It’s Time to Reappraise Our Concept of Property

For South Africans to make substantial and lasting progress in making the ideals of the Constitution a reality, it’s necessary to recognise past injustice, reappraise the conception of ownership and property, and accept the consequences of constitutional change. These were the words of the Constitutional Court of South Africa in a judgement delivered by Froneman J in case of Daniels v Scribante and Another (2017 ZACC 13).

In this case Mrs Daniels occupied a dwelling on the landowner’s property in terms of the Extension of Security of Tenure Act No 62 of 1997 (ESTA). The landowner accepted that the state of the dwelling was degrading and not fit for a human, but the landowner nonetheless wanted to stop Mrs Daniels from the leveling the floors, paving an outside area, and installing running water, a wash basin, a second window and a ceiling. All the improvements were going to be done by Mrs Daniels at her own cost.

The court had to decide if the landowner could stop Mrs Daniels from making improvements to the dwelling to make it habitable.

The Court’s Main Judgement

The court rejected the landowner’s argument that even though Mrs Daniels had the right to live in the dwelling on their property, she did not have the right to improve the property to make it fit for human habitation. In the courts main judgement Madlanga J said that the landowner placed an overly narrow interpretation the wording of the law, ignoring the laws purpose. He said that the law is about more than just a roof over your head, and that the right to occupy a dwelling can’t be separated from other fundamental human rights, like the right to human dignity. Mrs Daniels right to occupy the dwelling (her security of tenure) includes habitability. Habitability includes the right to make improvements. If there was no right to make the improvements, then the dwellings habitability is removed, destroying an occupier’s security of tenure.

The court also rejected the landowner’s second argument that if Mrs Daniels was allowed to improve the property, then the landowner might be forced to repay these costs if she was ever evicted, in effect meaning that the landowner was being forced to fund the improvements. The landowner argued that this would be a positive obligation, but that the Bill of Rights doesn’t impose a positive duty on a landowner to ensure that an occupier lives in conditions fit for human habitation.

Importantly, the court dismissed this second argument saying that the Bill of Rights can’t be interpreted as never being able to impose positive duties on private persons. ESTA already imposes a positive duty – a duty to accommodate another person on your land. What’s needed is a weighing of all the relevant factors, and the positive nature of the obligation is only one factor considered.

Mrs Daniels’ right to human dignity and security of tenure must be weighed against the potential that a landowner may have to compensate her if she was ever evicted. The court noted that under our common law a landowner already may have to compensate tenants or occupiers on their departure under certain circumstances.

Madlanga J ordered that Mrs Daniels has the right to improve the dwelling after consulting with the landowner regarding the times that her contractors will need access to the farm.

The Court’s Rejection of Property Absolutism

The landowner’s defense was based on the concept of property absolutism, which places the property rights of an owner above all else. In a separate concurring judgement Froneman J said that it is time for South Africans to reappraise the concept of property, and to reject property absolutism.

Froneman J said that this concept arose in Europe at a time when they underwent a real socio-political struggle against feudal oppression. In the European struggle property absolutism played an important role to ensure individual freedom, but just because the concept played an important role in developing western capitalism, it doesn’t mean that the concept should continue to exist under the South African constitutional dispensation.

The concept of property absolutism didn’t play a role in determining the current land distribution in South Africa. On the contrary, land distribution was determined by a series of laws that were calculated to deprive black people of land and to create a population of wage slaves – people who couldn’t be self-sufficient and who would have to depend on employment at white owned farms and mines for survival.

Froneman J dismissed the argument that absolute protection of property rights is necessary because of modern market benefits, pointing out that this argument is an attempt to slow down or frustrate constitutional change. He said that these extra-judicial arguments, based on economic efficiency, hide their theoretical assumptions and then leap to a conclusion that the economy will suffer from any change that upsets the existing protection and distribution of property. He warned against being blind to the limits of market based exchanges.

Froneman J rejected the argument that the protection of existing property is currently needed in South Africa in order to ensure personal and economic freedom.

This judgement doesn’t in itself alter the legal dispensation, but going forward it should be used to re-evaluate the strict concept of property, and the commonly held assumption that the rights of landowners will always trump the rights of other people in our democratic society.

Indeed, it is time to accept the consequences of constitutional change.


This work by Clinton Pavlovic is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

The unedited featured photograph by Katie Barrett was published under a Creative Commons Zero Licence.

Protecting Important Land Areas

During March 2017 the Supreme Court of Appeal of South Africa handed down a decision ensuring the continued environmental protection of the Makhonjwa Mountains in Mpumalanga (also known as the Barberton Greenstone Belt). This was necessary despite the area being placed on South Africa’s tentative list of world heritage sites in 2008, and despite the provincial government taking three separate actions in 1985, 1996 and 2014 to ensure that the area was protected.

In the case of Mpumalanga Tourism and Parks Agency v Barberton Mines (Pty) Limited ((216/2016) [2017] ZASCA 9 (14 March 2017)) the court was asked to decide if the Makhonjwa Mountains had legal protection from mining activities, or if a single flawed government notice meant that the government’s ongoing efforts to protect the area was for nothing.

Barberton Mines was granted a prospecting right in terms of the Minerals and Petroleum Resources Development Act, No 28 of 2002 (MPRDA). When the company wanted to start their prospecting operations they were denied access to the area by the Parks Agency. The Parks Agency alleged that the company’s prospecting right was invalid and fell to be set aside because it was granted over land that formed part of a protected area in terms of the National Environmental Management: Protected Areas Act, No 57 of 2003 (NEMPAA).

The Parks Agency appealed the Minister of Mineral Resource’s decision to grant the prospecting right using the department’s internal process, but the minister rejected this appeal. Barberton Mines then launched a court application in the North Gauteng High Court. The court held that the Makhonjwa Mountains were not protected under NEMPAA, granted Barberton Mines a court order affirming the company’s rights to prospect in the area, and ordered the Parks Agency not to prevent or interfere with the company’s prospecting activities.

Appeal to the Supreme Court

The Parks Agency took the High Court decision on appeal. It argued that the Makhonjwa Mountains is protected under NEMPAA because it is a declared, or designated, protected area. This protection prohibits anyone from conducting commercial prospecting, mining, exploration or production within its boundaries (see section 48).

Barberton Mines counter argued that the actions taken by the provincial government in 1985, 1996 and 2014 were insufficient to declare the Makhonjwa Mountains a protected area in terms of NEMPAA. It argued that the 1985 resolution was invalid because was not issued by the correct authority or published as required, and that the 1996 proclamation was void because it did not adequately describe the area – the resolution only identified the area as “Barberton Nature Reserve”, without any accompanying map or detailed area description.

The Supreme Court of Appeal affirmed that NEMPAA binds the state and trumps any other legislation if there is a conflict on the management or development of protected areas – if an area is validly declared or designated protected area then prospecting operations in the area is prohibited.

The only question that the court had to decide was whether the Makhonjwa Mountains was validly declared as a “protected area” as contemplated by NEMPAA. For this, the court placed emphasis on the 1996 proclamation, finding that it was sufficient to be considered a “declaration” or “designation” required by NEMPAA, albeit that this declaration took place before NEMPAA came into force. The court then turned its attention to Barberton Mines’ argument, and the High Court’s finding, that this proclamation must be found to be void because its description of the area was vague.

The court considered previous cases that dealt with actions to declare laws void for vagueness, including a 1955 Appellate Division case of R v Pretoria Timber Co (Pty) Limited (1950 (3) 163 (A)) that held that “[t]he degree of certainty, clarity or precision that must be present … depends on the circumstances. … The law requires reasonable and not perfect lucidity …”, and a 2006 Constitutional Court case of Affordable Medicines Trust v Minister of Health (2006 (3) SA 247 (CC)) that added that “[t]he doctrine of vagueness must recognise the role of the Government to further legitimate social and economic objectives [a]nd should not be used unduly to impede or prevent the furtherance of such objectives”.

