Long Beach Homeowners Association v MEC: Economic Development, Environmental Affairs and Tourism (Eastern Cape) and Others (195/2017) [2017] ZAECGHC 57 (16 May 2017)

IN THE HIGH COURT OF SOUTH AFRICA

(EASTERN CAPE LOCAL DIVISION, GRAHAMSTOWN)

CASE NO. : 195/2017

Reserved on : 23 March 2017

Date delivered : 16 May 2017

In the matter between:

LONG BEACH HOMEOWNERS ASSOCIATION

Applicant

And

MEC : ECONOMIC DEVELOPMENT,

ENVIRONMENTAL AFFAIRS AND

TOURISM (EASTERN CAPE)

First Respondent

DEPARTMENT OF ECONOMIC

DEVELOPMENT, ENVIRONMENTAL

AFFAIRS AND TOURISM (EASTERN CAPE) Second

Respondent

DIRECTOR GENERAL OF ENVIRONMENTAL

AFFAIRS (NATIONAL GOVERNMENT)

Third Respondent

G SMULDERS Fourth

Respondent

E J HARRIS

Fifth Respondent

M DENISON

Sixth Respondent

JUDGMENT

[1] The applicant approached court for orders that can be summarised as follows:-

1. First respondent is in contempt of court order of 25 April 2016 in that he failed to take a decision timeously in the internal appeal as he was directed to do.

2. Directing suspension of the said internal appeal pending the outcome of conciliation.

3. The applicant and first respondent follow conciliation process in 17(3)

3.1 Third respondent appoint a conciliator in terms of 18

(1) to resolve the dispute whether

- Applicant should be granted an environmental authorisation or not

alternatively - whether members of the applicant are entitled to adequate compensation from state on the basis that their property has effectively been expropriated; and other ancillary reliefs.

4. Alternatively to paragraphs 2, 3 the MEC is ordered to take a decision in the internal appeal within 14 days of the order.

[2] The application is opposed by the first and second respondents (respondents) who have for that purpose filed their opposing

affidavits. As the said affidavits were filed out of time, they also filed an application for condonation for the said lateness which was granted accordingly. After the applicant filed its replying affidavit the respondents in turn filed an application to strike out various paragraphs of the replying affidavit.

[3] During the hearing counsel for the applicant told the court that the applicant abandoning its alternate relief, seeking an order for adequate compensation. It was the view of all the parties that the application to strike out should be dealt with together with the main application and not as separate issue. However, during the hearing of the application to strike out was clearly isolated and dealt with first. In the circumstances, the said application is dealt with first in this judgment.

[4] The determination of the application to strike out raises questions to whether the applicant can proceed with the application, as it has presented its case in the founding affidavit or as it is presented in both the founding and replying affidavits. According to the applicant its case in reply is based on the correct law as averred by the respondents. According to the respondents the applicant’s version in the replying affidavit is not only confined on the issue of the correct law, but there are new issues of substance which change the direction of the case as well. It would be incorrect to allow the paragraphs objected to, because the respondents would not have had the opportunity to deal with the new issues belatedly raised under reply.

[5] It is common cause that if indeed the new issues are confined to being a consequence of the correct law; the 2010 Environmental Impact Assessment (EIA) regulations as averred by the respondent and not the 2014 National Appeal regulations, the applicant would be entitled to proceed with its case on the correct law. This finds support in the decision in National Society for Prevention of Cruelty to Animals v Minister of Justice and Constitutional Development Case CCT16/2016, the court allowed the applicant’s unopposed application to amend its notice of motion from the bar to reflect the correct law, and seek redress based on the correct law as averred by the respondents.

[6] In November 2012 the applicant applied for authorisation to build seven units at Long Beach. In May 2013 same was granted by the Department of Economic Development Environmental Affairs and Tourism, Eastern Cape. (DEAT) In June 2013, the second, third and fourth respondents lodged an appeal (the appellants) to the first respondent against an environmental authorisation so granted by DEAT. Subsequently, when the first respondent failed to take a decision in the internal appeal the applicant sought an order reviewing the first respondent’s failure and/or compelling him to do so. On 27 November 2013 the first respondent advised that the authorisation was suspended. Before the matter could be finalised, on 9 June 2014 the first respondent conceded that the suspension of authorisation did not comply with 2010 EIA regulations. On 25 June 2013 the first respondent decided the appeal in favour of the appellants and removed the authorisation. In September 2014 the applicants launched a review application in Pretoria High Court which was heard by Kollapen J under case number 28064/2014. In April 2016 the review application was successful, mainly for failure on the part of the first respondent to adhere to the principle of audi alteram partem. According to the applicant, the two year delay in the finalisation of the application was attributable to the respondents by filing technical interlocutory applications, amongst others. The first respondent was ordered to reconsider the applicant’s

