De Beers Consolidated Mines Limited v Regional Manager, Mineral Regulation Free State Region: Department of Minerals and Energy and Another (1590/2007) [2008] ZAFSHC 40 (15 May 2008)

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[2008] ZAFSHC 40
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De Beers Consolidated Mines Limited v Regional Manager, Mineral Regulation Free State Region: Department of Minerals and Energy and Another (1590/2007) [2008] ZAFSHC 40 (15 May 2008)

IN
THE HIGH COURT OF SOUTH AFRICA
(ORANGE
FREE STATE PROVINCIAL DIVISION)
Case No.: 1590/2007
In
the matter of:
DE
BEERS CONSOLIDATED MINES LIMITED
Applicant
and
THE
REGIONAL MANAGER, MINERAL
1
st
Respondent
REGULATION
FREE STATE REGION:
DEPARTMENT
OF MINERALS AND ENGERGY
DEPUTY
DIRECTOR-GENERAL, MINERAL
2
nd
Respondent
REGULATION,
DEPARTMENT OF MINERALS
AND
ENERGY
MINISTER
OF MINERALS AND ENERGY
3
rd
Respondent
ATAQUA
MINING (PROPRIETARY) LIMITED
4
th
Respondent
____________________________________________________
CORAM:
CILLIé,
J
et
EBRAHIM,
J
JUDGEMENT:
EBRAHIM, J
_____________________________________________________
HEARD
ON:
17 MARCH
2008
_____________________________________________________
DELIVERED
ON:
15 MAY
2008
[1]
This is an application for the judicial review of a decision taken by
the 2
nd
and 3
rd
respondents refusing to convert a prospecting permit granted
to
the applicant in terms of the Minerals Act, No. 50 of 1991 so as to
enable the applicant to continue its prospecting operations
lawfully
in terms
of
the Mineral and Petroleum Resources Development Act, No. 28 of 2002
(“the MPRDA”) which replaced the Minerals Act
of 1991 on
the 1 May
2004.
In addition the applicant’s have applied for a declaratory
order that its old order prospecting rights in respect of
subdivision
1, Kings
Paddock,
(subdivision 16 in the remaining extent of the farm Jagersfontein 14,
Magisterial District of Fauresmith, Free State Province
(excluding
tail
dumps, and consisting of prospecting permit 45/2003 and the rights to
diamonds held by De Beers by virtue of Noterial Deed
of Cession of
Mineral
Rights 85MR/1973 remains in force for a period of two years after
commencement of the MPRDA, that is until the 30 April
2006.
BACKGROUND
AND THE MPRDA
[2]
It is common cause,
2.1
that immediately before commencement of the MPRDA on the 1 May 2004
the applicant was the holder of Mineral Rights in and upon
subdivision
1 (Kings Paddock) and the Remaining Extent of the farm Jagersfontein
14, district of Fauresmith.
2.2
As holder of the said mineral rights the applicant applied for and
was granted a prospecting permit for diamonds on subdivisions
1 and
16 and
remaining
extent of the farm Jagersfontein (excluding the dumps in terms of
section 6 of the Minerals Act No. 50 of 1991). The said
permit (No.
45 of 2003) was issued for a period of 12 months from 11 of August
2003 until the 10 August 2004. 2.3 When MPRDA commenced
the applicant
was conducting prospecting operations by virtue of the abovementioned
permit and became the holder of an old order
prospecting right as
defined in the definitions contained in Schedule II to the MPRDA.
2.4
Under the previous Mineral Order, mineral rights were real rights
susceptible to ownership, existing in perpetuity. The State
later
regulated the
exercise
of these rights and issued, on application prospecting permits and
mining permits. Only if a person with mineral rights
wished to
exercise
any
of his or her rights did the need for application for the necessary
permits or authorisation become necessary.
“
The
scheme of (South African Mining) legislation was to create or
recognise mining rights, exercisable under a system of license
and
control, which were not dependent on the possession of the full
rights of ownership in the ground worked, but were to be reconciled

with the concurrent ownership rights of others.
”
See
UNION GOVERNMENT (MINISTER OF RAILWAYS
AND HARBOURS), v SIMMER AND JACK PROPRIETARY MINES, LTD
1915
AD
368.
2.5
Since 1 May 2004 a new Mineral Right’s regime has been
introduced. The underlining policy has shifted from privatisation
of
mineral rights to the State being in control of the granting,
exercising and retention of all rights to minerals and petroleum

resources. The only relevance of previous mineral rights was that
they constitute an element of the transitional arrangements in
the
MPRDA.
2.6
On the 26 April 2006 the applicant lodged an application for
conversion of its prospecting rights relating to prospecting permit

