IN THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
CASE NO: 230/12
and CASE NO: 233/12
Reportable

In the matter between:

ATWELL SIBUSISO MAKHANYA NO
FIRST APPELLANT
MINISTER OF WATER AND ENVIRONMENTAL
AFFAIRS

SECOND APPELLANT

and

GOEDE WELLINGTON BOERDERY (PTY) LTD                     RESPONDENT

Neutral Citation:
Makhanya v Goede Wellington Boerdery (Pty) Ltd
(230/12) [2012] ZASCA 205 (30 November 2012)
Coram:
HEHER, BOSIELO, TSHIQI and THERON JJA and
ERASMUS AJA
Heard:

5 November 2012
Delivered:

30 November 2012

Summary:
Administrative Law – whether the decision taken by the
Water Tribunal in refusing an appeal against a decision of
the Chief Director rejecting an application for a water
licence constitutes administrative action reviewable under
the Promotion of Administrative Justice Act 3 of 2000 –
whether it was appropriate for the court below when setting
aside the decision of the Tribunal, to substitute its own
decision, rather than remitting the matter to the Tribunal –
whether the court below was entitled to make a costs order
against a presiding officer (the First Appellant) performing
an adjudicative function in the event of the review against
his findings being successful.

______________________________________________________________
ORDER
______________________________________________________________

On appeal from: North Gauteng High Court, Pretoria (Goodey AJ sitting as
court of first instance).
1. The appeal of the first appellant is upheld with costs including the costs of
two counsel.
2. The appeal of the second appellant is dismissed with costs including costs
of two counsel.
3. The order of the court a quo is amended to read:
(1) The decision taken on 5 May 2010 by the First Respondent, dismissing the
Applicant’s appeal against the refusal by the Chief Director: Water Use in
the Department of Water Affairs and Forestry of the Applicant’s application
for a licence to use water from the Berg River is reviewed and set aside.
The said decision is substituted with the following:
‘1. The appeal by Goede Wellington Boerdery (Pty) Ltd against the
refusal on 11 April 2008 by the Chief Director: Water Use in the
Department of Water Affairs and Forestry of the Applicant’s
application for a licence to use water from the Berg River to which
ECPA Boerdery (Pty) Ltd is currently entitled’, is upheld.
2. The said licence is granted to Goede Wellington (Pty) Ltd.’
3. The Second Respondent is to pay the Goede Wellington’s costs,
including the costs of two counsel.’

______________________________________________________________
JUDGMENT
______________________________________________________________

ERASMUS AJA (HEHER, BOSIELO, TSHIQI and THERON JJA concurring)

Introduction

[1] This appeal, against the whole of the judgment and order of the North
Gauteng High Court, Pretoria (high court), concerns a decision taken by Mr
Makhanya (the first appellant), an additional member of the Water Tribunal
(Tribunal) established in terms of s 146 of the National Water Act1 (the Act).
The Tribunal dismissed an appeal against the refusal, by what was then the
Department of Water Affairs and Forestry (the Department), of an application
for a licence to use water for farming purposes from the Berg River in the
Wellington area of the Western Cape. The high court reviewed and set aside
the Tribunal’s dismissal of the appeal, substituted the Tribunal’s decision by
upholding the appeal, granted the water licence and ordered the Minister of
Water and Environmental Affairs (second appellant) and the first appellant to
pay costs.

[2] The first appellant heard the appeal in his capacity as an additional
member of the Tribunal. His appeal in this court is confined to the high court’s
order that he is to pay the costs in his official capacity. The second appellant’s
appeal is confined to two issues, namely, whether the Tribunal’s decision
constitutes administrative action reviewable under the Promotion of
Administration Justice Act (PAJA)2 and (assuming it is), whether it was
appropriate for the court a quo when setting aside the Tribunal’s decision, to
substitute its own decision in place thereof, rather than remitting the matter to
the Tribunal.

1 Act 36 of 1998
2 Act 3 of 2000.

Background

[3] The National Water Act came into force on 1 October 1998. The
preamble reads as follows:
‘Recognising that water is a scarce and unevenly distributed national resource which
occurs in many different forms which are all part of a unitary, inter-dependent cycle;
Recognising that while water is a natural resource that belongs to all people, the
discriminatory laws and practices of the past have prevented equal access to water,
and use of water resources;
Acknowledging the National Government’s overall responsibility for and authority
over the nation’s water resources and their use, including the equitable allocation of
water for beneficial use, the redistribution of water, and international water matters;
Recognising that the ultimate aim of water resource management is to achieve the
sustainable use of water for the benefit of all users;
Recognising that the protection of the quality of water resources is necessary to
ensure sustainability of the nation’s water resources in the interests of all water
users; and
Recognising the need for the integrated management of all aspects of water
resources and, where appropriate, the delegation of management functions to a
regional or catchment level so as to enable everyone to participate.’