application for environmental authorisation, hear the applicant on any of the first respondent’s concerns and take a fresh

decision. The matter has a long history therefrom, which for the reason that no decision has been taken as yet, the applicant

approached this court for the relief set out above.

[7] In the founding affidavit the applicant complains of a pattern of tardiness; incompetence and possible inability on the part of the first respondent to deal with internal appeal brought under section 43 of National Environmental Management Act 107/1998 (NEMA). Furthermore, the correspondence exchanged between legal representatives indicate that the first respondent is disinterested

in advancing the applicant’s case. The applicant has lost confidence in the ability of the first respondent to take a decision. That such is so indicated not only by the delay in resolving the matter but also by the fact that he had to procure the services of an independent consultant to assist him in taking a decision in the first internal appeal. He also wants to use an independent expert in the second internal appeal. According to the applicant the chosen consultants are not independent.

[8] In the 2014 regulations, the decision of the first respondent is more than a month late, from 8 December 2016. The applicant is in dispute with the first respondent, this being the sixth high court application against the first respondent regarding the environmental authorisation at Long Beach.

[9] Part of the history of the matter and interactions between the parties herein is central to the application to strike out.

Following the decision of Kollapen J there is a list of interaction and correspondence that took place between the parties,

most of which, in relation to dates and content, is not in dispute between the parties. Where there are issues of discontent, I will make reference to those as they become relevant. In relation to the application to strike out the paragraphs sought to be struck out relate to the following correspondence:

Annexure

Date

AM3

Letter of 25 November 2016

AM7

Letter of 9 December 2016

AM9

Letter of 3 February 2017

AM12

Letter of 10 February 2017

According to the applicant’s summary of the contents of those letters in the replying affidavit the respondent state that the first respondent appointed Dr Berliner and Mr Stewart to the appeal panel or appointed those as appeal panel to advise him. In actual fact none of the said letters referred to the two as members of the appeal panel. They are either referred to as having been asked to give expert advice, opinion or furnish expert reports.

[10] The next aspect relates to the averments that the applicant made, when it relied on the provisions of section 43(5) and 67 of the 2010 EIA Regulations.

Section 43(5) provides:

“The MEC may consider and decide an appeal or appoint an appeal panel. The regulations relate to time frames within which the MEC must act in involving the appeal panel and within which to furnish their recommendation.”

[11] I now consider the issue raised by the applicant that the issues they raised under reply only relate to the correct law as raised by the respondents in the answering affidavit. They say they are relevant arguments and important averments; there is no need to strike them out. In the 2010 EIA regulations experts are only provided for in regulation 64(2) (b) read with regulation 65 especially regulation 65(2). Other than that the appointment of Dr Berliner and Mr Stewart as appeal panel to assist the MEC would be ultra vires the 2010 EIA Regulations because the said regulations require the panellists to be independent. There is no provision for appointment of experts.

[12] According to the respondents the paragraphs sought to be struck are not only confined to being reliance on the correct law but they change the direction and substance of the case. The applicant was aware of the involvement of the two experts and their mandate but they failed to raise the issue of their appointment as being members of appeal panel, in its founding affidavit. I agree with the respondents that the direction of the case changes. However, that is the consequence of the correct law as being raised by the respondents. The correct law does not refer to appointment of experts but to members of appeal panel. If anything could be struck out would be reference to section 43 (5) of NEMA. In my view, that will have no consequence. The 2010 EIA regulations introduce the appeal panel, the time frames of their involvement and when they are to furnish the report.

[13] In the light of the principle in Natal Society for Prevention of Cruelty to Animals supra, the applicant is entitled to argue its case on the correct law as raised by the respondents. The respondents, having referred to that law, cannot turn around and state that they had no opportunity to deal with averments that arise therefrom. When they referred to the 2010 EIA regulations they ought to have dealt with how the two professionals were appointed in terms of the said regulations. In the circumstances, the application to strike out has to fail. I will deal with the issue of costs at the end of this judgment.

