IN THE HIGH COURT OF SOUTH AFRICA	
	 
GAUTENG LOCAL DIVISION, JOHANNESBURG

							                                 REPORTABLE
CASE NUMBER: 0049700/2017

DELETE WHICHEVER IS NOT APPLICABLE
(1)	REPORTABLE: YES/NO
(2)	OF INTEREST TO OTHER JUDGES: YES/NO
(3)	REVISED: 

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	DATE				SIGNATURE

____________________        ____________________
DATE				        SIGNATURE

               		      

	In the matter between 
LIMPOPO ECONOMIC DEVELOPMENT AGENCY		 		    Applicant 
And 
JOHANNES FREDERICK KLOPPER N.O.			             First Respondent
CHRISTOPHER RAYMOND REY N.O.				       Second  Respondent
LIEBENBERG DAWID RYK VAN DER MERWE N. O.                     Third  Respondent 
LEBOGANE MPAKATI N.O.             				        Fourth  Respondent
DILOKONG CHROME MINE (PTY) LTD				            Fifth  Respondent
ASA METALS (PTY) LTD 							Sixth  Respondent
EASTERN ASIA METAL INVESTMENT CO. LTD		      Seventh  Respondent
MINISTER OF MINERAL RESOURCES				         Eighth  Respondent
DIRECTOR-GENERAL: DEPT. MINERAL RESOURCES(‘DMR’)    Ninth  Respondent
REGIONAL MANAGER: LIMPOPO REGION OF DMR	          Tenth  Respondent
CHEETAH CHROME SOUTH AFRICA (PTY) LTD 		     Eleventh  Respondent

