News / Legal Brief
Nov 3,2016
The case of the Minister of Water and Environmental Affairs v Really Useful Investments (436/2015) [2016] ZASCA 156 is a reminder that certain provisions found in the Environmental Conservation Act 73 of 1989 (“ECA”) remain in force.
The ECA is erroneously considered to be repealed, however, certain provisions and notably sections 31A, 34 and 37 of ECA, remain in force.
Really Useful Investments (“RUI”) a developer of immovable property in Hout Bay, purchased certain vacant lots adjacent to the Dias River with the intention of developing them into residential and commercial properties. During 2010, RUI commenced development activities adjacent the Disa River by dumping rubble and fill on specific properties to raise their height. This activity precipitated the City of Cape Town issuing a directive in accordance with sections 31A (1) and (2) of ECA ordering RUI to take specific steps that included:
RUI complied fully with the directive at significant cost and attempted to recover this cost from The City, the Minister and the MEC in terms of Section 34 of ECA. Action ensued on the basis of a compensation claim against the Minister or competent authority for actual loss suffered as a result of the authority placing a “limitation” on the purpose for which the land may be used.
The Respondents defence was premised on RUI not having disclosed a proper cause of action, in that on the basis of section 37 of ECA and section 49 of the National Environmental Management Act 107 of 1998 (“NEMA”) the State and relevant third parties are entitled to an exemption as the action complained of was undertaking in good faith, in performance of a duty conferred in terms of ECA and NEMA. It must be noted that this exemption will not be applicable in circumstances where the State or relevant authority has acted unlawfully, negligently or in bad faith.
Savage J of the Western Cape Division of the High Court, distinguished between claims based in delict and those that in essence equate to an expropriation by virtue of the nature of the curtailment of the rights of the owner of the property. In her view RUI’s claim was sustainable as Section 34 provides for a statutory right to recover compensation and Section 37 of ECA and Section 49 of NEMA do not limit or restrict such right, as these exemptions are more appropriate defences to a claim in delict.
While the SCA confirmed Savage J’s finding that Section 37 of ECA and Section 49 of NEMA do not apply to compensation claimed under Section 34, it indicated that the circumstances under which such compensation could be claimed were limited. The directive issued under section 31A of ECA was not eligible for compensation for the following reasons:
If Savage J’s judgment was upheld, it could result in the unintended consequences of –
The SCA through its judgment may have accordingly averted a slew of unreasonable environmental compensation claims by aggrieved polluters seeking financial redress in terms of Section 34 for the remedying of harm that they have caused. A potentially untenable situation if one considers the very purpose of the punitive enforcement tools available to authorities in punishing non-compliance and taking effective measures to protect the environment.
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