The court stated that common sense must prevail, finding that the 1996 proclamation did not need a “faultless description couched in meticulously accurate terms in order to be valid”, only that the area should be indicated with sufficient certainty.

The court noted that the provincial government had given a particular meaning to the “Barberton Nature Reserve” since 1985. Because the 1996 proclamation is related to the detailed 1985 resolution it couldn’t be argued that people wouldn’t know what area the 1996 proclamation refers to. It is therefore valid for the 1996 proclamation to refer to the area only by name without detailing the exact area description.

The common sense approach adopted by the court is ultimately correct because minor errors in a government declaration shouldn’t prevent the government bodies from performing their important constitutional duties and achieving their social and economic objectives. The Nature of the error is, however, an important consideration. In this case the error had no real effect on the public’s ability to understand the declaration, but this doesn’t mean that in the future the court would turn a blind eye an error that truly introduces uncertainty.

The Parks Agency’s appeal was ultimately successful, effectively preventing Barberton Mines from conducting prospecting in the area which, if not certain before, is now a confirmed “protected area” under NEMPAA.

On a side note, the Supreme Court of Appeal appears to endorse the view that mining operations in a protected area might be permitted in under the MPRDA if the activities are in the national interest (section 48). The court wasn’t asked to decide this issue, but this may be an area of the law open for future debate.


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The unedited featured photograph by Jamie Hagan was published under a Creative Commons Zero Licence.

Prospecting Right Applications: The Queuing Conundrum

The laws governing mining rights in South Africa is founded on three principles: (i) the State is the custodian of all minerals; (ii) any person may apply for a right to prospect on a first come first served basis; and (iii) a use it or lose principle applies to rights. These principles ensure a system that encourages active prospecting and prevents people from holding onto rights without using them to prevent others from actively prospecting.

The application procedure is a system of queuing – the first to submit an application is in the front of the queue, and all subsequent applications form a queue behind the first which can only be considered once the first application has been rejected.

An unresolved legal question was whether a company can submit a non-compliant application as a placeholder in the queue, and then later amend the application to make sure it is compliant.

The recent Gauteng High Court decision in Aquila Steel (South Africa) Limited v the Minister of Mineral Resources and others (72248/15) promised guidance on the proper application of the principles governing the application procedure, which it indeed gave, but an important aspect of the decision mustn’t be overlooked. The laws that the court applied to come to its decision have been amended.

In this note I’ll consider if the court’s decision, and if the amendment of the the Mineral and Petroleum Resources Development Act, No 28 of 2002 (MPRDA) will affect its application.

The Courts Reasoning in the Aquila Steel Judgement

This case dealt with two conflicting prospecting rights granted over the same land for the same mineral.

On 19 April 2005 Ziza Limited (Ziza) submitted a prospecting right application. The application was, however, incomplete because it didn’t comply with the prescribed requirements – it omitted the prescribed plan showing the land over which the application applied.

On 18 April 2006 Aquila submitted prospecting right application, which was granted on 11 October 2006.

On 26 February 2008 Ziza’s prospecting right application was granted. There were now two rights granted over the same land for the same minerals.

On 14 December 2010 Aquila applied for a mining right. This application was, however, now refused by the Department of Mineral Resources (DMR) because of Ziza’s prior application that the DMR said was in queue before Aquila’s.

The court had to decide which application was first in queue and should be considered.

Aquila argued that Ziza’s application was not complete and that the defects meant it had to be rejected by the DMR – this rejection would result in the application falling out of the queue and leave Aquila’s application as next in line. Ziza counter argued that a defect in an application doesn’t mean that the application automatically fails and has to be rejected by the DMR, but that a defective application can be amended to remedy defects without losing its place in the queue.

Does a prospecting right applicant lose their place at the front of the queue if their application doesn’t comply with the formal requirements of the MPRDA? To answer this question the court applied the wording of section 16(3) of the MPRDA as it read at the time when the applications were submitted and decided:

If the application does not comply with the requirements of this section, the Regional Manager must notify the applicant in writing of the fact within 14 days of receipt of the application and return the application to the applicant.” (own emphasis).

The crux was to determine what notifying and “returning the application to the applicant” meant. Did this mean the application was rejected, or that the process was merely suspended to allow the applicant to amend the application without losing its place in the queue?

The court considered the objective of the act to prevent sterilisation of minerals. This would be hindered if the return of the application allowed the applicant to amend a defective application – the act didn’t specify any timelines that the amendment must be done, meaning that an applicant could delay the entire procedure by not amending the application (or taking years to amend as in the present case), effectively sterilising the minerals by preventing other companies from applying for prospecting rights over the land.

The court also considered the practicalities of “returning the application”. This means the DMR has no record of the application other than the day that it was received and returned. Crucially the DMR wouldn’t have records of the minerals or land that the application related to.

The court concluded that a “return” was a rejection meaning the application fell out of the queue. An applicant could amend the application but the resubmitted application must be treated as a new application and fall behind any other applications in the queue.

Ziza’s non-compliance meant that its application fell out of the queue. Aquila’s application would accordingly have to be considered because it was the next application in the queue.

Current Position under the MPRDA

The Aquila case applied the provisions of the MPRDA as they read between 2005 and 2013, the years when the decisions were taken. This means that the court’s reasoning may not apply to decisions taken after the amendment of the act.

The MPRDA was amended on 13 June 2013, and the amended provisions must be applied to any decisions taken by the DMR after this date. Section 16(3) now reads:

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

The amendment removes the requirement to return a non-compliant application – the very requirement that the court considered when deciding the Aquila case.

Under the amended section the DMR must only notify the applicant that its application is non-compliant. The DMR still can’t accept non-compliant applications, but it now doesn’t have an obligation to return them. Does the non-return of the application change the application of the Aquila judgement and mean that there is no rejection of the application? Does this now give an applicant an opportunity to remedy its applications non-compliance without losing its place in the queue?

In my opinion the amended section 16 of the MPRDA does not change the application of the Aquila decision. The amended section doesn’t alleviate the concerns in the Aquila judgement around the sterilisation of minerals if the applicant possibly has an unlimited period to remedy its applications non-compliance.

In terms of the amended section the applicant is still notified of the non-compliance. This notification itself would be an administrative action taken by the DMR, and would be a rejection of the application in line with the Aquila judgement. The non-return of the application merely alleviates the DMR’s burden and costs associated with returning voluminous applications.

Conclusion

The Aquila judgement highlights the need for prospecting right applicants to make sure that their application complies with all the formal requirements of the MPRDA before submission.

If an application is non-compliant the DMR must reject the application. The applicant can remedy the defects, but the resubmitted application will be regarded as a new application, and fall last in the application queue.

There have been amendments to the MPRDA removing the DMR’s obligation to return the non-compliant application, but this amendment would not alter the application of the legal principles decided in the Aquila judgement.


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Suspending Overbroad Safety Instructions that Halt Mining Operations

If an inspector has reason to believe that there is an occurrence, practice or condition on a mine that endangers any person, then section 54 of the Mine Health and Safety Act, No 29 of 1996 (MHSA) allows the inspector to issue any safety instruction necessary to protect the health and safety of persons at a mine.

These safety instructions can have severe consequences because inspectors are empowered to halt operations at the entire or part of the mine, halt any act or practice at the mine, or require the employer to take acts to rectify the occurrence, practice or condition (section 54(1)).

Unfortunately a practice developed where inspectors issued broad instructions going beyond what is needed to protect the health and safety of persons, often halting the operations of entire mines for very minor or isolated infractions.

