Maxrae Estates (Pty) Ltd v National Minister of Agriculture, Forestry and Fisheries and Another (13769/19) [2020] ZAGPPHC 58 (4 March 2020)

REPUBLIC OF SOUTH AFRICA

IN THE HIGH COURT OF SOUTH AFRICA,

(GAUTENG DIVISION, PRETORIA)

(1) REPORTABLE: NO

(2) OF INTEREST TO OTHER JUDGES: YES

(3) REVISED.

CASE NO: 13769/19

4/3/2020

In the matter between:

MAXRAE ESTATES (PTY) LTD

Applicant

and

THE NATIONAL MINISTER OF AGRICULTURE,

FORESTRY AND FISHERIES

First Respondent

DELEGATE OF THE MINISTER OF AGRICULTURE,

FORESTRY AND FISHERIES: LAND USE

AND SOIL MANAGEMENT

Second Respondent

JUDGMENT

1. The applicant is the registered owner of the remainder of the farm Yzervarkfontein 194 registration division IR, Gauteng Province. The property is located on both sides i.e to the north and the south of the provincial road RS0 that links the City of Tshwane to the N12, towards Delmas, and national road N17 further to the east. It is located approximately 13 kilometres north-west of the Bapsfontein and 18 kilometres south-east of Delmas. It falls within the jurisdictional area of the City of Tshwane Metropolitan Municipality. Its total extent is 539,1769 hectares. As the property is divided by R50 road into two portions, one is measuring 52,0708 hectares (a portion to the south of the R50 road) and 487,1064 hectares (a portion to the north of the R50).

2. The property in question is an agricultural land. It falls within the definition of agricultural land in terms of the Subdivision of Agricultural Land Act 70 of 1970 (“the Subdivision Act”). A portion of it is developed with a warehouse which receives fresh produce (mostly vegetables) from local farmers. The fresh produce is sorted and packaged and distributed to different national markets from the warehouse. The applicant operates the warehouse. The applicant intends to expand the warehouse and create a facility in similar fashion as the existing warehouse which would enable the applicant to cater for the wider market. According to the applicant, the existence of the warehouse has already disturbed the footprint of the property.

3. The applicant acknowledges that the Subdivision Act prohibits the subdivision of agricultural land or the establishment of a sectional title scheme without the consent of the Minister or his delegate. The applicant took the necessary steps to submit the necessary applications to the Department of Agriculture, Forestry and Fisheries ("the Department") seeking permission to subdivide the property and establish sectional title scheme on portion A of the property. The existing warehouse according to the applicant is developed on a portion of portion A and seek to expand the warehouse on portion A.

4. According to the applicant, the purpose of establishing a sectional title scheme is to accommodate the existing warehouse and bulk packaging facility and associated uses within a sectional title unit that measures 2.6249 hectares, whilst the remainder of the farm (portion A), comprising of approximately 50 hectares, will be retained as an agricultural unit within the proposed sectional title scheme. The sectional title unit that will accommodate the existing warehouse and the proposed expansions thereto and packaging areas, will, over and above the fact that the area that will comprise this unit is currently not used for agricultural purposes, comprise only 4.2% of proposed portion A

5. The applicant submitted the application through its agent, Metroplan. The applicant obtained the necessary environmental authorisation from the Gauteng Department of Agriculture and Rural Development as required by section 24 of National Environmental Management Act ("NEMA"). The applicant was advised on 29 June 2017 by the Gauteng Department of Agriculture and Rural Development that its environmental authorisation had been granted for the expansion of the agricultural products packaging facility and the construction of an access road.

6. The application for subdivision was considered by the second respondent. On 9 November 2017 the second respondent advised the applicant's agent, Metroplan that the application for subdivision had been refused. The applicant was aggrieved by the decision of the second respondent, as it was of the view that the decision was at odds with the purpose of the Subdivision Act. The applicant commissioned an agricultural study to be conducted by Index (Pty) Ltd, trading as Index Integrated Rural and Urban Development Expertise, a company specialising in agriculture and land use assessments. The aforesaid study found that in light of the alignment of road 50, the portions that form the subject of the proposed subdivision of the subject property are already functionally divided and operate independently of each other; that the establishment of the sectional title scheme, i.e. the accommodation of approximately 2,5 hectares of land, already used for warehousing and related purposes within a new sectional title unit, will not impact on the agricultural potential of the subdivided portions and that the portions that form the subject of the proposed subdivision, currently function as viable agricultural units and will continue to function as such, after subdivision and establishment of a sectional title on one of such portions.

