12 December 2012

South Africa: Agri SA Welcomes Court Ruling On Transfer of Water Licence

press release

Agri SA president Johannes Möller has welcomed the Appeal Court ruling in the case of AS Makhanya, N.O & the Minister of Water and Environmental Affairs vs. Goede Wellington Boerdery.

This court ruled that Goede Wellington's application for transfer of a water licence, as previously confirmed by the High Court, be granted with an order for costs against the minister. However, the order for costs against the Tribunal, as granted by the High Court, was set aside by the Appeal Court as there was no evidence of gross negligence on the part of the Tribunal.

Agri SA became involved in the case to seek clarity on the requirements for transfer of water rights as applied by the Department of Water Affairs.

According to Möller, the department had followed an approach using their version of black empowerment to the exclusion of all other factors listed in the Act. The relevant application for transfer of water rights was denied by the department, after which Goede Wellington Boerdery took the matter to the Water Tribunal. The Tribunal also focused solely on the transformation issue and adopted the same view as the department.

Act can be reviewed

The North Gauteng High Court was then approached to review the Tribunal's decision. This court ruled in favour of Goede Wellington Boerdery and approved the transfer of the water licence. The court found, among other things, that the Tribunal's decision had been an administrative one which in terms of the Promotion of Administrative Justice Act may be reviewed by a court, and that the court may replace the decision of the decision-maker (in this case the Tribunal) with another decision.

The court also strongly criticised the poor handling of the matter by the Tribunal and granted an order for costs against the relevant commissioner of the Tribunal in his official capacity. The state appealed against the Gauteng high court ruling. Mr Makhanya also appealed against the order to pay costs.

On appeal the state argued that the decision of the Tribunal had been a judicial decision and not an administrative one and that the Promotion of Administrative Justice Act was not applicable to judicial decisions. The state's legal team asked that the matter be referred back to the Tribunal.

Unfair to refer case back

The Appeal Court, however, ruled that in light of the lengthy process to which Goede Wellington's application had been subjected (which had started in 2008), the fact that a functional tribunal was not in place at present and since both the department and the tribunal continue to refuse to take other factors in Section 27 of the Act into account during their decision-making, it would be unfair towards Goede Wellington to refer the case back.

Möller said it was tragic that a matter that had so obviously been handled wrongly by the department, as repeatedly pointed out by Agri SA, should be subject to a lengthy court process. "The approach followed by the department did not serve the need for effective water use, economic growth and even black economic empowerment. The Appeal Court ruling will certainly serve as guidance when the Department of Water Affairs must in future process applications for water transfer," said Möller.

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