By Avani Singh and Duncan Wild on 18 December 2013.

After the record had been filed in the matter in an appeal to the Supreme Court of Appeal (“SCA“), the appeal lapsed for failure by the appellant, Dengetenge Holdings (Pty) Limited (“Dengetenge”), to prosecute it by timeously filing its heads of argument. The issue for determination before the SCA was whether the default should be condoned and the appeal revived.

The majority of the Constitutional Court, in a judgment written by Jafta J, found that leave to appeal should be granted, but that the appeal should be dismissed. Justice Jafta also found, in respect of the High Court judgment, that Dengetenge had not first utilsed the internal appeal before going to the High Court, but that regardless, Dengetenge had conceded in the High Court that the rights were awarded to it unlawfully.  

The issue arises from litigation over prospecting rights that had been awarded by the Minister of Minerals and Energy (“Minister”).  The matter came before Tuchten J in the North Gauteng High Court (“NGHC”) who inter alia reviewed and set aside the decision to award the prospecting rights to Dengetenge (“NGHC judgment- 17 June 2011, Dengetenge obtained leave to appeal the NGHC judgment to the SCA.

On 15 December 2011, Dengetenge filed the record of appeal with the registrar of the SCA, having obtained two extensions of time prior to that.

On 24 February 2012, Dengetenge filed a substantive application for condonation for the late-filing of its heads of argument, a day after the heads of argument were due to be filed. By way of a letter on 2 March 2012, the registrar notified Dengetenge that the appeal had already lapsed, and that an application for condonation would be required to revive it.

Approximately four months later, on 12 July 2012, Dengetenge filed an application for condonation and reinstatement of the appeal. After being informed that the heads of argument still had not been filed, Dengetenge re-served those documents on 27 August 2012 together with the heads of argument.

The SCA noted that the factors which are usually taken into account when considering an application for condonation include the degree of non-compliance, the explanation therefor, the importance of the case, a respondent’s interest in the finality of the judgment of the court below, the convenience of the court, and the avoidance of unnecessary delay in the administration of justice. The SCA was willing to accept that the matter was of substantial importance to Dengetenge, and that there had been minimal or no inconvenience to the court. However, it was not persuaded by Dengetenge’s explanations in relation to the other factors.

Firstly, the SCA found that no acceptable explanation had been provided for either the delay in filing the heads of argument or the delay in seeking condonation, noting that there were huge gaps in the chronological sequence advanced by Dengetenge. One of Dengetenge’s primary contentions in this regard was that it had discovered important documents missing from the record of appeal which needed to be included, thereby occasioning the delay. In the SCA’s view, however, Dengetenge’s explanation was “disingenuous and contrived” and it was “impossible to hold that the delay … [had] been explained in a manner which is even remotely satisfactory”.

Secondly, the SCA considered the respondents’ interest in the finality of the judgment of the court below. In particular, once the appeal had lapsed, the first and second respondents, those being the two other mining companies vying for the prospecting rights, took the view that the prospecting rights granted to them had become effective. They had therefore either commenced prospecting operations or had expended money with a view to commencing prospecting operations. According to the first and second respondents, these costs had been incurred when they believed that they had legal certainty in consequence of the appeal having lapsed and there having been no indication from Dengetenge that it intended to seek reinstatement. None of these allegations were disputed by Dengetenge, and the SCA accepted that the first and second respondents had been severely prejudiced by Dengetenge’s delay in prosecuting the appeal.

Lastly, the SCA considered Dengetenge’s prospects of success on appeal. In particular, the SCA noted that counsel for Dengetenge had conceded at the NGHC that the grant of the right to Dengetenge was unlawful as it was made in the face of an interdict. Although counsel for Dengetenge before the SCA argued that the NGHC was obliged mero motu to go behind the concession to determine whether it was correctly made, this was rejected by the SCA. The SCA held that Dengetenge could not, on appeal, seek to advance a case that was specifically abandoned before the court below, and concluded that Dengetenge had no prospects of success on appeal.

In light of the above, the SCA dismissed the application and concluded that “[i]ndividually weighed – on each of the three factors the scales are tipped against condoning the default and reviving the appeal. Cumulatively – they are decisive against it.”

Justice Jafta considered that even though no evidence of bias in the SCA, the SCA’s judgment only dealt with condonation and so the Constitutional Court could consider the correctness of the High Court judgment even though the SCA judgment would not be set aside. The Constitutional Court then went on to find that Southern Sphere had not exhausted internal remedies within the Department of Minerals and Energy and so should not be able to review the decision in a High Court, unless the High Court granted an exemption from these requirements. Even though Jafta J considered that had an exemption been applied for it would probably have been granted, there was no point in sending the matter back to the High Court in this case, as Dengetenge had conceded that the rights were awarded unlawfully and so an exemption, if granted, would not affect the merits of the case.

Zondo J wrote a separate judgment in which the Chief Justice concurred in which he found that leave to appeal should be granted but the appeal dismissed. Zondo J found that Dengetenge should be held to its concession that the rights were unlawfully awarded, and that, although it was for the administrative body to decide whether it would waive the requirement that an internal appeal be filed, that would serve no purpose here.

Justice Froneman, with Justice Cameron and Justice Van der Westhuizen concurring, would have found that due to the serious breach of the SCA’s rules, that leave to appeal should have been refused.

Download the judgment here.