THE SUPREME COURT OF APPEAL OF SOUTH AFRICA

JUDGMENT
Case no: 278/10

NORGOLD INVESTMENTS (PTY) LTD

Appellant

and

THE MINISTER OF MINERALS AND ENERGY OF
First Respondent
THE REPUBLIC OF SOUTH AFRICA

THE DIRECTOR GENERAL, MINERAL

Second Respondent
REGULATION, DEPARTMENT OF MINERALS
AND ENERGY

THE ACTING REGIONAL MANAGER, LIMPOPO
Third Respondent
REGION, DEPARTMENT OF MINERALS AND
ENERGY

THE REGIONAL MANAGER, MPUMALANGA

Fourth Respondent
REGION, DEPARTMENT OF MINERALS AND
ENERGY

RHODIUM REEFS LIMITED

Fifth Respondent

THE DEPUTY DIRECTOR GENERAL: MINERAL
Sixth Respondent
REGULATION
______________________________________________________________

Neutral citation:
Norgold v The Minister of Minerals and Energy of the
Republic of South Africa (278/10) [2011] ZASCA 49 (30 March 2011)

CORAM:

Navsa, Brand, Ponnan, Snyders JJA and Plasket AJA

HEARD:

15 March 2011
DELIVERED:
30 March 2011

SUMMARY:
Conversion of prospecting right in terms of Mineral and Petroleum
Resources Development Act 28 of 2002 ─ application lodged at wrong Regional Office
─ reached ultimate decision-maker ─ not fatal ─ served statutory purpose ─ renewal of
prior permit in terms of the Minerals Act 50 of 1991 not formally done within prescribed
period ─ held not to preclude subsequent conversion ─ implementation of decision by
subordinate not impinging on its validity.
______________________________________________________________

______________________________________________________________
ORDER
______________________________________________________________

On appeal from:
North Gauteng High Court (Pretoria) (Phatudi J sitting as
court of first instance).
The appeal is dismissed and the appellant is ordered to pay the costs of all
the respondents, including, where applicable, the costs of two counsel.
______________________________________________________________
JUDGMENT
______________________________________________________________

NAVSA JA (Brand, Ponnan, Snyders JJA and Plasket AJA concurring)
[1] This appeal, directed against a decision of the North Gauteng High
Court (Phatudi J), is the culmination of a battle for prospecting rights over
Portion 1 and the Remainder of De Goedeverwachting 332KT, situated in the
Magisterial District of Sekhukhune in the province of Limpopo (the property).
The high court had dismissed an application by the appellant, Norgold
Investments (Pty) Limited (Norgold), for an order reviewing and setting aside
a decision of the fourth respondent, the Regional Manager, Mpumalanga,
Department of Minerals and Energy, alternatively, the sixth respondent, the
Deputy Director General, Mineral Regulation of the same department, to
convert ‘an old order prospecting right’1 of the fifth respondent, Rhodium
Reefs Limited (Rhodium), over the property, to one in terms of item 6 of
Schedule 2 of the Mineral and Petroleum Resources Development Act 28 of
2002 (the Act).2 Norgold had also sought an order directing the third
respondent, the Regional Manager, Limpopo (of the Department of Minerals
and Energy) to accept its application for a prospecting right over the property
in terms of s 16(1) of the Act. It also failed in that quest. Phatudi J ordered that
Norgold pay the costs of all the respondents, including the costs of two
counsel. The present appeal is before us with the leave of the court below.

1 Issued on 1 June 2001 in terms of s 6 of the repealed Minerals Act 50 of 1991. The permit
entitled Rhodium to prospect for precious metals and base minerals found in mineralogical
association with those precious metals.
2 This Act came into operation on 1 May 2004.

[2] The application in the court below grew like Topsy, from a narrow focus
to one that was dispersed and opportunistic. Norgold is a company that
engages, inter alia, in exploration for and exploitation of mineral resources in
South Africa. The initial foundation for the application in the court below, as
appears from the founding affidavit of Mr Stephen Ward, a director of Norgold,
was that the application by Rhodium in April 2005, for a conversion of its
existing prospecting permit, purportedly in terms of item 6 of Schedule 2 of the
Act (item 6), was lodged in Mpumalanga, whereas the appropriate region was
Limpopo, where the property is located.

[3] Norgold submitted that the provisions of the Act, which prescribe the
regions in which applications should be lodged, either in terms of s 16 or
item 6, are peremptory and that Rhodium’s failure to comply was fatal.
Additionally, Norgold contended that the Regional Manager, Mpumalanga
lacked statutory authority to grant prospecting rights. According to Norgold, its
application for prospecting rights over the property, in terms of s 16 of the Act,
lodged on 3 April 2007 with the Regional Manager, Limpopo in whose region
the property was located, met all the prescribed requirements. Consequently,
it was entitled to be granted the prospecting rights and not Rhodium.

