THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Reportable

Case No: 436/2015

In the matter between:
THE MINISTER OF WATER AND ENVIRONMENTAL
AFFAIRS

FIRST APPELLANT
MINISTER OF LOCAL GOVERNMENT,
ENVIRONMENTAL AFFAIRS AND DEVELOPMENT
PLANNING, WESTERN CAPE

SECOND APPELLANT
and
REALLY USEFUL INVESTMENTS NO 219 (PTY) LTD          FIRST RESPONDENT
CITY OF CAPE TOWN                                                        SECOND RESPONDENT
Neutral Citation:
Minister of Water and Environmental Affairs v Really Useful
Investments (436/2015) [2016] ZASCA 156 (3 October 2016)
Coram:

Navsa, Wallis, Dambuza and Mocumie JJA and Dlodlo AJA
Heard:

17 August 2016
Delivered:

3 October 2016
Summary:
Environmental law – Interpretation and application of the Environment

Conservation Act 73 of 1989 (ECA) and the National Environmental Management
Act 107 of 1998 (NEMA) – exemption provisions in terms of s 37 of ECA and s 49 of
NEMA not applicable to compensation provisions in terms of s 34 of ECA –
provisions of s 34 of ECA not applicable to a regulatory directive issued in terms of
s 31A of ECA – landowner‟s particulars of claim accordingly not disclosing a valid
cause of action.

___________________________________________________________________
ORDER
___________________________________________________________________

On appeal from: The Western Cape Division of the High Court, Cape Town (Savage
J sitting as court of first instance).

1. The appeals of the Minister and the MEC are upheld with costs including the costs
consequent upon the employment of two counsel.
2. Insofar as they relate to the Minister and the MEC, paragraphs 2 and 3 of the
order of the court below are set aside and replaced by the following:
„The plaintiff‟s claims against the second and third defendants are dismissed with costs,
such costs to include those consequent upon the determination of the separated issue and
the costs of two counsel.‟
3. It is declared that the City‟s exception to the plaintiff‟s particulars of claim should
have been upheld.
4. The first respondent is ordered to pay the second respondent‟s costs of appeal
such costs to include those consequent upon the employment of two counsel.

___________________________________________________________________
Judgment
___________________________________________________________________
Navsa JA (Wallis, Dambuza and Mocumie JJA and Dlodlo AJA concurring.)

[1] This is an appeal against a judgment of the Western Cape Division of the
High Court (Savage J) . In consolidated proceedings she dismissed an exception
raised by the second respondent, the City of Cape Town (the City), to the particulars
of claim of the first respondent, Really Useful Investments No 219 (Pty) Ltd (RUI),
and also dismissed pleas raising the same point by the first and second appellants,
the Minister of Water and Environmental Affairs (the Minister) and the Minister of
Local Government, Environmental Affairs and Development Planning, Western Cape
(the MEC). The City, the Minister and the MEC were ordered, jointly and severally, to
pay RUI‟s costs.

[2] The Minister and the MEC were granted leave to appeal to this court by
Savage J. The City did not apply for such leave because it was under a
misapprehension that the order dismissing the exception was not appealable. While
that is ordinarily the case (Wellington Court Shareblock v Johannesburg City
Council; Agar Properties (Pty) Ltd v Johannesburg City Council 1995 (3) SA 827 (A)
at 835A-C; Maize Board v Tiger Oats Ltd & others 2002 (5) SA 365 (SCA) para 13;
Charlton v Parliament of the Republic of South Africa 2012 (1) SA 472 (SCA)) it is
not inevitably so. Where it is incontrovertible on the papers that the effect of the
exception is, so to speak, the last word on the subject,1 the dismissal of an exception
is appealable. The dismissal of the City‟s exception rejected its special defence,
which hinged solely on the point taken therein. The City was, however, a party to the
appeal and argued the matter, without objection, as if it was arguing an appeal
against the dismissal of its exception. I accordingly proceed on that footing and will
make allowances for the City‟s position in the ultimate order.

1 See Makhothi v Minister of Police 1981 (1) SA 69 (A).

Background
[3] During May 2014, RUI instituted action against the City, the Minister and the
MEC, claiming payment of compensation in terms of s 34 of the Environmental
Conservation Act 73 of 1989 (ECA), in an amount of R16 750 846 plus value added
tax, alternatively R2 818 422 plus value added tax, on the basis that a directive
issued by the City, aimed at environmental preservation and protection in relation to
land owned by RUI, and duly complied with by the latter, resulted in a substantial
diminution in the value of the land. The relevant statutory provisions will be dealt with
in due course. The following is the factual background, drawn from the particulars of
claim.

[4] RUI owns 39 immovable properties in Hout Bay, Cape Town, located
immediately to the west of the Disa River, between Princess Street and the sea-
shore.2 The properties are all subdivisions of Erf 1530. They were purchased by RUI
on 15 March 2007 at an auction, as a single lot, for a purchase price of R11 million,
and are all undeveloped. Before the City‟s directive referred to above, all of the
properties, except three erven, were zoned for residential use. Erf 7692 and Erf 7743
were zoned for commercial use. Erf 7745 was zoned for use as private open space
and for roads.

[5] After rezoning and subdivision processes, RUI submitted development plans
for the properties that were approved by the City‟s predecessors. As RUI looked to
develop the properties, it proceeded to raise the height of the lower-lying properties
to 4 metres above sea level by dumping waste matter and fill in and adjacent to the
Disa River. This prompted the City, acting in terms of ss 31A(1) and (2) of ECA, to
issue the directive referred to above. It was dated 10 May 2011 and RUI was
directed to do the following at its own expense, within 28 days of receipt thereof:
„2.1 [Survey] and [demarcate] the 1:100 year flood line for future management.
2.2 [Engage] the services of an independent freshwater ecologist to determine the extent of
the wetland that has been filled, to assess and evaluate the impacts of the filling on the
receiving environment and potential future flooding and water quality as a result of the filling
and to make detailed recommendations for rehabilitation.

