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[1997] ZASCA 84
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Government of the Province of the Eastern Cape v Frontier Safaris (Pty) Ltd. (96/96) [1997] ZASCA 84; 1998 (2) SA 19 (SCA); [1997] 4 All SA 500 (A); (29 September 1997)
THE SUPREME COURT OF APPEAL
OF
SOUTH AFRICA
CASE NUMBER: 96/96
In the matter between:
GOVERNMENT OF THE PROVINCE OF THE
EASTERN CAPE
Appellant
and
FRONTIER SAFARIS (PTY) LIMITED
Respondent
CORAM:
SMALBERGER, F H GROSSKOPF, HARMS, PLEWMAN JJA and STREICHER AJA
HEARD ON:
11 SEPTEMBER 1997
DELIVERED ON:
29 SEPTEMBER 1997
JUDGMENT
PLEWMAN IA
2
This is an appeal brought with the leave of this Court against an
order of the General Division of the Supreme Court of the
Ciskei
dismissing a Special Plea. The appellant is the successor to the former Government of the Republic of the
Ciskei
. (I will for convenience refer
to the appellant as "the government".)
In 1987 the government enacted the Nature Conservation Act 10
of 1987 ("the Act") to consolidate the laws relating to conservation and
the management and protection of fauna and flora within its domain. In
terms of the Act it established certain national reserves. Three reserves
are relevant to the appeal namely Tsolwana Game Reserve, Double Drift
(formerly Lennox Sebe) Game Reserve and Mpofu Game Reserve
(though the latter had not been proclaimed at the time of the events
giving rise to the litigation under consideration). These reserves were
established over a large number of farms in certain areas of the
Ciskei
and also covered portions of land known as the Hinana Tribal Resource
area. In November 1989 the government, in its wisdom, entered into a
3
written contract with one Frederick Barry Burchell, acting as the nominee
for a company to be formed, in terms whereof it purported to lease the
reserves to the company for a period of 40 years. The respondent is the
company which was incorporated to assume the rights and duties under
the contract which it duly adopted and ratified:
It seems clear that the reserves were not at the time fully
developed. The government negotiated a loan from the Development
Bank of
Southern Africa
in order to develop them. The terms of the loan agreement (an annexure to the contract in issue) are specific as to how
the funds are to be spent and a "Project Description", part of the
agreement, allocates funds to the provision of basic infrastructure (that
is fencing and roads) for each reserve. It is also apparent that the
government did not have trained personnel immediately capable of managing the reserves. The government's long-term object was the
development of the reserves with a view largely to the promotion of
tourism and it intended that the management of the reserves ultimately
4
be undertaken by
Ciskei
citizens. There are terms in the contract which
reflect these aims. The contract, which will be considered in more detail
presently, gave rise to an intricate inter-relationship between the parties
in which provision was made for the development of the reserves to be financed by the development loan and by the allocation to the
company
of responsibility for the administration of the reserves.
On 26 March 1993 the Minister of Finance, representing the
government, wrote to the respondent asserting that the contract was void
(on grounds not now in issue) and further claiming, in any event, the right to cancel the contract. Obviously the government had re-thought
matters. The letter was viewed by respondent as a repudiation of the
contract and it, for its part, seemed content to accept the repudiation. It
then cancelled the contract on the ground that it had been repudiated by
the government. In due course it served a summons on the government
and claimed damages. The claim for damages has been framed under a
number of heads covering expenditure of various sorts and includes a
5
substantial claim for future loss of profits. In the main claim some R62
million is sought and in the alternative claim R9 million. Happily little of this has any bearing on the appeal. What is in issue
is a special plea
(one of nine special pleas initially raised by the defendant). By an order
in terms of Rule 33(4), the plea was adjudicated on by the court a quo
as an issue to be decided separately from and before the other issues
arising on the pleadings were considered.
The relevant portion of the plea reads:
"In the alternative to paragraph 2.2 to 2.12 above the
Defendant pleads as follows:
2.13 Sub-section 25 (1) of the Ciskei Nature Conservation
Act, No 10 of 1987, as amended, provides as follows:
The control, maintenance, development and
management of a national nature reserve shall
vest in the Department (of Agriculture, Forestry
and Rural Development) which shall be
competent to exercise all or any of the powers
mentioned in sub-section (2) of this section or
which are otherwise necessary for the
6
attainment of the objects described in section
24.
2.14
The written agreement, Annexure 'A' to the Plaintiffs
Particulars of Claim, purports to divest the said
Department of the control, maintenance, development
and management of the three national nature reserves
mentioned therein.
2.15
The Defendant avers that the Government of the
Republic
of
Ciskei
was in law not competent to
conclude a contract in such terms and that the
aforesaid agreement is accordingly void,
ab initio
, and
unenforceable in law.
2.16
In the premises, the Defendant is in law not liable for
damages flowing from any alleged breach of the said
agreement.
