Magnificent Mile Trading 30 (Pty) Limited v Celliers NO.

• Jurisdiction: South Africa
• Judge: Cameron J, Froneman J, Jafta J and Khampepe J and Ledwaba AJ, Madlanga J and Mhlantla J and Nicholls AJ and Theron J
• Judgment Date: 09 October 2019
• Docket Number: CCT 157/18
• Court: Constitutional Court
• Hearing Date: 07 March 2019
• Citation: 2019 JDR 1959 (CC)

Madlanga J (Cameron J, Froneman J, Khampepe J, Ledwaba AJ, Mhlantla J, Nicholls AJ, Theron J concurring):

Introduction:

[1]

Yet again the Mineral and Petroleum Resources Development Act [1] (MPRDA) is before us for the adjudication of some aspects. [2] The first aspect concerns the transmissibility – after the death of the holder – of a right [3] arising from the MPRDA. The second concerns the applicability of the Oudekraal [4] / Kirland [5] rule (Oudekraal rule) to the award of a prospecting right contrary to the right enjoyed by the holder of an unused old order right under item 8 of Schedule II to the MPRDA. [6] This rule says an unlawful administrative act exists in fact and may give rise to legal consequences for as long as it has not been set aside. [7]

2019 JDR 1959 p5

Madlanga J (Cameron J, Froneman J, Khampepe J, Ledwaba AJ, Mhlantla J, Nicholls AJ, Theron J concurring)

[2]

This matter comes before us as an application for leave to appeal against a judgment of the Supreme Court of Appeal that upheld an appeal from a judgment of the High Court of South Africa, Gauteng Division, Pretoria (High Court).

Background:

[3]

I will not rehash the objects and impact of the MPRDA with regard to the holding and exploitation of mineral resources in the Republic of South Africa. They have been dealt with sufficiently by this Court [8] and the Supreme Court of Appeal. [9] Suffice it to pay attention to the MPRDA's abolition of the sterilisation of mineral rights which Mogoeng CJ described in Agri SA as "the entitlement not to sell or exploit minerals". [10]

[4]

At the centre of this litigation are the provisions of item 8 of Schedule II to the MPRDA. These provisions are applicable to unused old order rights. Item 1(ix) of Schedule II defines an unused old order right as "any right, entitlement, permit or licence listed in Table 3 to [Schedule II to the MPRDA] in respect of which no prospecting or mining was being conducted immediately before [the MPRDA] took effect". [11] At the time relevant to this matter, item 8 of Schedule II to the MPRDA provided:

"(1)

Any unused old order right in force immediately before this Act took effect, continues in force, subject to the terms and conditions under which it was granted, acquired or issued or was deemed to have been granted or issued for a period not exceeding one year from the date on which this Act took effect. . .

2019 JDR 1959 p6

Madlanga J (Cameron J, Froneman J, Khampepe J, Ledwaba AJ, Mhlantla J, Nicholls AJ, Theron J concurring)

(2)

The holder of an unused old order right has the exclusive right to apply for a prospecting right or a mining right, as the case may be, in terms of this Act within the period referred to in subitem (1).

(3)

An unused old order right in respect of which an application has been lodged within the period referred to in subitem (1) remains valid until such time as the application for a prospecting right or mining right, as the case may be, is granted and dealt with in terms of this Act or is refused.

(4)

Subject to subitems (2) and (3), an unused old order right ceases to exist upon the expiry of the period contemplated in subitem (1)."

[5]

The MPRDA took effect on 1 May 2004. That means the exclusive right under item 8(2) of Schedule II to apply for a prospecting right or a mining right had to be exercised at the latest by 30 April 2005. When the MPRDA came into operation, the late Mr Nicolaas Petrus Gouws held an unused old order right in respect of a coal deposit on his farm Driefontein, Middelburg, Mpumalanga. On 29 April 2005, a day before the deadline, he made an application in terms of section 16(1) of the MPRDA for the conversion of this right to a prospecting right. On 3 May 2005, a mere three days after the deadline, the applicant, Magnificent Mile Trading 30 (Pty) Ltd (Magnificent Mile), applied in terms of the same section for a prospecting right in respect of the coal deposit on Mr Gouws' farm.

[6]

Here is how Magnificent Mile appears to have become aware of the coal deposit. In her answering affidavit before the High Court, Mrs Josephine Terblanche Gouws, the widow of Mr Gouws, explained that Mr Gouws had requested his son-in-law to find a reputable company that would advise and assist him in applying for a prospecting right. To this end, the son-in-law approached a Mr Martin Pretorius, a director of Magnificent Mile. The son-in-law shared a confidential geological report Mr Gouws had obtained some years previously and which indicated that there was a substantial coal deposit on Mr Gouws' farm. In the end, instead of Magnificent Mile, Mr Gouws engaged for purposes of professional assistance another company, Benicon Earthworks and Mining Services (Pty) Ltd. It is quite remarkable that Magnificent

2019 JDR 1959 p7

Madlanga J (Cameron J, Froneman J, Khampepe J, Ledwaba AJ, Mhlantla J, Nicholls AJ, Theron J concurring)

Mile was ready with and lodged its own application within three days after the 30 April 2005 deadline.

