Government Gazette Number 30011 Dated the 26Th of June 2007

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ALL SOUTH AFRICAN LAW REPORTS 2007 VOLUME 2 (JUNE) NO 2

ANGLO OPERATIONS LTD vs SANDHURST ESTATES (PTY) LTD [2007] 2All SA 567 (SCA)

The parties herein were embroiled in a dispute regarding mineral rights. The respondent owned a farm over which the appellant held all rights to coal by virtue of notarial cession of mineral rights. In the High Court, the appellant had applied for permission to conduct open cast or strip mining – as opposed to underground mining, the court upheld a number of objections raised by the respondent, and refused the application.

The appellant’s title as holder of mineral rights arose from two cessions. The cessions did not expressly forbid or provide for open cast mining.

In terms of clause 1 of the cession the appellant were afforded “all such rights as may be needed for proper mining and exploiting the coal in, on and under all of the said property”. In spite of this wide wording it is apparent, that neither clause 1, nor any of the other clause of the cession expressly authorised open cast mining. The converse is equally apparent. Open cast mining is not expressly excluded by any term of the cession.

The issue of law that arises turns on the following question: what is the default position in common law where open cast mining is not expressly regulated by the grant of mineral rights?

The court made the following observations:

Paragraph 16: “The fundamental principle of our law, on the other hand, is that the owner of land is the owner not only of the surface, but of everything legally adherent thereto and also of everything above and below the surface.”

Paragraph 19: “The same can, in my view, be said about the exercise of mineral rights. Because minerals are by their nature usually found under the surface of the land, the right granted to the holder to extract and remove the minerals can generally only be exercised by excavating the land. Of necessity this involves damage to the surface of the land and a curtailment or even a deprivation of the rights of use normally enjoyed by the owner of the surface.”

Paragraph 20: “In consequence, as in the case of a servitude, the exercise of mineral rights will almost inevitably lead to a conflict between the right of the owner to maintain the surface and the mineral rights holder to extract the minerals underneath and”

Paragraph 21: “In accordance with the principles applicable to servitudes, the owner of a servient property is bound to allow the holder to do whatever is reasonably necessary for the proper exercise of his rights. The holder of the servitude is in turn bound to exercise his rights civiliter modo, that is, reasonably viewed, with as much possible consideration and with the least possible inconvenience to the servient property and its owner.”

The court having considered the affidavits concluded as follows: “ ... the applicant has, in my view, established that the great deal of coal would be left in the ground if extraction were to be limited to underground mining in that part of the Kriel South Coal Field, where the property is situated. It is therefore apparent that with reference to that part of the coal field, viewed as a whole, open cast mining can be described as reasonably necessary” .... “This, I believe, results from the principle derived from the law of servitudes, that the mineral rights holder is entitled to do anything which is reasonably necessary to remove the minerals from the property.”

The appeal was allowed.

CHAIRPERSON’S ASSOCIATION vs MINISTER OF ARTS AND CULTURE AND OTHERS [2007] 2 All SA 582 (SCA)

Pursuant to the first respondent’s approval of the change of the name of the town Louis Trichardt to Makhado, the appellant brought an application in the High Court, for the review and setting aside of the decision. The application was dismissed, leading to the present appeal.

Paragraph 46 of the judgment reads as follows: “The guideline is that before a proposal for a name change, even one of a transformatory nature, is considered, adequate consultation with local communities and other stakeholders must take place. In all the circumstances I think it is clear that this guideline should have been implemented in the case of the Louis Trichardt name change. It is clear form the summary of the facts set out above that such consultation did not take place. Apart from the short notice given of meetings to be held by ward councilors, the holding of the meeting advertised for 7 February 2002 on 6 February 2002, the refusal to hold back the process during the discussions with the chamber of commerce and the statement by the mayor that “we consult politicians, not Chambers”, there was the assertion by the mayor that the councilor for ward one had not done her job: which amounted to an admission that her ward (which it will be recalled comprises about 50% of the total jurisdictional area of the municipality including the town of Louis Trichardt West of the National Road, all the businesses in that part of the town, the Buys Community and a number of rural communities) was not consulted. Whether it was the counselor’s fault or not is neither here nor there; the failure to consult is not disputed.”

The appeal was allowed with cost.

NEL AND OTHERS vs METEQUITY LTD AND ANOTHER [2007] 2 All SA 602 (SCA)

The appellants had acted as sureties for the debts of a company incurred in favour of the respondents (acting in their capacities as trustees of the trust). Their liability as sureties extended to the principal debtor’s judgment debts owing to the respondents.

