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[2006] ZASCA 118
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Anglo Operations Ltd v Sandhurst Estates (Pty) Ltd (634/05) [2006] ZASCA 118; [2007] 2 All SA 567 (SCA); 2007 (2) SA 363 (SCA) (29 November 2006)
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THE
SUPREME COURT OF APPEAL
OF
SOUTH AFRICA
REPORTABLE
Case number : 634/05
In the matter between :
ANGLO OPERATIONS LTD APPELLANT
and
SANDHURST
ESTATES (PTY) LTD RESPONDENT
CORAM : HOWIE P, MTHIYANE, BRAND, MLAMBO JJA
et
THERON AJA
HEARD : 13 NOVEMBER 2006
DELIVERED : 29 NOVEMBER 2006
Neutral citation
: This judgment may be referred to as
Anglo
Operations v Sandhurst
[2006] SCA 146 (RSA)
SUMMARY
: Mineral rights â when holder is entitled to
conduct open cast mining - related issue concerning diversion of
stream to facilitate
open cast mining activities
___________________________________________________________________
JUDGMENT
BRAND JA
/
BRAND JA
:
[1] This
is a case about mineral rights. The respondent is the owner of a
farm, described as the remainder of Brakfontein 117, about
850
hectares in extent, near Bethal in the Mpumalanga Province ('the
property'). The appellant holds all rights to coal in respect
of the
property by virtue of a notarial cession of mineral rights which was
duly registered during July 2001. The present proceedings
started
when the appellant brought an application in the Pretoria High Court.
The relief sought was for an order, firstly, allowing
the appellant
to conduct open cast or strip mining â as opposed to underground
mining â on approximately 60 hectares of the property
and,
secondly, permitting the diversion of an existing stream on the
property in order to facilitate these open cast mining operations.
The respondent raised various objections to both aspects of the
relief sought. In a judgment which has since been reported
sub-nom
Anglo Operations Ltd v Sandhurst Estates (Pty) Ltd
2006 (1) SA
350
(T), most of these objections were upheld by the court
a quo
(De Villiers J). Consequently the appellantâs application was
dismissed with costs. The appeal against that order is with the leave
of the court
a quo
.
[2] The
appellantâs mineral title arises from a notarial cession in its
favour by African and European Investment Co Ltd ('AEIC')
during
2001. AEIC in turn acquired these rights by virtue of two separate
cessions, that were concluded on 18 March 1968, with the
then owners
of the property and the mineral rights involved. They were Mr Arthur
Sulski, who owned both the property and a 5/6 share
in the mineral
rights and Mr Morris Sulski, who held the remaining 1/6 share in the
mineral rights. Subsequent to these cessions
to AEIC, the respondent
took transfer of the property from Arthur Sulski. This was in 1972.
[3] The
cession by AEIC to the appellant did not relate to the property only.
It also provided for the transfer of the rights to coal
in respect of
a number of adjoining properties. It appears that these properties
are situated in what is known as the Kriel South
Coal Field where
coal mining had taken place for many years, both by way of strip
mining and underground mining activities. The appellant's
case is
that it had entered into an agreement with Sasol Mining (Pty) Ltd in
terms of which it undertook to make coal available to
the latter. In
order to give effect to this agreement, the appellant explained, it
decided to establish open cast mining operations
on the south-western
portion of the Kriel South Coal Field, consisting of the property and
those adjacent to it, which together formed
the subject matter of the
AEIC cession.
[4] With
regard to the two aspects of the relief sought by the appellant, I
shall first deal with the dispute that arose from its
desire to
conduct open cast mining on part of the property. This dispute gave
rise to issues of both law and fact. The issue of law
turns on the
content of the appellantâs title as the holder of mineral rights.
This title originally derived, as I have said, from
two cessions by
Arthur and Morris Sulski in favour of AEIC during 1968. These two
cessions were quoted in full by the court
a quo
(at
355H-357C). As appears from the quotation, the terms of the cession
by Arthur is substantially more detailed than the one by
Morris. The
reason for this, the court
a quo
inferred (at 357G), was that
Arthur remained the owner of the surface rights while Morris no
longer retained any interest in the
property at all. Whatever the
reason for the difference, both parties in argument before us
followed the court
a quo
âs example by concentrating their
focus on the more detailed provisions of Arthurâs cession. Since I
do not believe it makes much
difference, I propose to do the same.
[5] In
terms of clause 1 of Arthurâs cession, AEIC and its successors were
afforded âall such rights as may be needed for proper
mining and
exploiting the coal in, on and under all of the said propertyâ. In
spite of this wide wording it is apparent, in my
view, that neither
clause 1, nor any of the other clauses of the cession expressly
authorise open cast mining. The converse is equally
apparent. Open
cast mining is not expressly excluded by any term of the cession.
