Brief Summary

Administrative Law — Judicial Review — Wayleave application — Applicants seeking review of Eskom's refusal to grant wayleave for solar power project — Court finding refusal based on ulterior motives and material errors of law — Eskom's decision declared unlawful and constitutionally invalid, with substitution order granted to approve wayleave application.

Comprehensive Summary

Summary of Judgment

1. Introduction

This matter concerned an opposed application for judicial review in the High Court of South Africa, Gauteng Division, Johannesburg. The applicants, Sibanye Gold (Pty) Limited, Sibanye Solar PV (Pty) Limited, and Sibanye Stillwater Limited (referred to collectively in the judgment as “Sibanye”), sought to review and set aside a decision of the first respondent, Eskom Holdings SOC Ltd (“Eskom”), refusing a wayleave application. The review was brought primarily in terms of section 6 of the Promotion of Administrative Justice Act 3 of 2000 (PAJA) and, in the alternative, on the principle of legality.

The second respondent was the National Energy Regulator of South Africa (NERSA) and the third respondent was the Far West Rand Dolomitic Water Association. Neither the second nor the third respondent appeared.

The procedural history was materially shaped by the wayleave application process and Eskom’s internal decision-making structures. Sibanye submitted a wayleave application on 10 January 2023 (reference WS171/2023) in order to undertake work within Eskom’s servitude and cross Eskom’s 132 kV transmission lines. After internal consideration and shifting positions within Eskom’s structures, Eskom ultimately refused the wayleave by letter dated 4 December 2023, with reasons furnished on 13 December 2023. Sibanye then instituted review proceedings. The matter was heard as a Special Motion on 9 and 10 October 2025, and judgment was delivered electronically on 18 February 2026.

The subject-matter of the dispute was Eskom’s refusal to grant the wayleave necessary for Sibanye to proceed with a 50 MW “behind-the-meter” solar photovoltaic (PV) project intended to supply electricity to Sibanye’s Kloof Mine, including the construction of a facility line crossing Eskom’s servitude. The dispute thus implicated the lawfulness and rationality of Eskom’s decision-making in the context of the statutory and policy framework promoting private generation and renewable energy projects.

2. Material Facts

The court treated most material facts as largely common cause, and framed the dispute predominantly as one about the lawfulness of Eskom’s reasons and decision-making process rather than a contest over technical evidence.

Sibanye intended to develop a 50 MW solar PV plant in western Gauteng to supply electricity to its Kloof Mine. The project required connection to a section of the Kloof substation, which is owned and operated by Sibanye, via an approximately six-kilometre facility line that would cross Eskom’s 132 kV transmission lines. Those transmission lines run across land owned by the first applicant and the third respondent, over which Eskom holds a servitude. Because the proposed works would encroach upon Eskom’s servitude and involve crossing Eskom’s lines, Sibanye was required to apply to Eskom for a wayleave permitting entry and work within the servitude.

In the broader regulatory setting described by the court, government reforms announced in June 2021 expanded the Schedule 2 exemption regime under the Electricity Regulation Act 4 of 2006 (ERA), such that qualifying projects could be exempt from holding generation and distribution licences, subject to registration and compliance requirements. Sibanye’s planned project was treated in the judgment as falling within that exemption regime and having been registered with NERSA in 2022.

The court noted that Sibanye had secured the necessary regulatory approvals and authorisations, with finance and contractors in place, and that the wayleave was the only outstanding approval. The project was also designated a Strategic Integrated Project (SIP) under the Infrastructure Development Act 23 of 2014, a designation intended to expedite development through priority planning and implementation procedures.

In May 2022, Eskom issued a budget quote reflecting Sibanye’s proposed technical solution, and Sibanye accepted that budget quote in May 2023, paying a connection charge guarantee exceeding R15 million (excluding VAT). An initial site inspection occurred on 28 February 2023, and Sibanye provided a risk identification form and a technical report prepared by its consulting engineers, with the proposed solution stated to be compliant with relevant South African National Standards (SANS). Eskom’s technical team did not raise concerns during that inspection.

A material development occurred in October 2023, when an Eskom representative indicated that the crossing would only be permitted if the facility line used underground cables rather than an overhead line. Although this was a less desirable option for Sibanye, it accepted it as a compromise. Eskom’s internal structures initially supported the application on this condition: the Provincial Executive Committee (PEXCO) for the Gauteng cluster supported the wayleave on 4 October 2023, and the Distribution Licence and Regulatory Committee (DLRC) reached the same conclusion on 20 October 2023.

