1. INTRODUCTION 1

1.1 Previous comments 1

1.2 Principle of registration 2

1.3 Diagrams and plans 2

1.4 Sequence of comments 2

2. FIRST ISSUE OF CONCERN : IMMEDIATE DEREGISTRATION OF OLD ORDER

RIGHTS AND INABILITY TO REGISTER TRANSACTIONS IN RELATION

THERETO AT THE MINING TITLES OFFICE AND DEEDS OFFICES DURING THE

TRANSITIONAL PERIODS 3

2.1 The issue 3

2.2 The relevant clauses 4

2.3 The effect of the above clauses 8

2.4 The consequences if the Bill (once enacted) were to come into operation

immediately without being subject to schedule II MPRDA 12

2.5 Suggested amendments to the abovementioned three clauses 21

2.5.1 Clause 12 : The amended section 12 21

2.5.2 Clause 52 .23

2.5.3 Clause 53 24

3. SECOND ISSUE OF CONCERN : STATUS AND MANNER OF REGISTRATION OF

RIGHTS, AND CERTAIN RELATED ISSUES 25

3.1 Status of registrations 25

3.2 Consequences of and suggestions in regard to status of registrations 26

3.2.1 Statement of status of registrations 27

3.2.2 Registrable contracts 28

3.2.3 Empowering provisions in regard to registrations of prospecting rights and

mining rights, and related issues in regard to diagrams and plans 30

3.2.4 Marital status 37

3.2.5 Partnerships 39

3.2.6 Harmonisation with the Deeds Registries Act,1937 40

3.2.7 Destruction of old records 41

3.2.8 Access to Mining Titles Office 42

4. OTHER SIGNIFICANT ISSUES 42

4.1 No draft regulations available 43

4.2 Item 9 in schedule II MPRDA : continuation of reservations, permissions and

certain rights 43

5. DRAFTING ISSUES 44

5.1 Clause 1(a) of the Bill : s1 MTRA generally 44

5.2 Clause 1(b) of the Bill : deletion of definition of "holder" 44

5.3 Clause 1(c) of the Bill : s1 MTRA 45

5.4 Clause 1(e) : s1 MTRA 46

5.5 Clause 1(f) : s 1 MTRA 47

5.6 Clause 1(g) : s1 MTRA 47

5.7 Clause 1(h) : s1 MTRA 48

5.8 Clause 1(j) : s1 MTRA 48

5.9 Clause 5(a) of the Bill : s5(1)(a), (b), (c), (d) and (e) MTRA 48

5.10 Clause 5(d) of the Bill : s5(1)(n) MTRA 49

5.11 Clause 5(h) of the Bill : s5(1)(t) MTRA 50

5.12 Clause 5(i) of the Bill : new s5(1)(v) MTRA 50

5.13 Clause 8 of the Bill : s8 MTRA 50

5.14 Clause 10 of the Bill : s10(1) MTRA 51

5.15 Clause 12 of the Bill : s12 MTRA 51

5.16 Clause 13 of the Bill : s13 MTRA 51

5.17 Clause 14 of the Bill : s14 MTRA 52

5.18 Clause 15 of the Bill : s15 MTRA 52

5.19 Clause 16 of the Bill : s15A MTRA 52

5.20 Clause 17 of the Bill : s16 MTRA 53

5.21 Clause 19 : s17 53

5.22 Clause 20 of the Bill : s18 MTRA 54

5.23 Clause 23 of the Bill : ss21 to 23 and 25 to 30 MTRA 54

5.24 Clause 24 of the Bill : s24 MTRA 55

5.25 Clause 25 of the Bill : s31 MTRA 56

5.26 Clause 27 of the Bill : s35 MTRA 57

5.27 Clause 28 of the Bill : s37(1) MTRA 58

5.28 Clause 30(c) of the Bill : s39(5) MTRA 58

5.29 Heading to chapter IX MTRA 59

5.30 Clause 32(a) of the Bill : s41(1) MTRA 59

5.31 New s41(6) MTRA 60

5.32 New s41(7) 60

5.33 Clause 33 of the Bill : s42(2) MTRA 61

5.34 Clause 36 of the Bill : s45 MTRA 61

5.35 Clause 37 of the Bill : s46 MTRA 61

5.36 Clause 38 of the Bill : s47 MTRA 63

5.37 Clause 39 of the Bill : ss48 to 56 MTRA 63

5.38 Clause 43 of the Bill : s59 MPRDA 65

5.39 Clause 50 of the Bill : new s67A MTRA 65

5.40 Clause 52 of the Bill 66

5.41 Clause 53 of the Bill 67

6. CONCLUSION 67

The Bill : The Mining Titles Registration Amendment Bill, B24-2003

The Department : The Department of Minerals and Energy

DRA : Deeds Registries Act, 1937

LSA : Land Survey Act, 1997

MA : Minerals Act, 1991

MPRDA : Mineral and Petroleum Resources Development Act, 2002

MRA : Mining Rights Act, 1967

MTRA : Mining Titles Registration Act, 1967

PSA : Precious Stones Act, 1964

1. INTRODUCTION

1. Previous comments

The Chamber of Mines of South Africa thanks the Parliamentary Portfolio Committee for having afforded it the opportunity to comment on the Bill. The Chamber submitted written comments on the initial draft Bill to the Department of Minerals and Energy and also submitted comments to the Parliamentary Portfolio Committee on the draft Bill which was published in General Notice 959/2003 in Government Gazette 24634 of 31 March 2003. The present comments are a modified version of the latter comments, adjusted to take into account the changes which appear in the Bill, and are made in response to the invitation published in the Business Day on 9 May 2003.