7. The applicant lodged an internal appeal with the Minister against the decision of the second respondent. The appeal was noted through the applicant's attorneys on 5 February 2018. The notice of appeal sets out the grounds of appeal. There appears to have been a delay in the consideration of the appeal by the first respondent, which prompted the applicant to launch an application to compel the first respondent to make its decision on the appeal. Before the application to compel could be heard on an unopposed basis, the first respondent caused the appeal decision to be communicated to the applicant through the first respondent's attorneys on 15 November 2018. The outcome of the appeal was that the appeal was unsuccessful and the decision of the second respondent was confirmed.

8. The applicant was aggrieved by the refusal decision. It launched this review application for an order that the decision of the first respondent dated 9 November 2018 in terms of which the appeal noted by the applicant in terms of the provisions of the Subdivision of Agricultural Land Act was dismissed is reviewed and set aside.

9. The review application is opposed by the respondents who filed an answering affidavit. The record was also filed in accordance with the provisions of Rule 53 of the Uniform Rules of Court. As part of the review grounds, the applicant assert that the appeal that served before the first respondent was a wider appeal which called for a complete reconsideration of the matter de novo by the first respondent. The applicant also complains that it was not provided with internal reports or comments such as the appeal document and as such was unable to formulate any grounds of review in relation to those documents. The applicant relies on the grounds of review in section 6 of Promotion of Administrative Justice Act 3 of 2000 ("PAJA"). Among others the applicant assert that the first respondent has inter alia failed to meaningfully or at all consider from the original application and the appeal documents the fact that the two portions of the property i.e. portion A and the remainder, are already functionally divided by road RSO and, after the administrative subdivision thereof, the two portions will remain independent viable farming units on their own; that the purpose of the Act, as pronounced upon by our Courts of law in numerous occasions and by extension, the powers of the first respondent conferred upon it in terms of the Act, is to prevent the subdivision of high potential agricultural land (i.e. economic) units in non-viable (uneconomic) units.

10. The applicant submitted expert report that the subdivision will have no impact on the viability of the different portions but that the first respondent has made no reference to such report. The applicant further contend that from the appeal documents it was clear that over and above the mandate of the Minister, the Minister is also under a legal obligation to have regard to parallel legislation that also impose obligations and duties, relevant to the consideration of a matter by decision-maker, when it pertains to the use of land, such as forward planning policies (spatial development framework), the NEMA principles regarding the municipality, socio-economic impacts and the like.

11. The applicant complains that despite reference to these submissions no reference is to be found in the decision of the Minister that the Minister did consider them. The applicant further assert that the areas of land comprising the sectional title unit that will accommodate the extended warehouse, has already been completely transformed, that no physical agricultural activities have been or are currently undertaken on that portion and that the ultimate intention of the warehouse, is not only to serve and be subsidiary to agricultural land use undertaken on the subject property, but the entire sub-region and, in the process, the warehouse will operate in support of general agricultural activities, conducted in the wider area.

12. Essentially, the applicant's complaint is that the first respondent has ignored the relevant informe1tion which the applicant placed before him.

13. The respondents oppose the application and defend the decision of the second respondent which was confirmed by the first respondent on appeal. The substratum of the second respondent's decision or the reasons thereof, was captured as follows:

"The Department herewith informs you that in terms of section 4 of the Act, Act 70 of 1970, it does not support the proposed subdivision and such sectional title of the above-mentioned property. The property situated in an area where agricultural activities are taking place. The proposed subdivision will perpetuate the creation of smaller portions in the area. The approval will set a precedent for similar applications in the area. The warehouse should remain as part of the entire farm as it is used for agricultural purposes.

The Department has a mandate to protect agricultural land for agricultural production to ensure food security in the country."

