City of Cape Town v South African National Roads Agency Limited

• Jurisdiction: South Africa
• Judge: Binns-Ward J
• Judgment Date: 21 May 2013
• Docket Number: 6165/2012
• Court: Western Cape High Court, Cape Town
• Hearing Date: 21 May 2013
• Citation: 2013 JDR 1022 (WCC)

Binns-Ward J:

[1]

There are three applications before the court for adjudication at this stage. Each of them bears on or is related to a pending application in which the City of Cape Town ('the City') seeks the judicial review and setting aside of a series of decisions by the South African National Roads Agency Limited ('SANRAL' or 'the Agency') and the Ministers of Environmental Affairs and of Transport, respectively, directed at achieving the maintenance, upgrading and operation of certain sections of the national road system in the Western Cape

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Province by means of a road tolling operation. The papers in the review application are far from complete. The review application will thus be determined at some as yet undetermined future date and the evidence before the court that deals with the review might well give a materially different complexion to the case to that which is apparent on the papers before me at this stage. Although it has been necessary to some extent to consider the prospects of success that the City appears to have in the review application, it is appropriate to emphasise that this judgment should not be read as in any way pre-empting the judgment in the review application. .

[2]

The first application requiring determination at this stage concerns an application by the City to amend its notice of motion in the pending review application and for an order directing the disclosure, or discovery by the first, second and third respondents in those proceedings (SANRAL and the Ministers of Transport and of Environmental Affairs, respectively) of additional documentation. I shall hereinafter refer to the first application as 'the interlocutory application'. In the second application SANRAL seeks an order directing the City to file its supplementary founding papers, if any, in the review application within ten days. It is common ground that the second application will fall away automatically if the City is granted leave in the interlocutory application to amend its notice of motion in the review application. The third application is for an interim interdict pendente lite sought by the City to prohibit the undertaking of certain measures by the first respondent towards the implementation of a tolling operation on the affected sections of the national roads. That application will be referred to in this judgment as 'the interdict application'. It was agreed by counsel that I might have regard to the evidence in the applications holistically and collectively for the purposes of deciding any of them individually. In other words, I am permitted to have reference to the papers in the interlocutory application for the purposes of the interdict application and vice versa.

[3]

SANRAL is the only party opposing the interlocutory and interdict applications. The Ministers, who have indicated their intention to oppose the review application, have given notice that they will abide the judgment of the court in the matters to be determined in this judgment.

[4]

It is appropriate to begin by sketching the factual and statutory context in which the litigation has occurred. The history is a somewhat lengthy one; an outline will do.

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SANRAL is a juristic person incorporated as a company with a share capital in terms of the South African National Roads Agency Limited and National Roads Act, 7 of 1998 ('the SANRAL Act'). In terms of s 25 of the SANRAL Act, the Agency is 'within the framework of government policy, …responsible for, and [has the] power to perform, all strategic planning with regard to the South African national roads system, as well as the planning, design, construction, operation, management, control, maintenance and rehabilitation of national roads for the Republic, and is responsible for the financing of all those functions in accordance with its business and financial plan, so as to ensure that government's goals and policy objectives concerning national roads are achieved'.

[6]

Section 27 of the SANRAL Act [1] provides that SANRAL may, with the approval of the Minister of Transport, declare specified national roads, or portions thereof to be toll

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roads. A toll road is one in respect of which a toll or fee is levied on the users for availing of the utility. Section 28 of the SANRAL Act [2] permits SANRAL to enter into agreements with

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third parties to (amongst other matters) design, construct, operate and maintain national roads or portions thereof which are existing toll roads, or are declared as such. Such third parties become contractually entitled, subject to certain provisions of the SANRAL Act, and depending on the terms of the applicable agreement, to levy and collect toll either as an agent of SANRAL, or for their own account.

[7]

In 1998, SANRAL received a proposal from a development consortium which provided for the design, financing, construction and operation of certain portions of the N1 and N2 national roads in the vicinity of Cape Town in the Western Cape Province as toll roads. Implicit in the consortium's proposal, which was in the form of a 'build, operate and transfer' ('BOT') concept, [3] was the hope that SANRAL would ultimately conclude an agreement with it of the nature contemplated by s 28(1) of the SANRAL Act.

[8]

The construction and upgrade measures inherent in the project entailed activities listed in terms of the Environment Conservation Act 73 of 1989 ('the ECA') as activities which may have a substantially detrimental effect on the environment. The undertaking of such activities was subject to authorisation in terms of s 22 of the ECA. [4] The functionary statutorily appointed to determine whether to grant the required authorisation was the Minister of Environmental Affairs, alternatively, the so-called 'competent authority' referred to in s 22(1) of the ECA. SANRAL was sufficiently interested by the terms of the consortium's proposal to make application for the required environmental authorisation. [5] The application was submitted in May 2000. By that stage the National Environmental Management Act 107 of 1998 ('NEMA') had come into operation. Section 2 of NEMA states a set of principles by which decisions by all organs of state which could have a significant impact on the environment have to be guided. Those principles thus applied to any decision determining an application for environmental authorisation under the ECA.

[9]

The principles set out in s 2 of NEMA include the requirement that all development must be socially, environmentally and economically sustainable. Section 2(4) of NEMA

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states that determining whether any development is sustainable requires the consideration of all relevant factors including, amongst others, the following:

(i)

that a risk-averse and cautious approach is applied, which takes into account the limits of current knowledge about the consequences of decisions and actions; [6]

(ii)

that the social, economic and environmental impacts of activities, including disadvantages and benefits, must be considered, assessed and evaluated, and decisions must be appropriate in the light of such consideration, evaluation and assessment; [7] and

(iii)

that decisions must be taken in an open and transparent manner. [8]

[10]

In terms of the then applicable regulations ('the EIA regulations') [9] the determination of an application for environmental authorisation fell to be pronounced in a document called a 'record of decision'. On 30 September 2003, the competent authority, being the Acting Deputy Director-General of the then existing national Department of Environmental Affairs and Tourism ('DEAT'), [10] published a record of decision granting SANRAL the environmental authorisation it needed to undertake much of the construction work entailed in the project. The record of decision was forwarded to SANRAL under cover of an evenly dated letter from the competent authority, which contained the following qualification: 'Please note that all decisions with regard to the tolling of the road [are] the responsibility of the Department of Transport. In terms of the applicable legislation all issues related to the positioning of the toll plazas, other than the biophysical impacts, are also the responsibility of the Department of Transport.' The basis for the qualification was to be found in a 'working agreement' allegedly concluded earlier between SANRAL and DEAT concerning the practical application of the EIA regulations to SANRAL's activities in respect of the construction and upgrading of roads generally. The agreement allegedly contained a clause providing ' DEAT will only be concerned with the biophysical impacts associated with toll plaza's (sic). The toll principle is already covered by [the SANRAL Act]'. [11]

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[11]

The applicable statutory framework allowed for an appeal to the Minister of Environmental Affairs and Tourism against the competent authority's determination of the application for environmental authorisation. A number of interested parties, including the municipality of the City of Cape Town ('the City'), availed of the right to appeal.

[12]

In October 2005, the Minister announced his decision in respect of the appeals. The decision document recorded that the Minister had proceeded on the premise that tolling and the 'structuring of toll fees' were matters falling outside the ambit of the EIA regulations and thus outside his remit. He stated 'Socio-economic considerations associated with tolling are adequately considered in "the intent to toll" process. Any attempt by [DEAT] to address these issues through the EIA process would constitute unnecessary and unjustified duplication of effort between government departments'. He also recorded that '…matters raised in terms...