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CONSTITUTIONAL COURT OF SOUTH AFRICA

Case CCT 195/19

In the matter between:

NORMANDIEN FARMS (PTY) LIMITED                                                                       Applicant

and

SOUTH AFRICAN AGENCY FOR PROMOTION OF

PETROLEUM EXPORTATION AND EXPLOITATION

(SOC) LIMITED                                                                                                       First Respondent

RHINO OIL AND GAS EXPLORATION

SOUTH AFRICA (PTY) LIMITED                                                                    Second Respondent

MINISTER OF MINERAL RESOURCES                                                           Third Respondent

 

Neutral citation: Normandien Farms (Pty) Limited v South African Agency for Promotion of Petroleum Exportation and Exploitation SOC Limited and Others [2020] ZACC 5

Coram: Khampepe ADCJ, Jafta J, Madlanga J, Majiedt J, Mhlantla J, Theron J, Tshiqi J and Victor AJ

Judgments: Mhlantla J (unanimous)

Heard on: 26 November 2019 

Decided on: 24 March 2020

Summary: Mineral and Petroleum Resources Development Act 28 of 2002 — application for exploration right — mootness — interests of justice — punitive costs

 

ORDER

 

On appeal from the Supreme Court of Appeal (hearing an appeal from the High Court of South Africa, Western Cape Division, Cape Town):

1. Leave to appeal is dismissed.

2. The applicant must pay the costs of the application including costs of two counsel, on an attorney and client scale.

 

JUDGMENT

 

MHLANTLA J (Khampepe ADCJ, Jafta J, Madlanga J, Majiedt J, Theron J, Tshiqi J and Victor AJ concurring):

 

Introduction

[1] This is an application for leave to appeal against a judgment and order of the Supreme Court of Appeal.[1]  That Court upheld an appeal by the second respondent, Rhino Oil and Gas Exploration South Africa (Pty) Limited (Rhino), and set aside the decision of the High Court of South Africa, Western Cape Division, Cape Town (High Court).[2]

 

Factual background and legislative scheme

[2] On 12 April 2016, pursuant to section 79 of the Mineral and Petroleum Resources Development Act (MPRDA),[3] Rhino, a technology driven independent oil and gas exploration and development company focused on Africa, applied for an exploration right.  An exploration right is a right to search for petroleum on land, which may at times be over land that belongs to other landowners.[4]  An exploration right is a broad right, defined in sections 5(1) and (3) of the MPRDA as a land right which may extend to “entering the land to which such right relates together with his or her employees” with a view to “build, construct or lay down any . . . infrastructure which may be required for the purpose of . . . exploration”.  The exploration right applied for by Rhino related to its intention to recover oil and gas through non-invasive techniques and the drilling of boreholes.

[3] The exploration right application in this matter covered various farms including farms owned by the applicant, Normandien Farms (Pty) Limited (Normandien) in Northern KwaZulu Natal.[5]  Normandien conducts timber farming on its properties and has also established a bottling plant.  On 15 April 2016, the first respondent, the South African Agency for Promotion of Petroleum Exportation and Exploitation (PASA), which is the agency designated to perform the functions in Chapter 6 of the MPRDA on behalf of the Department of Mineral Resources, accepted Rhino’s application for an exploration right.

[4] At the heart of this matter lies the complex process of applying for an exploration right under section 79 of the MPRDA.  At a high level of abstraction, that legislative process entails four steps.  First, the acceptance by PASA of an application for an exploration right; second, the publication of the acceptance of the application; third, the filing of various reports with PASA as proof of legislative conformity (including an environmental impact assessment (EIA) and a Scoping Report); and fourth, if appropriate, the granting of an exploration right itself.