2 The Erven are 7681 to 7705, 7717 to 7722, 7726 to 7731, 7743 and 7745, Hout Bay.

2.3 [Survey] and [peg] the wetland extent on the site under the supervision of the freshwater
ecologist.
2.4 [Remove] the soil, general rubble and fill that was placed within the floodplain of the Disa
River to natural ground level as it existed prior to filling commencing, under the supervision
of the freshwater ecologist.
2.5 [Provide] the reports of the independent freshwater ecologist to the Environmental
Resource Management Department of the City for review and approval prior to any work
being undertaken.
2.6 [Carry] out such work at [their] expense to the satisfaction of the City.
2.7 [Submit] the specialist‟s verification that the necessary work has been done, to the
Environmental Resource Management Department.‟
As stated above, these steps were duly taken.

[6] RUI alleged that the directive prevented it from undertaking any development
on, (a) those of the properties below the 1:100 year flood line as surveyed in terms of
paragraph 2.1 of the directive; and (b) in the case of those of the non-residential
erven referred to in paragraph 4 above, parts of which are below the 1:100 year flood
line, on those parts of those erven. It was alleged further that the directive prevented
RUI from undertaking any development on those of the properties which are within
the wetland boundary as surveyed. These allegations were denied in the pleas filed
on behalf of the Minister and the MEC.3

[7] I turn to consider, in greater particularity, the City‟s notice of exception. Para 1
of the Notice of Exception reads as follows:
„The plaintiff‟s claim against the [City] is for the payment of compensation in terms of
section 34 of the Environment Conservation Act 73 of 1989 . . . , for loss allegedly incurred
pursuant to the [City‟s] exercise of its powers and performance of its duties under section
31A of the ECA in relation to certain immovable properties belonging to the plaintiff.‟
The City then went on to rely on the provisions of s 49 of the National Environmental
Management Act 107 of 1998 (NEMA), which provides:
„49 Limitation of liability.

3 See para 8 of the pleas of each of the Minister and the MEC. These are identical and record that the
relevant party:
„8.1
denies that the Directive constituted a limitation on the purposes for which the properties
could be used, within the meaning of s 34 of the ECA;
8.2
denies that the Directive prevented the Plaintiff from undertaking development on the
properties.

Neither the State nor any other person is liable for any damage or loss caused by –
(a)
the exercise of any power or the performance of any duty under this Act or
any specific environmental management Act; or
(b)
the failure to exercise any power, or perform any duty under this Act or any
specific environmental management Act,
unless the exercise of or failure to exercise the power, or performance of or failure to
perform the duty was unlawful, negligent or in bad faith.‟ (My emphasis.)
The City pointed out that in terms of s 1(1) of NEMA, ECA is a specific environmental
management Act contemplated in s 49(a).4 Its core contention was that since RUI
had not alleged that the City, in the exercise of its powers in terms of s 31A of ECA
had acted unlawfully, negligently or in bad faith it followed, on the basis of the
provisions of s 49 of NEMA, that it was exempted from liability for any loss sustained
by RUI. Based on the above, the City contended that the particulars of claim did not
disclose a cause of action. Paragraph 15.3 of the Minister‟s plea was to the same
effect, as was paragraph 15.3 of the MEC‟s plea.

Judgment of the court below
[8] In adjudicating the exception and dealing with the similar parts of the pleas of
the Minister and the MEC, Savage J had regard to the applicable statutory
provisions. First, s 31A of ECA, which empowered the City to issue the directive
„31A Powers of Minister, competent authority, local authority or government
institution where environment is damaged, endangered or detrimentally affected
(1) If, in the opinion of the Minister or the competent authority, local authority or government
institution concerned, any person performs any activity or fails to perform any activity as a
result of which the environment is or may be seriously damaged, endangered or
detrimentally affected, the Minister, competent authority, local authority or government
institution, as the case may be, may in writing direct such person-
(a)
to cease such activity; or
(b)
to take such steps as the Minister, competent authority, local authority or
government institution, as the case may be, may deem fit,
within a period specified in the direction, with a view to eliminating, reducing or preventing
the damage, danger or detrimental effect.
(2) The Minister or the competent authority, local authority or government institution
concerned may direct the person referred to in subsection (1) to perform any activity or

4 Section 1(1) of NEMA is a definition section, and ECA is defined as being one of several „specific
environmental management Acts‟.

function at the expense of such person with a view to rehabilitating any damage caused to
the environment as a result of the activity or failure referred to in subsection (1), to the
satisfaction of the Minister, competent authority, local authority or government institution, as
the case may be.
. . .‟ (My emphasis.)

[9] Second, s 34, which creates a right, in certain circumstances, for the owner of
property or the holder of a real right to recover compensation:
„34 Compensation for loss
(1) If in terms of the provisions of this Act limitations are placed on the purposes for which
land may be used or on activities which may be undertaken on the land, the owner of, and
the holder of a real right in, such land shall have a right to recover compensation from the
Minister or competent authority concerned in respect of actual loss suffered by him
consequent upon the application of such limitations.
(2) The amount so recoverable shall be determined by agreement entered into between
such owner or holder of the real right and the Minister or competent authority, as the case
may be, with the concurrence of the Minister of State Expenditure.
(3) In the absence of such agreement the amount so to be paid shall be determined by a
court referred to in section 14 of the Expropriation Act, 1975 (Act 63 of 1975), and the
provisions of that section and section 15 of that Act shall mutatis mutandis apply in
determining such amount.‟ (My emphasis.)