2. Principle of registration

Fundamentally, MPRDA and the Bill accept the principles that prospecting and mining rights are real, registrable rights capable, subject to Ministerial consent, of being transferred, ceded, bonded, let, sublet, and amended, by way of registrable transactions. The Chamber has always been in favour of these principles and supports their adoption in MPRDA and in the Bill.

3. Diagrams and plans

The Chamber also notes that the Department has sought in the Bill to clarify that mining rights will be registered by reference to diagrams prepared and approved in accordance with LSA whereas prospecting rights and the various forms of permit and permission available in terms of MPRDA will be recorded and filed by reference to prescribed sketch plans and locality plans. Some issues in regard to such diagrams remain and will be raised below.

4. Sequence of comments

In the comments which follow, the Chamber will first raise two issues of concern in regard to the Bill, then discuss other significant issues, and finally offer comments on drafting issues.

2. FIRST ISSUE OF CONCERN : IMMEDIATE DEREGISTRATION OF OLD ORDER RIGHTS AND INABILITY TO REGISTER TRANSACTIONS IN RELATION THERETO AT THE MINING TITLES OFFICE AND DEEDS OFFICES DURING THE TRANSITIONAL PERIODS

1. The issue

When the draft Bill was first introduced by the Department to the Portfolio Committee, the draft Bill caused adverse reaction both in the Portfolio Committee itself and in the press, where it was alleged that it would :

- cause immediate deregistration of existing rights or at least

- make it impossible for existing rights to continue to be dealt with by way of registrable transactions during the transitional period provided for in MPRDA.

Unfortunately, those aspects remain of the greatest concern in the Bill. It may be that the issue is only an interpretational one, namely that the Department is perhaps of the view that its wording does not have the above effects, whereas the Chamber is of the view that the wording does or at very least can be interpreted to have the above adverse effects. The Chamber raised this issue pertinently in its previous comments to the Department and to the Portfolio Committee. The matter remains unresolved or at least unclear, however, and should be focused on again in view of its significance and severely adverse practical consequences.

2. The relevant clauses

The three clauses which give rise to the Chamber’s concern are the following, namely :

1. clause 12 of the Bill whereby s12 MTRA will be substituted by the following new s12 :

"Continuation of existing registers during the transitional period

12. Until such time as any register has been prepared and opened under section 11, the Director-General shall continue during the transitional period referred to in Schedule II to the Mineral and Petroleum Resources Development Act, 2002, to keep the corresponding register in use in the [Mining Titles] Mineral and Petroleum Titles Registration Office immediately prior to the commencement of this Act[ and to make therein, in respect of any matter provided for in this Act, the like entries as were customarily made therein prior to such commencement]..";

2. clause 52 of, read with the Schedule to, the Bill, neither of which was in the draft Bill, and which clause 52 reads as follows :

"52. The Deeds Registries Act, 1937 (Act No. 47 of 1937), is hereby amended to the extent set out in the Schedule.".

The Schedule repeals the following provisions in DRA, namely :

- s3(1)(l), which empowers the Registrar of Deeds to :

"register grants or leases lawfully issued by the Government, of rights to minerals";

- s3(1)(m), which empowers the Registrar of Deeds to :

"register notarial cessions, leases or sub-leases of rights to minerals and notarial variations of such cessions, leases or sub-leases, notarial cessions of such registered leases or sub-leases, notarial cancellations of such leases or sub-leases, certificates of registration of such rights, and reservations of such rights made in grants or transfers of land, and notarial variations of such reservations";

- s3(1)(q), which empowers the Registrar of Deeds to :

"register notarial prospecting contracts and notarial variations, renewals and cessions thereof and cancellations of such contracts";

- s17(5)(b), whereby a cession of mineral rights in the name of husband and wife is deemed not to constitute a division of mineral rights into undivided shares or an increase in the number of holders of undivided shares in the mineral rights as contemplated in s20 MA;

- ss70-74ter, which deal with registrations of certificates of mineral rights in various circumstances;

- ss84 and 85, which deal with registration and cancellation of registration of prospecting contracts;

- s90(1)(c), which deals with cancellation of registration of prospecting contracts;

- s90(2)(b), which deals with cancellation of registration of mineral leases or prospecting contracts.

The Schedule amends the following provisions in DRA, namely :

- s3(1)(n), which deals with mynpachtbriewen and which will be amended to delete the reference to registration thereof on the title deeds of the mineral rights affected;

- s67, which deals with reservations of personal servitudes, and which will be amended to remove the reference to such reservations in deeds of cessions of mineral rights;

- s90(1)(a), which deals with cancellation of registration of leases of land and mineral leases, and which will be amended to remove the reference to leases of rights to minerals;

- s102, which defines "immovable property", and in which definition the reference to mineral leases in the current para (a) will be deleted;

- s102, which defines "prospecting contract", and which definition will be deleted;

3. clause 53 of the Bill, which reads :

"53. This Act is called the Mining Titles Registration Amendment Act, 2003, and comes into operation on the date of commencement of the Mineral and Petroleum Resources Development Act, 2002.".