Wherefore Defendant prays that Plaintiffs claim be
dismissed and that judgment be entered in the Defendant's
favour with costs."
(There are additional paragraphs to the plea but these form the basis for
a yet further special defence which is not presently relevant.)
7
The court a quo dismissed the special plea. What arises is the
validity of the government's central contention namely that the contract
purports to divest it (that is the government) of powers and duties
entrusted to it for public purposes by the Act and for that reason void.
Appellant's argument in the court a quo was founded on the
proposition that in law the state cannot be bound by a contract which
would fetter the future exercise by it of statutory powers. This led the
parties, and also to some extent the court, into an examination of certain
English authority which seems to be the genesis of this concept. Much
of this authority is coloured by the existence of royal prerogatives - a
subject also touched upon in certain decisions of this country. In this
Court, however, appellant's counsel disavowed reliance on any defence
other than the contention that the contract was contrary to the Act. Put
another way, counsel's submission was that the only enquiry was whether
the contract was, within the four corners of the Act, competent.
For this reason it is unnecessary to examine the proposition relied
8
upon in the court a quo or to consider the decisions, both English and
South African, in which principles relevant to the proposition then relied
upon are discussed. It is also unnecessary to debate the question of what
jurisdictional niche such concept fits in present-day South African law.
This notwithstanding, it is perhaps desirable that I refer briefly to what
seems to me the logical starting point in a debate relating to the effect
of a contract made by the State. In addition certain of the English cases
nicely illustrate the essential considerations which distinguish the
enforceable contracts from the unenforceable.
The starting point, in my view, is s 1 of the State Liabilities Act
20 of 1957. This Act, in so far as the relevant provision is concerned,
is a re-enactment of s 1 of the Crown Liabilities Act 1 of 1910. The
1957 Act was in force in the
Ciskei
by reason of the Status of the
Ciskei
Act 110 of 1981. Section 1 (of the State Liabilities Act) provides:
"Any claim against the State which would, if that claim had
arisen against a person, be the ground of an action in any
competent court, shall be cognizable by such court, whether
9
the claim arises out of any contract lawfully entered into on .
behalf of the State or out of any wrong committed by any
servant of the State acting in his capacity and within the
scope of his authority as such servant."
The Crown Liabilities Act, which was in the same terms, abolished
at least to the stated extent, any prerogative which may have existed and which could have barred liability by the State in contract.
South African Railways and Harbours
v Smith's Coasters (Pty) Limited
1931 AD 113
and Sachs v Donges NO
1950 (2) SA 265
(A) at 279 and 288.
The State Liabilities Act seems to have had a somewhat chequered
history in the
Ciskei
. Counsel's research (undertaken after the hearing at the court's request) shows that it was one of a multitude of acts repealed
by the Repeal of Laws Act 22 of 1985 (
Ciskei
). It was later re-enacted in the form of the State Liability Decree 21 of 1990 which was brought into force on 31 August 1990. It
seems thus that there was legislation
in those terms well before 1993 when the government repudiated the
contract. What the position was in the inter-regnum is not clear but it is
10
to be doubted that the relevant royal prerogatives could have been
revived. But clearly for the purposes of this appeal because of the terms
of the special plea the government's position in relation to contractual
liability had been equated to that of the ordinary citizen. This question
need not be further pursued.
What must now be examined is the Act (that is the Nature
Conservation Act) and the nature and purport of the contract. First the
Act. The object of the establishment of national reserves is defined in
s 24 and can for present purpose be summarised as being the protection,
preservation, reproduction or propagation in their natural state of wild
animals and indigenous plants and the preservation and enhancement of
the natural beauty of areas concerned.
The provisions relating to administration of the Act are in s 2. What this provides is that the Department of Agriculture, Forestry
and
Rural Development ("the department") is responsible for the
administration of the Act and that any authorization enabling any person
11
to do anything for which authorization is required under the Act must be
performed under the "licence, permit or other authorization" of a
competent authority in the department. The consequence is, of course,
that it is the department which both represented the government in
concluding the contract and which is designated to exercise the powers
conferred by the Act. It will, however, be convenient to continue simply
to refer to the government. The provisions relating to the control and
maintenance of reserves are -
"25. Control, maintenance, development and
management of national nature reserve. -
(1)
The control, maintenance, development and
management of a national nature reserve shall vest in the
Department which shall be competent to exercise all or any
of the powers mentioned in subsection (2) of this section or
which are otherwise necessary for the attainment of the
objects described in section 24.
