Seqhobane and 205 Others v Minister of Natural Resources and Others (CIV/APN/365/2000)

Case No: 
CIV/APN/365/2000
Media Neutral Citation: 
[2001] LSHC 105
Judgment Date: 
6 November, 2001

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CIV/APN/365/2000 IN THE HIGH COURT OF LESOTHO

In the matter between:-

LEBEKO SEQHOBANE & 205 OTHERS APPLICANTS

and

MINISTER OF NATURAL RESOURCES 1st RESPONDENT

COMMISSIONER OF MINES 2nd RESPONDENT

ATTORNEY GENERAL 3rd RESPONDENT

JUDGMENT

Delivered by the Honourable Mr Justice S.N. Peete on the 6nd November, 2001

On the 27/9/2000 Mr Maieane applied ex parte for and was granted an interim order couched thus:-

"1. Dispensing with the ordinary rules and modes of service as may be provided.

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2. A Rule Nisi is hereby issued returnable on the date and time to be
determined by this Honourable Court calling upon the respondent to
show cause (if any) why:

  1. The respondents shall not be interdicted from removing and/or
    causing to be removed applicants from their sites at Kao pending
    finalization hereof.

  2. Respondents shall not be interdicted from removing applicants
    from the said sites and/or in any way interfering with their
    continued digging of the diamonds in accordance with their
    licences.

  3. Directing respondents to extend the applicants' licences by a
    further six months so as to enable them to finish their work at the
    sites.

3. Prayers 1 and 2 (a) operate with immediate effect as interim Court
order."

The Rule was made returnable on 16th October 2000. The respondents have duly opposed the application.

The first applicant has made a founding affidavit which has been confirmed by his other co-applicants. In it, he states that he and other applicants were holders of licences authorizing them to dig for diamonds in the Kao Area in the Maluti mountains of Lesotho. It is common cause that the applicants have been holding these licences for several years and that they were renewable after every six months period. It stands to reason that before any applicant could continue digging for diamonds he had to renew his licence after every six months.

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He states that on the 23rd August 2000 the Minister of Natural Resources who is first Respondent sent the Acting Commissioner of Mines and other two officials:-

"to deliver a message that as from the 23rd day of September 2000 our diamond licences will not be renewed. The two addressed us on the day informing we accordingly. ' (Para 7)

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"We told the said trio that the notice was too short as were legitimately expecting that we would have them renewed regard being had to the peculiar circumstances of diamond digging at the said areas.We requested that we would like the respondent to hear us prior thereto so as to give us an opportunity to be heard by him (the decision maker) prior to the intended

It is common cause that all the licences then currently being held by the applicants had been renewed on the 23rd March 2000 and were all due to expire on the 23rd September 2000. The licences were granted and renewed subject to the conditions listed at the back of the licence document. These conditions stipulated that the licence constitutes a contract between the applicant on one hand and the Department of Mines on the other. Condition 7 stipulates that the licence may be cancelled or revoked by the Commissioner of Mines if some of the conditions listed have been breached.

It was not the respondents' case that any of the conditions had been breached or that there were revoking, terminating or cancelling the licences. The respondents' case is that the licences were simply not being renewed.

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In his answering affidavit the Honourable Minister of Natural Resources Monyane Moleleki states as follows:-

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In his affidavit the Minister states that the Lesotho Highlands Water Project was created under a Treaty between of Kingdom of Lesotho and the Republic of South Africa, its main purpose being to collect, store, divert water of the main Lesotho rivers of Senqu and Malibamatšo in order to effect the delivery of specified quantities of water to the Republic of South Africa. He states that into the Katse Dam flows clean waters from Malibamatšo river. He further states that the diamond digging and sifting results in very thick mud slimes flowing into Kao River and thence into the Malibamtšo River and that this

pollutes the clean water from the Malbamatšo River ... and the polluted water flows ultimately into Katse Dam. This artificial pollution of water which had been going on for a long time became a matter of great concern to my Ministry."

He goes on further to state that the only solution would be to built slimes dams but the costs thereof a was prohibitive M9 million.

