SCA summary: 

“Environmental law – Interpretation and application of the Environment Conservation Act 73 of 1989 (ECA) and the National Environmental Management Act 107 of 1998 (NEMA) – exemption provisions in terms of s 37 of ECA and s 49 of NEMA not applicable to compensation provisions in terms of s 34 of ECA – provisions of s 34 of ECA not applicable to a regulatory directive issued in terms of s 31A of ECA – landowner’s particulars of claim accordingly not disclosing a valid cause of action”.

Minister of Water and Environmental Affairs v Really Useful Investments No 219 (Pty) Ltd (436/2015) [2016] ZASCA 156 (3 October 2016) per Navsa JA (Wallis, Dambuza and Mocumie JJA and Dlodlo AJA concurring)

Excerpts without footnotes


[18]      I now turn to consider whether the court below was correct in its reasoning and conclusions.  A convenient starting point is an appreciation that ECA found its way into the statute books about five years before the advent of our constitutional democracy.[1] Even the apartheid regime understood the need for a studied approach in relation to the protection and controlled utilisation of the environment.[2]

. . . . .

[27]      Even at common law no person could use property owned by him or her in a manner that harmed the rights of others.  Nuisance involves the unreasonable use of property by one neighbour to the detriment of another.  Examples include repulsive odours, smoke and gases drifting over the plaintiff’s property from the defendant’s land, water seeping onto the plaintiffs property, leaves from the defendant’s trees falling onto the plaintiff’s premises, slate being washed down-river onto a plaintiff’s land, causing a disturbing noise, causing a common wall to become unstable by piling soil up against it, overhanging branches and foliage, an electrified fence on top of a communal garden wall, blue wildebeest transmitting disease to cattle on neighbouring ground, and occupants of structures on neighbouring land allegedly causing a nuisance.[1]

[28]      In an increasingly ecologically sensitive world the emphasis shifted beyond the interests of immediate neighbours to the protection and preservation of the environment for the benefit of present and future generations.  This shift has been given added emphasis by our Constitution.[2] That idea was already evident, even if only in nascent form, in the provisions of ECA, which dealt not only with the regulation of dangers posed to the environment but also provided for the declaration of protected natural environments, special nature reserves and limited development areas.

[29]      NEMA was enacted after the advent of our new constitutional order.[3] It is legislation envisaged in s 24 of the Constitution.  It almost completely replaced ECA.  Only certain provisions of ECA remain, including ss 21, 22 and 23.  Significantly, ss 31A, 34 and 37 also continue in existence.

[30]      NEMA was enacted to provide for co-operative environmental governance by establishing principles for decision-making on matters affecting the environment, institutions that will promote cooperative governance and procedures for co-ordinating environmental functions exercised by organs of state and to provide for certain aspects of the administration and enforcement of other environmental management laws.[4]

. . . . .

[34]      What is clear from the regulatory provisions of ECA and NEMA set out above, is that they are distinct provisions that regulate the activities of owners of land or of holders of real rights in land, and are aimed at preventing such activities from causing environmental harm.  Sections 21 and 22 of ECA, which continue in existence, are such measures.

[35]      Insofar as authorisations are required from environmental authorities to engage in such activities, either in terms of ECA or NEMA, these are not unusual.  There are other statutes that require authorisations to undertake particular activities.  Town planning schemes and legislation affecting particular undertakings, requiring licences and specific authorisations, are examples.

[36]      Section 23 of ECA, as stated above, also remains in existence.  However, it deals with the creation of limited development areas.  Section 23 and the repealed sections, 16 and 18,[1] were not primarily regulatory but sought to preserve, for posterity, areas considered to be ecologically important.  When an authority invoked its powers in terms of those sections, it curtailed real rights in land.  The invocation of those powers did not arise from the dangerous activities of the land owners or of persons having a real right in the affected areas.  They were invoked to protect and preserve the environment of South Africa for the benefit of all its people and for that purpose restricted or subtracted from the rights of the owners of the land concerned and others having real rights in it.