[4] Goede Wellington Boerdery (Pty) Ltd (Goede Wellington), the
respondent, is the owner of the farm Goede Hoop (Goede Hoop) in the
Wellington area. ECPA Boerdery (Pty) Ltd (ECPA) is the owner of a farm
Middelpos which is situated near Goede Hoop, approximately 300 meters
apart. The sole shareholder of Goede Wellington, Mr Edward Malan, is also a
trustee and a beneficiary of the Middelpos Trust which in turn is the sole
shareholder of ECPA.

[5] ECPA is the legal holder of an entitlement to use water from the Berg
River in respect of Middelpos. A small portion of the water use entitlement
held by ECPA in respect of Middelpos became available for transfer3 as a

3 Section 25 of the Act reads as follows:
‘(1)
A water management institution may, at the request of a person authorised to use
water for irrigation under this Act, allow that person on a temporary basis and on such

result of an investment made in updated irrigation technology which resulted
in the saving of water. In particular, ECPA shifted from the use of sprinkler
and flood irrigation to drip irrigation.

[6] Goede Wellington in turn owns an entitlement to use water from the
Berg River in respect of Goede Hoop. It however needed further water to
facilitate the development of a high quality citrus orchard. During July 2005 it
thus entered into an agreement with ECPA according to which the latter would
surrender some of its water use entitlement to Goede Wellington for use on
Goede Hoop. Goede Wellington’s use was made conditional upon it obtaining
the necessary licence from the Department.

[7] In November 2005 Goede Wellington applied to the Department for a
water licence in terms of the Act4 for the use of water in respect of seven
hectares of irrigable land. It indicated that it intended to use the land for high
quality citrus production. This would promote the efficient use of good
agricultural land in the area; ensure better opportunities for sustainable
permanent employment; contribute to investment; increase in economic
activity and the influx of export revenue for the local economy. The application
was supported by, amongst others, the Berg River Irrigation Board5 and the
Department of Agriculture in the Western Cape Provincial Government.

[8] In March 2006 the Regional Director: Western Cape of the Department
(Regional Director) recommended the approval of the licence application. Its
recommendation was accompanied by a detailed analysis of the application in
relation to s 27(1) of the Act. Section 27(1) provides an open list of factors to

conditions as the water management institution may determine, to use some or all of that
water for a different purpose, or allow the use of some or all of that water on another property
in the same vicinity for the same or a similar purpose.
(2) A person holding an entitlement to use water from a water resource in respect of any land
may surrender that entitlement or part of that entitlement –
(a) in order to facilitate a particular licence application under section 41 for the use of
water from the same resource in respect of other land; and
(b) on condition that the surrender only becomes effective if and when such application is
granted.
. . .’
4 See ss 40 and 41 of the Act.
5 Being responsible for the management of water in respect of the applicable catchment area.

be considered by a licensing authority in the adjudication of a licence
application. The section provides:
‘(1) In issuing a general authorisation or licence a responsible authority must take
into account all relevant factors, including–
(a) existing lawful water uses;
(b) the need to redress the results of past racial and gender discrimination;
(c) efficient and beneficial use of the water in the public interest;
(d) the socio-economic impact–
(i) of the water use or uses if authorised; or
(ii) of the failure to authorise the water use or uses;
(e) any catchment management strategy applicable to the relevant water resource;
(f) the likely effect of the water use to be authorised on the water resource and on
other water users;
(g) the class and the resource quality objectives of the water resource;
(h) investments already made and to be made by the water user in respect of the
water use in question;
(i) the strategic importance of the water use to be authorised;
(j) the quality of water in the water resource which may be required for the Reserve
and for meeting international obligations; and
(k) the probable duration of any undertaking for which a water use is to be
authorised.’
(My underlining.)

[9] The Regional Director found in favour of Goede Wellington on each of
the factors analysed and concluded that the existing legal uses of the water
would not be affected by the transfer, that after the transfer the water will be
put to more efficient use (this was also recognised by the Department of
Agriculture) and that export revenue will be generated. Most importantly for
present purposes, in relation to the factor relating to redressing the results of
past racial and gender discrimination, the recommendation found, firstly, that
the transfer would create new job opportunities in what, it can be remarked, is
an unemployment stricken labour market and that ‘[i]f the transfer of the water

use is not authorised, job opportunities will be lost’. Secondly, the report
remarked that Goede Wellington employed both male and female workers.

[10] In May 2007 the Chief Director: Water Use in the Department (the
Chief Director) wrote to Goede Wellington. The Chief Director indicated,
notwithstanding the Regional Director’s recommendation, that the ‘application
neither contributes to redress of the results of the past racial discrimination
nor promotes the equitable access to water’ and that Goede Wellington
should show cause why the application should not be denied on that basis. In
response, Goede Wellington submitted a ‘social and labour management
report’ compiled by human resource consultants as well as an ‘economic
report’. In these reports, along the lines of the Regional Director’s findings, it
was again submitted that Goede Wellington is committed to affirmative action,
that it has a skills development plan in place and that it is committed to
employment equity. It also stated that it aids its employees by ‘increasing
employee(s)(sic) access to educational institutions and by the inclusion of less
advantaged
groups
in
the
company
management
structure
and
(furthermore)(sic) to empower women in its current service’.