[4] It is necessary at this stage to have regard to the provisions, both of
s 16(1) and item 6. Section 16(1) of the Act provides:
‘(1)
Any person who wishes to apply to the Minister for a prospecting right must lodge the
application─
(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.’ (My emphasis.)

[5] Item 6 reads as follows:
‘(1)
Subject to subitems (2) and (8), any old order prospecting right in force immediately
before this Act took effect continues in force for a period of two years  from the date on which
this Act took effect subject to the terms and conditions under which it was granted or issued
or was deemed to have been granted or issued.

(2)
A holder of an old order prospecting right must lodge the right for conversion within
the period referred to in subitem (1) at the office of the Regional Manager in whose region the
land in question is situated together with─
(a)
the prescribed particulars of the holder;
(b)
a sketch plan or diagram depicting the prospecting area for which the conversion is
required, which area may not be larger than the area for which he or she holds the old order
prospecting right;
(c)
the name of the mineral or group of minerals for which he or she holds the old order
prospecting right;
(d)
an affidavit verifying that the holder is conducting or has conducted prospecting
operations immediately before this Act took effect on the area of that land to which the
conversion relates and setting out the periods during which such prospecting operations were
conducted and the results thereof;
(e)
a statement setting out the period for which the prospecting right is required,
substantiated by a prospecting work programme;
(f)
information as to whether or not the old order prospecting right is encumbered by any
mortgage bond or other right registered at the Deeds Office or Mining Titles Office;
(g)
a statement setting out the terms and conditions which apply to the old order
prospecting right;
(h)
the original title deed in respect of the land to which the old order prospecting right
relates, or a certified copy thereof;
(i)
the original old order right or a certified copy thereof; and
(j)
all prospecting information and the results thereof to which the right relates.
(3)
The Minister must convert the old order prospecting right into a prospecting right if the
holder of the old order prospecting right─
(a)
complies with the requirement of subitem (2);
(b)
has conducted prospecting operations in respect of the right in question;
(c)
indicates that he or she will continue to conduct such prospecting operations upon the
conversion of such right;
(d)
has an approved environmental management programme; and
(e)
has paid the prescribed conversion fee.’ (My emphasis.)

[6] It is common cause that the first respondent, the Minister of Minerals
and Energy (the Minister), acting in terms of s 7 of the Act, determined by way
of GN R 564, GG 26319, 30 April 2004 the regions in terms of which the Act
would be administered. Furthermore, it is uncontested that the region in which
the property is located falls within Limpopo and not Mpumalanga.

[7] The basis upon which Norgold’s application was not accepted in
Limpopo by the Regional Manager, Mpumalanga was because the
prospecting rights for precious metals and base minerals had already been
granted to Rhodium.

[8] I turn to describe how Norgold’s case broadened. In a supplementary
affidavit, filed a few months after the application had been lodged and after
receipt of the record of proceedings pursuant to Uniform rule 53, Norgold,
noting that no documentation appeared therein, contended additionally that
the decisions sought to be impugned appeared to have been made arbitrarily
and without good cause. A supplementary record was later filed, containing all
the documents upon which the ultimate decision to grant prospecting rights
was based, putting paid to that part of Norgold’s case.

[9] Furthermore, Mr Ward, in his supplementary affidavit, referred to a
telefax he had received from the Department of Minerals and Energy, in which
appeared a list of delegations in terms of s 62 of the Minerals Act 50 of 1991
(the Minerals Act) that bears upon the Mpumalanga region. From the list of
delegations it appears that the Director of Mineral Development in Limpopo
had delegated the administration of the property to his Mpumalanga
counterpart. It was contended on behalf of Norgold that the delegation was
irrelevant and of no force and effect in relation to Rhodium’s application for a
conversion in terms of item 6. It was submitted that if indeed the Regional
Manager for Mpumalanga had relied on the delegation, that, in itself would
have rendered the acceptance of the application for the conversion ultra vires
and the subsequent decision to grant prospecting rights null and void. It was
contended that the delegation had not survived the appeal of the Minerals Act.

[10] Norgold also submitted that since the decision to convert Rhodium’s
old order rights had been taken by the sixth respondent, the Deputy Director
General Mineral Regulation, and not by the appropriate decision-maker, the
Minister, the decision by the former falls to be set aside.

[11] The case continued expanding. The facts set out in the next two
paragraphs emerged mainly from the answering affidavit opposed to on behalf
of the Minister and her officials and were seized upon by Norgold to found an
entirely new case in its replying and subsequent affidavits.

[12] Rhodium held mineral rights over the property, due initially to a notarial
cession of mineral rights dated 18 December 1989. Subsequently it held a
prospecting permit issued on 2 June 2000 in terms of s 6 of the Minerals Act.
That permit was valid until 1 June 2001. In terms of s 6 of the Minerals Act a
prospecting permit is issued for a period of 12 months or such longer period
as may be determined. Section 6(4) of that Act provided further that the holder
of a prospecting permit may, ‘from time to time, at least one month prior to the
expiration of the period for which such permit has been issued or renewed, on
written application to the Director: Mineral Development concerned and on
payment of the prescribed application fee, obtain a renewal of such permit for
a period of 12 months or such longer period as the Director: Mineral
Development may determine if [the Director] is satisfied with the manner in
which such holder rehabilitates surface disturbances caused by . . .
prospecting operations on the land concerned’.