14. The decision of the second respondent was confirmed on appeal by the first respondent. It is common cause between the parties that the property is agricultural land and subdivision is prohibited unless consent has been given by the respondents. The relevant provisions are found in sections 3 and 4 of the Subdivision Act. Section 3 states that subject to the provisions of section 2 thereof, no agricultural land shall be subdivided unless the Minister has consented thereto in writing. Section 4 regulates applications for the Minister's consent and state thus:

"4. Application for consent of Minister, and imposition, enforcement or withdrawal of conditions by him -

1(a) Any application for the consent of the Minister for the purpose of section 3 shall -

(i) in the case where any Act referred to in paragraphs (a) to (e) of that section is contemplated, be made by the owner of that land concerned;

(ii) be lodged in such a place and be in such form and be accompanied by such plans, documents and information as may be determined by the Minister.

(b) For the purposes of paragraph (a) owner shall the meaning to it in section 102 of the Deeds Registry's Act, 1937 (Act 47 of 1937).

2. The Minister may in his discretion refuse or-

(a) on such conditions, including conditions as to the purpose for or manner in which the land in question may be used, as it deems fit, grant any such application;

(b) if he is satisfied that the land in question is not to be used for agricultural purposes and after consultation with the administrator

of the province on which such land is situated, on such conditions as such administrator may determine in regard to the purpose for or manner in which such land may be used, grant such application.

3. The Minister or, in the case of a condition referred to in subsection (2)(b), the administrator concerned may enforce any such condition.

4. The Minister, or in the case of a condition referred to in subsection (2)(b), the administrator concerned after consultation with the Minister may vary or withdraw any such condition and, if it has been registered against the title deed of the land, the Minister may direct that it be varied or cancelled."

15. Section 4(2), confers discretionary powers on the Minister. The nature of the discretion conferred is a wider discretion. It is wider in the sense that it does not limit him to certain prescribed conditions or factors. The discretion however is to be exercised in line with the purpose that is sought to be achieved by the Subdivision Act and not to be exercised arbitrarily. The purpose of the Subdivision Act can be found from its long title. It is to control the subdivision and, in connection therewith, the use of agricultural land. Essentially, is to prevent the fragmentation of agricultural land into small and uneconomic units. Where the Act confers wider powers on the decision maker, Courts should be slow to interfere with that discretionary power taking into

account the separation of powers doctrine. The Court should not ascribe to itself superior wisdom on matters which falls within the expertise knowledge of other branches of government See: Dawood v Minister of Home Affairs; Shalabi and another vs Minister of Home Affairs and others; Thomas and another vs Minister of Home Affairs and others[2000] ZACC 8; , 2000 (3) SA 936 (CC).

16. I accept that the decision of the Minister constitutes administrative action in the context in which it was taken. Therefore, PAJA applies to it. In Wary Holdings (Ply) Ltd v Stalwo (Ply) Ltd and another [2008] ZACC 12; 2009 (1) SA 337 (CC), Kroon AJ held at paragraph 80 as follows:

"I am not persuaded, however, that the enhanced status of municipalities and the fact that they have such powers it's a ground for ascribing to the legislature the intention that national control of agricultural land through the Agricultural Land Act, effectively be a thing of the past. There is no reason why the two spheres of control cannot coexist even if they overlap and even if, in respect of the approval of subdivision of agricultural land, the one may in effect veto the decision of the other. It should be borne in mind that the one's sphere of control operates from a municipal perspective and the other from a national perspective, each having its own constitutional and policy considerations. As adverted to earlier, land, agriculture, food production and environmental considerations are obviously important policy issues on a national level. An interpretation of the Agricultural Land Act that would attribute to the legislature the intention to retain the national governments role in effectively formulating national policy on this and other related issues, and to recognise the need for national policy to play a role in decisions to reduce agricultural land and for consistency in agricultural policy throughout the country, is an interpretation that can and should be properly adopted. That interpretation is the one effectively applied by the High Court."