[5] The crux of the case is the consequence of formal defects in the acceptance and publication of the application, that is steps one and two of the process outlined above.  On the one hand, Normandien argues that it suffered prejudice by virtue of the failure of PASA to properly publish the acceptance of the application, and that it could challenge this failure immediately, regardless of the fact that the exploration right had not yet been granted.  In other words, Normandien posits that it can challenge errors in steps one and two without having to wait until the grant of the exploration right, as envisaged under step four, occurs.  On the other hand, Rhino argues that the challenge was premature, and that Normandien should have first awaited the granting (if any) of the exploration right in question.  Rhino further argues that, on the facts of this case, Normandien has not suffered any prejudice because there was substantial compliance with the relevant requirements and, in any event, Rhino has since withdrawn its exploration right application.

[6] I now proceed to examine the legislative process and facts, in greater detail.

 

Step one: the acceptance of the application

[7] When PASA accepted Rhino’s application for the exploration right on 15 April 2016, it was required by section 79(2) of the MPRDA “within 14 days of the receipt of the application” to accept Rhino’s exploration right application if the conditions in section 79(1) were met.  One of the conditions set out in section 79(1)(b) is that any person who wishes to apply for an exploration right must lodge an application in the “prescribed manner”.

[8] The “prescribed manner” referred to in section 79(1)(b) is defined in the Mineral and Petroleum Resources Development Regulations (MPRD Regulations).[6]  Regulation 2 states, amongst other things, that “any application for any . . . right made in terms of the MPRDA must be lodged by submitting an appropriately completed form contained in Annexure I”.  That the relevant title deeds are required is confirmed by regulation 28(2)(f) which states that “the application . . . must contain . . . a certified copy or copies of the title deed or deeds, where applicable, in respect of the area to which the application relates”.

[9] It is common cause that certified copies of the relevant title deeds were not provided with the application by Rhino.  Normandien argues that this failure meant that PASA was unable to ascertain whose land might be adversely affected by the exploration right, and that those parties would therefore not be able to participate effectively or at all in the ensuing consultation process.  Accordingly, Normandien alleges that PASA acted unlawfully in accepting an application which was not made in the “prescribed manner” within the meaning of section 79(1)(b) of the MPRDA, read with regulations 2 and 28 of the MPRD Regulations.

 

Step two: publication of the acceptance

[10] PASA then published the acceptance of Rhino’s application.  Again, this is what it was required to do.  Section 10(1) of the MPRDA provides that “within 14 days after accepting an application . . . [PASA] must in the prescribed manner” both “make known that an application for [an exploration right] has been accepted” and “call upon interested and affected persons to submit their comments”.[7]

[11] That “prescribed manner” is to be found in regulation 3 of the MPRD Regulations, entitled “[c]onsultation with interested and affected persons”.[8]

[12] The notices were sent to various Magistrates’ Courts to be placed on their noticeboards.[9]  However, these notices were not sent to all the relevant magisterial districts.

[13] Normandien complains about this failure and argues that PASA was required by legislation not to accept the application on that basis.  As a result, Normandien contends that the exploration right application is a nullity.

[14] To this, the following must be added.  On 21 December 2016, after Normandien’s application to the High Court had been served on PASA, the latter published a notice in the Provincial Government Gazette of KwaZulu-Natal.  It recorded its acceptance of the exploration right application.  Calls for objections were required to be lodged by 3 February 2017.  However, this notice came too late, as section 10(1)(a) required this notice to have been published within 14 days after PASA’s acceptance of the application.[10]

 

Step three: the EIA and Scoping Report

[15] On 3 June 2016, Rhino submitted an application to PASA for environmental authorisation in terms of section 79 of the MPRDA.  PASA instructed Rhino to conduct the Scoping Report and EIA.[11]  Rhino then conducted a public consultation process in respect of the draft Scoping Report and draft EIA.

 

Step four: the granting of the exploration right

[16] For reasons that will be discussed below, the exploration right in question was never granted by PASA.  This is because it was formally withdrawn by Rhino on 24 July 2019.

[17] Normandien takes issue with the fact that the prescribed public participation process in terms of section 10 of the MPRDA, as well as regulation 3 of the MPRD Regulations, had not been complied with.  In particular, Normandien is critical of the process followed by Rhino and alleges that the acceptance of Rhino’s exploration right application by PASA was irregular and invalid.  Normandien alleges further that it did not receive the notice from PASA and had no knowledge of the fact that an application had been lodged.