(2)
The Department may, out of moneys appropriated for
the purpose by the National Assembly -
(a) do all such things as may be required for the
restoration, preservation and improvement of the land
comprising a national nature reserve;
12
(b)
take all such steps as will ensure the recovery
and continued existence of the animal and plant life which
is peculiar, or was at any time indigenous, to the area in
which such reserve is situated;
(c)
do everything which it may consider necessary
to ensure the security of the animal life and vegetation in a
national nature reserve and their retention in a natural state;
(d)
protect, develop and improve all water sources
and supplies and construct or erect fences, roads, dams,
bridges and buildings and such other works as it may
consider necessary for the maintenance, development, management and control of any national nature reserve
including, where appropriate, weirs, breakwaters, seawalls,
boathouses, landing stages, mooring places and swimming
pools;
(e)
reserve areas as breeding places for wild
animals or as nurseries for indigenous trees, plants, shrubs
and other flora;
(f)
provide accommodation and recreational
facilities for visitors to a national nature reserve but without
prejudice to the natural environment;
(g)
provide meals and refreshments for visitors to
a national nature reserve;
(h) carry on any business in a national nature
reserve;
(i) supply any other service for the convenience of
visitors to a national nature reserve;
13
(j) erect or establish or equip and maintain any
building, structure, depot or premises required or intended
to be used in connection with any matter referred to in
paragraph (f), (g), (h) or (i) or, with the concurrence of the
Minister of Internal Affairs and Land Tenure and the
Treasury, let any site required for such a purpose or any
such building, structure for such a purpose or any such
building, structure or premises as aforesaid;
(k) with the concurrence of the Treasury, make
such charges as it may determine in respect of any matter
referred to in paragraph (f), (g), (h) or (i) or which are to be
paid in respect of permission to enter or to sojourn within
a national nature reserve;
(I) subject to such conditions and the payment of
such charges (if any) as the Minister may prescribe with the
concurrence of the Treasury authorize any person or any
body, board or corporation established by or under any law
to carry on any activity which may, in terms of this
subsection be carried on by the Department."
In terms of s 26 certain activities are prohibited in reserves, for
example, no person other than an officer of the government may introduce any wild animal into a reserve.
Counsel for the appellant conceded that within the framework of
14
the quoted provisions the government was entitled to conclude contracts
affecting the control, maintenance, development and management (which
concepts I will refer to compendiously as "management"). Any such
contract, however, (so it was argued) would have to relate to a specific
project, undertaking or activity. The distinction which counsel sought to
convey was, for example, that under s 25(2)(f) a contract for the
construction of a specific lodge would be competent but permitting the
construction of an indeterminate number of lodges would not. The latter
it was argued would amount to an abdication of a duty placed on the
government.
For the purposes of this case 1 will assume that the "vesting" of
management of the reserves by s 25(1) imposed a duty on the government to manage them. But it seems to me that on a proper
construction of ss (2), the powers there mentioned are of a permissive
and not directory nature. The word "may", in its context, allows of no
other construction. It is this that counsel in argument termed the
15
government's "discretion". Discretion is however not a suitable word if
it is understood to connote anything more than the exercise of the
government's permissive powers. In my view ss (2) must be read as an
enumeration of permitted activities. Section 25(2)(1) in express terms
authorizes the government to carry out any of the activities mentioned by
engaging outside bodies or corporations to do so.
I turn now to the contract. In what follows, I will refer only to the
clauses which seem relevant or which were the subject of special
mention by counsel in argument. The preamble thereto makes it clear
that the object of the contract was that the "services" which the company
is to perform are to be performed "for and on behalf of the government".
Clauses 1 and 2 define the subject matter of the lease, namely the
reserves, and the term of the lease, namely 40 years. Clause 3 provides
for the rental which is to be paid - a direct payment of R10 000 per
annum for a specified period, which sum was to be supplemented thereafter in terms of a stated formula. Clause 4 governs the
16
commencement date of the contract in respect of each reserve. It also
allows the company to introduce and settle animals in the reserves before
the commencement date but then (only) in accordance with "the Game
and Resource Management Plan" which was to be agreed between the
parties. This clause was singled out by counsel for comment and I will
return to it.
Clause 5 falls under the heading "Infrastructure". It provides that
the basic requirements such as fencing and roads are to be provided by government in accordance with the arrangements agreed upon
in the loan
agreement to which reference has been made. In terms of clause 6 the
company, for its part, became obliged to maintain specified elements of
the infrastructure. It is also provided that the company will collect all
gate monies on behalf of the government and undertake responsibility for
the management and utilization of wild animals (again in accordance
with the Game and Resource Management Plan) and it is in addition
required to "further the continuation and development of tourism".
17
Clause 7 was, as I understood it, the cornerstone of appellant's argument.
I will deal with it separately. In clause 8 revenue from various sources
is allocated to either the government or the company. It provides that a
percentage of the company's income from the commercial realisation of
wild animals (the so-called "head tax") is to accrue to the government.
The company, it is further provided, may derive its income from curio
shops, meat processing, handicrafts, safari lodges and hotels and by
conducting tours and hunting and photographic safaris. Clause 10 relates
to certain transitional arrangements (and need not be discussed). All that
need be noted in relation to clause 13 is that the company's right to
introduce additional game into the reserves is made subject to the Game Management Plan already referred to and to "any applicable
law". I will
return to this phrase.
