Global Pact Trading 207 (Pty) Ltd v Minister of Minerals and Energy and Others (3118/06) [2007] ZAFSHC 68 (14 June 2007)

About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Free State High Court, Bloemfontein
SAFLII
>>
Databases
>>
South Africa: Free State High Court, Bloemfontein
>>
2007
>>
[2007] ZAFSHC 68
|

|

Global Pact Trading 207 (Pty) Ltd v Minister of Minerals and Energy and Others (3118/06) [2007] ZAFSHC 68 (14 June 2007)

IN THE HIGH COURT
OF SOUTH AFRICA
(ORANGE
FREE STATE PROVINCIAL DIVISION)
Case
No. : 3118/06
In the matter between:-
GLOBAL
PACT TRADING 207 (PTY) LTD
Applicant
and
THE
MINISTER OF MINERALS AND
First
Respondent
ENERGY
THE
REGIONAL MANAGER: MINERAL
Second
Respondent
REGULATION, FREE
STATE REGION
THE
DEPUTY DIRECTOR-GENERAL:
Third
Respondent
MINERAL
REGULATION
_____________________________________________________
CORAM:
KRUGER
J
et
VAN
DER MERWE J
_____________________________________________________
HEARD
ON:
21
MAY 2007
_____________________________________________________
DELIVERED
ON:
14
JUNE 2007
_____________________________________________________
THE COURT:
[1] The
essential relief claimed in this application is the review and
setting aside of a decision refusing the grant of a prospecting
right
to the applicant in terms of section 17 of the Mineral and Petroleum
Resources Development Act, No. 28 of 2002 (“the Act”).
[2] It is clear from the
papers that the decision to refuse the prospecting right applied for
by the applicant, was taken by the third
respondent. In terms of
section 17 of the Act the power to grant or refuse a prospecting
right is given to the first respondent.
Section 103 of the Act
provides that the first respondent may, subject to a qualification
not presently relevant, in writing delegate
any power conferred on
him or her by or under the Act. At the hearing before us it was
argued on behalf of the applicant that it
was not shown that the
power in question was delegated by the first respondent to the third
respondent. In the founding affidavit
however, it was clearly
accepted by the applicant that the power in terms of section 17 of
the Act was delegated to the third respondent.
In fact, the
applicant relied on that delegation in the context of whether the
applicant could or should have exhausted an internal
remedy, to which
aspect we will return shortly. In the answering affidavit the third
respondent states under oath that the power
in question was delegated
to him in terms of a written delegation document attached to the
papers. The delegation document provides
that if any organisational
changes occur which alter the names of existing designations, any
power delegated in terms thereof is
deemed to have been delegated to
equivalent ranks which arise from such changes. In the circumstances
we regard the attempt on behalf
of the applicant to rely on a minor
difference in the description of the post of the third respondent
contained in the written delegation
document, opportunistic and
without substance. We find on the totality of the evidence that the
power in terms of section 17 of
the Act was at all times relevant
hereto in writing delegated by the first respondent to the third
respondent.
[3] On behalf of the
respondents it was argued that the application should be dismissed
without consideration of the merits thereof
for failure by the
applicant to exhaust internal remedies available to it. Relying in
this regard in the first place on the provisions
of section 96 of the
Act, it was specifically argued that the remedy of appeal to the
first respondent is available to the applicant.
[4] According
to its heading, section 96 of the Act deals with internal appeal
process and access to courts. This section provides
as follows:
“
96 Internal
appeal process and access to courts
(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.”
[5] The
question then is whether the remedy of appeal to the first respondent
in terms of section 96 of the Act is available to the
applicant in
the circumstances of this case. For the reasons that follow, we
think that it is not.
[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.
[7] In this case section
103(4) and (5) of the Act specifically provides as follows:
“
(4) The
Minister, Director-General, Regional Manager or officer may at any
time-
(a) withdraw a delegation or
assignment made in terms of subsection (1), (2) or (3), as the case
may be; and
(b) withdraw
or amend any decision made by a person exercising a power or
performing a duty delegated or assigned in terms of subsection
(1),
(2) or (3), as the case may be.
(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.”
Furthermore,
in the written delegation document,
inter
alia
the following conditions of the delegation in question are stated:
“
(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 det
ermined
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
nonetheless 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.”