[13] The last application for renewal by Rhodium, in terms of s 6 of the
Minerals Act, was made on 9 April 2003, well before the expiry date of the
permit it then held, which was 1 June 2003. Rhodium had thus applied within
the period specified in s 6(4) of the Minerals Act, referred to in the preceding
paragraph, and complied with all the conditions for renewal. Put differently,
Rhodium was entitled to have the permit renewed. Departmental officials
delayed in processing the application. In April 2004 a permit for prospecting
on the property was endorsed in favour of Rhodium for the year ending June
2005. Thus, for the period June 2003 up to April 2004 Rhodium continued
prospecting without a permit having been formally issued. As stated above,
Rhodium’s application for conversion, lodged in April 2005 was approved on
14 January 2006

[14] Having been apprised of these facts Norgold sought to take advantage
and establish an entirely new case in its replying affidavit. It contended that
the purported conversion in terms of the new statutory regime was of no force
and effect because the last valid permit had lapsed, notwithstanding the
Department’s irregular attempt to belatedly breathe life into it, and there could
consequently be no valid conversion in terms of item 6.

[15] Not yet content, Norgold continued to broaden its case against
Rhodium even further. In its replying affidavit, Norgold noted that for a
conversion to take place in terms of item 6, an applicant had to show that it
had in fact prospected on the property immediately before the Act took effect.
It submitted that Rhodium was unable to demonstrate that it had done so
when the Act came into operation. Put simply, Norgold’s case in this regard
was that a necessary jurisdictional fact for conversion was absent and on that
basis alone the conversion was liable to be set aside.3

[16] Norgold did not stop there. It also contended for the first time in its
replying affidavit that the property on which Rhodium was entitled to prospect
under the old order rights, differed from the property which is the subject of
the prospecting right granted in terms of the Act. That point was correctly not
persisted in before us.

[17] In response to the ever-expanding case that it was required to meet
Rhodium served a notice on Norgold, in terms of Uniform rule 6(11) read with
6(15), in which it indicated its intention to seek an order to strike out the new
allegations in the latter’s replying affidavit. Norgold in turn, filed an application
for an order that its founding affidavit be supplemented by a further affidavit by
Mr Ward. In what appears to be typical of an emerging new, but still limited,
category of careless litigants, the following is stated by Mr Ward:

3Item 6(2)(a), which appears in para 5 above, requires an applicant for conversion to supply
an affidavit verifying that he or she is conducting or has conducted prospecting operations
immediately before the Act took effect. Item 6(3)(b) obliges the Minister to convert the old
order prospecting rights if certain conditions are met, including the requirement that an
applicant ‘has conducted prospecting operations’ in respect of the right in question.

‘Were the fifth respondent to succeed in its application to strike out what it contends are “new”
allegations, the applicant would be entitled to withdraw its application, tender costs and then
bring a new application, this time including the “new” allegations sought to be struck out. That
can hardly be a sensible approach to litigation.’

[18] The attitude of offending litigants appears to be that their cases are
better served by playing the victim. In the affidavit sought to be admitted by
Norgold the new case made out in the replying affidavit is repeated with
added details. Furthermore, a new twist was added. It was contended that
Norgold’s application could only be rejected if its application had been in
respect of the same minerals and on the same land in respect of which
Rhodium had applied. It was submitted that Norgold had applied for
prospecting rights for platinum group metals, nickel, copper, gold, vanadium
and chrome whereas Rhodium in its conversion application had chosen to
apply for prospecting rights for platinum group metals, nickel and copper. This
last submission was without doubt rightly not persisted in before us. The idea
of two prospecting parties on the same property competing over what parts of
ore they might each have a right to ultimately mine for, is ludicrous.

[19] At one stage, the high court made an order following on which the
Minister and her officials filed a supplementary record, which in turn led to
Norgold filing a further affidavit, contemplated by the court order, repeating
the foundations of its case, including what was set out initially and the new
points subsequently taken. This led to further responses (contemplated in the
court order) by the Minister and his officials and by Rhodium.

[20] At the outset before us, counsel for Norgold was constrained to
concede that litigation ought not to be conducted in the manner described
above.

[21] Having dealt with how the litigation unfolded, it is necessary to have
regard to further necessary details to complete the background against which
this appeal has to be decided.

