Autumn Skies Resources and Logistics (Pty) Ltd v Genet Manganese (Pty) Ltd In re: Genet Manganese (Pty) Ltd v Minister of Mineral Resources and Others (47060/2017) [2019] ZAGPPHC 559 (25 October 2019)

IN THE HIGH COURT OF SOUTH AFRICA

(GAUTENG DIVISION, PRETORIA)

(1) REPORTABLE: YES/NO

(2) OF INTEREST TO OTHER JUDGES: YES/NO

(3) REVISED

Case number: 47060/2017

Date of hearing: 18 October 2019

Date delivered: 25/10/2019

In the matter between:

AUTUMN SKIES RESOURCES

AND LOGISTICS (PTY) LTD

Appellant

and

GENET MANGANESE (PTY) LTD.

Respondent

In re:

GENET MANAGENESE (PTY) LTD

Applicant

THE MINISTER OF MINERAL RESOURCES

First Respondent

THE DIRECTOR GENERAL: MINERAL REGULATION:

DEPARTMENT OF MINERAL RESOURCES

Second Respondent

REGIONAL MANAGER: NORTHEN CAPE REGION,

DEPARTMENT MINERAL RESOURSED

Third Respondent

ASR AND

LOGISTICS (PTY) LTD Fourth Respondent

JUDGMENT

SWANEPOEL AJ: (Tolmay J and Fabricius J concurring):

[1] This is an automatic appeal in terms of section 18 (4) (ii) of the Superior Court Act, 2013 ("the Act against an order granted by Davis J in terms of section 18 (3) of the Act.

[2] On 18 April 2019 the learned judge granted an order reviewing and setting aside a decision by first respondent ("the Minister"), in terms of which the Minister dismissed an appeal by respondent ("Genet") against the granting of two mining rights to appellant ("ASR") on a property known as Portion 3 of the Farm Kapstewel ("the property").

[3] On 25 June 2019 Davis J refused ASR leave to appeal against the aforesaid order, and on 29 July 2019 ASR filed an application for leave to appeal to the Supreme Court of Appeal. As a general rule, an application for leave to appeal suspends the operation of the order appealed against.[1] However , Genet subsequently launched a further application for an order that, pending the appeal, effect be given to the order of 18 April 2019. This application, brought in terms of section 18 (3) of the Superior Courts Act, 2013 was successful, and on 6 September 2019 an order was granted by Davis J that, pending the appeal, the order in the review application is not suspended. It is against that order that ASR now appeals.

STATUTORY REGIME

[4] The statutory regime relevant to this matter is contained in the Mineral and Petroleum Resources Development Act, Act 28 of 2002 ("the MPRDA"). The sections of the MPRDA which are pertinent to this application, are as follows:

“16. Application for prospecting right.-

(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 fee.

(2) The Regional Manager must accept an application for a prospecting right if-

(a) the requirements contemplated in subsection (1) are met;

(b) no other person holds a prospecting right, mining right, mining permit or retention permit for the same mineral and land; and

(c) no prior application for a prospecting right, mining right, mining permit or retention permit has been accepted for the same mineral on the same land and which remains to be granted or refused.

(3) If the application does not comply with the requirements of this section, the Regional Manager must notify the applicant in writing within 14 days of the receipt of the application.

(4) ..........

(5) ··········

17. Granting and duration of prospecting right

(1) The Minister must within 30 days of receipt of the application from the Regional Manager, grant a prospecting right if-

(a) the applicant has access to financial resources and has the technical ability to conduct the proposed prospecting operation optimally in accordance with the prospecting work programme;

(b) the estimated expenditure is compatible with the proposed prospecting operation and duration of the prospecting work programme;

(c) the prospecting will not result in unacceptable pollution ecological degradation or damage to the environment;

(d) the applicant has the ability to comply with the relevant provisions of the Mine Health and Safety Act, 1996 (Act No. 29 of 1996);

(e) the applicant is not in contravention of any relevant provision of this Act; and

(f) in respect of prescribed minerals the applicant has given effect to the objects referred to in section 2 (d);

(2) The Minister must, within 30 days of receipt of the application from the Regional Manager, refuse to grant a prospecting right if-

(a) the application does not meet all the requirements referred to in subsection (i);

(b) the granting of such right will result in the concentration of the mineral resources in question under the control of the applicant and their

(a) the application does not meet all the requirements referred to in section (i);

(b) the granting of such right will result in the concentration of the mineral resources in question under the control of the applicant and their associated

companies with the possible limitation of equitable access to mineral resources.