3. The effect of the above clauses

1. Notably, clause 53 of the Bill indicates that the Bill (once enacted) will come into operation on the date of commencement of MPRDA.
2. In terms of s111 MPRDA, MPRDA will come into operation on a date fixed by the President by proclamation in the Government Gazette. This is therefore a fixed date, such as, say, 1 August 2003.
3. However, in terms of s110 MPRDA, the laws listed for repeal in schedule I MPRDA, which include various sections of DRA, will be repealed "Subject to Schedule 2". That Schedule is the transitional schedule in terms of which existing old order rights will remain in force for periods of one year, two years and five years. In terms of the relevant items in schedule II (i.e. items 4 to 8), during these periods, an old order right will remain in force "subject to the terms and conditions under which it was granted". These terms include that the relevant rights will remain registered and can, in the case of common law rights, be freely ceded, let, sublet, bonded, amended and subgranted by way of registrable transactions. In the case of statutory rights, some (such as claims) may also be freely so dealt with by way of registrable transactions whereas in other cases they can be so dealt with after Ministerial consent has been granted.
4. It may be the Department’s interpretation of clause 53 that due to the reference to coming into operation of MPRDA, the coming into operation of the Bill (once enacted) will automatically be subject to schedule II MPRDA. However, the Chamber does not believe that that interpretation would be correct in that, in the above example, the Bill (once enacted) would immediately come into operation on 1 August 2003 without any qualification that such coming into operation is subject to schedule II MPRDA and hence subject to the remaining in force of the existing terms and conditions of existing old order rights, including that they may still be transferred and otherwise dealt with by way of registrable transactions, as mentioned above. In the Chamber’s comments to the Department, it therefore suggested that clause 53 (in the previous draft clause 52) :

"should therefore, like s110 MPRDA, contain wording indicating that it is subject to schedule II MPRDA".

5. For the same reasons, the Chamber suggested that the proposed new version of s12 MTRA should be amended to clarify this issue. Again it may be that in its reference in the proposed version of s12 MTRA to continuation of use of registers, the Department is of the view that thereby registrations of existing rights will remain in operation and still be possible after commencement of the Bill (once enacted). However, the wording indicates that this would only be so until the new registers are opened. The new registers will need to be opened immediately on commencement of the Bill (once enacted). As a result of the introductory wording to the proposed version of s12 MTRA the old registers would immediately be closed. Due to the transitional provisions in MPRDA, however, the old registers and the new registers will need to remain open concurrently during the transitional period. The Chamber accordingly in its comments to the Department suggested wording to clarify this.
6. Unfortunately, in the Bill, these aspects have not been rectified. The new clause 52 and the new Schedule which did not appear in the draft Bill give the impression that the provisions in DRA which are referred to in the Schedule will be repealed immediately on coming into operation of MPRDA, i.e. not "subject to schedule 2" as provided for in s110 MPRDA. The matter of repeal of the relevant provisions in DRA is already dealt with in schedule I read with s110 MPRDA so that the appearance of the new clause 52 and the new schedule in the Bill seems to be a duplication of what already exists in Schedule I MPRDA. The answer to this is probably that it is intended not to bring those provisions of Schedule I MPRDA which refer to DRA into operation, and that rather those aspects are intended now to be dealt with in clause 52 and the schedule in the Bill. There is however a fundamental difference in the effect that this will have, namely that Schedule I read with s110 MPRDA is "Subject to Schedule 2", whereas clause 52 and the Schedule in the Bill are not similarly so subject. In other words, the repeals of and amendments to the provisions mentioned in the schedule to the Bill will not be subject to the transitional arrangements in Schedule II MPRDA, and will in terms of clause 53, take effect immediately on coming into operation of MPRDA.
7. In the above regard, the Chamber also refers to the submissions made by letter dated 21 May 2002 by the Chief Registrar of Deeds to the Parliamentary Portfolio Committee at the time of the Committee’s hearings on the bill which led up to MPRDA, where he said inter alia the following :

"Ad schedule 1

This schedule contains certain amendments to the Deeds Registries Act … It is … suggested that the proposed amendments to the Deeds Registries Act be omitted in this schedule so that the Deeds Registries Act can be duly amended by the Department of Land Affairs at the time when the ‘old order’ rights referred to in the Bill cease to exist because the relevant sections of the Deeds Registries Act constitute the legal basis for the existence of such old order rights. It must also be pointed out that amending the Deeds Registries Act at the coming into operation of the envisaged Act is not advisable because, in terms of schedule II, the ‘old order rights’ will continue to exist for a certain period after the coming into operation of the envisaged Act.

Ad schedule II

… it must be pointed out that the Bill does not spell out what, from a Deeds Office point of view, the implications of the envisaged Act would be in relation to dealings with rights that are registered in the Deeds Office. For example, in terms of item 5* of schedule II, an old order prospecting right continues to be in force for a period two years after the coming into operation of the envisaged Act now the question is, can a holder of a registered prospecting contract still register its renewal as contemplated in section 84 of the Deeds Registries Act? In short, can the Deeds Office within the period stipulated in schedule II continue with transactions relating to rights to minerals, other than the deregistration referred to in the schedule?".

(*now item 6 in Schedule II MPRDA).

4. The consequences if the Bill (once enacted) were to come into operation immediately without being subject to schedule II MPRDA

1. As mentioned above, the Chamber still hopes that the problem might be due to interpretational differences. However the consequences of this are so momentous that the Chamber does not believe that the matter can be left to interpretation, and that the Department should clarify its intentions in this regard. If the Department does intend that old order rights be de-registered immediately on commencement of the Bill (once enacted) or that transfers and other registrable dealings in respect of old order rights should cease immediately on commencement of the Bill (once enacted), that would crystallise the issue and it could then be debated by the Parliamentary Portfolio Committee. On the plain wording of the Bill, that does indeed seem to be the Department’s intention. If however, the Department intends namely that deregistrations not occur immediately and that transfers and other registrable dealings will be able to continue during the transitional period, then the wording of the three provisions mentioned in 2.2 above needs to be amended so that the intention appears expressly and is put beyond interpretational doubt.
2. If the intention is that the Bill (once enacted) should come into operation immediately and not be subject to the transitional arrangements in schedule II MPRDA, i.e. :

- that deregistration will occur immediately on

- or at least that registrations will not be possible after

coming into operation (say on 1 August 2003) of MPRDA, that would have extremely adverse consequences for South Africa’s mining industry and for empowerment initiatives and would then be contrary to the objects and provisions of MPRDA and its related broad-based socio-economic empowerment Charter.

