 2010 Mawetse
launched an application seeking a declaration that no person holds a
prospecting right in respect of chrome
on Driekop, alternatively that
Dilokong had abandoned its right.
[15]
Dilokong took the point
that Mawetse's application was premature because Mawetse had not
exhausted its internal appeal to the Minister
in terms of section 96
of the MPRDA. However, when Mawetse lodged such an appeal with the
Minister, she refused to consider it
on the ground that the matter
was
"sub judice"
as a
result of the first application.
[16]
As a result Mawetse
launched a second application to set aside the Minister's decision
that she was unable to consider the appeal
due to the litigation
between the parties.
[17]
In July 2011 an order
compelling the Minister to take the necessary steps to have the
appeal decided was granted. Pursuant to the
court order the Minister
considered Mawetse's internal appeal and dismissed it on 16 August
2011. In essence the Minister upheld
the grant of the prospecting
right to Dilokong.
[18]
Meanwhile the Department
had refused to provide Mawetse with the information regarding the
purported grant of a prospecting right
to Dilokong. Mawetse had, as a
result, approached this court for an order granting access to the
requested information. On 30 August
2010 the court granted the order
as sought.
I
proceed to deal with each ground of review in turn.
LACK
OF AUTHORITY
[19]
Mawetse's contention was
that the decision to award Dilokong a prospecting right was
reviewable in terms of section 6 of the Promotion
of Administrative
Justice Act, Act No. 3 of 2000 (PAJA), as,
inter alia,
the
official who purported to grant the prospecting right to Dilokong
lacked the legal authority to do so. It is common cause that
the only
person lawfully entitled to award a prospecting right was the Deputy
Director General (DDG). Also common cause is that
it was the DDG who
took the decision to award a prospecting right to Dilokong as can be
seen from the power of attorney and the
approval annexed to the
founding affidavit. The dispute seems to arise from the terms of the
right as set out in Annexure “
PWM5”
[20]
Annexure "PWM5",
a document headed 'PROSPECTING RIGHT', reads thus on page 52 of the
papers:
"LET IT HEREBY BE MADE
KNOWN
THAT on this 14 day of NOVEMBER
in the year 2007, before me, ELVIRA LE ROUX notary public duly sworn
and admitted, residing and
practicing at POLOKWANE, in the LIMPOPO
Province of South Africa, and in the presence of the subscribing
competent witnesses, personally
came and appeared:
GABATSHOLWE LEVY RAPOO Regional
Manager, Limpopo Region of the Department of Minerals and Energy, and
as such in his/her capacity
as the duly authorized representative of:
THE MINISTER OF MINERALS AND
ENERGY
The said Regional Manager,
being duly authorized thereto under and by virtue of a Power of
Attorney granted by the Deputy Director
General: Mineral Regulation
of the Department of Minerals and Energy on the 21 day of JUNE in the
year 2007 in terms of the powers
delegated to him by the Minister on
the 12th day of May 2004 in terms of
section 103
(1) of the
Mineral
and Petroleum Resources Development Act 2002
(Act No. 28 of 2002).
MR SUWEI ZHANG, in his capacity
as a duly authorized representative of DILOKONG CHROME MINE (PTY) LTD
...”
[21]
Later "PWM5"
reads:
"NOW THEREFORE THE MINISTER
GRANTS A PROSPECTING RIGHT TO THE HOLDER SUBJECT TO THE FOLLOWING
TERMS AND CONDITIONS
[22]
Paragraph 3 of "PWM5"
reads:
"3.
Commencement,
Duration and Renewal
3.1
The
prospecting right shall commence on 14 NOVEMBER 2007 and, unless
cancelled or suspended in terms of section 47 of the Act, will
continue in force fora period of THREE years ending 13 NOVEMBER 2010.
[23]
According to Mawetse the
prospecting right as set out in Annexure "PWM5" is
completely different from that recommended
in Annexure "PWM13".
Counsel for Mawetse submitted that the variation in the material
terms of the right such as the
duration of the prospecting right and
the 'waiver' of the BEE requirement was an indication that the terms
were not determined
by the DDG but by the Regional Manager. The award
of the prospecting right to Dilokong, therefore, was
ultra
vires
and unlawful and the right ought
to be set aside. In support of his submission counsel for Mawetse
referred to the matter of
Meepo v Kotze and Others
2008
(1) SA 104
(NC) where the court dealt with a similar issue, of a
Regional Manager not acting in accordance with the Power of Attorney.