[11] In July 2008 the Chief Director, however, informed Goede Wellington
that the licence application had been denied as issuance of the licence ‘will
not contribute towards the need to redress the result of the past and racial
gender discrimination’.

Proceedings before the Tribunal

[12] During August 2008 Goede Wellington appealed the decision of the
Chief Director to the Tribunal, 6  whose decision was in turn the subject of the
appeal to the court a quo. Item 6(1) of Schedule 6 of the Act provides that an
appeal to the Tribunal must be heard by one or more members, as the
chairperson may determine, and item 6(3) adds that an appeal takes the form

6 Section 148(1)(f) of the Act provides for an appeal against a decision of a responsible
authority on a water licencing application.

of a rehearing and that the Tribunal may receive evidence. In advance of the
hearing, Goede Wellington provided the Tribunal with an affidavit which
included an account of the factual background to the licence application and
provided the relevant information in respect of all eleven factors listed in s
27(1) of the Act. In addition, the legal representative of Goede Wellington
submitted detailed heads of argument to the Tribunal.

[13] On 5 May 2010, the Tribunal found against Goede Wellington. It ruled
that:
‘The Social and Labour Management Report presented by the applicant is silent on
both the issues of land ownership and involvement at management level or
participation in the running of agricultural enterprise by people from previously
disadvantaged communities. When all was said and done . . . there existed no
evidence before the Tribunal to the effect that the relevant factors set out in section
27(1) of [the Act] were not considered and no evidence was rendered proving that
the application is in consonance with the objectives of section 27(1)(b) of the [Act].’

Proceedings before the high court

[14] Consequently Goede Wellington approached the high court. It sought
an order inter alia in terms of ss 6 and 8 of PAJA reviewing the decision of the
Tribunal, setting it aside, substituting it with an order granting the licence to
Goede Wellington and mulcting Mr Makhanya in costs in his official capacity.
In the alternative, Goede Wellington asked for an order, inter alia, that its
application be deemed to be an appeal in terms of s 149 of the Act. 7 The
ground of appeal was that the Tribunal erred and misdirected itself and did not

7 Section 149 of the Act reads as follows:
‘(1) A party to a matter in which the Water Tribunal –
(a) has given a decision on appeal under section 148, may, on a question of law,
appeal to a High Court against that decision; or
. . .
(2) The appeal must be noted in writing within 21 days of the date of the decision of the
Tribunal.
. . .
(3) The appeal must be prosecuted as if it were an appeal from a Magistrate’s Court to a
High Court.’

comply with s 27(1) of the Act, read with Item 6(3) of Schedule 68 thereto, by
determining the appeal with reference solely to one of the factors in s 27(1)(b)
of the Act and evidence in relation to that factor, alternatively with inadequate
regard to the other factors in s 27(1) of the Act and the evidence in relation to
those factors.

[15] The second appellant opposed the application for judicial review in
principle, arguing that because decisions of the Tribunal are subject to
appeals to the high court on questions of law under s 149(1)(a) of the Act the
legislature did not intend to create a review or appeal procedure which is
based on procedural irregularities or factual disputes.

[16] The second appellant also opposed the application (whether for judicial
review or an appeal under s 149) on its merits, saying, amongst other things,
that the Department made a balancing act of the factors listed in section 27(1)
and after that balance the application was refused on the basis that it did not
satisfy section 27(1)(b), being one of the factors that must be taken into
account. The second appellant added that the factor listed in s 27(1)(b)
embodies all of the socio-economic factors defining the purpose of the Act as
set out in s 2, and is the only viable way to achieve the purpose to ensure that
the allocation of our water resources redress the result of past racial and
gender discrimination.

[17] The high court, referring to the constitutionally enshrined right to lawful,
reasonable and procedurally fair administrative action, found that the mere
fact that the Act is silent on a right to review an application for a licence does
not mean that that right is excluded. It emphasised the fact that courts must
treat the decisions of the executive with appropriate respect, but also that
courts may not rubberstamp unreasonable decisions simply because of the
complexity of the decision or the identity of the decision-maker and that their

8 Item 6(3) of schedule 6 of the Act reads as follows:
‘Appeals and applications to the Tribunal take the form of a rehearing. The Tribunal may
receive evidence, and must give the appellant or applicant and every party opposing the
appeal or application an opportunity to present their case.’

deference to the executive must not be shaped by an unwillingness to
scrutinise administrative action, but by a careful weighing up of the need for
and the consequences of judicial intervention. It found that the Act allows for
review in appropriate circumstances and that the Goede Wellington’s case
was such an instance. As a  result of the court a quo’s decision to uphold the
application for judicial review, it did not consider Goede Wellington’s
alternative appeal under s 149 of the Act.