[8] It
is clear therefore that the first respondent has both the power to
revoke the delegation to the third respondent in question
and to
exercise the power delegated herself and the power to exercise
control over the exercise of the delegated power. In our view
the
delegation to the third respondent in question took place in a scheme
of deconcentration of public power. It follows that when
the third
respondent refused to grant a prospecting right to the applicant, the
third respondent acted on behalf of the first respondent,
that the
first respondent acted through the third respondent and that the
decision to refuse must be regarded as the decision of
the first
respondent. On this basis no appeal in terms of section 96 of the
Act is available to the applicant.
[9] There is a further
indication that this conclusion must be correct. In terms of the Act
“Director-General” means the Director-General
of the Department.
“Department” means the Department of Minerals and Energy. The
Act also contains a definition of a designated
agency referred to in
section 96(1)(b) thereof, which is not relevant here. Importantly
however, an officer as referred to in section
96(1)(a) of the Act, is
defined as any officer of the Department appointed under the Public
Service Act, 1994. It follows that the
third respondent is an
officer as defined. It also follows that if the decision in question
must in law be regarded as the decision
of the third respondent,
then, in terms of section 96 of the Act, an appeal would lie not to
the first respondent, but to the Director-General.
It could not have
been intended that the exercise of a power granted to the first
respondent (the Minister) could be appealed against
to a lower
ranking official, to wit the Director-General. This anomaly does not
arise if the decision in question is regarded as
the decision of the
first respondent, as we do.
[10] Secondly
it was argued, albeit with little enthusiasm, that section 103(4)(b)
of the Act also provides an internal remedy to
the applicant. We
cannot agree. An internal remedy in this context is one that an
aggrieved person may exercise as of right. To
seek an indulgence,
which at best is what the request to act in terms of section
103(4)(b) would amount to, is not a remedy.
[11] In
the light of this conclusion it is not necessary to deal with the
prayer by the applicant for exemption in terms of section
7(2)(c) of
the Promotion of Administrative Justice Act, No. 3 of 2000 (“PAJA”).
It is worthy of note in passing however, that
it would appear that
in terms of the Act an absolute duty to exhaust the remedies in terms
of section 96 thereof is intended. That
is the import of section
96(3) and in section 96(4) section 7(2) of PAJA is not made
applicable to the proceedings contemplated in
terms of section 96.
[12] In respect of the
merits of the review, the applicant relied on a variety of grounds of
review. Some of these grounds, such
as the allegations of bias and
bad faith, are completely without foundation. However, on the view
that we take of the matter, it
is in this regard only necessary to
refer to what is stated below.
[13] Section 16(1) of the
Act provides that any person who wishes to apply to the first
respondent for a prospecting right must lodge
the application at the
office of the Regional Manager in whose region the land is situated
in the prescribed manner and with the
prescribed application fee.
Section 16(2) provides that the relevant Regional Manager must accept
an application for a prospecting
right if the requirements of section
16(1) are met and no other person holds a relevant right in the same
mineral and land. In terms
of section 16(3) the Regional Manager
must notify the applicant in writing within 14 days of receipt of the
application if the application
does not comply with the requirements
of section 16 and in terms of section 16(4) the Regional Manager must
notify the applicant
in writing if the application is accepted.
[14] The applicant lodged
the application for a prospecting right in question at the offices of
the second respondent on 22 September
2005. By letter dated 16
October 2005 the second respondent informed the applicant that the
application has been accepted. On 26
April 2006 the second
respondent wrote to the applicant in respect of this application in
the following terms:
“
The
relevant application has
inter
alia
been evaluated by the Department’s Directorate: Mine Economics and
the outcome of such an evaluation is that the relevant application
does
not
comply with the provisions of section 17 (a) & (b) of
abovementioned Act due to some outstanding information or documents.
Your
Company is therefore requested to submit the following, namely:-
Profiles of all personnel
(contractors and consultants) that will be assigned to the proposed
project, particularly the person that
will take responsibility for
the on site operation;
A revised prospecting work programme
that will lead to optimal prospecting of the area under application,
in the same regard, it
is suggested that the minerals to be
prospected for should only be limited to diamonds (general and in
kimberlite) as it is unlikely
that prospecting for all minerals will
be achieved due to different methods applicable to prospecting for
all minerals;
Justification as to why the proposed
life of mine is two (2) years whilst the prospecting work programme
suggests that the proposed
project can be exhausted in just ten (10)
months; and
A revised cost schedule where the
expenditure is broken down in terms of Regulation 7(1) (k) and all
regulatory costs applicable
to the operation (prospecting fees, cost
of rehabilitation, etc) should also be included on such a revised
cost schedule.
Kindly note that
your Company is requested to submit the relevant outstanding
information
on
or before 10 May 2006
.”
[15] It
is common cause that a written response to this letter was in fact
received at the offices of the second respondent on 10
May 2006.