(3) If the Minister refuses to grant a prospecting right, the minister must, within 30 days of the decision, in writing notify the applicant of the decision with reasons.

22. Application for mining right.-

(1) Any person who wishes to apply to the Minister for a mining 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

(2) together with the prescribed non-refundable application fee. The Regional Manager must, within 14 days of receipt of the application, accept an application for a mining right if-

(a) the requirements contemplated in subsection (1) are met;

(b) no other person holds a prospecting right, mining right, mining permit or retention permit for the same mineral and land; and

(c) no prior application for a prospecting right, mining right, mining permit or retention permit, has been accepted for the same mineral and land and which remains to be granted or refused.

23. Granting and duration of mining right

(1) Subject to subsection (4), the Minister must grant a mining right if-

(a) the mineral can be mined optimally in accordance with the mining work programme;

(b) the applicant has access to financial resources and has the technical ability to conduct the proposed mining operation optimally;

(c) tile financing plan is compatible with the intended mining operation and the duration thereof·,

(d) the mining will not result in unacceptable pollution, ecological degradation or damage to the environment and an environmental authorisation is issued;

(e) the applicant has provided for the prescribed social and Labour plan;

(f) the applicant has the ability to comply with the relevant provisions of the Mine Health and Safety Act, 1996 (Act No. 29 of 1996);

(g) the applicant is not in contravention of any provision of this Act; and

(h) the granting of such right will further the objects referred to in section 2 (d) and (f) and in accordance with the charter contemplated in section 100 and the prescribed social and labour plan.

(2) The Minister may, having regard to the nature of the mineral in question, take into consideration the provisions of section 26.

(2A) If the application relates to the land occupied by a community, the Minister may impose such conditions as are necessary to promote the rights and interests of the community, including conditions requiring the participation of the community.

(3) The Minister must, within 60 days of receipt of the application from the Regional Manager, refuse to grant a mining right if the application does not meet the requirements referred to in subsection (1).

(4) If the Minister refuses to grant a mining right, the Minister must, within 30 days of the decision, in writing notify the applicant of the decision and the reasons. "

[5] The Constitutional Court considered the application of sections 16 and 17 of the MPRDA in Aquila Steel (S Africa) (Pty) Ltd v Minister of Mineral Resources and others 2019 (3) SA 621 (CC). It held that upon receiving an application for prospecting rights (and by extension for mining rights) a Regional Manager has an evaluative function and is required to check whether an application has been lodged 'in the prescribed manner'. If it has not, the application must be returned to the applicant:

"Failure by the Regional Manager to return an application non­ compliant with the regulations constitutes failure to carry out an expressly specified statutory duty ('must return'). It fallows in my view that the malperformance in issue may constitute administrative action reviewable under PAJA. The conclusion that ZiZa's application was grossly defective when it was accepted, when it should have been returned, means it was also defective when the Minister considered it in terms of section 17 (1) of the MPRDA. That leads to the conclusion that the Minister's grant to ZiZA of a prospecting right was unlawful and should be set aside." (at paras. 52 and 53)

[6] Thus the process works as follows:

[6.1] When the Regional Manager receives an application he must check that it does not seek prospecting or mining rights to a property on which there is a pre-existing prospecting right or mining right. He must also check that the application is filed in the prescribed manner and is accompanied by the prescribed fee.

[6.2] If the Regional Manager is satisfied that the application complies with the section 17 statutory requirements, he must accept the application. It is then presented to the Minister. If the Regional Manager is not satisfied that the application is compliant, he must return the application within 14 days of receipt thereof.

[6.3] The Minister must grant an application for a prospecting right if the requirements in section 17 (1) (a) to (f) are met. The Minister must grant a mining right if the requirements of section 23 are met, and must refuse to do so if the requirements are not met.

[7] The MPRDA therefore creates a "first come, first served" system. If a person has prospecting or mining rights, or has lodged an application for such rights which has been accepted but not yet considered by the Minister, no other person may apply for rights to the same land and mineral. If the statutory requirements of the MPRDA are satisfied, the Minister must grant the rights applied for. It is against the aforesaid statutory background that I consider the facts of the matter.