[18] The court came to the conclusion that Mr Makhanya misinterpreted
s 27(1) of the Act. In doing so, he committed a material error of law. It found
that it was clear that the Tribunal adjudicated the appeal as if the factor
provided for in s 27(1)(b) was a prerequisite for the granting of a water
licence, and that it did not consider all relevant factors as required by s 27(1).
This was also evidence of the fact that the Tribunal had not applied its mind
properly. The decision therefore fell to be set aside.

[19] The court further found that the required exceptional circumstances
existed for substituting its decision for that of the Tribunal. It found that it was
at least as well qualified as the Tribunal to decide the matter, that sending it
back to be heard by the Tribunal would be a waste of time and that further
delay would cause unjustifiable prejudice to Goede Wellington. Further, it
found that the decision of both the Chief Director and the Tribunal displayed
an alarming degree of ineptitude, a lack of appreciation of what was required
of them, a lack of judgment, rationality, common sense and serious
incompetence.

[20] For those reasons and, in addition, for the Tribunal’s lack of expertise,
legal prowess, failure to apply its mind and the failure to have a legal expert
on board the court made a cost order against the second appellant and Mr
Makhanya (first appellant) in his official capacity as a member of the Tribunal,
the one paying the other to be absolved.

The appeal in this court

[21] The second appellant, whilst accepting that the Chief Director’s
decision not to grant the water licence to Goede Wellington was an
administrative action reviewable under PAJA, argues that the decision of the
Tribunal did not constitute administrative action reviewable under PAJA.
Further, and if it should be found that PAJA does apply, the second appellant
argues, no exceptional circumstances were present which would allow the
high court to substitute its decision for that of the Tribunal. Accordingly that
court should have remitted the matter to the Tribunal.

[22] The second appellant now also concedes that an error of law was
made, which both underlies the main ground of review upheld by the court a
quo and constitutes Goede Wellington’s ground of appeal that the Tribunal
considered only one of the factors (being that under s 27(1)(b)) as essential
and decisive, rather than considering all of the factors prescribed in the
statute (and any other considerations that might be relevant) in reaching its
decision.

[23] The second appellant points to various indicators in the Act which,
according to him, shows that the decision of the Tribunal in Goede
Wellington’s case, was not ‘truly of an administrative nature’: the Tribunal sits
as an appellate body, exercising what are in effect judicial functions akin to
that of a court. In this regard, the second appellant submits that it is significant
that the Act does not make an express reference to any right of review,
instead the legislator provided for an appeal directed to the high court only on
an issue of law.

[24] Mr Makhanya only opposes the costs order made against him in his
official capacity.

[25] Goede Wellington essentially supports the judgment of the high court.
It submits that the decision to dismiss the appeal against the Chief Director’s

refusal of the licence application is administrative action as defined in PAJA
and that the court a quo correctly substituted its decision for that of the
Tribunal. The question of exceptional circumstances has substantially
changed: new evidence was admitted in this appeal that the Tribunal has
been dissolved. What is more, it says, there is no justification for this court to
interfere with the court a quo’s discretionary decision to award costs against
Mr Makanya in his official capacity.

[26] I now turn to the consideration of whether the decision of the Tribunal
was reviewable under PAJA and could be substituted by the court a quo.

[27] The Tribunal effectively had to rehear the application for the water
licence. It is well recognised that an application of that nature will ordinarily
qualify as administrative action, since the advent of the Constitution.9
Administrative appeals usually allow for the reconsideration of an
administrative decision by a higher authority.10 Indeed, Hoexter, writing in
general, says that the ‘person or body to whom the appeal is made steps into
the shoes of the original decision-maker, as it were, and decides the matter
anew.’11 However, each Tribunal falls to be considered relative to its
empowering legislation. 12

[28] This court in South African Technical Officials’ Association v President
of the Industrial Court & Others 1985 (1) SA 597(A) at 610G-I held that a body
that is empowered to perform some of the functions of a court of law is not
necessarily to be regarded as a court of law.13 An administrative body can
perform the duties and functions of a court of law without becoming one. The
status and true identity of a particular body is not determined solely by the

9 Cora Hoexter Administrative Law in South Africa  2 ed (2012) at 184. Also see Lebowa
Granite (Pty) Ltd v Lebowa Mineral Trust 1999 (4) SA 375 (T) at 382E-G; Commissioner,
South African Police Service  v Maimela 2003 (5) SA 480 (T) at 485D; and in relation to PAJA
Magingxa v National Commissioner, South African Police Service 2003 (4) SA 101 (TkH) at
109J-110A.
10 Hoexter Administrative Law at 65.
11 Id.
12 Chapter 15 of the Act
13 Also see Sidumo & Another v Rustenburg Platinum Mines Ltd & others 2008 (2) SA 24
(CC) para 82.

nature and the type of the functions it performs. Certain factors are indicative
of whether a tribunal should indeed be seen as a court of law. This approach
was approved in Sidumo, where Navsa AJ (with whom the majority of the
Constitutional Court concurred on this issue) held that while there are
similarities between arbitrations before the Commission for Conciliation,
Mediation and Arbitration (“CCMA”) established by the Labour Relations Act
66 of 1995 and proceedings before a court of law, the CCMA is not a court of
law because there are also significant differences, including that: a
commissioner is empowered to conduct the arbitration with the minimum of
legal formalities, there is no blanket right to legal representation, the CCMA
does not follow a system of binding precedents, and commissioners do not
have the same security of tenure as judicial officers or undergo judicial
training.