__________________________________________________________		
J U D G M E N T
													
COPPIN J
Introduction
[1]	This is an application in which the applicant (“LEDA”) ultimately seeks to prevent the sale of a converted mining right held by the fifth respondent (“DCM”), which is in business rescue, at the behest of its business rescue practitioners(“BRPs”), to the 11th respondent (“Cheetah”), claiming that it has a stake and title interest  in the mining right.
 [2]	The application is opposed by the first to the sixth respondents (which includes the BRPs and DCM) and they have filed answering affidavits. Cheetah also opposed the application and although it did not file an answering affidavit it made legal submissions, essentially, supporting the arguments of the first to sixth respondents. The seventh, eighth, ninth and tenth respondent have not opposed the application. I shall, where relevant and for convenience, refer to the first to sixth respondents jointly as “the respondents”, to the eighth respondent as “the Minister”, the ninth respondent as the “Director – General”, and to the tenth respondent as the “Regional Manager”.	 
[3]	At the hearing LEDA’s counsel handed up a draft order reflecting the relief it was seeking, namely, the following: (1) A declaratory order that: 1.1 LEDA holds, alternatively, is entitled to, a 40% stake in the mining right held under file reference number LP142 MRC (“the mining right”); 1.2 that it has a “title interest” in the mining right as contemplated in section 134(3) of the Companies Act; 1.3 that any cession, transfer, letting, subletting, assignment, alienation or disposal of the mining right, or of an interest in any such right, or of a controlling interest in DCM (hereinafter referred to as “the disposal”), pursuant to business rescue proceedings in respect of DCM, is subject to the protection afforded to LEDA’s title interest provided by section 134(3)(a) of the Companies Act; 1.4 that the mining right may not be disposed of by DCM without the resolution contemplated in clause 15.2 of the shareholders’ agreement contemplated in clause 17 of the mining right; 1.5 that Cheetah’s offer to the BRPs of DCM, approved and accepted on or about 17 November 2017, and any agreements concluded pursuant thereto, are unlawful and void, alternatively setting aside such agreements. 2. That DCM’s BRPs and DCM are interdicted and restrained from disposing of the mining right without: 2.1 the prior consent of LEDA contemplated in section 134(3) of the Companies Act; and 2.2 the written consent of the Minister as contemplated in section 11 of the Minerals and Petroleum Resources Development Act (“MPRDA”). 3. Cheetah and its associates are interdicted and restrained from taking cession, transfer, possession, or otherwise acquiring the mining right: 3.1 without the written consent of the Minister in terms of section 11 of the MPRDA; and 3.2 without the resolution contemplated in clause 15.2 of the shareholders’ agreement. 4. DCM is directed to comply with the mining right and to conclude the agreement with LEDA, contemplated in clause 17 of the mining right, within three months of the order. 5. DCM’s BRPs are directed to ensure that DCM complies with the mining right and concludes the agreement with LEDA within 60 days of the order. 6. Alternatively to paragraphs 4 and 5, declaring that clause 17 of the mining right obliges the holder of the mining right to conclude an agreement with LEDA wherein LEDA will hold a 40% stake in the mining right. 7. The respondents and Cheetah are to pay the costs of the application, jointly and severally, including the costs of two counsel.
[4]	The relief sought in paragraph 1.1 calls for the interpretation of, in particular, clause 17 of the mining right, since LEDA contends that its holding, or entitlement, stems from that clause. It is common cause that a determination that the applicant does not have such a holding, or entitlement, is decisive of the application as the subsequent prayers are all dependent on a finding favourable to LEDA in respect of that issue.
[5]	Clause 17 of the mining right, which I shall quote in full in due course, inter-alia, makes reference to an agreement, or an arrangement, dated 11 December 2006. It is common cause that that reference is to a shareholders agreement concluded between the seventh respondent (“EAMI”) and LEDA as shareholders of the sixth respondent (“ASAM”), which holds and still holds 100% of the shareholding in DCM. ASAM is presently also in business rescue.
[6]	LEDA contends that clause 17, in essence, means that the Minister, when converting the mining right of DCM in terms of Item 7 of Schedule II of the MPRDA, granted to it a 40% stake in that mining right, alternatively obliged DCM to grant it such a stake by agreement.
[7]	The respondents and Cheetah dispute that interpretation, ultimately contending that it is a literal reading of that clause, without taking into account the context and the surrounding circumstances, including the power of the Minister in converting the right. They contend that the interpretation gives rise to illegality, absurdities and inconsistencies. I shall deal with the interpretational issue after having sketched a brief background of the essential common cause facts.
The relationship between the different role players
[8]	DCM is the holder of the mining right. ASAM owns 100% of the issued shares of DCM. EAMI and LEDA, respectively, own 60% and 40% of the issued shares in ASAM. The latter’s business involves the processing of chrome ore and the production of ferrochrome, which is sold locally and internationally.
[9]	The relationship between EAMI and LEDA was regulated by a joint venture agreement entered into between them on 5 December 1995. That agreement was substituted by the shareholders agreement that they entered into on 11 December 2006 in Beijing, China (“the shareholders agreement”).
Background facts