FACTUAL BACKGROUND

[8] On 13 June 2008 Autumn Skies Trading 128 CC ("Skies Trading") applied for two prospecting rights over the property known as Portion 3 of the Farm Kapstewel 436. The application was duly granted. It must be mentioned that at all relevant times one Adv. Sehunelo ("Sehunelo") was a member of Skies Trading. On 11 June 2011 Skies Trading applied for an extension of the prospecting rights. The extension application was granted on 25 July 2011, and notarially executed on 1 December 2011. The extension was valid until 30 November 2014.

[9] As I have stated above, no other person was entitled to apply for overlapping prospecting or mining rights during the currency of Skies Trading's pre-existing prospecting rights. Nevertheless, on 21 August 2013 ASR applied for mining rights for the same mineral on the same property. The application was supported by a letter by Sehunelo to the Regional Manager dated 28 August 2013 in which he wrote:

"This serves to confirm that Autumn Skies 187 CC (sic) is the holder of the prospecting right..... and has applied for a mining right on the same property under a new company name being ASR and Logistics. "

[10] Sehunelo intended the Regional Manager to believe that Autumn Skies 128 CC and ASR were one and the same entity, save for a change in name. The aforesaid statement was, to Sehunelo's knowledge, false. According to an affidavit deposed to by the Regional Manager, he took heed of the contents of the letter, and in the mistaken belief that the two entities were one and the same and that they did not fall foul of the provisions of section 22 (2) (b) of the MPRDA, the Regional Manager forwarded the application to the Minister who awarded the mining rights to ASR. It seems clear from a reading of Aquila (supra) that the awarding of the mining rights was irregular due to Skies Trading's pre-existing prospecting rights, and that the decision was properly reviewed and set aside. That, however, is a matter for the appeals court.

[11] On 15 April 2015 Genet applied for prospecting rights to the same property and mineral as had previously been held by Skies Trading. On 4 August 2015 the application was rejected on the grounds that ASR held pre-existing mining rights to the property, and that the awarding of prospecting rights to Genet would fall foul of the provisions of section 16 (2) (b) of the MPRDA. On 8 December 2015 Genet lodged an appeal against the awarding of the mining rights to ASR, and on 9 May 2017 the Minister dismissed the appeal for the following reasons:

"The appellant does not have locus standi to lodge an appeal, in that its application for a prospecting right was number four in line and cannot influence the outcome of a preceding application through appeal process and an alleged unlawful administrative decision will remain valid until set aside by a court of law."

[12] On 10 July 2017 Genet launched the application to review the Minister's decision. Genet based its application on the simple premise that the granting of mining rights to ASR was irregular given the fact that its application was filed while Skies Trading held prospecting rights to the same land. The Regional Manager should therefore have returned ASR's application for non-compliance with section 22 (2) (b) of the MPRDA. In turn, Genet contended, given the Regional Manager's failure to return the application, the Minister's decision to award the mining rights was also irregular.

[13] ASR argued that the premature acceptance of the application was a purely procedural error. The Court a quo held that this argument flew in the face of the Aquila judgment and the exclusivity regime set out in sections 16 (2) (b) and 22 (2) (b) of the MPRDA.

[14] In the alternative, ASR argued that the non-compliance with the MPRDA was not material. It contended that no prejudice would result from allowing its mining right to continue to exist, and that should the Minister's decision be set aside, substantial prejudice would be suffered by ASR and its employees. ASR alleged that:

[14.1] It had been mining on the property for five years:

[14.2] It employed 107 employees on the mine at a monthly cost of R 1.2 million, whose employment would be at risk if the mining right award was set aside;

[14.3] It had incurred capital expenses of R 180 million to conduct the operations on the property;

[14.4] It had incurred expenditure of R 7.6 million for exploration. drilling and preparation of a resource statement;

[14.5] It had expended R 6.3 million for construction of infrastructure;

[14.6] It had spent R 9.6 million on the removal of overburden.

[15] The Court a quo held that none of the aforesaid facts justified the exercise of the Court's discretion in favour of ASR, and it set aside the Minister's decision to award the rights to ASR.