There
the court found that the Regional Manager had acted
ultra
vires
as he had no authority to
determine the terms of the prospecting right. It is so that in the
present matter, in amending the duration
of the right from 4 years to
3 years,
inter alia,
the
Regional Manager used his discretion. This happened at the time when
the Regional Manager did not have authority to do so.
[24]
As in
Meepo
supra,
the fact is that the Minister
had delegated the power to grant a prospecting right specifically to
the Deputy Director General.
He was, therefore, not entitled to
delegate that power any further.
[25]
However, an important
difference is that in the present case the prospecting right was
never executed. This is no small difference
as a prospecting right
can be of no use unless it is implemented. There can,
therefore,
be no suggestion that the Regional Manager acted
ultra vires
his powers as he has not acted at all. I say this because "PWM5"
has not been signed. There has not been any explanation
for this
omission. No importance, therefore, can be attached to "PWM5".
In my view, the only document of relevance in
establishing authority
is Annexure "PWM13", the letter of approval signed by the
DDG, who had delegated power from the
Minister. The efficacy of this
document has not been attacked.
[26]
For that reason this
ground of review cannot succeed.
NON-COMPLIANCE WITH BEE REQUIREMENTS
[27]
It is common cause that
at the time Dilokong applied for a prospecting right it did not
comply with the BEE requirement. The question
is whether non
compliance with the BEE requirement is fatal to the application.
Mawetse contends that Dilokong should never have
been awarded the
prospecting right as its BEE non compliance was a fatal flaw in its
application.
[28]
It was submitted on
behalf of Mawetse that the decision of 21 June 2007 purporting to
grant a prospecting right to Dilokong was
unlawful. It was submitted
further that from the outset Dilokong's application for a prospecting
right was defective and should
not have been granted; that the
decision was prejudicial to other potential applicants for the same
right, and was, therefore,
procedurally unfair. It was, also
unreasonable and was an error of law as the decision maker knew that
the application was defective
but granted it anyway. Accordingly, the
decision was reviewable in terms of section 6(2) of the PAJA.
[29]
The DMR respondents have
not denied the above nor can they as the facts are clear from
hereunder:
29.1
Dilokong was called
upon, in terms of section 17(4) of the MPRDA to comply with the
object of section of 2(2)(d) of the Act by,
inter alia
,
submitting various documents. This is confirmed in the affidavit of
the MDR. The deponent to this affidavit is Motlatso Constance
Kobe,
the Chief Director; Mineral Regulation Branch in the office of the
Minster for Mineral Resources.
[30]
In paragraph 3.5 of the
affidavit she clearly states that in "PWM3" (an acceptance
letter from the fourth respondent to
Dilokong dated 06 December 2006)
Dilokong was called upon to comply with the objects of MPRDA as set
out in Section 2(d) of the
Act by submitting, not later than 4
February 2007, relevant documents which included a duly signed
shareholders agreement.
[31]
The relevant portion of
section 2 of the MPRDA provides:
"
The
objects of this Act are to -
substantially and
meaningfully expand opportunities for historically disadvantaged
persons, including women, to enter the mineral
and petroleum
industries and to benefit from the exploitation of the nation's
mineral and petroleum resources.”
[32]
In challenging the
second ground of review DMR stated that although there was a
Shareholders Agreement relating the BEE requirement
it was not
possible for Dilokong to comply owing to events beyond its control.
[33]
Dilokong explained its
predicament as follows:
33.1
The Shareholders’
Agreement dated 11 December 2006 entered into between Eastern Asian
Metal Investment Co. Ltd, (of which
Dilokong is a company 100% owned
by ASA) and Limpopo Economic Development Enterprise (LIMDEV)
specifically catered for a BEE Partner
in par 3 of the agreement.
33.2
The DDG was in
possession of the Shareholders Agreement at the time when the
decision to award the prospecting right to Dilokong
was made.
However, in consequence of State
policy and Parliament intervention, LIMDEV, was restrained from
disposing of the State assets
in its possession. Consequently
Dilokong was unable to comply with the terms and condition of the
shareholder agreement relating
to the BEE partner.