1. In terms of ss2(d), (e), (f) and (g) MPRDA, it is stated that the objects of MPRDA are inter alia to :

- expand opportunities for historically disadvantaged persons

- promote economic growth and mineral development

- promote employment and advance social and economic welfare

- provide for security of tenure in respect of prospecting and mining operations.

If existing rights are immediately deregistered or cannot after commencement of the Bill (once enacted) be dealt with by registrable transactions such as transfers, cessions, leases and bonds, this will have a hugely detrimental effect on the mining industry and on empowerment.

1. Immediate deregistration would convert registered mineral rights into personal rights which are not binding on third parties and would thereby endanger security of tenure. In referring to this possibility, the Chamber draws attention to the provisions of s12(2)(b) of the Interpretation Act, 1957, which provides that :

"(2) Where a law repeals any other law, then unless the contrary intention appears, the repeal shall not –

(b) affect the previous operation of any law so repealed or anything duly done or suffered under the law so repealed;" (Our underlining).

The Chamber however submits that the intention is not clear in the Bill in that regard, so that express wording should be provided to indicate that the Bill will not cause deregistration immediately of rights registered prior to the taking effect of the Bill (once enacted).

2. It will cause a freezing of the position on such date of commencement notwithstanding that practical day to day life will need to carry on. Transactions concluded prior to such coming into operation will need to be implemented, and transactions will need to be concluded during the transitional period provided for in schedule II MPRDA. Numerous examples of this exist.
3. Members of the Chamber have been using their best endeavours to conclude and implement empowerment transactions in order to give effect to s2(d) and to the Charter contemplated in s100(2), MPRDA. The transactions that have been and will be concluded need to be capable of implementation by way of registered transactions with empowerment companies, partnerships and other persons or vehicles, and need to result in registrable security of tenure for the persons empowered. If implementation is possible only by way of early conversion of old rights into new rights, this will cause added practical difficulties such as added administration, costs, and time. It would also, if the draft Mineral and Petroleum Royalty Bill, 2003 which was published on 20^th March 2003 by the National Treasury for comment, remains unamended in that regard, visit upon holders of rights (including empowerment holders) early liability for the State royalties provided for in that draft Bill.
4. Apart from empowerment transactions, there are everyday transactions involving sales of mines, whether as ongoing concerns or otherwise, rationalisation transactions as envisaged in s39 of the Taxation Laws Amendment Act, 1994 and sections 41 to 47 of the Income Tax Act, 1962, and others, which are concluded in furtherance of development of South Africa’s mineral resources and which result in economic growth, employment, and social and economic welfare.
5. There are ongoing acquisitions of prospecting, mining and mineral rights by domestic and foreign investors.
6. There are consequences which occur automatically, such as on death, insolvency, and liquidation, and involuntarily such as on foreclosure of bonds and on sales in execution, which need to be implemented by way of registrable transactions.
7. Bonds are of separate concern. Financial institutions have procured registration of bonds over old order rights, often to secure funding and financing of empowerment transactions. If on foreclosure of such bonds, the old order rights so bonded cannot be ceded, the bonds are rendered valueless. Furthermore, although existing bonds will on conversion of the underlying old order rights be transposed onto the new rights by virtue of items 6(6) and 7(6) in schedule II MPRDA, the bondholders have no means of compelling the mortgagors to convert. The position is exacerbated if no new bonds can be registered over old order rights after commencement of the Bill (once enacted).
8. In order to retain investor confidence in South Africa, which includes not only mining entities but also financial institutions which need to provide the necessary project funding and financing, it is essential that internationally recognised requirements of transferability, bondability, and security and continuity of tenure, be satisfied. The abovementioned three clauses and the Schedule in the Bill will have a dramatically adverse effect, will impede the objects of MPRDA, and will serve as a deterrent to empowerment, development, employment and welfare. As has been the case in the past, the share market can be expected to react negatively.
9. In the Chamber’s submissions to the Portfolio Committee on the Mineral and Petroleum Resources Development Bill, 2002 the Chamber mentioned that due to the provisions of ss 13 and 16(b) and (c) MA, prospecting permits and mining authorisations are not transferable and lapse on cession of the underlying old order rights. The Chamber again requests that, for the reasons mentioned above, items 6 and 7 of Schedule II MPRDA should be amended either in the present Bill, or in an amending Act to MPRDA, so that the provisions precluding the transfer of prospecting permits and mining authorisations and providing for the lapse of prospecting permits and mining authorisations upon transfer of the underlying rights to which they attach, as contained in ss 13 and 16(b) and (c) MA, will not apply. In place of that, transfer of prospecting rights and mining authorisations should be made possible subject to Ministerial consent in terms of s 11 MPRDA. This problem does not exist in the case of unused old order rights.

2. Section 110 MPRDA read with schedule I thereto already provides for the repeal of those provisions in DRA which deal with mineral rights, a topic now also addressed by clause 52 read with the schedule in the Bill. However, as mentioned above, unlike is the case in respect of clause 52 of the Bill, s110 MPRDA is prefaced by the words "Subject to Schedule 2", having the effect that the repeals which will be brought about by s110 MPRDA read with schedule I will not take effect during the transitional arrangements contained in schedule II MPRDA.
3. There are various parts of schedule II MPRDA with which clauses 12, 52 (read with the Schedule) and 53 in the Bill will conflict.