Despite arguments to the contrary in the court
a quo
(which
were considered at 391D-394D) both parties conceded in this court â
rightly in my view â that neither of them can rely
on any tacit
term of the cessions which can be said to determine the question of
open cast mining either way. The issue of law that
therefore arises
turns on the following question: what is the default position in
common law where open cast mining is not expressly
regulated by the
grant of mineral rights? The position contended for by the appellant
is, broadly stated, that unless it is expressly
or tacitly excluded
by the grant, of mineral rights, the holder is entitled, by virtue of
a term implied by law, to conduct open
cast mining when it is
reasonably necessary to remove the minerals, provided that it is done
in a manner least injurious to the interests
of the surface owner.
The respondentâs contention, on the other hand, is that unless the
grant expressly or tacitly allows open
cast mining, it is excluded by
virtue of a term implied by law. In referring to âimpliedâ and
âtacitâ terms of the grant,
I, of course, have the distinction in
mind that is explained by Corbett AJA in
Alfred McAlpine & Son
(Pty) Ltd v Transvaal Provincial Administration
1974 (3) SA 506
(A) 531-532. Accordingly, an implied term must be understood as a
provision of the grant imposed by law, ie as a reference to a
naturalium
of the grant. The description âtacit termâ on
the other hand, is used to denote unexpressed terms read into the
contract that
are based on the unarticulated but nevertheless
inferred or imputed intention of the parties.
[6] The
factual issues resulted from the appellant's allegations which were
built on its contentions regarding the law. In the first
place it
alleged that the open cast mining method it intends to employ is
reasonably necessary for the effective exploitation of
its right to
remove the coal from the property. Its second allegation was that it
planned to conduct these operations with due respect
for the
respondent's rights as the surface owner and that the activities it
intended to embark upon would constitute no more than
reasonable
interference with the farming operations on the property. These
allegations of fact were denied by the respondent in a
number of
material respects. It is apparent, however, that the factual disputes
are secondary to the legal dispute in that they will
only require
determination if the legal issue is decided in favour of the
appellant. I therefore propose to consider the question
of law first
before I turn to a more detailed account of the facts.
[7] The
appellant's case is essentially based on the following exposition of
the law by Malan J in
Hudson v Mann
1950 (4) SA 485
(T)
488B-H:
'
I have been referred to a number of
decisions from which the rights of the holder of mineral rights
appear reasonably well defined.
Such a holder . . . is entitled to go
upon the property, search for minerals and if he finds any to remove
them. In the course of
his operations he is entitled to exercise all
such subsidiary or ancillary rights, without which he will not be
able effectively
to carry on his prospecting and/or mining
operations.
When the owners are able reasonably to enjoy their
respective rights without any clashing of interests no dispute is, as
a rule, likely
to arise. The difficulty arises, as has happened in
the present case, when the respective claims enter into competition
and there
is no room for the exercise of the rights of both parties
simultaneously.
The principles underlying the decisions appear to be
that the grantee of mineral rights may resist interference with a
reasonable
exercise of those rights either by the grantor or by those
who derive title through him. In case of irreconcilable conflict the
use
of the surface rights must be subordinated to mineral
exploration. The solution of a dispute in such a case appears to me
to resolve
itself into a determination of a question of fact, viz.,
whether or not the holder of the mineral rights acts
bona fide
and reasonably in the course of exercising his rights. He must
exercise his rights in a manner least onerous or injurious to the
owner of the surface rights, but he is not obliged to forego ordinary
and reasonable enjoyment merely because his operations or activities
are detrimental to the interests of the surface owner.â
(See also
West Witwatersrand Areas Ltd v Roos
1936 AD 62
at 72;
Trojan
Exploration Co (Pty) Ltd v Rustenburg Platinum Mines Ltd
[1996] ZASCA 74
;
1996 (4)
SA 499
(A) 320C-E.)
[8] The
respondent has no quarrel, in principle, with Malan Jâs exposition
of the essential content of mineral rights. Its contention
is,
however, that it must be read subject to the surface ownerâs
inherent right to what is described as subjacent or lateral support.
The starting point of its argument in support of this contention, is
the judgment of De Villiers CJ â with Smith and Buchanan JJ
concurring â in
London and SA Exploration Co v Rouliot
(1891) 8 SC 75.
The gravamen of the decision in this case was that a
rule, similar in content to the English rule of lateral support,
which provides
landowners, as an intrinsic element of their
ownership, with the right of adjacent support of their land, should
be incorporated
into our law. Though this rule never formed part of
Roman Dutch Law, De Villiers CJ stated (at 92), our courts may '
in
the absence of direct authority . . : be guided by well-established
principles of the Roman law and of modern systems of law, provided
they do not lead us to conclusions inconsistent with the Dutch law
'
(see also Smith J at 98-99).