Despite that support, Eskom’s Ad Hoc Distribution Executive Committee (DEXCO) rejected the application on 16 November 2023. The minutes recorded that this was based primarily on a belief that it was not within Sibanye’s rights, “from a regulatory point of view”, to build the facility line, notwithstanding NERSA’s confirmation that the project was exempt from licensing requirements. The matter was referred back to Gauteng PEXCO, which on 28 November 2023 changed its initial supportive decision. Eskom then communicated the refusal by letter dated 4 December 2023, and set out reasons in a letter dated 13 December 2023.

In its 13 December 2023 reasons letter, Eskom advanced four primary reasons: alleged non-compliance with the ERA Schedule 2 exemption requirements; Eskom’s preferred alternative requiring connection to Eskom’s Libanon substation and the conclusion of a wheeling arrangement; the need for “orderly development” of electricity infrastructure; and unspecified “inherent operational risks”. Eskom’s wheeling proposal entailed an additional 30% wheeling cost (over and above other network costs), which Sibanye stated rendered the project commercially unfeasible.

The court further recorded that Eskom, in its answering affidavit, sought to introduce new reasons not contained in the contemporaneous reasons or the Rule 53 record. These included an asserted public interest basis, reliance on a previously undisclosed internal policy concerning distribution areas of supply and standalone customers, and an allegation that the servitude was earmarked for other projects.

3. Legal Issues

The central legal questions concerned the lawfulness and validity of Eskom’s refusal to grant the wayleave, assessed as administrative action reviewable under PAJA. The dispute required determination of whether Eskom’s decision was reviewable on one or more of the grounds in section 6(2) of PAJA, including (as pleaded and addressed in the judgment) whether the decision was taken for an ulterior purpose or motive, in bad faith, influenced by errors of law, based on irrelevant considerations or a failure to consider relevant considerations, and whether it lacked a rational connection to the information before Eskom and the reasons given.

A further legal issue concerned remedy. If the refusal was unlawful and fell to be set aside, the court had to decide what constituted a just and equitable remedy under section 8 of PAJA and, to the extent constitutional invalidity was implicated, under section 172(1)(b) of the Constitution. In particular, the court had to decide whether this was an exceptional case justifying substitution of Eskom’s decision with a decision granting the wayleave, rather than remitting the matter to Eskom.

The dispute was thus primarily one of law and the application of legal principles to largely common-cause facts, with the court also making evaluative assessments about Eskom’s stated motives, the rationality of its asserted concerns, and whether substitution was warranted on the established legal test.

4. Court’s Reasoning

The court approached the matter by first locating the review within the framework of section 6 of PAJA, which empowers courts to review administrative action on specified grounds including illegality, irrationality, unreasonableness, bad faith, ulterior purpose, errors of law, and failures of rational connection. The court also accepted that the wayleave decision constituted an administrative decision reviewable under PAJA, alternatively under the principle of legality, and treated that as undisputed.

On the first ground, the court considered Sibanye’s contention that Eskom refused the wayleave for an ulterior purpose, namely to prevent Sibanye from reducing its electricity purchases and to protect Eskom’s revenue stream. The court placed weight on Eskom’s own answering affidavit, which recorded projected revenue loss to Eskom if the PV project proceeded. The court characterised this as meeting the description of an ulterior purpose or motive, namely using a power for a purpose other than that for which it was given. It reasoned that a wayleave is an administrative permission to regulate access to and work within servitudes in a safe and orderly manner, and that Eskom’s wayleave policy did not confer a power to use wayleaves as leverage to block renewable projects or to impose preferred commercial terms.

The court further treated Eskom’s motives as inconsistent with the statutory and policy framework referred to in the judgment, including the purpose of the ERA Schedule 2 exemption regime and the project’s designation as a SIP under the Infrastructure Development Act. It held Eskom could not use internal processes to subvert statutory instruments intended to expedite private energy projects. It also reasoned that Eskom’s position was irrational and unreasonable in context, given the stated benefits of reducing demand on the national grid and freeing capacity, and given the court’s view that Sibanye would remain a major customer irrespective of the project.