[18] Normandien claims that it was only in December 2016 that it became aware of Rhino’s exploration right application.  And by then, the public participation process relating to the EIA was already at an advanced stage.  Normandien thus claims that it was prejudiced as a result of the failure to follow the mandatory provisions in the legislative scheme; specifically, the requirement that title deeds be attached to the form for the application for an exploration right at stage one of the process; and that acceptance of the application for the exploration right be properly published at stage two of the process.

 

Litigation history

High Court

[19] On 13 December 2016, Normandien applied, on an urgent basis, to the High Court for an order setting aside the acceptance by PASA of the application for an exploration right lodged by Rhino.

[20] The High Court, per Dlodlo J, held that sections 10(1)(a) and (b), and 79(1) of the MPRDA, read with regulation 3 of the MPRD Regulations, are prescriptive in form and do not constitute administrative action that falls within the meaning of the Promotion of Administrative Justice Act[12](PAJA).[13]  The “prescribed manner” referred to in section 79(1)(b), which references regulation 28, read with Form M of Annexure I to the MPRDA, only requires PASA to ascertain whether the requirements have been met.  This includes the mere scrutiny of documents submitted – which does not involve any decision-making.  In terms of the Scoping Report, PASA is required to exercise its discretion as to whether to accept or refuse it.[14]  Although the use of this discretion constitutes a decision, it is not the kind of decision that would adversely affect the rights of any interested parties at that stage; it is a mere phase of the multi-stage process required for environmental authorisation.

[21] The High Court held that the application for an exploration right and other aspects of the process, in terms of the MPRDA and the MPRD Regulations, are couched in peremptory terms.  Since Rhino’s application for an exploration right had been accepted on 15 April 2016, it would be impossible for PASA to comply with the peremptory terms of sections 10 and 79 of the MPRDA.  It held that the application was not made in the prescribed form and therefore PASA was required not to accept it, and that the publication of the acceptance of the application was also not effected in the prescribed form.  The effect was that the actions taken by PASA were unlawful and should be set aside on the basis of an illegality.^[15]  The High Court held that the acceptance was invalid as the mandatory statutory requirements in the MPRDA and MRPD Regulations had not been complied with.  It was argued further by Normandien that the process (including the process of the Scoping Report) also constituted an illegality and should be set aside.

[22] The High Court agreed with Normandien that it had been prejudiced since it did not have an opportunity to object to the acceptance of the application and remarked that “one must always treat matters falling under the MPRDA with the sensitivity deserved”.[16]  The High Court set aside PASA’s acceptance of Rhino’s application as well as the notices published by PASA and its acceptance of a Scoping Report submitted to it by Rhino.  It further interdicted Rhino from submitting the EIA and Environmental Management Program to PASA.  Rhino was granted leave to appeal this decision to the Supreme Court of Appeal.

 

Supreme Court of Appeal

[23] The Supreme Court of Appeal, per Plasket AJA, overturned the findings of the High Court.[17]  In sum, the Supreme Court of Appeal upheld the appeal with costs on the bases that Normandien had not suffered any prejudice and that the matter was not ripe for adjudication.

[24] The Supreme Court of Appeal reasoned that the matter could be dealt with “anterior to the merits”.[18]  It noted Normandien’s contention that the acceptance of the application for an exploration right was not administrative action.[19]  And while failures to comply with statutory duties are reviewable under the common law, it held that Normandien was required to show that the failure gave rise to prejudice, which it neglected to do.[20]

[25] Critical to this conclusion was that Normandien’s rights had not been adversely affected by the process thus far, and that it could point to no prejudice on its part at this stage.[21]  The Court noted that, as a general rule, based on trite legal principles, “a challenge to the validity of an exercise of public power that is not final in effect is premature [and] an application to review the action will not be ripe and cannot succeed on that account”.[22]  The Supreme Court of Appeal noted that Normandien had approached the High Court before a decision had been made (before the exploration right had been granted), “and before it had suffered any prejudice on account of the actions complained of”.[23]  It held that Normandien ought to have waited until the exploration right was granted, and then launch its challenge.  The Supreme Court of Appeal put the point as follows:

