Sechaba v Kotze and Others (869/2006) [2007] ZANCHC 4; [2007] 4 All SA 811 (NC) (29 June 2007)

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[2007] ZANCHC 4
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Sechaba v Kotze and Others (869/2006) [2007] ZANCHC 4; [2007] 4 All SA 811 (NC) (29 June 2007)

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IN
THE HIGH COURT OF SOUTH AFRICA
(Northern
Cape Division)
Case
number:
869/2006
Date
heard:
16,
22-23/05/2007
Date
delivered:
29/06/2007
In
the matter between:
MEEPO
YA SECHABA
Appellant
and
KOTZE,
JAN LOUIS KOEN 1
st
Respondent
BATHOPELE
MINING INVESTMENTS (Pty) Ltd 2
nd
Respondent
THE
REGIONAL MANAGER: MINERAL
DEVELOPMENT
AND ADMINISTRATION
NORTHERN
CAPE PROVINCE 3
rd
Respondent
THE
MINISTER OF MINERALS & ENERGY 4
th
Respondent
FIRSTRAND
BANK LIMITED 5
th
Respondent
Coram:
Lacock
J
et
Olivier
J
JUDGMENT
LACOCK
et
OLIVIER
J J:
Armed
with a prospecting right to prospect for diamonds on a property
described as the Remainder of the Farm Lanyon Vale no. 376,
situate
in the district of Hay, in extent 2655 hectares (the Farm), and
which prospecting right was issued to it in terms of the
Mineral and
Petroleum Resources Development Act, no. 28 of 2002 (the MPRDA) by
the third respondent on 1 July 2005, the applicant
(Meepo) on a
number of occasions since the end of July 2005 approached the first
respondent (Kotze) as the land owner of the Farm
for access to the
Farm for purposes of exercising its right to prospect for diamonds
on the Farm as authorised by its prospecting
right. Kotze, however,
refused Meepo access to the farm, contending
inter
alia
that Meepo’s prospecting right was
“void
ab initio”
.
This conduct of Kotze prompted Meepo to lodge an application (the
main application) for the following relevant relief:
That it be declared that the
applicant is entitled to immediate access to the farm of the first
respondent known as :
Remaining extent of the farm
Lanyon Vale 376 Northern Cape
In
extent 2375, 3214 hectares
Held
in terms of the Title Deed no 4256/2004
That it be declared that the
applicant is entitled to immediately commence and carry on
prospecting activities on the said farm.
That the first respondent be and
is hereby ordered to allow the applicant immediate access to the
said farm and to immediately commence
and carry out prospecting
activities on the said farm.”
Kotze
and the second respondent, a business associate of Kotze for
purposes of an application for a prospecting permit in terms
of the
Minerals Act, no. 50 of 1991 (the Minerals Act) and an applicant for
a prospecting right under the MPRDA, in turn applied
for
inter
alia
the review and setting aside of the prospecting right issued to
Meepo (the counter-application). The relevant prayers of the

counter-application read,
That the First and Second
Respondents be exempted under Section 7(2)(c) of the Promotion
of Administrative Justice Act,
3 of 2000 (‘PAJA’) from the
obligation to exhaust such internal remedies as may be provided
to the First and Second
Respondents by Section 96 of the Mineral
and Petroleum Resources Development Act, 28 of 2002 (‘the
Act’) in connection
with the decisions of the Third and Fourth
Respondents to refuse the application for a prospecting right of
the First and
Second Respondents in respect of the remainder of
the Farm Lanyon Vale 376 registration Division Hay, Northern
Cape Province
(‘the Property’) and accepting, processing and
granting an application for a prospecting right of the Applicant
in
respect of the said Property.
That the
Third and Fourth Respondents be ordered to receive the application
for a prospecting permit filed by the First and Second
Respondents
on 26
th
July 2001 (Ref. No NC5/2/2/1339) in terms of the Minerals Act no. 50
of 1991 in respect of the Property and to process the said
application as a pending application under Item 3 of Schedule II of
the Mineral and Petroleum Resources Developments Act No. 28
of 2002
(‘the Act’).
That the decisions of the Third
and Fourth Respondents to grant prospecting right no. 5/2005 dated 1
July 2005 as well as prospecting
right dated 24 March 2005 protocol
9/2005 in respect of the Property to the Applicant be reviewed and
set aside and that the said
two prospecting rights be declared null
and void.”
There
are no real differences for purposes of these proceedings between
the interests of Kotze and that of the second respondent.
For the
sake of convenience we will henceforth refer to the first and second
respondents (Kotze and Bathopele Mining Investments
(Pty) Ltd) as
“the
respondents”
,
to the third respondent and/or his predecessor in title as
“the
Regional Manager”
,
to the fourth respondent as
“the
Minister”
and to the deputy-director general in the office of the Minister of
Minerals and Energy as
“the
DDG”
.
We do not intend to
deal with all of the many issues raised in the pleadings, but will
content ourselves with only those issues
argued before us by
counsel, since, to our minds, those issues are conclusive for
purposes of this judgment. We shall furthermore
deal with those
issues in the same sequence as dealt with by counsel.
The History of
Events
It is common cause
that during July 2001 Kotze applied for a prospecting permit in
terms of the relevant provisions of the Minerals
Act to prospect for
diamonds on the Farm. The second respondent was subsequently joined
as a co-applicant for purposes of this
application. It is further
common cause that, despite a number of enquiries on behalf of the
respondents, they were not informed
of the fate of this application
before the repeal of the Minerals Act and the commencement of the
MPRDA on 1 May 2004.
Meepo too applied for a
prospecting permit to prospect for diamonds on the Farm in terms of
the Minerals Act.
Upon the commencement
of the MPRDA Meepo filed an application for a prospecting right to
prospect for diamonds on the Farm. The
DDG, Mr Mfetoane, who was
the Mineral Law Administrative Officer in the Northern Cape
(Kimberley) office of the Department of Minerals
and Energy at the
time, alleges that this application was received in his offices on 3
May 2004 (i.e. 3 days after the commencement
of the MPRDA), although
the written application itself is dated 5 May 2004. However, a note
appears in the handwritten register
kept in the office of the DDG
(and to which we refer in more detail hereunder) indicating that
this application was already received
in his office on 30 March
2004, but was returned to the Kimberley office on 3 May 2004.
This
application was approved by the DDG on 6 January 2005. On 24 March
2005 a prospecting right
“granted
in terms of sec. 17 of the Minerals and Petroleum Resources
Development Act, 2002 (Act 8 of 2002) PR 03/2005 NC 30/5/1/1/2/01PR”
was issued to Meepo. This document was signed by the Regional
Manager
“For
and on behalf of the Minister”
.
We shall henceforth refer to this document as the First Prospecting
Right.
On 1
July 2005, a second prospecting right was
“granted
(to
Meepo)
in terms of Section 17 of the Mineral and Petroleum Resources
Development Act, 2002 (Act 28 of 2002)”.
According to the introductory section of this document
“this
right replaces the unregistered right concluded by the Regional
Manager and the Holder on the 24
th
day of March 2005
(the first prospecting right)
in
respect of the application of the holder”
.
This document too was signed by the Regional Manager
“on
behalf of the Minister”
.
We shall refer to this document as the Second Prospecting Right.
This document, unlike the First Prospecting Right, was duly
registered
in the Mineral and Petroleum Titles Registration Office on
18 July 2005. On 20 July 2005 the Regional Manager approved Meepo’s
environmental management program (the EMP) whereby the Second
Prospecting Right became effective in terms of sec. 17(5) of the
MPRDA.
Meepo
relies on the Second Prospecting Right in support of the relief
claimed in the main application.
In the meanwhile the
respondents firstly on 15 June 2004 objected in writing to the
Regional Manager against the granting of a prospecting
right to
Meepo. This objection was not upheld.
Secondly, on 5 April
2005, the respondents appealed in terms of sec. 96 of the MPRDA to
the Director General of the Department of
Minerals and Energy (the
Defendant) against the granting of the First Prospecting Right. No
appeal was filed against the granting
of the Second Prospecting Right
since, as alleged by Kotze, the respondents only became aware of the
Second Prospecting Right when
the main application was served.
The
aforesaid appeal was still pending when the counter-application was
lodged on 2 August 2006.
The Applicable
Legislative Framework
The Minerals Act of
1991 was repealed and replaced by the MPRDA on 1 May 2004. The
MPRDA introduced a number of fundamental changes
to the statutory
regulation of the mineral resources of the Republic of South Africa.
The following such
changes appear to be apposite to these proceedings:
The
Legislature has done away with the traditional concept of
“mineral
rights”
.
The State is now the custodian of the mineral and petroleum
resources of the Republic of South Africa (sec. 3).