This practice has now been scrutinised and severely criticised by the Labour Court in the case of Anglo Gold Ashanti Limited v Xolole Mbobambi and others, where the court granted an order to partly suspend the safety instructions pending an appeal. This order allowed the mine to restart operations after being closed for a time.

I hope that the court’s criticism will curb overbroad safety instructions and undue production stoppages, but even if it doesn’t, the decision clarifies the grounds that can be relied on to have the safety instructions suspended pending an appeal.

Facts of the Case

An inspector observed two safety infractions on a single level of the mine that employed 2% of the mine’s workforce. The infractions were:

    • 43 explosive charges had not been placed in an explosive box; and
    • 4 rail switches didn’t have rail switching devices.

The inspector issued a safety instruction that prohibited the use of explosives throughout the whole mine and halted all tramming operations. This effectively closed the entire mine.

The mine launched an urgent application to suspend safety instructions pending a full appeal. The mine argued that the safety instructions were erroneously issued, contending that:

    • the non-compliance connected with the explosive charges was an isolated incident;
    • no circumstances existed on 44 level that rendered the whole level unsafe;
    • no circumstances existed that rendered the entire mine unsafe; and
    • the absence of rail switches doesn’t constitute a danger.

The Court’s Decision to Set Aside the Safety Instructions

The court applied two separate, but connected, lines of questioning in its analysis.

First, did the inspector comply with the requirements of section 54(1) when he issued the safety instructions?

Secondly, was the safety instruction itself an administrative action regulated by the Promotion of Administrative Justice Act 3 of 2000 (PAJA)? If so, then did the safety instructions comply with the legal requirements of (i) lawfulness; (ii) reasonableness; and (ii) procedural fairness?

The court said that there are two requirements in section 54(1) for the issuing safety instructions:

    • an inspector must objectively to establish a state of affairs which would lead a reasonable person to believe that there is a danger to the health or safety of any person at the mine; and
    • the instruction must be limited to the extent that it is necessary to protect the health and safety (paragraph 24).

The standard applied in these enquiries is the standard of reasonable practicality required in section 2 of the MHSA.

The court considered the safety instruction issued because of the absence of rail switches, holding that the inspectors didn’t satisfy the legal requirements; there were no objective facts that would lead a reasonable person to believe that the absence of rail switches poses any danger to any person at the mine (paragraph 19 and 32).

The court’s enquiry into the safety instruction that prohibited the use of explosives went further. Here the court accepted that there were objective facts that could lead a reasonable person to believe that the safety infraction posed a danger to persons at the mine, but that was not the end of the enquiry.

The court confirmed that a safety instruction issued by an inspector is an administrative action, and as an administrative action must, in terms of PAJA, be exercised (i) lawfully; (ii) reasonably; and (ii) in a procedurally fair manner (paragraph 57).

The court emphasised the requirement of reasonableness and applied the principle of legal proportionality (paragraph 27 to 33). This principle holds that if an action is not proportional to what it seeks to achieve, then the action is unreasonable and subject to review under PAJA.

A court looks at three elements to determine if an action is proportional, and consequentially reasonable:

    • was the measure suitable for achieving the desired aim (the suitability element);
    • was the measure necessary, or was there a lesser measure that could achieve the same desired aim (the necessity element); and
    • does the measure place an excessive burden on the individual that is disproportionate to the public interest that is protected (the balance element); (see de Ville, JR. 2003. Judicial Review of Administrative Action in South Africa. Durban: LexisNexis Butterworths, at pg. 203).

Accordingly, all safety instructions must be proportional and reasonable based on the objective facts. If not, then the affected company can approach a court for appropriate relief.

The court held that the safety infraction involving the explosives was an isolated incident that occurred on a single level of the mine employing a small fraction of the workforce. There was no objective fact that could be relied on by the inspector to infer that the entire level, and further the entire mine, was unsafe (paragraph 16 and 33).

Applying the principle of legal proportionality, the court held that the safety instructions were not proportional to the issues that the inspector identified, and went further than was necessary to protect the health and safety of persons at the mine (paragraph 32 – 33).

The court accordingly suspended the safety instructions issued in terms of section 54, with the exception of level 44 where the infraction had occurred (paragraph 34).

The Court’s Criticism of the Safety Instructions and the Inspectors Conduct

The court criticised the inspectors belief that they are empowered to close entire mines based only on a safety infraction in a single section or level of the mine, where the objective facts do not show that these infractions will render the entire mine unsafe (paragraph 36).

The court went as far as warning the inspectors that it would have seriously considered holding them personally liable for the mines legal costs if the mine had asked (paragraph 37).

The courts criticism is a stern warning to inspectors to exercise their powers in terms of the MHSA lawfully, reasonably and fairly.

Conclusion

The take away from this judgement is that safety instructions issued by an inspector in terms of section 54 of the MHSA must be reasonable, proportional, and limited by the extent to which it is necessary to protect the health and safety of persons at the mine.

An inspector does not have the power to close entire mines or sections of mines unless the objective facts show that the entire mine is unsafe, and total closure is proportional and indeed necessary to protect the health and safety of people on the mine.

Companies should evaluate any instructions issued in terms of section 54 and determine if they are to broad or go further than necessary. If so, urgent action can be brought in court to suspend the operation of the instructions pending an appeal in terms of the MHSA.


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The Protection of Buildings as Heritage Resources

An owner of land automatically has certain legal rights in the property that stem directly from the ownership – the right to use and enjoy the property, modify the property, sell the property, and, if so inclined, to destroy the property. That is, unless the structure is older than 60 years. At this age an owner’s right to modify or demolish his own buildings is automatically restricted by the National Heritage Act, No 25 of 1999 (National Heritage Act).

The National Heritage Act automatically applies to structures older than 60 years irrespective of whether the structure or property has been formally recognised and granted any heritage status. This means that if a development or project is being planned that involves the modification or demolition of a building older than 60 years, then the required permits must be acquired for before modifying or demolishing the structures. It is not a foregone conclusion that the permit will be granted, and even if the permit is granted the permit can contain restrictions limiting the right to develop the property in the future.

The application of the Heritage Act to buildings was demonstrated in the recent case of Peter Gees v the Provincial Minister of Cultural Affairs and Sport ((974/2015) [2015] ZASCA 136 (29 September 2016)) where a property owner applied for a permit to demolish a building. The building didn’t have any formal heritage status, but it was more than 60 years old. A demolition permit was granted, but as part of the permit the minister imposed restrictions on the future development of the property that included the requirement to have the future building plans approved by Heritage Western Cape before starting construction.

The landowner, unhappy with the restrictions in the permit, approached the court and argued that the minister did not have the power to restrict future development of a property when granting a permit to demolish a building. The Supreme Court of Appeal had to decide two questions, (i) whether the minister may place restrictions on the future development of property when deciding an application to modify or demolish a building, and (ii) if so, whether this curtailment of a property owners rights to use and enjoy the property is constitutional.

To decide these questions the court did a detailed analysis of the interaction between the formal and general protection mechanisms in the Heritage Act.

Formal and General Protections under the National Heritage Act

The National Heritage Act introduced an integrated system for the management of national heritage resources. The act includes a system of formal and general protection methods.

For the formal protection measures to apply, a formal procedure is followed to identify the place, consult with owners, and then declare the place as protected by publishing a government notice or registering it in the heritage register. Formal protection measures can apply to heritage sites, protected areas around heritage sites, identified heritage objects, or whole heritage areas (section 27 to 32).

The formal protection measures stand in contrast to the general protections that apply automatically, irrespective of whether the place has been identified as culturally significant. The general protections apply automatically to all structures older than 60 years, archaeology sites, palaeontology sites, meteorite sites, burial grounds, graves, and public monuments and memorials (sections 33 to 38).