Following
upon this proposition, is the statement by De Villiers CJ (at p 94)
which formed the keystone to the respondent's argument,
namely that:
'If the right to lateral support exists as a natural
right incident to the plaintiff's land â as in my opinion it does â
the parties
to the contract must be deemed to have contracted with a
view to the continued existence of that right. If they had intended
that
the plaintiffs should be deprived of this natural right ought
not the defendant to have stipulated to that effect? I am of opinion
that in the absence of such a stipulation the presumption is in
favour of an intention to preserve a well established natural right
of property rather than to part with such a right.'
[9] The
next step in the progression of the respondentâs argument is based
on in the judgment of Bristowe J (with Smith J concurring)
in
Coronation Collieries v Malan
1911 TPD 577.
Though the facts
of the
Coronation Collieries
case were fairly complicated, the
central question â for present purposes â was whether the
underground miner owed the landowner
a duty of vertical or subjacent
support of the surface. Bristowe J began to answer the question by
pointing out (at 590-591) that,
according to the well-settled
principles of English law â
the right to have the surface of land
in its natural state supported by the subjacent minerals is a right
of property and not of easement;
and that a lease or conveyance of
the minerals, even though accompanied by the widest powers of working
. . . carries with it no
power to let down the surface, unless such
power is granted either expressly or by necessary implication.
â
[10] This
statement regarding the position in English law, is clearly borne out
by the cases to which Bristowe J referred (see eg
the judgment of the
House of Lords in
Butterknowle Colliery Co Ltd v Bishop Auckland
Industrial Co-operative Co Ltd
[1906] AC 305
(per Lord Loreburn
LC at 309 and per Lord Macnaghten at 313). The learned judge then
immediately proceeded, however, to point out
the material differences
between our law and English law to which I shall presently return.
But, he said, (at 591), â
this difference between the two systems
of law does not affect the right of support, and the case of London
and South African Exploration
Co v Rouliot
(8 S.C. 75)
shows that, as
regards the rights of support for land in its natural state, there is
no difference between the English and the Roman-Dutch
law. In that
case it was held that a lessee of land for mining purposes cannot
prima facie withdraw support from the adjoining land
of the lessor.
There it was only lateral support that was in question, because the
lease contemplated surface workings, but the same
principle would
apply, if his workings were subterranean and the support in question
were vertical.
â
[11] In
evaluating Bristowe J's understanding of
Rouliot,
it is well
to remember that, although that case originated from mining
activities, it did not relate to a conflict between the surface
owner
and the holder of mineral rights in respect of the same land. The
claim was for damages arising from the defendantâs alleged
trespass
on the plaintiffâs property. What happened, in short, was that the
defendant (Rouliot) leased a claim in the Du Toitâs
Pan Mine from
the plaintiff company. The defendant conducted open cast mining on
the claim for many years. During these years he
left a sloping
buttress of diamondiferous ground to support the adjoining unleased
property of the plaintiff, forming the margin
of his mine. The
defendant then decided to mine the sloping buttress as well. Before
he did so, he removed a quantity of ground from
the unleased
adjoining property, because he considered that the working of the
buttress would cause a fall of the reef into his claim.
The removal
of the ground constituted the alleged trespass.
[12] In
the court of first instance, Solomon J held that the legal basis for
the plaintiffâs claim was that by common law it had
a right of
lateral support for its property and that this right had not been
given up by the lease. He then decided that, since open
cast mining
had been contemplated by the parties, the plaintiff must indeed be
taken to have given up its right to lateral support
for its adjoining
property. Consequently, he decided, the defendant had acted lawfully
in removing ground on the adjoining unleased
land before he exercised
his right to remove the lateral support to that land. It is against
this background that both De Villiers
CJ and Smith J held on appeal
that, although the principle of lateral support formed no part of
Roman Dutch law, it is a just and
equitable principle that should
best be incorporated into our law. And, so De Villiers CJ held in the
dictum
upon which the respondent relies (see para [9] above),
once it is accepted that the right to lateral support existed as an
incident
to the plaintiffâs right of ownership, the parties must be
deemed to have concluded their lease agreement with the view to the
continued existence of that right.
[13] The
court
a quo
(at 365H-I) referred to the severe criticism of
the judgment of De Villiers CJ in
Rouliot
by Mr L Kadirgamar,
an advocate from the then Ceylon, in the 1965 South African Law
Journal (see (1965) 82
SALJ
at 210, 357 and 395). It then
proceeded to attribute a substantial part of its judgment (at
367A-373E) to the question whether or
not the right of lateral
support should be retained as part of our law. Ultimately the court
concluded that it should.
[14] Unlike
the court
a quo
, I do not believe that the question regarding
the continued recognition of the principle of lateral support is one
that we have to
concern ourselves with in this case. It is clear that
the principle was adopted in
Rouliot
as a rule of neighbour
law. The real question in this case is whether that principle of
neighbour law should have been extended, as
was done in the
Coronation Collieries
case, to govern the relationship between
mineral right holders and the owners of the same land. Though the
last mentioned case came
on appeal to this court (see
Coronation
Collieries Ltd v Malan
1911 AD 586)
the decision of Bristowe J
was upheld on a different basis. In referring to
'Coronation
Collieries
' I therefore have the Transvaal Provincial case in
mind.