45/2003 in terms of item 6(2) of Schedule II to the MPRDA at the
office of the 1
st
respondent
together with all documents and information required by item 6(2). By
a letter dated the 21 August 2006, the 2
nd
respondent as delegatee of the 3
rd
respondent refused to grant the conversion of the old order
prospecting right on the basis that,
“
Item
6 of abovementioned scheduled II is not applicable in the case in
hand as the relevant application for conversion was not received
in
good time (that is prior to its expiry date of 10 August 2004).”
2.7
The term old order prospecting right is defined in the definitions
contained in schedule II to the MPRDA and means:
“
Any
prospecting lease, permission, consent, permit or license, and rights
attached thereto in force immediately before the date
on which this
Act took effect and in respect of
which
prospecting is being conducted.”
2.8
In terms of items 6(1) of Schedule II, the applicant has the right to
continue prospecting in terms of the old order prospecting
permit for
a period of 2 years from the date on which the MRPDA commenced on 1
May 2004 subject to the terms and conditions under
which it was
granted or issued or deemed to be granted or issued.
2.9
Item 6(2) provides as follows:
“
A
holder of an old order of prospecting right must lodge the right for
conversion within the period referred to in sub item 1 at
the office
of the regional manager in whose region
the
land in question is situated together with
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
7
(j)
”
Item
6(3) provides:
“
The
Minister must convert the old order prospecting right into a
prospecting right if the holder of the old order prospecting right
–
(a)
complies with the requirements of sub item 2
(b)
(c)
(d)
(e)”
Item
6(7) provides:
“
Upon
the conversion of the old order prospecting rights and the
registration of the prospecting rights into which it was converted,