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"Faced with the problem of lack of funds for the building to slimes dams in order to prevent pollution which had also become a matter of concern to the recipient of the water as delivered from Katse Dam (Republic of South Africa) I decided as the Head of the Ministry of Natural Resources, and also as the one who is finally accountable for the affairs of the Ministry, that it was imperative that diamond digging at Keo Area should be suspended while other avenues are being explored to prevent the pollution, inter alia by bui,ding of slimes dams. My said decision based upon consederations of factors, such as inter alia, weighing the advantages and disadvantages of continuing with the present small scale diamond digging business without slimes dams which causes pollution which ultimately will cause silting of the Katse Dam and the expenses of our violating terms of the Treaty by failing to maintain an enviroment conducive to the delivery of clean water to the Republic of South Africa."

He stated that as early as 10th March 2000 the first respondent held a Pitso at Kao over this matter whereat he addressed the problems.

"I even stated specifically that diamond digging in the area will be suspended while the Government was exploring ways and means of preventing pollution in the area. I went further to tell them that when the time came for the implementation of the decision they would be given notice so that they could round up their affairs."

He states that the August 2000 a visit by the Ministry officials to the Kao diamond digging area was mainly to give notice to the diggers that their licences would not be renewed when they expired in September 2000. In her affidavit, Nyakallo Mpatuoa states that when she addressed them on the 23"* August 2000, the applicants complained that the notice of one month was rather too short pointing out that it would not be possible for them to have completed the sifting of diamonds during that month. She states that diggers were told by her that when their licences expired on the

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23rd September 2000, the licences would not be renewed such that they would not be expected to continue digging at that area after the said date. She continues to say that as a result of representations made to her Ministry, an extension for two months was granted ex gracia on the 27th September 2000 to enable final sifting and cessation of operations. She says she was surprised to receive a court order on the 28th September 2000 interdicting her Ministry from removing the applicants from the site. In her view, the licences were not cancelled, but had expired by effluxion of time. The conditions at the back of the licence document say nothing about the conditions for renewal save to say that the licence may be revoked (or cancelled) by the Commissioner of Mines after consultation with the Diggers Committee probably after an inquiry as to whether other written conditions have been breached.

In the instant case, it is quite clear that we are not here concerned with termination or revocation of the diamond digging licences but with the refusal (decision) to renew the said licences. As already stated all licences were due to expire on the 23rd September 2000. It is principally a question of law whether the applicants had the right to be heard before the issuing authority exercised its administrative discretion to refuse renewal. Audi principle, so Gauntlett J.A. correctly stated in Rakhoboso vs Rakhoboso -1997-98 LLR 1 applies also to circumstances in which a person has no existing right or property affected by an administrative action but nonetheless, either by virtue of some form of promise or an established course of conduct by the administrative organ - is in fairness entitled to be heard before the prejudicial decision is taken (Schmidt vs Secretary of State for Home Affairs (1969) 1 All E.R. 904 (CA) at 909; Administrator Transvaal vs Traub 1989 (4) SA 731 per Corbett C.J. at 754. Legitimate expectation is a new common law phenomenon intended to

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protect individuals against whom adverse administrative actions are to be or have been taken "Like public policy, unless carefully handled it could become an unruly horse. A reasonable balance must be maintained to protect the individual from decisions unfairly arrived at by a public authority and the contrary desirability of avoiding undue judicial interference in their administration." As Corbett C.J. in Traub's case put it-

"A frequently recurring theme in these English case concerning legitimate expectation is "the duty to act fairly"... the phrase must not be misunderstood or misused.It is not for the court to judge whether a particuliar decision is fair . The courts are only concerned with the manner in which the decisions were taken and the extent of the duty to act fairly will vary from case to case."