“It launched a pre-emptive strike against Rhino.  It may perhaps have been best advised to ‘husband its power’ in anticipation of the battle that may (or may not) lie ahead.”[24]

 

In this Court

[26] Normandien seeks leave to appeal to this Court.  Since the filing of the application on 10 July 2019, there have been some key developments in the matter.

[27] First, the application for the exploration right was withdrawn.  After the Supreme Court of Appeal judgment, Rhino formally withdrew its exploration right application by way of a letter dated 24 July 2019.  On the same day, Rhino informed Normandien of the withdrawal.  However, this development was only disclosed to this Court on 4 October 2019, when the record was filed.

[28] Second, the parties attempted to settle the dispute.  Normandien addressed a letter to this Court on 31 July 2019 stating that the parties were considering settling the dispute in terms of rule 27 of the Rules of the Constitutional Court.[25]  In the letter, Normandien requested that the file not be allocated to a Judge as the matter may be withdrawn.[26]  However, the letter was silent about the withdrawal of Rhino’s exploration right application.^[27]

[29] On 15 August 2019, Normandien’s attorney wrote to Rhino’s attorney as follows:

“I wish to reiterate that, in principle, we agree that the underlying causa for the referral to the Constitutional Court is moot.  We go on record to state that we will agree to ‘withdraw the referral to the Constitutional Court’ (my emphasis as we are not entitled simply to withdraw a matter as rule 27 prevails).  Having taken instructions, we are amenable to having the Constitutional Court matter withdrawn in terms of rule 27 on the basis that each party pays its own costs.”

[30] Rhino explains that it has no intention or right to conduct exploration operations over the properties to which its exploration right application concerned.  It follows, argues Rhino, that all the steps and processes that Normandien seeks to challenge in these proceedings have lapsed and can have no further outcome nor effect.

[31] As a result of these developments, questions surrounding the mootness of these proceedings and whether it is in the interests of justice to grant leave to appeal, in light of the mootness, have arisen.  However, before turning to these, it is necessary to dispose of three preliminary issues, namely, condonation, jurisdiction and whether it is in the interests of justice to grant leave to appeal.

 

Condonation

[32] Normandien applies for condonation.  The application for leave to appeal was filed on 22 July 2019 when it should have been lodged on 24 June 2019.  Accordingly, it is out of time by 20 days.  The reasons for the delay are, amongst others, that Normandien instructed a new firm of attorneys; it had to apply for funding to cover the legal expenses associated with the application to this Court; Normandien did not receive the funding sought; and that it therefore became necessary to convene a board meeting to authorise Normandien’s expenses to fund this application.  Rhino opposes the application on the basis that the explanation is inadequate.

[33] I disagree.  The delay is minimal and the explanation provided is satisfactory.  It is clear from the explanation that there are justifiable reasons for the delay.  Furthermore, no prejudice will be suffered by Rhino.  Therefore, condonation is granted.

[34] There is also an application for condonation for the late filing of Rhino’s answering affidavit.  Rhino explained that the delay was occasioned by the negotiations between the parties after it had advised Normandien that it had withdrawn its exploration right application.

[35] The application is not opposed.  Rhino’s explanation is adequate.  Condonation for the late filing of Rhino’s answering affidavit is therefore granted.

