THE OCTOBER/NOVEMBER 2012 EXAMINATION PAPER
African Silver (Pty) Ltd is an established mining company that has successfully
operated its business in the South African mining industry over the last five decades
under the previous mining regime. South Africa is the world’s biggest producer of
platinum and African Silver (Pty) Ltd was the leading company extracting platinum in
the Bushveld complex, the main platinum producing area in South Africa. African Silver
(Pty) Ltd, as the leading company specializing in extracting and refining this metal, has
spent years and millions of rands in order to improve its mining operations, specifically
with relation to the extraction and refinement of platinum.
In October 2002, the Minerals and Petroleum Resources Development Act 28 of 2002
(MPRDA) came into operation, which makes provision for equitable access to and
sustainable development of the nation’s mineral and petroleum resources. In terms of
the MPRDA, African Silver (Pty) Ltd’s limited real right to mine automatically ceased to
exist on the date the Act came into operation. In consequence, African Silver (Pty) Ltd
had to apply for “new order” mining rights to carry on with its business. On 16 January
2003, African Silver (Pty) Ltd applied for mining rights in the Bushveld complex. The
application was summarily turned down by the Department of Minerals and Energy
without giving any reasons to African Silver (Pty) Ltd. In the interim, mining rights
pertaining to the Bushveld complex were granted to African Golden (Pty) Ltd. The
official who turned down African Silver (Pty) Ltd’s application is a shareholder in African
Golden (Pty) Ltd.
Answer the following questions and substantiate your answers.
QUESTION 1
1.1 Identify the organs of state in the given set of facts. Explain your answers
with reference to the constitutional definition of organ of state. (6)
In terms of section 239 of the Constitution, the following are organs of state:
The Department of Minerals and Energy (any department of state or administration in
the national, provincial or local sphere of government)
The official who made the decision in the Department of Minerals and Energy (any
other functionary or institution (ii) exercising a public power or performing a public
function in terms of any legislation)
1.2 Is administrative action in evidence in the set of facts? In your answer, you
should give a full definition of the concept “administrative action” with reference
pg. 17
,to the provisions of the Promotion of Administrative Justice Act (PAJA) 3 of
2000. (13)
Section 1 of PAJA defines "administrative action” as any decision taken, or any failure
to take a decision, by -
(a) an organ of state, when-
(i) exercising a power in terms of the Constitution or a provincial constitution;
or
(ii) exercising a public power or performing a public function in terms of any legislation;
or
(b) a natural or juristic person, other than an organ of state, when exercising a public
power or performing a public function in terms of an empowering provision, which
adversely affects the rights of any person and which has a direct, external legal effect.
There are exceptions to the definition. These exceptions are, however, not applicable
to the given set of facts.
The decision to turn down African Silver (Pty) Ltd amounts to administrative action
because it complies with the definition in that it involves a decision by an organ of state
(the official, the appointed person in the Department of Minerals and Energy)
exercising a public power or performing a public function in terms of any legislation
which has adversely affected the rights of a person (African Silver (Pty) Ltd)) and which
appears to have had a direct external legal effect.
1.3 Do the following actions constitute administrative action? Explain your answers.
(i) The enactment of the MPRDA (2)
No, it is excluded by section 1(b)(dd) of PAJA.
(ii) The decision of the Department of Minerals and Energy to grant African Golden
(Pty)
Ltd the mineral rights. (2)
Yes, it has a direct negative external legal effect (on African Silver) and it was made by
an organ of state.
(iii) The request for reasons by African Silver (Pty) Ltd (2)
No, the request for reasons is not a decision made by an organ of state.
[25]
QUESTION 2
2.1 What is the basis of administrative legality? (3)
r administrative action was not
authorised by law only but also performed in accordance with the prescripts laid down
by the law. The public administration must serve and promote the public interest,
protect and respect fundamental/human rights.
pg. 18
,2.2 Explain the principle of legality in the constitutional framework. (3)
legislation. Section 2 of the Constitution provides that any law or conduct that is not in
line with the Constitution may be declared invalid by the court.