1. The objects in item 2 of schedule II are to ensure security of tenure for operations, give holders of existing rights an opportunity to comply, and promote equitable access to mineral resources. Immediate deregistration of existing rights, and the removal of any possibility of proceeding with registrable transactions, as apparently contemplated in the Bill, are contrary to security of tenure. The Bill thereby also does not provide the opportunity which is held out to holders of existing rights in schedule II to transfer and deal with those rights during the transitional period. In the process, it acts as a deterrent to access to mineral resources.
2. Items 4 to 8 of schedule II all provide for existing rights to continue in force subject to the terms and conditions under which they were granted, including, as mentioned above, continued registration and registrability, and the ability to continue to conclude transfers and other registrable transactions. The only way of effecting delivery of real rights in immovable property is by way of registered transfer or cession. If registrations can no longer be effected, the transactions can no longer be implemented. However, items 4 to 8, unlike apparently the Bill, provide for continuation of these vitally important terms and conditions of registration, registrability, transferability and so on, of existing rights.

5. Suggested amendments to the abovementioned three clauses

Given the gravity of the above consequences, the Chamber suggests that it is essential that the matter be put beyond interpretational doubt by way of amendments to the three clauses referred to in 2.2 above which will introduce express words into them reflecting continued registration and registrability of old order rights.

1. Clause 12 : The amended section 12

The Chamber suggests that :

1. the words "Until such time as any register has been prepared and opened under section 11" be deleted;
2. the word "corresponding" in the fourth line be deleted;
3. the word "register" in that line should become "registers";
4. after the words "in use" in that line be inserted the words "which were in use";
5. the words "and to make therein … the like entries as were customarily made therein prior to such commencement" at the end of the sentence be retained.

The fully substituted version would thus read :

"Continuation of existing registers during the transitional period.

12. [Until such time as any register has been prepared and opened under section 11, the]The Director-General shall continue during the transitional period referred to in Schedule II to the Mineral and Petroleum Resources Development Act, 2002 to keep the [corresponding] registers in use in the [Mining Titles] Mineral and Petroleum Titles Registration Office which were in use immediately prior to the commencement of this Act and to make therein [, in respect of any matter provided for in this Act,] the like entries as were customarily made therein prior to such commencement.".

2. Clause 52

1. The Chamber suggests that as in the case of s110 MPRDA, clause 52 of the Bill should be prefaced by the words :

"Subject to Schedule II to the Mineral and Petroleum Resources Development Act, 2002",

and that a proviso be added to ensure continued registration and registrability.

2. The amended clause 52 would thus read :

"52. Subject to Schedule II to the Mineral and Petroleum Resources Development Act, 2002, the Deeds Registries Act, 1937 (Act No. 47 of 1937) is hereby amended to the extent set out in the Schedule to this Act; provided however that the aforegoing shall:

(1) not affect the previous operation of the provisions so amended or repealed or anything duly done under the provisions so amended or repealed;

(2) be subject to the continuations in force on existing terms and conditions, including where applicable continued registrability of transactions relating thereto, provided for in items 4 to 9 in Schedule II to the Mineral and Petroleum Resources Development Act, 2002 for the periods therein provided.".

3. Clause 53

1. The Chamber suggests that as in the case of s110 MPRDA, the relevant part of clause 53 of the Bill should be prefaced by the words :

"subject to Schedule II to the Mineral and Petroleum Resources Development Act, 2002),",

and that a proviso be added to ensure continued registration and registrability.

2. The amended clause 53 would thus read :

"53. This Act is called the Mining Titles Registration Amendment Act, 2003 and, subject to Schedule II to the Mineral and Petroleum Resources Development Act, 2002, comes into operation on the date of commencement of that Act[the Mineral and Petroleum Resources Development Act, 2002]; provided however that such coming into operation shall :

(1) not affect the previous operation of the provisions of the principal Act prior to such coming into operation or anything duly done under such provisions;

(2) be subject to the continuations in force on existing terms and conditions, including where applicable continued registrability of transactions relating thereto, provided for in items 4 to 9 in Schedule II to the Mineral and Petroleum Resources Development Act, 2002 for the periods therein provided.".

3. SECOND ISSUE OF CONCERN : STATUS AND MANNER OF REGISTRATION OF RIGHTS, AND CERTAIN RELATED ISSUES

1. Status of registrations

Section 5(1) MPRDA contemplates that prospecting rights and mining rights will be real rights, a concept supported by the Chamber. In order for real rights in immovable property to be created, it is necessary for their existence to be known to the world. This is achieved by registration in a register to which the public has access (see Kleyn, D G and Boraine, A, Silberberg and Schoeman’s The Law of Property, Fourth Ed, p82ff). This has resulted in the South African legal system not rendering the registration of real rights dependent on the validity of the underlying contract or cause (the abstract as opposed to the causal theory of registration). (See Kleyn and Boraine, op.cit., pp78ff and 110ff). Two consequences flow from this, namely that :

1. it is necessary to ensure that registrations pursuant to MTRA continue to enjoy the status of registrations at the Deeds Office and hence have the effect of creating real rights; and
2. because the registrations will in themselves stand notwithstanding the validity or otherwise of the underlying contract or cause, the necessary control is exerted to ensure that the registrations once made do in fact reflect the correct legal position.

2. Consequences of and suggestions in regard to status of registrations

Various consequences flow from 3.1 above in regard to which the Chamber wishes to raise comments and make suggestions.

1. Statement of status of registrations

The proposals in the Bill indicate that there will be various types of transactions capable of being dealt with at the Mineral and Petroleum Titles Registration Office :

- registrations of prospecting rights and mining rights and transactions relating thereto (clause 5(a) of the Bill : the amended s5(1)(c) MTRA)

- recordals and filings of various forms of permits and permissions, namely reconnaissance permissions and permits, retention permits, mining permits and technical co-operation permits , and of financial provisions, environmental management plans and programs, and closure certificates (clause 5(i) of the Bill : the proposed new s5(1)(v) MTRA).