the old order prospecting right ceases to exist.”
Item
6(8) provides:
“
If
a holder fails to lodge the old order prospecting rights for
conversion before the expiry of the period referred to in sub-item
1,
the old order prospecting right ceases to exist.”
THE
ISSUES
[3]
It is alleged by the applicant that the refusal by the second and
third respondent was induced by an erroneous interpretation
and
application on
their
part of the provisions of item 6(1) of Schedule II to the MPRDA and
that accordingly in terms of
section 6(2)(d)
of the
Promotion of
Administrative
Justice Act, No. 3 of 2000
, this court has jurisdiction to review
that decision. It is not disputed that the decision constitutes
administrative
action.
Section
6(2)(d)
provides:
“
A
court or tribunal has the power to judicially review an
administrative action if –
(a)
(b)
(c)
(d)
The action was materially influence by an error of law.”
The
applicant’s also contend that, despite having lodged an
internal appeal against the decision of the 2
nd
and 3
rd
respondent, no appeal lies in
respect
of their decision as it was the decision of the 2
nd
respondent against which no appeal is competent in terms of
the provisions of section
96
of the MPRDA. In any event the applicant contends further that it has
applied for an exemption in terms of the provisions of
section
7(2)(c)
of
the
Promotion of Administrative Justice Act, No. 3 of 2000
. First, second
and third respondents’ have filed answering affidavits setting
out the
basis
of their opposition to the application. No papers have been filed by
the 4
th
respondent and on the 3 March 2008 a notice of
withdrawal of its
opposition
was received. The gravamen of the opposition of the 1
st
,
2
nd
and 3
rd
respondents’ to the application is that the applicant
was enjoined to
apply
for the conversion before the old order permit expired on the 10
October 2004 and having failed to do so it had waived its
right to a
conversion.
This was so because the old order permit was subject to the terms and
conditions of that permit, one of which was that
it had a life
span
of 12 months only. In addition the respondent contends that the
application is premature and ought not to be entertained in
view of
the failure
of
the applicant to first exhaust internal remedies available to it in
terms of
section 96
of the MPRDA. This argument is based on the
provisions of
section
7(2)(a)
of the
Promotion of Administrative Justice Act, No. 3 of 2000
which respondents allege are prescriptive.
Section 7(2)(a)
provides:
“
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.”
According
to the respondents’ the provisions of
section 7(2)(c)
of the
Promotion of Administrative Justice Act, No. 3 of 2000
do not assist
the
applicant.
Firstly because of the absence of exceptional circumstances in this
case and secondly and more pertinently because
section 7(2)(c)
does
not apply to administrative decisions taken in terms of the MPRDA.
Section 7(2)(c)
provides:
“
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 dreems it in the interest of justice.”
The
issues to be determined are therefore threefold, namely:
1.
Is the applicant bound by the provisions of
section 96(3)
of the
MPRDA?
2.
What is the duration of the old order prospecting permit as granted
to the applicants under permit number 45/2003?
3.
In the event of the court finding in the applicant’s favour in
respect of the first two issues should this court interfere
with the
decision of the
administrative
functionary and substitute its own decision for that of the
functionary?
THE
INTERNAL REMEDY IN TERMS OF
SECTION 96
OF MPRDA
[4]
Section 96(1)
provides as follows:
“
(1)
Any person whose rights or 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.”
The
respondents’ contend,
(a)
that the provisions of section 96 are prescriptive; and
(b)
that the provisions of section 7(2)(c) are not applicable to the
internal appeal process in terms of section 96 by virtue of
its
explicit omission
from
the provisions of section 96(4) and that, accordingly no exemption on
any grounds from the obligation to pursue internal remedies
in terms
of
section of section 96(3) is possible or permitted.
The
applicant has relied on two unreported judgements handed down in this
division by Kruger and Van der Merwe JJ namely:
GLOBAL
PACT
TRADING
207 (PTY) LTD v MINISTER OF MINERALS AND ENERGY
, case
number 3118 of 2006 and
MOFSCHAAP
DIAMONDS (PTY) LTD
v
THE MINISTER FOR MINERAL AND ENERGY AND OTHERS
, case
number 3117/2006 in support of its submissions that the decision of
the
2
nd
respondent was not appealable in terms of section 96 as it was
effectively the decision of the 3
rd
respondent, that is the Minister of Minerals
and
Energy. I quote from those indictments:
“
[6]
In his well-known work on administrative law,
Administratiefreg
,
p. 52 – 57, Prof. Marinus Wiechers distinguishes in the field
of delegation of public power
inter
alia
between
what
he terms deconcentration and decentralisation. Delegation of power in
the form of decentralisation takes place when powers
are transferred
to an independent organ or
body
which carries out these powers and functions entirely in its own
name. As a rule the
delegans
(that is the delegating authority) has no authority to act
on behalf of the
delegate
and has no control over the independent body other than appointment
of the members thereof and/or some form of appeal against
the
decisions of that body.
Deconcentration
on the other hand, is applicable where the functions are performed by
the delegate in the name or on behalf of the
delegans
,
in other words the
delegans
acts by
means
of the delegate. An essential feature of the deconcentration of
administrative power is that the
delegans
may withdraw the delegation at any time and perform the
function
himself
or herself. Also, the
delegans
may exercise various forms of control over the delegate.
These principles were expressly adopted in
NAIDOO
AND OTHERS v
JOHANNESBURG
CITY COUNCIL AND OTHERS
1979 (4) SA 893
(W) at 896 E –
898 E and
SA FREIGHT
CONSOLIDATORS (PTY) LTD v CHAIRMAN, NATIONAL
TRANSPORT
COMMISSION, AND ANOTHER
1987 (4) SA 155
(W) at 164 F –
169 D. We respectfully believe that these decisions are correct. See
also Baxter,
Administrative
Law
, p. 436 footnote 317 and p. 441, 442 as well as
LAWSA
,
2
nd
Edition, Volume 1, para 101, p. 81 – 82. This principle
is also illustrated in the judgment of
BARTLETT
v MUNISIPALITEIT VAN KIMBERLEY
1966 (2) SA 95
(GW) at 100
E – 102 F, where it was decided that where the exercise by a
town clerk of a power delegated
to
him by the municipal council is attacked, the proper body to sue is
the municipal council or municipality as the town clerk acted
on its
behalf under the delegated authority. The
judgment
in the case of
ADMINISTRATOR,
CAPE v ASSOCIATED BUILDINGS LTD
1957 (2) SA 317
(A) at 323
H, referred to on behalf of the respondents, does not support
the
respondents’ argument, as it in fact provides an example of
administrative deconcentration.”
It is necessary
to analyse the written delegation document in the
present
matter in the context of these legal principles but before doing so
reference must be made to the provisions of section
103(4) and
section
103(5) of the MPRDA:
“103 Delegation and assignment…
(3)
The Director-General, the Regional Manager or any other officer to
whom a power has been delegated or to whom a duty has been
assigned
by or under this Act, may in
writing
delegate any such power or assign any such duty to any other officer.
…
(5)
The Minister, Director-General, Regional Manager or officer is not
divested of any power or exempted from any duty delegated
or assigned
by him or her.”
In
my view the following conditions in the delegated document provide
insight into the underlying intention of the Minister that
is the 3
rd
respondent,
in
delegating to the 2
nd
respondent the powers contained therein. (The delegated
document appears at pages 577 and 578 of the indexed and
paginated
bundle of pleadings. (a) Any power must be exercised judiciously with
the necessary discretion and with due regard to
the applicable
regulations,
as well as other instructions and control measures determined in
terms of the act. (f) Should any doubt exist for any
reason as to
which
decision should be taken regarding any matter, such matter should be
referred to me for finality. (g) The aforesaid powers
may none the
less
be exercised by myself notwithstanding the fact that it has been
delegated. (h) I should be consulted should there be any reason
to
move
away
from or revise established policy guidelines and the said power,
shall not be further delegated without my consent.
To
my mind these conditions leave no doubt that the
delegans
,
that is the Minister, was the effective decision maker acting by
means of the
delegatee
,
(that is the 2
nd
respondent) and that the delegation to the 2
nd
respondent was made in a scheme of deconcentration of public
power.
Accordingly
when the 2
nd
respondent
refused the conversion in question he acted on behalf of the 3
rd
respondent. That decision must
consequently
be regarded as the decision of the 3
rd
respondent, which for obvious reasons would not be appealable
in terms of section 96 of the
MPRDA.
Mr. Nthai SC for the respondents’ contended that in view of the
power granted to the 3
rd
respondent in terms of section 103 to withdraw
such
delegation at any time or amend any decision made by her
delegatee
(in this case the 2
nd
respondent) was an indication of the fact that there
was
no bar to the Minister hearing an appeal from the decision to refuse
the conversion. I must respectfully point out that this
is a rather
convoluted
submission and smacks of an attempt to twist the facts in order to
make them fall within the ambit of section 96. The
simple fact is
that
there
was no withdrawal of the 2
nd
respondent’s delegation nor a withdrawn of the decision
to refuse the conversion and that in accordance with
the
applicable legal principles the fact that the Minister has the power
to withdraw a delegation or amend a decision taken by a
delegatee
only
serves
to underline the facts that any such decision taken by the
delegatee
is in fact the decision of the Minister. In both
circumstances it would be absurd for such a decision to then be the
subject of
an appeal in terms of section 96(3) of the Act. Mr. Nthai
was at pains to point out that the
whole
administration of the MPRDA would become a nightmare if it were
required of the Minister to attend personally to all the powers