The only other clauses to which it is necessary to refer are clauses
19 and 22. Clause 19 is the clause which confers a right of cancellation
on the government. This includes that right in the event of the company
18
"failing to maintain the Reserves and/or public facilities in accordance
with acceptable standards" and also in the event of the company "failing
to observe standards of wild game management in accordance with
acceptable standards". Finally there is clause 22. Clause 22.1 is in the
following terms.
"Nothing in this agreement shall be construed as exempting
[the company] from the provisions of the Nature
Conservation Act No 10 of 1987 as amended and as may be
amended or from the provisions of any other law or regulations in the Ciskei."
(I have made a small grammatical correction in the clause as it appears
in the record.)
Counsel's argument was that by virtue of the contract the
government has abdicated its functions in relation to the management of
the reserves and purported to transfer this entire function to the company.
Abdication must necessarily imply that for the term of the lease the
company had been substituted for the government. As an illustration of
this general proposition counsel referred to clause 4 and the company's
19
right to introduce animals into the reserve before commencement of the
lease. The clause, so it was argued, if given effect to would override s 2
and s 26. In my view the contrary is true. On a proper construction of
the contract the right to introduce game will have to be exercised in co-
operation with the government. The phrase "any applicable law" in
clause 13 underlines this. But the main contention turned on the
provisions of clause 7.1 and I therefore quote it in full:
"7.1 [The company] further, as part and parcel of this
agreement, agrees subject to the provisions of Clause
20.1, 20.2, 20.3, and 20.4 to generally assume
responsibility for the management and maintenance of the Reserves in accordance with acceptable standards
and more particularly agrees and undertakes to:
7.1.1
Employ and pay all staff necessary to
administer and maintain the Reserves (save for
the employment of law enforcement officers
and staff retained by the Government for the
purposes of meeting its obligations in terms of
this Agreement.)
7.1.2
To supply those persons resident on and
7.1.1
,20
adjacent to the Reserves, with surplus meat at
a privileged rate as and when this may be available.
7.1.3
Permit local residents, under supervision, to
obtain certain herbs for their own use where
this is feasible and not objectionable to the
good management of the Reserves.
7.1.4
Permit local residents under supervision to
collect thatching grass where this is feasible
and not objectionable to the good management
of the Reserves.
7.1.5
Permit local residents to collect firewood under
supervision where this is feasible and not
objectionable to the good management of the
Reserves.
7.1.6
In consideration for hunting on the Hinana
Tribal Resource Area, to pay the said Authority
a mutually agreed percentage of the daily rates
and hunting fees for this activity."
Emphasis was placed on the phrase "generally assume
responsibility for the management and maintenance of the reserves".
21
However, to suggest that this phrase can be taken from its context and
read without regard to the contract as a whole (as seems to me inherent
in the argument) is fallacious. In my view more is being read into the
clause than is warranted. Firstly it proclaims an "undertaking" by the
company and not, I would suggest, the conferment of an enforceable all-
embracing right. The generality of the phrase is qualified not only by the
preceding clauses but also by the specific additional undertakings which
follow in the sub-clauses. Clause 7 is in fact a subsidiary clause of a
catch-all nature and one supplementary to (for example) limitations
otherwise provided for. The references to clause 20 relate to provisions
covering an obligation to co-operate with officials of the Republic of
South Africa in so far as the administration of the Double Drift reserve is concerned; an obligation to respect the resolutions of
a consultative
committee (yet to be formed) and an obligation to respect a commitment
made by the government to a body known as the Endangered Wild Life Fund. It was common cause between counsel that the references to
22
clause 20 were of no assistance in placing limits upon the generality of
clause 7. I am not convinced that this is so but even if that be accepted
it nonetheless seems to me that appellant's counsel's contention cannot be
correct.
The overall effect of the contract is that it imposes a series of
reciprocal obligations on the parties all of which are consonant with the
objects of the legislation. Indeed this was conceded by appellant's
counsel. At first blush the term of 40 years and the seemingly low rental
would tend to make one wonder how advantageous the contract was to
the government. But this is simply a speculative observation. There is
no evidence to show that the contract was in fact disadvantageous to the
government and even if it was this would be irrelevant to the question of
whether the contract is ultra vires the Act.
The provisions of clauses 4, 5, 6, 13 and 19 all suggest that the
government was not intending to wash its hands of the obligation to
manage the reserves. Clause 22.1, in my view, puts this beyond doubt.
23
It can hardly be suggested that statutory control is being lost. Yet that
was the essence of the appellant's argument.
The distinction which should, in my view, be drawn is one
between a situation where a power is being exercised and one where it
is being abandoned. One finds this distinction in academic writings and
in case law relevant to the principles upon which the special plea was
originally framed. For example in C Turpin Government Contracts the
following is said at p 24/25:
"The rule being one of public policy, if a court should again
be required to determine its applicability to a government
contract due weight should be given to certain other
considerations of policy: that contracts seriously made should be enforced and reasonable expectations realized.