[15] In
arguing that
Coronation Collieries
should not be followed, the
appellant first pointed to the material conceptual difference in this
regard between English law and
our law. The position in English law,
as pointed out by Bristowe J himself in
Coronation Collieries
(at 591), is that it is possible for different horizontal layers of
land to be owned by different persons. Based on this concept,
the
principle of subjacent support was succinctly stated as follows by
Lord Macnaghten in
Butterknowle Colliery
(supra) at 313):
â
The
result seems to be that in all cases where there has been a severance
in title and the upper and the lower strata are in different
hands,
the surface owner is entitled of common right to support for his
property in its natural position . . .â
[16] The
fundamental principle of our law, on the other hand, is that the
owner of land is the owner not only of the surface, but
of everything
legally adherent thereto and also of everything above and below the
surface (see eg
Rouliot (supra)
at 91;
Rocher v Registrar
of Deeds
1911 TPD 311
at 315;
Union Government v Marais
1920
AD 240
at 246). In terms of our law, it is thus not possible to
divide the ownership in separate layers. In consequence, while in
English
law the holder of mineral rights actually becomes owner of a
particular layer below the surface, this does not happen in our law.
In accordance with what has now become a settled principle of our
law, a right to minerals in the property of another is in the nature
of a quasi-servitude over that property (see eg
Rocher v Registrar
of Deeds (supra)
at 316;
Nolte v Johannesburg Consolidated
Investment Company Ltd
1943 AD 295
at 305-6;
South African
Railways & Harbours v Transvaal Consolidated Land &
Exploration Co Ltd
1961 (2) SA 467
(A) at 490-491).
[17] Once
this conceptual difference is appreciated, it is apparent that the
extension of the rules governing the relationship between
neighbours
to the relationship between the mineral rights holder and the owner
of the land, comes much more easily if one adopts
the English
approach. After all, the two owners of the different layers are
vertical neighbours, so to speak. To say in these circumstances,
as
Bristowe J did in
Coronation Collieries,
that De Villiers CJ
simply disregarded the conceptual differences in
Rouliot
and
that he had decided that 'this difference between the two systems of
law does not affect the right of support' is, with respect,
not
correct. Equally erroneous, in my view, is the statement that De
Villiers CJ decided to incorporate the English doctrine of lateral
and subjacent support, with all its ramifications, into our law. On
the contrary, I agree with the statement by the court
a quo
(at 366B) that what had happened in
Rouliot
was that
'De
Villiers CJ and Smith J simply introduced, as judge made law, a rule
which they regarded as common to all civilised systems of
law
because, as they perceived it, a lacuna existed. The judges did not
concern themselves with the exact pedigree of the rule .
. .. The
rule was introduced because it was regarded as just and equitable.
'
[18] I
therefore agree with the appellant's argument that the extension of
the lateral support rule in
Coronation Collieries
to the
relationship between owner and mineral rights holder was founded in a
substructure that can not be sustained.
Rouliot
simply did
not provide authority for the proposition on which the judgment by
Bristowe J was built. A further reason why the judgment
in
Rouliot
cannot unreservedly be extended to the relationship between the
owner of property and the holder of what has been described as a
quasi
servitude, appears from the following
dictum
by
Schreiner JA in
Kakamas Bestuursraad v Louw
1960 (2) SA 202
(A) 216H-217C:
'But . . . in the case of a servitude like the present
one the position seems to me to be materially different from that in
Rouliot's
case. The exercise of the rights granted in that
case did not necessarily involve any interference with the lessor's
rights in the
unleased part of its property. The lessee could mine,
though not so deeply or so cheaply, without infringing the lessor's
right of
lateral support. But in the present case the damming of the
river [which constituted the exercise of the servitutal right under
consideration]
necessarily submerged part of the plaintiff's property
. . . which would not otherwise have been submerged . . ..The normal
effect
of servitudes is that they derogate from the rights of the
servient owner. The extent of the derogation will depend firstly on
the
terms of the servitude and secondly on the principle that the
servitutal rights must be exercised
civiliter modo
. But there
is no generally applicable principle that in the absence of contrary
stipulation the rights of the servitude holder must
yield to those of
the servient owner . . .."
[19] The same can, in my view, be said about the exercise of mineral
rights. Because minerals are by their nature usually found under
the
surface of the land, the right granted to the holder to extract and
remove the minerals can generally only be exercised by excavating
the
land. Of necessity this involves damage to the surface of the land
and a curtailment or even a deprivation of the rights of use
normally
enjoyed by the owner of the surface. The difference between
underground mining and open cast mining lies in the degree of
such
disturbance and not in whether or not it will occur. Even in the case
of underground mining, the degree of disturbance to the
surface and
hence to any right on the part of the owner to preserve the surface,
must depend (excepting for purposes of this point
the terms of the
grant) upon the location and the extent of the reserves to be mined.
