THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT

Not Reportable
Case No: 407/2020

In the matter between:
MAXRAE ESTATES (PTY) LTD                                               APPELLANT

and

THE MINISTER OF AGRICULTURE,
FORESTRY & FISHERIES                                     FIRST RESPONDENT

DELEGATE OF THE MINISTER OF
AGRICULTURE, FORESTRY & FISHERIES,
LAND USE & SOIL MANAGEMENT                 SECOND RESPONDENT

Neutral citation: Maxrae Estates (Pty) Ltd v The Minister of Agriculture,
Forestry and Fisheries & Another (case no 407/2020) [2021]
ZASCA 73 (09 June 2021)
Coram:
WALLIS, DAMBUZA and MAKGOKA JJA, GORVEN and
UNTERHALTER AJJA
Heard:

06 May 2021
Delivered:            This judgment was handed down electronically by circulation
to the parties' representatives by email, publication on the
Supreme Court of Appeal website and release to SAFLII. The

date and time for hand-down is deemed to be 10h00 on 09
June 2021.

Summary:  Administrative law – Review of administrative decision taken by the
Minister of Agriculture, Forestry and Fisheries – Failure by the Minister to apply
his mind to relevant factors – decision irrational – appeal upheld.

ORDER

On appeal from: Gauteng Division of the High Court, Pretoria (Mdalana-
Mayisela J sitting as court of first instance):

1.
The appeal is upheld with costs.
2.
The order of the high court is set aside and replaced with the following:

‘2.1
The decision of the first respondent dated 9 November 2018,
dismissing the appeal noted by the appellant in terms of the
Subdivision of Agricultural Land Act 70 of 1970, is reviewed
and set aside.
2.2
The appeal against the refusal of the subdivision application
is remitted to the first respondent for reconsideration
2.3
The respondents are ordered to pay the applicant’s costs of the
application jointly and severally’.

JUDGMENT

Dambuza JA (Wallis, Makgoka JJA, Gorven and Unterhalter AJJA
concurring)

Introduction
[1] The appellant, Maxrae Estates (Pty) Ltd, is the registered owner of a farm
located within the City of Tshwane Metropolitan Municipality (the Municipality).

In December 2016 the appellant submitted an application to the Department of
Agriculture, Forestry and Fisheries (the Department), seeking approval for the
subdivision of a farm and for establishment of a sectional title ownership scheme
on one of the subdivided portions. That application was rejected by the delegate1
of the Minister of the Department and an appeal to the Minister against that
refusal failed.  An application by the appellant to review and set aside the
Minister’s decision was dismissed by the Gauteng Division of the High Court,
Pretoria (high court, Mdalana-Mayisela J). This appeal, with the leave of the high
court, is against that order.

Background
[2] The appellant’s farm, known as Yzervarkfontein 194, lies to the North and
South of the R50 Provincial Road which links the City of Tshwane to the town
of Delmas within the Gauteng Province. One portion thereof, the proposed
Portion A, measuring 52.0708 hectares, lies to the South of the provincial road
and the remainder, measuring 487.1064 hectares, lies to the North of the road. On
the proposed Portion A there is a warehouse that receives fresh produce from
local farmers which is then packaged and distributed to different markets.

[3] During 2017 the appellant, through its agent, Metroplan Town Planners
and Urban Designers (Metroplan), applied to the Department for permission to
subdivide the farm and to establish a sectional title ownership scheme with two
sections on the proposed Portion A, where the warehouse is located. The
application was made in terms of ss 3 and 4 of the Subdivision of Agricultural
Land Act 70 of 1970 (the Act). The appellant advanced, as the reasons for the

1 In terms of s 8 of the Subdivision of Agricultural Land Act 70 of 1970 the Minister may delegate to any officer
in the Public Service any power conferred upon him by the Act, excluding the powers to make Regulations in
terms of s 10.

proposed subdivision, that it wished to expand the warehouse so as to cater for a
wider market. The operator of the warehouse needed to invest in the upgrading
of the warehouse, and therefore intended to establish a sectional title ownership
scheme to secure his financial interest over the warehouse portion and enable
further investment and the sourcing of funds to make the substantial capital
investment that the upgrade required. The extended warehouse would cover 4.2%
of the proposed Portion A, and the remaining 50 hectares of Portion A would be
retained as an agricultural unit.