[10] Third, s 37, which, in essence, is a statutory exemption from liability:
„37 Restriction of liability
No person, including the State, shall be liable in respect of anything done in good faith in the
exercise of a power or the performance of a duty conferred or imposed in terms of this Act.‟

[11] In addition, the court below had regard to s 24 of the Constitution, which
contemplates legislative measures for the protection of the environment for the
benefit of present and future generations. Savage J had regard to one such
legislative measure, namely, NEMA, and in particular s 49(a), the provisions of which
are set out in para 7 above. She noted that as of 1 May 2005, s 49 of NEMA was

amended to extend its application to any „specific environmental management Act‟,
defined in s 1(1) of NEMA to include ECA.5

[12] Savage J considered that s 34(1) of ECA provided a right to claim
compensation in specific circumstances, namely, actual loss suffered by a claimant
arising from the limitations placed on the purposes for which land may be used, or in
relation to activities that may be undertaken on the land. She saw this remedy as
distinct from the right to recover damages in delict. She reasoned that in providing
for compensation s 34(1) of ECA operated similarly to an expropriation claim.

[13] Section 31A, referred to above, came into operation during 1992 and ss 34
and 37 of ECA were not amended thereby, nor by the provisions of NEMA. The court
below took the view that this pointed to a legislative intent to keep intact the statutory
right embodied in s 34. Savage J concluded that neither s 37 of ECA nor s 49 of
NEMA, could be read to limit the right to compensation provided for by s 34.

[14] The court below thought it significant that s 49 did not limit other statutory
rights to compensation, such as that set out in s 36 of NEMA, which provides for
compensation in the event of expropriation for environmental purposes. It reasoned
that this was especially so, given the constitutional imperative in s 25(2) of the
Constitution, that there be no expropriation without compensation, and went on to
say the following (para 12):
„[T]here can be no doubt that compensation under s 36 is therefore not limited to
circumstances in which wrongfulness, unlawfulness or bad faith exists.‟
The court noted that s 34(3) of ECA provides that the amount of compensation, in
certain circumstances, is to be determined by a court referred to in s 14 of the
Expropriation Act 63 of 1975.

[15] In para 13 of the judgment the following appears:
„Section 34 contemplates the lawful exercise of public power. Given that the exercise of
public powers is only legitimate where it is lawful, a right to compensation under s 34 could
not have been intended to arise only when public power has been exercised unlawfully in

5 The amendment was made in terms of the National Environmental Management Amendment Act 46
of 2003 which came into force on 1 May 2005.

that the exercise of the power would in such cases be illegitimate by virtue of its
unlawfulness.‟ (Footnote omitted)

[16] It was accepted by Savage J that the environment was held in public trust for
beneficial use in the public interest and must be protected. However, she went on to
state (para 20):
„[L]egislative prescripts which protect the environment from unlawful activity and hold
responsible those who harm it cannot be construed to limit or restrict other statutory
entitlements, such as provided in s 34, unless this is apparent from the language of the
statute read in context.‟

[17] The following paragraph of the judgment contains, in succinct terms, the ratio
for the orders dismissing the exception and striking out the relevant parts of the
pleas (para 22):
„A statutory right to recover compensation is clearly provided in s 34 and is one neither
limited nor restricted by s 37 [of ECA] or s 49 [of NEMA] which are provisions whose
purpose it is to provide a defence to a claim in delict. To find differently would be to strain at
an interpretation that does not accord with the language of the provision read in context and
the statute as a whole. It follows that [RUI‟s] particulars of claim as it stands discloses a
cause of action and does not lack averments which are necessary to sustain an action within
the contemplation of rule 23(1).‟ (Footnote omitted)

Discussion
[18] I now turn to consider whether the court below was correct in its reasoning
and conclusions. A convenient starting point is an appreciation that ECA found its
way into the statute books about five years before the advent of our constitutional
democracy.6 Even the apartheid regime understood the need for a studied approach
in relation to the protection and controlled utilisation of the environment.7

[19] It is necessary to explore the relevant constituent parts of ECA in its original
form. Section 2 empowered the Minister of Environment Affairs to determine, after
consultation with the Council for the Environment; the then Administrator of each
province; each Minister charged with the administration of any law which in the

6 ECA came into operation on 9 June 1989.
7 See the long title of ECA.

opinion of the Minister of Environmental Affairs related to a matter affecting the
environment; as well as with the Minister of Finance and the Minister of Economic
Affairs & Technology, the general policy to be applied with a view to:8
„(a)
the protection of ecological processes, natural systems and the natural beauty as
well as the preservation of biotic diversity in the natural environment;
(b)
the promotion of sustained utilization of species and ecosystems and the effective
application and re-use of natural resources;
(c)
the protection of the environment against disturbance, deterioration, defacement,
poisoning or destruction as a result of man-made structures, installations, processes or
products or human activities; and
(d)
the establishment, maintenance and improvement of environments which contribute
to a generally acceptable quality of life for the inhabitants of the Republic of South Africa.‟

[20] Section
of
ECA
empowered
an
Administrator,
in
appropriate
circumstances, to declare an area to be „a protected natural environment‟.
Section 16(1) set prerequisites for such a declaration, the relevant part of which read
as follows:
„Provided that such protected natural environment may only be declared –
(a) if in the opinion of the Administrator there are adequate grounds to presume that the
declaration will substantially promote the preservation of specific ecological
processes, natural systems, natural beauty or species of indigenous wildlife or the
preservation of biotic diversity in general; and
(b) after consultation with the owners of, and the holders of real rights in, land situated
within the defined area. . . .‟

[21] Section 16(2) authorised the Minister to issue directions in respect of land or
water in a protected natural environment, in order to achieve the general policy and
objects of ECA, and s 16(3) made the owner or holder of a real right in land situated
within a protected natural environment subject to such directions. Section 16(4) gave
the Administrator the power to direct the Registrar of Deeds to make an entry in the
deeds registry, of the directions in question. Section 16(5) was significant:
„The Administrator may with the concurrence of the Minister of Finance out of money
appropriated by Parliament for that purpose and subject to such conditions as he may
determine, render financial aid by way of grants or otherwise to the owner of, and the holder

8 The policy was given effect by publication in the Government Gazette.

of a real right in, land situated within a protected natural environment in respect of expenses
incurred by the owner or holder of the right in compliance with any direction issued in terms
of subjection (2).‟
The contemplated financial assistance appears to have been based on the largesse
of the State rather than it being compelled to render it. It is important to bear in mind
that the „financial assistance‟ was in relation to expenses incurred by a holder of a
real right in complying with a directive.