No provision is made
for the compulsory compensation of a land owner for the surface use
of its property for purposes of prospecting
or mining for minerals
except in cases of expropriation (Sch. 2 par. 12) or by means of
arbitration (sec. 54).
The holder of a
prospecting or mining right now has a limited real right in the land
which is the subject matter of the right, and
this right must be
registered (sections 5(1) and 19 (2) (a) ).
The prevalence of
State power of control over the mineral resources of the Republic
and the concomitant ousting of the (mineral)
rights of the land
owner and/or the holder of mineral rights (sec. 3 (2) ).
A consideration of the
provisions of the MPRDA inevitably leads to a realisation of the
conflict between the interests and/or rights
of a holder of a
prospecting or mining right and that of a land owner. All these
rights are core rights enshrined in the Bill
of Rights (see sections
24 and 25 of the Constitution).
We
are of the view that, when interpreting the applicable provisions of
the MPRDA and more particularly those provisions that may
be suspect
of more than one construction, preference should be given to that
construction which would result in the most rational
balance between
the aforesaid conflicting interests and/or rights of a holder of a
prospecting or mining right on the one hand
and that of a land owner
on the other hand. See
SABC
Ltd v National Director of Public Prosecutions
2007 (1) SA 52
D (CC)
at par. 126; Anglo Operations Ltd v Sandhurst Estates (Pty) Ltd
2007
(2) SA 363
(SCA) at 375 F
.
The Main
Application
At
the time when Meepo demanded access to the Farm, it was the holder
of a prospecting right which right, in terms of sec. 17(5)
of the
MPRDA,
“became
effective”
on 20 July 2005. In terms of sec. 5(3) of the MPRDA, Meepo was
therefore
prima
facie
entitled to exercise the rights mentioned in these sections, i.e. to
enter and to prospect for diamonds on the Farm.
The respondents,
represented by Mr Van Heerden, however, submitted that Meepo is not
entitled to access to the Farm and to prospect
for diamonds on the
Farm by reason of its failure to consult with the land owner (Kotze)
after it was granted a prospecting right
and before demanding access
to the Farm as required in sec. 5(4) (c) of the MPRDA. By reason of
the aforesaid, so argues Mr Van
Heerden, Meepo is not entitled
to the relief sought in the main application, and that application
was prematurely brought.
It is common cause
that, but for an effort to agree on compensation payable for the
surface use of the prospecting area on the Farm,
Meepo did not,
subsequent to the granting of the prospecting right, and more
particularly the approval of its EMP on 20 July 2005,
consult or
attempt to consult with Kotze before it demanded access to the Farm.
The fate of the main application therefore primarily
depends on the
interpretation of sec. 5(4) of the MPRDA, and more particularly
whether sec. 5(4) (c) refers to a pre- or post granting
of a
prospecting right consultation process. Sec. 5 (4) of the MPRDA
reads,
“
(4) No
person may prospect for or remove, mine, conduct technical
co-operation operations, reconnaissance operations, explore for
and
produce any mineral or petroleum or commence with any work incidental
thereto on any area without-
(a) an approved environmental
management programme or approved environmental management plan, as
the case may be;
(b) a
reconnaissance permission, prospecting right, permission to remove,
mining right, mining permit, retention permit, technical
co-operation
permit, reconnaissance permit, exploration right or production right,
as the case may be; and
(c) notifying
and consulting with the land owner or lawful occupier of the land in
question.”
Mr Danzfuss SC on
behalf of Meepo submitted that the relevant provisions contained in
sec.5 (4) of the Act are of a general nature
and that, once an
applicant has complied with the specific provisions of sec. 16, and
more particularly sec. 16(4) (b) of the MPRDA,
no further
consultative process with a land owner is required by sec. 5(4) (c)
of the act.
Sec.
16 of the MPRDA reads as follows:
“
16. (1) Any
person who wishes to apply to the Minister for a prospecting right
must lodge the application-
(a) at the office of the
Regional Manager in whose region the land is situated;
(b) in
the prescribed manner; and
(c) together
with the prescribed non-refundable application fee.
(2)
The Regional Manager must accept an application for a prospecting
right if-
(a) the
requirements contemplated in subsection (1) are met; and
(b) no
other person holds a prospecting right, mining right, mining permit
or retention permit for the same mineral and land.
(3)
If the application does not comply with the requirements of this
section, the Regional Manager must notify the applicant in writing
of
that fact within 14 days of receipt of the application and return the
application to the applicant.
(4)
If the Regional Manager accepts the application, the Regional Manager
must, within 14 days from the date of acceptance, notify
the
applicant in writing-
(a) to
submit an environmental management plan; and
(b) to
notify in writing and consult with the land owner or lawful occupier
and any other affected party and submit the result of
the
consultation within 30 days from the date of the notice.
(5)
Upon receipt of the information referred to in subsection (4) (a) and
(b), the Regional Manager must forward the application
to the
Minister for consideration.
(6)
The Minister may by notice in the Gazette invite applications for
prospecting rights in respect of any land, and may specify
in such
notice the period within which any application may be lodged and the
terms and conditions subject to which such rights may
be granted.”
Mr
Danzfuss, supported by Mr Ntai SC for the Minister and the Regional
Manager, developed his argument as follows:
Sec.
5 of the MPRDA forms part of Chapter 2 thereof, the heading of
which reads “
Fundamental
Principles”
,
and the contents of sec. 5(4) should be read against the backdrop
of these general principles or guidelines. This submission
is
supported by the wording of the heading to sec. 5 reading
“Legal
nature of prospecting right, mining right, exploration right or
production right, and rights of holders thereof”
.
The specific requirements an applicant for a prospecting right has
to meet in respect of consulting with a land owner are contained
in
sec. 16 (4) (b) of the act, as well as where applicable, sec. 10(2)
thereof. This latter section provides,
“
10.
(2) If a person objects to the granting of a prospecting right,
mining right or mining permit, the Regional Manager must refer
the
objection to the Regional Mining Development and Environmental
Committee to consider the objections and to advise the Minister
thereon.”
The aforesaid explains
why sec. 5(4) contains no provisions in regard to the subject
matter(s) of the consultation envisaged in
sec. 5(4)(c), as is
mentioned in sec. 10(2) and Regulation 3 of the regulations
published under sec. 107 of the MPRDA (the Regulations).
An
applicant for a prospecting right is in terms of Reg. 5(1) (g)
required to submit a prospecting work program (PWP) contemplated
in
Reg. 7 to the Regional Manager together with his or her application.
This document contains all the detail of the applicant,
as well as
the proposed method of prospecting, and is to form the subject
matter of the consultations envisaged in sec. 16(4) (b)
and, if
applicable, sec 10(2) of the MPRDA. The environmental management
plan (EMP) referred to in sec. 16(4) (a) can be approved
subsequent
to the granting of the prospecting right (see sec. 17(5) of the
MPRDA). If this happens (as in the matter under consideration)
no
purpose will be served to require a holder of a prospecting right to
consult with the land owner subsequent to the granting
of the right,
since the approved EMP will be a
fait
a complis
.
The EMP, which is in standard format, in any event contains all the
information required in the PWP.
Since Meepo
substantially complied with the provisions of sec. 16(4) (b) and
sec. 10(2) of the MPRDA, the provisions of sec 5(4)
(c) are not an
impediment to Meepo’s right of access and its right to prospect
for diamonds on the Farm.
In
his support of the aforesaid submissions, we were referred by Mr Ntai
SC to Dale,
“South
African Mineral and Petroleum Law”
(2006) at par. 107.1 and to the case of
Director:
Mineral Development, Gauteng Region, and Another v Save The Vaal
Environment & Others, 1999(2) SA 709 (SCA)
.
Attractive as it may
sound, we do not agree with the aforesaid contentions advanced by
counsel.
Firstly. We agree
that Chapter 2 of the MPRDA contains the fundamental principles
subjacent to the legislative approach to the
development and
regulatory regime of the mineral and petroleum resources of the
Republic of South Africa. It is our view that
the provisions of the
act should be interpreted with due regard to the constitutional
rights, norms and values the legislature sought to encapsulate,

protect and advance in the act. The more prominent rights, norms
and values appear to be the custodial role of the State over the
mineral and petroleum resources of the nation and the concomitant
disposal of the traditional concept of State and/or individual
rights to unexploited minerals (sec. 3(1) of the MPRDA), the State’s
obligation to protect the environment for the benefit of
the present
and future generations (sec. 24 of the Constitution and the preamble
to the MPRDA); the right to equitable access
to the natural
resources of the country (sec. 25(4)(a) of the Constitution); and
the right not to be deprived of property arbitrarily
(sec. 25(1) of
the Constitution). See further sec. 2 of the MPRDA.