33.4
As a result of the above
challenge Dilokong had been unable to give effect to the terms of the
Shareholders on the BEE compliance.
[34]
Counsel for Mawetse,
correctly argued that the reasons for Dilokong's failure to comply
with the requirements were irrelevant for
purposes of these
proceedings. What is relevant is that the grant of the prospecting
right was subject to a condition that was
never met. With Dilokong
conceding that it was and still is not BEE compliant the question
should be whether such failure to comply
has any effect on the grant
of the prospecting right to Dilokong.
IS
THE BEE REQUIREMENT OPTIONAL?
[35]
Part B of the
application for prospecting right, in namely Annexure "PWM11"
to the Applicant's Founding Affidavit records
that the completion of
Part B is optional for applications for a prospecting right. DMR
sought to argue that this meant that the
BEE requirement was only
relevant for the execution of the prospecting right and had no
relevance in the decision to award the
prospecting right. It was
submitted on behalf of DMR that it was only in respect of the
execution of a mining right that it was
imperative that the applicant
be BEE compliant.
[36]
Counsel for DMR further
submitted that in terms of Section 17(4) of the MPRDA the Minister
had a discretion to request the applicant
for a prospecting right to
give effect to the object referred to in Section 2(d). The Minister
had a choice whether to exercise
the discretion or not as there was
no compulsion in such a request. Failure to comply with section 2(d)
insofar as a prospecting
right is concerned did not preclude the
granting of a prospecting right to Dilokong. Consequently Dilokong
was rightfully awarded
the prospecting right, was the argument.
[37]
There is no substance in
this submission for the following reasons. The purported grant of the
prospecting right to Dilokong was
always conditional on Dilokong's
compliance with the Charter. This is clear from the following:
[38]
The approval of 21 June
2010 records that Dilokong has not complied with the Charter and
section 17(4) of the MPRDA on the date
of approval, and recommends
the grant of the right subject to Dilokong so complying.
BEE
COMPLIANCE - THE MPDRA AND THE MINING CHARTER
[39]
Counsel for Dilokong
submitted that in the MPRDA there are no statutory requirements that
enjoins an applicant for a prospecting
right to be BEE compliant,
either at the time of lodging and acceptance of the application or at
the time when the decision to
grant a prospecting right is taken. He
argued that the circumstances under which a prospecting right must be
refused or granted
are set out in section 17(1) and 17(2) of the
MPRDA: the Minister or her delegate is obliged to grant a prospecting
right if the
"requirements of section 17(1) of the MPRDA have
been met".
[40]
It is so that both
section 17(1) and 17(2) play a pivotal role in the decision whether
an application for a prospecting right ought
to be granted or
refused. However, the two sub sections cannot be read in isolation.
They have to be read in conjunction with other
relevant provisions.
[41]
Section 17(4) of the
MPRDA reads thus:
"17(4) The Minister may,
having regard to the type of mineral concerned and the extent of the
proposed prospecting project,
request the applicant to give effect to
the object referred to in Section 2(d)."
[42]
If the intention of the
Legislature was to restrict the discretion of the Minister to the
stage of execution the Act would have
said so. There is no
justification to confine section 17(4) to the stage of execution.
That BEE compliance is a requirement is
also clear from the Charter.
42.1
The
Charter is made in terms of section 100 of the MPRDA. The objective
is to "develop a broad-based socio-economic empowerment
Charter
that will set the framework, targets and timetable for effecting the
entry of historically disadvantaged South Africans
into the mining
industry and allow such South Africans to benefit from the
exploitation of mining and mineral resources".
42.2
Section 1 of the MPRDA
defines "broad-based economic empowerment" as,
inter
alia, -
A social or economic strategy, plan,
principle, approach or act which is aimed at
-...
(b) Transforming such industries so as
to assist in, provide for, initiate or facilitate
(i)
the ownership,
participation in or the benefiting from existing or future mining,
prospecting, exploration or production operations."
42.3
Neither
this definition nor section 100(2) of the MPRDA, restricts the
application of the Mining Charter to mining rights, or the
stage of
execution. On the contrary, section 100(2) refers more broadly to the
"mining industry", and the definition
expressly includes
prospecting within its ambit.