[22] In addition to the creation of a protected natural environment, s 18 of ECA
empowered the Minister to declare areas to be „special nature reserves‟. However,
this could only be done in respect of land that was owned by, or under the exclusive
control of, the State.9 From 1992 it could also be done at the request of the owner of
the land.10

[23] Significantly, s 23, which bore the title „limited development areas‟,
empowered the Minister to declare a defined area a „limited development area‟.
Section 23(2) read as follows:
„No person shall undertake in a limited development area any development or activity
prohibited by the Minister by notice in the Gazette or cause such development or activity to
be undertaken unless he has on application been authorized thereto by the Minister or a
local authority designated by the Minister in the notice, on the conditions contained in such
authorization.‟
Sections 23(3) and (4) provided for representations to be made by interested or
affected parties concerning the influence of any proposed activity on the
environment. Section 27 of ECA entitled a competent authority to make regulations
regarding limited development areas. Such regulations could impose restrictions on
the nature and extent of the development or activities in connection with
development. It could also provide for a procedure to be followed for permission to
be obtained for development in such an area.

[24] Section 20 of ECA, on the other hand, dealt with waste management and
prohibited the operation of a disposal site without a permit by the Minister of Water

9 See s 18(2) of ECA.
10 Section 18(2) was amended by s 7 of the Environment Conservation Amendment Act 79 of 1992
and s 18(2)(bA) was inserted.

Affairs. That Minister was empowered to issue directions with regard to the control
and management of disposal sites. Section 21 empowered the Minister to identify
activities which might have had a substantial detrimental effect on the environment.
Section 22 of ECA prohibited activities listed in section 21 without written
authorisation by the Minister.

[25] The provisions of s 21 and the relevant part of s 22 appear hereafter:
„Identification of activities which will probably have detrimental effect on the
environment
21. (1) The Minister may by notice in the Gazette identify those activities which in his opinion
may have a substantial detrimental effect on the environment, whether in general or in
respect of certain areas.
(2) Activities which are identified in terms of subsection (1) may include any activity in any of
the following categories, but are not limited thereto:
(a)
Land use and transformation;
(b)
water use and disposal;
(c)
resource removal, including natural living resources;
(d)
resource renewal;
(e)
agricultural processes;
(f)
industrial processes;
(g)
transportation;
(h)
energy generation and distribution;
(i)
waste and sewage disposal;
(j)
chemical treatment;
(k)
recreation.
. . .
Prohibition of undertaking of identified activities
22. (1) No person shall undertake an activity identified in terms of section 21(1) or cause
such an activity to be undertaken except by virtue of a written authorization issued by the
Minister or a local authority or an officer designated by the Minister by regulation.
. . .‟

[26] As can be seen, sections 20, 21 and 22 of ECA were regulatory in nature.
They provided for oversight of activities, undertaken on property, that were
potentially hazardous and might have proven environmentally harmful. The

provisions of s 31A, set out in para 8 above, were inserted in 1992.11 Those
provisions contain regulatory authority extending beyond listed activities and
broadened the powers of an environmental authority. Regulatory actions could be
directed against „any activity‟ or the failure to perform „any activity, as a result of
which the environment is or may be seriously damaged, endangered or detrimentally
affected‟. An interesting feature of s 31A was that the regulatory powers it contained
could be exercised not only by the Minister and the MEC, but also by a local
authority and by designated government bodies.12 That then is the statutory
architecture of ECA in its original and amended form before the advent of NEMA.

[27] Even at common law no person could use property owned by him or her in a
manner that harmed the rights of others. Nuisance involves the unreasonable use of
property by one neighbour to the detriment of another. Examples include repulsive
odours, smoke and gases drifting over the plaintiff‟s property from the defendant‟s
land, water seeping onto the plaintiffs property, leaves from the defendant‟s trees
falling onto the plaintiff‟s premises, slate being washed down-river onto a plaintiff‟s
land, causing a disturbing noise, causing a common wall to become unstable by
piling soil up against it, overhanging branches and foliage, an electrified fence on top
of a communal garden wall, blue wildebeest transmitting disease to cattle on
neighbouring ground, and occupants of structures on neighbouring land allegedly
causing a nuisance.13

[28] In an increasingly ecologically sensitive world the emphasis shifted beyond
the interests of immediate neighbours to the protection and preservation of the
environment for the benefit of present and future generations. This shift has been
given added emphasis by our Constitution.14 That idea was already evident, even if

11 Section 31A was inserted by s 19 of the Environment Conservation Amendment Act 79 of 1992 and
amended by Proclamation R43 of 8 August 1996.
12 On 23 August 1996 the National Parks Board (SANParks) was designated in terms of this
provision.
13 See J Neethling et al Law of Delict 5 ed (2006) at 107 – 108 and 336 and the cases there cited.
14 Section 24 of the Constitution provides:
„24 Environment
Everyone has the right –
(a)
to an environment that is not harmful to their health or wellbeing; and
(b)
to have the environment protected, for the benefit of present and future generations, through
reasonable legislative and other measures that –
(i)
prevent pollution and ecological degradation;

only in nascent form, in the provisions of ECA, which dealt not only with the
regulation of dangers posed to the environment but also provided for the declaration
of protected natural environments, special nature reserves and limited development
areas.

[29] NEMA was enacted after the advent of our new constitutional order.15 It is
legislation envisaged in s 24 of the Constitution. It almost completely replaced ECA.
Only certain provisions of ECA remain, including ss 21, 22 and 23. Significantly,
ss 31A, 34 and 37 also continue in existence.