[4] In anticipation of the subdivision and expansion of the warehouse, an
environmental authorisation had already been granted to the appellant by the
Gauteng Provincial Department of Agriculture and Rural Development in terms
of  the provisions of the National Environmental Management Act 107 of 1998
(NEMA) and the regulations promulgated in terms thereof.2 The Municipality had
also already issued a rezoning certificate3 in relation to the farm, in terms of which
land use thereon was approved for ‘Agriculture, Farm Stall subject to Schedule
10 and one dwelling house’.  These documents formed part of the appellant’s
application, together with an approval of the subdivision that had been granted
by the predecessor of the City of Tshwane Metropolitan Municipality, (the
Kungwini Local Municipality) in 2008.

[5] In a letter dated 9 November 2017, the second respondent, in her capacity
as the Minister’s delegate, dismissed the appellant’s application in the following
terms:

2 In terms of s 24 of NEMA the potential consequences or impact on the environment of certain listed activities
must be investigated, assessed and reported to the competent authority or the relevant minister in order to give
effect to the general objectives of integrated environmental management. The Environmental Authorisation dated
29 June 2017 authorised the activities listed under items numbers 24(ii) and 28(ii) of Listing Notice 1 of 2014.
3 Dated 27 July 2016.

‘The Department herewith informs you that in terms of section 4 of the Act, Act 70 of 1970, it
does not support your proposed subdivision and sectional title of the above-mentioned
property. The property is situated in an area where agricultural activities are taking place. The
proposed subdivision will perpetuate the creation of smaller portions in the area. The approval
will set a precedent for similar applications in the area. The warehouse should remain as part
of the entire farm as it is used for agricultural purposes.
The Department has a mandate to protect agricultural land for agricultural production to ensure
food security in the country.’

[6] In preparation for its appeal to the Minister against the decision of the
delegate, the appellant commissioned a specialist study by Index (Pty) Ltd
(Index), an entity with expertise in agriculture and land use, on the agricultural
potential of the farm. The Index report on the viability of agricultural activities
on the proposed portion A after the proposed subdivision of the farm, formed part
of the appeal documents.

[7] The appellant’s appeal to the Minister against the decision of his delegate
was unsuccessful. The reasons given by the Minister for dismissing the appeal
were that the proposed subdivision would:
‘2.2 . . . result in the creation of a small portion that will not be sustainable (‘viable (sic)) and
will not be resistant in the long run considering the impact of climate change.
2.3 The proposed portion A (52 Ha) will not be in line with Departmental Norms and Standards
for a sustainable viable unit under dryland nor for livestock production.
2.4 The proposed rezoning for sectional title will grant new land use rights whereas the existing
warehouse is considered as farming required infrastructures in the farming industry to support
the entire farm.
2.5 Although it was indicated that the current agricultural activities will still continue, the main
challenge is the sectional title on 2,5 hectares of the property. Such will result in the setting a

precedence for similar applications for sectional title in the area. Although [the] reason for
sectional title was to obtain finance from the bank in order to increase the fresh produce facility
which has become very small compared to the fresh produce that is received.’4

In the high court
[8] The appellant launched a review application in the high court, challenging
the dismissal of its appeal on the grounds that the Minister’s decision was
arbitrary and irrational. It contended that the Minister took into account irrelevant
factors and ignored relevant considerations, especially the Index report. The high
court dismissed the review application, having found that the Minister had
exercised his wide discretion properly, in line with the purpose of the Act, and
within the bounds of the law, by considering all information placed before him.
The court highlighted that the separation of powers doctrine required courts to be
slow to interfere with discretionary powers exercised by the executive.