We
accept that it was the intention of the Legislature to make provision
in the MPRDA for a rational balance between
inter
alia
the rights of a holder of a prospecting right on the one hand and the
property rights of a land owner on the other hand, as well
as the
fundamental right to have the environment protected and that the
provisions of the act should be interpreted with due regard
to the
aforesaid constitutional values and norms. See par. 8 above, and
Director:
Mineral Development Gauteng v Save the Vaal Environment
(supra)
at 718 E to 719 D
.
Since the granting of
a prospective right as a necessary consequence results in serious
inroads being made on the property rights
of a land owner, it is
not surprising that the legislature has attempted to alleviate
these consequences by providing for due
consultations between a
land owner and the holder of or an applicant for a prospecting
right. It appears that, apart from the
mechanisms provided for in
sections 10(2) and 54 of the MPRDA, which mechanisms are designed
to resolve objections or disputes
between an applicant for or a
holder of a prospecting right and a land owner, consultation is the
only prescribed means whereby
a land owner is to be appraised of
the impact prospecting activities may have on his land and, for
instance, his farming activities.
For these reasons we
have come to the conclusion that these sections of the MPRDA
providing for consultations between an applicant
for and/or a
holder of a prospecting right and a land owner should be widely
construed.
Secondly.
The heading of sec. 5 of the MPRDA reads,
“Legal
nature of prospecting right, mining right, exploration right or
production right, and rights of holders thereof”
.
It therefore appears that the legislature intended that the
provisions of this section are applicable to holders of rights
already
granted under the act. A person can only be a holder of a
right, or a successor in title to a holder, subsequent to the
granting
of that right. (See the definition of
“holder”
).
We are entitled to take cognisance of the heading of sections in an
act for purposes of ascertaining the intention of the legislature.

See
Chotabhai
v Union Government (Minister of Justice) and Registrar of Asiatics,
1911 AD 13
at 24
.
The
wording of sub-sec. (4) of sec. 5 of the act is in any event
indicative thereof that it refers to a person who is the holder
of a
right. As holder of a (prospecting) right, that person is not
allowed to
“prospect
… or commence with any work incidental thereto”
without
“
notifying
and
consulting
with
”
the land owner. (Our emphasis).
The
persons referred to in sections 10 (2) and 16 (4) (b) of the MPRDA
are not holders of a prospecting right. Those provisions
are
applicable to applicants for prospecting rights. An applicant for a
prospecting right is not entitled to the rights referred
to in sec.
5 of the act. It would be absurd to require from an applicant for a
prospecting right to
notify
a land owner in terms of sec. 5 (4) (c) of the act. We see no
reason for reading the words
“notifying
and consulting”
in this section disjunctively. What a land owner needs to be
notified of and consulted about is the intention of a holder to

commence with his or her prospecting activities and any work
incidental thereto.
Thirdly. In terms of
Reg. 5 (1) (g) an application for a prospecting right must contain a
PWP contemplated in Reg. 7. The following
provisions contained in
Reg. 7 are the only provisions that may have a bearing on the
occupational or proprietary rights of an
occupier or land owner of
affected land:
“
The
prospecting work programme must contain –
…
the plan contemplated in
regulation 2 (2), showing the land to which the application relates;
…
the mineral or minerals to be
prospected for;
…
…
a description of the prospecting
method or methods to be implemented that may include –
any excavations, trenching,
pitting and drilling to be carried out;
any bulk sampling and testing
to be carried out; and
any other prospecting methods
to be applied;
…
technical data detailing the
prospecting method or methods to be implemented and the time
required for each phase of the proposed
prospecting operation;
…
…
…
…
costs pertaining to the
rehabilitation and management of environmental impacts; and
…”
In
comparison hereto Reg. 52 (2) reads as follows:
“
(2) An
environmental management plan, must substantially be in the standard
format provided by the Department and must contain-
(a) a description of the
environment likely to be affected by the proposed prospecting or
mining operation;
(b) an
assessment of the potential impacts of the proposed prospecting or
mining operation on the environment, socio-economic conditions
and
cultural heritage, if any;
(c) a
summary of the assessment of the significance of the potential
impacts, and the proposed mitigation and management measures
to
minimise adverse impacts and benefits;
(d) financial
provision which must include-
(i) the
determination of the quantum of the financial provision contemplated
in regulation 54; and
(ii) details
of the method providing for the financial provision contemplated in
regulation 53;
(e) planned
monitoring and performance assessment of the environmental management
plan;
(f) closure
and environmental objectives;
(g) a
record of the public participation undertaken and the results
thereof; and
(h) an
undertaking by the applicant regarding the execution of the
environmental management plan.”
A
comparison of the required details of the two documents immediately
reveals that far more detail are to be submitted and contained
in an
EMP than in a PWP in regard to the potential impact on the
environment of prospecting or mining activities. The environmental
disturbances brought about by prospecting and/or mining activities
are in particular the concerns that impact upon the occupational
and/or proprietary rights of a land owner or occupier of land.
Once
a prospecting right had been granted to a holder, he or she, as soon
as that right becomes effective on the date of approval
of the EMP,
is entitled to enter the relevant prospecting area
“together
with his or her employees, and may bring onto the land any plant,
machinery or equipment and build, construct or lay down
any surface …
infrastructure which may be required for purposes of prospecting …”
(sec. 5 (3) (a) of the MPRDA). These activities may have a major
disruptive effect on a land owner and other occupiers of his
property.
One can think of many examples of such activities, for
instance the ill-considered construction of roads, the breaking down
or damaging
of fences, the depletion of boreholes or other water
resources, the construction of office buildings or housing facilities
for employees
on unsuitable or dangerous terrain, the construction of
an aqueduct through cultivated fields, excavating in the immediate
vicinity
of dwellings, etc.
In
our view the consultative process envisaged in sec. 5 (4) (c) of the
act is intended to afford a land owner the opportunity of
“softening
the blow”
inevitably suffered as a consequence of the granting of a prospecting
or other right under the act. This is the only means afforded
in the
MPRDA to a land owner to protect his rights as such, barring the
mechanisms for the resolution of disputes referred to above.
This
interpretation accords with the rational balancing of conflicting
interests and/or rights as alluded to in par. 8 above.
We are accordingly of
the view that, by the enactment of sec. 5 (4) (c) of the MPRDA, the
legislature intended that, post the granting
of a prospecting right
and before the commencement of prospecting activities on any land
which is the subject of such prospecting
right, proper notice of the
intention to enter the land for purposes of prospecting should be
given to the land owner, followed
by a consultative process.
As an alternative
argument, Mr Danzfuss submitted that, should we hold against him on
the main argument (as we did), the provisions
of sec. 5 (4) (c) of
the act are no bar to Meepo’s right to enter the Farm, and that
Meepo is therefore entitled to the relief
requested in par.2 of the
Notice of Motion.
In
support of this submission, Mr Danzfuss contended that sec. 5 (3) of
the Act distinguishes between (a) the right to enter the
land, (b)
the right to prospect, and (c) the right to remove minerals. Sec. 5
(4), so the argument continues, merely restricts
a holder’s rights
to prospect for and to remove minerals without notifying and
consulting with the land owner, and leaves his
right
“to
enter”
unencumbered.
This argument can be
disposed of without much ado.
Although
Meepo alleged in passing that a
“technical
team”
was refused leave to visit the Farm in July 2005, the real purpose of
the main application (which is dated 27 July 2006) is clearly
to
obtain access to the Farm for purposes of conducting prospecting
activities. In a letter dated 16 November 2005 addressed by
Meepo’s
attorneys to the attorneys for the respondents, it was said,
“It
is further our instructions that Mr Kotze is
prohibiting
access to our client, its partners and/or contractors in order to
prospect on the said area in terms of a legal prospecting
right.”
On
5 March 2006 Meepo approached the Regional Director under sec. 54 of
the MPRDA where the following was alleged on its behalf:
“
In terms of
Section 54(1)(a) of the Minerals and Petroleum Resources Development
Act 28 of 2002 you are hereby notified that, as the
holder of the
prospecting right, our client is prevented from commencing and/or
conducting prospecting and that such prevention detrimentally
affects
the objects of the MPRD Act 28 of 2002.
You
are kindly requested to take the necessary steps prescribed by
Section 54 (2) within 14 days, as stipulated by the said legislation,
after receipt of this correspondence.
Kindly
inform us which action the department will follow in order to enable
our client to prospect on the area in question. We confirm
our
client’s willingness to mediate the matter and negotiate with the
surface owner to ascertain the amount of compensation payable.

However, we hold instructions to approach the High Court on an urgent
basis in terms of Section 54 (4) of the Act, should the matter
not be
mediated or mediated successfully.”
In
par. 26 of the supporting affidavit, the deponent representing Meepo,
declared as follows:
“
This
application is extremely urgent.