[22] In its answering affidavit, Rhodium set out its prospecting history on the
property. Prior to our new constitutional era, the property fell within the self-
governing territory of Lebowa. Rhodium’s operations on the property formed
part of a larger prospecting project known as the Kennedy’s Vale project,
extending over a number of farms, primarily in the Mpumalanga province. The
Kennedy’s Vale project appears to have commenced in the early 1980’s. The
development of a shaft system on the farm Kennedy’s Vale commenced in
1988. Later, it slowed down and was mothballed in October 1990 when the
platinum price fell and it was deemed uneconomical. The planning had
included parts of the property and another farm. In 1991 Impala Platinum
Holdings (Implats) acquired a 38 per cent interest in Barplats, Rhodium’s
holding company. This was later increased to an 83 per cent holding. In 2000,
Rhodium applied for prospecting permits in respect of all the farms comprising
the Kennedy’s Vale project. At that time, the property was within the Limpopo
province. The boundary between Limpopo and Mpumalanga ran along the
Steelpoort River, which constitutes the south-eastern boundary of the property
and Boschkloof, which was another farm that formed part of the Kennedy’s
Vale project. Boschkloof and the property were situated in Limpopo whereas
the remainder of the project farms fell within Mpumalanga.

[23] The applications for prospecting permits for Boschkloof and the
property were lodged in the Northern region. The prospecting permit for the
property was issued to Rhodium by the Director: Mineral Development of the
Northern region in Polokwane on 2 June 2000.  Rhodium applied for
prospecting permits for the other farms which were part of the Kennedy’s Vale
project in Mpumalanga and they were all issued in that province.

[24] Because it straddled two provinces the administration of the project
proved problematic, both from the perspective of Rhodium and the
Department of Minerals and Energy. Following on discussions in 2000,
involving the relevant high-ranking officials of the Department, the powers of
the Director of the Limpopo Province were delegated to his/her counterpart in
Mpumalanga, in terms of the then prevailing Minerals Act, which allowed a
delegation of this kind. Accordingly Rhodium was advised by the Department

to lodge its applications for renewal in Mpumalanga. Rhodium complied. It
was thus a case of administrative convenience that saw that practice
developing and that led to the application for conversion being lodged in
Mpumalanga, when the new statutory regime, which does not allow a
delegation of powers between regional managers, came into operation.

[25] Conceding that the application was lodged at the wrong office,
Rhodium’s case is that since it is the Minister or her delegatee who
adjudicates applications for conversions in terms of item 6, the region in which
the application is lodged is not crucial. The designated office is for
administrative convenience and serves a practical purpose, as the local office
is the one most closely linked with the prospecting area and can be assumed
to know the background and history and can be of assistance to the ultimate
decision maker, the Minister, should the need arise.

[26] It is to be noted that with the revision of municipal boundaries in 2005
the entire project area now falls within the Limpopo Province and the
Department has directed that when Rhodium is ready to proceed from
prospecting to mining it should lodge its application for mining rights in
Limpopo.

[27] Rhodium supplied the following relevant information in its answering
affidavit: It conducted prospecting on various parts of the project area in terms
of the prospecting permits and renewals. A three-dimensional seismic study
which was an extremely expensive item of expenditure was conducted in
respect of the project area. 116 holes were drilled totalling 78 300 metres with
a further 8 014 metres drilled from 455 deflections. The information gathered
and the assessments made enabled Rhodium to decide which parts of the
project area were viable and which not. The geological data was valuable and
of such a kind that it was classified in terms of the South African Code for the
Reporting of Exploration Results, Mineral Resources and Mineral Reserves as
inferred, indicated and measured minerals respectively. In respect of the
property the resources were reported on all three bases.

[28] In 2004 Rhodium’s ownership changed when Eastern Platinum
obtained the majority shareholding. Importantly, that transaction was
premised on the validity of the aforesaid prospecting rights, including those on
the property and on the strength of prospecting data gleaned during
prospecting operations.

[29] In its answering affidavit Rhodium stated unequivocally that after the
application for conversion had been granted in 2006 further prospecting was
conducted in various parts of the project area. During 2006 and early 2007 a
drilling program was undertaken, comprising 38 315 metres of diamond core
drilling over the northern part of the project area. That program cost in excess
of R30 million computed as follows: R27 million to drilling, R1,6 million to the
assay of drilling samples, R2,3 million to professional geological services,
R2,6 million to seismic re-interpretation and R500 000 to topographic
mapping. Approximately 9 000 metres were drilled on the property. The point
is made that the 3D modelling treated the Kennedy’s Vale project area as one
entity. No individual farm or area was treated as such in the modelling.
Documentation concerning ore reserves and resources was submitted to the
Toronto Stock Exchange. The documentation includes all quantified resources
for all the project farms and updated prior records as a result of prospecting
work done during the last 18 months.

[30] Mr Jacinto Ferreira Dos Santos Rocha, the Deputy Director-General,
Mineral Regulation is the sixth respondent. In his answering affidavit he is
adamant that he made the decision to convert Rhodium’s old order right in
terms of item 6. In doing so he acted in terms of a delegation of powers to him
by the Minister in terms of s 103 of the Act. He provided proof of the written
delegation.