[29] In the instant matter the members of the Tribunal do not have the same
security of tenure as judicial officers. Item 1 of Schedule 6 to the Act provides
that a member is appointed for a period determined by the second appellant.
In terms of item 4, read with s 146(8) of the Act, the appointment of a member
may be terminated ‘for good reason’ by the second appellant and after
‘consultation with the Judicial Service Commission’. The uncertain tenure of
the office those selected to comprise the Tribunal, is not compatible with
judicial independence.14

[30] As to the training of the members of the Tribunal, some have no legal
training or expertise. They may be appointed on the recommendation of the
Water Research Commission established by s 2 of the Water Research Act15
because they are qualified in water resource management or engineering in
related fields. It is thus perfectly possible and in accordance with the Act that
an appeal to the Tribunal could to be conducted by a person who has no legal
experience or training and merely has a degree in engineering. These factors
go to show that the court is dealing with an administrative tribunal which

14 See Sidumo at 612D.
15 34 of 1971.

performed an administrative action, as defined in s 1 of PAJA, in dismissing
Goede Wellington’s appeal.

[31] In President of the RSA v South African Rugby Football Union16 with
reference to the right to administrative justice in terms of s 33 of the
Constitution it was stated:
‘In s 33 the adjective “administrative” not “executive” is used to qualify “action”. This
suggests that the test for determining whether conduct constitutes “administrative
action” is not the question whether the action concerned is performed by a member
of the executive arm of government. What matters is not so much the functionary as
the function. The question is whether the task itself is administrative or not. It may
well be, as contemplated in Fedsure, that some acts of a legislature may constitute
“administrative action”. Similarly, judicial officers may, from time to time, carry out
administrative tasks.17 The focus of the enquiry as to whether conduct is
“administrative action” is not on the arm of government to which the relevant actor
belongs, but on the nature of the power he or she is exercising.’
The nature of the power exercised by the Tribunal was no less and no more
than a consideration of whether a water licence should be granted or not.
Consequently the court a quo was correct in finding that the decision of the
Tribunal constituted administrative action.

[32] The second appellant conceded that the Tribunal made an error of law
in only considering one of the factors as essential and decisive, rather than
considering all the relevant factors prescribed in the statute.

[33] To my mind, however, and according to Goede Wellington, the
reasonableness of the decision must also be called into question. The
Constitutional Court has previously had occasion to address administrative
decision-making where the official is faced with a number of considerations of
which racial redress is one. Much like the situation facing the court in Bato

16 2000 (1) SA 1 (CC) para 141.
17 There may be circumstances in which the performance of administrative functions by
judicial officers infringes the doctrine of separation of powers. That, however, is not an issue
we need consider here.

Star,18 s 27(b) contains a wide number of objectives and principles. Some of
them may be in conflict with one another, as they cannot all be fully achieved
simultaneously. There may also be many different ways in which each of the
objectives stand to be achieved. The section does not give clear guidance on
how the balance an official must strike is to be achieved in doing the
counterweighing exercise that is required.19 As opposed to the legislative
scheme before the court in Bato Star, there is no indication in the Act that s
27(1)(b) is to be regarded as in any way more important than the other
factors.

[34] As to the s 27(1)(b) requirement itself, our courts recognise that, at
least where there is no express legislative provision to the contrary,
transformation such as that envisioned in the section can be achieved in a
myriad of ways. Indeed, there is no one simple formula to achieve
transformation. 20

[35] Section 6(2)(h) of PAJA requires a simple test: an administrative
decision will be reviewable if it is one a reasonable decision-maker could not
reach.21 In the instant case, where the administrator was faced with a balance
to be struck, it is constitutionally endorsed and opportune to ask: did the
administrator strike a balance fairly and reasonably open to him?22

[36] . It is not for the courts to consider whether the Tribunal’s decision was
the best decision in the circumstances, and overstep the limits imposed on
this court by our constitutionally enshrined separation of powers doctrine.23
The court in fulfilling its judicial function is to enquire whether the Tribunal’s
decision struck a reasonable balance between all the factors set out in

18 Bato Star Fishing (Pty) Ltd v Minister of Environmental Affairs 2004 (4) SA 490 (CC).
19 Bato Star (CC) para 32.
20Bato Star (CC) para 35.
21Bato Star (CC) para 25.
22Bato Star (CC) para 44 where R v Chief Constable of Sussex, ex parte International
Trader’s Ferry Ltd [1999] 1 All ER 129 (HL) was quoted and said to provide “sound guidance”
in determining what constituted reasonable action of an administrative decision-maker under
PAJA.
23Bato Star (CC) para 54.

s 27(b), and some not mentioned in the section, owing to its inclusive
nature.24

[37] It must be observed that the need to redress the results of past racial
and gender discrimination is only one factor in a non-exhaustive list of several
factors that have to be taken into account when issuing a licence. It clearly
does not presuppose a crude approach where a s 27(1)(b) sledgehammer
should be taken to an otherwise exemplary application. In this case, it cannot
even be said with any degree of certainty that Goede Wellington did not
satisfy the s 27(1)(b) requirement standing on its own. The Regional Director
Western Cape concluded that Goede Wellington’s application did indeed
satisfy the requirement.