designated
to
her in terms of that Act and the effect of that Act was to make that
all internal procedures and processes
pro
non scripto
whenever she
delegated
these powers to either the Director General, Deputy Director General
or the Regional Manager. That he argued could never
have been
the
intention of the legislature. He argued that persons must apply to
the Minister and she grants the application in terms of the
MPRDA
regarding,
for
instance, permission, prospecting rights, a renewal of prospecting
rights, permission to remove and dispose of minerals, application
for
mining
rights, application for the renewal of mining rights, issuing and
duration of mining permits, application for retention permits
and the
issuing
and
application of a closure certificate. Of practical necessity these
powers must be delegated and if the argument of the applicant
is
correct, no
appeal
procedure would be applicable in all the above circumstances. These
circumstances cover all the activities and rights regarding
the
practical
execution of mineral rights in the whole of South Africa. I am in
complete agreement with his submissions, with one caveat,
and that is
that
they are all submissions made in general. What is important is that
one has to examine the terms and conditions of the particular
or
specific
delegation
in order to establish whether the powers therein contained are to be
wholly exercised in the discretion the
delegatee
concerned or
whether
such powers are subject to the supervisory and overall approval of
the Minister. Only then one can arrive at a conclusion
as to which
decisions
are appealable and which are not. Mr. Nthai’s argument that
because of the practical necessity of the Minister having
to
delegate, that
therefore
no appeal procedures would ever be applicable is on that account
fatally flawed.Much was made in argument by Mr. Grobbelaar
SC, for
the
applicant as to why this court is bound by the decisions in the
GLOBAL PACT TRADING 207
(PTY) LTD
and the
MOFSCHAAP
DIAMONDS
(PTY)
LTD
cases. Mr. Nthai expanded on the principles of
stare
decisis
attempting to convince us why we were not so
bound. Save to express
our
acceptance of the legal principles set out in those two judgments, I
do not deem it necessary to comment any further on this
aspect of the
argument.
Of far more interest to the court were counsel’s submissions
regarding the issue of the application for exemption
from the
obligation to
exhaust
internal remedies in terms of section 7(2)(c) of the Promotion of
Administrative Justice Act, No. 3 of 2000 (PAJA). In this
regard two
scenarios
were put forth by Mr. Nthai:
(a)
Where section 7(2)(c) was not applicable; and
(b)
Where it was applicable.
In
regards to the first scenario, Mr. Nthai relied heavily in support of
his contentions on the decision in
MEEPO
v KOTZE & OTHERS
2008 (1) SA
104
Northern Cape Division. He argued since section 96 of the MPRDA
specifically excludes any reference to section 7(2)(c) that its

provisions
have
no application to the internal appeal procedure which is therefore
prescriptive. Thus no questions of an application for exemption
from
such
a
procedure arises. As authority for his viewpoint he drew heavily on
the
dicta
of
the court in
MEEPO
at
119 B – C, paragraph 28:
“
[28]
Another argument which could possibly have led to the same result
would be that the legislature, when promulgating the MPRDA
after PAJA
had already come into operation
(and
clearly well aware of the provisions of the latter Act), had intended
to 'regulate the whole subject' of access to courts and
that the
relevant provisions in the MPRDA
'necessarily
supersedes and repeals all former Acts, so far as it differs from its
prescriptions' (see New Modderfontein Gold Mining
Co v Transvaal
Provincial Administration 1
919
AD
367
at 397 and Mthembu v Letsela and Another
2000 (3) SA 867
(SCA) at
881B - C).“
I
am in respectful agreement however with counsel for the applicant
that the court in
MEEPO
was
merely repeating legal argument. What
happened
in that case is that the court, after hearing legal argument on the
issue, refrained from deciding on the correctness thereof
and coming
to
any definite conclusion on this aspect. In any event the wording of
section 7(1)
of the
Promotion of Administrative Justice Act, No. 3 of
2000
which
is made specifically applicable to the internal appeal process by
virtue of the provisions of
section 96(4)
of the MPRDA is “subject
to” the
provisions
of subsections 2(c).
“
[7]
Procedure for judicial review
(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.”
In
YNUICO LTD v MINISTER OF TRADE AND
INDUSTRY AND OTHERS
1996
(3) SA 919
Constitutional Court 995, paragraph 8, the meaning
of
phrase “subject to” was discussed. Reference was made to
the case of
STATE v MARWANE
1982
(3) SA 717
A at 747H – 748A where these
words
as they appear in the Constitution of Bophuthatswana were discussed
and where it was held as follows:
“
The
purpose of the phrase 'subject to' in such a context is to establish
what is dominant and what subordinate or subservient; that
to which a
provision is 'subject', is dominant - in
case
of conflict it prevails over that which is subject to it. Certainly,
in the field of legislation, the phrase has this clear
and accepted
connotation. When the legislator wishes to
convey
that that which is now being enacted is not to prevail in
circumstances where it conflicts, or is inconsistent or incompatible,