On appeal
[9] The appellant contended that the Minister’s decision was arbitrary,
irrational and unreasonable, in that it was not founded on any evidence
demonstrating that the subdivision was inimical to the provisions of the Act and
would lead to the creation of an unviable agricultural land parcel. It was also
submitted that the decision was premised on irrelevant considerations and was
not rationally connected to the purpose for which the Minister’s authority was
given. According to the appellant, the subdivision would only formalise the
layout of the farm that was created by the partition effected by the R50 road. The

4 The last sentence seems to be incomplete. At the hearing of the appeal counsel who represented the Minister
could not shed any light as to this state of affairs.

appellant also maintained that the Minister ignored the fact that the farm was
surrounded by small farms which had been subdivided in terms of the Act.

[10] The Minister and his delegate (respondents) denied that the two portions
of the farm were operated independently of each other. They also contended that
the appellant’s failure to explain the role of Metroplan and Porcupine
Developments5 in the subdivision application created an impression that the real
intention behind the proposed subdivision was to sell the proposed portion A for
development of residential sectional title units. They denied that the Index report
was not considered.

The law
[11] Both parties accepted that the purpose of the Act is to prevent
fragmentation of agricultural land into small uneconomic units that might
potentially lead to rural communities being impoverished.6 Section 3(a) of the
Act prohibits the subdivision of agricultural land without the consent of the
Minister. An application for the Minister’s consent must be made by the owner
of the land concerned.7 Section 4 regulates the circumstances in which the
Minister’s written consent will be granted. In terms of s 4(2)(b) the Minister may,
in his discretion, refuse consent if he is satisfied that the land will not be used for
agricultural purposes or may, after consultation with the relevant provincial
administrator, grant conditional consent.

5 The latter is the entity which applied for the environmental authorization.
6 See Van der Bijl and Others v Louw and Another 1974 (2) SA 493 (C) at 499C-E.
7 Section 4(1)(a)(i) of the Act.  In terms of s 4(1)(b) 'owner' shall have the meaning assigned to it in s 102 of the
Deeds Registries Act, 1937 (Act 47 of 1937), ie, the registered owner.

[12] The parties were in agreement that in considering the appeal the Minister
exercised a wide discretion conferred upon him under s 4(2) of the Act, and that
his decision constituted administrative action. The appeal therefore amounted to
a rehearing of the matter which could take into account new evidence. It is trite
that the exercise of public power by the executive and other public functionaries
is subject to the principle of legality. Section 6(2) of the Promotion of
Administrative Justice Act 3 of 2000 (PAJA) enjoins the courts to review
administrative action where such was taken on the basis of irrelevant
considerations and where relevant factors were ignored. An administrative
decision must be rationally related to the purpose for which the power was given
to the administrator. As to the test on whether the exercise of public authority
passes constitutional muster, the Constitutional Court in Pharmaceutical
Manufacturers Association of South Africa and Another: In re Ex Parte President
of the Republic of South Africa and Others said:
‘The question whether a decision is rationally related to the purpose for which the power was
given calls for an objective enquiry. Otherwise a decision that, viewed objectively, is in fact
rational, might pass muster simply because the person who took it mistakenly and in good faith
believed it to be rational. Such a conclusion would  place
form
above
substance
and
undermine an important constitutional principle.’8

Discussion
[13] In support of its appeal to the Minister, the appellant filed a number of
documents, including the Index report, the environmental authorisation, and an
area map depicting the appellant’s farm together with surrounding farms.
Amongst other things, in the Index report, the type of soil on proposed portion A

8 Pharmaceutical Manufacturers Association of South Africa and Another: In re Ex Parte President of the
Republic of South Africa and Others (CCT31/99) [2000] ZACC 1; 2000 (2) SA 674 (CC) para 86.

was discussed, together with the reasons for the conclusion that the proposed
development would not result in an unviable land portion.

