Desert Wind Properties 67 (Pty) Ltd v Member of the Executive Committee Department of Rural, Environment and Agricultural Development, Northwest Provincial Government and Others (M645/2016) [2018] ZANWHC 34 (15 March 2018)

IN THE NORTH WEST HIGH COURT, MAFIKENG

CASE NO: M 645/2016

NOT REPORTABLE

NOT OF INTEREST TO OTHER JUDGES

CIRCULATE TO OTHER MAGISTRATES: NO

CIRCULATE TO REGIONAL MAGISTRATES: NO

In the matter between:

DESERT WIND PROPERTIES 67 (PTY) LTD Applicant

and

THE MEMBER OF THE EXECUTIVE COMMITTEE

DEPARTMENT OF RURAL, ENVIRONMENT AND

AGRICULTURAL DEVELOPMENT,

NORTH WEST PROVINCIAL GOVERNMENT 1st Respondent

THE DEPARTMENT OF RURAL ENVIRONMENT

AND AGRICULTURAL DEVELOPMENT

NORTH WEST PROVINCIAL GOVERNMENT 2nd Respondent

THE MADIBENG LOCAL MUNICIPALITY 3rd Respondent

DATE OF HEARING: 8 FEBRUARY 2018

DATE OF JUDGMENT: 15 MARCH 2018

COUNSEL FOR THE PLAINTIFF: ADV. M M RIP SC

COUNSEL FOR THE DEFENDANT: ADV. S KOLBE SC

JUDGMENT

HENDRICKS J

Introduction

[1] The applicant, the owner of a farm situated in the Hartbeespoort dam area, applied to the Department of Rural, Environmental and Agricultural Development, North West Provincial Government (‘the department’) for environmental authorization in terms of Section 43 of the National Environmental Management Act 107 of 1998 (‘the NEMA act’) to establish a township. The application was refused. Dissatisfied about the outcome, the applicant lodged an appeal against the refusal of authorization with the Member of Executive Council (‘MEC’) responsible for the department. The appeal was also unsuccessful. The applicant now approached this Court for an order to review and set aside the appeal decision of the MEC. The application is opposed by the MEC (first respondent) and the department (second respondent).

[2] The farm of the Applicant is situated adjacent to a busy intersection near the Hartbeespoort dam wall, which is a tourist attraction. The applicant is desirous to establish a township on the property in order to create a mixed use development consisting inter alia of a hotel, conference centre, casino, amphitheater, retail and residential components. Consultants were appointed to assess and

report on the possibility for such development and to obtain the necessary environmental authorization in terms of the NEMA act

requirements. This was duly done. An application was made to the department for the requisite environmental authorization. This

application was accompanied by the relevant required documentation in order to comply with the statutory requirements.

[3] On the 5th August 2014 the department notified the applicant that environmental authorization was refused. The following were advanced as the reasons for the decision to refuse the environmental authorization:

"After consideration of the information and facts as listed above, the Department made the following findings:-

(a) The proposed development is not compatible with land uses which are permitted within the Magaliesberg protected environment (MPE), and these might set a precedence of other high density developments within the MPE;

(b) The development's site is located on the boundary of the MPE and it is very close to the MPE as compared to other similar developments of high density in the area. Should this development be authorised, one of the objectives of the Magaliesberg Protected Environment which calls to the management of development intensity around the MPE in order to limit "edge effect" on the MPE boundaries will not be realised or achieved. See the Basic Assessment Report dated 23 July 2014 complied by Lokisa Environmental Consulting CC has not demonstrated substantially that the development confirms to land uses in the Magaliesberg Protected Environment:

Environment Management Framework and Plan dated October 2007. The layout plan for the development to the Department indicates high density residential uses, hotel, casino, conference facilities, retail park, theme park, tourism, related activities, adventure activities and sport facilities within the area of 6.7172 hectares.

In view of the above, the Department is not satisfied that the proposed activity can be undertaken without conflicting with the land use objectives of the Magaliesberg Protected Environment; Environmental Management Framework and Plan dated October 2007, the application is accordingly refused."

[4] An appeal to the MEC was lodged accompanied by submissions and a motivation. On the 03rd June 2016 the MEC refused the appeal and upheld the decision of the department. The reasons advanced for the refusal of the appeal are as follows:

"The following reasons were given for refusing the environmental authorisation:-

(i) Because, the development is not compatible with land uses in the Magaliesberg Protected National Environment (MPNE);

(ii) Because the development will set a precedent in the MPNE for further developments:

(iii) Because the edge effect of the MPNE boundary should be limited;

(iv) Because the report did not demonstrate that the development confirms with the MPNE plan."

