This appeal concerned an application brought by the late Mr Nicolaas Gouws (Mr Gouws) for the conversion of his unused old order mineral right to a new order prospecting right for coal in respect of his property, Portion 9 of the farm Driefontein 338 in the district of Middelburg, Mpumalanga. Magnificent Mile Trading 30 (Pty) Ltd (Magnificent Mile) brought a competing application for a prospecting right in respect of the same property and the same mineral. Mr Gouws passed away before his application had been decided, so a central question before the Supreme Court of Appeal (the SCA) was whether a prospecting right may be granted to a deceased estate, or whether the death of Mr Gouws put an end to his application.
After Mr Gouw’s death and due to administrative error, Mr Gouw’s application was granted in respect of a farm called Driefontein in the Wakkerstroom district of Mpumalanga. At the same time, Magnificent Mile was granted a prospecting right in respect of Mr Gouw’s property.
In the court a quo, Magnificent Mile brought an application to review and set aside a number of decisions taken by officials within the Department of Mineral Resources, consisting of decisions in favour of Mr Gouw’s deceased estate and that of his widow Josephine Gouws (Ms Gouws). The executor of Ms Gouw’s estate opposed the relief sought by Magnificent Mile and brought a counter-application for declaratory relief. The Court a quo granted Magnificent Mile’s application, setting aside the decisions in question and dismissed the counter-application.
The SCA held that the granting of a prospecting right is a unilateral administrative act and in this case there were a number of grounds for reviewing the prospecting right granted to Mr Gouws in respect of the incorrect property. The SCA concluded that this granting of a prospecting right was a nullity due to the defects in the related administrative decision and therefore Mr Gouw’s application for a prospecting right had never been decided and was still pending.
Regarding the effect of Mr Gouw’s death on his application, once application had been made within the window period provided for in the Mineral and Petroleum Resources Development Act 28 of 2002 (the MPRDA), the unused old order right remains valid until the application is either granted or refused. If granted, the unused old order right is replaced with a prospecting or mining right. If refused, the holder lost the unused old order right.
The SCA held that Mr Gouws was entitled to a decision in respect of his application to convert his older right to a new order right. With the defective decisions having been set aside, the decision had not yet been taken. In the SCA’s view, Mr Gouw’s estate was entitled to a decision. If the application is granted, it may be necessary for the executor of Mr Gouw’s estate to seek the approval of the Minister of Mineral Resources for the transfer of the prospecting right to Mr Gouw’s heirs.
The appeal is upheld with costs. The result of this was that the order of the court a quo was set aside and replaced with an order stating that Magnificent Mile did not have the right or competency to apply for any right in terms of the MPRDA in respect of Portion 9 of the farm Driefontein 338 in the district of Middleburg in Mpumalanga. Furthermore, the application for a prospecting right lodged by the late Mr Gouws in respect of the farm Driefontein is still pending a decision by the relevant authority.
The value of this decision is that it clarifies the position regarding the death of an applicant for the conversion of older order rights to new order rights after application has been made but before the decision has been made. In this scenario, the estate of the deceased applicant is entitled to a decision on that application. Furthermore, the old order right remains intact until the decision is made.
Written by Jan – Harm Swanepoel and supervised by Charlotte Clark, 13 July 2018