[14] I now turn to the main application.

(a) Contempt of Kollapen J’s order

The principles governing the contempt of court applications were articulated in Fakie NO CC 11 Systems (Pty) Ltd [2006] ZASCA 52; 2006 (4) SA 326 SCA at 344 paragraph [42] as follows:

“(a) The civil contempt procedure …

(b) The respondent in such proceedings …

(c) In particular the applicant must prove the requisites of contempt (the order, service or notice, noncompliance and wilfulness and mala fides) beyond reasonable doubt.

(d) But, once the applicant has proved the order, service or notice and non-compliance, the respondent bears an evidential burden in relation to wilfulness and malafide, contempt will have been established beyond reasonable doubt

(e) A declaratory and other remedies remain available to civil applicant on a balance of probabilities”.

[15] The common cause chronologically of events after the order of 25 April 2016 is as follows:

On 17 May 2016 the applicants wrote;

29 June 2016 - the respondents responded enclosing MEC letter of 27 June 2016 explaining the process of appeal;

2 August - the applicant enquires from first applicant, seeking clarity in process of appeal;

13 August - submissions by the applicants are received;

31 August - the applicant enquire if submissions received;

5, 12 September - the applicant request response to letter of 2 August 2016;

23 September – the respondents wrote;

27 September - the applicants wrote;

4 October, 11 October, 19 October - parties’ submissions are exchanged;

21/25 November - The first respondent responded;

5 December - The applicant responds;

6 December - The first respondent state his time frame to the applicant.

The following are not common cause;

10 August - letter from applicant seeking response from the respondents do not seem to be common cause.

9, 12 December - Even though the applicant disputes seriously the receipt of these letters and makes serious allegations

that the letters were a fabrication or manufactured ex post facto, in relation to their non-transmission, in its record of chronology it acknowledges that Dr Berliner and Mr Stewart were appointed on this day.

[16] DELAY IN ANSWERING CORESPONDENCE :

According to the delay alleged by the applicant, the first respondent only responded to their letters from 17 May 2016 to 28 October 2016 on 25 November 2016. Annexure B to the founding affidavit is a letter from the respondent’s attorney, dated 29 June 2016. Amongst others, it gives the basis for the first respondent affording an opportunity to the appellants as well to make submissions. To this extent the timeline of six months cannot be true. In her letter of 25 November 2016 the state attorney acknowledged that there were delays caused by problems of her ill-health and problems with her computer that had to be replaced. This could be in respect of the correspondence of 2 August 2016, 10 August 2016, 12 September 27 September 2016 and 4 November 2016. In that intervening period between 13 August 2016 and 11 November 2016 (23 September 2016, 04 October 2016, 11 October 2016 and 19 October 2016) there is an exchange of parties’ submissions. On 25 November 2016 before the launch of the current application the applicant’s outstanding correspondence was responded to, submissions were exchanged up to around 11 October 2016. In that letter the first respondent mapped the way forward.

[17] The parties agreed that the first respondent had until 12 December 2016 to make his decision on the internal appeal, on the correct legal framework. On 9 December two professionals were appointed and given up to 10 January 2017 to furnish their expert reports. The respondents state that on 9 and 12 December they sent letters to the applicant, receipt of same which is vehemently denied by the applicants. In the said letters the respondents explain and answer many issues relating to the internal appeal, including, restating their position that the first respondent would decide on whether there would be an in-person hearing after receipt of all submissions, expert reports and responses thereto; the time frames for receipt of expert reports and final decision on the appeal to be furnished and made, being in 21 and 90 days respectively; explanation about why the appellants were afforded an opportunity to make submissions; seeking permission to visit the Longbeach site on proposed dates and etc.