[43]
It is so, as counsel for
Dilokong submitted, that the Minister's discretionary power was
carefully circumscribed: the Minister may
not simply demand that all
applications for prospecting rights must comply with section 17(4) of
the MPRDA because the legislature
imposed two jurisdictional facts
for the exercise of the discretion. Firstly, the Minister or her
delegate must have regard to
the type of mineral concerned and,
secondly, she or her delegate must have regard to the extent of the
proposed prospecting project.
It was submitted on behalf of Dilokong
that the Minister could not call upon an applicant for a prospecting
right to comply with
section 2(d) of the MPRDA without having regard
to the two jurisdictional facts above.
[44]
It has not been
suggested by Dilokong that the Minister failed to exercise her
discretion properly or that the present case is one
of those where
the Minister should have used her discretion not to request BEE
compliance. The Minister, through her authorized
delegate,
recommended that a prospecting right be granted subject to compliance
with the Mining Charter and that decision has not
been attacked.
Nowhere is there mention that this has to be done at the time of
execution.
[45]
It was submitted for the
first time, on behalf of Dilokong, in its heads of argument, that it
was the Regional Manager who made
this request, and that the request
was accordingly unauthorized and invalid. This submission cannot be
sustained for the following
reasons:
45.1
Dilokong
does not challenge the authority of the Regional Manager to make the
request contained in "PWM3" anywhere in
its papers. The
result is that neither the DMR respondents nor Mawetse had an
opportunity to respond to the allegation.
45.2
Dilokong has not
challenged the request contained in "PWM3", in any
proceedings. The request concerned, therefore, remains
valid in law
until set aside by a court.
(Oudekraal Estates (Pty) Ltd v
City of Cape Town and Others
2004 (6)
SA 222
(SCA) at para 26.)
[46]
Dilokong's submission
also overlooks the fact that the approval and the Power of Attorney
which, according to Dilokong, constituted
the administrative decision
to grant the right, were expressly subject to a suspensive condition,
namely that Dilokong become BEE
compliant. These decisions were
properly taken by the DDG personally and not the Regional Manager.
[47]
There is a further point
that Dilokong argues which is that there is a distinction between
mining and prospecting rights, in that
compliance with the Mining
Charter is compulsory in respect of mining rights, but may only be
requested by the Minister in respect
of prospecting rights. As
already stated earlier there is nothing in the Charter to support
this submission. However, even if this
submission were to be correct,
(which is doubtful), it is irrelevant in circumstances where the
Minister has correctly exercised
her discretion to require Dilokong
to comply with the Charter in respect of the prospecting right. She
clearly did so through her
delegate, the DDG, by granting the
prospecting right subject to the condition that Dilokong become BEE
compliant. Counsel for Mawetse,
correctly, su
bmitted that the
discretionary
mandatory distinction
relied upon by Dilokong, takes the matter no further.
NO
PROSPECTIVE RIGHT WAS AWARDED
[48]
The Minister's decision
to dismiss Mawetse’s appeal and the Department's refusal to
consider Mawetse's application for a prospecting
right in respect of
chrome over Driekop were founded on the claim that Dilokong is
presently the holder of the prospecting right.
[49]
It is Mawetse's
contention that Dilokong was never properly awarded a prospecting
right as,
inter aila
, the
prospecting right is contractual in nature and that there was never a
meeting of the minds between between the parties concerned.
In
support of this contention Mawetse relies on the case of Meepo
supra.
[50]
It was argued on behalf
of Mawetse that Dilokong and the Department had not agreed on the
terms of the purported right and that
this was illustrated by that
Dilokong had failed to execute the right. The right concerned had not
been executed because Dilokong
did not comply with one of the terms
stpulated by the Department, namely that it had to produce proof that
it had at least a 26%
BEE shareholder and it could not. Because no
agreement was ever reached regarding the terms of the prospecting
right no prospecting
right was ever granted, it was argued.
[51]
Alternatively it was
argued on behalf of Mawetse that the prospecting right could not be
given effect to in the absence of Dilokong's
compliance with the
terms and the conditions of the shareholders agreement relating to
the
BEE partner. If the prospecting right was, notwithstanding
non compliance, given effect to, the right that is sought to be
executed
would then not accord with the right that was granted.