[10]	Before conversion of the mining right DCM was the holder of an old order mining right as contemplated in Schedule II of the MPRDA. It applied, in terms of the provisions envisaged there, for conversion of that right to a mining right under the MPRDA. The Minister, alternatively, the Minister represented by the Director- General, alternatively, by the Regional Manager, converted the old order mining right in terms of item 7 of the MPRDA. Item 7 deals with the conversion of all mining rights that were being used and were in effect immediately before the MPRDA took effect on 1 May 2004.	
[11]	The shareholders’ agreement envisaged, inter-alia, an expansion of ASAM’s and DCM’s infrastructure and their production of ferrochrome and this required a considerable amount of capital, a portion of which was to be financed. The agreement also dealt with the involvement of a black economic development partner (“BEE partner”), as envisaged in the MPRDA, the Broad-based Black Economic Empowerment Act and the Mining Charter. The approved BEE partner was to organise and arrange its own finances for the purchase of shares in ASAM. The Group’s shareholding was to be restructured to allow for the introduction of such a partner. In particular, LEDA was to sell off 30% of its shareholding in ASAM to the BEE partner. LEDA was to identify the BEE partner, but its admission as a shareholder was to be approved by the shareholders in a general meeting. The shareholders’ agreement envisaged that the introduction of the BEE partner would be finalised by the end of March 2007, or by such extended date as EAMI and LEDA would agree to.
[12]	The shareholders’ agreement confirmed that before the transfer of the shares to the approved BEE partner, EAMI would continue to hold 60% (i.e. 20 625 000) of the shares in ASAM, and LEDA 40% (i.e. 13 750 000) of the shares. After the transfer to the BEE partner, EAMI would continue to hold its 60%, but LEDA would only hold 10% (i.e. 3 437 500) of the shares and the BEE partner 30% (i.e. 10 312 500) of the shares in ASAM. In other words, LEDA’s initial shareholding was subject to dilution in favour of the BEE partner.
[13]	The shareholders’ agreement envisaged that ASAM would have no more than five directors. That EAMI (or its successors in title) would be entitled to appoint three directors and LEDA two of the directors until introduction of the BEE partner, whereafter it would only be entitled to appoint one director and the BEE partner would be entitled to appoint the other director.
[14]	The shareholders’ agreement also envisaged that certain acts listed in that agreement, including the disposal, in any manner, of ASAM’s assets or its business would not take place, except as may be approved or agreed by all or any of the shareholders who, at the relevant time, hold at least 75% of the issued share capital of ASAM (clause 15.2).
[15]	It is common cause that no BEE partner has been approved or identified or introduced into ASAM as envisaged in the shareholders’ agreement and that the dilution of LEDA’s shareholding, as envisaged in the shareholders’ agreement, has not occurred as a result.
[16]	ASAM has been in business rescue since 29 February 2016. The business plan for its rescue was adopted by its creditors on 6 December 2017. DCM has been in business rescue since 24 March 2016 and its business rescue plan was approved on 17 November 2017. ASAM and DCM have the same BRPs.
[17]	LEDA at a particular stage resolved to capitalise DCM and take it out of business rescue and requested, through its attorneys, that the proposed sale of DCM, or of its business, or its assets, be held in abeyance in order to enable LEDA “to finalise the terms of the financial package” that would enable it to save DCM. The BRPs did not agree to delay matters and through their attorneys, inter-alia, informed LEDA that they had received concrete offers for the restructuring of DCM and that they would be exploring those offers, but also indicated that they would consider LEDA’s proposals if it reached them in time.
[18]	LEDA participated in the process and through its attorneys informed the BRPs’ attorneys of its expression of interest regarding the acquisition of DCM’s business. LEDA wanted to do a due diligence investigation and offered to pay a fully refundable commitment fee of R1 million. The BRPs had proceeded to a non–binding bidding process in terms of which certain companies were invited to submit offers for the acquisition of DCM’s assets and/or business and LEDA was informed of the process and was to comply with certain conditions, which included the payment of the deposit of R5 million. LEDA was to submit a written offer by no later than 17h00 hours on 21 July 2007.
[19]	LEDA complied with the request, paid the deposit of R5 million before 7 July 2017 and commenced with considering and reviewing the documents in the electronic data room of DCM. It employed specialists to advise it concerning the technical, environmental and specialist aspects of the due diligence investigation. While the parties engaged each other concerning LEDA’s request for certain documentation pertaining to the investigation, the BRPs informed LEDA that they had already received two concrete offers for the purchase of DCM’s assets and business as a going concern. LEDA was invited to submit a non-binding offer for the purchase of the same so that it could be considered.
[20]	On 20 July 2017, through its attorneys, LEDA submitted a non-binding offer of R300 million, subject to certain conditions. The offer was to lapse by 21 July 2017 if it was not responded to. No response was forthcoming and the offer accordingly lapsed.
[21]	A meeting was ultimately held on 14 August 2017 between representatives of LEDA and the BRPs, and their respective attorneys, to discuss the way forward. LEDA would initially not accept the proposal to participate in a “bid-out” process, but ultimately did participate in such a process. According to LEDA, this was in an attempt to protect its interests. LEDA was given three weeks, ending on 31 August 2017, to complete its due diligence investigation. According to LEDA, it is during these due diligence investigations that its attorneys drew its attention to the terms of the mining right, including and in particular those in clause 17.