The
period allowed for prospecting in the prospecting right commenced on
5 July 2007 ending on 4 July 2007. Almost one half of this
time
period has already lapsed because of the attitude of the first
respondent.
The
normal time period needed for the completion of all the prior
arrangements, the prospecting process and the completion thereof
is
about two years. That is the main reason why the prospecting right
was granted for only two years.
If
this application is not finalised urgently, the applicant will suffer
irreparable harm because it will spend millions of rand in
the
prospecting process without being able to complete and finalise the
process.”
Access for the
aforesaid purpose is not authorised without prior consultation with
the land owner.
The main application
was therefore prematurely brought and cannot succeed.
By reason of the
aforesaid finding we find it unnecessary to deal with the issue
whether a proper consultation was held with the
land owner in terms
of sec. 16 of the MPRDA prior to the granting of a prospecting right
to Meepo. Suffice it to say that, to
our minds, the respondents
were properly invited to attend such consultations and had
sufficient opportunity to participate therein.
The Preliminary
Issue in the Counter Application
On 5 April 2005 the
respondents lodged an appeal (presumably in terms of section 96 of
the MPRDA) against the granting of Meepo’s
prospecting right.
Despite numerous enquiries regarding the progress with the appeal it
was not finalised before November/December
2006; in other words
after the date on which the counter-application had been lodged on 2
August 2006.
On behalf of Meepo it
was argued
in
limine
that
the respondents’ counter-application should be dismissed on the
basis of it having been lodged prematurely. This argument
was based
primarily on the provisions of section 96 (3) of the MPRDA.
Under the heading
“
Internal
appeal process and access to courts”
section 96 (1) of the MPRDA provides for appeals against certain
administrative decisions. The provisions of subsection (3) of
section 96 read as follows:
“
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.”
The deference of
review applications until domestic remedies have been exhausted has
been recognised in our Courts on numerous occasions,
both in common
law and on the basis of applicable legislation; even in cases where
it was not explicitly agreed upon or provided
for (see the
discussion in
Erasmus
:
Superior Court Practice, Farlam et al, at B1-382 to B1-383).
It is now statutorily
provided for in section 7 (2) (a) of the Promotion of Administrative
Justice Act, 3 of 2000 (
“the
PAJA”
),
on which all applications for the review of administrative action
are now based (see
Transnet
Ltd and Others v Chirwa
2007
(2) SA 198
(SCA)
).
Subsection 2 (c) of
section 7 of the PAJA, however, makes provision for the granting of
exemption from the provisions of subsection
(2) (a), to enable
applicants to approach Courts on review without first exhausting
their internal remedies. An order granting
such an exemption is
indeed part of the relief claimed by the respondents in their
counter-application.
Mr Danzfuss submitted
on behalf of Meepo that the provisions of subsection (2) (c) of
section 7 of the PAJA do not apply to matters
resorting under the
MPRDA and that the respondents are therefore not entitled to the
exemption applied for in the counter-application.
He based this
submission on the maxim
inclusio
unius est exclusio alterius
,
and on the fact that the legislature, in enacting the provisions of
section 96 of the MPRDA, omitted any reference to section
7 (2) (c)
of the PAJA when it provided, in section 96 (4) of the MPRDA, that
“S
ections
6, 7 (1) and 8 of the
Promotion of Administrative Justice Act, 2000
…, apply to any court proceedings contemplated in this section”
,
and he argued that, against the background of the clear prohibition
in
section 96
(3) of the MPRDA, the only reasonable inference is
that the legislature intended to exclude the application of
subsection (2) (c)
of
section 7
of the PAJA in matters resorting
under the MPRDA.
Another argument which
could possibly have led to the same result would be that the
legislature, when promulgating the MPRDA after
the 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
1919
AD 367
at 397 and Mthembu v Letsela and Another
2000 (3) SA 867
(SCA) at 881B-C
).
Indications in the
MPRDA of such an intention could arguably be the heading of
section
96
(
“Internal
appeal process and access to courts”
),
the fact that the legislature deemed it necessary to specifically
exclude access to Courts before internal remedies are exhausted
(which was in any event already provided for in
sec. 7
(2) (a) of
the PAJA) and the fact that the legislature specifically provided
that
sections 6
,
7
(1) and
8
would be applicable to review
proceedings in respect of such matters (which would even in the
absence of a reference thereto in
any event have been applicable).
The result of such an
interpretation would then be that these provisions of the MPRDA
which regulate access to Courts would apply
to the exclusion of
those of the PAJA not specifically referred to and made applicable.
In view of what follows it is, however,
not necessary to come to a
final conclusion in this regard.
As already mentioned,
the respondents’ internal appeal was finalised (and dismissed)
during November/December 2006, and therefore
well before the date on
which the hearing of this matter (including the counter-application)
commenced. The question is whether,
even if the counter-application
had been lodged prematurely (in other words prior to the exhaustion
of the respondents’ internal
remedies), it would have been a
nullity which could not be entertained and adjudicated upon by this
Court. In our view this could
never be the case in the present
circumstances.
Even if it were to be
assumed that the mere lodging of the counter-application amounted to
an application as contemplated in
section 96
(3) of the MPRDA (see
the discussion in
Erasmus:
Superior Court Practice, supra, at B1-201), the fact remains that,
by the time the relief applied for in the counter-application
was
actually argued and considered, the appeal had been finalised and
the internal remedies had therefore
in
esse
been exhausted.
Despite the objection
in
limine
on behalf of the applicant, the relief claimed in the
counter-application was dealt with extensively on behalf of the
applicant
and the other respondents, both in heads of argument and
at the hearing. To uphold the objection under these circumstances
would
mean that the main application would have to be considered in
isolation, and as though there is no counter-application; whatever
the merits of the counter-application. It would also mean that not
only the respondents, but all the other parties who were in
any
event involved and had in any event already canvassed the merits of
the counter-application, would have to come back to Court
at a later
stage on the same issues.
This is not a case
where proceedings were instituted prior to the accrual of a cause of
action (compare
South
African Hotels v Wienburg
1950 (1) SA 516
(CPD) and
Ngani
v Mbanje and Another
,
Mbanje
and Another v Ngani
1988 (2) SA 649
(ZS)). The provisions of
section 96
(3) of the
MPRDA have nothing to do with a party’s cause of action. It
merely provides for a procedural deference of the remedy
of review,
and not a complete ouster thereof.
In our opinion it
would certainly not be in the interests of justice to dismiss the
respondents’ counter-application on this basis.
We are of the
view that, at the date of the hearing it was clear that the appeal
had in fact in the meantime been turned down,
and since all parties
were thoroughly prepared to argue the counter-application, the point
in
limine
should not have been persisted with.
Although the facts in
Le
Grand v Carmelu (Pvt) Ltd
1980
(1) SA 240
(Z)
may be distinguishable, the following remarks of
MacDonald
CJ
at
242 D to G
are in our view equally apposite in this matter:
“
The civil courts in common
with the criminal courts exist to do justice and not to provide some
practitioners with a forum in which,
relying upon technical and
wholly academic points, to attempt to prevent a court adjudicating
upon the real issues.
It was said with commendable
clarity and forthrightness in
R
v Hepworth
1928 AD
265
at 277 that:
‘
A criminal trial is not a game
where one side is entitled to claim the benefit of any omission or
mistake made by the other side,
and a judge’s position in a
criminal trial is not merely that of an umpire to see that the rules
of the game are observed by both
sides. A judge is an administrator
of justice, he is not merely a figure head, he has not only to direct
and control the proceedings
according to recognised rules of
procedure but to see that justice is done.
It
must with equal force and truth be said that a civil trial is not to
be allowed by the presiding judicial officer to degenerate
into a
contest on technical and wholly academic points which obscure and
even frustrate a trial on the real issues.’
Mr Ntai in our view
adopted the correct attitude by not relying upon the provisions of
section 96
(3) of the MPRDA in argument and, in fact, conceding that
in the circumstances it would be in the interests of justice that
the
Court considers the counter-application.
Although it is, in
view of the conclusion to which we have already come, probably not
necessary to decide, we are also of the view
that, although the
provisions of
section 96
(3) are on the face of it peremptory in
nature, the fact that the internal remedies were in fact exhausted
by the time the matter
was heard, constituted substantial and
sufficient compliance with those provisions (see
Nkisimane
and Others v Santam Insurance Co Ltd
1978
(2) SA 430
(A) at 433 H to 436 A, JEM Motors Ltd v Boutle and
Another
1961 (2) SA 320
(N) at 327
and
further,
Observatory
Girls Primary School and Another v Head of Department of Education,
Gauteng
2003
(4) SA 246
(W) at 255, Matloga v Minister of Law and Order
1989 (3)
SA 440
(BG), Van Niekerk and Another v Favel and Another
[2006] ZAGPHC 24
;
2006 (4) SA
548
(W) at 571 para. 36, Ex parte Mothuloe (Law Society, Transvaal,
Intervening)
1996 (4) SA 1131
(T) at 1138 D to E and Weenen
Transitional Local Council v Van Dyk
2000 (3) SA 435
(N) at 442 B to
444 J
).