[18] In amplification of denial of receipt of the said letters the applicant state that they employed an IT expert to confirm that the said letters were never received in their server. It invited the respondents, before they filed their answering affidavit, to challenge that and produce their own expert evidence that the said letters were sent. According to the respondents the letter of 9 December 2016 was prepared already, by the 8 December 2016. The legal adviser handling the matter on behalf of the first respondent Ms Goliath, in her affidavit, confirmed under oath, that she had read the letter on that date. She discussed its contents with the first respondent and gave the state attorney the go ahead to send the letter. According to the respondents the letters were indeed sent. The applicant attack this by relying on the fact that the respondents did not seek to disprove their IT specialist’s advices or did not do enough to prove that the letters were sent on their side. The applicant state that the respondents did not need to follow procurement processes for a service that is required for court processes. They could have got an IT specialist without following the tender processes. The first respondent was mala fides in ignoring applicant’s correspondence advising that the process in handling the matter was flawed. He clearly ignored all that until after 6 months when he apologised on 25 November 2016. The manufactured evidence of letters of 9 and 12 December 2016 is farfetched and has to be rejected. It demonstrates bad faith which meets the requirements for contempt of court articulated in Fakie, supra.

[19] I may agree that the respondents could have done more in proving that the letters of 9 and 12 December 2016 were sent out, after receiving the correspondence challenging them to do so. However, it is a fact that on 29 June 2016, the first respondent indicated what steps he would take in complying with court order. Submissions were exchanged until 11 October 2016. On 25 November again the outline was given and parties agreed on the deadline of 12 December 2016. I accept that the letters of 9, 12 December 2016 were not received. However, I am unable to conclude that it is farfetched that the letters were written and were supposed to have been sent, even if they were eventually not sent out. I have no basis to conclude that Ms Goliath, an officer of this court, lied under oath in order to assist the first respondent in covering up any conduct that would be mala fides on his part. These are the findings I would have to make in order to reject the version of the respondents on application of the principle in Plascon Evans Paints Ltd v Van Riebeck Paints Ltd [1984] ZASCA 51; 1984 (3) SA 623 (AD) at 634 H-L. I therefore accept that the said letters existed.

[20] In the final analysis I agree that the respondents did not act within the time frames they ought to have followed and therefore the first respondent failed to comply with time stipulations in the 2010 EIA regulations. The court order was made on 25 April 2016. The applicants wrote to the MEC on 17 May 2016 and the response thereto was only 29 June 2016. Furthermore correspondence of 2nd, 12 August 2016, 12 and 27 September 2016 and 4 November 2016 were responded on 25 November 2016, with explanation though.

However, I conclude that the respondents have shown that they did not wilfully and mala fides fail to comply with the court order, I am persuaded that they did not deliberately and intentionally violate the court’s repute.

(b) REFERRAL TO CONCILIATION

[21] The applicant relies on the provision of section 17(3) of NEMA in seeking an order that the internal appeal pending before the first respondent be referred for conciliation. It avers that the appeal has been conducted ultra vires of regulation 67(1) read with 67(2) of 2010 EIA regulations read with section 43 of NEMA. In the applicant’s view the appeal will not be fairly entertained and will fall short of fairness required by the Constitution of Republic of South Africa, Act 108 of 1996 (the Constitution) and Promotion of Administrative Justice Act, Act 3 of 2000 (PAJA).

Section 17(3) of NEMA provides:

“A court of tribunal hearing dispute regarding the protection of the environment may order the parties to submit the dispute to a

conciliator appointed by the Director-General in terms of the Act and suspend the proceedings pending the outcome of the conciliation”.

[22] The issue is whether this court may suspend the internal appeal pending before the first respondent. There are various

complaints that the applicant raised about the appropriateness of the first respondent in prosecuting the appeal, which included the loss of trust on the first respondent. The applicant submits that considering the irregularities in the prosecution of the appeal, the first respondent’s decision will, without doubt, be taken on review. It would be better to stop the flawed process now than wait for the time the said decision is made. It argues further that section 17(3) is applicable herein because the applicant has raised a dispute with the first respondent in this application about protection of the environment. This court must interpret the section in a manner that is consistent with the spirit of the Bill of Rights. The applicant annexed “VJL1” to the replying affidavit being a document from the first respondent’s website on decision making and conflict management, which defines alternative dispute resolution (ADR) to refer to, use of conciliation, mediation and arbitration. It states that Chapter 4 of NEMA authorises the use of ADR mechanisms to ensure fair decision making and effective conflict management, which is desirable for purposes of resolving differences and disagreements speedily and cheaply. They emphasised on the purpose of Chapter 4 of NEMA;

- to facilitate agreements reached by the disputing parties only where

trust has been broken as a result of a lengthy dispute;

- resolve environmental disputes through ADR process;

- prevent the potential of disagreements and differences arising amongst stakeholders that may lead to full blown disputes, among others.