[20] In
consequence, as in the case of a servitude, the exercise of mineral
rights will almost inevitably lead to a conflict between
the right of
the owner to maintain the surface and the mineral rights holder to
extract the minerals underneath. How is this inherent
conflict to be
resolved in principle? According to the respondent's argument, based
on
Rouliot
and
Coronation Collieries
, which found
favour with the court
a quo,
the answer lies in the adoption
of the English law doctrine of subjacent support. I do not agree with
this approach. The correct approach,
in my view, is the one proposed
by the appellant, that this conflict should be determined in
accordance with the principles developed
by our law in resolving the
inherent conflicts between the holders of servitutal rights and the
owners of the servient properties.
[21] In
accordance with the principles applicable to servitudes, the owner of
a servient property is bound to allow the holder to
do whatever is
reasonably necessary for the proper exercise of his rights. The
holder of the servitude is in turn bound to exercise
his rights
civiliter modo
, that is, reasonably viewed, with as much
possible consideration and with the least possible inconvenience to
the servient property
and its owner. In applying these principles to
the mineral rights it can be accepted on good authority that the
holder is entitled
to go onto the property, search for minerals and
if he finds any to remove them (see eg
Hudson v Mann (supra)
at 488;
Trojan Exploration Co (Pty) Ltd v Rustenburg Platinum
Mines Ltd
[1996] ZASCA 74
;
1996 (4) SA 499
(A) 509G-H). In accordance with the
Latin maxim, translated as 'whosoever grants a thing is deemed also
to grant that without which
the grant itself would be of no effect',
this must include the right on the part of the holder to do whatever
is reasonably necessary
to attain his ultimate goal as empowered by
the grant. In
West Witwatersrand Areas Ltd v Roos (supra)
at
72 Curlewis ACJ refers with approval to the following examples given
in illustration of this maxim:
'
So,
if a man leases his land and all mines therein, when there are no
open mines the lessee may dig for the minerals; by the grant
of the
fish in a man's pond is granted power to come upon the banks and fish
for them; and where minerals are granted the presumption
is that they
are to be enjoyed and that a power to get them is also granted as a
necessary incident.'
[22] In my view, the general rules regarding the content of mineral
rights that has thus become crystallised, is in accordance with
the
statement by Malan J in
Hudson v Mann (supra)
at 488B-H (see
para [7] above). In contrast with the view held by the court
a
quo,
I do not believe that open cast mining creates an exception
to these general rules. On the contrary, I believe it fits seamlessly
into this general pattern. Accordingly, because open cast mining is
usually more invasive of the surface owner's rights than underground
mining, it should only be allowed if it is reasonably necessary.
Whether it qualifies as such in any particular case, cannot be
determined
at a theoretical level. Reasonable necessity will always
depend on the facts. And, in that event, the mineral rights holder,
like
the holder of a servitude, is bound to exercise his right
civiliter modo
, ie in a manner least injurious to the interest
of the owner in the surface of the property. Otherwise stated in
contract law parlance
â absent any express or tacit term of the
grant, the mineral rights holder is entitled, by virtue of a term
implied by law, to
conduct open cast mining when it is reasonably
necessary in order to remove the minerals, provided that is done in a
manner least
injurious to the interests of the surface owner.
[23] Finally,
three findings by the court
a quo
remain for comment. First
among these is the finding that even if it were to be held â as in
my view it should â that
Coronation Collieries
was wrongly
decided, that decision had been 'in operation' for nearly a hundred
years and should thus not be lightly disturbed (at
372F-H). This
finding appears to rely on the maxim which has been described by
Innes J in
Webster v Ellison
1911 AD 73
at 92 as 'that
dangerous maxim
communis error facit ius'
, which can only find
application, Innes J said, if the usage based on error can be
described as 'uniform and unbroken'. The mere
fact that decisions
based on a wrong interpretation of the law were given many years ago
would not be sufficient reason for refusing
to correct the error
because, so Innes J said (at 93):
'
If
it were otherwise, the result would be an unfortunate one. For when
does a decision become so venerable that its original error
is to be
regarded as modifying the law?
(See also
Du Plessis NO v Strauss
1988 (2) SA 105
(A) 141F-142H;
Business Aviation Corporation v Rand Airport Holdings
[2006]
SCA 72 (RSA) at paras 38-41.)
[24] I do
not think it can be said that
Coronation Collieries
gave rise
to any usage at all. The only authority, apart from
Coronation
Collieries
itself, relied upon by the respondent in this regard,
was the judgment of Kriegler J in
Elektrisiteitsvoorsieningskommissie
v Fourie
1988 (2) SA 627
(T) (at 634A-H, 641C-J and 642F-G) where
it was accepted, without comment, that, by virtue of
Coronation
Collieries
, the English right of subjacent support must be
regarded as part of our common law (see also the discussion of this
case in the judgment
of the court
a quo
at 380G-382E). It
must, however, be borne in mind that in
Fourie
the existence
of such right in common law was not in dispute at all. The reason
probably was that the mineral rights holder had in
any event
expressly undertaken, in terms of the grant, to provide adequate
subjacent support to the surface (see 630J-631A). In the
circumstances it is clear, in my view, that the doctrine of
communis
error facit ius
does not apply.