[38] The preamble to the Act makes it clear that water is a natural resource
that belongs to all people and that the discriminatory laws of the past have
prevented equal access to water and the use of water resources. It makes it
equally clear that water in South Arica is scarce. The preamble recognises
that the ultimate aim of water resource management is to achieve the
sustainable use of water for the benefit of all users. It states that the
’protection of the quality of water resources is necessary to ensure
sustainability of the nation’s water resources in the interests of all water
users’.

[39] The Act provides many factors, one of which is the redress factor. It
must be seen against the background of the constitutional commitment to
achieving equality and remedying the consequences of past discrimination.25
Section 9 of the Constitution provides that ‘[t]o promote the achievement of
equality, legislative and other measures designed to protect or advance
persons, or categories of persons, disadvantaged by unfair discrimination may

24 As Schutz JA said in Minister of Home Affairs and Tourism & others v Phambili Fisheries
(Pty) Ltd & Another; Minister of Environmental Affairs and Tourism & others v Bato Star
Fishing (Pty) Ltd 2003 (6) SA 407 (SCA) para 50 ‘judicial deference does not imply judicial
timidity or an unreadiness to perform the judicial function’. O’Regan J agreed with this
statement. (Bato Star (CC) 46.)
25Ngcobo J in Bato Star (CC) para 75.

be taken.’ But transformation can be achieved in various ways.26 How it is to
be achieved in accordance with a particular Act is an issue of, among other
things, legislative interpretation.27 The process to be followed in the instant
case is not delineated by a points scoring system or the like to assist the
Tribunal in assessing a particular application. The assessment is largely left to
the official’s ability to assess a particular application in relation to the factors
stipulated in s 27(b).

[40] The Act provides an open and transparent means by which
applications must be assessed. Although much is left to the discretion of the
decision maker who is allowed to take factors into consideration not
mentioned in the list, it is clear that s 27(b) and indeed the rest of the Act,
requires these factors to be assessed by finding an appropriate balance after
evaluating all the factors expressly provided for and others. Neither the Act
nor the section attributes any significant weight to any of the factors. And, to
my mind, a decision maker, who would not be able to add factors to a closed
legislative list of factors, cannot on a whim decide to elevate one factor to pre-
eminence. That this was done is clear from the reasons provided by the
Tribunal. The court a quo was therefore correct in concluding that the decision
not to grant the licence sought by Goede Wellington had been unlawful.

[41] I now turn to the substitution order made. PAJA provides that in judicial
review proceedings a court may grant any order that is just and equitable.28 It
expressly provides for orders which are included within the just and equitable
rubric. An order setting aside an administrative action can be coupled with
other remedies such as remitting the matter for reconsideration, varying an
administrative action and correcting a defect. PAJA further provides that it
would be just and equitable for a court to substitute an administrative action
with one of its own making in ‘exceptional circumstances’.29 It is this remedy
that the court a quo thought competent. The high court quashed the

26Ngcobo J in Bato Star (CC) para 104.
27Ngcobo J in Bato Star (CC) para 77 et seq.
28 Section 8(1).
29 Section 8(1)(c)(ii)(aa).

administrator’s decision and substituted its decision for that of the Tribunal,
awarding the licence sought to Goede Wellington.

[42] PAJA does not provide guidelines as to what may be understood under
the term ‘exceptional circumstances’. However, the recognition of the principle
that a court should be slow to assume a discretion which has been statutorily
entrusted to another tribunal, which finds expression in the statutory
requirement,30 predates the Act’s enactment in our law. In Johannesburg City
Council v Administrator, Transvaal31 Hiemstra J after recognising the
principle, held that where the end result is in any event a foregone conclusion
and it would merely be a waste of time to refer the matter back to the
administrative functionary, the court will depart from the ordinary course. Most
relevant to the instant case is that it was held that a court would be particularly
willing to substitute its decision for that of the administrative functionary where
‘much time has already been lost by an applicant to whom time is in the
circumstances valuable, and the further delay which would be caused by the
reference back is significant in the context.’32 It was held that the object of this
consideration is to minimise future loss of time.33 Johannesburg City Council,
written in 1969, has however been held not to fully describe the position under
the Constitution and PAJA.