[31] That then is the background against which the application was decided
in the court below. It is necessary to record that Rhodium had challenged
Norgold’s locus standi on the basis that at the time that the former applied to
convert its old order right the latter had no interest in whether it was awarded

as it had not yet itself applied for a prospecting permit. In oral argument
before us this point was rightly abandoned.

[32] The court below delivered a sparse judgment of 13 pages, the first two
of which contained the order sought by Norgold. Phatudi J began with the
primary substantive point raised by Norgold, namely, the effect of the
application for conversion being lodged at the wrong office. He found that the
delegation by the Regional Manager, Limpopo of his powers, to the
Mpumalanga Regional Manager, was ‘good for administration purposes that
ensure good control and management of the prospecting projects’ and held
that the Regional Manager, Mpumalanga ‘had jurisdiction to convert
Rhodium’s prospecting right’.

[33] The learned judge turned to the next question: whether a permit can be
renewed after it had expired? He answered it as follows in para 18:
‘Renewal simply means to make “new” of a thing that existed. A motor vehicle disc licence
normally displayed on the front windshield may expire without being noticed by the owner or
driver thereof. Such a licence may be renewed days or months after expiry date on the same
terms and conditions upon fulfilment of the requirements for renewal.’

[34] The learned judge went on to find that even though the word ‘must’ is
used in prescribing the office at which an application for conversion in terms
of item 6 should be lodged, it was ‘merely directory and not peremptory’. The
court below went on to find that the Regional Manager, Limpopo, correctly
applied the provisions of s 16 of the Act in refusing Norgold’s application for a
prospecting permit.

[35] Having decided the merits the court below nevertheless went on to
deal with the locus standi point, which had been raised in limine, and held that
Norgold lacked locus standi as it had no protectable interest at the time the
application for conversion had been made by Rhodium.

[36] Phatudi J found it unnecessary to deal with Rhodium’s application to
strike out the new matter in Norgold’s replying and further affidavits and ‘the

hearsay that flow with it’. Ultimately, the court below dismissed Norgold’s
application in the terms set out at the commencement of this judgment.

Conclusions

[37] Before us the appeal was restricted to three main issues which will be
dealt with in turn hereafter.

[38] The first question to be addressed is whether Rhodium’s failure to
lodge its application for conversion at the regional office in Limpopo rendered
the conversion in terms of item 6 ineffective? It is necessary to have regard to
the provisions of item 6 set out above and to consider the purpose they serve.

[39] Item 6(2) sets out the information and documentation that must
accompany an application for conversion. It is a checklist for the ultimate
designated decision-maker. Item 6(3) obliges the Minister to convert the old
order permit if certain prescribed requirements are met and if the further
conditions set out in item 6(3) are fulfilled. There can be no doubt that the
regional office serves as a post-box for receipt of the application and the
accompanying information. There is no discretion required to be exercised by
the Regional Manager. His or her task is to send it onwards to the ultimate
decision-maker. Item 6(2), insofar as it prescribes an office for receipt of the
application is for the Department’s administrative convenience, its ultimate
purpose being to see to it that the application reaches the designated
decision-maker.

[40] In my view the significance of the role of the Regional managers is
exaggerated by Norgold in its heads of argument. Regional managers can, of
course, be of assistance in verifying if the preconditions have been met, but
they are not the ultimate decision-maker, nor do they exercise a discretion in
that regard. Ironically, because of the history of administration of the project
area, the wrong office in this case, the Mpumalanga regional office, was best
placed to be of assistance.

[41] Section 103(1) of the Act provides for delegation and assignment in the
following terms:
‘The Minister may, subject to such conditions as he or she may impose, in writing delegate
any power conferred on him or her by or under this Act, except a power to make regulations
or deal with any appeal in terms of section 96, and may assign any duty so imposed upon him
or her to the Director-General, the Regional Manager or any officer.’

[42] The sixth respondent, Mr Dos Santos Rocha, is an officer as defined in
the Act.4 He has provided proof of the written delegation of powers by the
Minister. The application for conversion reached him and he made the
decision sought to be impugned.

[43] In Unlawful Occupiers, School Site v City of Johannesburg 5 this court
said the following:
‘[I]t is clear from the authorities that even where the formalities required by statute are
peremptory it is not every deviation from the literal prescription that is fatal. Even in that event,
the question remains whether, in spite of the defects, the object of the statutory provision has
been achieved (see eg Nkisimane and Others v Santam Insuarnce Co Ltd 1978 (2) SA 430
(A) at 433H-434B; Weenen Transitional Local Council v Van Dyk 2002 (4) SA 653 (SCA) in
para 13).’
See also Moela v Shoniwe 2005 (4) SA 357 (SCA) para 8.

[44] Even if one were to assume in favour of the appellant that item 6,
insofar as it prescribes the regional office at which the application for
conversion is to be lodged, is peremptory, the object of the Act was clearly
achieved. The correct decision-maker received the application for conversion
and made the decision. The first point must therefore be decided against the
appellant.