In June 1992, the respondents obtained judgment against the principal debtor, in respect of a loan secured by a mortgage bond registered in favour of the respondent. The property in respect of which the mortgage bond was registered was sold in execution, but the proceeds of the sale covered only part of the debt. The action against the appellants in the court a quo was for the payment of the balance of the judgment debt owing by the principal debtor.

On appeal, the main argument advanced by the appellants was that the trust was not a valid one as there was an identity of interests between the trustees (the respondent) and the beneficiary (the first respondent).

Paragraph 11 of the judgment reads as follows: “A company has a legal personality separate from that of its shareholders. That separate personality may, however, in certain circumstances be disregarded by a court. The mere fact that a company has only one shareholder who is in full control of the company does however not constitutes a basis for disregarding its separate legal personality. The mere fact that two companies have the same shareholder and the same directors similarly does not constitute a basis for disregarding the separate legal personalities of the two companies” and

Paragraph 12: “The appellants could not point to any improper conduct in the establishment or use of the corporate respondents or in the conduct of their affairs. In the light of the fact that the corporate object of the two trustees is the same, the fact that they appointed the same nominee to carry out the trust and made use of the services of the same credit committee, is of no significance.”

The appeal was dismissed.

HAROUN vs GARLICK [2007] 2 All SA 627 (C)

The respondent had acquired ownership of a certain immovable property in 1978. In 1984, a sub-division of the property was approved. A year later, a portion of the property was transferred into the name of two trusts. The respondent remained the owner of the remainder of the property. In 1988, approval was granted for the remainder to be divided into two erven subject to the condition that one erf was consolidated with the erf which was now owned by the two trusts. The erf which then remained was sold to a third party who then sold it to the applicant.

The erf (Erf 9944) which was to be consolidated with the erf which was owned by the trusts was never consolidated, and was in fact placed in a certificate of registered title in the name of the respondent. The applicant sought an interdict preventing the respondent from alienating Erf 9944 and to transfer it to the trusts as was originally intended. The cause of the applicant’s complaint was the respondent’s intention of increasing the size of Erf 9944 to approximately 1000 square meters, which would violate the zoning regulations which required all erven to be not less than 4 000 square meters in size.

As to the question of locus standi the court held that the applicant as an owner of an adjoining erf has a direct and substantial interest in the compliance with and enforcement of the zoning scheme applicable to the properties in question. This right is reinforced by section 36 of the Land Use Planning Ordinance, 15 of 1985 which entails the recognition, inter alia, of the preservation of the natural and developed environment of the area and the existing rights of neighbours. Applicant is entitled to protect such interest against the unlawful use of and dealings with neighbouring land that would adversely affect his enjoyment, privacy, peace and tranquility.

And further applicant seeks to prevent the development and alienation of the illegal erf that would firstly detract from the existing character and amenities of the neighbourhood and secondly would absolve respondent from his obligation to comply with the condition of subdivision or for that matter with zoning scheme.

The court found that there was no merit in further preliminary points that were raised.

The application was granted.

NATIONAL DIRECTOR OF PUBLIC PROSECUTIONS vs GERBER AND ANOTHER [2007] 2 All SA 639 (W)

The National Director of Public Prosecutions sought a forfeiture order in terms of section 50 of the Prevention of Organised Crime Act 121 of 1998 (“POCA”). The order was sought in respect of the second respondent’s residential property.

During a raid on the property, the police had found a dagga plantation, together with bags of harvested dagga. The first respondent, who was the second respondent’s partner, was arrested and charged with dealing in dagga. The second respondent was not charged with any offence.

Section 50(1)(a) of the POCA obliges a High Court to make a forfeiture order if it finds, on a balance of probabilities, that the property concerned “is an instrumentality of an offence referred to in Schedule 1”. Dealing in dagga is such an offence. Section 52(1) empowers a court making a forfeiture order to exclude from its operation certain interests in the property.

In terms of section 52(2A), the second respondent had to state that she acquired the property legally and neither knew nor had reasonable grounds to suspect that the property was an instrumentality of the offence in question.

Paragraph 25 of the judgment reads as follows: “What did not arise in Simon Prophet (supra) and what has not arisen in any of the other decisions to which I was referred by Mr Pillay (who appeared for the applicant) in the course of his helpful argument, is whether “forfeiture is permissible when the owner has committed no wrong of any sort, whether intentional or negligent, active or acquiescent.”

Paragraph 26: “The second respondent’s version that the applicant was unable to refute, and which it did not seek to test by way of a reference to oral evidence, was that she found herself in a position where she was powerless to prevent the first respondent from pursuing his unlawful conduct by using her property as an instrumentality for his unlawful conduct. This assertion is supported by Kaplan’s report.”

