Normandien Farms (Pty) Limited v South African Agency for Promotion of Petroleum Exportation and Exploitation (SOC) Limited and Others

Rhino Oil and Gas Exploration South Africa (Pty) Limited (Rhino) applied to the South African Agency for Promotion of Petroleum Exportation and Exploitation (PASA) for an exploration right on 12 April 2016 under section 79 of the Mineral and Petroleum Resources Development Act 28 of 2002 (MPRDA). The application covered various farms including farms owned by Normandien Farms (Pty) Limited (Normandien) in Northern KwaZulu-Natal. PASA accepted the application on 15 April 2016. However, Rhino failed to attach certified copies of relevant title deeds to the application as required by regulation 28(2)(f) of the MPRD Regulations. PASA also failed to properly publish the acceptance of the application in accordance with section 10(1) of the MPRDA and regulation 3 of the MPRD Regulations, as notices were not sent to all relevant magisterial districts. Normandien only became aware of the application in December 2016, after the public participation process relating to the environmental impact assessment (EIA) was already at an advanced stage. Normandien alleged it was prejudiced by these failures. On 13 December 2016, Normandien applied to the High Court to set aside PASA's acceptance of Rhino's application. After the Supreme Court of Appeal dismissed Normandien's appeal, Rhino formally withdrew its exploration right application on 24 July 2019. Normandien then sought leave to appeal to the Constitutional Court.

• Whether the Constitutional Court should grant leave to appeal where the matter has become moot due to the withdrawal of the exploration right application
• Whether it is in the interests of justice to hear a moot matter
• Whether formal defects in the acceptance and publication of an exploration right application can be challenged before the exploration right is granted (ripeness)
• Whether Normandien suffered prejudice from the procedural irregularities
• Whether a punitive costs order on an attorney and client scale is warranted in the circumstances

1. Leave to appeal is dismissed. 2. The applicant (Normandien) must pay the costs of the application including costs of two counsel, on an attorney and client scale.

The binding legal principles established are: (1) Mootness is not an absolute bar to the justiciability of an issue, and the Constitutional Court may entertain a moot appeal where the interests of justice so require, but the Court has discretion not to hear moot matters where the relevant factors (practical effect, importance of issues, complexity, resolution of conflicting precedents) are not present. (2) Where a lower court has not decided a matter on the merits but only on preliminary grounds such as ripeness or lack of prejudice, and where any order by the Constitutional Court would have no practical effect because the subject matter of the dispute has been withdrawn or abandoned, it is not in the interests of justice to grant leave to appeal. (3) A punitive costs order on an attorney and client scale is warranted where a party conducts itself in a reprehensible manner, including pursuing litigation known to be moot as a pressure tactic to obtain costs orders, lacking candour with the court about material developments, and abusing court processes.

The Court made several non-binding observations: (1) The Court noted that section 10 of the MPRDA and its procedural requirements are clear and do not present complex legal principles requiring determination. (2) The Court acknowledged that the MPRDA was enacted to give effect to section 24 of the Constitution and to redress past racial discrimination, and that interpretation and application of such constitutionally-mandated legislation constitutes a constitutional matter engaging the Court's jurisdiction. (3) The Court implicitly endorsed the Supreme Court of Appeal's emphasis on the importance of public participation in the exploration right application process, referencing the Bengwenyama case. (4) The Court noted that if Rhino wishes to apply for an exploration right in future, it will have to bring a new application and comply with the provisions of the MPRDA, and cannot rely on the Supreme Court of Appeal's judgment to bypass required procedures. (5) The Court observed that for an appeal on the question of costs alone, the test remains whether the interests of justice permit the Court's intervention, but on the facts of this case no such intervention was warranted.

This case clarifies the Constitutional Court's approach to mootness and the interests of justice test for granting leave to appeal in moot matters. It establishes that the Court will not grant leave to appeal merely to resolve conflicting judgments between lower courts where: (1) the lower court did not decide the matter on the merits but only on preliminary grounds; (2) any order would have no practical effect; (3) the issues are not complex; and (4) the lower court judgment does not undermine important legal principles. The judgment also reinforces that punitive costs orders on an attorney and client scale will be imposed where a party acts in a reprehensible manner, including using court proceedings as pressure tactics, lacking candour with the court, and pursuing moot litigation knowing it has no merit. The case demonstrates the importance of complying with procedural requirements under the MPRDA but also shows that challenges to procedural irregularities in the exploration right application process may be premature if raised before the exploration right is actually granted. The case is significant for mining and environmental law practitioners regarding the timing of challenges to procedural irregularities in the MPRDA application process.