There is no need to identify one of these sites and consult with the owners before the general protections apply to them.

General Protection for Buildings older than 60 Years

The Heritage Act automatically protects all structures older than 60 years. The provincial resources authority must grant a permit before these buildings, or any part of them, can be altered or demolished (section 34(1)).

The permit procedure and appeal process is set out in the Heritage Act (sections 48 and 49). When a permit is applied for the heritage resources authority may issue the permit subject to conditions, which may include the conditions that security is given for the completion of the proposed work, providing for the recycling or depositing of materials into a materials bank for historical building materials, stipulating that design proposals be revised, or stipulating the qualifications and expertise required to perform the actions (sections 48(2)(a) to (d)).

If a permit is refused, then the authority must consider if the structure should be protected formally in terms of one of the formal protection measures (section 34(2)).

Objection Raised by the Landowner in the Case under Discussion

In the Gees case the a demolition permit for a building older than 60 years was granted, but the minister imposed restrictions on the future development of the property as part of the permit.

The City of Cape Town regarded the area that the building was located in as a significant “well-preserved art deco streetscape”, and thought that the character of the area should be conserved. The particular building itself was not deemed worthy of protection – the building was classified by the city as an “IIIC heritage resource” that only derives its significance from its contribution to the character of the surrounding area.

The building was not protected by any of the formal protection methods. It was not part of any declared national or provincial heritage site (section 27), in a heritage area (section 31), under provisional protection (section 29), listed in any heritage register (section 30), or declared a national heritage object (section 32). The only protections in the Heritage Act that applied to the building in this case were the general protection measures that apply automatically to all buildings older than 60 years.

The landowner argued that the act did not authorise the heritage authority to place conditions on the future development of a property when it was considering an application to demolish a structure that had no formal heritage status.

This argument was rejected by the court. The court held that if the imposition of permit conditions was limited only to areas that were formally protected, then the ambit for the protection of heritage resources would be reduced to small declared areas only, leaving large areas open for possible abuse.

The court evaluated the objectives of the Heritage Act, finding that the conditions imposed were designed to enable the heritage authority to fulfil its duties. The imposition of the conditions on the future development of a property when it was considering an application to demolish a structure that had no formal heritage status was found to be lawful.

The court briefly considered the landowner’s second argument that the curtailment of his rights to use and enjoy the property was unconstitutional. The court found that the conditions imposed in the demolition permit was a curtailment of property rights amounting to a deprivation of property, but that the deprivation was in the interests of the community, and constitutional.

Conclusion

This case illustrates the importance of considering and applying for all necessary approvals before undertaking any project or development.

If a project or development involves the alteration or demolishing of any structure or part of a structure that is older than 60 years then a permit must first be obtained in terms of the Heritage Act.

It must be borne in mind that if a permit is granted to alter or demolish a structure, the heritage authority does have the power to impose conditions on the future development of a property, limiting the landowner’s right to fully use and enjoy their ownership rights.


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When the Court Can’t Condone Regulatory Non-Compliance

“It’s easier to ask forgiveness than it is to get permission” is the often quoted adage coined by Grace Hopper. But, it is also important to keep another adage in mind – there is often “an exception that proves a rule”.

The dangers of not getting necessary permissions before starting construction activities in a buffer zone of an environmentally protected area was illustrated in a recent court case where two homeowners were ordered to demolish all buildings and rehabilitate the land to its pristine state.  This judgement was handed down on 19 August 2016 in the case of iSimangaliso Wetland Park Authority and Another v Feasey Property Group Holdings (Pty) Ltd and others [2016] JOL 36485 (KZP).

The homeowners’ defence was twofold. First they argued that their activities were not in fact harming the environment, meaning that no action could be taken against them. Second, they asked the court to grant them an indulgence and give them time to get the necessary permissions. These defences were rejected outright by the court.

The homeowners’ activities were taking place in a so-called “buffer zone” bordering the iSimangaliso Wetland Park. This park is a world heritage site protected by the South Africa’s World Heritage Convention Act (No 49 of 1999) and international conventions.

An environmental buffer zone is an area that is outside of the boundaries of a park that is protected to ensure that activities outside of the park can’t have a negative impact, and so that the park can integrate into its surrounding areas. Buffer zones are created by the National Environmental Management Protected Areas Act No 57 of 2003 (Protected Areas Act).

The sites where the homeowners’ activities were taking place are owned by the Government of KwaZulu Natal and the Republic of South Africa. The land hasn’t been transferred to the Ingonyama Trust, but it is still to be administered by the Ingonyama Trust in terms of the KwaZulu-Natal Ingonyama Trust (Act 3KZ of 1994). In addition, being inside the iSimangaliso Wetland Park’s buffer zone, the land falls under the jurisdiction of the iSimangaliso Wetland Park Authority.

It appears that the homeowners did attempt to get permission to occupy the sites and construct houses – they had entered into a lease agreement, albeit not with the registered owners of the land, and there was consent from the Mbila Traditional Counsel. Even so, they had not applied for any of the required environmental authorisations that were required because the sites were in a buffer zone.

The outright failure to apply for, or obtain, the required environmental authorisations was not, however, even considered by the court. The decision of the court focused exclusively on the fact that there was no valid lease agreement for the site and that the homeowners had no other right to occupy the land.

The homeowners conceded that they didn’t have a valid lease agreement or any other right to occupy or build on the sites. Their defense was whittled down to a request to the court to be granted an indulgence so that they could enter into the required agreements and apply for any environmental authorisations that were needed.

The court took a dim view of the request for an indulgence, equating it to a request for it to condone illegal actions.

The court applied an earlier decision of the Supreme Court of Appeal (Lester v Ndlambe Municipality and Another 2015 (6) SA 283 SCA) where it was said that a court does not have the discretion to give a person an indulgence to enable them to legalise an illegal use of land – the court must uphold the rule of law and prevent any on-going contravention of the law.

The court doesn’t have the power to forgive, even if forgiveness is only sought temporarily.

The result – the homeowners were ordered to vacate the sites and rehabilitate the land restoring it to a pristine state, requiring that they demolish all buildings.

The take away from this judgement is that it is important to obtain all necessary approvals before undertaking any project or development. In this case the failure to acquire a valid consent to occupy the land was the decisive factor applied by the court, but one must also be careful not to overlook any environmental authorisations that might be required taking into account the nature and location of the development.


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The Effect of Local Zoning Laws when Applying for a Mining Right

When a person is applying for a prospecting or mining right in South Africa, emphasis is placed on ensuring compliance with the provisions of the Mineral and Petroleum Resources Development Act, No 28 of 2002 (MPRDA) and other applicable national legislation that regulates environmental management.

An area of legal compliance that is sometimes overlooked is the need to comply with provincial and local land use and zoning restrictions. These can prevent mining operations even if a mining right has been granted in terms of the MPRDA. If there is a town planning ordinance that restricts the right to mine unless the land is appropriately zoned for mining, then the holder of a mining right or permit must get land use planning authorisation before starting with operations.

The failure to consider land zoning could therefore have dire consequences on a project.

To understand the interaction of national, provincial and local legislation in South Africa, some background on the different spheres of government is useful.

The Interaction between National, Provincial and Local Legislation

In South Africa the power to pass laws is divided into three government spheres – national, provincial and local (section 43 of the Constitution). Each sphere is allowed to pass legislation governing the areas that it exercises control over. The control might be exclusive or concurrent control that is exercised jointly.