It is this decision of the MEC that form the basis of this review application.

The Law

[5] In Sidumo and Another v Rustenburg Platinum Mines and Others 2008 (2) SA 24 (CC) the following is stated with regard to the standard of review:

“[106] The Carephone test, which was substantive and involved greater scrutiny than the rationality test set out in Pharmaceutical

Manufacturers, was formulated on the basis of the wording of the administrative justice provisions of the Constitution at the time,

more particularly, that an award must be justifiable in relation to the reasons given for it. Section 33(1) of the Constitution presently states that everyone has the right to administrative action that is lawful, reasonable and procedurally fair. The reasonableness standard should now suffuse section 145 of the LRA.

[107] The reasonableness standard was dealt with in Bato Star. In the context of section 6(2)(h) of PAJA, O’Regan J said the

following: “[A]n administrative decision will be reviewable if, in Lord Cooke’s words, it is one that a reasonable

decision-maker could not reach.”

[108] This Court recognised that scrutiny of a decision based on reasonableness introduced a substantive ingredient into review

proceedings. In judging a decision for reasonableness, it is often impossible to separate the merits from scrutiny. However, the

distinction between appeals and reviews continues to be significant.

[109] Review for reasonableness, as explained by Professor Hoexter, does threaten the distinction between review and appeal. The Labour Court in reviewing the awards of commissioners inevitably deals with the merits of the matter. This does tend to blur the distinction between appeal and review. She points out that it does so in the limited sense that it necessarily entails scrutiny of the merits of administrative decisions. She states that the danger lies, not in careful scrutiny, but in “judicial overzealousness in setting aside administrative decisions that do not coincide with the judge’s own opinions.” This Court in Bato Star recognised that danger. A judge’s task is to ensure that the decisions taken by administrative agencies fall within the bounds of reasonableness as required by the Constitution.

[110] To summarise, Carephone held that section 145 of the LRA was suffused by the then constitutional standard that the outcome of an administrative decision should be justifiable in relation to the reasons given for it. The better approach is that section 145 is now suffused by the constitutional standard of reasonableness. That standard is the one explained in Bato Star: Is the decision reached by the commissioner one that a reasonable decision-maker could not reach? Applying it will give effect not only to the constitutional right to fair labour practices, but also to the right to administrative action which is lawful, reasonable and procedurally

fair.”

This Court must determine whether the decision taken by the MEC to uphold the refusal of environmental authorization by the department must be reviewed and set aside.

[6] The applicant premised its appeal against the decision of the MEC on the following grounds:

(a) In making the decision, the MEC had regard to irrelevant considerations and failed to have regard to relevant considerations. The MEC rigidly relied on policy to justify the decision;

(b) The decision of the MEC is arbitrary and capricious and inconsistent with the legislation. The MEC merely rubberstamped the department’s decision and failed to appreciate that the land is not within the Magaliesberg Protected Natural Environment area;

(c) The MEC’s decision is not rationally connected to the material placed before her. The MEC failed to appreciate that the intended development falls outside the Magaliesberg Protection Natural Environment area.

[7] The department adopted an Environmental Management Framework (EMF) as a guideline, code or policy to assist in the management, regulation and decision - making process of the area of land within or adjacent to the Magaliesberg Protected National Environment (MPNE) area. The EMF is aimed at addressing the requirements as contemplated in Section 71 of the Environmental Impact Assessment Regulations of Government Notice R3685 (21 April 2006), as well as the basic components of a Management Plan for the protected area as described in section 41 of the National Environmental Management: Protected Areas Act 57 of 2003. The EMF is a general policy framework to assess inter alia the desirability of intended developments in the MPNE.

[8] It was contended on behalf of the applicant that the MEC incorrectly found that the intended development is within the MPNE area. This is not what was found by the MEC. After considering the grounds of appeal and the reasons given by the department for refusing the environmental authorization, the MEC state:

“I have scrutinized the information pertaining to this matter and I concur with the decision and reasons given to refuse the granting of an environmental authorization in this application. I am of the opinion that the decision has been made correctly and I am also of the opinion that the proposed activity cannot be undertaken without conflicting the land use objectives of the MPE: Environmental

Management Framework and Plan dated October 2007.”

As alluded to earlier, the reasons given for refusing the environmental authorization by the department and considered by the MEC were the following:

(v) Because, the development is not compatible with land uses in the Magaliesberg Protected National Environment (MPNE);

(vi) Because the development will set a precedent in the MPNE for further developments:

(vii) Because the edge effect of the MPNE boundary should be limited;

(viii) Because the report did not demonstrate that the development confirms with the MPNE plan."