[25] The
second finding by the court
a quo
which requires comment
relates to the relevance of the Minerals Act 50 of 1991 to the
outcome of the present legal dispute. Broadly
stated, the view
expressed by the court
a quo
in this regard (at 388A-389E) was
that, since the provisions of the Act are essentially regulatory in
nature, they do not assist
in determining the ambit of the rights
acquired by the holder of mineral rights. Or, as De Villiers J put it
(at 388I-389A)
'It is thus clear that the provisions of the
Minerals Act 50 of 1991 are designed to regulate mining, not to add
to or subtract from
common-law mineral rights. Those rights are
treated by the Minerals Act as something previously established, only
the exercise of
which is regulated.
' I agree with this
conclusion. Moreover, the same can, in my view, be said of the
successor to that Act, ie the
Mineral and Petroleum Resources
Development Act 28 of 2002
, which came into operation on 1 May 2004.
Though these legislative provisions may become relevant in
determining the
civiliter modo
exercise of open cast mining,
the mineral rights holder's entitlement to adopt this method of
mining at all must be established with
reference to the express,
tacit and implied terms of the grant.
[26] Thirdly,
I need to deal with the court
a quo'
s finding that the legally
implied term contended for by the appellant would be in conflict with
the guarantee against arbitrary deprivation
of property afforded by
s
25
of our Constitution (at 397G-399B). The court's reasoning in
support of this finding appears to be encapsulated by the following
statement, at 398B-D:
'
The
argument for the applicant results in a term being implied by the
court
ex lege
to the effect that the owner is deprived of the
use of the surface. . . .
If
the argument were upheld it would result in an implied term which has
the effect that the owner is deprived, without his agreeing
thereto,
of the last remaining aspect of his ownership which is of any
practical value to him.
'
[27] I do
not agree with this line of reasoning. In my view the owner cannot be
said to be arbitrarily deprived of anything. He â
or, in this case,
his predecessor â had sold certain rights. The purpose of the whole
exercise is to determine the nature and ambit
of what had been sold.
It is true that if the ambit of the 'merx' is extended, he will be
deprived of whatever the extension entails.
But by the same token it
can be said that to the extent that the 'merx' is reduced, the
'buyer' will be deprived of what he had 'bought'.
That is why I hold
the view that the notion of arbitrary deprivation does not enter the
picture at all. In the light of its views
on the effect of s 25, the
court
a quo
also found room for the application of s 39(2) of
the Constitution, which requires all courts, when developing the
common law, to
promote the spirit, purport and object of the Bill of
Rights (at 397H-398B). Again, I do not agree. As in the case of
servitudes
we are trying to resolve a conflict between the
contradictory interests of two individuals. Both in the case of
servitudes and in
the case of mineral rights, I can see no reason why
one of these conflicting interests would be preferred by any of the
values underlying
the Bill of Rights. Consequently I do not believe
that the application of s 39(2) yields an answer different from that
which I have
found the common law to provide.
[28] I
revert to the facts. In this regard two questions arise. Firstly,
whether the applicant has shown that open cast mining, as
opposed to
underground mining methods, is reasonably necessary. Secondly,
whether the way in which the appellant proposes to conduct
these
activities has been shown to be the least invasive of the
respondent's interest in the surface of the property. Consideration
of these questions has been complicated by the manner in which the
appellant chose to lay the factual foundation for its case, coupled
with the respondent's penchant for technical objections. In the
result, a substantial portion of the court
a quo's
judgment
was dedicated to a discussion on squabbles of a procedural kind (at
383D-387H; 383H-391A). I do not propose to repeat this
discussion in
any detail. The only reason why I refer to it at all is that it
ultimately led to a dismissal of a substantive application
by the
appellant to supplement its founding affidavit, which in turn gave
rise to a separate ground of appeal. Apart from these procedural
issues, a statement of the facts in broad outline would, in my view,
suffice.
[29] The
opening statement on behalf of the appellant in its founding
affidavit was that underground mining on the property is not
economically viable and that open cast mining is thus reasonably
necessary. In motivating this contention, the deponent to the
affidavit
did not deal with the property in isolation, but in the
context of that part of the Kriel South Coal Field where the property
is
situated as a whole, because, so he said, utilisation of the coal
reserves on the property must be considered in the context of the
whole mining project planned by the appellant on that part of the
field. As to why the project as a whole requires open cast mining,
he
essentially gave the following reasons:
(a) The shallow depth of the coal in the area will render underground
extraction both uneconomical and unsafe.