On the second ground, the court held Eskom’s refusal was materially influenced by errors of law. It examined Eskom’s interpretation of Schedule 2 of the ERA, in which Eskom asserted a “first right of refusal” enabling it to dictate the connection method for private projects. The court found this interpretation inconsistent with the express wording of Schedule 2 (as quoted in the judgment) and held that the schedule and the Minister’s exemption notice made no reference to such a right. It accepted Sibanye’s explanation that the facility line fell under clause 3.2 and was not subject to clause 3.1 requirements, and noted NERSA’s consistent confirmation that the project and facility line were exempt from licensing requirements. On that basis, the court concluded the decision was affected by a material error of law under section 6(2)(d) of PAJA, and also involved irrelevant considerations and unlawfulness under PAJA and legality.

On the third ground, the court addressed Eskom’s internal policy framework. It accepted Sibanye’s submission that Eskom’s wayleave policy contemplated a largely mechanical process, including site inspection and conclusion of a standard form agreement regulating work and liability. The court noted Eskom’s concession that the wayleave policy did not, on its face, confer a discretion to refuse once requirements were met. Eskom’s attempt to rely on “other policies” was then evaluated. The court rejected Eskom’s reliance, first introduced in the answering affidavit, on a different internal policy concerning distribution areas of supply and standalone customers. The court characterised this as an impermissible after-the-fact justification because it was not part of the contemporaneous reasons or Rule 53 record. It also held that, on its own terms, the policy was confined to licensing processes and changes to licensed areas of supply, and thus did not apply to an exempted distribution facility such as the present project. The court further emphasised that internal policy is not legislation and cannot be rigidly applied as a fetter to preclude all crossings of Eskom lines, particularly given evidence that Eskom had frequently granted wayleaves for other crossings. This supported review on the basis of error of law, irrelevant considerations, and unlawfulness.

On the fourth and fifth grounds, the court assessed Eskom’s assertions of operational and safety risk and its insistence on a wheeling alternative. It found Eskom’s allegations of “inherent operational risks” and unsafe technical solutions to be bald and unsubstantiated, with no supporting assessment in the Rule 53 record and no confirmatory technical evidence. The court contrasted these allegations with the facts that Eskom issued a budget quote, accepted payment of connection fees, had technical teams involved, and that its own PEXCO and DLRC had supported the application subject to underground cabling without raising safety concerns. It also observed that the DEXCO minutes did not reflect specific technical concerns. In addition, the court rejected Eskom’s later assertion that the servitude was earmarked for other projects, again treating it as an after-the-fact justification unsupported by disclosed documentation even after a Rule 35(12) request.

With respect to wheeling, the court accepted Sibanye’s contention that Eskom’s attempt to use the wayleave process to impose a wheeling arrangement was improper. It reasoned that a wayleave concerns access to servitudes and safe execution of work, not the imposition of Eskom’s preferred commercial arrangements. It also accepted Sibanye’s submission that Eskom’s answering affidavit revealed no genuine interest in pursuing the wheeling alternative, because Eskom’s underlying objective was to prevent revenue loss by blocking the project.

Having found multiple review grounds established, the court concluded that the impugned decision was unlawful and invalid and fell to be set aside.

On remedy, the court applied section 8 of PAJA and section 172(1)(b) of the Constitution, noting that substitution is an extraordinary remedy but permissible in exceptional circumstances. It relied on the Constitutional Court’s guidance in Trencon Construction (Pty) Ltd v Industrial Development Corporation of South Africa Ltd and Another 2015 (5) SA 245 (CC), emphasising the cumulative consideration of whether the court is in as good a position as the administrator and whether the outcome is a foregone conclusion, together with other factors such as delay and bias. The court accepted Sibanye’s submission that granting the wayleave was effectively a foregone conclusion because the wayleave process was mechanical under Eskom’s own policy, the technical teams had accepted the underground cable solution, and no further information was said to be required. It considered additional factors favouring substitution, including Eskom’s demonstrated bias against the project, the extensive delay relative to the 14-day period contemplated in Eskom’s wayleave policy, and the economic and social importance of the project as described in the judgment. It held substitution to be just and equitable, with implementation details to be regulated through the standard form agreement envisaged in the wayleave policy.

On costs, the court applied the general principle that costs follow the result, referring to Myers v Abrahamson 1951 (3) SA 438 (C), and found no reason to deviate from that rule.

5. Outcome and Relief

The court held that Eskom’s decision refusing Sibanye’s wayleave application (reference WS171/2023) was unlawful and constitutionally invalid, and it reviewed and set aside the refusal.