The national legislature has the power to pass laws that govern any matter as long as the matter is not in the exclusive control of the provincial government (section 44(1)(a) of the Constitution). The provincial government has more limited powers – it exercises concurrent power with the national legislature in some areas, but it also has exclusive powers in other areas (section 44(1)(b) of the Constitution).

Areas of concurrent national and provincial competence include the administration of indigenous forests, the environment, regional planning and development, and urban and rural development (schedule 4 of the Constitution). The areas where the provincial government exercises exclusive legislative competence, and where the national legislature has no power to govern, include provincial planning, and provincial roads and traffic regulation (schedule 5 of the Constitution). A full list of the different functional areas is included at the end of this note.

When applying national and provincial legislation you have to ask, if an activity is permitted by national legislation can that activity then be restricted by provincial legislation or local by-laws? In the context of mining, if a person is permitted to mine in terms of the MPRDA, which is national legislation applicable throughout the entire Republic, can they then be prevented from mining if provincial legislation places additional requirements that must be met before starting with the mining activities?

A Conflict between Land Use and Zoning Restrictions, and the Right to Mine

The question whether local land use and zoning restrictions can restrict a person’s right to mine in terms of a mining permit was considered in 2012 by the South African Constitutional Court in the Maccsand case (CCT 103/11 [2012] ZACC 7).

Maccsand was granted two mining permits. One to mine the “Rocklands dunes” in a residential area zoned as public open space, and the second to mine the “Westridge dunes”, also in a residential area but situated on three erven zoned as public open space and rural areas. The City of Cape Town brought legal action against Maccsand to stop all mining activities on the dunes until the land was rezoned to allow for mining.

The legal action to stop the mining activities was brought because Maccsand had not complied with the provincial Land Use Planning Ordinance 15 of 1985 (LUPO), which prohibits the use of land for purposes that are not permitted in the zoning scheme or regulations. LUPO provides that if a person wants to undertake mining activities, these activities can only be undertaken if the land zoning scheme permits it or if a departure is granted.

It was argued in support of Maccsand that a right to mine can’t be limited by local land use and zoning restrictions because the regulation of mining fell in the national sphere of government. It was argued that the permit granted in terms of the national legislation authorising mining could not be limited by local land use and zoning restrictions because the limitation would be an intrusion by the local sphere of government into an area falling in the national sphere.

The court recognised that there is a natural overlap between land use and mining because mining will always take place on land, but stated that overlaps in the competencies of national and local government may be permitted. LUPO governs the use of all land in the Western Cape Province, which is a function of the local sphere of government in terms of the Constitution – it doesn’t regulate mining.

Because of the overlap of competencies between the MPRDA and LUPO, the granting of a mining right doesn’t automatically exclude the application of LUPO, and it doesn’t mean that the MPRDA trumps the provisions of LUPO – indeed the MPRDA itself states clearly that a mining right is subject to any other applicable law, such as LUPO (section 23(6) of the MPRDA).

The court found against Maccsand, holding that there is no conflict between the MPRDA and LUPO, and that it is permissible under the Constitution if mining can’t take place in terms of the MPRDA until the land is rezoned in terms of applicable land use and zoning restrictions.

The Need to Assess Restrictions According to the Operations Location and Time of Commencement

The Maccsand case dealt with a provincial ordinance enacted by the Provincial Counsel of the former Cape of Good Hope, but it illustrates an important legal principle applicable in all of South Africa’s provinces – the right to conduct mining activities in terms of the MPRDA can be restricted by provincial and local land use and zoning restrictions.

The different provinces in South Africa have different land use and zoning restrictions. This means that a mining right holder must look at the provincial legislation applicable in the province where operations are intended in order to determine if there are provincial restrictions restrict mining operations. If so, then it is necessary to determine what approvals are needed from the local authority before starting operations.

Over and above determining if there are land use and zoning restrictions, it is also necessary to determine what provincial legislation that was applicable at the time that operations commenced because the present legislation might not always be applicable.

This was illustrated in the Mtunzini Conservancy v Tronox KZN Sands (Pty) Ltd case (Mtunzini Conservancy v Tronox KZN Sands (Pty) Ltd and another [2013] 2 All SA 69 (KZD)). The facts of this case were strikingly similar to the Maccsand case, but the court distinguished the two cases and held that in the Mtunzini Conservancy case the current provincial legislation could not be used to prevent Tronox from continuing with its mining operations.

In 1988 Tronox was granted a single right to mine mineralised sand dunes over two discontinuous areas of land, referred to as the Hillendale and Fairbreeze properties. When the right was granted in terms of the old Minerals Act, No 50 of 1991, Tronox planned to mine the Hillendale property first and then later mine the Fairbreeze property. This was reflected in the company’s mining authorisations.

In 2012 when the company started to plan its mining activities on the Fairbreeze property the Mtunzini Conservancy objected, and brought legal action against Tronox to stop all mining activities on the dunes. The Mtunzini Conservancy relied directly on the Maccsand case and argued that Tronox couldn’t start with any construction activities on the Fairbreeze property until it was granted development approval in terms of the provincial KwaZulu-Natal Planning and Development Act No. 6 of 2008 (the PDA).

The court distinguished the Mtunzini Conservancy case from the Maccsand case based on when the mining operations started and the applicable provincial legislation that was applicable at the relevant time. When the company started with its mining operations in the Maccsand case, unauthorised mining was already prohibited by the provincial legislation (LUPO). This was not the case in the Mtunzini Conservancy case.

In the Mtunzini Conservancy case, when the company started its mining operations in 1988 there was no provincial legislation in place that restricted the intended operations without requiring additional provincial authorisations – the restriction that were being relied on by the Mtunzini Conservancy were only introduced after Tronox had already started its mining operations.

The court held that the application of PDA is not retrospective, and the law that was applicable when the right to mine was granted in 1988 continued to apply. When Tronox was granted the right to mine the Fairbreeze property in 1988 it had complied with all legislation and had been granted all of the necessary authorisations in terms of the then applicable legislation. The court accordingly held that the KwaZulu-Natal Planning and Development Act did not restrict mining operations that had commenced before the act became effective, and that the company’s right to mine the Fairbreeze property is not restricted by the provisions of the PDA which came into effect after the start of the mining operations.

An Approach When Considering Local Land Use and Zoning Restrictions

The following approach has been suggested when considering zoning restrictions:

  • is there a town planning scheme promulgated over the land;
  • if so, has the land been zoned for a particular use;
  • if so, does the zoning permit mining;
  • if not, does the town planning scheme have a general exemption for mining;
  • if not, does the town planning scheme make provision for existing land uses, and is the mining activities covered by these provisions;
  • if not, could it be argued that the town planning scheme legally invalid (Dale et al South African Mineral and Petroleum Law Issue 17 app-248).

If the outcome of this line of questioning shows that mining activities on the intended land are restricted, then the holder of a right will have to ensure that the land is rezoned to permit mining before any mining activities take place on the property.

Don’t Overlook Local Zoning Laws

Because provincial and local land use and zoning restrictions can prevent mining operations, it is important to consider these early in project planning process in order to ensure that prospecting and mining operations are not halted before they have even had the chance to start.


Provincial Legislation to Consider

I have included a list of provincial legislation that might become applicable below for the sake of completeness.

Eastern Cape

  • Land Use Planning Ordinance 15 of 1985 (of the former Cape Province);
  • Ciskei Land Use Regulation Act 15 of 1987.

Northern Cape

  • Northern Cape Town Planning and Development Act 7 of 1998;
  • Spatial Planning and Land Use Management Act 16 of 2013.

Western Cape

  • Land Use Planning Ordinance 1985 (Western Cape);
  • Western Cape Land Use Planning Act 3 of 2014.

Free State

  • Township Ordinance 9 of 1969 (as amended by the Township Ordinance Amendment Act 10 of 1998).