[30] NEMA was enacted to provide for co-operative environmental governance by
establishing principles for decision-making on matters affecting the environment,
institutions that will promote cooperative governance and procedures for co-
ordinating environmental functions exercised by organs of state and to provide for
certain aspects of the administration and enforcement of other environmental
management laws.16

[31] Section 2 of NEMA sets out applicable national environmental management
principles, inter alia, that environmental management must place people and their
needs at the forefront of its concern, and serve their physical, psychological,
developmental, cultural and social interests equitably.17 Section 2(3) of NEMA states
that development must be socially, environmentally and economically sustainable.
Section 2(4)(a) provides, amongst others, for the following factors to be taken into
account when considering what constitutes sustainable development:
„(i)
That the disturbance of ecosystems and loss of biological diversity are avoided, or,
where they cannot be altogether avoided, are minimised and remedied;
(ii)
that pollution and degradation of the environment are avoided, or, where they cannot
altogether be avoided, are minimised and remedied;
. . .

(ii)
promote conservation; and
(iii)
secure ecologically sustainable development and use of natural resources while
promoting justifiable economic and social development.‟
15 It was assented to in 1998 and most of its provisions came into operation on 29 January 1999.
16 See the long title of NEMA.
17 See s 2(2) of NEMA.

(vi)
that the development, use and exploitation of renewable resources and the
ecosystems of which they are part do not exceed the level beyond which their integrity is
jeopardised.
. . .
(viii)
that negative impacts on the environment and on people‟s environmental rights be
anticipated and prevented, and where they cannot be altogether prevented, are minimised
and remedied.‟

[32] Like ECA, NEMA sets out „listed activities‟ that require authorisation as well as
the identification of an authority to grant it.18 Section 24F of NEMA prohibits the
commencement of listed activities without the requisite authorisation. Section 28 of
NEMA provides that persons who cause or may cause significant pollution or
degradation of the environment must take reasonable measures to prevent such
pollution or degradation from occurring, continuing or recurring, or, in so far as such
harm to the environment is authorised by law or cannot reasonably be avoided or
stopped, to minimise and rectify such pollution or degradation of the environment.19

[33] There are provisions in NEMA which oblige people engaged in prospecting,
exploration, mining or production to make provision for remediation of environmental
damage.20 Section 31L of NEMA empowers environmental management inspectors
to issue compliance notices. NEMA also has a number of enforcement provisions.21

[34] What is clear from the regulatory provisions of ECA and NEMA set out above,
is that they are distinct provisions that regulate the activities of owners of land or of
holders of real rights in land, and are aimed at preventing such activities from
causing environmental harm. Sections 21 and 22 of ECA, which continue in
existence, are such measures.

[35] Insofar as authorisations are required from environmental authorities to
engage in such activities, either in terms of ECA or NEMA, these are not unusual.
There are other statutes that require authorisations to undertake particular activities.

18 See s 24 of NEMA.
19 See s 28(1) of NEMA.
20 See s 24P of NEMA.
21 See ss 31N, 31O, 33, 34, 34C and 34D of NEMA. These include the revocation of permits or
authorisations, private prosecutions, criminal proceedings and the forfeiture of items.

Town planning schemes and legislation affecting particular undertakings, requiring
licences and specific authorisations, are examples.

[36] Section 23 of ECA, as stated above, also remains in existence. However, it
deals with the creation of limited development areas. Section 23 and the repealed
sections, 16 and 18,22 were not primarily regulatory but sought to preserve, for
posterity, areas considered to be ecologically important. When an authority invoked
its powers in terms of those sections, it curtailed real rights in land. The invocation of
those powers did not arise from the dangerous activities of the land owners or of
persons having a real right in the affected areas. They were invoked to protect and
preserve the environment of South Africa for the benefit of all its people and for that
purpose restricted or subtracted from the rights of the owners of the land concerned
and others having real rights in it.

[37] Section 34, dealing with „compensation for loss‟, was part of ECA from
inception,23 and continues in existence. Its purpose must be seen in the light of what
follows. Generally, our law sets its face against confiscation of land rights without
compensation.24 By way of s 34 of ECA, the legislature saw fit to allow for
compensation for the curtailment of real rights in land flowing from the provisions of
the erstwhile s 16 and the existing s 23.25 Compensation as provided for in section

22 Section 16 of ECA was amended in 1992 and finally repealed in 2003. The financial assistance
provided for in that section was thus abolished. Section 18 of ECA was also repealed in 2003.
23 An amendment by way of Proclamation R43 of 8 August 1996 is, for present purposes,
inconsequential.
24 See Arun Property Development (Pty) Ltd v Cape Town City [2014] ZACC 37; 2015 (2) SA 584
(CC), para 34.
25 For present purposes, there is no need to get involved in the complex questions raised and left
unanswered in Minister of Minerals and Energy v Agri South Africa [2012] ZASCA 93; 2012 (5) SA 1
(SCA) para 15; and Reflect-All 1025 CC v MEC for Public Transport, Roads and Works, Gauteng
Provincial Government & others [2009] ZACC 24; 2009 (6) SA 391 (CC) para 65, concerning the
development of a doctrine of constructive expropriation. In the United States of America, a radical
curtailment of a landowner‟s freedom to make use of his or her land may entitle him or her to
compensation, under their doctrine of „regulatory takings‟. This is described in the title on „Eminent
Domain‟ by Francis C Amendola et al in the Corpus Juris Secundum (2007) Vol. 29A §84 as follows:
„It is within the power of governmental entities to regulate property to some extent, but if the regulation
goes too far it will be recognized as a taking. A “regulatory taking,” also known as “inverse
condemnation,” occurs when the purpose of the government regulation and its economic effect on the
property owner render the regulation substantially equivalent to an eminent domain proceeding and,
therefore, require the government to pay compensation to the property owner. . .
When the government condemns or physically appropriates property, the fact of a taking is typically
obvious and undisputed, but when the owner contends a taking has occurred because a law or
regulation imposes restrictions so severe that they are tantamount to a condemnation or

34 was on the basis of advancing the public interest by creating what are effectively
ecological reserves.