The provisions of
section 96 (3) are clearly distinguishable from provisions which
pertain to the very cause of a party’s action
(compare
Malokoane
v Multilateral Motor Vehicle Accidents Fund
[1998] ZASCA 72
;
1999
(1) SA 544
(SCA)
.
There is further no indication that those provisions were
promulgated in the public interest (compare
Pio
v Smith
1986
(3) SA 145
(ZH)
).
The question is simply
what the legislature’s intention with section 96 (3) was and
whether it had in the end been achieved.
In
Douglas
Hoërskool en ‘n Ander v Premier, Noord-Kaap, en Andere
1999
(4) SA 1131
(NC)
at 1145 D to F
Buys
J
quoted with approval the following passage from
Maharaj
and Others v Rampersad
1964
(4) SA 638
(A) at 646 C to E
:
“
The enquiry, I suggest, is not
so much whether there has been ‘exact’, ‘adequate’ or
‘substantial’ compliance with this
injunction but rather whether
there has been compliance therewith. This enquiry postulates an
application of the injunction to the
facts and a resultant comparison
between what the position is and what, according to the requirements
of the injunction, it ought
to be. It is quite conceivable that a
court might hold that, even though the position as it is not
identical with what it ought
to be, the injunction has nevertheless
been complied with. In deciding whether there has been a compliance
with the injunction the
object sought to be achieved by the
injunction and the question of whether this object has been achieved
are of importance.”
In
Unlawful
Occupiers, School Site v City of Johannesburg
,
2005
(4) SA 199
(SCA) at 209 G to I Brand JA
remarked as follows:
“
Nevertheless, it is clear from
the authorities that even where the formalities required by statute
are peremptory it is not every
deviation from the literal
prescription that is fatal. Even in that event, the question remains
whether, in spite of the defects,
the object of the statute provision
had been achieved…”
In our opinion the
legislature’s intention with section 96 was obviously to ensure
that internal remedies are exhausted before
decisions contemplated
in subsection 96 (1) are subjected to the scrutiny of the Courts and
the costs of such a course incurred.
That object was effectively
achieved. To put it another way, we cannot for a moment conceive
that it could be argued that, for
this Court to consider the
counter-application under these circumstances, would frustrate the
legislature’s object with the provisions
of section 96 (3).
It is therefore also
unnecessary to consider whether the plausible attitude adopted by Mr
Ntai on behalf of the Regional Manager
and the Minister did not
perhaps amount to a proper waiver of a statutory right. There is no
indication that section 96 (3) was
enacted in the public interest
(compare
Absa
Bank Bpk h/a Bankfin v Louw en Andere
1997
(3) SA 1085
(C)
and
South
African Co-operative Citrus Exchange Ltd v Director-General: Truck
and Industry and Another
[1997] ZASCA 6
;
1997
(3) SA 236
(SCA)
.
Had these provisions been intended for the exclusive benefit of the
department responsible for the administration of the MPRDA
such a
waiver would be competent (see
SA
Eagle Insurance Co Ltd v Bavuma
1985
(3) SA 42
(A)
and
Road
Accident Fund v Mothupi
2000
(4) SA 38
(SCA)
).
Although the
provisions of section 96 (3) were clearly intended to give the
authorities the
“procedural
advantage”
of not being liable to sanction by the Courts before being afforded
the opportunity of reconsidering its own administrative actions
(compare
Blue
Circle Ltd v Valuation Appeal Board, Lichtenburg, and Another
[1991] ZASCA 43
;
1991 (2) SA 772
(A) at 795E), it could conceivably be argued that,
in view of the regulations promulgated in terms of the MPRDA and the
obligation
to give interested parties the opportunity to be heard in
the consideration of such an internal appeal, the provisions of
section
96 (3) were also intended for the benefit of such parties.
For these reasons the
point
in
limine
cannot succeed.
The Validity of
the Second Prospecting Right
For purposes of
determining this issue, it is necessary to sketch a brief history of
the administrative process that preceded the
granting and/or issuing
of the Second Prospecting Right to Meepo, as well as to deal with
the statutory authority of the State
officials who performed certain
functions in this process.
Meepo applied for a
prospecting right in terms of sec. 16 of the MPRDA. This
application is dated 5 May 2004. A notice of acceptance
(apparently
in terms of sec.16 (2) of the act) was issued by the Regional
Manager on 17 May 2004. However, Meepo had already been
advised of
the acceptance of its application by the Regional Manager on 10 May
2004.
On 15 June 2004 the
respondents objected in writing to the aforesaid application. On 16
July 2004 the objection was tabled and discussed
at a meeting of the
Regional Mining Development and Environmental Committee (REMDEC)
where all parties concerned were either present
or represented. This
was apparently done in terms of sec. 10 (2) of the act. The REMDEC
recommended that the application be processed
further.
The
Regional Manager obtained the views of other interested Government
Departments in regard to the application, satisfied itself
that Meepo
would be financially able to execute the proposed prospecting works,
and furthermore received the requested EMP from Meepo.
On or about 29
November 2004 a written submission was directed by the Regional
Manager to the DDG in Pretoria for the approval of
the application.
This document contains the following relevant information:
“
AIM
To obtain your approval for the
granting of a prospecting right to Meepo Ya Sechaba Closed
Corporation.”
Hereafter follows a
detailed confirmation that all statutory requirements had been
complied with. The last paragraph of this document
reads as follows:
“
In light of the fact that the
applicant has complied with the requirements of sections 17 (1) and
19 (4) (a) of the Act, as well as
the fact that the application will
have a positive socio-economic impact in the relevant area, as
indicated in paragraphs 12 above,
it is recommended that you, please
–
Grant a prospecting right to
Meepo Ya Sechaba Closed Corporation in accordance with section 17
(1) of the Act for a period of two
years, subject to the terms and
conditions as may be determined.
Grant permission to Meepo Ya
Sechaba Closed Corporation to remove and dispose diamonds in terms
of section 20 (2) of the Act, for
such holder’s own account.
Sign the attached power of
attorney, authorising the Regional Manager, Northern Cape Region, to
sign on your behalf the prospecting
right to be granted to Meepo Ya
Sechaba Closed Corporation in this regard.”
The document, as well
as a power of attorney, was signed by the DDG on 6 January 2005. The
power of attorney reads as follows:
“
I ABIEL MORAKE MNGOMEZULU, in
my capacity as Deputy Director-General: Mineral Development of the
Department of Minerals and Energy,
by virtue of the powers delegated
to me in terms of section 103 (1) of the Minerals and Petroleum
Resources Development Act 2002
(Act 28 of 2002), by the Minister of
Minerals and Energy of the Republic of South Africa on 12 May
2004, hereby grant a Power
of Attorney to the Regional Manager,
Northern Cape Region, of the Department of Minerals and Energy, to
sign the prospecting right
contemplated in section 17 (1) of the said
Act in favour of Meepo Ya Sechaba Closed Corporation, in respect of
The Remainder of the
Farm Lanyon Vale No 376, Registration division
of Hay, Province of the Northern Cape, according to the approval
signed by me today.”
It
is common cause that the Minister has properly delegated her power to
grant a prospecting right to the DDG, that a Regional Manager
has no
such original or delegated power and that any further delegation of
its delegated powers by the DDG had been expressly prohibited
by the
Minister.
On receipt of the
aforesaid approval by the DDG, the Regional Manager and Meepo
notarially executed a document headed
“PROSPECTING
RIGHT”
on 24 March 2005 (the First Prospecting Right). In terms of par.
3.1 of this document
“this
prospecting right shall commence on the 24
th
day of March 2005 and … will continue in force for a period of two
years from the 24
th
day of March 2005 ending on 23
rd
day of March 2007.”
On 21 April 2005
Meepo’s attorneys advised the Regional Manager as follows:
“
We confirm that the above
prospecting right, signed on 24 March 2005, cannot be registered with
the Registrar of Mining
Titles, due to the fact that a certified
sketch plan was not registered at the Registrar of Mining Titles
before signature of the
agreement.
We
confirm a meeting with Godfrey Mfetoane on 5 April 2005 as well as a
telephonic conversation with Thabitha of the Registrar of
Mining
Titles on 31 March 2005.
Find
attached hereto an internal memo dated 22 March 2005, explaining the
requirements for registration. We confirm that the said
memo was
faxed to Godfrey Mfetoane of your offices on 5 April 2005.