The court granted a substitution order, replacing Eskom’s refusal with a decision granting the wayleave application.

Eskom was ordered to pay Sibanye’s costs of the opposed application, including the costs of two counsel (one being senior counsel where employed), on scale “C” of the applicable tariff under the Uniform Rules of Court.

Cases Cited

Trencon Construction (Pty) Ltd v Industrial Development Corporation of South Africa Ltd and Another 2015 (5) SA 245 (CC).

Myers v Abrahamson 1951 (3) SA 438 (C) at 455.

Legislation Cited

Promotion of Administrative Justice Act 3 of 2000, section 6 and section 8.

Electricity Regulation Act 4 of 2006, Schedule 2.

Infrastructure Development Act 23 of 2014.

Constitution of the Republic of South Africa, 1996, section 172(1)(b).

Rules of Court Cited

Uniform Rules of Court, Rule 53.

Uniform Rules of Court, Rule 35(12).

Uniform Rules of Court, costs tariff reference to scale “C”.

Held

The court held that Eskom’s refusal to grant the wayleave constituted reviewable administrative action and that the refusal was unlawful on multiple grounds under PAJA and, alternatively, the principle of legality. It found that Eskom acted with an ulterior purpose linked to retaining Sibanye’s revenue stream, and that Eskom’s refusal was materially influenced by errors of law in its interpretation and application of the ERA Schedule 2 exemption regime.

The court further held that Eskom misinterpreted and misapplied its internal wayleave policy, and that it impermissibly attempted to justify its refusal through after-the-fact reliance on additional policies and reasons not contained in its contemporaneous reasons or the Rule 53 record. It held that Eskom’s claims of operational and safety risks were unsubstantiated and not rationally connected to the information before Eskom. The court also held that Eskom’s effort to use the wayleave process to impose a wheeling alternative was irrational, unreasonable, and unlawful.

On remedy, the court held that exceptional circumstances justified substitution. It held that the court was in as good a position as Eskom to determine the outcome, that the granting of the wayleave was effectively a foregone conclusion given the mechanical nature of the process under Eskom’s policy and the absence of substantiated technical objections, and that factors including delay, bias, and the project’s importance supported a just and equitable substitution order.

LEGAL PRINCIPLES

A decision by an organ of state involving the grant or refusal of permission to access and work within servitudes, where it constitutes administrative action, is reviewable under PAJA and, in appropriate cases, under the principle of legality. The grounds of review include that the action was taken for an ulterior purpose, in bad faith, was materially influenced by an error of law, took account of irrelevant considerations or ignored relevant ones, lacked a rational connection to the information before the administrator, or was otherwise unlawful or unconstitutional, as reflected in section 6(2) of PAJA.

An administrator may not use a power conferred for a specific administrative purpose (such as managing safe access to servitudes through a wayleave) to pursue collateral commercial objectives or to leverage unrelated outcomes. Where an administrator’s disclosed motive reveals that the power was used to achieve an end foreign to the empowering purpose, this may constitute an ulterior purpose and render the decision reviewable and invalid.

Internal policies are not legislation and cannot be applied rigidly as if they create inflexible prohibitions that displace the proper exercise of lawful power. A decision may be unlawful where internal policy is misapplied, where policy is treated as an absolute bar inconsistent with practice, or where a decision is defended through after-the-fact justifications not forming part of the contemporaneous reasons or administrative record.

A party to review proceedings is generally confined to the reasons that existed at the time of the decision as reflected in the administrative record, and attempts to introduce new reasons later may be treated as impermissible justification rather than lawful explanation of the original decision.

Under section 8 of PAJA, courts have a discretion to grant just and equitable relief, including, in exceptional circumstances, a substitution order. In determining whether substitution is appropriate, the court applies the approach articulated in Trencon Construction (Pty) Ltd v Industrial Development Corporation of South Africa Ltd and Another 2015 (5) SA 245 (CC), giving substantial weight to whether the court is in as good a position as the administrator to make the decision and whether the administrator’s decision is a foregone conclusion, while also considering other relevant factors such as delay, bias, and fairness to all parties.

The general rule on costs remains that costs follow the result, absent good grounds to depart from that position, consistent with Myers v Abrahamson 1951 (3) SA 438 (C).

Sibanye Gold (Pty) Limited and Others v Eskom Holdings Soc Ltd and Others (2024/063165) [2026] ZAGPJHC 123 (18 February 2026)