Maxrae Estates (Pty) Ltd v The Minister of Agriculture, Forestry and Fisheries & Another

Maxrae Estates (Pty) Ltd, the registered owner of farm Yzervarkfontein 194 in the City of Tshwane Metropolitan Municipality, applied in December 2016 to the Department of Agriculture, Forestry and Fisheries for approval to subdivide the farm. The farm was divided by the R50 Provincial Road, with proposed Portion A (52.0708 hectares) lying to the south containing a warehouse for receiving, packaging and distributing fresh produce, and the remainder (487.1064 hectares) to the north. The appellant sought to establish a sectional title ownership scheme on Portion A to enable the warehouse operator to secure financial investment for expanding the warehouse. Environmental authorization had been granted under NEMA and the Municipality had issued a rezoning certificate. The delegate of the Minister refused the application in November 2017, and the Minister dismissed the appeal in November 2018. The appellant commissioned a specialist Index report on agricultural viability which formed part of the appeal documents. The high court (Mdalana-Mayisela J) dismissed the review application, and the appellant appealed with leave.

• Whether the Minister's decision to refuse the subdivision application was arbitrary and irrational
• Whether the Minister failed to apply his mind to relevant factors including the Index report and other evidence
• Whether the Minister took into account irrelevant considerations
• Whether the Minister's decision was rationally connected to the purpose of the Subdivision of Agricultural Land Act 70 of 1970
• Whether the exercise of the Minister's discretion complied with the principle of legality and the requirements of PAJA

1. The appeal is upheld with costs. 2. The order of the high court is set aside and replaced with: 2.1 The decision of the first respondent dated 9 November 2018 dismissing the appeal in terms of the Subdivision of Agricultural Land Act 70 of 1970 is reviewed and set aside. 2.2 The appeal against the refusal of the subdivision application is remitted to the first respondent for reconsideration. 2.3 The respondents are ordered to pay the applicant's costs jointly and severally.

The binding legal principle is that the exercise of public power by the executive is subject to the principle of legality and must be rationally related to the purpose for which the power was given. An administrative decision will be reviewable under s 6(2) of PAJA where it was taken on the basis of irrelevant considerations and where relevant factors were ignored. The test for rationality calls for an objective inquiry - a decision that objectively is irrational cannot pass constitutional muster simply because the decision-maker believed in good faith it was rational. Wide ministerial discretion requires consideration of factors relevant to the decision and does not permit disregarding those factors to make an arbitrary decision. The separation of powers doctrine does not shield arbitrary decisions from judicial review.

The court observed that where an answering affidavit is deposed to by an official other than the decision-maker, and includes factors and reasons not contained in the actual decision, such portions of the affidavit are inadmissible as impermissible post-hoc rationalizations. The court also noted that there was no indication in the record that Ms Chipeta, who deposed to the answering affidavit, had any involvement in either the delegate's or the Minister's decision, raising questions about her claimed personal knowledge of the contents of the affidavit.

This case is significant in South African administrative law as it reinforces the principle that even where a Minister exercises a wide discretion, the decision must be rationally connected to the purpose for which the power was given. It demonstrates that courts will intervene where decision-makers ignore relevant factors and take into account irrelevant considerations, regardless of invocation of the separation of powers doctrine. The case clarifies that a mere statement that discretion was exercised for the given statutory purpose is insufficient - the actual decision-making process must demonstrate application of mind to relevant evidence. It also illustrates the inadmissibility of post-hoc rationalizations in answering affidavits that introduce considerations not actually relied upon by the decision-maker.