Dengetenge Holdings (Pty) Ltd v Southern Sphere Mining and Development Company Ltd and Others

Dengetenge Holdings (Dengetenge) was granted prospecting rights over certain farms by the Deputy Director-General (DDG) on 11 November 2006. Southern Sphere Mining had applied for prospecting rights over the same properties and was also granted rights by the DDG on 4 October 2006. Rhodium Reefs had obtained an interdict on 26 October 2005 restraining the granting of prospecting rights over the properties pending review proceedings, and on 6 December 2006 obtained a review order directing that prospecting rights be granted to it. The DDG had thus granted prospecting rights to Dengetenge in breach of the interdict. Southern Sphere brought a review application in the High Court to set aside the grant of prospecting rights to Dengetenge and Abrina, without first exhausting internal remedies under section 96 of the MPRDA. At the hearing in the High Court, Dengetenge's counsel withdrew opposition and conceded the grant of the prospecting right to Dengetenge was unlawful as it was granted in breach of the interdict. The High Court set aside the grant of prospecting rights to Dengetenge. Dengetenge appealed to the Supreme Court of Appeal but the appeal lapsed due to late filing of heads of argument. Dengetenge's application for condonation and reinstatement was refused by the Supreme Court of Appeal. Dengetenge then applied to the Constitutional Court for leave to appeal.

• Whether the Supreme Court of Appeal exhibited bias or a reasonable perception of bias in refusing Dengetenge's condonation application
• Whether Dengetenge should be granted leave to withdraw the concession made by its counsel in the High Court
• Whether the High Court was competent to entertain Southern Sphere's review application without Southern Sphere having exhausted internal remedies as required by section 96(3) of the MPRDA and section 7(2) of PAJA
• Whether Southern Sphere instituted review proceedings after unreasonable delay or after expiry of the 180-day period prescribed by section 7(1) of PAJA
• Whether it is in the interests of justice to grant leave to appeal

Leave to appeal against the Supreme Court of Appeal decision on condonation was refused. Leave to appeal against the High Court decision was granted. The appeal against the High Court decision was dismissed with costs, including costs of two counsel.

The binding legal principles established are: (1) The requirement to exhaust internal remedies under section 96(3) of the MPRDA exists for the benefit of the Minister and Director-General to enable them to examine administrative actions before judicial scrutiny. This requirement can be waived by those functionaries. (2) Where the Minister requests that a court decide the matter and indicates which relief she supports or opposes, this constitutes a waiver of the right to have internal remedies exhausted. (3) Once administrative authorities have expressed the view that an impugned decision should not have been made and requested the court to decide the matter, no useful purpose is served by requiring exhaustion of internal remedies. (4) A concession made by counsel in court will generally be held to bind the party, particularly where: (a) the party had opportunity to object but did not; (b) withdrawal would cause prejudice to other parties who have relied on the concession; (c) there is no adequate explanation for the delay in seeking to withdraw the concession; and (d) it has not been demonstrated that counsel lacked authority to make the concession. (5) The 180-day period for instituting review proceedings under section 7(1) of PAJA begins to run from when the applicant became aware not only of the decision but also of the reasons for it.

Zondo J made several important observations: (1) Where a review applicant has instituted proceedings without exhausting internal remedies and the Minister subsequently requests the court to decide the matter, this cures the initial defect in the application. (2) Making allegations of bias against judges without reasonable grounds is very serious and should not be done lightly, particularly when alleged against judges of the Supreme Court of Appeal, as such allegations damage public confidence in the Judiciary. (3) Following the Mabaso precedent, an applicant refused condonation by the Supreme Court of Appeal should ordinarily seek leave to appeal directly against the High Court judgment rather than seeking leave to appeal against the Supreme Court of Appeal's refusal of condonation. Jafta J observed: (1) PAJA significantly transformed the common law position by making it compulsory to exhaust internal remedies before approaching a court for review. (2) Section 7(2) of PAJA is framed in peremptory terms indicating its requirements should be observed except where exemption is granted. (3) Section 96(3) of MPRDA does not confer a benefit on administrative functionaries but imposes an obligation on the aggrieved party to exhaust internal remedies. (4) Caution must be exercised when using foreign cases to interpret South African legislation. (5) Ordering a remittal solely for formality where the outcome is clear would constitute waste of scarce judicial resources. Froneman J observed that there was a pattern of playing loosely with the integrity of court processes by Dengetenge, which militates against granting leave to appeal.

This case clarifies important principles regarding the exhaustion of internal remedies in administrative law. The majority judgment establishes that: (1) The requirement to exhaust internal remedies under section 96(3) of the MPRDA and section 7(2) of PAJA can be waived by the administrative functionaries for whose benefit it was enacted. (2) Where the Minister or relevant authority requests that a court decide competing claims rather than deciding internal appeals, this constitutes a waiver of the requirement to exhaust internal remedies. (3) The duty to exhaust internal remedies serves no useful purpose where the administrative authority has already taken the position that the impugned decision should not have been made. (4) Judicial concessions made by counsel during proceedings will generally bind the party unless prejudice can be avoided. (5) The calculation of the 180-day period under PAJA requires knowledge not only of the decision but also of the reasons for it. The minority judgment (Jafta J) emphasizes that section 96(3) of the MPRDA and section 7(2) of PAJA impose mandatory requirements expressed in peremptory language, and that administrative functionaries lack power to circumvent these legislative injunctions by directing parties to proceed directly to court without exhausting internal remedies.