In the case of Mafunya vs Mutare City Council, 1984 (2) SA 124 Dumbutshena

JP held that where an issuing authority acts under powers conferred upon it by an Act of Parliament and there is no statutory duty to conduct a hearing before refusal, a duty to give an opportunity to be heard and to disclose reasons for refusal of renewal of the licences should be implied. (See also Breen vs Amalgamated Engineering Union -1971) 2 QB. 175 (C.A.) where Lord Denning MR stated at 190 H:-

"But if he is a man whose property is at stake, or who is being deprived of his livehood then reasons should be given why he is being turned down and he should be given a chance to be heard I go further If he is a man Who has some right or interest; or some legitimate expectation, if which it would not be fair to deprive him without a hearing, or reasons given, then these should be afforded him according as the case may demand.The giving of reasons is one of the fundamentals of good adminisration.

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... if the Minister rejected their request Without reasons, the court might infer that he had no good reasons: and if he gave a bad reason, it might vitiate his

The learned Judge President then cited SA de Smith - Judicial Review of Administrative Action 3rd Ed at p. 197

'Non-renewal of an existing license is usually a more serious matter than

... There ought to be a strong presumpstion that prior notice and opportunity to be heard should be given before a license can be revoked (or not renewed).

livehood or serious pecuniary..."

Duty to act fairly requires that the issuing authority should be ready and prepared to hear persons where their interests were to be affected by its decision. Claim to a renewal is often morally stronger than refusal to grant a new licence because factors of prior involvement in the business concerned and of licence holders' existing interest in eking out a livelihood out of the diamond digging, are positive considerations not to be ignored without good cause.

It is not in dispute that on the 23"* September 2000 all the licences of the applicants expired; but they had been not terminated. If at all the licences had been revoked by the Minister before they expired this court would certainly have declared such revocation invalid mainly because the right or power to revoke a diamond digging licence is vested in the Commissioner of Mines and not upon the Minister of Natural

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Resources. It is unnecessary to delve into the law on this issue because the pertinent facts of this case do not raise the issue of termination, cancellation or revocation but that of legality of administrative decision not to renew the licences at Kao Diamond Digging Area.

I have already alluded to the fact that the conditions of the licence are silent about the renewal procedure. I have already held that the applicants as holders of existing and valid licences had a "legitimate expectation" to be heard before the decision not to renew their licences was made. It is not in dispute further that the decision not to renew the licences was made not by the Commissioner of Mines but the Minister of Natural Resources.

It is important to note that it is not disputed that on the 10th March 2000, a pitso was held at Kao Area and addressed by the Minister himself and that the applicants also raised their concerns about the alleged problem of pollution caused by the diamond sifting process. Even though a mutual understanding was not reached about the fate of the diamond digging it is clear that when the Ministry Officials again went to Kao in August 2000 to announce that the licences would not be renewed, and the applicants had been given opportunity to air their concerns. Lawson vs Cape Town Municipality 1982 (4) SA 1 (C).

The Minister states that he made a policy decision based on considerations which had regard to the Lesotho - South Africa Treaty, water cleanliness, pollution, and the relative cost of building slimes dams. It is not for this court to impute or infer

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improper motive because this application is not for review but for a final interdict and mandamus

What is in issue is whether the applicants, when their licences no doubt expired on the 23rd September 2000, had the right to be heard before the issuing authority came to a decision that the licences would not be renewed any longer. I have already decided that they had the right to be afforded an opportunity to voice their concerns. Whether they were afforded sufficient or adequate opportunity is mainly a question of fact to be decided upon the papers as they stand.

After the March 2000 pitso the applicants knew that the Minister was contemplating suspending the digging of diamonds at Kao; and when they were given a month's notice in August, the applicants had had ample opportunity between March and August to have made concrete representations to the Commissioner of Mines and his/her Minister to persuade them that the intended suspension was inappropriate or prejudicial. The fact that the digging licence endured for only 6 months or a year as the case may be, did not alter the position that the applicants had a legitimate or reasonable expectation that their licences would be renewed and would be consulted before the decision not to renew was reached.