The MEC states the following in her answering affidavit with regard to the MPR policy framework:

"16. Acting in terms of the provisions of the Environmental Impact Assessment Regulations, 2006 during or about March 2009 the Department adopted the Environment Management Framework (the EMF) for the Magaliesberg Protected Environment.

17. The EMF encapsulates a management plan which is specifically applicable to the Magaliesberg Protected Environment (MPE) and its surrounding areas. It is a general policy framework used as a reference tool to determine, amongst others, the desirability of intended developments in and around the MPE so as to effectively manage, amongst others, the "edge effects" in the immediate area surrounding the MPE."

[9] It was submitted on behalf of the applicant that the MPF policy was too rigidly applied by the MEC and there was no discretion exercised on the part of the MEC. Counsel for the applicant Adv. Rip SC, referred this Court to the judgment of the Supreme Court of Appeal (‘SCA’) in Magaliesberg Protection Association v MEC for Agriculture, Conservation, Environment and Rural Development & Others, case no 563/2012 ZASCA (2013), delivered on 30 May 2013. In particular was reference made to paragraphs [45] to [48] which reads as follows:

“[45] The contents of the EMF in question was debated extensively with counsel for the MPA to determine what precisely in the report differed from what is generally acknowledged to be the ecologically sensitive nature of the MPE. Such acknowledgement is set out in the environmental impact report compiled on behalf of Lesekha. Section 24G(1) of NEMA requires that a report on the impact of an activity on the environment be assessed. That aspect too is addressed in the Lesekha report.

[46] What emerged from this debate is that counsel was advancing a case foreshadowed in its founding affidavit, namely, that listed activities within the MPA were almost totally prohibited, In submissions before us, counsel, although disavowing that the MPA was proposing that the prohibition was absolute, nevertheless suggested that if consideration was given to the provisions of the EMF it would almost always compel the competent authority to lean against granting authorisation.

[47] In relation to the critical content of the EMF on which the MPA relied, counsel on its behalf relied on a graphic in relation to the activity in question, namely the construction of the facility developed by Kgaswane, alongside which there were multiple crosses denoting incompatibility on all relevant levels. For the remainder, counsel could not point to any other part of the EMF which differed from the concerns addressed by the legislation referred to earlier in this judgement and those expressed in the documentation that served before the Chief Director and the MEC. Insofar as the RSDF is concerned, counsel for the MPA was once again unable to draw our attention to any part of it which contained material likely to be different to the concerns addressed in the Lesekha report. Of course the RSDF notes the sensitivity of the area which, as stated before, is generally acknowledged.

[48] It follows that, unless one adopts the position which was eschewed by counsel on behalf of the MPA, that in assessing an application for ex post facto authorisation or, indeed, for pre-commencement authorisation, a decision-maker is bound to refuse environmental authorisation, then one is left with the conclusion that, in the present case, neither the EMF nor the RSDF added any further relevant factors for consideration. Put simply, they were inconsequential. If a competent authority were to act in the predisposed manner suggested on behalf of the MPA, such a decision would no doubt be challengeable on account of it constituting a rigid adherence to a fixed policy.”

The SCA in the above-mentioned matter states that if a competent authority were to act in a predisposed manner, such a decision would be challengeable on account of it constituting a rigid adherence to fixed policy. A competent authority must exercise a discretion.

[10] The MEC in her answering affidavit stated that the intended development by the applicant is a high density development which will have a serious and major impact on the MPNE and surrounding area. The intended land use by the applicant was not compatible with the permitted land use for the area. In my view, there is nothing wrong in applying the MPE policy. The policy also conforms with the applicable legislative framework. On the face of it, it seems that the MEC did apply her mind and exercised a discretion with regard to the policy to be applied. She did not conclude that the proposed area is within the MPE.

[11] However, when the record was file in terms of Rule 53 of the Uniform Rules of Court, a report compiled by Nedrick Bila was amongst the documents discovered by the first and second respondents. This report was supported and co-signed by Mr. Mashudu Nematendani, the Acting Deputy Director in the department. This report was compiled in relation to the intended development of the applicant.