17. In Metcash Trading Ltd vs Commissioner of SARS and another 2001 (1) SA 1109 (CC) at paragraph 40, Kriegler J stated that:

"It has long been accepted that when the Commissioner exercises discretionary powers conferred upon him (or her) by statute, the exercise of the discretion constitutes administrative action which is reviewable in terms of the principle of administrative law. Those principles were described in Johannesburg Stock Exchange and another vs Witwatersrand Nigel Ltd and another, as follows:

broadly, in order to establish review grounds it must be shown that the President failed to apply his mind to the relevant issues in accordance with the behest of the statute and the tenants of natural justice such failure may be shown by proof, inter alia, that the decision was arrived at arbitrarily or capriciously or ma/a fide or as a result of unwarranted adherence to a fixed principle or in order to further an ulterior or improper purpose; or that the President misconceived the nature of the discretion conferred upon him and took into account irrelevant considerations or ignored relevant ones; or that the decision of the President was so grossly unreasonably as to warrant the inference that he had failed to apply his mind to the matter in the manner aforestated ... some of these grounds turn to overlap. "

18. It therefore falls upon the applicant who challenges the decision of the Minister in this case to show that the exercise of the discretion by the Minister as conferred on him by section 4(2) of the Subdivision Act was arbitrary, or that the discretion was exercised improperly. Given the wide nature of the discretion conferred on the Minister by section 4(2), I am unable to find that the Minister did not exercise the discretion within the bounds of the law and that the Minister did not exercise it reasonably, rationally and justifiably. The Minister has provided the reasons why he upheld the decision of the second respondent. Similarly, the discretion conferred on the Minister by section 4(2) when he considered the appeal, are the same discretionary powers that were conferred on the second respondent when considering the application. I also find no justifiable reason to hold that the second respondent did not exercise the discretion rationally, reasonably and within the bounds of the law. The decision of the second respondent was therefore not arbitrary. Once found that it was not arbitrary, it follows that the upholding of the second respondent's decision by the first respondent was also not arbitrary.

19. The applicant has attacked the decision of the second respondent also on grounds of rationality. To this end, reliance was placed in Law Society of South Africa and others vs President of the Republic of South Africa and others 2019 (3) SA 30 (CC). The passage in affordable medicines judgement by the Constitutional Court was restated that the principle of legality entails the exercise of public power which must be done lawfully in respect of the power lawfully conferred. The power must be exercised in good faith and should not be misconstrued. In this matter it is not contended that the first and second respondents lacked the requisite power to consider the application and the appeal as lodged by the applicant. If they are found to have exercised their powers within the parameters of section 4(2) of the Subdivision Act, then it should follow that the power was exercised lawfully and within the confines of the law which gives effect to that power.

20. I find that reliance on the Law Society of South Africa and others does not come to the assistance of the applicant in reviewing and setting aside the first respondent's decision. Similarly, I find that reliance on the Democratic Alliance vs President of South Africa and others 2013 (1) SA 248 (CC) is also not of assistance to the applicant. I say so because the Minister has exercised the power for the purpose it was meant for and exercised the discretion conferred on him by the Act. It is further contended by the applicant that whilst the Minister possesses

discretionary powers, and that the exercise of that power constitutes administrative action, the Constitution and PAJA requires that the exercise of the power be performed in an administratively fair manner and that fairness includes an enquiry as to the rationality of the impugned administrative action. As I have already concluded that the discretionary power conferred by section 4(2) of the Subdivision Act is a wider discretion, the

Minister has taken into account all relevant factors including the decision of the second respondent and the appeal record and provided reasons for his decision. The reason provided is not irrational as it is linked to the purpose sought to be achieved by the Subdivision Act.

21. For the above reasons I find that the applicant has failed to make out a case for the review and the setting aside of the first respondent's decision. It follows that the application cannot succeed. With regard to costs, I am of the view that costs should follow the event in this matter. The respondents' heads of argument were prepared by one junior counsel but appearance at the hearing of the matter was done by senior counsel and junior counsel. Costs in this matter should follow the event.

22. Accordingly, I make the following order:

22.1 the application is dismissed with costs inclusive of the costs of two counsel, where employed.

MMP Mdalana-Mayisela

Judge of the High Court

Gauteng Division

On behalf of applicant: Adv M Majozi

Instructed by: Ivan Pauw & Partners Attorneys

On behalf of respondents: C E Puckrin SC

H C Janse Van Rensburg

Instructed by: State Attorneys, Pretoria