[16] In its founding affidavit in this application Genet submitted an agreement between ASR and a company named Autumn Skies Iron Ore (Pty) Ltd ("ASIO"). In terms of this agreement ASR granted ASIO the right to mine on the property with effect from 1 December 2017. In return, ASIO accepted liability for a loan granted by Skies Trading to ASR in the amount of R 4.8 million. The agreement makes it clear that ASR's averments in the Court a quo, relating to its alleged mining activities, is a complete fabrication in that:

[16.1] It did not conduct mining operations on the property;

[16.2] It did not spend any money in respect of capital expenditure, exploration, drilling or the preparation of a resource statement:

[16.3] It had no employees who were conducting mining operations;

[16.4] It had not spent any money on infrastructure;

[16.5] It had no equipment or any assets on the mine.

[17] ASR's version in the review application regarding alleged mining activities was a fraud intended to mislead the Court a quo. The deponent to ASR's affidavit, in which these allegations were made, was one Lionel Koster, a director of ASR. Koster signed a resolution on 1 December 2017 authorizing the ASIO agreement, notwithstanding which he misrepresented in an affidavit to the Court some two months later that ASR was operating on the mine. In my view Koster deliberately committed perjury in the review application by not only concealing the ASIO agreement, but by blatantly putting up a false version.

[18] ASR's application for leave to appeal against the section 18 (3) order was dismissed on 25 June 2019. Genet consequently sent a letter to ASIO and to ASR in which it pointed out that mining operations on the mine should cease. Nevertheless, ASR, through ASIO, has continued to conduct mining operations on the property in defiance of the order of Davis J.

[19] Even more outrageously, despite being aware of Genet's challenge to the mining rights, ASR has purported to sell 51% of the mining rights to a company named Jactron. of which two Chinese investors and Sehunelo are the directors. ASR has allegedly received some R 9 million from Jactron pursuant to the sale agreement. Not only does the alleged sale fly in the face of the court order, it is illegal, contravening the provisions of the MPRDA.

[20] None of the aforesaid allegations were denied by ASR in its answering affidavit. It took the view that the allegations constitute new facts which should not be allowed in this application. That view is wrong, simply for the reason that the section 18 (3) application is a stand-alone application in which different considerations apply. In my view, ASR's stance was motivated more by the fact that there is no satisfactory reply to Genet's allegations. It is against this factual

background that the section 18 (3) application must be considered.

SECTION 18 OF THE SUPERIOR COURTS ACT1 2013

[21] Section 18 (1) (2) and (3) of the Superior Courts Act, 2013 reads as follows:

"18 Suspension of decision pending appeal

(1) Subject to subsections (2) and (3), and unless the court under exceptional circumstances orders otherwise, the operation and execution of a decision which is the subject of an application for leave to appeal, is suspended pending the decision of the application or appeal.

(2) Subject to subsection (3), unless the court under exceptional circumstances orders otherwise, the operation and execution of a decision that is an interlocutory order not having the effect of a final judgment, which is the subject of an application for leave to appeal or of an appeal, is not suspended pending the decision of the application or appeal.

(3) A court may only order otherwise as contemplated in subsection (1) or (2), if the party who applied to court to order otherwise, in addition proves on a balance of probabilities that he or she will suffer irreparable harm if the court does not so order and that the other party will not suffer irreparable harm if the court so orders."

[22] Under the common law it was generally accepted that once an appeal was lodged the order under appeal was automatically suspended. A party could, however, apply for leave to execute the order notwithstanding the appeal. Rule 49 (11) (which has since been repealed) restated the common law position that an appeal suspended the execution of an order. Under the common law a court had a wide discretion whether to allow execution or not.[2] It was held in South Cape Corporation (supra at 545 B)that:

"The purpose of this rule as to the suspension of a judgment on the noting of appeal is to prevent irreparable damage from being done to the intending appellant, either by levy under a writ of execution or by the execution of the judgment in any other manner appropriate to the nature of the judgment appealed from "

[23] Section 18 has brought with it a more stringent test for the implementation of an appealed order. In lncubeta Holdings (Pty) Ltd v Ellis[3] the Court held the following (at 194 C):

"It seems to me that there is indeed a new dimension introduced to the test by the provisions of s 18. The test is twofold. The requirements are:

* First, whether or not 'exceptional circumstances exist; and

* Second, proof on a balance of probabilities by the applicant of-

o the presence of irreparable harm to the applicant/victor, who wants to put into operation and execute the order; and

o the absence of irreparable harm to the respondent/loser, who seeks leave to appeal."