 

Jurisdiction

[36] It is accepted that for leave to appeal to be granted, an applicant must show that the matter falls within the jurisdiction of the Court and that the interests of justice warrant the granting of leave.^[28]  This Court’s jurisdiction is engaged when a matter raises a constitutional issue or an arguable point of law of general public importance that ought to be heard by this Court.[29]

[37] Normandien contends that this matter raises a constitutional issue.  It submits that we are dealing with the interpretation of the MPRDA (section 10, section 79 and the MPRD Regulations), which “involves the interpretation and application of a statute that was enacted to discharge a constitutional obligation to redress inequalities caused by past racial discrimination and to create equitable access to mineral and petroleum resources”.[30]

[38] It is accepted, more generally, that the interpretation and application of legislation specifically mandated by the Constitution is a constitutional matter.[31]  Section 24 of the Constitution indicates that the State is under a constitutional obligation to take reasonable and legislative measures to ensure, amongst other things, sustainable development with natural resources along with justifiable social and economic development.[32]  Based on this, the Constitution envisages the reform of the mining and mineral dispensation through various vehicles including the enactment of legislation such as the MPRDA.[33]  Section 2(h) of the MPRDA provides that one of its objects is:

“[To] give effect to section 24 of the Constitution by ensuring the nation’s mineral and petroleum resources are developed in an orderly and ecologically sustainable manner while promoting justifiable social and economic development”.

[39] I therefore agree that the matter falls within our jurisdiction.

[40] However, that a matter engages our jurisdiction is not sufficient for leave to appeal to be granted.  As was stated in Paulsen “[w]hether a matter will, in fact, receive our attention will depend on the interests of justice”.[34]

 

Interests of justice and mootness

[41] Normandien submits that even if the application is moot, this Court has a duty to adjudicate the matter because the judgment of the Supreme Court of Appeal is incorrect and constitutes binding precedent, which would prejudice future litigants.  Normandien also raises the issue of the costs order against it, and contends that it is imperative that PASA conducts itself correctly in future matters and that the general public ought to know their rights.  Normandien notes that PASA has accepted two further applications by Rhino for exploration rights.

[42] On the other hand, Rhino submits that the matter is moot in fact and in law.  It contends that Normandien challenges steps in the process taken by PASA in respect of its acceptance of Rhino’s exploration right application notwithstanding that the disputed application has been withdrawn.  Rhino also submits that once the application for exploration rights was withdrawn, the issues raised by Normandien became wholly academic and, Rhino argues, there is therefore no live controversy between the parties.

[43] Rhino further contends that Normandien has conceded mootness.  This is based on the letter (dated 15 August 2019) in which Normandien agreed with Rhino that the appeal is moot and that it has elected not to proceed with the appeal.[35]  Rhino contends that the parties had agreed that the merits of the dispute are moot.  But, Rhino alleges that after the matter was set down for hearing Normandien changed tack on the issue of mootness.

[44] Rhino submits that the appeal will have no practical effect, and contends that any issue on costs cannot cloak a moot matter as a live one.  It submits that a costs order granted by the Supreme Court of Appeal cannot render a moot application live in the context of this matter.

[45] Rhino further submits that no interests of justice considerations militate in favour of granting leave to appeal in this matter.  The Supreme Court of Appeal judgment was correctly decided; the environmental authorisation was never sought by Rhino and, in any event, it has been abandoned and will not affect Rhino’s other exploration activities (which are not subject to these proceedings).

 

Analysis

[46] It is clear from the factual circumstances that this matter is moot.  However, this is not the end of the inquiry.  The central question for consideration is: whether it is in the interests of justice to grant leave to appeal, notwithstanding the mootness.  A consideration of this Court’s approach to mootness is necessary at this juncture, followed by an application of the various factors to the current matter.

[47] Mootness is when a matter “no longer presents an existing or live controversy”.[36]  The doctrine is based on the notion that judicial resources ought to be utilised efficiently and should not be dedicated to advisory opinions or abstract propositions of law, and that courts should avoid deciding matters that are “abstract, academic or hypothetical”.[37]

[48] This Court has held that it is axiomatic that “mootness is not an absolute bar to the justiciability of an issue [and that this] Court may entertain an appeal, even if moot, where the interests of justice so require”.[38]  This Court “has discretionary power to entertain even admittedly moot issues”.[39]

[49] Where there are two conflicting judgments by different courts, especially where an appeal court’s outcome has binding implications for future matters, it weighs in favour of entertaining a moot matter.[40]

[50] Moreover, this Court has proffered further factors that ought to be considered when determining whether it is in the interests of justice to hear a moot matter.[41]  These include:

(a)  whether any order which it may make will have some practical effect either on the parties or on others;

(b)  the nature and extent of the practical effect that any possible order might have;

(c)  the importance of the issue;

(d)  the complexity of the issue;

(e)  the fullness or otherwise of the arguments advanced; and

(f)   resolving the disputes between different courts.