The mere fact that a contract is shown to have the effect of
limiting the future executive action of the Crown or other
public authority falls far short of a demonstration that the public interest is infringed and that the contract should be held invalid.
In particular it may appear that the making of
the contract, far from being an improper violation of
freedom of executive action, is a legitimate exwecise of that
freedom."
24
The principle originally contended for by counsel (that is in the court a
quo) is one which in
England
also applies to subordinate bodies. A case
dealing with this contention in relation to a subordinate body is the case
of Dowty Boulton Paul Limited v Wolverhampton Corporation
[1971] 2
All ER 277
(Ch). Pennycuick VC after discussing cases which held that
it was not competent for the Government to fetter future executive action
said as follows at 282 e-h:
"I have said that the principle laid down in those cases is
established beyond doubt. That seems to me, however, a
principle wholly inapplicable to the present case. What has
happened here is that the corporation has made what is
admittedly a valid disposition in respect of its land for a term of years. What is, in effect, contended by counsel for
the corporation is that such a disposition - and, indeed, any
other possible disposition of property by a corporation for
a term of years, for example, an ordinary lease - must be
read as subject to an implied condition enabling the
corporation to determine it should it see fit to put the
property to some other use in the exercise of any of its
statutory powers. Nothing in the cases cited supports this
startling proposition. The cases are concerned with attempts to fetter in advance the future exercise of statutory powers
25
otherwise than by the valid exercise of a statutory power.
The cases are not concerned with a position which arises
after a statutory power has been validly exercised.
Obviously, where a power is exercised in such a manner as
to create a right extending over a term of years, the
existence of that right
pro tanto
excludes the exercise of
other statutory powers in respect of the same subject-matter, but there is no authority and I can see no principle on which that sort
of exercise could be held to be invalid as a fetter
on the future exercise of powers."
While the principles under consideration in that case have a
different legal status from that for which the appellant has argued here,
the practical tests applied to ascertain whether or not the present statute
has been contravened are really no different. The short question, in each
case is, is the government exercising its (discretionary or statutory)
powers or is it seeking to abdicate those powers to others? Here
management involves activities of various kinds and the statute provides
that those activities may be contracted out. The analysis of the contract which I have given points, in my view, inescapably to the
conclusion that
the government was exercising its powers. The contract, in my view, is
26
not contrary to the Act and the appeal must be dismissed.
The order I make is: The appeal is dismissed with costs.
C PLEWMAN JA
CONCUR:
SMALBERGER JA)
F H GROSSKOPF JA)
HARMS JA)
THE SUPREME COURT OF APPEAL
CASE NO 96\96
In the matter between:
GOVERNMENT OF THE PROVINCE OF
THE
EASTERN CAPE
APPELLANT
and
FRONTIER SAFARIS (PTY) LIMITED RESPONDENT
CORAM
: SMALBERGER, F H GROSSKOPF, HARMS,
PLEWMAN JJA and STREICHER AJA
HEARD ON
: 11 SEPTEMBER 1997
DELIVERED ON
: 29 SEPTEMBER 1997
JUDGMENT
STREICHER, AJA
:
I have had the benefit of reading the judgment prepared by
Plewman JA. For the reasons that follow I am unable to agree
2
with with the conclusion reached by him.
The Government of the
Ciskei
("the Government") leased
national nature reserves of which it was the owner to the respondent.
The question to be decided is whether the agreement of lease was
a valid agreement.
S 25(1) of the Nature Conservation Act 10 of 1987
(
Ciskei
) ("the Act") provides as follows:
"The control, maintenance, development and management of
a national nature reserve shall vest in the Department which
shall be competent to exercise all or any of the powers
mentioned in subsection (2) of this section or which are
otherwise necessary for the attainment of the objects described
in section 24."
S 25(2) sets out a number of activities that may be
carried on by the Department out of moneys appropriated for the
purpose by the National Assembly (the subsection is quoted in the
3
judgment of Plewman JA).
S 25(2)(1) empowers the Department to authorize any
person or any body, board or corporation established by or under any
law to carry on any activity which may, in terms of this subsection
be carried on by the Department, subject to such conditions and
payment of such charges (if any) as the Minister may prescribe with
the concurrence of the Treasury.
The Department referred to is the Department of Agriculture, Forestry and Rural Development.
In terms of s 25(1) the control, maintenance, development and management of the national nature reserves
mentioned in the agreement of lease, vested in the Department. The respondent alleges in its special plea, which was dismissed by
the
court a quo, that the agreement of lease was void and unenforceable
4
in that the Government thereby purported to divest the Department
of the control, maintenance, development and management of the
national nature reserves mentioned in the agreement.