[24] It seems to me that the words "A court may only order otherwise as contemplated in subsection (1) or (2) ......." (my emphasis) indicate that it is a sine qua non for the granting of an order allowing execution, that the applicant must prove that it will suffer irreparable harm should the order not be implemented, and in addition, it must prove that the other party will not suffer irreparable harm if execution is allowed.

This is the first leg of the enquiry. If either question is answered in the negative, the existence or not of exceptional circumstances is moot. Only once those questions have been determined in the affirmative can the question of 'exceptional circumstances' be addressed as a second leg of the enquiry.

[25] The enquiry as to 'irreparable harm· to the parties is, as held by Sutherland J in lncubeta,[4] comprised of two separate findings, one in respect of each party. If either one of the questions is answered in the negative (ie. that applicant will not suffer irreparable harm if execution is refused, or the other party will suffer irreparable harm if the order is executed upon). execution of the order should not be allowed.

[26] Once the 'irreparable harm' hurdle is crossed, a wider consideration is necessary, to determine whether 'exceptional circumstances' exist that justify the deviation from the default position that the appeal suspends execution.

[27] The meaning of unexceptional circumstances" was considered in Mv Ais Mamas Seatrans Maritime v Owners, Mv Ais Mamas, and another[5] (referred to with approval in lncubeta Holdings). The approach in this matter can be summarized as follows:

[27.1] The words "exceptional circumstances" contemplate something out of the ordinary or of an unusual nature;

[27.2] The circumstances must arise from, or be incidental to, the case;

[27.3] The determination whether exceptional circumstances exist does not depend on the exercise of a judicial discretion, but is a fact-based exercise;

[27.4] Depending on the context of its use, the phrase 'exceptional circumstances' has a primary meaning of ·unusual' or 'different', or in its secondary meaning , 'markedly unusual' or 'specially different';

[27.5] Where in a statute it is directed that a fixed rule shall be departed from only in exceptional circumstances, a strict rather than liberal meaning should be given to the phrase.

[28] The Mv Ais matter was concerned with the interpretation of the words 'exceptional circumstances' within the confines of the Admiralty Jurisdiction Regulation Act, 1983, and, as Sutherland J warned in lncubeta Holdings, "Nevertheless it seems to me, to be necessary to express caution about importing from one kind of enquiry into another kind of enquiry an understanding of a familiar phrase. "

[29] Sutherland J went on to say (at 195 E):

"The context relevant to s 18 of the SC Act is the set of considerations pertinent to a threshold test to deviate from a default position, ie the appeal stays the operation and execution of the order. The realm is that of procedural laws whose policy objectives are to prevent avoidable harm to litigants. The primary rationale for the default position is that finality must await the last court's decision in case the last court decides differently - the reasonable prospect of such an outcome being an essential ingredient of the decision to grant leave in the first place. Where the pending happening is the application for leave itself, the potential outcome in that proceeding, although conceptually distinct from the position after

leave is granted, ought for policy reasons to rest on the same footing. "

[30] Therefore, the enquiry as to 'exceptional circumstances' must be fact based, and a deviation from the default position can only follow should fact and policy reasons justify the deviation.

[31] Sutherland J was of the view that the appellant's prospect of success on appeal played no role in the consideration process. The same view was held in Liviero Wilge Joint Venture & another v Eskom Holdings Soc Ltd [2014] ZAGPJHC 150. However, the opposite view was taken by Binns-Ward J in The Minister of Social Development Western Cape & others v Justice Alliance of South Africa & another [2016] ZAWCHC 34 and in Joubert v Joubert (Gauteng Provincial Division case no. A357l2018 (delivered 14 December 2018).

[32] The Supreme Court of Appeal has now decided the issue when it held in University of the Free State v Afriforum 2018 (3) SA 428 (SCA) that:

"I am in agreement with the approach of Binns-Ward J. In fact, Justice Alliance serves as a prime example why the prospects of success in the appeal are relevant in deciding whether or not to grant the exceptional relief. "

[33] I turn now to consider the application of these principles to this matter .