As Mr Mosito submitted essentially the licence created a contract between the Commissioner of Mines and the individual digger for a six (or twelve) month duration, after which it had to be renewed mutually. It is not in dispute that the diamond diggers were given a public notice six months before the licences were due to expire and were thus given opportunity to air their views. I cannot say that they

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were deprived the benefit of the audi alteram partem rule; legitimate expectation, in my view, entitled them to be notified in advance if the licences were no longer going to be renewed. The legitimate expectation did not create a substantive right that the licences will always be renewed. Martin vs de Kock 1948 (2) SA 719. An anolagous paradigm is a passport entitling holder to a renewal after expiry of the period of five years. In Fellner vs Donges No-1953 (2) SA 617 Murray J. held that grant in the first instance of a passport is a matter of discretion of the Crown (Sachs vs Donges -1950 (2) SA 265 AD), but if such passport was not going to be renewed, the holder was entitled to be heard before a decision could be reached.

A contractual relationship was in my view created between the several applicants at Kao and the respondents, part of which was a right of renewal clearly exercisable at each other's option. But for the renewal condition 1, it is clear that on effluxion of the period of validity, the licence document becomes valueless and the rights and privileges would vanish. The holder, if desiring to new licence, would be required to apply for a new licence which the respondents have the right or discretion to refuse. The effect of a renewal of a contract is to continue for a further period the contractual relationship between the parties. In the Queen vs Licencing Justices of Crewkerne 21 QBD 87, Lindley LJ said

What is the meaning of applying for the renewal of a license? It can only mean that the license holder is applying to renewal that which is in

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In this case, it is clear that the applicants did not seek to renew their licences before they expired on the 23rd September 2000.

In my view the legitimate expectation cannot create a right that the licences shall always be renewed; at best it can create an expectation that if the respondents were not longer going to renew the licences, the applicants would be notified within a reasonable time. In the present case I am of the view that 6 months notice made in March 2000 was reasonable. The rights to renew the licence were not irrevocable or automatic. The papers show that between March 2000 and 23rd September 2000, the applicants made no attempt to negotiate their position with the issuing authority and as a matter of law the licences effluxed; new contracts had to be entered into and under the principle of freedom of contract each party would exercise its options.

According to Baxter, Administrative Law p.389 it is stated that-

"Obviously the state and its organs can contract. In the absence of an enabling statutory provision, the source of this power is the common law prerogative.

R.H.Christie - Law of Contract - p.249 states that -

"to be valid a state contract must be entered into in the ordinary or (directly or indirectly) by the responsible Minister."

In my view, when licences expired on the 2rd September 2000, the respondents were free to renew or not to renew. It is against public policy to force another party into an agreement and indeed the Government's position in relation to contractual liability

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can be equated to that of an ordinary citizen. (Government Proceedings and Contracts Law 1965; Government of the Province of the Eastern Cape vs Frontier Safaris -

1998 (2) SA 119. Contracts seriously made should be enforced and reasonable expectations realised (C. Turpin - Government Contracts, p.24-5).

The decision not to renew reached by the Minister of Natural Resources is principally a policy decision whereas termination of a particular licence could not be performed by the Minister but only by the Commissioner of Mines. It is not necessary to come to any definite decision on this matter, because, as I have already pointed out, the principal issue to be decided upon is non-renewal and not termination or revocation of licence.

I have not been made to understand that in deciding not to renew the licences to dig diamonds, the Minister of Natural Resources acted mala fide or had not applied his mind to the issue and to have not given sufficient weight to all competing interests in the Kao Area. One other factor is that it is not proper to fetter in advance future executive action especially in contract matters; the very fact that the digging licence is of such short duration demonstrates this fact. It is not a 99- year lease but one of very short duration. Reasonable expectation of any diamond digger is that after every six months, his right to diamond digging expires and should be renewed if he wishes to dig and sift for more diamonds; he has, as I have already pointed out, the right to be notified if his licence is not going to be renewed; he cannot however insist upon renewal if the issuing authority, for reasons given as in this case, states in advance that it is not going to renew the licence. Renewal in this case is a matter for negotiation and bargaining and not for litigation.

In all circumstances of the case the Rule is discharge with costs.

JUDGE

For Applicants : Mr Mosito For Respondents : Mr Putsoane