Our
clients instructed us that your department is following up with the
Registrar which necessary steps are to be taken to register
the
prospecting right in the absence of a certified sketch plan,
registered by the Registrar.”
On 1 July 2005 the
Regional Manager and Meepo notarially executed a second document
headed
“PROSPECTING
RIGHT”
(the Second Prospecting Right). This prospecting right was
hereafter registered at the offices of the Registrar of Mining
Titles.
This is the prospecting right relied upon by Meepo for
purposes of the main application, and which the respondents seek to
have
reviewed and set aside.
The first question
that presents itself is when and as a result of whose administrative
conduct was the prospecting right
granted
to Meepo as contemplated in the MPRDA.
Messrs Danzfuss and
Ntai submitted that the right was granted to Meepo on 6 January
2005 when the DDG approved and signed the
aforesaid recommendation,
and that the signing by the Regional Manager of the notarially
executed
“Prospecting
Right”
on
24 March 2005 and again on 1 July 2005 merely amounted to an
administrative formality whereby the granting of the right by the
DDG was confirmed and formalised.
We do not agree with
these submissions.
When the said
recommendation of the Regional Manager was approved by the DDG, so
it appears to us from the above quoted wording
of the document, the
DDG merely approved the recommendation to – at some future
unspecified moment in time â€“ grant a
prospecting
right to Meepo. Hence the words
“…
for a period of two years, subject to the terms and conditions as
may be determined.”
The two year period was
never intended to run from 6 January 2005. In the First Prospecting
Right, the two year period was to run
from 24 March 2005 to 23 March
2007, and in the Second Prospecting Right from 5 July 2005 to 4
July 2007.
No
“terms
and conditions”
were
“determined”
in this document. This is a clear indication that the terms and
conditions were intended to be determined at some future time and
that the right, when granted, would be subject to those terms and
conditions to be determined.
Viewed from the
perspective of an applicant for a prospecting right, the question is
when do the rights and privileges pertaining
to a prospecting right
vest in him or her as holder of that right. The word
“holder”
in relation to a prospecting right is defined in the act as
“the
person to whom such right has been granted or such person’s
successor in title.”
In our view it cannot be said that Meepo acquired any rights as
holder of a prospecting right at the time of approval of the

aforesaid recommendations and before any terms or conditions in
respect of the prospecting right, as well as the period of its

validity, had been determined. These were only determined and
communicated to Meepo at the execution of the aforesaid notarial
deeds on 24 March 2007 and 1 July 2007 respectively.
In our view, the legal
nature of the act in terms whereof a prospecting right is granted to
an applicant, is a contractual one whereby
the Minister, as the
representative of the State as the custodian of the mineral resources
of the Republic of South Africa, consensually
agrees to grant to an
applicant a limited real right to prospect for a mineral or minerals
on specified land for a specified period
and subject to such
conditions as may be determined or agreed upon. See sec. 17 of the
MPRDA. Until such terms and conditions had
been determined and
consensually agreed upon or consented to by an applicant, it cannot
be said that a prospecting right had been
granted to an applicant.
The right can only be granted once the terms and conditions had been
determined and communicated to an
applicant for his acceptance. See
Ondombo
Beleggings v Minister of Mineral and Energy Affairs,
[1991] ZASCA 108
;
1991 (4) SA 718
(AD) at 724 to 725
.
This was done in this matter when the notarial deed referred to
above was executed by the Regional Manager and the representative
of
Meepo.
To say that a
prospecting right only becomes effective in terms of sec. 17 (5) of
the MPRDA on the date of approval of the EMP,
is no answer to the
aforesaid. A holder of a prospecting right acquires rights as such
upon the granting of the right, for instance
the right to have his
EMP considered and/or approved in terms of sec. 17 (5). What is
postponed by this section is the exercising
of the right to prospect
and to remove minerals (see sec. 5 (4) (a) of the act), but the
rights become vested in a holder upon
the granting of that
prospecting right.
We therefore find that
a prospecting right had been granted to Meepo firstly on 24 March
2005 and again on 1 July 2005. That
this was the stance of Meepo at
all relevant times is undoubtedly clear.
In par. 10 of its
founding affidavit, Mr Shuping, on behalf of Meepo, alleges,
“The
right
(the
Second Prospecting Right)
was
granted on 5 July 2005 for the period commencing on 5 July 2005 and
ending on 4 July 2007”
(The first date of 5 July 2005 is an error and should have read 1
July 2005.)
If the relevant
prospecting right (the Second Prospecting Right) was granted to
Meepo on 1 July 2005, that right was granted by
the Regional
Manager, who was not authorised to grant the right on behalf of
either the Minister or the DDG. It was conceded by
Mr Ntai that the
aforementioned power of attorney was not a valid delegation of power
by the DDG to the Regional Manager, and it
was further conceded
that, should we find that the Second Prospecting Right was granted
to Meepo by the Regional Manager, that
conduct by the Regional
Manager would be
ultra
vires
his authority, rendering the right void. These concessions were
properly made.
The aforesaid finding
is dispositive of the counter-application. However, and if we
wrongly concluded that the prospecting right
was not granted by the
DDG on 6 January 2005, the Minister has a further difficulty
which appears to us to be insurmountable.
What the DDG empowered
the Regional Manager to do in terms of the aforementioned power of
attorney, was
“…
to sign the prospective right contemplated in sec. 17 (1) of the
said Act …
according
to the approval signed by me today.”
(Our emphasis). According to the approval signed by the DDG on that
day (6 January 2005) he approved the granting of a prospecting
right
to Meepo
“subject
to the terms and conditions as may be determined.”
It is common cause that the DDG did not determine any such terms or
conditions. The documents comprising the Prospecting Right
that was
signed by the Regional Manager contain a number of terms and
conditions not to be found in the approval. The following
are only
a few of these terms and/or conditions:
The period of duration
of the right.
“
The Holder shall
pay to the Minister throughout the duration of this prospecting
right any levy, fee, royalty or consideration payable
in terms of
any relevant Act of Parliament. All payments required in terms of
this Act shall be made by the Holder to the South
African Revenue
Services (SARS) at the relevant time-periods determined by the said
Act. The prospecting fees payable under this
right is R2 326-00
(two thousand three hundred and twenty six rand) for the first,
escalating by 50c (fifty cents) for the
duration of the right.”
(sic)
“
The Holder is
entitled to the rights referred to in section 5 (2) and (3) and any
other relevant provisions of the Act, and such
other rights as may
be contained in this prospecting right or such other right as may be
granted, acquired, or conferred upon it
by any other applicable
law.”
“
No boreholes
sunk by the Holder during the currency of this prospecting right
shall be sealed or closed up by the Holder without
the prior written
approval of the Minister, but the Holder shall fence and render safe
all boreholes, shafts, openings and excavations
in accordance with
the provisions of the Act, the
Mine Health and Safety Act, 1996
and
any other applicable laws and regulations.”
“
The Holder, its
successors in title and/or assigns, shall during tenure of this
prospecting right take all necessary and reasonable
steps while
carrying out their prospecting operations:
to safeguard and
protect the environment, the prospecting area and prevent damage or
harm to any person or persons using or entitled
to use the of the
prospecting area;
to
prevent any damage which may be caused by or through or in
consequence of the exercise by the Holder of its aforesaid right to
conduct prospecting operations under this prospecting right;
in
so far as there is legal liability arising, compensate such person or
persons for any damage or losses, including but not limited
to damage
to the surface, crops or improvements, which such person or persons
may suffer as a result of, or arising from or in connection
with the
exercise of its rights under this prospecting right or of any act or
omission in connection herewith.”
“
In the
furthering of the objects of the Act, the Holder acknowledges to be
bound by the provisions of the Memorandum of Agreement
(‘MOA’)
entered into between the members of the Holder on 04
th
MARCH,
(Attached hereto marked Annexure C.) Where any of the provisions of
the said MOA is changed in full or in part, the
Holder must, in
writing, inform the Minister through a resolution signed by the
directors of the Holder and obtain a written approval
of such change
from the Minister. The notice to the Minister must be submitted
sixty days (60) before the intended change may
take effect.”
It is not in dispute
that these terms and conditions were determined by the Regional
Manager and not by the DDG. The Regional Manager
was not authorised
to determine same.
Mr Ntai submitted that
most of the conditions inserted in these Prospecting Rights are in
any event statutory conditions contained
in the act, were therefore
superfluous, did not require the exercise of a discretion by the
Regional Manager or the DDG, and should
therefore not be regarded as
the determining of terms and conditions in the exercise of an
administrative function subject to review.
This argument begs the
question. Sec. 17 (6) of the act reads,
“
A
prospecting right is subject to this Act, any other relevant law and
the terms and conditions stipulated in the right and is valid
for the
period specified in the right, which period may not exceed five
years.”