By vesting the control, maintenance, development and
management of the reserves in the Department the legislature
conferred authority or power on the Department to control, maintain,
develop and manage the reserves. Having done so, unless the
contrary appears to be the case, one must assume that the legislature
intended the Department to exercise the authority or power and not
someone else. Baxter, Administrative Law, at 434 states the position
thus:
"In modern democracies original power derives from the
political authority of elected legislatures. Because of the
practical requirements of government it is recognized that such
bodies may delegate their powers. In
South Africa
, Parliament
is recognized to have unlimited powers of delegation.
5
Considerable latitude is also given to such 'original' authorities
as provincial councils. But all other administrative authorities
are treated as defegees, power having been delegated to them
by the original authority. Not being the direct repositories of
public trust they are not permitted the same freedom to choose
who shall exercise their powers. There is a presumption that
they may not further delegate (ie sub-delegate) their powers:
delegatus non potest delegare."
(Pty) Ltd 1965(4) SA 628 (A) at 639 C-D Botha JA said:
"The maxim delegatus delegare non pofest is based upon the
assumption that, where the legislature has delegated powers
and functions to a subordinate authority, it intended that
authority itself to exercise those powers and to perform those
functions, and not to delegate them to someone else, and that
the power delegated does not therefore include the power to
delegate. It is not every delegation of delegated powers that
is hit by the maxim, but only such delegations as are not,
either expressly or by necessary implication, authorised by the
delegated powers."
Wade, Administrative Law, 6th ed. at 363 says:
"There is no general principle that administrative functions are
6
delegable. The principle is rather that, where any sort of decision has to be made, it must be made by the authority
designated by Parliament and no one else."
It does not follow that every act performed in the
execution of a power conferred on an administrative body has to be
performed by that body.
Wade, op cit states at 362:
"A public authority is naturally at liberty to employ agents in
the execution of its powers, as for example by employing
solicitors in litigation, surveyors in land transactions, and
contractors in road-building. The essential thing is that it
should take its decisions of policy itself, and observe any
statutory requirements scrupulously."
Whether or not the Department could delegate its
authority to control, maintain, develop and manage the reserves
therefore turns upon a construction of the empowering statute.
No express authority to delegate the Department's
7
authority to manage the reserves is to be found in the statute. In
order to effectively exercise the authority to control, maintain,
develop and manage, the Department obviously required ancillary
powers and for this reason s 25(1) specifically provides that the
Department shall be competent to exercise all or any of the powers
mentioned in s 25(2) or which are otherwise necessary for the attainment of the objects described in s 24. Whether or not a
particular activity should be carried on and how it should be done
requires a policy decision. Furthermore, the various activities need to be co-ordinated. An express authority to authorize another
person
to carry on any of those activities can therefore not be considered to
be an express authority to authorise another person to control,
maintain, develop and manage the reserves.
No implied authority to delegate the Department's
8
authority to manage the reserves is to be found in the statute either.
The contrary is the case. The fact that the legislature specifically
provided that the Department could authorise a third party to carry
on any or all of the activities mentioned in s 25(2) and not that the
Department could authorize a third party to control, maintain, develop and manage the reserves is a clear indication that the legislature
did
not intend the Department to have such power.
The national nature reserves are national assets which
have to be protected for the benefit of present and future generations.
In accordance with this requirement the object of the Act is in s 24
expressly stated to be the protection, preservation, reproduction or
propagation in their natural state of wild animals and indigenous
plants and the preservation and enhancement of the natural beauty of
the area concerned. In managing the reserves numerous policy
9
decisions affecting nature conservation and related matters obviously
have to be made. The legislature considered the Department to be
the appropriate authority to make these decisions. In the
circumstances it is highly unlikely that the legislature intended the
Department to have the authority to delegate its authority to manage
the reserves. If the Department was unable to manage the reserves
effectively the Government should have requested the legislature to
reconsider the matter.
I therefore conclude that the Department did not have
authority to delegate its authority to manage the reserves. The
legislature and not the Department was the appropriate body to
decide by whom the national nature reserves should be managed.
It remains to consider whether the Department, by
entering into the agreement' of lease with the respondent contrary to
10
the provisions of the Act abdicated its authority to manage the
reserves. To do so it is necessary to refer in some detail to the
contents of the lease. I shall do so under three heads viz. the respondent's main rights and obligations, the Government's main
obligations and the rental and other sources of income.
1. The respondent's main rights and obligations in terms of the
agreement of lease (excluding its obligations in respect of rental).
1.1 The respondent as lessee could occupy the reserves for
a period of 40 years. During the term of the lease the
respondent could at its own expense and for its own account
derive income from the conduct of curio shops, game meat
processing factories, safari lodges, restaurants, hotels, guided
tours, hunting and photographic safaris and from the
development of handicraft industries and the sale of surplus
11
game, dead or alive. The agreement does not contain any
stipulations in regard to the number of shops, factories,
restaurants and hotels that could be established, the nature and
number of buildings that could be erected to house them and
their situation within the reserves. Upon termination of the
lease the respondent was entitled to be compensated for fixed
improvements effected by it.