Although recordals and filings and even registrations of various types of permits and licences (for example claim licences and surface right permits) are currently possible in terms of MTRA, the Bill’s proposals go further in now empowering also recordals and filings of matters which do not pertain to real rights at all, being the financial provisions, environmental management plans and programmes, and closure certificates, mentioned in the version of s5(1)(v) MTRA proposed in clause 5(i) of the Bill. While the Chamber supports these additional recordals and filings, they are not truly proper to a Registration Office, and therefore might endanger the status of rights registered there. In order to avoid this, and since there has been no case law on the status and consequences of registrations at the Mining Titles Office, i.e. on whether registration there converts a right into a real right which is binding on third parties such as successors in title or creditors, the Chamber suggests that the Bill expressly deal with this by way of a new s2(4) MTRA along the following lines :

"(4) Registrations of rights in terms of this Act shall constitute real rights binding on third parties including but not limited to successors in title and creditors, and shall generally have the status and legal consequences of registrations of rights at Deeds Offices in terms of the Deeds Registries Act, 1937 (Act No. 47 of 1937).".

2. Registrable contracts

1. Because registrations of rights in property are intended to bring about real rights, s63 DRA provides that no deed purporting to create personal rights is capable of registration. The Bill retains the concept of registration of contracts as contained in s41 MTRA, and which concept in itself is supported by the Chamber. Section 41 MTRA however currently refers expressly to :

"any … contract referred to in section 5(1) … (n)",

the reference there being to registration of "prospecting contracts", which term is currently defined in s1 MTRA to refer to a deed conferring the right to prospect.

2. However, the Bill proposes to repeal s5(1)(n) without introducing any other empowering provision relating to registration of contracts, and furthermore does not propose to insert a definition of the term "contract". Possibly by implication the term must relate in some way to a prospecting right or a mining right although nothing is said in that regard in the amended s1 MTRA and no empowering provision appears in s5(1) that would clarify this. However, even if such implication is validly to be made, there is nothing restricting such contracts to contracts constituting real rights. Theoretically therefore, on such an interpretation, transport contracts, supply contracts, contractorship contracts, and so on, could be registered. The Chamber does not think that that is the intention, nor that such an arrangement would be desirable, in that again it would detract from the status of registrations, namely that they create real rights. The Chamber therefore suggests the insertion in s1 MTRA of the following definition of "contract" :

‘ "contract" means a contract relating to a right but excludes a lease, a sublease or a servitude, and excludes any contract which gives rise purely to personal rights’.

The reason for the exclusion of leases, subleases and servitudes is that they are dealt with separately in s46 MTRA.

The above definition would also enable an amended version of s5(1)(n) MTRA to be retained, along the following lines :

"(n) register [prospecting] contracts and notarial variations, extensions, renewals and cessions thereof and cancellations of such contracts;".

3. Empowering provisions in regard to registrations of prospecting rights and mining rights, and related issues in regard to diagrams and plans

1. One of the principal objects of the Bill as disclosed in its long title, and is :

"to re-regulate the registration of mineral and petroleum titles and other rights connected therewith and certain other deeds and documents".

Clause 2 of the Bill proposes to amend s2 MTRA to provide that the Mineral and Petroleum Titles Registration Office is the office for the registration of all mineral and petroleum titles.

2. MTRA is adjectival legislation which gives effect to aspects necessitated by substantive legislation. That this is so appears from s1 MTRA, in which terms defined in MRA apply to MTRA. The Bill understandably proposes to delete the reference in s1 MTRA to MRA and insert a reference to MPRDA. MTRA was drafted on the basis of being dependent on pre-existing provisions in the substantive legislation, being MRA and PSA at the time. Similarly, MTRA as amended by the Bill (once enacted) will be dependent on pre-existing provisions in MPRDA. However, in regard to provisions relating to registrations of prospecting rights and mining rights, in regard to the need for plans and diagrams, and in regard to aspects such as subdivision, MPRDA is less comprehensive than were MRA and PSA. Therefore those aspects, which previously were dealt with in those substantive laws, should now be dealt with in MTRA.
3. Prospecting rights and mining rights in themselves are not the subject of separate provisions, as were for example mining leases in terms of s49 MTRA. Since mining rights are probably most analogous to mining leases, the old s49 MTRA (which the Bill proposes to repeal) dealing with mining leases includes additional concepts that would be desirable in relation to the new forms of prospecting right and mining right. For example, s49 MTRA contains express references to the need for diagrams on amendment of the relevant mining lease area. Various other provisions in MRA provided guidance particularly where rights were dealt with in part only (i.e. by way of subdivision), such as ss61 to 63 dealing with transfer, mortgage and abandonment of base mineral and precious metal claims, ss71 and 72 dealing with abandonment, transfer and mortgage of mynpachten, and ss86 to 88 dealing with registration, abandonment, transfer and mortgage of Natal mining claims.
4. The Bill does however not make it clear what the procedures relating to registrations of prospecting and mining rights, and relating to recordals and filings of reconnaissance permissions and permits, mining permits, retention permits, and technical cooperation permits, actually are. Although there are empowering provisions in the amended s5(1)(c) for registration of prospecting rights and mining rights and in the amended s5(1)(v) for recordal and filing of permissions and permits, there are no further substantive provisions in terms of which such registrations and recordals and filings are to occur. In the Chamber’s comments to the Department, it speculated that prospecting rights and mining rights, being a form of contract, were intended to be dealt with as such in terms of s41 MTRA, and requested that a definition of "contract" be inserted in s1 MTRA to make this clear. However, no such definition has been inserted, and it now appears to the Chamber that it was not the intention of the Department that such rights be dealt with as contracts. Currently s49 MTRA deals with mining leases granted in terms of MRA, PSA and prior legislation. Such mining leases are probably the most analogous to mining rights in terms of MPRDA. There, as in the relevant provisions in MRA, PSA and prior legislation, provision was made for the need for diagrams to be lodged which depicted the mining lease area. Since MPRDA and the draft Regulations proposed to be made in terms thereof do not clarify aspects relating to plans and diagrams, it is essential that this be done in MTRA. The proposed definition of "diagram" in s1 MTRA does not expressly refer to mining rights but rather to real rights in general, which by virtue of s5(1) MPRDA would thus include both prospecting rights and mining rights. Although definitions of "diagram" and "plan" are proposed to be inserted into s1 MTRA, there are no substantive provisions actually requiring that a mining right be depicted on a diagram, or that a prospecting right, reconnaissance permission or permit, retention permit, mining permit or technical co-operation permit be depicted on a plan.
5. The above concerns could be addressed were provisions similar to s49 MTRA to be inserted early on in MTRA, such as in a new chapter IIIbis along the following lines.