[12] For the sake of completeness, the report is quoted herein below and it states:

“"INTRODUCTION

The current scientific recommendation is for the proposed Magalies Crossing on Portion 149 of the Farm Zandfontein 447, J.Q., Madibeng Local Municipality, North West Province with reference number NWPIEIAI7712011. The file was received on 14 April 2014 and an initial site inspection was arranged to be conducted on 30 April 2014 and a site visit was done on 25 April 2014. The development is outside the protected area. A nursery is active and operating outside the proposed development and another business also operating within the proposed development at the corner close to Magalies Crossing.

DISCUSSION AND CONCLUSION

As per specialist report:-

- Despite the fact that the proposed activity is to be conducted closer to the protected area (Magaliesberg), the impact will be minimal as the area has already transformed and currently not used as close to the Magalies Crossing and Magaliesberg Mountain.

- One red data tree species, the Maroela Tree has been noted at the site proposed for the proposed development. It is our recommendation that TOPS Permit must be applied before the trees can be cleared during development and mitigation measure put in place to minimise the impact.

RECOMMENDATION

· It recommended that the relevant permit be obtained for the Maroela tree, Scierocatya Birrea and other red data species might be

identified or be removed during developments;

· It is also recommended that the mitigation management plan be put in place that will include the other red data species which will be identified during development;

· The proposed development is recommended for approval;"

Clearly evident from this report, is the fact that the proposed development of the applicant was recommended for approval. It is also apparent from this report that the intended development area falls outside the protected area. The proposed activity’s impact will also be minimal as the area has already transformed. No mention about this report is made in the reasons for refusal of authorization by the department and the appeal by the MEC.

[13] In her answering affidavit, the MEC admit that this report by Bila was not considered in coming to the conclusion to dismiss the appeal. Mr. Nematendani, who co-signed and supported the report by Bila, prepared another report which was negative and opposite to the report by Bila. Reliance was placed on this second report by Mr. Nematendani in reaching its decision to refuse environmental authorization by the department and the subsequent dismissal of the appeal by the MEC.

[14] There is no satisfactory explanation offered why Mr. Nematendani, as Acting Deputy Director and senior of Bila in the department, would at first support the report by Bila and recommend the intended development and subsequent thereto summersaulted and compiled his own report that is in contrast with the report of Bila. The fact that there were two conflicting reports on the proposal signed and compiled by Nematendani should have raised an alarm. The fact that the report by Bila was not considered in arriving at the decision by the MEC clearly illustrate and highlight the contention by the applicant that relevant information was not considered in arriving at the decision to refuse authorization by the department and the dismissal of the appeal by the MEC. This in my view amounts to an irregularity on the part of the MEC in consideration of the appeal.

[15] Furthermore in her answering affidavit, the MEC seems to rely on the decision taken by UNESCO to declare the entire Magaliesberg a biosphere reserve. The decision by UNESCO was taken on the 09th June 2015. This was after the department refused the environmental authorization on 04th August 2014. No submissions with regard to the UNESCO decision were either made by the applicant or invited for comment by the MEC. The UNESCO decision also does not appear in the reasons advanced by the MEC for the refusal of the appeal. The MEC cannot now rely on the UNESCO decision to substantiate the decision to refuse the appeal. Fairness demands that the MEC should have invited comments and / or further representation(s) with regard to the UNESCO decision before a decision could be taken with regard to the appeal. This underscore the contention that the decision by the MEC was arbitrary and / or capriciously taken. She had regard to irrelevant considerations and her decision was also not rationally connected to the information supplied.

[16] I am of the view that the application should succeed. The decision by the MEC to refuse the appeal should consequently be reviewed and set aside. The matter should be remitted to the MEC to reconsider the appeal and to make a fresh decision within ninety (90) calendar days from date of this judgment. Insofar as costs are concerned, there is no plausible reason why costs should not follow the result and be awarded in favour of the successful litigant, the applicant. Furthermore, this is an involved matter and is of great significance to both parties. This explain why senior counsel (SC) are employed by both parties. The costs awarded should include the costs consequent upon the employment of senior counsel.

Order

[16] Consequently, the following order is made:

(i) The decision by the First Respondent (MEC) taken on 03rd June 2016 to refuse the appeal by the applicant, is reviewed and set aside.

(ii) The matter is remitted to the First Respondent (MEC) to reconsider the applicant’s appeal and to make a fresh decision within ninety (90) calendar days from the date of this judgment.

(iii) The First and Second Respondents are ordered to pay the costs of this review application jointly and severally, the one paying the other to be absolved. Such costs to include the costs consequent upon the employment of senior counsel (and junior counsel, if applicable).

R D HENDRICKS

JUDGE OF THE HIGH COURT,

NORTH WEST DIVISION, MAHIKENG