(b) The
extraction ratio attainable through open cast mining will be
significantly higher than through underground mining methods.
(c) Significantly
higher strip ratios â ie the amount of overburden to be removed
(expressed in cubic metres) to uncover one ton
of coal â will be
attainable through open cast mining.
(d) A
geotechnical analysis by consultant geologists had confirmed the
suitability of the area for open cast mining methods.
(e) The
type of coal obtained through open cast mining is better suited for
Sasol's requirements, which is important, because the
economic
viability of the mining project as a whole is dependent on the
appellant's ability to satisfy Sasol's requirements.
[30] With reference to these reasons, the deponent to the
respondent's answering affidavit stated that he had no knowledge of
'the
contents of these paragraphs and consequently deny it'. He then
proceeded to object to the admissibility of this evidence â of
which he had no knowledge â on the basis that it was of an expert
nature and not supported by expert witnesses who had properly
qualified themselves to do so. In its replying affidavit, the
appellant sought to meet this objection by filing confirmatory
affidavits
by properly qualified experts. These were met by the
respondent in a rejoining affidavit. However, in its rejoinder the
respondent
again produced no rebutting evidence of a substantive
nature, but contented itself with further technical objections, now
aimed primarily
at the appellant's alleged attempt to make out a case
for the first time in reply.
[31] Again
the appellant tried to remedy the situation, this time through a
substantive application to supplement its founding affidavit
by
incorporating the alleged new matter, consisting mainly of
confirmatory affidavits by experts, already introduced in reply.
Though
the application was launched one month before the hearing of
the matter in the court
a quo
, the respondent again elected
not to deal with this 'new matter' on its merits, but chose to oppose
the substantive application instead.
In the event its opposition was
upheld by the court
a quo
. The court's reasons for this
decision appear from the following laconic statement (at 390H-I):
'Mr du Plessis [for the respondent] submitted that the
court should decide the matter on the founding affidavit and dismiss
the new
application, which he submits is totally irregular. In my
view, the court should indeed dismiss the new application with costs.
I
agree that the new application is totally irregular. The respondent
would be seriously prejudiced if the new application were to
be
upheld.'
[32] I am
not entirely sure what is meant by the description of the application
as 'totally irregular'. If it is intended to convey
that the
application amounted to a deviation from the uniform rules of court,
the answer is, in my view, that, as has often been
said, the rules
are there for the court and not the court for the rules. The court
a
quo
obviously had a discretion to allow the affidavit. In
exercising this discretion, the overriding factor that ought to have
been considered
was the question of prejudice. The perceived
prejudice that the respondent would suffer if the application were to
be upheld, is
not explained. Apart from being deprived of the
opportunity to raise technical objections, I can see no prejudice
that the respondent
would have suffered at all. At the time of the
substantive application, the respondent had already responded â in
its rejoining
affidavit â to the matter sought to be included in
the founding affidavit. The procedure which the appellant proposed
would have
cured the technical defects of which respondent
complained. The respondent could not both complain that certain
matter was objectionable
and at the same time resist steps to remove
the basis for its complaint. The appellant's only alternative would
have been to withdraw
its application, pay the wasted costs and bring
it again supplemented by the new matter. This would merely result in
pointless waste
of time and costs. For these reasons the applicant's
substantive application to supplement its founding affidavit should,
in my view,
have succeeded.
[33] Having
regard to all the affidavits in their final form, the applicant has,
in my view, established that a great deal of coal
would be left in
the ground if extraction were to be limited to underground mining in
that part of the Kriel South Coal Field where
the property is
situated. It is therefore apparent that with reference to that part
of the coal field, viewed as a whole, open cast
mining can be
described as reasonably necessary. The respondent's answer was,
however, that the same cannot be said with regard to
the property as
a discrete entity. According to the respondent's argument, the
position regarding adjoining properties is of no consequence.
Otherwise, so the respondent argued, it would be possible for a
mineral rights holder to enhance his rights with reference to a
particular
property by acquiring the mineral rights of its
neighbours. The answer to this argument is, in my view, that it
depends on the facts.
As I have said before, questions relating to
reasonable necessity cannot be answered at a theoretical level. On
the facts established
by the appellant in this matter, I am satisfied
that mining for minerals on the property can only be made
economically viable by
means of a project which combines it with its
adjoining properties. The enquiry as to what is reasonably necessary
must therefore,
in my view, be directed to the project as a whole.
This, I believe, results from the principle derived from the law of
servitudes,
that the mineral rights holder is entitled to do anything
which is reasonably necessary to remove the minerals from the
property.
[34] Another
reason why, on the facts of this case, it would not be right to
regard the property in isolation is that it was clearly
within the
contemplation of the parties to the original cession that, for
purposes of mining activities, the property would be combined
with
its neighbours to form part of a larger field. Thus it was agreed in
clause 6 of the cession (which is quoted in the court
a quo
's
judgment at 356D-E) that the mineral rights holder '
shall have the
right to mine and exploit adjoining or other areas from the said
property and shall have all rights of user and way
for their
purpose
'.
