Court ruling: The Subdivision of Agricultural Land

In a recent decision of the Appellate Division in Bloemfontein, in the matter of Maxrae Estates (Pty) Ltd v Minister of Agriculture, Forestry and Fisheries and Another (407/2020) [2021] ZASCA 73 (9 June 2021), the court made it clear that the executive must apply its mind prior to making decisions or exercising its legislative discretion.

August 30, 2021

The facts of the case

Maxrae Estates (Pty) Ltd (the appellant) was seeking to subdivide its farm in terms of the Subdivision of Agricultural Land Act 70 of 1970 in order to establish a sectional title scheme. The purpose of this scheme would be to raise finance that would in turn be used to increase the production of fresh produce and enable the expansion of an existing warehouse.

In terms of the Act, the consent of the Minister of Agriculture, Forestry and Fisheries (the respondent) was required for a proposed subdivision of this nature. When the respondent refused to give his consent, the appellant applied to the High Court for an order to be granted requesting that consent be given by the respondent.

This application was dismissed by the Gauteng Division of the High Court, Pretoria which found that the respondent had exercised his discretion widely, having carefully considered all relevant factors. The court of first instance further stated that the respondent had thoroughly investigated the report, environmental consent, and all relevant supporting documents provided by the appellant.

At the time that the above decision was reached, an environmental authorisation had already been given by the Department of Agriculture and Rural Development in anticipation of the subdivision. In addition, a re-zoning certificate had been issued by the municipality and the appellant had commissioned a specialist study to show the feasibility of farming after the scheme had been established.

It became clear from the judgement that the respondent had dismissed the application for the following reasons – even though the appellant had proved that agricultural activities would continue even after the scheme was established:

  • The proposed scheme would be situated in an area where agricultural activities take place.
  • The Department of Agriculture and Rural Development’s mandate is to protect agricultural land in order to protect food security in the country.
  • The success of the application would set a precedent for similar applications in the area.
  • The proposed subdivision was not in line with departmental norms and the rezoning of the land would grant new land use rights.

The High Court chose to respect the separation of powers doctrine that courts should be slow to interfere with the powers exercised by the executive. As a consequence, the appellant approached the Supreme Court of Appeal with an application to overturn the judgement handed down by the High Court.

The issue on which the Appellate Division had to decide was whether the High Court was justified in its rationale for dismissing the application – to this end it had to consider whether the respondent had applied his mind, carefully taking into account the evidence provided by the appellant. In doing so, the Appellate Division gave consideration to the following pieces of legislation:

  1. Subdivision of Agricultural Land Act 70 of 1970
  2. National Environmental Management Act 107 of 1998
  3. The separation of powers doctrine
  4. Van der Bijl and Others v Louw and Another 1974 (2) SA 493 (C)
  5. Deeds Registries Act 1937 (Act of 1937)
  6. Promotion of Administrative Justice Act 3 of 2000 (PAJA)
  7. Pharmaceutical Manufacturers Association of South Africa and Another

The Supreme Court of Appeal applied the rule of law in the following manner and made the following comments in its decision:

  • The application to subdivide the farm was made in terms of Act 70 of 1970 by the appellant and the environmental consent was obtained in terms of the National Environmental Management Act.
  • The separation of powers doctrine was applied by the High Court, which begs the question of whether there was a thorough probe into the department’s decision to dismiss the application.
  • The Court of Appeal further acknowledged that the purpose of the consent required for Act 70/1970 by the respondent is to prevent the breakdown of agricultural land into small inefficient units that could lead to rural communities being impoverished as stated in the case of Van der Bijl and Others.
  • In terms of section 6(2) of the Promotion of Administrative Justice Act, the courts are to review administrative action where such action was taken based on irrelevant considerations and where pertinent factors were ignored.
  • In Pharmaceutical Manufacturers Association of South Africa and Another, the courts held that an objective enquiry had to be held; decisions had to be looked at in good faith and as being rational.

The court’s decision

After taking all relevant facts into consideration, the Supreme Court of Appeal held that there were discrepancies in the respondent’s decision, communicated in his letter and affidavit, and that he had not applied his mind to the application. It also held that the respondent’s decision be set aside and that the matter be referred to the respondent’s office for deliberation, taking into consideration all the relevant factors highlighted in the application.

It remains to be seen whether the decision will be overturned or the consent will be granted.

Written by Wessel de Kock

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