" CHAPTER IIIbis

Registration of rights and recordals of permits and permissions

16bis. Registration of mining rights and production rights and other matters relating to such rights.-

(1) Every mining right or production right, every cession of the rights and obligations thereunder, and any amendment of the terms and conditions thereof, shall be in the form of a notarial deed describing by reference to a diagram the area for which it is granted, and shall be submitted for registration to the Director-General together with the diagram and such further originals or copies of the notarial deed and such other deeds and documents as may be prescribed.

(2) Whenever any mining right or production right :

(a) has been amended, modified, abandoned or cancelled, such deeds and other documents as may be prescribed shall be submitted to the Director-General who shall register such amendment, modification, abandonment or cancellation;

(b) is in any way dealt with as to part only, the part so dealt with shall be depicted on a diagram referred to in the relevant deed and which shall be lodged together with such deed when such deed is lodged for registration.

(3) In order to give effect to subsection (1), an applicant for a mining right or for a production right in terms of section 22 or section 83 of the Mineral and Petroleum Resources Development Act, 2002 shall within six months after being notified in writing by the Minister that his or her application has been granted, lodge with the Director-General a diagram of the area for which the right will be granted, and the mining right shall be executed by the Minister and the applicant as soon as possible after such diagram has been approved, confirmed or certified by the office of the Surveyor-General.

16quat. Recordal and filing of permissions and permits and other matters relating to such permissions and permits.

(1) Every reconnaissance permission, mining permit, retention permit, reconnaissance permit or technical co-operation permit shall refer to a plan depicting the area for which it is issued, and shall be submitted for recordal and filing to the Director-General together with the plan and such further originals or copies of the permission or permit and such other deeds and documents as may be prescribed.

(2) Whenever any reconnaissance permission, mining permit, retention permit, reconnaissance permit or technical co-operation permit :

(a) has been amended, modified, abandoned or cancelled, such deeds and other documents as may be prescribed shall be submitted to the Director-General who shall record and file such amendment, modification, abandonment or cancellation;

(b) is in any way dealt with as to part only, the part so dealt with shall be depicted on a plan referred to in the relevant document and which shall be lodged together with such document when such document is lodged for recordal and filing.".

4. Marital status

1. Clause 17 of the Bill in its proposed amendment of s16 MTRA proposes that rights be registered in the name of the holder of the right only, "even when such holder is married". As a consequence, the Bill proposes the repeal of all the existing provisions (such as ss16, 18, 29 and 30) in MTRA which relate to marital status. Although the Chamber has sympathy for the philosophy of simplification of MTRA as much as possible, it does not believe that MTRA can, for the reasons mentioned below, ignore marital status.
2. Due to the effects of the abstract theory of registration as referred to in 3.1 above, it is essential that the registrations reflect the legal reality brought about by South Africa’s matrimonial regime. So for example, if the holder of a right does not have contractual capacity without consent of his or her spouse to alienate a right which falls within the spouses’ joint estate, the registrations should reflect this. Otherwise he or she might purport to alienate the right without such consent, which would result in an invalid alienation and the consequent transfer would reflect an incorrect legal position. The effect of death of a spouse on the joint estate also needs to be taken into account. In this regard it is notable that s56(b) MPRDA causes lapsing of a prospecting right or mining right on death of the holder only when there are no successors in title. Similarly, when an unmarried person subsequently marries in community of property, the right will by operation of law become part of the joint estate, and the registration will need to reflect this.
3. The Bill in the above regard does not appear to the Chamber to be consistent with the Matrimonial Property Act, 1984, and will lead to uncertainty in regard to the contractual capacity and identity of holders and hence in regard to the validity or otherwise of registrations. Due to empowerment transactions, the marital status of historically disadvantaged natural persons who will increasingly hold rights, will remain important. The Chamber submits that it remains necessary for MTRA to operate within the broader matrix of the South African matrimonial laws.

