Elderberry Investments (Pty) Ltd and Another v Department of Economic Development and Environmental Affairs: Province of the Eastern Cape and Others

The First Applicant owns immovable property zoned for business use in Jeffreys Bay. The Second Applicant, a close corporation of which the First Applicant is a member, applied for and obtained an Environmental Authorisation on 12 March 2012 from the First Respondent (the Department of Economic Development and Environmental Affairs) to construct a filling station and associated infrastructure. The Authorisation required that construction must commence within 12 months, failing which it would lapse. Following the grant of the Authorisation, the Applicants faced a lengthy process spanning approximately seven years (2013-2020) involving objections, appeals, refusal of site and retail licences by relevant authorities, and review applications. The Gauteng High Court set aside the refusal of licences on 25 July 2014, but further litigation and internal appeals continued until the licences were ultimately issued on 21 April 2021. Building plans approval was also delayed until April 2021. The Applicants placed pegs on the property, strung ropes, cleared vegetation, and evened out the ground in 2014. On 8 April 2021, the Third Respondent (Kouga Local Municipality) queried whether the Authorisation had lapsed. The First and Second Respondents confirmed on 15 April 2021 that the Authorisation had lapsed. The Applicants then brought an urgent application seeking a declaration that the Authorisation had not lapsed and remained of full force and effect.

• Whether the Environmental Authorisation issued on 12 March 2012 had lapsed under the National Environmental Management Act 107 of 1998 (NEMA) and the Environmental Impact Assessment Regulations, 2010
• What constitutes 'commencement' of construction of a filling station and associated infrastructure for purposes of the condition in the Environmental Authorisation
• Whether preliminary site preparation activities (placing pegs, stringing ropes, clearing vegetation, levelling ground) constitute commencement of the authorised activity
• The proper interpretation of conditions in an Environmental Authorisation having regard to context, purpose, and the framework of integrated environmental management under NEMA
• Whether delays caused by litigation and administrative processes relating to other required licences affect the determination of when the authorised activity commenced

1. The provisions of the Rules in respect of forms and service are dispensed with and any non-compliance with the Rules in respect of timeframes is condoned. 2. It is declared that the Environmental Authorisation issued by the First Respondent to the Second Applicant, under Authorisation Notice Register Number EC08/LN1/13/11-43, dated 12 March 2012 in respect of the property situated at the corner of St Francis Drive and Outeniqua Drive, Jeffreys Bay, Eastern Cape has not lapsed and is of full force and effect. 3. The First and Second Respondents are to pay the costs of this application on a scale as between attorney and client jointly and severally, the one paying the other to be absolved.

The binding legal principle established is that for purposes of determining whether an Environmental Authorisation has lapsed under a condition requiring commencement within a specified period, 'commencement' includes any physical activity on site that can be viewed as associated with the authorised activity or in furtherance of it, including site preparation activities such as demarcation, clearing vegetation, and ground levelling. The definition of 'commence' in section 24 of NEMA, which includes 'the start of any physical implementation in furtherance of listed activity, including site preparation', must be given a purposive and inclusive interpretation. Where an authorised activity comprises multiple components (such as a filling station with retail area, parking bays, and fuel tanks), any physical activity associated with any of these components constitutes commencement of the activity as a whole. Environmental Authorisations must be interpreted in the context of the integrated environmental management framework under NEMA, having regard to the language used, the context, the apparent purpose, and the background known to those responsible for its production, in accordance with the principles in Natal Joint Municipal Pension Fund v Endumeni Municipality 2012 (4) SA 593 (SCA).

The court made obiter observations that: (1) Even demarcation of a parking lane within the property would constitute commencement to the extent it can be characterised as physical activity in furtherance of a listed activity or any activity associated therewith. (2) Section 24L of NEMA empowers environmental and other related authorities to issue joint authorisations where warranted, and this should be considered in the context of projects requiring multiple licences and permits. (3) While the court did not agree that mere application for licences constitutes commencement, any physical activity in furtherance of the listed activity does. (4) The court expressed displeasure at the 'lackadaisical manner' in which the Respondents conducted themselves in the matter, which was reflected in the costs order. (5) The court noted that attorneys acting as counsel forgo certain entitlements they would have as attorneys, including costs relating to travel time and travel costs. (6) The court noted that Regulation 37 of the Environmental Impact Assessment Regulations empowers authorities to impose conditions before commencement, and the Respondents had not exercised these powers but sought to rely on them belatedly.

This judgment is significant for environmental law in South Africa as it provides guidance on the interpretation of conditions in Environmental Authorisations, particularly regarding what constitutes 'commencement' of an authorised activity. The court adopted a purposive and contextual approach to interpretation, consistent with Endumeni principles, and held that preliminary site preparation activities can constitute commencement under NEMA. The judgment emphasizes that Environmental Authorisations must be interpreted within the broader framework of integrated environmental management under section 24L of NEMA, which envisages coordination between different regulatory regimes. The case illustrates that where applicants face delays through no fault of their own in obtaining other required licences and permits, and where authorities are aware of these challenges, they cannot later claim an Authorisation has lapsed if some physical activities in furtherance of the project have commenced. The judgment also reinforces the principle that administrative authorities must exercise their powers fairly and consistently, and may face adverse costs orders where their conduct is found wanting.