IRREPARABLE HARM

[34] Before this Court, ASR took one point only: It contended that Genet had not demonstrated that it would suffer irreparable harm should the section 18 (3) order not be granted. The argument goes that Genet's application to the Minister was fatally flawed in that it did not comply with a number of requirements of the MPRDA, nor with regulations 2, 5 and 7. It is alleged that due to its non-compliance with the MPRDA, the application could not have been accepted by the Regional Manager, nor could the Minister have granted Genet prospecting rights. ASR's contention is that if Genet could not have been awarded any rights pursuant to the defective application, it can therefore not suffer irreparable harm should the section 18 (3) order not be granted.

[35] This allegation was raised for the first time in ASR's application for leave to appeal to the Supreme Court of Appeal. At no stage, prior to applying for leave to appeal, did ASR dispute that Genet had filed a proper and compliant application to the Regional Manager. Genet argues that it is inadmissible for ASR to raise this point on appeal, as it had never raised it in the review application.

[36] Mr. Wessels SC, ASR's counsel, argues that the Genet application for prospecting rights was annexed to the founding affidavit in the review application, and that it is quite permissible for an appeals court to consider the application and to consider whether it complies with the provisions of the MPRDA. Mr. Wessels submits that Aquila supports his argument in that the Constitutional Court in that matter dealt at length with the defects in the ZiZa application for prospecting rights, and it held that due to those defects, the ZiZa application should not have been granted.

[37] Mr. Wessels' submission misrepresents the facts in Aquila. Whilst it is so that the Constitutional Court closely considered the ZiZa mining rights application and its flaws, the issue was not raised before the Constitutional Court for the first time. It was, from the outset, a central part of Aquila's attack on ZiZa's rights that the original application was fatally flawed. The issue was fully canvassed by the parties in the papers. The High Court specifically pronounced on that issue. In this matter Genet was not afforded an opportunity to deal with the allegation that the

application to the Minister was fatally flawed. The Aquila matter can therefore be distinguished from this matter on their respective facts.

[38] Ms. Hartford SC, for Genet, quite properly pointed out that ASR cannot make out a completely new case on appeal. She also pointed out, correctly in my view, that the Regional Manager had the statutory obligation to return applications that did not comply with the MPRDA. One can make the deduction that the application was compliant from the fact that the Regional Manager did not return the application. Instead of doing so, as he should have had the application been non-compliant, he submitted it to the Minister for his consideration. It must also be borne in mind that the Minister did not refuse the application due to non­ compliance with the MPRDA, but rather due to ASR's alleged pre-existing right, and the mistaken belief that three other companies stood in line before Genet. The inescapable conclusion is that the application was compliant with the MPRDA

[39] In Magnificent Mile Trading (Pty) Ltd v Celliers N.O. and others [2019] ZACC 36 Jaftha J made the point[6] that an administrative action, such as the Regional Manager's acceptance of Genet's application, is presumed to be valid until it is set aside by a court. In my view, it is not for this court to consider the validity or invalidity of the Genet application at this stage, and ASR's reliance on its alleged invalidity is misplaced.

[36] In the circumstances, had the Minister applied his mind properly, he would have been obliged to grant the prospecting rights to Genet. Therefore, Genet has a direct and substantial interest in the continued mining operation being conducted by ASR through ASIO. Should the mining operation continue whilst the appeal is pending, the ore body would be depleted. Furthermore, on Genet's undisputed version, ASR is not complying with its rehabilitation obligations. Genet, or whomever follows on ASR on the mine, will be saddled with a rehabilitation obligation that is growing on a daily basis .

[37] ASR is, despite its allegations that it has Invested vast sums of money in the mine, not able to provide the necessary financial guarantees that its rehabilitation obligations will be met. In these circumstances Genet's submission that should it seek damages from ASR at a later stage it may well not be able to recover anything, is convincing. I have no doubt that Genet will suffer irreparable harm should the review order not be given effect to immediately.

[38] ASR has not submitted that it would suffer irreparable harm should the order not be suspended. There is good reason for that approach: Simply put, ASR has no stake in the mine save that it is entitled to payment of a monthly fee of R 990 000.00. It does not, despite its contrary allegations, have employees on the mine, it owns no infrastructure, and it has sold off 51% of its mining rights to Jactron. In my view, should the order be implemented, ASR will suffer no harm whatsoever.

EXCEPTIONAL CIRCUMSTANCES

[39] The exceptional circumstances in this matter are, in my view, self­ evident. ASR obtained its mining right in fraudulent circumstances after Sehunelo misrepresented to the Regional Manager that Skies Trading and ASR were one and the same entity. The mining operation that has apparently been ongoing since December 2017 is illegal, and continues to be conducted illegally.