[38] Section 36 of NEMA, in similar vein, enables property to be acquired by the
State in the public interest. It reads as follows:
„36 Expropriation
(1) The Minister may purchase or, subject to compensation, expropriate any property for
environmental or any other purpose under this Act, if that purpose is a public purpose or is in
the public interest.
(2) The Expropriation Act, 1975 (Act 63 of 1975) applies to all expropriations under this Act
and any reference to the Minister of Public Works in that Act must be read as a reference to
the Minister for purposes of such expropriation.
(3) Notwithstanding the provisions of subsection (2), the amount of compensation and the
time and manner of payment must be determined in accordance with s 25(3) of the
Constitution, and the owner of the property in question must be given a hearing before any
property is expropriated.‟
The legislature saw fit to ensure that where environmental purposes would be served
by the State acquiring land there should be compensation. Accordingly, s 36(2) of
NEMA makes the Expropriation Act applicable.

[39] Section 34 of ECA could not, conceivably, have been directed at providing
compensation for actions taken under the repealed s 20 or the existing ss 21, 22 and
31A. As stated above, those provisions were aimed at regulating harmful activities. It
cannot be so that in instances in which potentially harmful activities on land are
restricted that compensation would inevitably be payable. It is hard to believe that a
refusal of authorisation for activities which may have a substantial detrimental effect
on the environment, related, for example, to waste removal or chemical processes
would automatically entitle a holder of a right in land to compensation. It is difficult to
comprehend that a person seeking to use his land, contiguous to a residential area,
for a manufacturing process that will emit noxious gases in the area, could claim
compensation in the event of a refusal of authorisation for him to do so. Put

appropriation, the predicate of a taking is not self-evident, and the analysis is more complex.‟
(Footnotes omitted)
See also the title on „Eminent Domain‟ by David K Allen et al in American Jurisprudence 2 ed (1996)
Vol. 26 §10 et seq.

differently, it is difficult to conceive of a right to compensation for restrictions rightly
being put in place to prohibit dangerous processes.

[40] To interpret and apply s 34 of ECA to allow for such compensation would be
to discourage environmental authorities from fulfilling their constitutional obligation to
protect the environment and to put people first in applying the environmental
management principles set out in NEMA. It would, perversely, encourage land
owners to act in an environmentally offensive manner so as to solicit compensation.
It would fly in the face of the common law. And, finally, it would lead to absurdity. The
power under s 31A(2) to cause harmful conduct to be remedied is a power to compel
the landowner to do so at its own expense. It is incongruous in the extreme that
having done so at own expense, it could then turn round and say that it is entitled to
compensation for loss suffered by it, which would include that self-same expense.
Even if, as a result the land becomes less valuable.

[41] Insofar as s 23 of ECA is concerned, namely the creation of limited
development areas, the right to compensation is retained by the continued existence
of s 34 of ECA. However, for s 23 to be invoked and applied by environmental
authorities, an extended process is prescribed. Before a limited development area
can be proclaimed, the processes set out in s 23(4) have to be followed.26
Furthermore, s 23(2) allows for authorisation for development activities to be
conducted within a limited development area, subject to such conditions as a
competent authority might deem fit. As demonstrated below, s 23 finds no
application in the present dispute.

[42] As already noted, the obligation to pay compensation under s 34 rests on a
„competent authority‟ as defined and that extends only to the Minister and the MEC.

26 Section 23(4) reads as follows:
„(4) A limited development area shall not be declared unless the competent authority –
(a) has given notice in the Official Gazette and in not fewer than one English and one Afrikaans
newspaper circulating in the area in question of his or her intention to declare such area as a
limited development area;
(b) has permitted not fewer than 60 days for the submission to the Director-General of the
provincial administration concerned, of comment on the proposed declaration;
(c) has considered all representations received in terms of such notice; and
(d) has consulted each Minister charged with the administration of any law which in the opinion of
the competent authority relates to a matter affecting the environment in that area.‟

These are the very people who are empowered to act under ss 16 and 23
respectively. It is significant that in introducing s 31A and conferring powers on local
authorities and designated government bodies the definition of „competent authority‟
was not extended to include these bodies. That is a clear indication that it was not
thought that the exercise of the powers under s 31A would create a situation
contemplated under s 34. The distinction between the authorities referred to in
ss 31A and 34 is an aspect to which I shall return in due course.

[43] Before returning to the pleadings it is necessary to turn our attention to the
provisions of s 37 of ECA and s 49 of NEMA. The provisions of s 37, which are set
out in para 10 above, state that no person, including the State, shall be liable in
respect of anything done in good faith in the exercise of a power or the performance
of a duty conferred or imposed in terms of the Act. It is a conventional exemption
provision. It follows almost exactly the wording of s 8 of the then Forest Act 122 of
1984, considered by this court in Simon’s Town Municipality v Dews & another 1993
(1) SA 191 (A). In that case this court said that such a clause has to be interpreted
against the background of the law relating to statutory authority as a defence to a
delictual claim because:
„Conduct which would otherwise give rise to delictual liability may be justified and rendered
lawful by the fact that it consists of the exercise of a statutory power.‟27

[44] In Dews this court went on to say the following (at 195I-196C):
„Whether a particular statutory enactment in fact authorises interference with or the
infringement of the rights or interests of another depends upon the intention of the
Legislature, which is determined in accordance with the usual canons of statutory
interpretation. Of especial significance in this connection is whether the statutory provision is
directory or permissive in character. . .
A further important principle is that, even where the statute does authorise interference with
the rights of others, the person or authority vested with the power is under a duty, when
exercising the power, to use due care to take all reasonable precautions to avoid or minimise
injury to others.‟
Thus, liability would attach if an affected party could show that by using different
methods the extent of the infringement of the rights and damage could have been

27 At 195I-J.

avoided or restricted and damages would be payable or an interdict granted to the
extent of the excessive injury occasioned by the authority.