[45] I turn to the next question, namely, whether the untimely formal
renewal of the prior permit precluded its conversion in terms of item 6. The
motor car licence disc analogy by the court below was inapposite and

4 Officer is defined in s 1 of the Act as follows:
‘ “officer” means any officer of the Department appointed under the Public Service Act, 1994
(Proclamation No. 103 of 1994).’
5 Unlawful Occupiers, School Site v City of Johannesburg 2005 (4) SA 199 (SCA) para 22.

unhelpful. All the indications are that Rhodium met the conditions for renewal
prescribed by s 6(4) of the Minerals Act. It had applied within the prescribed
time and was entitled to a renewal. The laxity of departmental officials should
not be laid at its door. More fundamentally, the decision to renew the permit
was not taken on review. The decision to convert in terms of item 6 is
currently being challenged.

[46] The decision to renew existed as a fact and it had legal consequences
that cannot be overlooked. It cannot be suggested that the preconditions for
renewal were not substantively met. For years after the permit had been
renewed, Rhodium and others regulated their conduct and expended much
money, effort and resources based on its validity. Even assuming that the
decision to renew the permit was irregular, which is doubtful, Norgold’s
remedy was to have that decision set aside. In Oudekraal Estates (Pty) Ltd v
City of Cape Town6 the following is said:
‘The proper functioning of a modern State would be considerably compromised if all
administrative acts could be given effect to or ignored depending upon the view the subject
takes of the act in question.  No doubt it is for this reason that our law has always recognised
that even an unlawful administrative act is capable of producing legally valid consequences
for so long as the unlawful act is not set aside’.
See also Chairperson, Standing Tender Committee & others v JFE Sapela
Electronics (Pty) Ltd & others.7

[47] In Camps Bay Ratepayers’ Association & another v Harrison and the
Municipality of the City of Cape Town8 the Constitutional Court, referring to
the Oudekraal decision in this court with approval, said the following (para
62):
‘[A]dministrative decisions are often built on the supposition that previous decisions were
validly taken and unless that previous decision is challenged and set aside by a competent
court, its substantive validity is accepted as a fact. Whether or not it was indeed valid is of no
consequence. Applied to the present facts this means that the approval of the February 2005

6 Oudekraal Estates (Pty) Ltd v City of Cape Town 2004 (6) SA 222 (SCA) para 26.
7 Chairperson, Standing Tender Committee & others v JFE Sapela Electronics (Pty) Ltd &
others 2008 (2) SA 638 (SCA) para 28.
8 Camps Bay Ratepayers’ Association & another v Harrison and the Municipality of the City of
Cape Town 2011 (2) BCLR 121 (CC).

plans must be accepted as a fact. If the footprint issue was part of that approval, that decision
must likewise be accepted as a fact unless and until it is validly challenged and set aside.’

[48] In Harnaker v Minister of the Interior9 Corbett J, in dealing with the
effect of delay in setting aside administrative decisions, said the following:
‘In such a case the grounds of review might, for example be that the body had exceeded its
powers. If this ground were substantiated, the review would establish that the proceedings
and any act following therefrom were null and void. The application of the delay rule in such a
case would prevent the aggrieved party from establishing such nullity. In a sense delay would
therefore “validate” a nullity.’

[49] The Promotion of Administrative Justice Act 3 of 2000 prescribes a
time limit for bringing applications for judicial review of administrative action.10
This is in line with the common law delay rule. In Associated Institutions
Pension Fund & others v Van Zyl & others11 Brand JA said the following:
‘The raison d’être of the rule is said to be twofold. First, the failure to bring a review within a
reasonable time may cause prejudice to the respondent. Secondly, there is a public interest
element in the finality of administrative decisions and the exercise of administrative functions
(see eg Wolgroeiers Afslaers (Edms) Bpk v Munisipaliteit van Kaapstad 1978 (1) SA 13 (A) at
41).’

[50] As stated above, there appears to be no substantive basis for
challenging the renewal. Significantly, more than six years after the renewal in
terms of the repealed Minerals Act and after many developments and actions
in consequence, an application for review of that decision has still not been
brought. In my view for all the reasons aforesaid the second point must also
be decided against Norgold.

[51] I turn to the question whether there is any substance to Norgold’s
submission that Rhodium had not proved that it had conducted prospecting

9 Harnaker v Minister of the Interior 1965 (1) SA 372 (C) at 381B-C.
10 Section 7(1) provides that proceedings for judicial review must be instituted without
unreasonable delay and not later than 180 days after the date on which any proceedings
instituted in terms of internal remedies have been concluded or, where no such remedies
exist, the date on which the person concerned was informed of the administrative action,
became aware of it and the reasons for it or might reasonably have been expected to have
become aware of the action and the reasons.
11 Associated Institutions Pension Fund & others v Van Zyl & others 2005 (2) SA 302 (SCA)
para 46.

operations on the property and was thereby precluded from having its permit
converted. Allied to this is the submission on behalf of Norgold that the person
making the decision to convert the permit had been misled in this regard by
Rhodium ─ that it had in fact been prospecting at the time that the Act came
into operation or when the application for conversion was made. Before us, it
was submitted on behalf of Norgold, that there was at the very least a dispute
of fact that ought to be referred to oral evidence.