[14] According to the Index report, the agricultural potential of the land on the
northern part of the proposed Portion A was assessed as having moderate to
severe limitations with regard to the plants that could be grown thereon. The
report concluded that despite these limitations, with the enhancement of
irrigation, the low and medium potential land could be improved to high potential
land such that vegetables and peaches could be grown under drip irrigation, rather
than dryland farming. The Index report concluded that the subdivision would
contribute to ‘optimal utilization of agricultural land and a viable agricultural
practice’, and that the extension of the warehouse would benefit the local
agricultural industry.

[15] The Minister referred to none of the factors and conclusions set out in this
or any of the other reports or documents in his decision. Instead, his decision
comprised vague conclusions which included matters in respect of which there
was no evidence before him. His conclusion that ‘the creation of a small portion
will not be sustainable viable and will not be resistant in the long run considering
the impact of climate change’ was one such example. There was no evidence
before the Minister on the impact of the subdivision on climate change. Tellingly,
his conclusions were expressed in exactly the same terms (including the editorial
errors therein) as the submissions made to him in a memorandum prepared by the
Deputy Director of the Department, Ms Marubini, on 27 June 2018 in relation to
the appeal. In that memorandum, titled ‘General Submission’, the following was
recorded:

‘General submission prepared by the Department of Agriculture, Forestry and Fisheries (Ms
M C Marubini – Deputy Director: Land Use Administration) dated 27 June 2018 and signed
as recommended by the Minister of Agriculture, Forestry and Fisheries on 9 November 2018’.
(Emphasis supplied).

[16] One can only conclude that the Minister did not apply his mind to the
information and submissions made in support of the appellant’s appeal. Instead
he extracted the recommended conclusions from the submissions made to him by
the Deputy Director. He ignored the relevant evidence and analysis bearing upon
the appeal and took into account irrelevant matters in relation to which no
evidence served before him (for example, climate change).

[17] The high court was clearly alive to the fact that the Minister had to exercise
his broad discretion within the boundaries of the law. However, it seems to have
misconstrued what, in effect, that principle entailed in this case. The high court
reasoned, erroneously, that the court was precluded from examining the propriety
of the Minister’s decision because of the broad discretion which he exercised and
his expressed intention to advance the objectives of the Act. However, the wide
Ministerial discretion essentially entailed the consideration by him of the factors
that were relevant to the decision he was required to make. The exercise of a wide
discretion was no licence for disregarding those factors and making an arbitrary
decision. And the Minister could not use the doctrine of separation of powers to
shield such arbitrary decision from review by the court. Mere mention that the
Ministerial discretion has been exercised for the given purpose was not sufficient.
The court was constrained to intervene where the decision maker had ignored the
relevant factors and taken into account irrelevant considerations.

[18] Lastly, it bears mention that even though the decision was made by the
Minister, he did not depose to the answering affidavit filed in opposition to the
review application.  It was rather the Deputy Director, Ms Theresa Sebueng
Chipeta who deposed to that affidavit, on the basis that she had personal
knowledge of the contents thereof, and that she was duly authorised to do so.
There was no indication as to where her knowledge was derived from (as to the
bases on which the Minister made his decision). None of the departmental
documents in the record indicated that she had any involvement in either the
delegate's decision or that of the Minister.

[19] Furthermore, there was a disjuncture between the Minister’s decision as
communicated in his letter of 9 November 2018, and some of the reasons and
conclusions furnished in the answering affidavit. For example, in the answering
affidavit Ms Chipeta stated that the proposed subdivision and sectional title would
lead to building of residential and commercial establishments. She also contended
that a negative inference should be drawn from the appellant’s failure to explain
the role played by Metroplan and Porcupine Developments9 in the subdivision
application. All of this did not appear in the Minister’s decision. Clearly Ms
Chipeta had impermissibly included in the answering affidavit, factors to which
the Minister had had no regard when considering the appeal. Strictly speaking her
affidavit was inadmissible in the proceedings before the high court.

[20]  In light of the finding I make, that the Minister did not apply his mind to
the appeal, it is only proper that the Minister’s decision be set aside and the matter
be referred back to the Minister for due consideration.