with a specified other enactment, it very
frequently,
if not almost invariably, qualifies such enactment by the method of
declaring it to be 'subject to' the other specified
one.”
Applied
in the present context, it is clear that the phrase “subject
to” in section 7(1)(a) is in a dominant position
to section
7(2)(c) of the Promotion
of
Administrative Justice Act 2000 so that section 7(1)(a) will only
apply where it does not conflict or is not inconsistent or

incompatible with the
provisions
of section 7(2)(c). That means that the application of section
7(1)(a) as referred to in section 96(4) of the MPRDA applies
only in
as
much
as it is not in conflict with section 7(2)(c), that is in as much as
a court has not granted exemption from the obligation
to exhaust the
internal
remedy
of an appeal as contemplated by section 96(1) of the MPRDA. The whole
of section 7(1)(a) of PAJA to which section 96(4) of
the
MPRDA
refers is thus subject to section 7(2)(c) which provides that 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.
See
ARCHIBALD BARRY NICHOL AND ANOTHER v
REGISTRAR OF PENSION FUNDS AND OTHERS
,
unreported SCA case number
467/04.
Thus far from explicitly excluding the applicability of section
7(2)(c) of PAJA, this section is incorporated by reference
to
sections 7(2)(c)
in
section 7(1) of PAJA.
See
DALE SOUTH AFRICAN MINERAL AND
PETROLEUM LAW, SHEDULE II, 212 (28)
where
the following is stated:
“However
despite the
provisions
of section 96(3) of the Act the power of the High Court in terms of
section 7(2)(c) of PAJA is preserved through section
96(4) of the
Act.”
Moreover
PAJA gives effect to section 33 of the Constitution. It was clearly
intended to be and in substance is a codification of
the rights
contained
in section 33 of the Constitution which deals with the right to
administrative justice. Indeed PAJA is the legislation
envisaged in
section
33(3)(a)
of the Constitution of the Republic of South Africa Act 1996 which
provides that national legislation must provide for
the review of an
administrative
action by the court. In a codification of the Constitutional right
encompassed in section 33 of the Constitution,
PAJA cannot be
found
to have been excluded by the MPRDA, unless such exclusion was
expressly authorised in a constitutionally permissible manner.
See
ATTORNEY
GENERAL OF LESOTHO AND ANOTHER v SWISSBOROUGH DIAMOND MINES (PTY) LTD
AND OTHERS
1997 (8) BCLR
1122
(Lesotho CA) 1132 A–B per Mohamed P. Under the respondents’
interpretation of section 96(3) and (4) of the MPRDA section
96(4)
excludes
the competence of the court to grant exemption and, in such cases,
the power of the court to hear the review application.
Such an
interpretation
should be avoided if at all possible; indeed there is a long standing
presumption against the ousting of the jurisdiction
of courts of
law.
In
THE SPEAKER OF THE
NATIONAL ASEMBLY v DE LILLE AND ANOTHER
1999 (11) BCLR
1339
(SCA), paragraph 14 Mohamed CJ
held
as follows:
“
Section
2 of the Constitution expressly provides that law or conduct
inconsistent with the constitution is invalid and the obligations

imposed by it must be fulfilled. It follows that any
citizen
adversely affected by a degree, order or action of any official or
body which is not properly authorised by the Constitution
is entitled
to the protection of the courts. No
parliament,
no official, and no institution is immune from judicial scrutiny in
such circumstances.”
See
also
DE WET v DEETLEFS
1928
AD 286
at 290:
“It
is a well recognised rule in the interpretation of statutes that in
order to oust the jurisdiction of the court of
law,
it must be clear that such was the intention of the legislature.”
The
rights protected in the administrative justice clause of section
33(1) of the Constitution
are
constitutional matters. In
FREDERICKS &
OTHERS v MEC FOR EDUCATION AND TRAINING, EASTERN CAPE AND OTHERS
[2001] ZACC 6
;
2002
(2)
SA
693
CC, paragraph 33 the Constitutional Court stated as follows:
“…the
Legislature may not oust the jurisdiction of the High Court to
consider constitutional
matters
unless it assigns that jurisdiction to a court of similar status,
even if at the same time, it confers a similar, though
not exclusive
jurisdiction upon another tribunal or forum.”
I
conclude in the light of the aforegoing authorities therefore and it
is the finding of this court therefore that section 7(2)(c)
is
applicable to the
provisions
of section 96 of the MPRDA and that the provisions of section 96(3)
are not prescriptive. The second scenario put forth
by Mr. Nthai
deals
with the question of exemption. It is the respondents’
contention that the applicant has made no case for exemption.
In
light however of the
view
I have taken in this judgment in regard to my finding:
(a)
That no internal appeal lies from the refusal of the second
respondent to grant the conversion; and (b) That the provisions
of
section 96(3) with
regard
to the internal appeal process are non prescriptive, the question
relating to exemption in terms of section 7(2)(c) of PAJA
with
reference to
section
96 of the MPRDA in the context of the facts of the present case are
academic.
THE DURATION OF
THE OLD ORDER PROSPECTING
PERMIT
[6]
This is the second issue for determination and is an issue which
requires an understanding of the principles surrounding the