[52]
Dilokong's defence to
this ground of review sought to persuade this court that the Meepo
case was wrongly decided and that a prospecting
right is not
contractual in nature. It was argued on behalf of Dilokong that the
granting of a prospecting right is the exercise
of a statutory power
and nothing else.
[53]
In my view nothing turns
on whether the terms of the prospecting right are contractual as held
in Meepo or statutory as contended
by Dilokong.
[54]
What matters in the
present case is that the decision to grant a prospecting right was
subject to conditions and the implementation
of the right was held in
abeyance until the conditions had been complied with. Dilokong failed
to comply with the condition and
accordingly disabled itself from
implementing the right to prospect.
THE
RIGHT HAS LAPSED
[55]
Mawetse contends that
the prospecting right granted to Dilokong, if it was lawfully
granted, has lapsed on the basis of one of the
two grounds:
55.1
that it has expired in
terms of section 56(a) of the MPRDA or
55.2
it was abandoned as
contemplated in section 56(f) of the MPRDA. The two provisions read
as follows:
"Any right, permit,
permission or license granted or issued in terms of this Act shall
lapse, whenever -
(a)
it
expires
(f) it is abandoned."
Has
the prospecting right expired?
[56]
The language of section
56 is clear and mandatory. It provides that any right issued in terms
of the MPRDA shall lapse when it expires
or is abandoned.
[57]
In
Minister
of Environmental Affairs and Tourism and Others v Pepper Bay Fishing
(Pty) Ltd; Minister of Environmental Affairs and others
v_Smith
2004
(1) SA 308
(SCA) at para 32 the court said the following about such
language:
''The provisions of the
invitation pertinent to the Pepper Bay case, on their plain wording,
clearly state that the application
fee must be paid at the time that
the application is lodged. Paragraphs 15 and 16 of the instructions
are similarly couched in
peremptory terms. An applicant 'must pay'
the application fee and 'must pay the application fee promptly and
timeously'. The general
principle is, of course, that language of a
predominantly imperative nature such as 'must' is to be construed as
peremptory rather
than directory unless there are other circumstances
which negate this construction (see eg Sutter v Scheepers
1932 AD 165
at 173 - 4)"
[58]
Section 56(a) of the
MPRDA does not stipulate the expiry date. This, however, does not
mean that a prospecting right is perpetual.
It is, therefore,
necessary to peruse other sections for guidance in this regard.
[59]
Relying on section 18(5)
of the MPRDA, Dilokong insists that the prospecting right awarded to
it has not expired. It argues that
section 18(5) refers to a "stated
expiry date" in the context of one stated in the prospecting
right itself. Since the
prospecting right granted to Dilokong has not
yet been notarially executed, there was no such date stated in the
prospecting right
itself, was the argument.
[60]
In my view, reliance on
section 18(5) is misplaced as we are here dealing with an application
for a prospecting right and not with
a renewal application. Annexure
"PWM 4", a letter from the DDG, clearly informs Dilokong
that the application for a prospecting
right has been approved.
In
paragraph 2 it is stated:
"Take note that the
Regional Manager will approve the environmental management plan on
the date of signing of the right."
[61]
According to Dilokong
the above communication must be seen in the context of section 17(5)
of the MPRDA. This section provided,
at the time, that the granting
of a prospecting right only became effective on the date on which the
environmental management plan
is approved in terms of section 39
thereof. Since this step had not yet taken place, the prospecting
right, including the duration
thereof, had not yet taken legal
effect, it was argued on behalf of Dilokong.
[62]
This submission has no
merit. It could never have been the intention of the Legislature to
allow protracted delays to frustrate
the objects of the MPRDA. On
Dilokong's argument the prospecting right, which it says was awarded
on 21 June 2007, is frozen in
perpetuity and can never lapse since
its term starts to run only once the right is executed. To endorse
such an argument would
amount to allowing the unlawful reservation
and freezing of the mineral rights for Dilokong. This could not have
been the intention
of the Legislature.
[63]
According to Dilokong
the prospecting right that was due to be notarially executed on 14
November 2007 was to "continue in
force for a period of three
years ending on 13 November 2010”. On Dilokong's own terms,
therefore, the three year lifespan
has expired. To conclude otherwise
would be to make a finding which is at odds with the objects of the
MPRDA which are clearly
against the sterilization and reservation of
mineral rights. It would also make a mockery of the objects of the
MPRDA, which are,
inter alia, to ensure that mineral rights are
timeously exploited for the benefit of the public.
