Saidex (Pty) Ltd and Others v The Minister of Minerals and Energy NO and Others

The appellants conducted business in the diamond industry under the Diamonds Act 56 of 1986 (the Act). During 2005 the Act was amended twice and the amendments came into effect on 1 July 2008. The appellants, comprising diamond dealers and holders of a diamond exchange certificate, challenged the amendments alleging that they were deprived of their business, specifically what they called a 'tender business'. This involved unlicensed foreign buyers assisting licensed local dealers in purchasing unpolished diamonds. The appellants sought an interim interdict to preserve their rights under the old Act pending a main application by the South African Diamond Producers Organisation (SADPO) to declare certain provisions of the amended Act unconstitutional. The appellants relied heavily on a 1993 letter from the South African Diamond Board (SADB) which they alleged authorized their 'tender business' by exempting certain premises from restrictions on unlicensed persons. However, this letter was not attached to the papers. The North Gauteng High Court (Sapire AJ) refused the interim interdict. The appellants appealed with leave.

• Whether the appellants established a prima facie right justifying interim interdict relief
• Whether the 'tender business' described by the appellants was lawful under the Diamonds Act 56 of 1986 before the 2005 amendments
• Whether a letter from the South African Diamond Board created an exemption allowing dealing with unlicensed foreigners
• Whether the amended Act unlawfully deprived the appellants of vested rights
• Whether the appellants established irreparable harm and balance of convenience for interim relief
• Whether the order refusing interim interdict was appealable

The appeal was dismissed with costs, including the costs of two counsel.

An applicant for an interim interdict must establish a prima facie right based on valid legal provisions, not merely on long-standing practices or alleged administrative acquiescence. A business practice that contravenes the express provisions of governing legislation cannot constitute a lawful vested right, even if allegedly conducted with knowledge of regulatory authorities. Administrative bodies cannot create exemptions or conditions contrary to the provisions of their enabling legislation. Where legislation requires conditions to be endorsed on licenses (as per sections 29 and 30 of the Diamonds Act), the absence of such endorsement is fatal to claims that such conditions exist. The 'tender business' involving unlicensed foreign persons dealing in unpolished diamonds was illegal under both the original Diamonds Act 56 of 1986 and the amended Act, as it violated sections 18, 19, 20, 21, 31 and 48 which prohibited dealing in, possession of, and purchase and sale of unpolished diamonds by unlicensed persons. Legislative amendments that expressly prohibit previously illegal (though possibly tolerated) practices do not constitute unlawful deprivation of rights.

The court noted, without deciding definitively, that it would accept in favor of the appellants that the order refusing interim relief was appealable, though acknowledging the issue of appealability of interim orders is 'by no means a simplistic one'. The court commented that the effect of refusing interim relief was final in declining to preserve the status quo, and consideration on appeal did not constitute undesirable piecemeal adjudication. The court observed that sloppiness and lack of discipline in drafting notices of appeal is not encouraged, but where no prejudice is caused, matters should be decided on merits. The court noted that section 31(9)'s reference to 'section 4 of this Act' taking effect was not 'void for uncertainty' as argued by appellants; it clearly referred to 1 July 2008 when the amended Act came into operation. The court's reference to applying the lesser test from Webster v Mitchell (rather than the more stringent test) given the urgent application context was made 'in favour of the appellants' without deciding the issue definitively.

This case clarifies the requirements for interim interdicts in the context of regulatory changes affecting established business practices. It establishes that an illegal practice, even if long-standing or conducted with administrative acquiescence, cannot create vested rights worthy of interim protection. The case demonstrates that interim relief requires proof of a prima facie right based on law, not merely on administrative practices or uncorroborated interpretations of correspondence. It also confirms the principle that administrative bodies like the SADB cannot create exemptions contrary to enabling legislation. The judgment reinforces that regulatory amendments aimed at eliminating illegal practices, even if those practices were widespread, do not constitute unlawful deprivation of rights. The case is significant in South African mining and minerals law for interpreting the Diamonds Act and its amendments, particularly regarding the regulation of diamond dealing and the requirements for lawful participation in the diamond trade.