[45] A provision such as s 37 can only be relied on where the power in question
was exercised or the duty performed in good faith and without negligence and within
statutorily prescribed constraints. That does not mean that it is without practical
effect. Dismissing an argument that this rendered the provision nugatory, Corbett CJ
pointed out that:
„It was submitted by appellant's counsel that if s 87 be interpreted in this way, it in effect
adds nothing to the common law and is redundant. This would suggest that this was not the
legislative intent. I do not think that this argument is sound. As I have indicated, a party
relying on statutory authority as a defence must first establish that the statutory enactment
under which he acted authorises interference with or the infringement of the rights or
interests of others. This is a matter of interpretation. The effect of s 87 is to dispense with
any such enquiry as far as powers or duties conferred or imposed by or under the Act are
concerned. At the same time s 87 introduces as a positive element the requirement of good
faith, the onus of establishing which would be on the party claiming immunity. It is thus not
correct to say that the interpretation which has been placed on s 87 renders it redundant. But
even if it does, this would not be the first time that a legislative provision was declaratory of
the common law or was inserted ex abundanti cautela.‟28

[46] Sections 34 and 37 were part of ECA when it was first enacted and continue
in existence. On ordinary principles of interpretation they ought not to be regarded as
being in conflict. As pointed out above, they can be reconciled and are coherent
within the scheme of ECA and NEMA. In Panamo Properties (Pty) Ltd & another v
Nel & others NNO [2015] ZASCA 76; 2015 (5) SA 63 (SCA) para 27, this court said
the following:
„When a problem such as the present one arises the court must consider whether there is a
sensible interpretation that can be given to the relevant provisions that will avoid anomalies.
In doing so certain well-established principles of construction apply. The first is that the court
will endeavour to give a meaning to every word and every section in the statute and not
lightly construe any provision as having no practical effect. The second and most relevant for
present purposes is that if the provisions of the statute that appear to conflict with one
another are capable of being reconciled then they should be reconciled.‟ (Footnotes omitted)

28 At 197B-E.

[47] As pointed out above, s 34 of ECA provides a statutory right to compensation
in restricted circumstances. Section 37 of ECA, on the other hand, provides
protection against liability to pay damages in delict arising out of the proper exercise
of powers or functions under ECA. The protection does not extend to acts that are
performed negligently or in bad faith or outside the terms of the statute, as such
actions are by definition not lawful. It follows that s 37 had no application in relation
to situations falling within s 34 and did not operate to exclude the right of any
landowner or holder of a real right in land to claim compensation under that section.

[48] I now turn to deal with the provisions of s 49 of NEMA, set out in para 7
above. It expressly incorporates the common law requirements of lawfulness, good
faith and absence of negligence in order to enjoy protection against liability. The
protective cloak is arguably wider than s 37 of ECA, because of the reference to
damage „caused by‟ the exercise of a power or the performance of a duty. It also
appears to place the onus on a claimant to show that the act was performed
unlawfully, negligently or in bad faith. Other than those differences, its purpose is no
different from that of s 37 of ECA.

[49] There is no reason to construe s 49 in the manner suggested on behalf of the
City, namely, that it excludes claims for compensation under s 34 where the
interference with the owner‟s rights occurred as a result of lawful, non-negligent acts
undertaken in good faith, but to afford such a claim where the interference is
unlawful, negligent or undertaken in bad faith. As demonstrated above, s 34 provides
a holder of a real right in land with a right to compensation as a result not of
regulatory interference, but because of the creation of protected environmental
areas. The interpretation contended for by the City would have the effect of nullifying
the right to compensation that has existed since the enactment of ECA.

[50] It is now necessary to return to the pleadings. In its particulars of claim, RUI
claimed that the directive set out in para 5 above, was issued as a result of the
exercise by the City of its powers in terms of ss 31A(1) and (2) of ECA. That directive
was regulatory. It focused primarily on (a) preventing pollution of the flood plain of
the Disa River, (b) preventing future flooding, and (c) preventing water and soil

contamination. As discussed above, landowners or other holders of real rights in
land, were not, at common law, permitted to engage in activities on that land that
were harmful to others. In exercising its powers under this subsection, the City was
complying with its constitutional and statutory obligations to prevent harm to the
environment.

[51] Paragraph 2.3 of the directive required RUI to survey and peg the wetland
extent on the site under supervision of a freshwater ecologist. It will be recalled that
RUI asserted, in its particulars of claim, that the directive prevented it from
undertaking any development within the wetland boundary and below the flood line.
As pointed out above, this was denied by the Minister and the MEC in their
respective pleas. Furthermore, RUI did not assert that the Minister had declared
RUI‟s property a limited development area in terms of s 23 of ECA. As stated earlier,
s 23 envisages an extended process which RUI does not contend was embarked
upon. If those processes had been followed, it would have been open to RUI to
make representations in regard thereto and take such legal steps as it might have
been advised. Nowhere in RUI‟s particulars of claim will one find reliance placed on
the powers of the Minister, the MEC or the City in terms of ECA and NEMA to set
aside an ecological zone, which, on the analysis referred to earlier, might have
triggered a claim for compensation.

[52] To sum up, it is clear from paras 5 to 15 of RUI‟s particulars of claim that its
claim was erroneously based on a purported entitlement to compensation arising
from the City‟s actions taken under s 31A(1) of ECA. A claim based on such actions
can only succeed if that power was exercised unlawfully, negligently or in bad faith.
The error was compounded by the Minister, the MEC and the City‟s acceptance that,
but for the exemptions provided for in s 37 of ECA and s 49 of NEMA, RUI‟s claim
would have been competent. The question that arises is whether these incorrect
assumptions of the parties preclude us from deciding the matter on the basis set out
above. For the reasons that follow, I think not.