[64]
Not surprisingly DMR is
in agreement with Dilokong. However its insistence that a prospecting
right was lawfully awarded to Dilokong
and that it is only the
execution of that right which has been delayed does not assist
Dilokong as the grant of the prospecting
right is inextricably linked
to its execution. It also does not avail Dilokong that it has
launched a counterapplication for
the execution of the right and
that the DMR is not opposing it.
[65]
It appears to me that
the DMR and Dilokong seem to think that the underlying problem can
simply be cured by an order to execute
the right. This thinking
overlooks, among others, that in terms of section 17(6) of the MPRDA,
a prospecting right is valid for
a period specified in the right,
which period may not exceed five years. There is a very good reason
for this.
[66]
An application for a
prospecting right may be granted or refused. Where it is refused that
may be the end of the matter, i.e. if
the applicant elects not to
take the matter further, by way of appeal or review. Where the
application is granted, however, a process
is embarked upon which
culminates when the right is executed. Certain specified steps in the
process between the grant of the right
and its execution have to be
taken and taken at specific periods. They are all important as they
are all there for a purpose. Missing
one step may have a serious
impact not only on the process itself, which would be incomplete, but
would also possibly have grave
repercussions for stake holders. By
way of example, an Environmental Management Plan ("EMP"),
is a prerequisite for a
valid exercise of a prospecting right in
terms of section 5 (4) of the MPRDA. Without it further progress
after the approval of
the right is stalled.
[67]
Dilokong's EMP was filed
on 2 February 2007. No progress was made thereafter. It seems to me,
as contended by Mawetse, that after
5 years the EMP would be outdated
as the terrain and the communities in the area may have changed.
Going ahead at this stage with
the implementation of the right might
have serious implications for the environment and the communities
around Driekop.
[68]
It is clear, therefore,
that in the event there was a lawful award of a prospecting award to
Dilokong that right has now been lost
because of the unreasonable
delay in using it. The reasons for such a delay are irrelevant.
[69]
On this ground alone I
find that the prospecting right awarded to Dilokong, if it was
properly awarded, has lapsed as it has expired.
Has
the right been abandoned?
[70]
It is doubtful whether
in a case, such as this one, where it is clearly impossible to
execute a right it can be said that the right
has been abandoned.
However in view of my finding above that the right has lapsed it
shall not be necessary to determine whether
the right in this case
was abandoned.
REASONS FOR TURNING DOWN THE APPEAL
WERE INADEQUATE, IRREGULAR AND UNLAWFUL.
[71]
The right to written
reasons is enshrined in section 33(2) of the Constitution, which
provides:
"Everyone whose rights are
adversely affected by administrative action has the right to be given
written reasons."
[72]
Section 5(2) of PAJA
gives effect to this right. In terms of this provision the
administrator is obliged to furnish adequate reasons
in writing
within 90 days after receiving a request for reasons from an affected
party.
[73]
In some cases, however,
an administrator is obliged to give reasons whether or not there has
been a request for the reasons. (See
Koyabe and others
i/
Minister of Home Affairs and others (Lawyers for Human Rights
as amicus curiae)
2010 (4) SA 327
(CC), paragraphs [61] to [62].
[74]
What constitutes
adequate reasons shall always differ from case to case and depends
partly on the statutory and factual context.
In
Minister of
Environmental Affairs and Tourism and others v Phambili Fisheries
(Pty) Ltd
2003 (6) SA 407
;
Minister
of Environmental Affairs and Tourism and Others v Bato Star Fishing
(Pty) Ltd (SCA), para [40] the court said the following:
“
That the decision maker
should set out his understanding of the relevant law, any findings of
fact on which his conclusions depend
(especially if those facts have
been in dispute), and the reasoning process which led him to those
conclusions. He should do so
in clear and unambiguous language, not
in vague generalities or the formal language of legislation. The
appropriate length of the
statement covering the matters will depend
upon considerations such as the nature and importance of the
decision, its complexity
and the time available to formulate the
statement. Often those factors may suggest a brief statement of one
or two pages.”