This response emanated from Bonaparte Diamond Mines NL, an Australian
company, which the applicants says would fund the
initial exploration
in terms of the prospecting right applied for. The exact legal
relationship between the applicant and this company,
if any, is not
clear. What is clear though, is that the response, consisting
together with annexures thereto of some 24 pages, should
have been
considered as the applicant’s response to the second respondent’s
requests in terms of his letter of 26 April 2006.
[16] It is common cause
further that as a result of misfiling, the aforesaid letter of
Bonaparte Diamond Mines NL to the second respondent,
was not
considered by the second respondent when he made his written
recommendation to the third respondent to refuse the applicant’s
application for the prospecting right in question and was not
referred to in his recommendation to the third respondent. Although
the third respondent does not expressly say so, it is clear from the
evidence that he had not considered this letter when he accepted
the
recommendation by the second respondent to refuse the application.
The written recommendation of the second respondent was dated
22 May
2006 and was accepted by the third respondent on 19 June 2006. The
Bonaparte Diamond Mines NL letter was however only rediscovered
after
the misfiling thereof on 24 July 2006 as appears from the affidavit
of the second respondent’s secretary.
[17] It
is not disputed by the respondents that the decision to refuse the
prospecting right constitutes administrative action as
defined in
PAJA. In accordance with section 33 of the Constitution, section
3(1) of PAJA provides that administrative action which
materially and
adversely affects the rights or legitimate expectations of any
person, must be procedurally fair. In terms of section
6(2)(c) of
PAJA a court has the power to judicially review an administrative
action if it was procedurally unfair. The concept of
procedural
fairness is flexible (see
CHAIRMAN,
BOARD ON TARIFFS AND TRADE, AND OTHERS v BRENCO INC AND OTHERS
2001 (4) SA 511
(SCA) at 520 – 521 para 11 - 13) and depends on the
circumstances of each case, as is provided in section 3(2) of PAJA.
[18] In
the present case it was implicit in the second respondent’s letter
of 26 April 2006 that if the response thereto is received
on or
before 10 May 2006, the applicant’s application will not be refused
without considering that response. However what happened
is exactly
what was said would not happen. That the second respondent may not
legally have been obliged to call for the further
information or that
he may have misconceived his duties in terms of section 16 of the
Act, is immaterial. So is the reason why the
information actually
received was not considered. As the question is whether the
procedure employed was fair, it is not necessary
to refer to the
contents of the response of 10 May 2006, save to say that it was
clearly relevant. The matter is analogous to a
promise made by a
public authority to follow a certain procedure. In such case it is
in the interest of good administration that
the public authority
should act fairly and implement its promise. See the as yet
unreported judgment in the
CHAIRPERSONS’
ASSOCIATION v MINISTER OF ARTS AND CULTURE
[2007] SCA 44 (RSA) p. 15 – 16 para 45 – 46. In summary, the
respondents called for further information from the applicant and
indicated that if such further information is received timeously, it
will be considered when adjudicating upon the application by
the
relevant authority, but failed to consider relevant information
timeously received. In our judgment this is manifestly procedurally
unfair, as was properly conceded by counsel for the respondents. We
conclude therefore that the decision to refuse the applicant’s
application for the prospecting right in question is fatally flawed
by procedural unfairness. It follows that this decision must
be set
aside.
[19] In the papers the
applicant asked for an order that the prospecting right applied for
be granted by this Court. This claim was
rightly not pressed by
counsel for the applicant. This is certainly not an exceptional case
within the meaning of section 8(1)(c)(ii)
of PAJA. In our view the
employment of two counsel by the applicant was justified and the
costs of 27 July 2006 should follow the
result.
[20] In the result the
following orders are made:
1. The decision to refuse
the applicant’s application for a prospecting right for diamonds
and all minerals in respect of the remaining
extent of the farm
Bronkhorstfontein 438, situated in the magisterial district of
Heilbron, is reviewed and set aside.
2. The
application is referred to the first respondent or her delegate to be
reconsidered in accordance with this judgment.
3. The
respondents are ordered to pay the costs of the application,
including the costs of 27 July 2006 and of two counsel.
____________
A.
KRUGER, J
_______________________
C.H.G. VAN DER MERWE,
J
On
behalf of applicant: Adv. C.N. van Heerden
With
N. Smit
Instructed
by:
Hill,
McHardy & Herbst Inc.
BLOEMFONTEIN
On
behalf of respondents: Adv. J.Y. Claasen
Instructed
by:
The
State Attorney
BLOEMFONTEIN
/sp