[7]

The Department of Mineral Resources accepted Mr Gouws' application in terms of section 16(2) of the MPRDA on 20 May 2005, and Magnificent Mile's on 31 May 2005. Mr Gouws died on 7 November 2005 before a decision had been taken on his application.

[8]

From then onwards "a veritable comedy of official errors" [12] commenced. In the High Court judgment Fabricius J says "[w]hatever could go wrong with the applications . . . did go wrong". [13] On 13 December 2005 the Department purported to grant Mr Gouws a prospecting right he had not applied for. This was in respect of the farm Driefontein, Wakkerstroom, Mpumalanga instead of Driefontein, Middelburg, Mpumalanga, the farm he owned before his death. On 16 January 2006 it granted Magnificent Mile a prospecting right in respect of Mr Gouws' farm.

[9]

An attempt by Magnificent Mile to conduct prospecting operations did not achieve much as the late Mr Gouws' family resisted it. On 18 November 2009 Magnificent Mile applied for a mining right in terms of section 22(1) of the MPRDA.

[10]

Next came efforts by the Department to undo the mess it had made. On 9 November 2010 it purported to amend the prospecting right it had granted to Mr Gouws by: changing "Wakkerstroom" to "Witbank"; [14] and substituting as the grantee of this prospecting right "the Beneficiary, Late Estate Nicolaas Petrus Gouws". Instead of making the "amendment" applicable to the whole of Mr Gouws'

2019 JDR 1959 p8

Madlanga J (Cameron J, Froneman J, Khampepe J, Ledwaba AJ, Mhlantla J, Nicholls AJ, Theron J concurring)

farm, it made it in respect of only one of the two deeds of transfer under which Mr Gouws owned the farm. This, despite the fact that the application by Mr Gouws was in respect of both deeds of transfer and thus the whole farm.

[11]

Pursuant to an application in terms of section 11 of the MPRDA by Mrs Gouws for a cession of the prospecting right, on 2 November 2011 the Department registered the prospecting right in the name of Mrs Gouws in respect of the one portion of Driefontein, Middelburg held under one of the two deeds of transfer. Subsequent to this, Magnificent Mile appealed internally against the award of the prospecting right to the Gouwses. Mrs Gouws opposed the appeal which is yet to be decided. On 10 April 2013 the Department refused Magnificent Mile's application for a mining right on the basis that the right applied for by Magnificent Mile "comprise[d] of land in respect of which rights for the same minerals ha[d] been granted in respect of an application received prior to [Magnificent Mile's] application in this regard". This was an obvious reference to the application by Mr Gouws for a prospecting right that had been lodged before Magnificent Mile's.

[12]

Magnificent Mile brought a review application at the High Court against the following people: the Minister of Mineral Resources; the Director-General: Department of Mineral Resources; the Deputy Director-General, Mineral Regulation: Department of Mineral Resources; [15] Ms Anneke Denise Le Roux, the executor of the estate of Mr Gouws; [16] and Mrs Gouws who has since been substituted by Ms Charmaine Celliers, the executor of her estate. [17] Mrs Gouws is survived by her two daughters who are her heirs. Only Mrs Gouws opposed the application. Magnificent Mile's original and amended notice of motion sought extensive relief. For present

2019 JDR 1959 p9

Madlanga J (Cameron J, Froneman J, Khampepe J, Ledwaba AJ, Mhlantla J, Nicholls AJ, Theron J concurring)

purposes I highlight only that the amended notice of motion asked for: the setting aside of the award of rights that had been made in favour of the Gouwses; [18] the refusal of the application for a prospecting right by Mr Gouws in respect of Driefontein, Middelburg; the setting aside of the decision to refuse Magnificent Mile's application for a mining right; and the substitution for this refusal decision of a decision granting the mining right.

[13]

Magnificent Mile contended that the right that Mr Gouws enjoyed terminated when he died with the result that no other right could have been granted to any other person pursuant to the application for a prospecting right he had lodged. In other words, Mr Gouws' right was not transmissible to his sole heir, Mrs Gouws. It also contended that the relief relating to the mining right flowed as a matter of course from the prospecting right which it had already been granted.

[14]

Mrs Gouws opposed the first prong of the application on the basis that Mr Gouws' right was transmissible first to the executor and ultimately to her, the sole heir. As for the rest, her opposition was that Magnificent Mile was precluded from lodging an application for a prospecting right before Mr Gouws' application had been decided. She added that, as a result of this preclusion, Magnificent Mile was not entitled to...