Fedsure Life Assurance LTD v Greater Johannesburg 1999 (1) SA 374 (CC): the
executive “may exercise no power and perform no function beyond that conferred upon
them by law.”
Section 8 of the Constitution provides that the Bill of Rights binds the executive
authority – state administration in all spheres of government – and all organs of state.
This means that organs of state and individuals exercising public power are bound by
the law and not elevated above it.
2.3 In order to determine whether African Silver (Pty) Ltd’s right to reasonable
administrative action was infringed, explain the Constitutional Court’s
interpretation of the right to reasonable administrative action. In your answer,
you should apply the Court’s interpretation to the given set of facts and refer to
the relevant case law and provisions in PAJA. (14)
PAJA gives effect to the right to reasonable administrative action by giving an
individual the capacity under section 6(1) “to institute proceedings in a court or a
tribunal for the judicial review of an administrative action” on the ground that:
exercise of the power or the performance of the function authorised by the empowering
provision, in pursuance of which the administrative action was purportedly taken, is so
unreasonable that no reasonable person could have exercised the power or performed
the function” (section 6(2)(h))
of sec 6(2)(h) in the case of
Bato Star Fishing (Pty) Ltd v Minister of Environment Affairs 2004 4 SA 490.
J emphasised the importance of reading section 6(2)(h) in line with the wording of
section 33(1) of the Constitution. J, the subsection must be
construed consistently with the Constitution and in particular with section 33 which
requires a simple test, namely that an administrative decision will be reviewable if it is
one that a reasonable decision-maker could not reach. (also referred to in the study
guide as the “simple” test)
nd on the circumstances of each
case as it is context-based.
factors relevant to determining
whether a decision is reasonable:
-maker
pg. 19
, pact of the decision on the lives and well-being of those affected
QUESTION 3
3.1 Discuss whether bias is in evidence in the set of facts. (10)
-law rules of natural justice:
Audi alteram partem (to hear the other side before a decision is taken)
Nemo iudex in sua causa rule (no one should be judge in his own case – rule against
bias/prejudice)
-The last rule is important in this context. In terms of this rule, the decision-maker
must be, and must reasonably be perceived to be, impartial or unbiased. Rule against
bias.
- st common examples of bias are: the presence of pecuniary/financial interest
– more evident in this set of facts the presence of personal interest
Rose v Johannesburg Local Road Transportation Board 1947 4 SA 272 (W), the
chairman of the board responsible for the granting or refusal of transport licences was
at the same time director of the three large taxi companies, and therefore biased. The
court found that the reasonable person would realise that the chairman was indeed
biased because of his financial interest in the taxi company.
BTR
Industries SA v Metal and Allied Workers Union 1992 3 SA 673 (A) as “the existence of
a reasonable suspicion of bias satisfies the test and that an apprehension of the real
likelihood that the decision maker will be biased is not a prerequisite for disqualifying
bias".
SACCAWU v Irvin & Johnson 1999 7 BCLR 725 (CC) the CC confirmed the
correctness of the test in the BTR case. However, the CC decided to use the phrase “a
reasonable apprehension of bias” rather than “a reasonable suspicion of bias”.
appearance of bias rather than the
existence of actual bias.
re was undoubtedly a reasonable
apprehension of bias since the officer of the Department of Minerals and Energy is a
shareholder in African Golden.
