De Beers Consolidated Mines (Pty) Ltd v Regional Manager, Limpopo: The Department of Mineral Resources and Energy and Others

De Beers Consolidated Mines (DBCM) operated the Oaks Mine in Limpopo from 1998 to 2008 under a mining license. In November 2009, DBCM submitted a closure application for the Mine as required by the Mineral and Petroleum Resources Development Act 28 of 2002. Over a decade, the Department of Mineral Resources and Energy required the closure plan to include backfilling the pit, which DBCM resisted on the basis that this formed no part of the approved Environmental Management Programme. On 6 June 2020, the Department advised DBCM that its closure application would remain pending until a revised closure plan indicating how the pit would be backfilled was submitted. In July 2020, DBCM lodged an internal appeal under s 96 of the Act against the Regional Manager's decision refusing to grant the closure application unless backfilling was undertaken. Before the internal appeal was decided, DBCM brought a review in the high court seeking exemption from exhausting internal remedies under s 7(2)(c) of PAJA, a declaration that it was not obliged to backfill the pit, setting aside of the Regional Manager's decision, and an order directing the Minister to grant the closure application. The high court declined the exemption but also decided one of the substantive grounds of review (error of law concerning retrospective application of amended s 43 of the Act) and directed that the Minister's appeal decision must be taken in line with the amended MPRDA provisions.

• Whether it was competent for the high court to refuse an exemption from exhausting internal remedies under s 7(2)(c) of PAJA while simultaneously deciding the substantive merits of the review and issuing a directory order
• Whether a court may exercise its review jurisdiction under PAJA when it has declined to grant an exemption from the obligation to exhaust internal remedies
• Whether the high court's directory order to the Minister on how to decide the internal appeal was proper

The appeal was upheld with costs, including the costs of two counsel. Paragraphs 1 and 2 of the high court's order were set aside and replaced with an order directing the appellant to exhaust the internal remedies provided by s 96 of the Mineral and Petroleum Resources Development Act 28 of 2002, with the matter referred back to the third respondent (the Minister) who was directed to consider and decide the applicant's internal appeal within 30 days and communicate the decision within 10 days of it being taken. The directory aspect of the high court's order requiring the Minister to decide in accordance with amended s 43 was removed.

Section 7(2) of PAJA is binary in its application: either the obligation to exhaust internal remedies is excused by the court granting an exemption, or it is not. If a court declines to grant an exemption under s 7(2)(c), the bar on the court's review jurisdiction in s 7(2)(a) remains in place. A court may not direct a party to exhaust an internal remedy while simultaneously exercising its review jurisdiction by deciding the substantive merits of the review. Once a court declines an exemption application, it is not competent to engage the substantive merits of the review until the internal remedy has been exhausted. Courts have a constitutional duty under the rule of law to determine and exercise their powers only within the limits of what the law permits.

The court observed that the high court's directory order had unfortunate consequences that strict adherence to s 7(2) of PAJA avoids: it would tie the hands of the Minister in coming to a decision on the internal appeal rather than permitting the Minister to come to his own decision on the important question of the legal regime applicable to the closure application, and it would have the entailment that the error of law ground would become res judicata should the review be pursued after the Minister decided the internal appeal. The court noted that the power of courts to review administrative action under PAJA is an important constitutional competence, the exercise of which is regulated by PAJA, and that this is what the rule of law under the Constitution demands.

This case is significant for establishing clear limits on the exercise of judicial review jurisdiction under PAJA in South Africa. It firmly establishes that s 7(2) of PAJA operates in a binary manner: courts cannot simultaneously refuse an exemption from exhausting internal remedies while also deciding the substantive merits of a review. The judgment reinforces the principle that the duty to exhaust internal remedies defers the exercise of the court's review jurisdiction and that courts must adhere strictly to the jurisdictional limits imposed by PAJA. It prevents courts from effectively pre-judging matters by issuing directory orders to decision-makers while purporting to require parties to first exhaust internal remedies. The case is important for administrative law generally and reinforces the rule of law principle that courts must exercise their constitutional competence to review administrative action only within the limits prescribed by statute.