[22]	On 7 September 2017 LEDA’s attorneys wrote to the attorneys of the BRPs informing them of LEDA’s (alleged) right, interest or title to the mining right and sought an undertaking from the BRPs attorneys that they and DCM would not transfer or otherwise dispose of the mining right without consulting with LEDA and obtaining its consent for such sale or disposal. On 22 September 2017 the BRP’s attorneys responded, effectively denying that LEDA had any claim to or title or interest in the mining right.
[23]	On 3 October 2017 the BRPs issued a “Confidential Proposal to Prospective Purchasers” in terms of which offers were invited for the acquisition of the business of DCM as a going concern. The invitees were to attend the meeting on 20 October 2017 at their attorneys’ offices and participate in a private boardroom “bid-out” process. Participants were to pay R50 million into the trust account of the BRP’s attorneys. In their proposal the BRPs also referred to LEDA’s letter of 7 September 2017 and stated that they had taken legal advice and reject the views expressed by LEDA in that letter.
[24]	According to LEDA, notwithstanding that response from the BRPs, it was of the view that participation in the bid-out process and the acquisition by it of the mining right and the other assets of DCM was the way to protect its interests. Accordingly, so avers LEDA, it proceeded to pay the deposit of R50 million into the BRPs attorneys’ trust account. By letter it informed those attorneys accordingly, and that the managing director of LEDA, Mr Morore Benjamin Mphalele, was authorised to finalise the transaction for the acquisition of DCM. Mr Mphalele deposed to LEDA’s affidavits in these proceedings.
[25]	On the same day LEDA’s attorneys also informed the BRPs’ attorneys by letter that legal proceedings would be commenced in light of the BRPs’ views disputing LEDA’s claim to a title interest in the mining right. The letter also advised that the dispute had to be resolved before any attempt was made to sell the mining right and that the “bid-out” process was premature. LEDA further requested consent to institute proceedings and an undertaking that the “bid-out” process would not proceed until the dispute regarding its claim to a stake in the mining right had been resolved.
[26]	In the letter the BRPs, through their attorneys, refused to give the requested undertaking and promised to revert on the issue of the consent. LEDA, through its attorneys, took the stance that it would participate in the “bid-out” process, but (according to it) it still intended enforcing its alleged title interest in the mining right.
[27]	On 20 October 2017 LEDA instituted action proceedings against certain of the present respondents, including DCM and ASAM in which it, inter-alia, sought a declaratory order: (a) that it holds a 40% stake in the mining right; (b) that it has a title interest in the mining right as contemplated in section 134(3) of the Companies Act; (c) that any disposal of the mining right pursuant to the business rescue of DCM was subject to the protection afforded to such title interest by section 134(3)(a); and (d) that the mining right may not be disposed of without a resolution contemplated in clause 15.2 of the shareholders’ agreement.
[28]	On that same date the “bid-out” meeting was held in which three bidders, including LEDA and Cheetah, participated. Each bidder paid a deposit of R50 million. Cheetah bid R456 million for 100% of the mining right and LEDA bid R450 million for it. Accordingly, Cheetah was the successful bidder. LEDA took umbrage, because, according to it, the BRPs had no regard for its title interest in the mining right. LEDA’s attorneys wrote to the attorneys for the BRPs seeking an undertaking that they would not continue with the business rescue plan for DCM, or implement the sale of DCM, or its assets, until the litigation had been finalised. The undertaking was refused by the BRPs and they accused LEDA of adopting delaying tactics in order to frustrate the successful rescue of DCM.
[29]	DCM’s business rescue plan was published on 3 November 2017. It included the offer made by Cheetah to acquire the business of DCM as a going concern, or to acquire all of the issued shares in and claims on the loan accounts against DCM, subject to terms and conditions. The plan also included a notification that a meeting was to be held on 17 November 2017. An urgent application brought by LEDA to interdict the meeting was struck-off the roll for lack of urgency and LEDA then brought this application.
[30]	In the interim, on 1 November 2019, the Director-General, on behalf of the Minister, granted unconditional consent in terms of section 11 of the MPRDA for the mining right to be ceded to Cheetah. On 11 November 2017 LEDA appealed to the Minister against the grant of such consent, inter-alia, on the grounds that it had not been granted a hearing, or an opportunity to make representations, before the decision to grant the consent was taken.
The respective contentions regarding LEDA’s claim to a stake in the mining right
[31]	LEDA contends: (a) That a mining right is a limited real right in respect of the mineral and the land to which such rights relates (it extends to the minerals and the land); (b) the grant of such right in terms of the MPRDA is contractual in nature, but constitutes a single administrative act by the Minister or his delegate and is performed in terms of the statutory powers conferred by the MPRDA; (c) in terms of section 25(2)(d) of the MPRDA the holder of a mining right must comply, amongst other things, with the terms and conditions of the mining right; (d) the mining right, in this instance, expressly provides that the holder of the mining right (i.e. DCM) is bound by the agreement or arrangement contemplated by the shareholders agreement and further provides that LEDA has a 40% stake in the mining right; (e) therefore, LEDA has a title interest in the mining right as contemplated in section 134(3) of the Companies Act; (f) any disposal of the mining right pursuant to the business rescue proceedings is subject to the protection afforded to LEDA (i.e. as a title interest holder) by section 134(3) of that Act; (g) neither the mining right, nor DCM’s shares, may be disposed of in business rescue proceedings without the resolution contemplated in clause 15.2 of the shareholders’ agreement.