interpretation of
statutes.
Section 4 of the MPRDA provides:
“1. When
interpreting a provision of this act, any reasonable interpretation
which is consistent with the objects of this
act
must
be preferred over any other interpretation which is inconsistent with
such object.”
Thus
not only must the interpretation decided upon be one which is
reasonable, it must also be one which accords with the objects
of
this act.
Mineral
and Petroleum resources are the common heritage of all the people of
South Africa and in accordance with the new dispensation
introduced
by the MPRDA on the 1 May 2004 the state become the custodian of
these resources for the benefit of all South Africans.
The state
acting
through the Minister may accordingly grant or refuse a prospecting
right be it a mineral or mining right. This is a fundamental
change
as the
state
has done away with the legal notion of private ownership of mining
and mineral rights and the state in granting prospecting
benefits or
permits
is not dealing with the mineral resources of the public as a holder
of common law rights nor does it deal with these minerals
as a
subject
of
mineral rights of private persons. Since the 1 May 2004 all mineral
resources belong to the nation and the state is vested with
the
custodianship
and
control of such mineral resources. All mineral right holders in which
ever form, were divested of their rights in respect of
their
previously held
mineral
rights. These mineral right holders obtained new rights in terms of
the transitional arrangements in Schedule II to the
MPRDA. One of the
objects
of the MPRDA is to give security of tenure in respect of prospecting
operations which are in the process of being undertaken
and to give
the
holder of an old order right an opportunity to comply with the new
MPRDA so as to make provision for and promote equitable access
to and
sustainable
development of the nations mineral and petroleum resources. In this
sense the MPRDA is an exemplary model of the State’s
commitment
to Broad Based Economic Empowerment. Broad Based Economic Empowerment
is defined in the MPRDA as a social or
economic
strategy, plan, principle, approach or act which is aimed at
redressing the results of past or present discrimination based
on
race,
gender
or other disability of historically disadvantaged persons in the
minerals and petroleum industry, related industries and
in the value
chain
of
such industries. The main objects of the MPRDA are contained in
section 2 of the Act and are the following:
“
2
Objects of Act
The
objects of this Act are to-
(a)
recognise the internationally accepted right of the State to exercise
sovereignty over all the mineral and petroleum resources
within the
Republic;
(b)
give effect to the principle of the State's custodianship of the
nation's mineral and petroleum resources;
(c)
promote equitable access to the nation's mineral and petroleum
resources to all the people of South Africa;
(d)
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;
(e)
promote economic growth and mineral and petroleum resources
development in the Republic;
(f)
promote employment and advance the social and economic welfare of all
South Africans;
(g)
provide for security of tenure in respect of prospecting,
exploration, mining and production operations;
(h)
give effect to section 24 of the Constitution by ensuring that the
nation's mineral and petroleum resources are developed in
an orderly
and ecologically sustainable manner
while
promoting justifiable social and economic development; and
(i)
ensure that holders of mining and production rights contribute
towards the socio-economic development of the areas in which
they are
operating.”
Item
2 of Schedule II to the MPRDA supplements these objects by giving the
holder for an old order right (whether prospecting or
mining), an
opportunity
to comply with the MPRDA. It is a trite principle of the
interpretation of statutes that in analysing the wording of
a
statutory enactment
so
as to arrive at the intention of the legislature in regard to the
specific purpose for which the enactment was legislated, that
words
are to be
given
their ordinary grammatical meaning. This is the golden rule in the
interpretation of statutes and the point of departure when

undertaking the
onerous
task of interpreting a statute. See
L
C STEYN, Uitleg van Wette, Vyfde Uitgawe
and
L
M DU PLESSIS, Interpretation of Statutes.
Item
6(1) of Schedule II provides:
“
(1)
Subject to subitems (2) and (8), any old order mining right in force
immediately before this Act took effect continues in force
for a
period of 2 years from the date on which this
Act
took effect subject to the terms and conditions under which it was
granted or issued or was deemed to have been granted or issued.”
Mr
Grobbelaar contended that, in accordance with another trite principle
of interpretation, the least restrictive interpretation
must be
employed in
interpreting
words and phrases in a statute so as to give them the most benevolent
construction. He contends further that in accordance
with
these
two primary rules in the interpretation of statutes the phrase in
item 6(1)
“for a
period of two years”
means just that. That is that
an old order
prospecting
right remains in force for a period of two years and that it does so
irrespective of when the old order permit would
otherwise have
lapsed.
He negates the importance of the words
“subject
to”
in item 6(1) on the basis that item 6(1)
expressly provides for the duration of the old
order
prospecting permit as being two years. He argues that had the
legislature intended for an old order prospecting right to continue

subject to
all
the terms and conditions under which it was granted or issued
including the original duration thereof it would not also and