1.2 The respondent undertook to maintain and foster the
cordial relationship that existed with the adjoining Andries
Vosloo Game Reserve administered by the Government of the
Republic
of
South Africa
, to observe and respect the
resolutions and agreements of a proposed consultative
committee consisting of representatives of the
Cape
Provincial
Administration and the Ciskei National Parks Board, and to
12
use its best endeavours to maintain the Government's
commitment to the Endangered Wild Life Fund.
1.3 Subject to these undertakings the respondent agreed to
assume responsibility for the management and maintenance of
the reserves in accordance with acceptable standards and to
employ and pay all staff necessary to administer and maintain
the reserves (save for the employment of law enforcement
officers and staff retained by the Government for the purposes
of meeting its obligations in terms of the agreement), to supply
those persons resident on and adjacent to the reserves with
surplus meat at a privileged rate, to permit local residents to
collect herbs, thatching grass and firewood where it was
feasible and not objectionable to the good management of the
reserves and in consideration for hunting on the Hinana Tribal
13
Resource Area to pay the Hinana Tribal Authority mutually
agreed percentage-of-the daily rates and hunting fees for this
activity.
1.4 The respondent undertook the obligation and
responsibility of the development and control of fauna and
flora according to acceptable standards, of tick and vermin
control and of ensuring the continuation and development of
game and trophy hunting operations.
The respondent furthermore undertook the responsibility of
ensuring the continuation and development of tourism in the
form of game viewing and photographic safaris in accordance
with the Resource Management Plans which were to be agreed
after consultation between the parties (clause 6.2.6 of the
agreement).
14
In addition the respondent agreed to attempt to foster the
development of educational and research projects within the
reserves whenever reasonably feasible.
1.5 Clauses 4.2.2, 4.2.4, 6.2.2, 6.2.6 and 13.3 contain
references to Game and Resource Management Plans. The
reference in clauses 4.2.2 and 6.2.6 is a reference to Game
and Resource Management Plans to be agreed after
consultation between the parties. In terms of clause 4.2.2 the respondent was entitled to introduce and settle animals in the
reserves before commencement of the lease. In terms of clause
13.3, and subject to the provisions of the Game and Resource
Management Plans, it could do so after commencement of the
lease. In terms of clause 4.2.4 the respondent was entitled to
maintain in the reserves, the number of cattle determined in
15
accordance with the Resource and Management Plan. In terms
of clause 6.2.2 the respondent had to manage and utilise the
wild animals and game in accordance with acceptable
standards which were to be recorded in Game and Resource
Management Plans. The respondent agreed to maintain stock
levels of wild animals conservatively and further agreed that
these levels would be determined in consultation by the parties
on an annual basis.
The respondent agreed to do what it reasonably could to ensure
that the wild and domestic animals in the reserves did not
graze on crops or prey on domestic animals on adjoining farms.
1.6 In terms of the lease the respondent could purchase all
movable assets required by it and situated within the reserves
16
at their book value and the Government could do the same
upon termination of the lease. By agreement the mechanical pumps, generators and machinery bolted to fixed bases were
deemed to be movables.
1.7
The respondent undertook to collect and pay to the
Government gate entrance fees (less a commission).
1.8
The respondent undertook to, in accordance with
acceptable standards, to maintain certain elements of the
infrastructure viz. windmills, boreholes, small dams, hunting
access roads, the game farming infrastructure and buildings.
The respondent also undertook to be responsible for the normal
maintenance and repair of the interior and exterior of all
buildings situated in the reserves save for any structural defects
or faults which the Government undertook to repair.
1.7
17
1.9 The parties specifically agreed that nothing in the
agreement should be construed as exempting the respondent
from the provisions of the Nature Conservation Act, 1987 or
from the provisions of any other law.
2. The Government's main obligations in terms of the agreement
of lease.
2.1 The Government undertook to construct certain elements
of a bulk infrastructure for the reserves in accordance with
acceptable engineering standards. These elements consisted of
main access roads within the reserves as well as roads from the
perimeter to adjacent national roadways, fences along the
perimeter of the reserves, main storage dams, viewing roads which were to be agreed to, gate houses and entrance gates.
The Government obtained a loan of R2 713 000 from the
18
Development Bank of Southern Africa for this purpose. The
Government furthermore undertook to maintain such infrastructure.
2.2 The Government undertook to attend to the maintenance
of law and order within the reserves including the
administration and observance of the provisions of the Nature
Conservation Act, 1987, to re-settle all persons then settled on
farms in the areas incorporated by the reserves and to ensure
the prevention of poaching and trespassing. 3. The rental and other sources of income.
3.1 The respondent undertook to pay to the Government an
amount equal to 5% (called a head tax) of all income received
from the commercial realisation of wild animals in the reserves
including the sale price of all meat and skins sold, the cost
19
charged to hunters for animals hunted and game trophies sold
as well as all live animals sold.