[32]	The respondents and Cheetah contend that since the section 11(i.e. of the MPRDA) consent was granted unconditionally, the relief LEDA seeks, particularly, to interdict the Minister from consenting to the cession of the mineral right, was now moot. Regarding LEDA’s claim to a stake in the right, they argue: (a) adherence to the plain language of the mining right would produce an absurdity and that it was imperative to avoid such an absurdity. Reference in that regard was made in particular to what was held in Natal Joint Municipal Pension Fund v Endumeni Municipality (“Endumeni”). According to the argument, the reference to “holder/empowering partner” in clause 17 of the mining right, is incorrect. The reference ought to have been to “EAMI/LEDA”; (b) LEDA’s case concerning clause 15.2 of the shareholders’ agreement is dependent on its interpretation of clause 17 being upheld; (d) LEDA’s reliance on the first part of clause 17 for the assertion that DCM is “bound” to the shareholders’ agreement, is an “overestimation”, particularly since: (i) the MPRDA is clear that the parties may regulate their affairs and business as they wish in order to comply with the objectives set out in section 2(d) and (f) of that Act; (ii) the parties may do so by way of a joint venture or company; (iii) all that the introductory part of clause 17 states is that the Minister has recognised that there is a shareholding upstream of DCM, i.e. at the level of ASAM; (iv) there is no magic in that introductory phrase; (e) to contend that DCM is bound by the shareholders’ agreement, as if it were a party thereto or as if it relates to DCM, would lead to uncertainty and absurdity, because: (i) it cannot be determined which clauses DCM would be bound by and to conclude that it is bound by a particular clause would be nonsensical; (ii) the shareholders’ agreement deals with the rights and obligations of LEDA and EAMI; and it deals specifically with their governance of ASAM, which itself, is not a party to that agreement. DCM is nothing more than a “designated business” to be carried on as a subsidiary of ASAM; (iii) linguistically, clause 15.2, read with clause 15.2.13, of the shareholders’ agreement deals with an undertaking given by LEDA and EAMI to each other that they would not dispose of material assets of ASAM, unless the requisite shareholders’ resolution is passed. To interpret clause 15.2 as referring to DCM, is nonsensical; (f) ASAM is not disposing of the mining right. If LEDA’s interpretation of clause 15.2 is accepted it would mean that DCM’s shareholder, namely ASAM, must give the undertaking required by clause 15.2., which is not what is intended in that clause. Further, ASAM’s BRPs are not disposing of any assets, but DCM BRPs are disposing of DCM’s assets, and they are entitled to do so in terms of section 140(1)(a) of the Companies Act, as they have full management control of DCM in substitution for its board, or any of its pre-existing management. Like DCM’s management, DCM’s BRPs are not bound by the provisions of the shareholders agreement.
[33]	Regarding LEDAs claim that it has “title interest”, as contemplated in section 134 of the Companies Act, the respondents and Cheetah argue that: (a) its reliance on that section is misplaced; (b) the purpose of business rescue is discussed in Diener N.O. v Minister of Justice and Correctional Services and Others; (c) the section provides protection in respect of property over which another person has security, or title interest; (e) it has been held that title interest was an alternative to security and was intended to mean something other than security. The last portion of section 134(3)(a) indicates that like security, title interest is something which safeguards the payment of indebtedness due to the creditor of the company in business rescue; (e) it has been held by the Supreme Court of Appeal (“SCA”) that the purpose of section 134(3) is to fully protect a secured creditor. A practitioner who wants to dispose of secured property must obtain prior consent, unless the proceeds of the disposal would be sufficient to fully discharge the protected indebtedness. Where there is no indebtedness section 134(3) does not apply.
[34]	According to the latter argument, LEDAs interpretation ignores the latter portion of section 134(3)(a) which specifically refers to the “discharge of indebtedness”, and completely ignores section 134(3)(b) and would therefore result in an absurdity. If LEDA was correct it could derail DCM’s adopted business rescue plan by simply withholding its consent. DCM is not indebted to LEDA and therefore section 134(3) does not apply.
Clause 17 of the mining right
[35]	The document evidencing the conversion of DCM’s old order mining right, inter-alia, confirms that DCM applied for such conversion and that the Minister, alternatively, the Director-General, further alternatively, the Regional Manager has, by virtue of the powers delegated to him, converted that old order mining right in terms of Item 7 of Schedule II of the MPRDA. It also confirms that DCM is granted the sole and exclusive right to mine and to recover the minerals in or under the mining area for DCM’s own benefit and account, subject to the terms and conditions of the right, the provisions of the MPRDA and any other applicable law in force for the duration of the right. Various other obligations are imposed upon the holder (i.e. DCM), including those relating to the commencement, duration and renewal of the right, the payment of royalties and other monies, the payment of interest, and other restrictions and obligations pertaining to the exercise of the right, the holders liability for compensation for loss of damage, the protection of boreholes, shafts and other openings, et cetera. 