[52] As pointed out above, the answering affidavit was explicit and detailed
in its description of prospecting operations, both in respect of the Kennedy’s
Vale project as a whole and the property, designed to show its historical
involvement on the property and its entitlement to conduct prospecting
operations. The new case sought to be fashioned by Norgold in its replying
affidavit was based on an unsubstantiated denial that Rhodium had indeed
prospected on the farm. Norgold suggested that the documentation proved
exploration by Rhodium’s holding or associate companies and not by
Rhodium itself. Norgold contended that prospecting in relation to Kennedy’s
Vale project ought to be considered distinctly from prospecting on the
property. In its replying affidavit, Norgold quibbled with the statistics provided
by Rhodium in respect of the number of holes that were drilled in furtherance
of prospecting activity. It does not deny that a substantial amount of drilling
had been done. Much of Norgold’s case in respect of Rhodium’s failure to
conduct prospecting rights on the property is conjecture.

[53] The supplementary affidavits subsequently filed by Norgold were much
in the same vein. Reliance was also placed on unsworn statements and
hearsay evidence, the particulars of which it is not necessary to explore any
further.

[54] It is trite that all the necessary allegations upon which an applicant’s
case is based must appear in his or her founding affidavit. A court will not
usually allow an applicant to make out a completely different claim in his or
her replying affidavit. A court does have a discretion to allow new matter in a
replying affidavit and a distinction is usually drawn between a case in which

new material is first brought to light by the applicant who knew of it at the time
when his or her founding affidavit was prepared and a case in which facts
alleged in a respondent’s answering affidavit revealed the existence or
possible existence of a further ground for relief. In the latter case, a court
would more readily incline to allow new matter in a replying affidavit but would
then allow a fourth set of affidavits to be filed.12 In the present case, however,
Norgold had already filed a supplementary founding affidavit before
Rhodium’s answering affidavit, wherein reference was made to its prospecting
operations as part of its description of its historical involvement on the
property and with the Kennedy’s Vale project. It had the record on which the
decision to convert had been based and provided no explanation at all for why
it had not raised this issue in its first supplementary affidavit.

[55] The new case sought to be introduced by Norgold in its replying and
further affidavits is opportunistic and not based on any admissible evidence.
As stated above, it is conjecture and mainly based on vague assumptions and
hearsay evidence. The application to strike out those offending parts of the
replying affidavit which fall within this category ought to have been dealt with
by the court below in favour of Rhodium. In any event, Rhodium’s assertions
about its prospecting activities are unequivocal and substantiated and there is
nothing to suggest that its statements in this regard lack credibility or that
there is a genuine dispute of fact on this aspect. As stated above, the court
below, in my view, ought to have struck out the offending parts of Norgold’s
replying affidavit leaving Rhodium’s allegations about its prospecting activities
completely unchallenged. For the purposes of this appeal those allegations
are disregarded. It follows that this third question should also be decided in
Rhodium’s favour.

[56] Considering the conclusions set out above, it is clear that the Regional
Manager, Limpopo Province, was correct to reject Norgold’s application for a
prospecting permit. The Regional Manager is obliged to accept an application
for a prospecting permit in terms of s 16(2) of the Act only if the requirements

12 See D E van Loggerenberg, P B J Farlam Erasmus Superior Court Practice (2009) B1-45
to B1-46 and the authorities there cited.

of s 16(1) are met and if ‘no other person holds a prospecting right, mining
right, mining permit or retention permit for the same mineral and land’. Thus
the application to review a ‘decision’ by him is liable to be dismissed.

[57] Once it is accepted that the sixth respondent in fact made the decision
and did so on the basis of a proper delegation of powers it follows that the
Regional Manager, Mpumalanga fell out of the picture and served no other
purpose than receiving the application and sending it on for final decision. The
application to review the decision by him must also accordingly fail.

[58] It was submitted on behalf of Norgold that since the Regional Manager,
Mpumalanga signed the notarial prospecting right, he should be regarded as
the person who granted the conversion in terms of item 6 and not the sixth
respondent. In Nelson Mandela Metropolitan Municipality & others v
Greyvenhouw CC & others 2004 (2) SA 81 (SECLD) para 50 the following is
stated by Plasket AJ:
‘Non-discretionary decisions ─ such as giving effect to a discretionary decision ─ would not
defeat the purpose of the rule. Baxter states the position thus:
“Powers which involve little or no discretion ─ so-called “purely mechanical” powers ─ are
usually delegable. Since there is no choice involved nothing is lost if the power is exercised
by a subordinate. The same may be said where the person designated by the legislation
directs his personal attention to those elements of the power which involve discretion and
then, having made a decision, leaves its implementation to someone else.” ‘

[59] What is set out in the dictum in the preceding paragraph is precisely
what occurred in the present case. The sixth respondent took the decision to
convert and left it to the Regional Manager, Mpumalanga to implement. In any
event, it is not the document of implementation that was challenged but it is
the decision to convert the old order prospecting, which is the subject of the
present litigation.