[37]      Section 34, dealing with ‘compensation for loss’, was part of ECA from inception,[2] and continues in existence.  Its purpose must be seen in the light of what follows.  Generally, our law sets its face against confiscation of land rights without compensation.[3]  By way of s 34 of ECA, the legislature saw fit to allow for compensation for the curtailment of real rights in land flowing from the provisions of the erstwhile s 16 and the existing s 23.[4]  Compensation as provided for in section 34 was on the basis of advancing the public interest by creating what are effectively ecological reserves.

. . . . .

[39]      Section 34 of ECA could not, conceivably, have been directed at providing compensation for actions taken under the repealed s 20 or the existing ss 21, 22 and 31A.  As stated above, those provisions were aimed at regulating harmful activities.  It cannot be so that in instances in which potentially harmful activities on land are restricted that compensation would inevitably be payable.  It is hard to believe that a refusal of authorisation for activities which may have a substantial detrimental effect on the environment, related, for example, to waste removal or chemical processes would automatically entitle a holder of a right in land to compensation.  It is difficult to comprehend that a person seeking to use his land, contiguous to a residential area, for a manufacturing process that will emit noxious gases in the area, could claim compensation in the event of a refusal of authorisation for him to do so.  Put differently, it is difficult to conceive of a right to compensation for restrictions rightly being put in place to prohibit dangerous processes.

. . . . .

[43]      Before returning to the pleadings it is necessary to turn our attention to the provisions of s 37 of ECA and s 49 of NEMA.  The provisions of s 37, which are set out in para 10 above, state that no person, including the State, shall be liable in respect of anything done in good faith in the exercise of a power or the performance of a duty conferred or imposed in terms of the Act.

. . . . .

[45]      A provision such as s 37 can only be relied on where the power in question was exercised or the duty performed in good faith and without negligence and within statutorily prescribed constraints.  That does not mean that it is without practical effect.  . . . .

. . . . .

[46]      Sections 34 and 37 were part of ECA when it was first enacted and continue in existence.  On ordinary principles of interpretation they ought not to be regarded as being in conflict.  As pointed out above, they can be reconciled and are coherent within the scheme of ECA and NEMA.  In Panamo Properties (Pty) Ltd & another v Nel & others NNO [2015] ZASCA 76; 2015 (5) SA 63 (SCA) para 27, this court said the following:

When a problem such as the present one arises the court must consider whether there is a sensible interpretation that can be given to the relevant provisions that will avoid anomalies.  In doing so certain well-established principles of construction apply.  The first is that the court will endeavour to give a meaning to every word and every section in the statute and not lightly construe any provision as having no practical effect.  The second and most relevant for present purposes is that if the provisions of the statute that appear to conflict with one another are capable of being reconciled then they should be reconciled.’ (Footnotes omitted)

[47]      As pointed out above, s 34 of ECA provides a statutory right to compensation in restricted circumstances.  Section 37 of ECA, on the other hand, provides protection against liability to pay damages in delict arising out of the proper exercise of powers or functions under ECA.  The protection does not extend to acts that are performed negligently or in bad faith or outside the terms of the statute, as such actions are by definition not lawful.  It follows that s 37 had no application in relation to situations falling within s 34 and did not operate to exclude the right of any landowner or holder of a real right in land to claim compensation under that section.

[48]      I now turn to deal with the provisions of s 49 of NEMA, set out in para 7 above.  It expressly incorporates the common law requirements of lawfulness, good faith and absence of negligence in order to enjoy protection against liability.  The protective cloak is arguably wider than s 37 of ECA, because of the reference to damage ‘caused by’ the exercise of a power or the performance of a duty.  It also appears to place the onus on a claimant to show that the act was performed unlawfully, negligently or in bad faith.  Other than those differences, its purpose is no different from that of s 37 of ECA.

[49]      There is no reason to construe s 49 in the manner suggested on behalf of the City, namely, that it excludes claims for compensation under s 34 where the interference with the owner’s rights occurred as a result of lawful, non-negligent acts undertaken in good faith, but to afford such a claim where the interference is unlawful, negligent or undertaken in bad faith.