[36]	Clause 17 of the mining right is headed “Provisions relating to section 2 (d) and (f) of the Act” (The “Act” being the MPRDA), and the clause reads: “in the furthering of the objects of this Act, the holder is bound by the provisions of an agreement or arrangement dated 11 December 2005 entered into between the holder/empowering partner and it is being recorded that the parties shall within 3 (three) months of executing the right, conclude a new agreement wherein Limpopo Economic Development Agency will hold 40% of stake in the right without an obligation to dilute. The above is subject to the transfer of Limpopo Economic Development 40% stake at a later stage to SOMCO upon due notice by the Minister (the empowerment partner) which agreement or arrangement was taken into consideration for purposes of compliance with the requirements of the Act and/or Broad Based Economic Empowerment Charter developed in terms of the Act and such agreement shall form part of this right.” 
[37]	It is established that the process of interpreting a document, such as the one in question, concerns the objective action of giving meaning to the words used in the document, taking into account their context, by reading them in light of the whole document and the circumstances that prevailed at the time of the creation of the document. Attention is to be given to the language used, including grammar and syntax, the context of the words or provision being interpreted, the purpose of the provision and the information or material known to the drafters of the provision. Where the language is ambiguous, so that it may support more than one meaning, each possibility must be weighed with reference to all those factors mentioned. A sensible meaning is to be preferred to a senseless or unbusiness-like one, which defeats the purpose of the provision. But those charged with the interpretation must be wary of and guard against replacing the actual words used in the provision with their subjective assessments of what is sensible or businesslike.
[38]	In sum: “the inevitable point of departure is the language of the provision itself, read in context and having regard to the purpose of the provision and the background to the preparation and production of the document.”
Discussion
The meaning of clause 17
[39]	LEDA, fortified by its view that the words used in clause 17 ought to be given their ordinary grammatical meaning and relying for its interpretation on the literal meaning of the clause, has ignored the proper approach expounded above. It ignores not only the context, purpose, and background to the preparation and production of the mining right, including clause 17, but the fact that its literal interpretation would produce an illegal result. A proper interpretation would eschew such a meaning.
[40]	Having accepted that the “agreement or arrangement dated 11 December 2006” refers to the shareholders’ agreement, LEDA nevertheless interprets the clause as imposing an obligation on DCM, which is not a party to that agreement, to enter into an agreement with it in terms of which it would be granted a 40% stake in the mining right. It ignores the fact that the clause requires “the parties” to the shareholders’ agreement to conclude a new agreement in terms of which it is to granted “a stake” which is not subject to the obligation to dilute. More worryingly still, LEDA construes the phrase “… It is being recorded that the parties shall within three months of executing the right, conclude a new agreement wherein Limpopo Economic Development Agency will hold 40% of stake in the right without an obligation to dilute”, as the grant to it, albeit indirectly, of a 40% share in the mining right that had been granted to DCM.
[41]	It is a requirement of the rule of law, which is integral to our Constitution, that the exercise of any public power by, for example, the Minister, or any other State functionary, must be authorised by law and not be arbitrary. Furthermore, as far as the delegation of the Minister’s powers are concerned, it is a matter of common sense that the Minister can only legally and effectively validly  delegate to a functionary such power as he, or she, has, and the Minister is not able to legally, validly and effectively delegate power that he or she does not have.
[42]	LEDA’s interpretation assumes that the Minister and the other functionaries, such as the Director-General and Regional Manager, granted it an interest, or stake in the mineral right, albeit indirectly, despite the fact that it never had an interest in the old order mining right; and had never applied for such a right either to be granted to it, or to be converted; and despite the fact that it had never demonstrated that it had met the requirements for the grant of such a right, or for its conversion, and regardless of the fact that it could not become a co-holder of the mining right without the obligations that the holder of such right would have in terms of the MPRDA. The assumption is clearly wrong, because neither the Minister, nor any of the mentioned functionaries, have any such powers. And a proper interpretation of clause 17 would not assign such powers to them.
[43]	In terms of section 22 of the MPRDA the person who wants a mining right must apply to the Minister in the manner provided by the Act, in particular section 22(1). The application is only accepted if it complies with the requirements of section 23 of that Act. The Minister must grant the mining right to such a person only if it, inter-alia, has access to financial resources and has the technical ability to conduct the proposed mining operations optimally; and its financing plan is compatible with the intended mining operation and the duration thereof; and it has provided financially and otherwise for the prescribed Social and Labour Plan; and has the ability to comply with the relevant provisions of the Mine Health and Safety Act; and is not in contravention of the MPRDA. Section 23(3) of the MPRDA provides that the Minister must refuse to grant a mining right if the application does not meet all the requirements spelled out in section 23(1). The same stringent requirements, duly adapted, apply to the renewal of a mining right.