[43] A case is exceptional when, on a proper consideration of the relevant
facts, a court is persuaded that a decision to exercise the power in question
should not be left to the designated functionary. That determination will be
made with reference to established principles, like those in Johannesburg City
Council, informed by the constitutional imperative that administrative action
must be lawful, reasonable and procedurally fair.34 As the Constitution
enshrines everyone’s rights to lawful, reasonable and procedurally fair

30 Hoexter Administrative Law at 552.
31 Johannesburg City Council v Administrator, Transvaal 1969 (2) SA 72 (T).
32 At 76E-G.
33 At 77D.
34 Gauteng Gambling Board v Silverstar Development Ltd & others 2005 (4) SA 67 (SCA)
para 28.

administrative action,35 a court has to have regard to considerations
of fairness.36 There will be no remittal to an administrative authority in cases
where such a step will operate procedurally unfairly.37

[44] A further important consideration is whether the court a quo was in a
position to make the decision and whether, in addition, fairness dictated that it
should have done so. It must be emphasised that an administrative decision
making body is generally best equipped by its composition, experience, and
access to sources and expertise to make the right decision.38 It is now
established that the mere fact that a court considers itself as qualified to take
the decision in place of the administrator is not sufficient for it to do so.
Fairness to the applicant must also be considered and could tilt the scale in
favour of an applicant. Considerations of fairness may in a given case require
the court to make the decision itself provided it is able to do so.39

[45] The only reasonable decision that could have been reached by the
Tribunal, had it assessed the appeal in accordance with the Act, is that Goede
Wellington’s application for a licence should be granted. What is more, further
delay will cause unjustifiable prejudice to Goede Wellington. The trees in the
citrus orchard were already planted between six and eight years ago and they
require the additional water as soon as possible in order to develop and
produce to their full potential.

[46] Furthermore, from what has come to the attention of the court, both
from the Bar and from communications between the parties which form part of
the record, the consideration of a referral back to the Tribunal for a speedy
result would be to rely on wishful thinking. The Tribunal has been disbanded.

35 Section 33(1) of the Constitution provides: “Everyone has the right to administrative action
that is lawful, reasonable and procedurally fair.”
36 Commissioner, Competition Commission v General Council of the Bar of South Africa &
others 2002 (6) SA 606 (SCA) para 14.
37 Id.
38 Gauteng Gambling Board v Silverstar Development Ltd & others 2005 (4) SA 67 (SCA).
Also see Minister of Enviromental Affairs and Tourism & others v Phambili Fisheries (Pty) Ltd;
Minister of Enviromental Affairs and Tourism & others v Bato Star Fishing (Pty) Ltd 2003 (6)
SA 407 (SCA) paras 47 -50.
39 Commissioner, Competition Commission para 15.

Counsel for the second appellant informed the court that there are
amendments to the Act in the offing. However, neither counsel could indicate
whether and when the Tribunal would be functional again. The Goede
Wellington could face an indefinite delay in consequence of remittal.

[47] Astoundingly, after acknowledging the foregoing in a communication
addressed to Goede Wellington, the State Attorney informed it that should this
court rule in the second appellant’s favour the matter will be referred to a
mediation panel in accordance with s 150 of the Act. I say astounding, as the
mediation panel provided for in s 150 is aimed at the settling disputes through
a process of mediation and negotiation. It is not a body appropriate to
consider the application for awarding of licenses.

[48] In the event, exceptional circumstances exist which show that the court
a quo’s substitution order was well made. What is more, considerations of
fairness overwhelmingly dictate that this matter be speedily resolved by this
court.

Costs

[49] The high court awarded costs against Mr Makanya in his official
capacity. As it will be recalled, Mr Makanya did not oppose the relief sought
either in the high court or this court, he merely challenged the order of costs
made against him.

[50] It is trite that in awarding costs a court of first instance exercises a
judicial discretion. A court of appeal cannot interfere in the exercise of that
discretion merely because it would have made a different order.40 The power
of this court, a court of appeal, to interfere is limited to those cases where the
exercise of the judicial discretion is vitiated by misdirection, irregularity, or the

40 Protea Assurance Co Ltd v Matinise 1978 (1) SA 963 (A) at 976H; Minister of Prisons and
another v Jongilanga 1985 (3) SA 117 (A) at 124B.

absence of grounds on which the court below, acting reasonably, could have
made the order in question.41

[51] The general principles relating to awards of costs against public
officers were stated by Innes CJ in Coetzeestroom Estate and GM Co v
Registrar of Deeds.42 The central tenet of these principles is that mulcting an
official in costs where his action or attitude, though mistaken, was bona fide
would be inequitable. It was also established that it would be detrimental to
the proper functioning of the administration which is essential in the public
interest to maintain. This is as the official would be hampered in making the
decisions he is mandated to make in fear of a costs order being made against
him in subsequent litigation. It was also laid down that this would be so
whether he is indemnified from paying from his own pocket or not. What is
more, where a public official does not oppose the relief sought or opposes
with the motive merely to assist the court, no cost order will in the normal
course be made against him.43 However, the court, in keeping with its
discretion to make a costs order it deems fit, retains the right to make a costs
order where an official’s actions are mala fide or grossly irregular.44 Proof of
mala fides or grossly unreasonable conduct is necessary.45

[52] In the instant case no mala fides or grossly unreasonable conduct was
proved and the high court erred in mulcting Mr Makhanya in costs. As has
been shown, he at most struck a balance not open to him in law.