[53] The interpretation and application of the provisions of ECA and NEMA,
referred to above, were extensively argued before us and relevant permutations as
to outcomes were fully debated. More than a hundred years ago, this court, in Cole v

Government of the Union of South Africa 1910 AD 263 at 272-273 warned of
confirmation of a decision clearly wrong, in circumstances where the issues were
fully aired and there was no unfairness to any party. More recently, the Constitutional
Court in CUSA v Tao Ying Metal Industries & others [2008] ZACC 15; 2009 (2) SA
204 (CC) para 68 reiterated that principle.

[54] I am mindful of the care that should be taken in framing an exception and that
the aim of the exception procedure is to avoid the leading of unnecessary evidence
and to dispose of a case in whole or in part in an expeditious and cost effective
manner.29 As set out in the preceding paragraph, no further evidence was
contemplated and all the issues in relation to the application and interpretation of the
statutory provisions have been fully aired. It would not be in the interests of justice to
avoid a decision because of the incorrect assumption by all concerned. To do
otherwise would also serve no useful purpose.

[55] For all the reasons set out above, it is clear that RUI‟s case as pleaded
disclosed no cause of action. RUI‟s case was erroneously premised on regulatory
action taken in terms of s 31A(1) of ECA on the part of the City and contending that
this gave rise to a claim for compensation in terms of s 34 of ECA. Once that
assumption was fallacious its claim was nothing more than a claim for compensation
in respect of compliance with a directive under s 31A(1). Perhaps even more
fundamental in relation to RUI‟s claim for compensation against the City is the
distinction referred to in para 42 above, between the authorities implicated in relation
to s 31A and s 34. A claim in terms of s 34 to recover compensation may only be
brought against „the Minister or competent authority concerned‟. That does not
include a local authority. RUI‟s claim in terms of s 34 against the City was thus not
sustainable. The convoluted assertions in para 21 of RUI‟s particulars of claim,
based on the unconstitutionality of the aforesaid distinction, do not overcome the
obstacles that follow from the conclusions reached in the preceding paragraphs. If
anything, the distinction reinforces the findings aforesaid.

29 See Andries Charl Cilliers et al Herbstein & Van Winsen’s The Civil Practice of the High Courts and
the Supreme Court of Appeal of South Africa 5 ed (2009) at 630.

[56] The finding by the court below that s 37 of ECA and s 49 of NEMA do not
apply to compensation claims under s 34 of ECA was correct. However, the question
it did not address was whether the circumstances were such as to fall within s 34. As
discussed above the actions taken by the City in issuing a directive in terms of
section 31A does not fall within the purview of s 34. The relevant parts of the pleas of
the Minister and the MEC, and the City‟s exception, that the particulars of claim did
not disclose a cause of action ought therefore to have been upheld. The court below
erred in dismissing the exception and striking out the relevant parts of the pleas of
the Minister and the MEC.

[57] For all the reasons set out above, the following order is made:
1. The appeals of the Minister and the MEC are upheld with costs including the costs
consequent upon the employment of two counsel.
2. Insofar as they relate to the Minister and the MEC, paragraphs 2 and 3 of the
order of the court below are set aside and replaced by the following:
„The plaintiff‟s claims against the second and third defendants are dismissed with costs,
such costs to include those consequent upon the determination of the separated issue and
the costs of two counsel.‟
3. It is declared that the City‟s exception to the plaintiff‟s particulars of claim should
have been upheld.
4. The first respondent is ordered to pay the second respondent‟s costs of appeal
such costs to include those consequent upon the employment of two counsel.

______________________
M S Navsa

Appearances:

Counsel for Appellant:
P B J Farlam SC (with him M Bishop) (Heads
prepared by P B J Farlam SC, M Bishop and N
Pakade.)

Instructed by:

The State Attorney, Cape Town

The State Attorney, Bloemfontein

Counsel for First Respondent:
A M Breitenbach SC (with him A Erasmus and A
Christians)

Instructed by:

DHM Du Plessis Hofmeyr Malan c/o Van der Spuy
& Partners, Cape Town

Webbers, Bloemfontein

Counsel for Second Respondent: G M Budlender SC (with him P S van Zyl)

Instructed by:

Smith Ndlovu Summers, Cape Town

Rosendorff Reitz Barry, 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

3 October 2016

STATUS

Immediate

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

Minister of Water and Environmental Affairs v Really Useful Investments (436/2015)
[2016] ZASCA 156 (3 October 2016)

MEDIA STATEMENT

Today, the Supreme Court of Appeal (SCA) upheld an appeal by the Minister of Water and
Environmental Affairs and the MEC for Environmental Affairs and Development Planning, Western
Cape, against an order of the Western Cape Division of the High Court, Cape Town, and
consequently held that the particulars of claim of the first respondent, Really Useful Investments No
219 (Pty) Ltd (RUI), did not disclose a cause of action.

RUI owned a number of properties which it wished to develop. The City of Cape Town (the City)
issued a directive in terms of s 31A of the Environment Conservation Act 73 of 1989 (ECA), ordering
RUI to cease certain environmentally harmful activity and rectify any damage already caused.  RUI
did so, and then claimed compensation in terms of s 34 of ECA, which provides for compensation
where a landowner's rights have been limited under that Act.

The issues before the SCA were (i) whether RUI could claim compensation in terms of s 34 for
expenses incurred and losses allegedly sustained as a result of the directive issued by the City under
s 31A; and (ii) whether the exemption provision contained in s 37 of ECA and/or s 49 of the National
Environmental Management Act 107 of 1998 (NEMA) prevented a claim to compensation in terms of
s 34.

Regarding the second issue, the SCA held that the exemption provisions contained in s 34 of ECA
and s 49 of NEMA only applied to delictual claims and not to claims for compensation under s 34 of
ECA.

Regarding the first issue, however, the SCA held that compensation was not claimable under s 34 of
ECA for regulatory action taken under s 31A of ECA. To hold otherwise would result in absurdity.
Therefore RUI’s claim could not be sustained.

Accordingly, the SCA upheld the appeal and held that RUI’s particulars of claim did not disclose a
cause of action.

--- ends ---