As demonstrated above, s 34 provides a holder of a real right in land with a right to compensation as a result not of regulatory interference, but because of the creation of protected environmental areas.  The interpretation contended for by the City would have the effect of nullifying the right to compensation that has existed since the enactment of ECA.

[50]      It is now necessary to return to the pleadings.  In its particulars of claim, RUI claimed that the directive set out in para 5 above, was issued as a result of the exercise by the City of its powers in terms of ss 31A(1) and (2) of ECA.  That directive was regulatory.  It focused primarily on

(a) preventing pollution of the flood plain of the Disa River,

(b) preventing future flooding, and

(c) preventing water and soil contamination.

As discussed above, landowners or other holders of real rights in land, were not, at common law, permitted to engage in activities on that land that were harmful to others.  In exercising its powers under this subsection, the City was complying with its constitutional and statutory obligations to prevent harm to the environment.

. . . . .

[52]      To sum up, it is clear from paras 5 to 15 of RUI’s particulars of claim that its claim was erroneously based on a purported entitlement to compensation arising from the City’s actions taken under s 31A(1) of ECA.  A claim based on such actions can only succeed if that power was exercised unlawfully, negligently or in bad faith.  The error was compounded by the Minister, the MEC and the City’s acceptance that, but for the exemptions provided for in s 37 of ECA and s 49 of NEMA, RUI’s claim would have been competent.  The question that arises is whether these incorrect assumptions of the parties preclude us from deciding the matter on the basis set out above.  For the reasons that follow, I think not.

[53]      The interpretation and application of the provisions of ECA and NEMA, referred to above, were extensively argued before us and relevant permutations as to outcomes were fully debated.  More than a hundred years ago, this court, in Cole v Government of the Union of South Africa 1910 AD 263 at 272-273 warned of confirmation of a decision clearly wrong, in circumstances where the issues were fully aired and there was no unfairness to any party.  More recently, the Constitutional Court in CUSA v Tao Ying Metal Industries & others [2008] ZACC 15; 2009 (2) SA 204 (CC) para 68 reiterated that principle.

[54]      I am mindful of the care that should be taken in framing an exception and that the aim of the exception procedure is to avoid the leading of unnecessary evidence and to dispose of a case in whole or in part in an expeditious and cost effective manner.[1] As set out in the preceding paragraph, no further evidence was contemplated and all the issues in relation to the application and interpretation of the statutory provisions have been fully aired.  It would not be in the interests of justice to avoid a decision because of the incorrect assumption by all concerned.  To do otherwise would also serve no useful purpose.

[55]      For all the reasons set out above, it is clear that RUI’s case as pleaded disclosed no cause of action.  RUI’s case was erroneously premised on regulatory action taken in terms of s 31A(1) of ECA on the part of the City and contending that this gave rise to a claim for compensation in terms of s 34 of ECA.  Once that assumption was fallacious its claim was nothing more than a claim for compensation in respect of compliance with a directive under s 31A(1).  Perhaps even more fundamental in relation to RUI’s claim for compensation against the City is the distinction referred to in para 42 above, between the authorities implicated in relation to s 31A and s 34.

A claim in terms of s 34 to recover compensation may only be brought against ‘the Minister or competent authority concerned’.  That does not include a local authority.  RUI’s claim in terms of s 34 against the City was thus not sustainable.  The convoluted assertions in para 21 of RUI’s particulars of claim, based on the unconstitutionality of the aforesaid distinction, do not overcome the obstacles that follow from the conclusions reached in the preceding paragraphs.  If anything, the distinction reinforces the findings aforesaid.

[56]      The finding by the court below that s 37 of ECA and s 49 of NEMA do not apply to compensation claims under s 34 of ECA was correct.  However, the question it did not address was whether the circumstances were such as to fall within s 34.  As discussed above the actions taken by the City in issuing a directive in terms of section 31A does not fall within the purview of s 34.  The relevant parts of the pleas of the Minister and the MEC, and the City’s exception, that the particulars of claim did not disclose a cause of action ought therefore to have been upheld.  The court below erred in dismissing the exception and striking out the relevant parts of the pleas of the Minister and the MEC.