The court in paragraph 27 inter alia concluded as follows: “I find that an unrestricted application of Chapter 6 of POCA and, in particular, section 52(2A)(a) would result in the second respondent, who committed no wrong of any sort, intentional or negligent, being arbitrarily deprived of her property.”

In the result the forfeiture application was dismissed.

UTHINGO MANAGEMENT (PTY) LTD vs MINISTER OF TRADE AND INDUSTRY AND OTHERS [2007] 2All SA 649 (T)

The applicant sought an order interdicting the second and third respondents from operating a national lottery in South Africa, pending the final determination of the applicant’s review application.

In the second part of the application, the applicant sought the review and setting aside of the first respondent’s award to a third party of a licence to conduct the national lottery.

The court having considered the evidence as contained in the affidavit inter alia made the following observations at page 665: “My view is that for the Minister of Trade and Industry to comply with the requirements of section 13(2)(b)(iv) and (3)(b) of the Lotteries Act mentioned above, must at least be aware or have had information about all the shareholders of the third respondent and all individual shareholders in the entities which constitute the third respondent. Failure to secure the said information will not enable the Minister to comply with the provisions of the Lotteries Act mentioned above.

The Lotteries Board, when advising the Minister as required by section 10(a) of the Lotteries Act perform an administrative act, as the Minister might act in accordance with their recommendation. Furthermore, when advising the Minister, the Board is bound to apply principles of openness and transparency. Failure on their part to consider all the relevant and material information prior to advising the Minister, is also subject to judicial review as provided for in section 6(2) of the Promotion of Administrative Justice Act.

There are serious shortcomings in the investigation the Board carried out and consequently in the memorandum they presented to the Minister. The Board did not investigate and their memorandum does not contain information (which is material to the Minister and their recommendation) about the individual shareholders of the entities that constitute both the applicant and the third respondent.

The Minister and the National Lotteries Board failed to consider or take into account mandatory and material information prescribed by section 13 of the Lotteries Act, namely the shareholders in the entities which constitute the applicant.

The decision to award the licence to Gidani was set aside.

All SOUTH AFRICAN LAW REPORTS 2007 VOLUME 3 (JULY) NO 1

P v P [2007] 3 All SA 9 (SCA)

Section 28(2) of the Constitution of the Republic of South Africa, 1996 provides that a child’s best interest are of paramount importance in every matter concerning the child.

Determining what custody arrangement will serve the best interests of the children in any particular case involves the High Court making a value judgment, based on its findings of fact, in the exercise of its inherent jurisdiction as the upper guardian of minor children. An appeal court will therefore not easily second-guess those findings and conclusions.

The principles applicable to the admissibility and evaluation of expert opinion evidence are well-established. …. As Chetty J pointed out: “It is clear … that expert opinion is not the mere conjecture, surmise or speculation of the expert: it is his judgment in a matter of fact. It is equally clear, that whilst in may cases a court needs and benefits from an expert’s opinion, the expert witness should not usurp the function of the court.

The trial judge did not question the specialized knowledge, training or experience of the various expert witnesses, but identified his main problem with such experts as being “(their) inability ... to draw a line between matters of fact and matters of value thereby distorting the judicial process by acting like judges.” For this reason he considered their evidence to have “no real probative value”.

BLUELILLIESBUSH DAIRY FARMING (PTY) LTD AND ANOTHER vs MINISTER OF AGRICULTURE AND OTHERS [2007] 3All SA 35 (SE)

The applicants were dairy farmers whose animals were affected by an outbreak of bovine tuberculosis in 2004. The animals were slaughtered immediately and the affected farms placed under quarantine. Compensation for the slaughtered animals was paid by the third respondent’s office applicants in terms of the Animal Diseases Act 35 of 1984. Such compensation was based upon the slaughter value of the affected animals. However, the applicants contended that they should have been paid the fair market value of the slaughtered animals on the basis that they were otherwise productive dairy cattle.

Section 19 of the Act focuses on the fixing of a fair amount as compensation. The regulations promulgated in terms of the act make reference to fair market value been paid as compensation. The compensation must be based upon a fair market value of the animal to be slaughtered. Any exercise of discretion which goes beyond these parameters must be regarded as ultra vires and unlawful.

The grounds of review are based on section 6 of the Promotion of Administrative Justice Act 3 of 2000. One of the grounds upon which an administrative action may be judicially reviewed is that the decision taken was materially influenced by an error of law. Another ground is that relevant considerations were not taken into account or not considered, and furthermore, that the decision was taken arbitrarily or capriciously. My findings that the second respondent by the implementation of a policy wrongly determined compensation and, furthermore, erred in law by not determining that the fair market value should be based on the value of productive dairy cattle, are covered by the grounds of review mentioned above. This court is therefore entitled to review and set aside the decision of the second respondent.