3.2 Discuss fully whether African Silver (Pty) Ltd received a procedurally fair
treatment in terms of PAJA. (10)
Administrative action which materially and adversely affects the right or legitimate
expectations of any person must be procedurally fair (s 3(1) of PAJA). Briefly,
legitimate expectation means that the rules of fair procedure are extended to those
cases where no vested right exists, but only a “legitimate expectation” of a benefit that
may be granted or a benefit that will not be withdrawn before a hearing has occurred.
pg. 20
African Silver (Pty) Ltd is an established mining company that has successfully
operated its business in the South African mining industry over the last five decades
under the previous mining regime. South Africa is the world’s biggest producer of
platinum and African Silver (Pty) Ltd was the leading company extracting platinum in
the Bushveld complex, the main platinum producing area in South Africa. African Silver
(Pty) Ltd, as the leading company specializing in extracting and refining this metal, has
spent years and millions of rands in order to improve its mining operations, specifically
with relation to the extraction and refinement of platinum.
In October 2002, the Minerals and Petroleum Resources Development Act 28 of 2002
(MPRDA) came into operation, which makes provision for equitable access to and
sustainable development of the nation’s mineral and petroleum resources. In terms of
the MPRDA, African Silver (Pty) Ltd’s limited real right to mine automatically ceased to
exist on the date the Act came into operation. In consequence, African Silver (Pty) Ltd
had to apply for “new order” mining rights to carry on with its business. On 16 January
2003, African Silver (Pty) Ltd applied for mining rights in the Bushveld complex. The
application was summarily turned down by the Department of Minerals and Energy
without giving any reasons to African Silver (Pty) Ltd. In the interim, mining rights
pertaining to the Bushveld complex were granted to African Golden (Pty) Ltd. The
official who turned down African Silver (Pty) Ltd’s application is a shareholder in African
Golden (Pty) Ltd.
Answer the following questions and substantiate your answers.
QUESTION 1
1.1 Identify the organs of state in the given set of facts. Explain your answers
with reference to the constitutional definition of organ of state. (6)
In terms of section 239 of the Constitution, the following are organs of state:
The Department of Minerals and Energy (any department of state or administration in
the national, provincial or local sphere of government)
The official who made the decision in the Department of Minerals and Energy (any
other functionary or institution (ii) exercising a public power or performing a public
function in terms of any legislation)
1.2 Is administrative action in evidence in the set of facts? In your answer, you
should give a full definition of the concept “administrative action” with reference
pg. 17
,to the provisions of the Promotion of Administrative Justice Act (PAJA) 3 of
2000. (13)
Section 1 of PAJA defines "administrative action” as any decision taken, or any failure
to take a decision, by -
(a) an organ of state, when-
(i) exercising a power in terms of the Constitution or a provincial constitution;
or
(ii) exercising a public power or performing a public function in terms of any legislation;
or
(b) a natural or juristic person, other than an organ of state, when exercising a public
power or performing a public function in terms of an empowering provision, which
adversely affects the rights of any person and which has a direct, external legal effect.
There are exceptions to the definition. These exceptions are, however, not applicable
to the given set of facts.
The decision to turn down African Silver (Pty) Ltd amounts to administrative action
because it complies with the definition in that it involves a decision by an organ of state
(the official, the appointed person in the Department of Minerals and Energy)
exercising a public power or performing a public function in terms of any legislation
which has adversely affected the rights of a person (African Silver (Pty) Ltd)) and which
appears to have had a direct external legal effect.
1.3 Do the following actions constitute administrative action? Explain your answers.
(i) The enactment of the MPRDA (2)
No, it is excluded by section 1(b)(dd) of PAJA.
(ii) The decision of the Department of Minerals and Energy to grant African Golden
(Pty)
Ltd the mineral rights. (2)
Yes, it has a direct negative external legal effect (on African Silver) and it was made by
an organ of state.
(iii) The request for reasons by African Silver (Pty) Ltd (2)
No, the request for reasons is not a decision made by an organ of state.
[25]
QUESTION 2
2.1 What is the basis of administrative legality? (3)
r administrative action was not
authorised by law only but also performed in accordance with the prescripts laid down
by the law. The public administration must serve and promote the public interest,
protect and respect fundamental/human rights.
pg. 18
,2.2 Explain the principle of legality in the constitutional framework. (3)
legislation. Section 2 of the Constitution provides that any law or conduct that is not in
line with the Constitution may be declared invalid by the court.