It
is clearly the prerogative of the grantor of the right to determine
the terms and conditions to which it would be subject. The
determining issue is not the contents of the terms and conditions of
the right, but the authority of the grantor to determine whatever
terms or conditions.
In
casu
the terms and conditions of Meepo’s prospecting right were not
determined by the grantor of the right. These terms and conditions
were determined by the Regional Manager. In acting thus, he acted
ultra
vires
his
statutory powers.
There is a further
reason for holding that the Second Prospecting Right is invalid.
If one is to accept
that the Regional Manager was authorised by the DDG to sign the
First Prospecting Right on his behalf (which
the Regional Manager
did), the Regional Manager was never granted authority to sign the
Second Prospecting Right on behalf of the
DDG. (It is common cause
that the only recommendation and power of attorney signed by the DDG
were the aforementioned documents
signed by him on 6 January 2005).
The Second Prospecting
Right differs from the First Prospecting Right in the following
material respects:
The period of
validity, as referred to hereinbefore, differs.
The description and
size of the prospecting area differs. In the First Prospecting
Right the prospecting right area is described
as
“
The prospecting right area
shall comprise the following:
Certain: Remainder
of the Farm Lanyon Vale No 376
Situate: District
of Hay, Northern Cape Province
Measuring: 2375,
3214 hectares in extent.
Which
Prospecting Right Area is described in detail on the attached
Diagram/Sketch Plans marked Annexure B”
In the Second
Prospecting Right the area is described as
“
Certain ABCD, Orange River;
DE
and A representing an area on the Remainder of the Farm Lanyon Vale
No 376,
Situate
in the District of Hay,
Northern
Cape Province,
In
extent of 2655 Hectares in total,”
The
two sketch plans attached to the two documents differ as well.
It is alleged on
behalf of the Minister and the Regional Manager that, because of
clerical errors in the First Prospecting Right,
the errors were
corrected before registration thereof, and the Second Prospecting
Right represents the corrected copy of the prospecting
right granted
to Meepo.
This construction
appears to be an over simplification of the legal concept of a
prospecting right; and of what actually transpired.
Meepo acquired certain
rights at the granting of the First Prospecting Right. In terms of
that Right, Meepo’s right to prospect
on the Farm ran from
24 March 2005 to 23 March 2007. Had the Regional Manager
approved of Meepo’s EMP in terms of sec.
17 (5) of the MPRDA
before the notarial deed dated 24 March 2005 was lodged for
registration, that prospecting right would
have become effective in
terms of sec. 17 (5) of the Act. (All parties were
ad
idem
that registration of a prospecting right is no prerequisite for its
validity. We agree).
What the Regional
Manager did, was not to merely rectify errors in the already
existing prospecting right. He in fact replaced
that right with
another prospecting right and issued to Meepo a fresh prospecting
right. This much is clear from the introductory
section of the
Second Prospecting Right where it is stated,
“
AND WHEREAS the Minister has
granted to MEEPO YA SECHABA CLOSE 23 a prospecting right in terms of
section 17 of the Act,
AND WHEREAS this right replaces
the unregistered right concluded by the Regional Manager and the
Holder on the 24
th
day of March 2005 in respect of the application of the holder.
NOW
THEREFORE THE MINISTER GRANTS A PROSPECTING RIGHT SUBJECT TO THE
FOLLOWING TERMS AND CONDITIONS:”
If it was the
intention of the Regional Manager to merely correct clerical errors,
why then was the period for which the right was
granted, altered? On
what authority was this period of validity not only altered, but in
effect extended to beyond a period of
2 years as authorised by the
DDG? (The right was, on the version of Meepo, the Minister and the
Regional Manager effectively granted
for a period which commenced on
either 6 January 2005 or on 24 March 2005 and ending on 4 July
2007).
The Regional Manager
had no authority and no power of attorney to act as aforesaid, and
his conduct was therefore
ultra
vires
his authority.
In the last instance:
sec. 102 of the MPRDA reads:
“
A reconnaissance permission,
prospecting right, mining right, mining permit, retention permit,
technical corporation permit, reconnaissance
permit, exploration
right and production right work programme, mining work programme,
environmental management programme, and environmental
management plan
may not be amended or varied (including by extension of the area
covered by it or by the addition of minerals or
a share or shares or
seams, mineralised bodies, or strata, which are not at the time the
subject thereof) without the written consent
of the Minister.”
If it is to be accepted
that the replacement of the First Prospecting Right by the Second
Prospecting Right merely amounted to the
correction of clerical
errors, the difference in the period of validity between the two
Rights can certainly not be labelled as a
“clerical
error”
.
To this end at least, the Regional Manager was, in our view, not
entitled or authorised to amend the period of validity of the
First
Prospecting Right without the consent of the Minister or the DDG.
For these reasons we
conclude that the Second Prospecting Right issued to Meepo is of no
force and effect and should be set aside.
The
Respondents’ application under the Minerals Act
The respondents
applied in July 2001 for a prospecting permit on the Farm in terms
of the applicable provisions of the Minerals
Act. At the
commencement of the MPRDA on 1 May 2004, the respondents had not
been informed by the Department of the fate of this
application.
This much is common cause.
The respondents aver
that, when Meepo’s application for a prospecting right dated 5 May
2004 under the MPRDA was accepted and
processed, its aforesaid
application was a pending application as envisaged in par. 3 of
Schedule II to the MPRDA, and should therefore
have been considered
in terms of sec. 16 of the MPRDA. Par. 3 (1) of the said schedule
to the Act reads:
“
Any application for a
prospecting permit, mining authorisation, consent to prospect,
consent to mine or permission to remove and dispose
of any mineral
lodged, but not finalised, in terms of section 6, 8 or 9 of the
Minerals Act immediately before this Act took effect
must be regarded
as having been lodged in terms of section 13, 22, 27, 79 or 83 of
this Act, as the case may be.”
(The omission of a
reference to sec. 16 of the act is clearly a
casus
omissus
and of no consequence.)
It had been conceded,
correctly so in our view, that, if the said application of the
respondents was still pending at the commencement
of the MPRDA, it
should have been considered in accordance with the provisions of
sec.9 of the act in preference to the application
of Meepo, in which
event the counter-application has to succeed.
What therefore needs to
be determined is whether the 2001 application of the respondents (the
2001 application) was still a pending
application on 1 May 2004.
The Minister and the
Regional Manager aver that the 2001 application was refused on 27
February 2004. In support of this allegation
these parties rely on
a handwritten note in a handwritten register. Each page of this
register contains 6 columns. The heading
of each column from left
to right reads:
“
Date
Regions
Date
received
Type
of application
Surname/
Names/Farms
Ref. no’s
File
no’s
Allocated
to who
Action
Required
Date
to Management”
On
one of the pages one finds the following reference to the 2001
application: The first two columns are blank. In the third column
the following is noted,
“Jan
Louis Koen Kotze
Refusal (sic) of the
granting to Prospect / Remove / Dispose of Diamonds on the farm
Lanyonvale.”
The fourth column
contains a reference number. The fifth column reads,
“DDDRR
– Mokolo
30
– 1 – 04”
The sixth column
contains two notes. The first one reads
“Grants
permission to the applicant.”
The second one reads,
“Refused
permission on the 27 – 2 – 04.”
This last mentioned
written note contained in this register is the only piece of
“evidence”
relied upon by the Department that the 2001 application was
considered and refused on 27 February 2004.
In application of the
rule in
Plascon-Evans
Paints v Van Riebeeck Paints,
[1984] ZASCA 51
;
1984 (3) SA 623
(A) at 635 C
,
we are convinced that the aforesaid allegation on behalf of the
Minister and the Regional Manager is so clearly untenable that
we
should reject same on the papers before us.
In his answering
affidavit the DDG avers,
“
Both the Applicant and the
First Respondent had applied for prospecting rights on the same
property in terms of the Minerals Act.
The application was refused
on 27 February 2004. A decision by the Director-General to refuse
the application was taken on 27 February
2004. The Court is
referred to a copy of an extract from the register evidencing the
entry in regard to the dates of receipt of
the application and the
refusal thereof, attached hereto and marked Annexure ‘GM1’. The
First Respondent was notified of the
refusal in May 2004 by the
Regional Office (Kimberley).”
(Annexure
GM1 is an extract of the above mentioned register.) We find this
averment, to say the least, extremely suspicious.
On 15 March 2004 the
attorney for the respondents addressed a letter to the Chief
Director of the Department, Pretoria, reading,
“
The above matter and our
letter to you dated 10
th
February 2004, a copy of which is attached hereto, has reference.
We have been informed that the
above application was handed to you by Mr. Raboo of the Kimberley
office on 3
rd
February 2004.
Kindly
let us have your confirmation thereto and whether there are any
further outstanding requirements.”
