Sechaba v Kotze and others
[2007] 4 All SA 811 (NC)
Division:
Northern Cape Division
Date:
19 April 2007
Case Number:
3242/06
Before:
HJ Lacock J and CJ Olivier J
Sourced by:
JJ Schreuder
Summarised by:
D Harris
• Editor’s Summary • Cases Referred to • Judgment •
Mining and minerals – Prospecting rights – Access to land – Requirements – Mineral and Petroleum Resources Development Act 28 of 2002 sets up preliminary requirements which must be complied with before access is obtained.
Editor’s Summary
The applicant had been granted prospecting rights in terms of the Mineral and Petroleum Resources Development Act 28 of 2002 (“the Act”) by the third respondent. The rights were granted in respect of land owned by the first respondent. However, the latter refused to allow the applicant access to the farm with the result that it was unable to exercise its rights. The applicant therefore approached the Court for an order declaring that it was entitled to access to the farm.
Held – In enacting section 5(4)(c) of the Act, the legislature intended that, upon 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. The applicant had not complied with those preliminary requirements, and its application was therefore premature.
The Court then turned to examine a counter-application by the first respondent for the setting aside of applicant’s prospecting rights, and the granting of such rights to the first respondent. It was found that the granting of the applicant’s rights was void ab initio and the counter-application succeeded.
Notes
For Mining and minerals see:
· LAWSA First Reissue (Vol 18, paras 1–425)
Cases referred to in judgment
Absa Bank Bpk h/a Bankfin v Louw en Andere 1997 (3) SA 1085 (C)
826
Anglo Operations Ltd v Sandhurst Estates (Pty) Ltd 2007 (2) SA 363 (SCA)
816
Blue Circle Ltd v Valuation Appeal Board, Lichtenburg and another 1991 (2) SA 772 (A)
826
Chotabhai v Union Government (Minister of Justice) and Registrar of Asiatics 1911 AD 13
819
Director: Mineral Development, Gauteng Region and another v Save the Vaal Environment and others [1999] 2 All SA 381 (1999(2) SA 709) (SCA)
818
Douglas Hoërskool en ’n ander v Premier, Noord-Kaap en andere [1999] 4 All SA 146 (1999 (4) SA 1131) (NC)
826
JEM Motors Ltd v Boutle and another 1961 (2) SA 320 (N)
825
Page 812 of [2007] 4 All SA 811 (NC)
Le Grand v Carmelu (Pvt) Ltd 1980 (1) SA 240 (Z)
825
Maharaj and others v Rampersad 1964 (4) SA 638 (A)
826
Malokoane v Multilateral Motor Vehicle Accidents Fund [1998] 4 All SA 486 (1999 (1) SA 544) (SCA)
825
Matloga v Minister of Law and Order 1989 (3) SA 440 (B)
825
Mothuloe (Law Society, Transvaal, Intervening), Ex parte [1999] 2 All SA 342 (1996 (4) SA 1131) (T)
825
Mthembu v Letsela and another [2000] 3 All SA 219 (2000 (3) SA 867) (SCA)
824
New Modderfontein Gold Mining Co v Transvaal Provincial Administration 1919 AD 367
824
Ngani v Mbanje and another; Mbanje and another v Ngani 1988 (2) SA 649 (ZS)
824
Nkisimane and others v Santam Insurance Co Ltd 1978 (2) SA 430 (A)
825
Observatory Girls Primary School and Another v Head of Department of Education, Gauteng 2003 (4) SA 246 (W)
825
Ondombo Beleggings (Edms) Bpk v Minister of Mineral and Energy Affairs 1991 (4) SA 718 (AD)
830
Pio v Smith 1986 (3) SA 145 (ZH)
826
Plascon-Evans Paints Ltd v Van Riebeeck Paints 1984 (3) SA 623 (A)
835
R v Hepworth 1928 AD 265
825
Road Accident Fund v Mothupi [2000] 3 All SA 181 (2000 (4) SA 38) (SCA)
826
SA Eagle Insurance Co Ltd v Bavuma 1985 (3) SA 42 (A)
826
SABC Ltd v National Director of Public Prosecutions 2007 (1) SA 52 D (CC)
816
South African Co-operative Citrus Exchange Ltd v Director-General: Trade and Industry and another [1997] 2 All SA 321(1997 (3) SA 236) (SCA)
826
South African Hotels Ltd v Wienburg 1950 (1) SA 516 (C)
824
Transnet Ltd and Others v Chirwa 2007 (2) SA 198 (SCA)
823
Unlawful Occupiers, School Site v City of Johannesburg 2005 (4) SA 199 (SCA)
826
Van Niekerk and another v Favel and another 2006 (4) SA 548 (W)
825
Weenen Transitional Local Council v Van Dyk 2000 (4) BCLR 445 (2000 (3) SA 435) (N)
825
Judgment
LACOCK AND OLIVIER JJ:
[1]
Armed with a prospecting right to prospect for diamonds on a property described as the Remainder of the Farm Lanyon Vale 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 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 landowner 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:
Page 813 of [2007] 4 All SA 811 (NC)
“2.