9 Porcupine Developments had commissioned the Index report.

[21] In the result:
1.
The appeal is upheld with costs.
2.
The order of the high court is set aside and replaced with the following:

‘2.1
The decision of the first respondent dated 9 November 2018,
dismissing the appeal noted by the appellant in terms of the
Subdivision of Agricultural Land Act 70 of 1970, is reviewed
and set aside.
2.2
The appeal against the refusal of the subdivision application
is remitted to the first respondent for reconsideration.
2.3
The respondents are ordered to pay the applicant’s costs of the
application jointly and severally’.

______________________

N DAMBUZA

JUDGE OF APPEAL

Appearances:

For the Appellant:        M Majozi
Instructed by:                Ivan Pauw and Partners, Pretoria.
Phatshoane Henny Attorneys, Bloemfontein.

For the Respondents:    HC Janse Van Rensburg

Instructed by:
State Attorney, Pretoria.
State Attorney, Bloemfontein.
THE SUPREME COURT OF APPEAL OFSOUTH AFRICA

MEDIA SUMMARY OF JUDGMENT DELIVERED

FROM
The Registrar, Supreme Court of Appeal

DATE
09 JUNE 2021

STATUS

Immediate

Please note that the media summary is for the benefit of the media and does not form part of
the judgment.

Maxrae Estates (Pty) Ltd v The Minister of Agriculture, Forestry and Fisheries
& Another (case no 407/2020) [2021] ZASCA 73 (06 May 2021)

MEDIA STATEMENT

Today the Supreme Court of Appeal upheld an appeal against an order of the Gauteng
High Court, Pretoria, in terms of which an application brought by the appellant, Maxrae
Estates, for review of a decision by the Minister of Agriculture, Forestry and Fisheries,
refusing subdivision of Farm Yzervarkfontein 194,  was dismissed.

Maxrae Estates is the owner of the farm located within the City of Tshwane
Metropolitan Municipality. The farm lies to the North and South of the R50 Provincial
Road linking the City of Tshwane to the town of Delmas in the Gauteng Province.
Maxrae applied to the Department of Agriculture, Forestry and Fisheries for permission
to subdivide the farm and to establish a sectional title ownership scheme on it with two
sections on the southern portion as the proposed Portion A. On the proposed Portion
A there is a warehouse that receives fresh produce from local farmers for packaging
and distribution to different markets. The appellant wished to raise funds for extension
of the warehouse.

The application for permission to subdivide was rejected by the delegate of the Minister
mainly, on the ground that approval thereof would encourage establishment of sub-
economic farming units thus endangering food security. An appeal to the Minister
against that refusal failed for the same reason. The Minister was also of the view that
the smaller subdivided unit would ‘not be resistant in the long run considering the
impact of climate change’, and that Maxrae, in fact, intended to sell the farm for
establishment of residential sectional units.

The appellant brought an application in the high court challenging the decision of the
Minister on the grounds that the decision was irrational, unreasonable and arbitrary
because the Minister took into account irrelevant factors, ignored relevant factors, and
reached conclusions which were not supported by evidence. The high court dismissed
the review application. It found that the Minister had exercised his wide discretion
properly, in line with the purpose of the relevant laws and had considered all the
evidence placed before him.

In upholding the appeal against the decision of the high court, the SCA held that the
high court erred in its understanding of the Minister’s wide discretionary powers. It held
that wide Ministerial discretion was no licence for disregard of factors that were
relevant to the decision he was required to make.  The SCA found that the Minister
ignored the evidence and conclusions set out in the expert reports submitted by
Maxrae and instead made vague conclusions which included matters in respect of
which there was no evidence before him. Also, rather than making an independent
assessment of the information placed before him, the Minister extracted conclusions
made in a memorandum prepared for him to sign by the Deputy Director of the
department. The SCA ordered that the matter revert to the Minister for fresh
consideration of Maxrae’s appeal.

--- ends --