This
letter was followed up by another letter dated 21 April 2004.
In the meanwhile, the
Regional Manager addressed a letter to the said Chief Director
dated 8 April 2004. This letter reads as
follows:
“
Re: enquiry on an
application for a prospecting permit on certain surveyed portion of
the farm Lanyon vale no 376: diamonds
Applicant: J L K Kotze
Your
facsimile dated 07 April 2007 bears reference.
We
have forwarded a submission for refusal of the Minister’s consent
dated 23/01/2004 on behalf of the above-mentioned applicant.
Mr
Rapoo personally handed the submission as the applicant alleges.
This is a historical application,
which was initially on a competing basis with that of Meepo Ya
Sechaba Closed Corporation on the
same property. Mr Kotze is the
farm owner of the abovementioned property and has successfully
interdicted Meepo Ya Sechaba from
carrying out prospecting on his
farm through a Court Interdict during the year 2002. A liquidation
order was granted against Meepo.
After an inspection, The
Directorate; Mine Economics divided the property in two equal half
(sic)
to
accommodate both applicants. Then the applicant successfully filed a
liquidation order against Meepo Ya Sechaba CC.
This
application (Mr Kotze) is only on the other half of the property and
is therefore recommended for refusal. The reasons for refusal
are
clearly indicated on the said submission. Meepo has successfully
been compo suited by the court and have been re-instated to
continue
trading under same through the Registrar of Companies and their
application on the other half of the property has also been
forwarded
for Ministerial consideration for consent to prospect for a period of
one year.
Based on the historical
background of this application,
the
Acting Director: Mineral Development would appreciate if the
application were expedited before the implementation of the MPRDA.”
(emphasis supplied).
What
clearly emerges from this letter are the following:
The reference to
“Mr
Rapoo”
and the words
“as
the applicant alleges”
refer to the abovementioned enquiry directed by the respondents’
attorney to the Chief Director dated 15 March 2004.
A facsimile dated 7
April 2004 was directed by the Chief Director to the Regional
Manager in regard to the 2001 application.
The said letter was
addressed by the Regional Manager to the Chief Director in reply
to the said facsimile.
In his reply to the
Chief Director, the Regional Manager requested the Chief Director
to consider the application before the
implementation of the
MPRDA.
This much was conceded
by Mr Ntai.
We
were unable to find any reference in this register to the application
of Meepo under the Minerals Act.
During the first day
of the hearing of this matter on 16 May 2007, we raised this
anomaly with Mr Ntai. He requested a postponement
to clarify same
and the matter was postponed to 22 and 23 May 2007. We pertinently
requested Mr Ntai, and allowed the Minister
and the Regional
Manager to file supplementary affidavits in this regard, to submit
to us a copy of the facsimile referred to
in the letter of the
Regional Manager quoted above since no copy thereof could be found
in the records discovered; to explain
when and by whom the decision
was taken to refuse the 2001 application on 27 February 2004 and to
submit any written documents
or notes in support thereof, to
explain the reason for the enquiry dated 7 April 2004 addressed to
the Regional Manager if the
2001 application had already been
refused in February 2004, when and how the Regional Manager had
been informed of the alleged
decision of 27 February 2004; and why
that decision had only been conveyed to the respondents on 11 May
2004.
The DDG filed a
supplementary affidavit dated 17 May 2007. In this affidavit
the DDG
alleges that his
letter to the Chief Director dated 8 April 2004 (it will be
remembered that Mr Mfetoane was the Regional Manager
at the time in
the Kimberley office) was an enquiry addressed by him to the Chief
Director! (This is patently not correct);
failed to attach or
even refer to the contents of the facsimile dated 7 April 2004;
did not explain when
or by whom the 2001 application was refused;
explained that once a
decision is taken by head office, such decision
“is
captured in the register similar to the one referred to above”
,
i.e. the original of annexure
“GM1”
;
explained why the
regional office is not always timeously advised of decisions taken
by head office;
failed to state when
the Kimberley office was advised of the decision to refuse the 2001
application;
explained that the
respondents were only advised of the said decision on 11 May
2004; and
was unable to state
when Meepo was advised of the refusal of its earlier application,
save to advise that he
“seem(s)
to recollect that a letter would have been dispatched at the same
time when the first respondent was informed”
.
No such letter could be traced.
No further explanation
was proffered on behalf of the Department in regard to our main
concern, viz. the apparent discrepancy between
the alleged date (27
February 2004) on which the 2001 application was refused and the
enquiry by the Chief Director on 7 April 2004.
No affidavit or any
other documentary proof was submitted to corroborate the hearsay
evidence of Mr Mfetoane that the 2001 application
was in fact
considered and refused in February 2004. If that application was in
fact refused in February 2004, we would at least
have expected
confirmation of this by the person who took that decision or someone
who could positively or convincingly confirm such
a decision.
As pointed out above,
the attorneys for the respondents made a number of enquiries to the
Chief Director regarding the fate of the
2001 application subsequent
to 27 February 2004. If the application was in fact refused by the
Chief Director on 27 February
2004, we would have expected a
reply to that effect to the respondents or their attorneys. The
absence of such a reply or even
an explanation therefore by the
Chief Director, and the aforementioned enquiry by the Chief Director
to the Regional Manager on
7 April 2004, strengthens the inevitable
inference that no decision was taken on 27 February 2004 to
refuse the 2001 application.
But for the hearsay
ipsi
dixit
of the DDG and the highly doubtful
“support”
of that statement, there is no evidence on which we can find that
the 2001 application had been refused in February 2004. We

therefore find that the respondents’ contention that the 2001
application was only refused on the day they were notified of such
refusal, i.e. on 11 May 2004, must, on a balance of probabilities,
be accepted.
In the absence of any
other evidence, it therefore follows that the 2001 application was
still pending when Meepo submitted its
application under the MPRDA
to the Regional Manager. The acceptance and processing of that
application in disregard of the respondents’
pending application
was therefore irregular and
ultra
vires
the powers of the Regional Manager and/or the DDG. The prospecting
right of Meepo therefore falls to be reviewed and set aside.
It further follows that
the 2001 application should have been processed as a pending
application under item 3 of the second Schedule
of the MPRDA. The
respondents are therefore entitled to the relief requested in par. 4
of the counter-application.
COSTS
This matter was
initially enrolled for 28 March 2007. By reason of the
incompleteness of the departmental records that were filed,
the
matter had to be postponed and could not proceed on that date.
Mr Danzfuss argued that
it was the duty of the respondents to see to it that the records were
complete and filed, and therefore the
respondents should be held
responsible for the payment of the wasted costs occasioned by the
postponement.
Mr
Ntai conceded that the Department too was to some extent to blame for
the incompleteness of the records, and that those costs should
be
borne by all the respondents. We agree with this submission.
Counsel are
ad
idem
that the costs of the main and counter-application should follow the
result of the applications. We are, however, of the view
that,
although the Minister and the Regional Manager supported the main
application, there is no justification for holding these
parties
liable for the respondents’ costs in the main application.
We therefore make the
following orders:
The
main application is dismissed.
The
Applicant is directed to pay the first and second Respondents’
costs in the main application.
No
order is made in respect of the costs of the third and fourth
Respondents in the main application.
The
counter-application succeeds.
The
Prospecting Right granted to the Applicant in respect of the
Remainder of the farm Lanyon Vale No. 376, situate in the district
of Hay, Northern Cape, as embodied in notarial deed Protocol no.
011/2005 dated 1 July 2005, and registered in the Mineral and
Petroleum Titles Registration Office: Pretoria, on 18 July 2005, is
declared null and void.
The
third and/or fourth Respondents are directed to process the
application of the first and second Respondents for a prospecting
permit submitted in terms of the Minerals Act no. 50 of 1991 on 26
July 2001 (ref. no. NC5/2/2/1339) as a pending application under
item 3 of Schedule II of the
Mineral and Petroleum Resources
Development Act. No. 28 of 2002
.
The
Applicant and the third and fourth Respondents are directed to pay
the first and second Respondents’ costs in the counter-application
jointly and severally, the one paying the others to be absolved.
The
first, second, third and fourth Respondents are directed to pay the
applicant’s wasted costs caused by the postponement
of the case
on 28 March 2007 jointly and severally, the one paying the others
to be absolved.
_______________ _______________
HJ
Lacock CJ Olivier
JUDGE
JUDGE
For
the applicant:
Adv
FWA Danzfuss SC
(Instructed
by Du Toit & Bomela, Kimberley)
For
the 1
st
and 2
nd
respondents:
Adv
CN Van Heerden & Adv RS Willis
(Instructed
by Van De Wall & Partners, Kimberley)
For
the 3
rd
and 4
th
respondents:
Adv
Ntai SC and Adv SP Mothle
(Instructed
by the State Attorney)