[51] I will now consider some of these factors in the context of the current matter.

[52] As a point of departure, an order by this Court in this matter will not have a practical effect.  It must be borne in mind that the main relief sought by Normandien in the High Court was for the setting aside of the acceptance of Rhino’s application by PASA.  Now that Rhino’s application has been withdrawn, there is nothing to set aside or interdict.  There is no triable issue to consider and no party will receive any direct benefit or advantage as a result of an order on the merits by this Court.  In terms of complexity, section 10 of the MPRDA is clear – there is no discrete legal principle that requires this Court to decide the case.

[53] It is necessary to consider whether it is in the interests of justice to grant leave to appeal in order to resolve disputes between courts and conflicting judgments.  Indeed, the High Court and Supreme Court of Appeal did come to different conclusions.  Normandien contends that Rhino will rely on the judgment of the Supreme Court of Appeal in future applications.

[54] I disagree.  The judgment of the Supreme Court of Appeal will not be of assistance for the following reasons: first, the Supreme Court of Appeal did not decide Normandien’s review application on the merits nor did it pronounce on the legality of the process.[42]  It dismissed the matter on preliminary issues such as ripeness and lack of prejudice.[43]  The complaint about the alleged non-compliance with the procedural requirements was not decided by the Supreme Court of Appeal.  Second, the fundamental importance of public participation in the process for an exploration right application was not undermined by the Supreme Court of Appeal.  Rather, the Supreme Court of Appeal stated that “while [Bengwenyama] concerned a prospecting right for minerals, the views expressed by Froneman J apply equally to exploration rights for petroleum”.[44]  This evinces the Supreme Court of Appeal underscoring the importance of public participation in the process of applying for an exploration right.

[55] Third, Rhino will have to bring a new application should it wish to apply for an exploration right in the future and comply with the provisions of the MPRDA.  It cannot rely on the Supreme Court of Appeal’s judgment to bypass the procedures that are set out in section 10 of the MPRDA.

[56] Based on this analysis, the various factors are not present in this matter.  Therefore, there are no factors to trigger this Court to exercise its judicial discretion and consider that even though the matter is moot, it is in the interests of justice to grant leave to appeal.  It is, therefore, not necessary to consider other issues raised such as ripeness, prejudice and peremption.

[57] For the purposes of appealing to this Court on the question of costs alone, the test is, again, whether the interests of justice permit this.[45]  However, the facts of this case do not warrant this Court’s interference in the costs order issued by the Supreme Court of Appeal and the High Court.

[58] In light of the above, while the matter engages this Court’s jurisdiction, it is not in the interests of justice to grant leave to appeal.  Accordingly, the application falls to be dismissed.

Costs

[59] Rhino asks for costs on an attorney and client scale.  It submits that Normandien acted improperly and refused to withdraw the matter if the costs order by the Supreme Court of Appeal was not reversed.  It contends that Normandien’s dilatory tactics resulted in this matter being set down for hearing by this Court.

[60] It is trite that the award of costs is a matter that falls within the discretion of the Court.  A punitive costs order is an extraordinary order which will be imposed only in exceptional circumstances, having regard to the conduct of the parties throughout the litigation.[46]

[61] In this matter, I am persuaded that a punitive costs order is warranted.  Without repeating what has already been stated, I think it is prudent that we revisit the pertinent facts.