expressly have
provided
that the old order prospecting right continues in force for two
years. It would simply have provided that it continues
in force
subject to the
terms
and conditions under which it was granted or issued. As further
corroboration for this interpretation we were referred to
the wording
of item
6(4)
which provides:
“
No
terms and conditions applicable to the old order prospecting right
remain in force if they are contrary to any provision of the

constitution or this act.”
According
to Mr. Grobbelaar the plain meaning of this provision is therefore
that the term of validity of the old permit, namely
12 months in this
case,
can clearly not remain in force in view of the contrary provision in
item 6(1) that the old order prospecting permit continues
in force
for two
years
and that accordingly the applicant’s old order prospecting
permit had a two year lifespan from the date of the commencement
of
the
MPRDA
on the 1 May 2004. Mr. Grobbelaar also referred us to the wording of
item 6(8) to which item 6(1) is subject, namely:
“If
the holder fails to
lodge
the old order prospecting right for conversion before the expiry of
the period referred to in item 1 the old order prospecting
right
ceases to exist.”
He
contends that this means that the old order permit ceases to exist
only if the holder has failed to lodge it for conversion before
the
expiry of
two
years since the commencement of the MPRDA that is the 1 May 2004. Mr.
Nthai SC contends simply that: (a) The wording of item
6(1) makes
it
clear that the extension of the duration of the old order prospecting
permit to two years is subject to the terms and conditions
under
which it was
granted
or issued (my underlining). That being so it is subject to the period
of time for which it was issued, namely 12 months
as that period is a
condition
of its validity. Consequently, the applicant ought to apply for
conversion before the expiry of the period of 12 months
for which the
permit
was
validly issued. That is before it expired on the 10 August 2004.
After that date the permit lapsed and the applicant possessed
no more
prospecting
rights which could be converted in terms of item 6(1). He argues that
if this were not the case and had the legislature
intended to fit a
period
of two years regardless of the lifespan of the old order permit, it
would have said so in plain and unambiguous language
in enacting item
6(1).
In his opinion the legislature would have added the words
“inrespective of
when the underlining permit lapses”
in stead of the
word
enacted
“subject to the
terms and conditions under which it is granted or issued”.
(b)
Secondly, Mr. Nthai contends that the MPRDA wiped out
all
old order rights and in providing for transitional arrangements it
would not revive or grant a right which is greater than the
one which
previously
existed.
This is so because the MPRDA intended to place a
“cap”
on old order rights in line with the fundamental objects
of the act such that
whatever
the position before the coming into operation of the MPRDA, a holder
of an old order prospecting right would not be entitled
to hold that
right
under the new mineral regime for a period more than 2 years
regardless of the duration for which it was granted. Thus if it
was
granted for a
period
of 12 months it would expire at the end of that 12 month period
unless converted to a new order right which would then give
the
holder of
that
permit a further two years prospecting rights. Should the old order
right be granted for more than two years, on conversion
it acquired a
lifespan
of two years. Thus the proper interpretation of item 6(1) is that the
duration of the old order permit could never be more
than two years.
This
two year period however, was subject to the period of validity for
which the permit had initially been issued. In analysing
and
considering
these
diametrically opposed arguments and submissions of both counsel, I
have found a fatal flaw in the submissions made by Mr.
Grobbelaar
that
the duration of the old order permit is two years regardless of the
initial period for which it was issued and it is this,
it overlooks
the fact that, in
line
with the proper interpretation and ordinary connotation of the phrase
“subject to”,
the scope of item 6(1) has to be restricted. In support of
this
view
I quote with approval once again
STATE
v MARWANE
1982 (3) SA 717
A at 747H – 748A were
Miller J analysed and discussed the
meaning
of the phrase
“subject
to”
:
“The purpose of the phrase
'subject to' in such a context is to establish what is dominant and
what subordinate or subservient;
that to
which
a provision is 'subject', is dominant - in case of conflict it
prevails over that which is subject to it. Certainly, in the
field of
legislation, the phrase has this clear and accepted
connotation.
When the legislator wishes to convey that that which is now being
enacted is not to prevail in circumstances where
it conflicts, or is
inconsistent or incompatible, with
a
specified other enactment, it very frequently, if not almost
invariably, qualifies such enactment by the method of declaring it
to
be 'subject to' the other specified one.”
In
C & J CLARK v INLAND REVENUE
COMMISSIONER
1973
(2) All ER 513
at 520, Megarry J observed:
“In
my judgment the phrase ‘subject to’ is a
simple
provision which merely subjects the provisions of the subsections to
the provisions of the master subsections. When there
is no clash, the
phrase does nothing; if there is
collision,
the phrase shows what is to prevail.”
This
means therefore that in contextualising the phrase for present
purposes the limitation of 12 months in regard to the validity
of the
old order
prospecting
permit, being a condition under which that permit was granted and
issued initially, would assume a dominant position
in the
interpretation
of the provision of item 6(1). Taken to its logical conclusion this
would mean that the provision was that the old
order prospecting
permit
or right should continue in force for a period of two years from the
date of the commencement of the MPRDA provided that
the permit had
been
lodged for conversion before the expiry of the period for which it
had been initially granted in this case, 12 months. Applying
this
interpretation
to the facts of the present case also reveals a further shortcoming
in the case of the applicant and in the interpretation
which Mr.
Grobbelaar
would have this court give to the provisions of item 6(1). That is
that had the legislature intended that the first part
of item 6(1),
namely:
“
Subject
to sub items 2 and 8 any old order prospecting rights in force
immediately before this act took effect continues in force
for a
period of two years from the date on which
this
act took effect.”
to prevail, it would undoubtedly have
made its intention clear by using the qualifying word
“notwithstanding”
so that the provision
read
as follows:
“
Subject
to sub items 2 and 8 any old order prospecting right in force
immediately before this act took effect continues in force
for a
period of two years from the date on which
this
act took effect notwithstanding the terms and conditions under which
it was granted or issued or was deemed to have been granted
or
issued.”
It
therefore cannot be contended that the legislature in enacting the
provisions of item 6(1) used the words
“subject
to”
without a proper appreciation
of
its ordinary connotation and effect. That however, does not mean
that, the legislature, whilst appreciating the restrictive nature
of
the phrase
“
subject
to”, and the consequential limitations which flowed from its
use, intended that the old order prospecting permit should
continue
in force
subject
to it being converted before the expiry of the initial period for
which it had been issued, namely 12 months. I say so for
the simple
reason
that
the legislature expressly provided a period of 2 years for conversion
of the old order permit. Item 6(2) provides as follows:
“(2)
A holder of an old
order
prospecting right must lodge the right for conversion within the
period referred to in subitem (1) at the office of the Regional