3.2 The respondent undertook to pay rental to the
Government in a sum of R10 000 per annum for a period of
5 years and thereafter either R10 000 (or such other figure that
the parties agreed upon) or 2% of any excess of income over
expenditure derived from the conduct of curio shops, game
meat processing factories, safari lodges, restaurants and hotels,
guided tours, hunting and photographic safaris, the
development of handicraft industries and the sale of surplus
game dead or alive whichever was the greater. For purposes of
calculating the aforesaid excess income, the commission earned
by the respondent on gate entrance fees collected on behalf of
the Government was to be deemed not to be income from the
20
aforementioned sources and the head tax was to be deemed to
be an expense.
3.3 The Government could at its own expense and for its
own account collect revenue from the issuing of hunting
licences and from 10 holiday chalets which it could erect on
the Double Drift Game Reserve as a public amenity.
The respondent obtained the right to occupy the reserves
and, subject to the terms of the Act to conduct a substantial
commercial enterprise thereon. It specifically agreed to assume
responsibility for the management and maintenance of the reserves,
to exercise control over the reserves and to attend to various aspects
of a developmental nature.
In the judgment of Plewman JA he comes to the
conclusion that the Government did not abdicate its authority to
21
manage the reserves. He states that the provisions of clauses 4, 5, 6,
13 and 19 all suggest that the government was not intending to wash
its hands of the obligation to manage the reserves and that clause
22.1 puts this beyond doubt. In my judgment an analysis of these
clauses do not support this conclusion.
Clause 4.2.2 did place a limitation on the respondent's right to introduce animals into the reserves and clause 4.2.4 placed
a limitation on the number of cattle that the respondent could
maintain in the reserves.
Clause 5 deals with the Government's obligation in
regard to the provision of a bulk infrastructure. It also deals with the
Government's undertaking to attend to the maintenance of law and
order within the reserves, the observance of the provisions of the Act
and the prevention of poaching and trespassing. These matters are
22
matters that should be attended to by the Government even in respect
of private property. In addition Clause 5 contains an undertaking by the Government to re-settle all persons at the time settled on
farms
in the areas incorporated by the reserves. This was no more than an
undertaking to give vacant possession.
Clause 6.2.2 required the respondent to manage and
utilise wild animals in accordance with acceptable standards which
were to be recorded in Game and Resource Management Plans. No
agreement was required in this regard. In terms of 6.2.6 the
development of tourism in the form of game viewing and
photographic safaris was to be done in accordance with Resource
Management Plans which were to be agreed between the parties.
Clause 13.3 placed some restriction on the introduction
into the reserve, by the respondent, of further game.
23
Clause 19 is the cancellation clause. In my view this
clause provides confirmation that the respondent and not the Government was, from the commencement of the lease, to manage
the reserves. The clause provided that the Government would be
entitled to cancel the agreement inter alia where the respondent failed
to maintain the reserves and the public facilities in accordance with
acceptable standards and where the respondent failed to observe
acceptable standards of wild game management. It furthermore provided that the respondent would be entitled to cancel the
agreement inter alia where there existed a state of social, civil or
political disorder or lawlessness which rendered the continued
management of the reserves impossible, where by operation of law or executive Government action, effective management and control
of the reserves became impossible and where the Government failed
24
to provide or maintain essential infrastructural services which
rendered the continued management of the reserves impossible or
severely prejudiced the respondent in the management of the
reserves.
Clause 22.1 is the clause that provides that nothing in the
agreement should be construed as exempting the respondent from the
provisions of the Act or from the provisions of any other laws. This
clause required no more than that, to the extent that the agreement empowered the respodent to control, maintain, manage or develop
the
reserves, it should exercise that power lawfully.
Subject to the aforesaid limitations the respondent, as
lessee, had the right to use and enjoy the property and the
Government, as lessor, was under an obligation to refrain from doing
anything which would disturb the respondent in its use and
25
enjoyment. The right to use and enjoy the property included the
right to control and manage the property.
The limitations placed on the respondent's power to
manage did not alter the fact that it was the respondent, and not the
Department, which was, in terms of the agreement, going to manage
the reserves. This fact is recognised by the respondent itself in its
particulars of claim. It alleges in its main claim for damages that it
would initially have made a profit of R2 000 000 per annum and that
it would have made a total profit in an amount of R755 010 702
from the running and administration of the reserves in terms of the
agreement, had it been allowed to run and administer the reserves for
the remaining period of the lease.
The parties purported to vest the Department's authority
to manage the reserves in the respondent. The Department had no
26
authority to do so. Its attempt to do so amounts to an abdication of
its authority to manage the reserves. The agreement of lease, is
therefore invalid.
I would accordingly have upheld the appeal with costs
and have substituted for the order of the court a quo an order dismissing the plaintiffs claim with costs.
P E STREICHER
ACTING JUDGE OF APPEAL