[62] On 24 July 2019, Rhino advised Normandien in writing that the application for an exploration right had been withdrawn.  Rhino further advised that no exploration activity would occur pursuant to that application thus rendering the application for leave to appeal moot.  In the same letter, Rhino requested that Normandien withdraw its application in this Court, with no order as to costs.

[63] On 26 July 2019, Normandien requested that Rhino provide it with proof from PASA that the application for exploration right had indeed been withdrawn irrevocably.  Normandien agreed that, upon confirmation of the withdrawal the matter was indeed moot, but drew Rhino’s attention to rule 27 of the Rules of this Court which requires an agreement between the parties before a matter may be withdrawn.  Normandien informed Rhino that it would only withdraw its application in this Court, by agreement, if Rhino tendered its costs in the High Court, Supreme Court of Appeal and in this Court.

[64] On 30 July 2019, Rhino refused to tender Normandien’s costs.  It indicated that if Normandien agreed to withdraw its application in this Court, by 12h00 on 1 August 2019, then it would agree that each party bears its own costs in relation to the application before this Court.

[65] On 31 July 2019, Normandien requested an indulgence of at least one week from Rhino to consult with its counsel.  Not having heard from Normandien, Rhino again wrote to Normandien on 13 August 2019 and indicated that should Normandien fail to withdraw its application by 12h00 on 15 August 2019, Rhino would be forced to file its answering papers.

[66] On 13 August 2019, Normandien replied and again confirmed that the underlying causa in this matter had been rendered moot by Rhino’s withdrawal of its application.  Normandien, however, persisted in its position that the issue of costs in the High Court had to be settled before the application in this Court could be withdrawn.  It requested Rhino to make submissions regarding the issue of costs in the High Court and the Supreme Court of Appeal.

[67] The following day, Rhino responded that it was not going to abandon its costs order in the Supreme Court of Appeal.  Again, Rhino proposed a compromise: that Normandien withdraw its application in this Court by agreement, with each party paying its own costs, failing which Rhino would file its answering papers and seek a punitive costs order.

[68] This correspondence on the issue of costs continued until 11 September 2019, when this Court issued directions enrolling the matter for hearing.  Thereafter, Normandien took a different approach and advised Rhino that it would be persisting with this application.

[69] I consider it to be highly inappropriate for Normandien to leave litigation pending before this Court with the knowledge that the case is moot on the facts.  I am left with the impression that Normandien was using the proceedings in this Court as a pressure tactic to compel Rhino to pay its costs in the High Court, Supreme Court of Appeal and in this Court.  Normandien knew that Rhino could not unilaterally withdraw this application before this Court and used this to its advantage in the hope that this would compel Rhino to pay its costs.

[70] Another factor is Normandien’s lack of candour.  On 31 July 2019, Normandien addressed a letter to this Court in which it explained that the parties were considering settling the dispute.  However, that letter made no mention of the fact that the application for an exploration right had been withdrawn by Rhino.  In the event that the Court had been made aware of the withdrawal of the application for an exploration right, it is unlikely that the application would have been set down for hearing.

[71] It is clear that Normandien’s actions were merely a disguised attempt to recover costs.

[72] The effect of these factors is that Rhino, by Normandien’s dilatory conduct, has been forced to pursue this litigation before this Court even though Normandien recognised that the case was moot.  Normandien’s conduct is reprehensible and an abuse of process which warrants a punitive costs order.

 

Order

[73] The following order is made:

1. Leave to appeal is dismissed.

2. The applicant must pay the costs of the application including costs of two counsel, on an attorney and client scale.

 

For the Applicants: A J Dickson SC, M G Roberts SC and E Roberts instructed by Vinnicombe and Associates

For the First and Second Respondents: A J Dickson SC, M G Roberts SC and E Roberts instructed by Vinnicombe and Associates

A R Bhana SC and I Goodman instructed by Webber Wentzel

 

[1] Rhino Oil and Gas Exploration SA (Pty) Limited v Normandien Farms (Pty) Limited [2019] ZASCA 88; 2019 (6) SA 400 (SCA) (Supreme Court of Appeal judgment).

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