[75]
The duty to give reasons
goes to the heart of procedural fairness, and has thus been described
as "the third principle of natural
justice”. (See Hoexter
Administrative Law in South Africa,
2
nd
ed (Cape Town: Juta & Co. Ltd, 2012) at 463, fn 15.
[76]
Reasons for a decision
play an important role in assisting the affected parties determine a
way forward. It is fundamental in enabling
affected parties to
exercise their right to be heard, to challenge the decision or to
rectify their position. The duty also encourages
rational and
structured decision making, and so improves decision making. (See
R
\/
Higher Education Funding
Council, ex parte Institute of Dental Surgery
[1994]
1 All ER 651
(QB) at 665J-666A.)
[77]
What constitutes
adequate reasons will always vary depending on the circumstances of
each case
(Koyabe supra
para
[63]).
[78]
The reasons provided by
the Minister are embodied in Annexure "PWM 9". Whether or
not the reasons concerned are adequate
would depend on the scope and
the nature of the appeal.
[79]
In the present case the
applicant states that the reasons provided by the Minister for
turning down Mawetse's appeal are inadequate
as they do not "engage
with the substantive objections that were raised in the appeal at
all". According to Mawetse the
reasons provided merely restate
the original decision and assert that it was properly taken by the
Deputy Director General who
was empowered to do so. There is no
explanation of the basis for these conclusions.
[80]
To determine the
adequacy or otherwise of the reasons put forward by the Minister this
court needs to understand the basis or the
grounds of the appeal. The
applicant did not put forward its internal appeal of 28 October 2010
as part of the evidence. In addition
nowhere in its papers, that is,
both the founding affidavit and the replying affidavit are the
grounds of the applicant's appeal
foreshadowed.
[81]
Counsel for Dilokong
correctly submitted that in the absence of the grounds of appeal
concerned this court was in no position at
all to determine whether
the reasons furnished were adequate or not. There is, therefore, no
substance in this ground of review.
THE
COUNTER-APPLICATION
[82]
Dilokong seeks a
mandatory compelling the Minister to execute the prospecting right.
The counter-application is incompetent for
there are legal obstacles
to the execution of the right as sought by Dilokong in its
counterapplication namely:
82.1
The moratorium
precluding Dilokong from disposing of its equity in order to become
BEE compliant; and
82.2
The Minister's
determination that the prospecting right may not be executed unless
and until Dilokong is BEE compliant.
[83]
Dilokong has not sought
to set aside the moratorium or the Minister's decision to require it
to be BEE compliant.
[84]
It is trite that
administrative decisions are valid and stand until set aside by a
competent court. Until set aside the decision
has legal consequences
that cannot be ignored. In
Oudekraal Estates (Pty) v City of
Cape Town and Others
2004 (6) SA 222
(SCA) at para [26] the court stated the following:
“
The proper functioning
of a modern State would be considerably compromised if all
administrative acts could be given effect to or
ignored depending
upon the view the subject takes of the validity of the act in
question. No doubt it is for this reason that our
law has always
recognized that even an unlawful administrative act is capable of
producing legally valid consequences for so long
as the unlawful act
is not set aside”
[85]
In the present case
Dilokong has not attempted to have the two decisions above set aside
by a court and cannot now conduct itself
as if they do not exist.
[86]
There is yet another
reason why the Dilokong's counter-application cannot succeed and it
is this: Dilokong has not availed itself
of the internal appeal
remedy provided for in section 96 of the MPRDA.
[87]
Section 96 of the MPRDA
(prior to amendment by Act 49 of 2008 which commenced on 7 June 2013)
provides:
“
Internal appeal process
and access to courts
(1)
Any
person whose rights and legitimate expectations have been materially
and adversely affected or who is aggrieved by any administrative
decision in terms of this Act may appeal in the prescribed manner to
-
(a)
the
Director General, if it is an administrative decision by a Regional
Manager or an officer; or
(b)
the
Minister, if it is an administrative decision by the Director-
General or the designated agency.
(2)
An
appeal in terms of subsection (1) does not suspend the administrative
decision, unless it is suspended by the Director-General
or the
Minister as the case may be.
(3)
No
person may apply to the court for the review of an administrative
decision contemplated in subsection (1) until that person has
exhausted his or her remedies in terms of that subsection.