The applicant submits that the respondents cannot now be seen to be acting against their own invention founded or based on the spirit of section 24 of the Constitution. The applicant also referred to paragraph 6 of the department’s note encouraging parties to refer their disputes to ADR in the following circumstances.

(a) Any time during the course of an activity impacting in the environment;

(b) Before the decision/authorisation is granted or refused;

(c) When appeal against decision is launched;

(d) Before litigation or even during litigation.

[23] The respondents dispute that there is a dispute between the applicant and the first respondents as contemplated in section 17(3). Furthermore, there is no dispute between the parties pending before any court or tribunal regarding the protection of environment. The dispute raised by the applicant against the first respondent is whether the first respondent is entitled to consult independent experts; allow the appellants to make further submissions and the delay in dealing with the appeal.

[24] In reading this, I ask the questions, what dispute is before this court; which parties are parties to that dispute; if I pend the proceedings in that dispute would that have the effect of achieving the results envisaged in the provisions in section 17(3). It is common cause that before this court is the applicant and the first respondent, in the main about the first respondent’s conduct in the prosecution of the appeal. Would there be anything to be suspended in those issues, if I were to order the third respondent to refer the matter for conciliation. Indeed the dispute raised in this court has a link to the main dispute about the granting or refusal of environmental authorisation. However, this court is not adjudicating on that dispute as between the applicant and appellant. It is only concerned about the conduct of the first respondent, his being contemptuous in complying with the court order in the main. In my view, if I would suspend these proceedings, any referral would be on that limited issue of procedure and process. The dispute about the actual protection of environment is not yet before this court, but before the first respondent. As much as it would have been desirable to have it resolved speedily, and less costly, I do not regard section 17(3) as being of assistance to the applicants in the present circumstances.

[25] During the hearing it did not seem that the applicant was persisting with the prayer for alternative relief that the first respondent be ordered to take a decision in the internal appeal within 14 days hereof. Needless to say, the parties already agreed to the time frames in this matter, except that the first respondent requested permission for in loco inspections. In my view, it is still possible for the parties should they agree, to adjust the related time lines accordingly.

COSTS

[26] In the application to strike out I was asked to make an order on a punitive scale. The respondents were seeking to strike out paragraphs which are important and relevant, like they did in the failed rule 30 application brought during the Pretoria High court’s proceedings. Murphey J stated that it was wrong for the respondents to do so. Again in the contempt application I was asked to grant costs on a punitive scale de bonis propriis. The respondents submit that the applicants were advised in correspondence that the litigation is vexatious and would fail. The applicant also went too far by suggesting that the letters of 9 and 12 December 2016 were manufactured by the officers of the court ex post facto. Also, most issues like, the process of appointment of the experts being ultra vires of 2010 EIA regulations, are not relevant in this application. Therefore when I dismiss the application I ought to grant costs debonis propriis. Costs are in the discretion of the court. In my view, none of the issues raised in the matter can be said to have been unnecessarily raised, in the contrary I regard the application and its opposition as raising very interesting issues. The application to strike out cannot be said to have been an attempt to supress the hearing of important relevant information. It was very necessary to decide whether these issues as raised in the reply unfairly change the substance and direction of the case, without being a result of solely being the application of the correct law, or not. In the circumstances, I am not inclined to grant costs on a punitive scale.

[27] Similarly, the application for contempt and referral of the matter to conciliation, involved important issues of whether the first respondent’s delay and tardiness can be said to satisfy the requirement of malafides as require in contempt of court proceedings. The issues raised in this judgment relating to the referral application are equally important. I do not regard the actions of the applicants who have, suffered more than three years to get a final decision on their applications, since November 2012, for environmental authorisation as unreasonable, in seeking to enforce their right to a speedy decision. I also find no basis for punitive costs against the applicant or their legal representatives.

In the result the following order is made:

1. The application to strike out is hereby dismissed with costs.

2. The main application is hereby dismissed with costs.

_____________________

B Majiki

Judge of the High Court

Appearances :

Counsel for the applicant : Advocate Hopkins

Instructed by

: Messrs. Wheeldon Rushmere & Cole

119 High Street

GRAHAMSTOWN

Counsel for the respondent: Advocate M A Albertus SC with Mr F Petersen

Instructed by

: Messrs. Enzo Meyers Attorneys

100 High Street