Order

[53] 1. The appeal of the first appellant is upheld with costs including the
costs of two counsel.

41 See Attorney-General, Eastern Cape v Blom 1988 (4) SA 645 (A) at 670D – E.
42 1902 TS 216 223-224.
43 Fourie v Cilliers 1978 4 SA 163 (O) at 166 B - D.
44 See Flemming v Flemming 1989 (2) SA 253 (A) at 262B-263A;
45 Per Eloff AJP writing for the full bench in Hammond-Tooke v Stadsklerk van Pretoria 1989
(3) SA 977 (T) at 990E – G.

2.  The appeal of the second appellant is dismissed with costs including costs
of two counsel.
3. . The order of the court a quo is amended to read:
(1)  The decision taken on 5 May 2010 by the First Respondent, dismissing
the Applicant’s appeal against the refusal by the Chief Director: Water Use in
the Department of Water Affairs and Forestry of the Applicant’s application for
a licence to use water from the Berg River is reviewed and set aside.
The said decision is substituted with the following:
‘1. The appeal by Goede Wellington Boerdery (Pty) Ltd against the
refusal on 11 April 2008 by the Chief Director: Water Use in the
Department of Water Affairs and Forestry of the Applicant’s application
for a licence to use water from the Berg River to which ECPA Boerdery
(Pty) Ltd is currently entitled, is upheld.
2. The said licence is granted to Goede Wellington (Pty) Ltd.’
3. The Second Respondent is to pay the Goede Wellington’s costs,
including the costs of two counsel.’

___________________
N ERASMUS
ACTING JUDGE OF APPEAL

APPEARANCES:

FOR FIRST APPELLANT:
M Mojapelo

Instructed by:

L Mbanjwa Incorporated, Pretoria

Naudes Attorney, Bloemfontein

FOR SECOND APPELLANT:
P Kennedy SC (with him T Makhubele)

Instructed by:

The State Attorney, Pretoria

The State Attorney, Bloemfontein

FOR RESPONDENT:
AM Breitenbach SC (with him EF van
Huyssteen)

Instructed by:

Werksmans Incorporated, Tyger Valley

Symington & de Kok, Bloemfontein

THE SUPREME COURT OF APPEAL
REPUBLIC OF SOUTH AFRICA

MEDIA SUMMARY OF JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL

FROM

The Registrar, Supreme Court of Appeal

DATE

30 November 2012

STATUS

Immediate

Please note that the media summary is for the benefit of the media and does not form
part of the judgment.

Makhanya & another v Goede Wellington Boerdery (Pty) Ltd
(230/12 & 233/12) [2012] ZASCA 205 (30 November 2012)

The Supreme Court of Appeal (SCA) today dismissed an appeal by the
Minister of Water and Environmental affairs against a decision of the North
Gauteng High Court, Pretoria, in which it reviewed and set aside a Tribunal in
terms of the National Water Act’s decision to refuse the transfer of a licence to
use water for farming purposes from one farm to another.  The high court
further substituted its order for that of the Tribunal and granted costs against
its presiding officer.

The SCA upheld the appeal against a costs order and found that it would be
inequitable to mulct an official with costs where his action, though mistaken,
was bona fide.

The SCA, found that the actions performed by the Tribunal in considering an
appeal from an official constituted administrative action in terms of PAJA and
thus is reviewable.  The actions of the Tribunal amounted to an error in law in
considering only one of a number of relevant factors applicable in the granting
or transfer of water licences.  The decision was also unreasonable and stood
to be set aside.  The court further found that exceptional circumstances
existed that allowed a court to substitute its order for that of an administrative
Tribunal.  Hence it issued the following order:

1. The appeal of the first appellant is upheld with costs including the costs of

two counsel.
2. The appeal of the second appellant is dismissed with costs including costs
of two counsel.
3. The order of the court a quo is amended to read:
(1) The decision taken on 5 May 2010 by the First Respondent, dismissing the
Applicant’s appeal against the refusal by the Chief Director: Water Use in
the Department of Water Affairs and Forestry of the Applicant’s application
for a licence to use water from the Berg River is reviewed and set aside.
The said decision is substituted with the following:
‘1. The appeal by Goede Wellington Boerdery (Pty) Ltd against the
refusal on 11 April 2008 by the Chief Director: Water Use in the
Department of Water Affairs and Forestry of the Applicant’s
application for a licence to use water from the Berg River to which
ECPA Boerdery (Pty) Ltd is currently entitled’, is upheld.
2. The said licence is granted to Goede Wellington (Pty) Ltd.’
3. The Second Respondent is to pay the Goede Wellington’s costs,
including the costs of two counsel.’