Gauteng

  • Gauteng Planning and Development Act 3 of 2003;
  • Town Planning and Townships Ordinance 15 of 1986 (Transvaal);
  • Division of Land Ordinance 20 of 1986;
  • Transvaal Board for the Development of Peri-Urban Areas Ordinance 20 of 1943.

KwaZulu Natal

  • KwaZulu-Natal Planning and Development Act 6 of 2008;
  • KwaZulu Land Affairs Act 11 of 1992;
  • KwaZulu Ingonyama Trust Act 3 of 1994;
  • KwaZulu Amakhosi and Iziphakonyiswa Act 9 of 1990.

Limpopo

  • Town Planning and Townships Ordinance 15 of 1986 (Transvaal);
  • Transvaal Board for the Development of Peri-Urban Areas Ordinance 20 of 1943;
  • Venda Proclomation 45 of 1990.

Mpumalanga

  • Town Planning and Townships Ordinance 15 of 1986 (Transvaal);
  • KwaNdebele Town Planning Act 10 of 1992.

North West

  • Town Planning and Townships Ordinance 15 of 1985 (Transvaal);
  • Town Planning and Townships Ordinance 15 of 1986 (Transvaal);
  • Transvaal Board for the Development of Peri-Urban Areas Ordinance 20 of 1943;
  • Bophuthatswana Land Control Act 39 of 1979

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2015 Financial Provision Regulations, and Pre-existing Rehabilitation Provisions

To prospect or mine for minerals, or to explore for or produce petroleum resources, a person must have have a licence granted in terms of the MPRDA (the principle act governing mining and production rights) and an environmental authorisation granted in terms of National Environmental Management Act, No 107 of 1998 (NEMA) (the principle act governing environmental management). To get these a guarantee, termed a “financial provision”, must be given to cover the possible cost associated with the management, rehabilitation and remediation of environmental impacts that result from the operations. The financial provision ensures that there is enough funds available to rehabilitate the environmental impacts that the operations may have had once the operations end.

The financial provisions were regulated by the MPRDA, but in the last few years the laws have been amended to bring the regulation of financial provisions under the ambit of NEMA. The new 2015 Financial Provision Regulations published under NEMA came into effect on 20 November 2015.

Some companies are now in a position where they have given the required financial provision, but under the old MPRDA regulations that are not applicable any more. The question is, what steps must now be taken to comply with the new regulations?

The short answer is that the current financial provision is regarded as being issued and approved in terms of the regulations (regulation 17(4)), but steps must be taken in the very near future to review the financial provision and align it with the new requirements (regulation 17(4)).

Methods used to provide the financial provision under the regulations

The three vehicles that were used under the Mineral and Petroleum Resources Development Act, No 28 of 2002 (MPRDA) to give the financial provision are all still available under the 2015 Financial Provision Regulations (GN R1147 in GG 39425 of 20 November 2015) (the regulation). These are:

  • financial guarantee issued by a registered bank, insurer or underwriter;
  • cash deposited into an account administered by the Minister of Mineral Resources (Minister); or
  • a contribution to a trust fund established specifically for this purpose (MPRDA regulation 53(1) and regulation 8(1)).

Even though the available vehicles haven’t changed, the format of the financial guarantee and trust deed are now prescribed in the regulations (see appendix 1 and 2), and the permissible uses of trusts has been changed by the new regulations. A full discussion of these falls outside the scope of this note.

Time frame to conduct the review

A holder of a right that was issued before 20 November 2015 (a holder) must conduct a review, assessment and adjustment of its financial provision to ensure that it complies with the new regulations (regulation 17(5)):

  • within 3 months of the end of its first financial year after November 2015; or
  • within 15 months after November 2015 (regulation 17(5)(a) and (b)).

The time frame must be regarded as either/or, so for the first review the holder can choose the most suitable time frame that fits its purposes. The financial provision must then be reviewed annually after the first review (regulation 17(5)(b)).

Procedure to conduct the review

The review, assessment and adjustment of a financial provisions approved under the MPRDA is largely the same as the procedure that is applicable to new financial provisions approved in terms of the regulations (in terms of regulation 17(5) regulation 11 must be applied).

The procedure can be broken down into the following steps.

Step 1: Preparation of the prescribed reports and plans. The holder must prepare the following reports and plans:

  • an annual rehabilitation plan setting out the annual requirements for rehabilitation and remediation;
  • a final rehabilitation, decommissioning and mine closure plan setting out the requirements for the decommissioning and closure of the at the end of life of the operations; and
  • an environmental risk assessment report setting out the requirements for the remediation of latent and residual environmental impacts, including the pumping and treatment of polluted or extraneous water (regulation 11(1)(a), (b) and (c)).

The minimum contents of these plans and reports are prescribed in the regulations (see appendix 3, 4, and 5), so a holder must ensure that the plans and reports are compliant, and that they contain the prescribed minimum information (regulation 12(1), (2), and (3)).

Step 2: Assessment of the adequacy of the current financial provisions. The holder must do an assessment of adequacy in light of the reports and plans, and identify any necessary adjustments that must be made to the financial provisions (regulation 11(2)).

Step 3: Independent audit. The reports, plans and assessment of adequacy must be audited by an independent auditor (regulation 11(3)(a)).

Step 4: Inclusion of the assessment into the environmental audit report. The assessment of adequacy must be included in the environmental audit report that is required in terms of the Environmental Impact Assessment Regulations 2014 (regulation 11(3)(b)).

Step 5: Submission. A holder must submit the following to the Minister:

  • the independent auditor’s report that sets out the results of the assessment of adequacy;
  • proof of payment or proof of arrangements to make any adjustments to the financial provision; and
  • the prescribed environmental and rehabilitation plans and reports (regulation 11(3)(c)).

Approval of the updated financial provision by the Minister

After receiving the updated financial provision, the Minister has 30 days to:

  • approve the financial provision;
  • refer the provision back to the holder for revision; or
  • refuse to approve the financial provision (regulation 17(10)).

If the Minister refuses to approve the updated financial provision he must provide reasons for the refusal, and he may appoint an independent assessor to review the assessment at the cost of the holder (regulation 17(15)(b) and (c)).

If the Minister refuses to approve the updated financial provision the holder is regarded as being non-compliant with section 24P of NEMA (regulation 17(15)(a)).

Procedure to top up a shortfall in the financial provision

If the review and assessment procedure shows that there is a shortfall in the financial provision, the holder must:

  • increase the financial provision within 90 days from the date of the audit report (regulation 17(16)(a)); and
  • submit proof of payment, or proof of arrangements, to make any adjustments to the financial provision (regulation 17(5) and 11(3)(c)).

The transitional arrangements provide relief to holders if they are unable to increase their financial provision to cover a shortfall. If a holder is not able to increase its financial provision the holder and the Minister may enter into a payment agreement where the holder agrees to increase the financial provision over a period of 5 years or less (regulation 17(7)). The payment agreement must be reviewed annually by the Minister (regulation 17(7)).

Procedure if there is an excess in the financial provision

If the review and assessment procedure shows that the financial provision has an excess of funds, the holder can’t reduce the financial provision, but must defer that excess against future assessments (regulation 17(16)(b)).

Procedure to withdraw a financial guarantees provided under the MPRDA

The regulations that apply to the withdrawal of new financial guarantees approved in terms of the new regulations apply equally to the withdrawal of financial guarantees previously approved under the MPRDA (regulation 17(17)).

If a financial institution wants to withdraw a guarantee:

  • the financial institution must give the Minister at least four months written notice of its intention by registered mail (regulation 8(3)(a)); and
  • the Minister must then give the holder 60 days to provide an alternate arrangement for the financial provision (regulation 8(4)).