Manager in whose region the land in question is
situated
together with …”
This
means that the old order permit continues to be of force and effect
for a period of two years provided it is converted within
that period
of two
years
so as to give effect to the transitional arrangements provided for in
the MPRDA. Thus the applicants had a period of two years
to convert
the
old order permit. In my view the fact that the legislature chose to
provide precisely the same period, that is two years, for
the
conversion of the
old
order permit as for its duration in terms of the new mineral regime,
is telling. What it is saying is this: The old order permit
is to
continue in
force
for a period of 2 years with immediate effect from the date of
commencement of the MPRDA, that is the 1
st
May 2004 and every holder of
such
a permit has two years to convert it.
The
two year period for the conversion is effectively in my view in the
nature of a moratorium such that, regardless of the period
when the
old
order
permit expires (in this case on the 10 August 2004), it continues to
be valid and legally enforceable for two years provided
it is
converted
sometime
within that two year period. This the applicants did. They applied
for a conversion on the 26
th
April 2006. Had the legislature not
provided
for a period within which the conversion was to take place, the
initial period of validity would have been critical in
deciding upon
the
overall
validity of the applicants permit. However that period of validity is
no longer relevant in view of the moratorium granted
to all old order
permit
holders to convert their permits within two years of the MPRDA coming
into operation and in terms of the provisions of item
6(4), can no
longer
be enforced as being contrary to the provisions of item 6(2). I
conclude therefore that the duration of the applicant’s
old
order prospecting
permit
is two years, calculated from the date of the commencement of the
MPRDA that is the 1 May 2004 and that accordingly the said
permit
would
have expired on the 30 April 2006. Such an interpretation would
accord with the main objects of the MPRDA and, in particular,
give
effect to
the
legislature’s intention to provide security of tenure in
respect of prospecting operations.
SUBSTITUTION
OF THE DECISION OF THE
FUNCTIONARY
[7]
The application for conversion was refused by the 2
nd
and the
3
rd
respondent
solely on the basis that the validity of the permit in question had
lapsed.
As the period of the duration of the old order permit in terms of the
new regime has long lapsed, no useful purpose would
be served in
remitting
the matter to the 2
nd
and 3
rd
respondents
for their reconsideration.
[8]
In the result the following order is made: 8.1 The decision to refuse
to convert the applicant’s old order prospecting
permit in
terms of item
6(1)
of Schedule II to the MPRDA is hereby reviewed and set aside. 8.2 The
2
nd
and 3
rd
respondents are directed to convert the applicants’ old
order
prospecting permit (No. 45/2003) in respect of subdivision 1, (Kings
Paddock), Subdivision 16 and the Remaining Extent of
the farm
Jagersfontein
14, Magisterial District Fouriesmith, Free State Province (excluding
tail dumps) and consisting of the rights to diamonds
held by the
applicants
by virtue of Notarial Deed of Cession of Mineral Rights 85MR/1973
into a prospecting right in respect of the said properties
and to do
all
things and take all steps necessary for the execution and
registration of such converted right as envisaged in the Mineral and

Petroleum
Resources
Development Act 28 of 2002. 8.3 The 1
st
,
2
nd
and 3
rd
respondents are ordered to pay the applicant’s costs
which costs are to include
the
costs consequent upon the employment of two counsel.
_
____________
S.
EBRAHIM, J
I
concur.
_____________
C.
B. CILLIé, J
On
behalf of applicant: Adv. G. L. Grobbelaar SC and
J.
L. Gildenhuys
Instructed
by:
Denys
Reitz
BLOEMFONTEIN
On
behalf of respondents: Adv. S. Nthai SC and
J.
Claasen
Instructed
by:
State
Attorneys
BLOEMFONTEIN