(4)
Sections
6, 7 (1) and 8 of the Promotion of Administrative Justice Act, 2000
(Act 3 of 2000), apply to any court proceedings contemplated
in this
section"
[88]
The law contemplates
that the appeal should be made timeously. Regulation 74(1) of the
Regulation to the MPRDA requires that an
internal appeal be lodged
within 30 days of an affected person becoming aware of the decision.
[89]
Section 7of PAJA
provides:
"(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."
[90]
In the present case the
DDG made the grant of the prospecting right to Dilokong subject to
the condition that Dilokong comply with
the Mining Charter by
demonstrating its BEE credentials.
[91]
The Constitutional Court
has held that internal appeals in terms of section 96 lie in respect
of decisions of the Minister's delegates.
(See
Bengwenyama
Minerals (Pty) Ltd and Others
u
Genorah Resources (Pty) Ltd and Others
2011
(4) SA 113
(CC) at para 48-50.)
[92]
In
Bengwenyama,
the court, re-iterated its earlier
decision that "the need to allow executive agencies to utilize
their own fair procedures
is crucial in administrative action".
[93]
Nowhere in the papers
does Dilokong suggest that it appealed in terms of section 96 against
the decision to render the grant of
the right conditional on its
compliance with the Mining Charter. Neither has it applied for
condonation for its failure to exhaust
its internal remedies, nor has
it set out any exceptional circumstances that might persuade this
court to grant such condonation.
On the contrary Dilokong seems to
have deliberately dragged its feet. It has known, at the latest,
since 14 November 2007, of the
Department's refusal to execute the
right because of its failure to comply with the BEE requirements. Yet
it elected not to litigate
or appeal the decision in the hope that it
would be able to obtain a suitable BEE partner and comply with the
condition. This constitutes
an unreasonable delay which fatally
undermines the counter-application.
[94]
In
Oudekraal
Estates supra
the SCA emphasized the
importance of prompt action in taking administrative decisions on
review as prejudice to interested parties
might flow from an
unreasonable delay. Having regard to the above, it is clear that
Dilokong's failure to pursue its internal appeal
against the DDG's
decision to impose a condition on the grant of the prospecting right
as well as the unreasonable long delay are
fatal to its
counter-application.
[95]
The counter-application,
by Dilokong, therefore, has no merit and cannot succeed.
REVIEW
OF THE DECISION REFUSING MAWETSE'S APPLICATION
[96]
On 27 October 2009 the
fourth respondent rejected Mawetse's application for a prospecting
right in respect of chrome in Driekop.
The basis of this refusal was
that Dilokong already held that prospecting right in respect of the
same mineral in Driekop.
[97]
As can be seen above
that decision was based on a material error of law. Accordingly it is
reviewable in terms of section 2(d) of
the PAJA. It should,
therefore, be set aside in accordance with the relief sought in
paragraph 6 of the notice of motion.
CONCLUSION
[98]
I am of the view that
Mawetse has made out a case for review for reasons referred to above.
[99]
In the result I grant
the following order:
99.1
It is declared that the
fifth respondent does not hold a valid prospecting right in respect
of chrome on the farm Driekop 253 KT
as it has lapsed and no longer
constitutes a bar to considering the applicant's application for a
prospecting right.
99.2
The decision of the
fourth respondent of 27 October 2009 refusing the applicant's
application for a prospecting right in respect
of chrome on the farm
Driekop 253 KT, insofar as the fourth respondent refused the
application, is set aside.
99.3
The applicant's
application for a prospecting right in respect of Driekop 253 KT is
remitted to the third respondent for consideration
in the light of
the above within 30 days of this order.
The fifth Respondent's
counter-application is dismissed with costs.
99.5
The respondents are
ordered to pay the costs jointly and severally, such costs to include
costs of junior and senior counsel.
T M MASIPA
JUDGE OF THE NORTH GAUTENG
HIGH COURT, PRETORIA
Counsel
for the Applicant: G J Marcus SC
N
Ferreira
Instructed
by: Maponya Incorporated
Counsel
for the First to Fourth: N Cassim SC
M
M Mokadikoa
Instructed
by: The State Attorney
Counsel
for the Fifth Respondent: M M Oosthuizen SC
A
Higgs
Instructed
by: Steyn Kinnear Incorporated
Date
of Hearing: 15 October 2013
Date
of Judgment: 30 January 2014