Fedsure Life Assurance LTD v Greater Johannesburg 1999 (1) SA 374 (CC): the
executive “may exercise no power and perform no function beyond that conferred upon
them by law.”
Section 8 of the Constitution provides that the Bill of Rights binds the executive
authority – state administration in all spheres of government – and all organs of state.
This means that organs of state and individuals exercising public power are bound by
the law and not elevated above it.
2.3 In order to determine whether African Silver (Pty) Ltd’s right to reasonable
administrative action was infringed, explain the Constitutional Court’s
interpretation of the right to reasonable administrative action. In your answer,
you should apply the Court’s interpretation to the given set of facts and refer to
the relevant case law and provisions in PAJA. (14)
PAJA gives effect to the right to reasonable administrative action by giving an
individual the capacity under section 6(1) “to institute proceedings in a court or a
tribunal for the judicial review of an administrative action” on the ground that:
exercise of the power or the performance of the function authorised by the empowering
provision, in pursuance of which the administrative action was purportedly taken, is so
unreasonable that no reasonable person could have exercised the power or performed
the function” (section 6(2)(h))
of sec 6(2)(h) in the case of
Bato Star Fishing (Pty) Ltd v Minister of Environment Affairs 2004 4 SA 490.
J emphasised the importance of reading section 6(2)(h) in line with the wording of
section 33(1) of the Constitution. J, the subsection must be
construed consistently with the Constitution and in particular with section 33 which
requires a simple test, namely that an administrative decision will be reviewable if it is
one that a reasonable decision-maker could not reach. (also referred to in the study
guide as the “simple” test)
nd on the circumstances of each
case as it is context-based.
factors relevant to determining
whether a decision is reasonable:
-maker
pg. 19
, pact of the decision on the lives and well-being of those affected
QUESTION 3
3.1 Discuss whether bias is in evidence in the set of facts. (10)
-law rules of natural justice:
Audi alteram partem (to hear the other side before a decision is taken)
Nemo iudex in sua causa rule (no one should be judge in his own case – rule against
bias/prejudice)
-The last rule is important in this context. In terms of this rule, the decision-maker
must be, and must reasonably be perceived to be, impartial or unbiased. Rule against
bias.
- st common examples of bias are: the presence of pecuniary/financial interest
– more evident in this set of facts the presence of personal interest
Rose v Johannesburg Local Road Transportation Board 1947 4 SA 272 (W), the
chairman of the board responsible for the granting or refusal of transport licences was
at the same time director of the three large taxi companies, and therefore biased. The
court found that the reasonable person would realise that the chairman was indeed
biased because of his financial interest in the taxi company.
BTR
Industries SA v Metal and Allied Workers Union 1992 3 SA 673 (A) as “the existence of
a reasonable suspicion of bias satisfies the test and that an apprehension of the real
likelihood that the decision maker will be biased is not a prerequisite for disqualifying
bias".
SACCAWU v Irvin & Johnson 1999 7 BCLR 725 (CC) the CC confirmed the
correctness of the test in the BTR case. However, the CC decided to use the phrase “a
reasonable apprehension of bias” rather than “a reasonable suspicion of bias”.
appearance of bias rather than the
existence of actual bias.
re was undoubtedly a reasonable
apprehension of bias since the officer of the Department of Minerals and Energy is a
shareholder in African Golden.
3.2 Discuss fully whether African Silver (Pty) Ltd received a procedurally fair
treatment in terms of PAJA. (10)
Administrative action which materially and adversely affects the right or legitimate
expectations of any person must be procedurally fair (s 3(1) of PAJA). Briefly,
legitimate expectation means that the rules of fair procedure are extended to those
cases where no vested right exists, but only a “legitimate expectation” of a benefit that
may be granted or a benefit that will not be withdrawn before a hearing has occurred.
pg. 20