[44]	Nowhere in the MPRDA is the Minister, or his or her delegate(s) empowered to grant a mining right to someone who has not applied and has not complied with the requirements for the grant of such a right. I have also not been referred to any law that permits that. The fact that the objects of the MPRDA, namely, in terms of section 2 (d) is to “substantially and meaningfully expand opportunities for historically disadvantaged persons, including women, to enter the mineral and petroleum industries and to benefit from the exploitation of the nation’s mineral and petroleum resources”, and in terms of section 2(f) to “promote employment and advance the social and economic welfare of all South Africans”, does not alter the position. Such persons would have to apply for the grant of such rights. Even a community that wishes to obtain a right to mine must lodge an application with the Minister for the grant of such a preferent right (section 104(1)). Further, even though an organ of State may be exempted from the provisions of section 22 in respect of any activity to remove any mineral from land, or for a particular purpose, that organ of State is still obliged to submit an environmental management program for approval (section 39(4)). In this matter LEDA has not contended that it has been exempted, either as contemplated in section 39, or at all.
[45]	Item 7 of Schedule II of the MPRDA deals with the continuation of an old order mining right, i.e. a right listed in Table 2 of the Schedule and in force immediately before the MPRDA came into effect. The holder of such a right (such as the DCM in this instance) was obliged to lodge the right for conversion in accordance with the prescribed procedure (item 7(2)). In terms of item 7(3) the Minister is obliged to convert such a right into a mining right if the holder of the right – (a) complies with the requirements of sub-item (2); (b) has conducted mining operations in respect of the right in question; (c) indicates that he, she or it will continue to conduct such mining operations upon conversion of the right; (d) has an approved environmental management programme; and (e) has paid the prescribed conversion fee. Item 7(4) provides that no terms and conditions of the old mining right that are in conflict with the Constitution or the MPRDA, remain in force, implying that those conditions that are consistent with (or not in conflict with) those laws continue to apply. What is significant is that there is no provision (at least express) in the Schedule which empowers the Minister to impose new terms and conditions when converting the right.
 [46]	Item 7(5) provides that the holder must lodge the converted right with the Mining Titles Office for registration and upon registration the old order mining right ceases to exist. Item 7(8) provides that if the holder fails to lodge the old order mining right for conversion before expiry of the period referred to in item 7(1), the right ceases to exist.
[47]	DCM was the sole holder of the old order mining right that was converted and it was the only one that applied for and complied with the requirements for conversion. The Minister could not have awarded LEDA a share in the converted right, even indirectly. LEDA not only never had such a share, but did not apply for conversion and never complied with the requirements for conversion. The Minister could not even have done this by requiring “the holder/empowering partner”, whoever that might be, to conclude a new agreement with LEDA in terms of which LEDA would be granted a 40% stake in the right. That would simply be to attempt to do what the Minister otherwise could not himself do in terms of the law. Even if LEDA had been a holder of, or had a stake (or interest, or say in an undivided share) in the old order mining right itself, but never applied for its conversion, that right of LEDA would have ceased to exist and the Minister could not arbitrarily grant LEDA a mining right (or share in the right) notwithstanding. That such a bizarre and illegal outcome, as contended for by LEDA, was never intended is borne out by a proper construction of clause 17.
[48]	The shareholders’ agreement referred to in clause 17 (i.e. the agreement dated 11 December 2006) was not entered into by DCM, but was concluded by the shareholders in ASAM, namely, EAMI and LEDA, none of whom were ever holders of the mining right in question. The Minister and his delegates must have been aware of that position. Now how could they be required to enter into an agreement effectively granting LEDA 40% share in the mining right of DCM, or at least without DCM or ASAM’s involvement? The Minister could never have intended what is not legally possible and enforceable. Unless, what is referred to by the “40% stake in the right” was the shareholding stake in ASAM, since that is what EAMI and LEDA clearly had a say over, and not to the mining right per se.
[49]	Until the sale, inter alia, of the mining right envisaged by DCM’s BRPs, LEDA never required that an agreement be entered into in terms of which it was granted 40% of the mining right itself. The correspondence that passed indicates that it was accepted, including by LEDA, that it was not the mining right itself that was being referred to, but the shareholding in ASAM. In a letter dated 14 November 2013 written by the chairman of LED, Mr Mofasi Lekota, to the chairman of ASAM, Mr Fengzi Nan, there is no mention at all about the alleged stake in the mining right. In the minutes of a board meeting of ASAM/DCM held on 15 January 2014 where, inter-alia, Mr Nan (the chairperson), Mr Lekota (the deputy chairperson), Ms Maroga (a director appointed by LEDA), and Ms Maja (a shareholder representative, i.e. of LEDA) were present, similarly, no mention is made about the alleged stake in the actual mining right. The subsequent conduct of the parties also does not bear out LEDA’s interpretation of clause 17, and instead, supports the interpretation of the respondents. This is also apparent from the minutes of a shareholders meeting of ASAM/DCM held on 13 May 2014, where, inter-alia, the same persons mentioned above the present and that the terms and conditions, in particular clause 17, of the mining right were discussed.