[60] One final aspect requires brief attention. A more comprehensive
judgment by the court below might well have dissuaded the present appeal,
which it is clear is entirely without merit.

[61] In light of the above, the following order is made:
The appeal is dismissed and the appellant is ordered to pay the costs of all
the respondents, including, where applicable, the costs of two counsel.

_________________
M S NAVSA
JUDGE OF APPEAL

APPEARANCES:

For Appellant:

C D A Loxton SC

O Mooki

Instructed by

Werksmans Inc c/o Brazington Shepperson

& McConnell Hatfield

Symington & De Kok Bloemfontein

For 1st – 4th & 6th

Respondents:

M S M Brassey SC

Instructed by

The State Attorney Pretoria

The State Attorney Bloemfontein

For 5th Respondent:
G L Grobler SC

L Bekker

Instructed by

Tabacks Attorneys c/o Edelstein Bosman

Pretoria

McIntyre & Van der Post Bloemfontein
THE SUPREME COURT OF APPEAL OF SOUTH AFRICA

MEDIA SUMMARY OF JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL

FROM

The Registrar, Supreme Court of Appeal

DATE

30 March 2011

STATUS

Immediate

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

Norgold v Minister of Mineral and Energy of the Republic of South Africa
(278/10) [2011] ZASCA 49 (30 March 2011)

Media Statement

Today the Supreme Court of Appeal (SCA) dismissed an appeal by Norgold Investments
(Pty) Ltd (Norgold) against a judgment of the North Gauteng High Court (Phatudi J),
dismissing an application by Norgold for an order reviewing  and setting aside the decision of
the Regional Manager, Mpumalanga of the Department of Minerals and Energy (fourth
respondent) to convert an old order prospecting right of Rhodium Reefs Limited (Rhodium)
over certain property into one in terms of item 6 of Schedule 2 of the Minerals and Petroleum
Resources Development Act 28 of 2002 (the Act). Norgold also sought an order directing the
Regional Manager, Limpopo to accept its application for a prospecting right over the property.

Rhodium had applied in April 2005 for a conversion of its existing prospecting permit in terms
of item 6 of Schedule 2 of the Act. It was wrongly lodged in Mpumalanga as the property fell
within the Limpopo, the region prescribed by the Act for the lodging of an application for
conversion. According to Norgold the Act was peremptory in this regard. Norgold also
contended that the Regional Manager, Mpumalanga lacked jurisdiction to grant the
conversion as requested.  Norgold had itself subsequently applied for a prospecting right in
respect of the property in question and submitted that its application met all the prescribed
requirements. It contended that it should have been granted the prospecting rights. Norgold's
application for prospecting rights had been turned down on the bases that Rhodium already
possessed prospecting rights over the property.

Rhodium, conceding that the application was lodged at the wrong regional office, agued that
since it was the Minister or her delegatee who adjudicates applications for conversions the
region in which the application is lodged is not crucial.  The designated office is for
administrative convenience and serves a practical purpose. Mr Dos Santos Rocha, The
Deputy Director General: Mineral Regulation, in his affidavit stated that he, on the basis of a
proper delegation of power, had made the decision to convert the old order prospecting right.

Dealing with the first question as to whether Rhodium's failure to lodge its application for
conversion in the Limpopo regional office rendered the conversion ineffective the SCA,
considered that since the application had reached the ultimate decision-maker Mr Dos Santos
Rocha, an officer as defined in the Act, the purpose of the Act was served and that point had
to be decided against Norgold.

The SCA then turned to the question of whether the untimely formal renewal of the prior
permit precluded its conversion.  All indications were that Rhodium met the requirements for
renewal as prescribed by the act and that the late processing of its application could be laid at
the door of department officials. Furthermore, a period longer than six years had passed
without an application for review of that decision having been brought. The court held that the
second point must also be decided against Norgold.

The last point to be decided was whether or not Rhodium had conducted prospecting
operations on the property thereby meeting a necessary precondition for the conversion of the
old order prospecting right. The court accepted Rhodium’s assertions in this regard and held
that the allegations to the contrary which were vague and unsubstantiated were made for the
first time in replying and further affidavits and ought to have been struck out. The court held
that Norgold’s application in the court below had grown from a narrow focus to one that was
dispersed and opportunistic.

Lastly, the court held that the Regional Manager, Limpopo had been correct in rejecting
Norgold's application.

The appeal was dismissed with costs and the appellant was ordered to pay the costs of all the
respondents, including, where applicable, the costs of two counsel.

--- ends ---