If the holder can’t provide an alternate arrangement within the 60 day period, the Minister must call on the financial guarantee. This money is then held by the Minister until an alternate arrangement can be provided for the financial provision (regulation 8(5)).

If the holder does provide an alternate arrangement then the Minister must release the first guarantee within 7 days of receiving the alternate financial provision (regulation 8(6)).

The public’s right of access to information

The holder must make any approved amendment to its environmental management programme available to the public (regulation 17(19)). This may must be:

  • published on the holders public website, if the holder has one;
  • available at the site office of the operations; and
  • accessible to the public on request (regulation 13(1)).

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Categories of Contract Language

A large part of my daily activities involves drafting legal contracts, and recently I have been looking for resources on the best ways to construct contracts and phrase clauses.

One resource that has really caught my attention is A Manual of Style for Contract Drafting, Third Edition, by Kenneth A Adams.

When it comes to constructing clauses for a contract Adams goes much further than other contract drafting books I have read. Where most books give handy guidelines and lists of words to use or avoid using, Adams takes the entire process one step back.

Adams suggests a process where each clause is analysed, and the language used in the clause is determined by the legal outcomes that the parties intend to flow from the clause. He suggests that each clause in a contract has a function, and the language that a clause uses will be determined by this function. For example, a clause that functions to impose an obligation will be distinguished from one that imposes a prohibition or one that provides one party with discretion.

Each type of contractual language must be used consistently throughout a contract.

Adams breaks contractual language into eleven different categories, with each category serving a different function in a contract. These categories are:

  • Language of Agreement
  • Language of Performance
  • Language of Obligation
  • Language of Discretion
  • Language of Prohibition
  • Language of Policy
  • Language of Declaration
  • Language of Belief
  • Language of Intention
  • Language of Recommendation
  • Expressing Conditions

When drafting a clause you must determine what the clause needs to accomplish and find what the function of the clause is. Once you have determined this then the most appropriate category of language can be used to achieve that function.

The process is not as easy as it seems at first because many clauses can be incorrectly phrased in more than one different contract language. This is illustrated throughout the book in numerous examples. For instance, an obligation to purchase shares can be expressed in various ways:

  • The Purchaser shall purchase the Shares…
  • The Purchaser must purchase the Shares …
  • The Purchaser will purchase the Shares …
  • The Purchaser agrees to purchase the Shares …
  • The Purchaser undertakes to purchase the Shares …
  • The Purchaser shall be obligated to purchase the Shares …
  • The Purchaser is obligated to purchase the Shares … (Adams table 2).

By following the approach suggested by Adams a contract becomes more internally consistent in the language used and easier to read and interpret.

Language of Agreement

“The parties agree as follows.”

The language of agreement expresses the parties’ state of mind. This language should only be used once in each contract; in the lead in to a contract (Adams Para 3.16).

It is common to see language of agreement used throughout a contract, often coupled with a statement of fact or an obligation. For example “the parties agree that the material is free from defects… ” or “the parties agree that the seller will deliver the material on 1 January 2016”.

The use of “the parties agree” is redundant in these examples. These clauses are recorded in a contract, which is an agreement by its very nature.

These examples can also be expressed better using other, more appropriate, language. For example, if one party is supposed to be warranting that the material is free from defects then it should be expressed adequately as a warranty. On the other hand, if “agreed” statement is intended to limit one party’s liability if the statement turns out to be true, then again the limitation of liability can be expressed better using other language.

Language of Performance

“The Seller hereby sells the shares to the Purchaser.”

The language of performance expresses actions that are accomplished by signing the contract (Adams Para 3.19).

The word “hereby” could be omitted from the language, but for certainty sake it is recommended that the word is kept because it is both grammatically correct, and it eliminates a possible interpretation that another sale of shares is being referred to (Adams Para 3.21).

Language of Obligation

“The Indemnified Party shall notify the Indemnifying Party of any claim.”

The language of obligation expresses obligations that are imposed on a party (Adams Para 3.44). It is recommended that the word “shall” should be used as the language of obligation (Adams Para 3.44).

In order to check if you have used the word “shall” correctly and consistently throughout a contract, replace the word “shall” with the words “has [or have] a duty to”, and if the sentence still makes sense then chances are that it the word has been correctly used as part of the language of obligation (Adams Para 3.48 and 3.78).

An example of a clause that fails the suggested test is “This agreement shall be interpreted in accordance with the laws of the Republic of South Africa.” It doesn’t pass the “has a duty to” test because it isn’t imposing an obligation on a party. The correct language to use for this particular clause would the language of policy.

Some consideration must be given to whether “shall” is the appropriate word that should be used for obligations, where other alternatives such as “must” and “will” might suffice. It is suggested that “shall” is the most appropriate word to express an obligation (Adams Para 3.62 – 3.72 and 3.108 – 3.111).

Language of Discretion

“The indemnified party may at its expense retain its own co-counsel.”

The language of discretion is used to convey that a party has the discretion to take a specified action (Adams Para 3.141).

When using the language of discretion, it is important to consider if the discretion is limited. If “the Seller may sell the Shares to Bob”, does this preclude the Seller from selling the Shares to anyone else? Care must be taken to avoid possible ambiguity (Adams Para 3.144 – 3.148).

Another consideration is if the discretion given to a party must be exercised in good faith. When considering this, it must be determined if the duty of good faith applies, and if so, if the legal jurisdiction allows this duty to be waived at all (Adams Para 3.169 – 3.183). The use of the term “in its sole and absolute discretion” when is an attempt to waive the duty of good faith that one part owes to another.

The timing of the exercise to the right must also be considered. When can the right be exercised? Can the right only be exercised once, or can it be exercised “on one or more occasions”? (See Adams 3.197 – 3.204)

Language of Prohibition

“The Customer shall not modify the Equipment without the Lessor’s prior written consent.”

The language of prohibition specifies what a party is prohibited from doing (Adams Para 3.223).

Language of Policy

“The laws of the Republic of South Africa govern all matters arising out of this agreement.”

The language of policy is used for rules that the parties must observe, but that don’t need any express action or inaction by a party (Adams Para 3.240).

Verbs in the language of policy must still be expressed in the present tense.

Language of Declaration

“The Seller states that the Equipment is listed in schedule A.”

The language of declaration is used to state facts. There are two different kinds of declarations:

  • the statement of a fact that is known by one of the parties; and
  • the acknowledgement of a fact by one of the parties (Adams Para 3.271).

It is suggested that only the words “states” or “acknowledges” should be used in the language of declaration, not the often used phrase “represents and warrants” (Adams Para 3.273).

Some thought must, however, be given to the phrase “represents and warrants”. In practice this phrase is used to cover different bases. This is because the breach of a representation and the breach of a warranty give rise to two different legal actions.

In both cases the remedy that is available to a party if the other breaches the contract are:

  • rescission (cancellation) of the contract; and/or
  • a damages claim to compensate for losses.

The difference between the two lies in the legal basis that the remedies stem from. The breach of a representation gives rise to a delictual remedy based on a misrepresentation, while a breach of a warranty gives rise to a claim based on the breach of contract.

Even though there is a legal difference between a representation and a warranty, both of these statements are a statement of fact. There is a strong argument that the verb that introduces the statement of fact (for example represents or warrants) will not alter whether the statement of fact is a representation or warranty, or both (Adams Para 3.278).

It is recommended that the term “represents and warrants” is not used to introduce a statement of fact, but that the general “the Party states that …” is used.

Language of Belief

“The parties believe that this agreement complies with the requirements of the National Credit Act.”

The language of belief is used to state an opinion that the parties to a contract have about the legal implications of an agreement or clause. This is because it is not up to the parties to decide if the agreement complies with the law, but this will later be determined by a court (Adams Para 3.319).