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
3.
That it be declared that the applicant is entitled to immediately commence and carry on prospecting activities on the said farm.
4.
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.”
[1.1]
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 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:
“2.
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.
3.
That the Third and Fourth Respondents be ordered to receive the application for a prospecting permit filed by the First and Second Respondents on 26th 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 Minerals and Petroleum Resources Developments Act No. 28 of 2002 (‘the Act’).
4.
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.”
[2]
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”.
[3]
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
Page 814 of [2007] 4 All SA 811 (NC)
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
[4]
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.
[5]
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 (ie 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.
[6]
This application was approved by the DDG on 6 January 2005. On 24 March 2005 a prospecting right “granted in terms of section 17 of the Minerals and Petroleum Resources Development 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 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 24th 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 section 17(5) of the MPRDA.
Meepo relies on the Second Prospecting Right in support of the relief claimed in the main application.
Page 815 of [2007] 4 All SA 811 (NC)
[7]
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 section 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
[8]
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.
[8.1]
The following such changes appear to be apposite to these proceedings:
(a)
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 (section 3).
(b)
No provision is made for the compulsory compensation of a landowner for the surface use of its property for purposes of prospecting or mining for minerals except in cases of expropriation (Schedule 2 paragraph 12) or by means of arbitration (section 54).
(c)
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) ).
(d)
The prevalence of State power of control over the mineral resources of the Republic and the concomitant ousting of the (mineral) rights of the landowner and/or the holder of mineral rights (section 3(2) ).
[8.2]
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 landowner. All these rights are core rights enshrined in the Bill of Rights (see sections 24 and 25 of the Constitution of the Republic of South Africa, 1996).
[8.3]
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
Page 816 of [2007] 4 All SA 811 (NC)
and that of a landowner on the other hand. See SABC Ltd v National Director of Public Prosecutions 2007 (1) SA 52 (CC) at paragraph 126; Anglo Operations Ltd v Sandhurst Estates (Pty) Ltd 2007 (2) SA 363 (SCA) at 375F.
The main application
[9]
At the time when Meepo demanded access to the Farm, it was the holder of a prospecting right which right, in terms of section 17(5) of the MPRDA, “became effective” on 20 July 2005. In terms of section 5(3) of the MPRDA, Meepo was therefore prima facie entitled to exercise the rights mentioned in these sections, ie 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 landowner (Kotze) after it was granted a prospecting right and before demanding access to the Farm as required in section 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.
[10]
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 section 5(4) of the MPRDA, and more particularly whether section 5(4)(c) refers to a pre- or post-granting of a prospecting right consultation process. Section 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 landowner or lawful occupier of the land in question.”
[11]
Mr Danzfuss SC on behalf of Meepo submitted that the relevant provisions contained in section 5(4) of the Act are of a general nature and that, once an applicant has complied with the specific provisions of section 16, and more particularly section 16(4)(b) of the MPRDA, no further consultative process with a landowner is required by section 5(4)(c) of the Act.
Section 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–
Page 817 of [2007] 4 All SA 811 (NC)
(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 landowner 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:
[11.1]
Section 5 of the MPRDA forms part of Chapter 2 thereof, the heading of which reads “Fundamental Principles”, and the contents of section 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 section 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 landowner are contained in section 16(4)(b) of the Act, as well as where applicable, section 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.”