[40] ASR has not complied with Us rehabilitation obligations which is a further illegality, and it continues to do so. ASR has shown utter contempt for the court process by ignoring the order of Davis J. Instead of recognizing that it had no right to continue the mining operation, ASR continued to mine, even continuing after its application for leave to appeal was dismissed, and then continuing after the section 1B (3) order was granted.

[41] Furthermore, Koster deposed to an affidavit in which he perjured himself by telling the Court a quo that ASR had invested vast sums of money in the mine, and had numerous employees that were dependent on the continued mining operation whilst in fact it had not expended any monies, nor did it have employees on the mine. Despite Genet's attack on its rights, ASR has purported to sell a stake in its "rights" to an investor, contrary to the provisions of the MPRDA. Given these facts, I believe that it is fair comment by Genet to say that ASR regards itself as above the law. To allow ASR to continue its unlawful conduct would, in my view, be iniquitous.

[41] There is also a strong public interest in the awarding of prospecting and mining rights. It is perhaps useful to quote the preamble to the MPRDA:

"RECOGNISING that minerals and petroleum are non-renewable natural resources ;

ACKNOWLEDGING that South Africa's mineral and petroleum resources belong to the nation and that the State is the custodian thereof,·

AFFIRMING tile State's obligation to protect the environment for the benefit of present and future generations, to ensure ecologically sustainable

development of mineral and petroleum resources and to promote economic and social development;

RECOGNISING the need to promote local and rural development and the social upliftment of communities affected by mining,

REAFFIRMING the State's commitment to reform to bring about equitable access to South Africa's mineral and petroleum resources;

BEING COMMITTED to eradicating all forms of discriminatory practices in the mineral and petroleum industries;

CONSIDERING the State's obligation under the Constitution to take legislative and other measures to redress the results of past racial discrimination;

REAFFIRMING the State's commitment to guaranteeing security of tenure in respect of prospecting and mining operations; and

EMPHASISING the need to create an internationally competitive and efficient administrative and regulatory regime.. "

[42] None of the aims expressed in the preamble to the MPRDA can be achieved should the type of lawlessness displayed by ASR be allowed. The public interest requires that such operations be stopped as expeditiously as possible. Therefore, in my view, there are exceptional circumstances present justifying the section 18 (3) order.

CRIMINAL CONDUCT

[43] In my view there is prima facie evidence that both Sehunelo and Koster have made themselves guilty of criminal conduct. Sehunelo deliberately misrepresented to the Regional Manager that Skies Trading and ASR were one and the same entity when in reality they were not. He did so in order to obtain the mining rights for ASR, whilst he was fully aware that ASR was not entitled to apply for those rights

[44] Koster has made substantial misrepresentations in a supplementary affidavit in the review application, and he is at least prima facie guilty of perjury.

[45] Consequently I intend to refer this judgment to the Director of Public Prosecutions for consideration as to possible criminal charges.

COSTS

[46] In light of my views regarding ASR's conduct, and that of its directors, I have no doubt that a punitive costs order is appropriate.

[47] In the circumstances I make the following order:

[47.1] The appeal is dismissed;

[47.2] The appellant shall pay respondent's costs on the attorney/client scale;

[47.3] The Registrar of this Court is directed to forward this judgment to the Director of Public Prosecutions with a view to the investigation of the possible criminal conduct referred to herein.

Swanepoel AJ

Acting Judge of the High Court,

Gauteng Division, Pretoria

I agree:

Tolmay J

Judge of the High Court,

Gauteng Division, Pretoria

Fabricius J

COUNSEL FOR APPELLANT: Adv. E Wessels SC

ATTORNEYS FOR APPELLANT: Mendelow-Jacobs

Mr. Mendelow

COUNSEL FOR RESPONDENT: Adv. C Hartford SC

ATTORNEYS FOR RESPONDENT: Werksmans Attorneys

Mr. C Stevens

[1] Section 18 (1) of the Superior Courts Act, Act 10 of 2013.

[2] South Cape Corporation (Pty) Ltd v Engineering Management Services 1977 (3) SA 534 (A)

[3] 2014 (3) SA 189 (GJ)

[4] At page 196 A - B

[5] 2002 (6) SA 150 (C)

[6] Al paragraph 83