It has, however been suggested that the language of belief shouldn’t be used, but instead the statement should be stated in the language of declaration, namely to state a fact. This may, however, give rise to a cause of action if the statement of fact proves to be incorrect.

Language of Intention

“The parties intend that the Consultant will be an independent contractor.”

The language of intention is used for aspects of a relationship that can’t be established by the parties and is not in their control, but must be interpreted and determined by the court (Adams Para 3.322).

It may, however, still be useful to record the parties’ intention because a court might take into account the parties stated intention when interpreting the contract (Adams Para 3.330).

Language of Recommendation

“The Company recommends that the Participant consult with their personal legal advisor if …”

This language is used in a situation where a party with greater bargaining power wants to draw the other parties attention to a particular clause or legal consequences (Adams Para 3.332).

Expressing Conditions

If the Company receives a Notice of Transfer, it shall transfer the Shares.”

A condition refers to a future event that is uncertain (Adams Para 3.260). It should be expressed as an if/then statement. If [the uncertain event occurs], then [a party shall perform a specific obligation].


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The Right to Sue, or be Sued, after Death

On the 13th May 2016 the High Court of South Africa (Gauteng Local Division) handed down its judgement in the class action certification case of Nkala and Others v Harmony Gold Mining Company Limited and Others.

This case certified the classes that will participate in the class action law suit that will be brought against thirty two different mining companies.

In the intended class action the applicant representatives want to institute action on behalf of all current and former underground mine workers who have contracted silicosis or pulmonary tuberculosis (TB), and on behalf of the dependents of these mineworkers who have died of these diseases, after 12 March 1965 (paragraph 40). The court was told that the number of potential class members could be between 17,000 and 500,000 people (paragraph 7).

The claim is based on the mining companies’ alleged breach of duties that they owed to their employees (paragraph 58). These alleged duties include the common law duty to provide a safe and healthy work environment, the duty to comply with the Mine Works Act No 12 of 1911 and the Mine Health and Safety Act No 29 of 1996, and the breach of certain constitutional obligations and rights (paragraph 58).

The court’s judgement will allow the class action to proceed, provided that the judgment is not successfully appealed.

The potential effect of this judgment does, however, extend beyond class action suits and has the potential to impact other cases where damages are claimed in the future. This is because the court’s decision develops the South African common law on the transmissibility of claims for non-patrimonial (general) damages.

The Courts Development of the Common Law on the Transmissibility of claims for Non-Patrimonial (General) Damages

In its judgment the court took the opportunity to develop the South African common law that regulates the transmissibility of claims for non-patrimonial (general) damages. In other words, the court developed the right that the estate of a deceased person has to sue, or be sued, for non-patrimonial (general) damages after the death of the person who suffered or caused them.

This relevant paragraph of the court’s decision outlining the common law development is:

“In conclusion, we hold that the common law should be developed as follows:

A plaintiff who had commenced suing for general damages but who has died whether arising from harm caused by a wrongful act or omission of a person or otherwise, and whose claim has yet to reach the stage of litis contestatio, and who would but for his/her death be entitled to maintain the action and recover the general damages in respect thereof, will be entitled to continue with such action notwithstanding his/her death; and

The person who would have been liable for the general damages if the death of a plaintiff had not ensued remains liable for the said general damages notwithstanding the death of the plaintiff so harmed;

Such action shall be for the benefit of the estate of the person whose death had been so caused;

A defendant who dies while an action against him has commenced for general damages arising from harm caused by his wrongful act or omission and whose case has yet to reach the stage of litis contestatio remains liable for the said general damages notwithstanding his death, and the estate of the defendant shall continue to bear the liability despite the death of the defendant” (paragraph 220, own emphasis).

But what is the practical effect of this finding? To understand this, it is necessary to look at the distinction in that is drawn between patrimonial and non-patrimonial (general) damages in South African law.

The Distinction between Patrimonial and Non-Patrimonial Losses

A patrimonial loss is a loss that causes a reduction in the value of a person’s estate, often through the decrease in the value of an asset that is owned (Visser and Potgieter Damages Second Edition 45). One method that can be used to determine the size of a patrimonial loss is by comparing the current value of a person’s estate after a damage causing event, with the value of the person’s estate before the event. The difference in these values would be the patrimonial loss that was suffered.

An example of a patrimonial loss is the damage suffered when a motor car is involved in an accident. The size of this loss can generally be determined based on a comparison of the value of the car before and after the accident.

Non-patrimonial (general) damages on the other hand don’t necessarily directly impact the value of a person’s estate. Non-patrimonial loss includes claims for money that results from:

  • infringement of a person’s physical or mental interests, such as
    • physical and mental pain and suffering;
    • shock;
    • disfigurement;
    • loss of amenities of life; and
    • shortened life expectancy;
  • defamation; and
  • infringement of a person’s dignity (Visser and Potgieter 99 – 115).

Non-patrimonial losses are losses that are suffered that are highly personal in nature, and aren’t as easily quantifiable as patrimonial losses.

The two types of damages aren’t, however, mutually exclusive, and both types of damages can arise from the same action. For example, if a person is physically assaulted they might have to pay for medical attention (a patrimonial loss), but they might also suffer pain and suffering (a non-patrimonial loss). The person who was assaulted would be able to claim compensation for both of these losses that arose from the same action.

The Previous Common Law Legal Position on the Transmissibility of Claims

Previously the common law only allowed claims for patrimonial losses to be transmitted. This means that if a patrimonial loss is suffered by a person who later dies, that deceased person’s estate may institute action to recover the patrimonial damages.

The common law did not, however, generally allow the estate of a deceased person to sue a wrongdoer for non-patrimonial losses that was suffered by the deceased. The exception to this rule is that if the deceased had already commenced the required legal action, and if the legal action had reached a stage referred to as “litis contestatio” before death, then the claim is transmitted to the deceased persons estate and it can be pursued (paragraphs 187 to 188).

In a court case the stage of litis contestatio is usually reached when the court pleadings have closed, namely once the issues in dispute have been identified by the parties through the exchange of the required court documents.

The court stated that due to the various court procedures the time between commencing the legal action and the legal action reaching the stage of litis contestatio can be long. If the person commencing the claim for non-patrimonial (general) damages dies during this period, then the claim falls away on death and his estate can’t continue with the legal action. However, if the stage of litis contestatio is reached before death then the deceased person’s estate will be able to proceed with the claim and claim the non-patrimonial (general) damages.

The court considered various foreign legal positions, and held that the South African common law had failed to keep up pace with the procedural development in the law.

The court accordingly decided to develop and alter the South African common law as it applies to the transmissibility of claims for non-patrimonial (general) damages, altering the law to make it so that a claim for non-patrimonial (general) damages it transmissible to a deceased person’s estate provided that the deceased person had merely commenced with the legal action. The court therefore removed the requirement that the court proceedings must have reached a stage of “litis contestatio“.

 The Practical effect of this Development of the Common Law

The practical effect of this judgement is that claims for non-patrimonial (general) damages are now transmissible once legal action has been commenced.

This means that the estate of a deceased person can now continue with a claim non-patrimonial (general) damages that was suffered by the deceased, provided that the legal action has been instituted before death.

If a claimant dies after instituting legal action but before the issues in dispute have been fully identified by the parties through the exchange of the required court documents, otherwise known as the close of pleadings or litis contestatio, the claim is no longer extinguished and the claimants estate may proceed to recover both the patrimonial and non-patrimonial (general) damages that was suffered.

It must, however, be noted that the parties to this case have stated their intention to appeal the High Court’s judgment, so this might not be the final position on the transmissibility of claims.


This work by Clinton Pavlovic is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.