[50]	In any event, on the version of LEDA, it had no knowledge of its claimed entitlement and only became aware that it had an entitlement to a stake in the actual right after its attorneys “discovered” clause 17 and drew its attention to the wording of that clause. This clearly implies that there was never any conscious decision on its part, prior to such awareness, to claim such a stake, although the bona fides of that version are undermined by LEDA’s participation in the ‘out-bid’ process of DCM’s BRPs after it became aware of its alleged entitlement.
[51]	It is hard not to find that LEDA is being opportunistic and is, literally, clutching at straws, the main one being the inelegant and poor construction and wording of clause 17. The clause, read in its proper context, is referring to the shareholders’ agreement and to the parties to that agreement. Words such as “without an obligation to dilute” refers to what the parties to the shareholders’ agreement had agreed (in clause 5 thereof) concerning LEDA’s obligation to dilute 30% its shareholding in ASAM to only 10%, by transferring 30% of its 40% to the anticipated BEE partner, or shareholder. It only makes business sense if the requirement was for LEDA to no longer have an obligation to dilute, because it had such an obligation before (i.e. as per the shareholders’ agreement). The “new agreement” envisaged in clause 17 could only be a reference to an agreement amending the shareholders’ agreement, in particular, by amending LEDA’s shareholding to 40% without the obligation to dilute such shareholding, and further to provide for the transfer, at a later stage, of that shareholding to SOMCO.
[52] 	It makes no business sense to refer to the shareholders’ agreement as if DCM was bound by it and to require DCM to amend it, or require the actual parties to the shareholders’ agreement, namely, EAMI and LEDA, to enter into an agreement giving LEDA a 40% share in the mining right, which is not their asset, but DCM’s asset. LEDAs interpretation of clause 17 is, thus, objectively unsustainable.
[53]	Clause 17 merely means that the Minister (or his delegate(s)) required the shareholders’ agreement to be amended, insofar as it required that LEDA transfer 30% of its 40% stake in the shareholding of ASAM, which was the sole shareholder of DCM and effectively in control of DCM, to the BEE partner, and instead, provide that LEDA would hold onto its 40% shareholding stake until duly notified by the Minister, whereupon it had to transfer the entire 40% stake. This, according to clause 17 was to satisfy the objectives articulated in section 2 (d) and (f) of the MPRDA.
LEDA’s reliance on clause 15.2 of the shareholders agreement
[54]	For the interdictory relief it seeks, LEDA relies, essentially, on clause 15.2 of the shareholders’ agreement, based on its interpretation of clause 17 of the mining right. But the reliance is misplaced. The rejection of its interpretation of clause 17 is decisive of that issue. In any event, it is also unsustainable for any of the following reasons. DCM was not a party to and is not bound by the shareholders’ agreement. The shareholders’ agreement deals with the rights and obligations of LEDA and EAMI as shareholders of ASAM. Clause 15.2, in particular, deals with the resolutions of those shareholders, in terms of which they undertake to each other, not to dispose of the material assets of ASAM, unless the requisite shareholders’ resolution had been obtained. Even though ASAM is DCM’s sole shareholder, neither ASAM, nor its BRPs, is disposing of the mining right and, in any event, ASAM is not the holder of that mining right.
LEDA’s reliance on section 134(3) of the Companies Act
[55]	LEDA’s argument, that it has title interest as envisaged in section 134(3) of the Companies Act must also fail. The rejection of its interpretation of clause 17 of the mining right is also decisive of this issue. In addition, it must fail because the reliance is in any event misplaced and based on an erroneous reading of that section. The arguments made by the respondents and Cheetah in that regard has merit. LEDA has no security over any of the property of DCM (including its mining right), nor does it have any title interest over that right. Moreover, DCM is not indebted to LEDA, and no case has been made out to the effect that there is such indebtedness.
[56]	Section 134 is intended to protect creditors of a financially distressed company which is in business rescue. The section’s purpose is not to give persons, such as LEDA, who are not creditors (and at best are indirect beneficial shareholders) a say concerning the assets of the company in business rescue.
The grant of consent in terms of section 11 of the MPRDA
[57]	The respondents and Cheetah, inter-alia, submitted that the grant of such consent by the Minister has rendered the relief, sought by LEDA in these proceedings, moot. As pointed out earlier, LEDA has filed a notice appealing the Minister’s decision granting consent, relying on its unsustainable interpretation of clause 17 of the mining right and its misplaced reliance on section 134(3) of the Companies Act. LEDA has no prospect of preventing the sale of the mining right on the bases it has sought to do so. In any event, LEDA’s appeal to the Minister does not strengthen the case it sought to make in this application.
Relief
[58]	In the result: 
The application is dismissed with costs; such costs are to include the costs of two counsel of, respectively, the respondents and of Cheetah.	 

                                                                                _______________________
							                 P COPPIN
                                                                             JUDGE OF THE HIGH COURT
                                                                               GAUTENG LOCAL DIVISION

APPEARANCES : 

For the Applicant: 					PL Carstensen SC and DM Smith 
Instructed by: 					Tshisevhe Gwina Ratshimbilani Inc. 								(“TGR Attorneys”)

For the First to Sixth Respondent:  		AJ Eyles SC and R Ismail
Instructed by:  					Hogan Lovells (SA) Inc. 

For the Eleventh Respondent: 			GB Rome SC and A Milovanovic-Bitter
Instructed by: 					Thomson Wilks Inc.                                      
                                          
Date of hearing: 					13 November 2019					      
Judgment handed down:	 			29 January 2020.