And in
clause 4 of the cession (quoted at 356A-B) reference is made to
installations which the mineral rights holder '
might require to
enable it to properly exercise its rights or to exploit the field
successfully
'.
[35] The
conclusion that, in the circumstances, the appellant is entitled to
conduct open cast mining on the property, raises the
question as to
the
civiliter modo
exercise of this right. It appears that the
appellant's interference with the surface will divest the respondent
of approximately
50 hectares of irrigable land. According to the
respondent, irrigation on the property takes place by way of the
centre pivot system.
By means of this system, four circles of about
38 hectares each are irrigated on a rotational basis once every four
years. The proposed
open cast mining will affect about one and a half
of these circles. I do not believe that this in itself renders the
appellant's
proposed conduct unreasonable. Consequently it should, in
my view, be allowed.
[36] I now
turn to the diversion of the stream for which permission is sought.
It relates to an unnamed stream on the property that
currently flows
through the proposed open mining area. It is common cause that the
stream will, unless diverted, sterilise a large
part of the coal
field and may make the whole mining operation unviable. If that
occurs, there can be no mining on the property.
[37] Having
regard to the field as a whole, the diversion of the stream is
therefore reasonably necessary. According to the approach
adopted by
the court
a quo
(at 399C-400J) it is, however, not permissible
to have regard to the field as a whole. For purposes of this enquiry,
so the court
found, the property must be seen as a separate entity.
Since it is common cause that the stream will not interfere with
mining activities
on the property itself, the court held, permission
for its diversion should be denied. I do not agree with this
approach. In the
particular circumstances of this case, I believe the
property should be regarded as part of the field because it can only
be economically
mined in combination with its neighbours. Moreover,
it appears to have been within the contemplation of the parties to
the original
cession that it would be so combined (see paras [33] and
[34] above). I therefore conclude that the diversion of the stream is
for
the appellant's exploitation of its mineral rights with reference
to the property and that it should therefore be allowed.
[38] This
raises the question whether the manner in which the appellant
proposed to effect this diversion would pass the
civiliter modo
test. The appellant admitted that, without mitigatory measures,
the proposed stream diversion will:
(a) cut
off water to the existing dam and thereby affect the irrigation on
the farm;
(b) result
in a loss of cattle watering-holes in the bed of the stream;
(c) create an obstruction in the path along which cattle are herded
once a week in order to be dipped.
The appellant therefore undertook to implement the following
mitigatory measures if the diversion of the stream is allowed:
(a) 'It will install the infrastructure necessary to ensure that the
supply of water to the existing farm dam is maintained at current
levels.'
(b) 'It
will install the infrastructure necessary to ensure that the watering
requirements for cattle are maintained at present levels.'
(c) 'The
current design of the stream includes a causeway . . . [which] will
be suitable for access by cattle and will thus not affect
the present
dipping arrangements of the cattle on the property.'
[39] It goes without saying that any permission granted for the
diversion of the stream will be subject to the appellant's compliance
with these undertakings. The respondent's reaction in its rejoining
affidavit was, however, that the undertakings were too vague
and, in
any event, inadequate. I think the answer to these objections is that
compliance with the
civiliter modo
requirement can only be
determined properly after the commencement of the appellant's
activities. If the respondent at that stage
believes that these
activities are more than reasonably injurious to its interests, its
position will be no different from that of
any other owner of
servient property. It will be able to seek protection against such
conduct from the court.
[40] For
these reasons the following order is made:
'1. The appeal is allowed with costs, including the costs occasioned
by the employment of two counsel.
2. The
order of the court
a quo
is set aside and for it is
substituted the following:
(a) 'The applicant's application to supplement its founding affidavit
is granted.
(b) It is
declared that the applicant is entitled to undertake the following
activities on Remaining Extent of the farm Brakfontein
117,
Registration Division I.S., Mpumalanga Province ('the property'), by
virtue of applicant's right to coal as held under Notarial
Cession of
Mineral Rights K3770/2001RM together with its mining authorisation
13/2003 granted in terms of section 9(1) read with
section 9(3)(e) of
the Minerals Act 50 of 1991, as read with the definition of "old
order right" in item 1 of Schedule
II to the Mineral and
Petroleum Resources Development Act 28 of 2002.:
(i) to construct a stream diversion on the property at the point
marked on the map annexed to respondent's answering affidavit as
annexure 'H4';
(ii) to
utilise 60.2925 hectares on the northern portion of the property, as
indicated on annexure 'H4', for open cast coal mining
purposes.
(c) The respondent is directed to pay the costs of the application,
including the costs occasioned by the costs of two counsel.'
.......................
F D J
BRAND
JUDGE OF
APPEAL
Concur
:
Howie P
Mthiyane
JA
Mlambo JA
Theron AJA