5. Partnerships

1. The Bill proposes to repeal s22 and the proviso to s39(5), MTRA, which relate to partnerships. Partnerships are not in South African law separate legal entities distinct from the individuals who are the partners : see Bamford, B, The Law of Partnership and Voluntary Association in South Africa, Third Edition, p25. Accordingly, special provisions relating to partnerships appear in s22 MTRA (and correspondingly in s24bis DRA).
2. Many of the empowerment arrangements pursuant to s2(d) MPRDA and the Charter have taken and will continue to take the form of joint ventures, some of which will be partnerships (see Pezzutto v Dreyer 1992(3) SA 379(A)).
3. Again, since the abstract theory of registrations requires that the registrations reflect the actual legal situation, the Chamber submits that it would not be correct for the registrations not to reflect the details of partnerships or for MTRA not to disclose how registrations in relation thereto are to occur. The Chamber enquires how, in the absence of provisions in MTRA relating to partnerships, registrations relating to partnerships should occur. The Chamber submits that registrations merely in the names of the relevant individuals who are the partners, without any reference to the fact that they are in partnership, would be misleading because numerous legal consequences (such as on dissolution of partnerships), flow which do not flow if the parties are merely co-owners. These consequences are currently addressed in s22 MTRA.
4. There would be merit in not only retaining the provisions in MTRA which relate to partnerships, but in extending them also to relate to unincorporated joint ventures which do not constitute partnerships.

6. Harmonisation with the Deeds Registries Act,1937

Many of the provisions in MTRA are substantially similar or even identical to those in DRA. Again in order to ensure the status and correctness of registrations at the Mineral and Petroleum Titles Registration Office, the Chamber submits that it would be preferable for the existing harmonisation between MTRA and DRA to continue insofar as this accords with the underlying principles in MPRDA.

7. Destruction of old records

In terms of the current proviso to s5(1)(a) MTRA, the Director-General may "with due regard to any regulations made under section 10(1)(k)" destroy or otherwise dispose of any record which has been cancelled. Regulation 8 in Chapter VIII of the Regulations currently also so provides "whenever in his opinion and after consultation with the Director of the Archives the retention of such document is no longer necessary : Provided that no diagram shall be destroyed which the Surveyor-General has not previously cancelled".

The proposed amendment in clause 5(a) of the Bill to s5(1)(a) MTRA would delete the reference to this Regulation, and would refer to "any record referring to a title which is no longer valid in terms of this Act or any other law". This would therefore include all the titles to old order rights which will cease to exist in terms of schedule II, MPRDA. In furtherance of the status and sanctity of registrations as discussed above, the Chamber counsels against such destruction or disposal. Disputes could still arise which flow out of old titles. For example, in terms of schedule II MPRDA, the old title must be proved in order to convert to and apply for a new right in terms of items 6,7 and 8, and claims for compensation in terms of item 12 will be founded on the basis of the old rights. Furthermore, research often requires access to historical titles. There are numerous reasons why the history of titles remains relevant. In any event, destruction of very old titles may well conflict with the objects of the National Heritage Resources Act,1999.

8. Access to Mining Titles Office

As mentioned in 3.1, for rights registered at the Mining Titles Office to be real rights, it is necessary for their existence to be known to the world, i.e. for there to be constructive knowledge, which is achieved by registration in a register to which the public has access. Clause 8 of the Bill will amend s8(1) MTRA in a manner which will, unlike the existing s8(1) and unlike the corresponding s7(1) DRA, give the Director-General a discretion to permit access, in that it uses the word "may" rather than the word "shall". The Chamber submits that in order to retain the status of the Mining Titles Office, and of the rights registered there as real rights, the word "shall" should be used. The Chamber does however suggest that to preserve integrity and security of the records, s8(1) should be prefaced by the words "Subject to section 6(1)(e),".

4. OTHER SIGNIFICANT ISSUES

1. No draft regulations available

The Chamber is raising the present comments without having had the benefit of also having seen the draft Regulations which will be needed to implement the Bill. Its comments should therefore be understood in that light.

2. Item 9 in schedule II MPRDA : continuation of reservations, permissions and certain rights

Items 9(1) and (7) in schedule II MPRDA provide for the remaining in force of certain reservations or permissions for, or rights to, the use of surface, and of leases of the State’s interest in precious stones mines, all as granted or acquired under MRA, PSA and other repealed legislation. In regard to the firstmentioned category, item 9(3) provides for the continued ability to cede, transfer, let, sublet, subdivide, and/or mortgage them and for registration of such dealings at the Mining Titles Office. Similarly, leases of State’s interest remain capable of being so dealt with in accordance with their terms and conditions. The Bill however deals only with rights, permissions and permits acquired under MPRDA and not also with rights, permissions and permits which continue or remain in force in terms of MPRDA and which are contemplated to be registrable at the Mining Titles Office. The Chamber submits that the Bill needs to provide for this and refers to the suggested new s5(1)(w) MTRA in 5.12.3 below and to the suggested amended s56 MTRA and new ss56A and 56B MTRA in 5.37.3 below.

5. DRAFTING ISSUES

The comments below are raised on the clauses in the Bill in the order in which they appear in it.

1. Clause 1(a) of the Bill : s1 MTRA generally

By virtue of the introductory wording to s1 MTRA, definitions in MPRDA will apply to MTRA. However, the Bill repeats certain of such defined terms, such as exploration right, production right, prospecting right, reconnaissance permit, retention permit, and technical co-operation permit, while omitting others such as the all-important mining right. The Chamber suggests that either way, the approach should be consistent.

2. Clause 1(b) of the Bill : deletion of definition of "holder"

The consequence of the deletion of the existing definition of holder in MTRA is that the definition of holder in MPRDA will apply, namely the person to whom the right or permit has been granted or such person’s successor in title. The Chamber submits that this raises the problem identified in 3.2.4 above in regard to marital status.

3. Clause 1(c) of the Bill : s1 MTRA

1. In relation to the definition of ‘diagram’, the Chamber submits that :

1. amendments to LSA in order to embody the necessary empowering provisions relating to the diagrams necessary for MTRA, would be required, unless the Surveyor-General is satisfied that the current provisions of LSA will suffice for this purpose;
2. the reference to "a real right" would by virtue of s5(1) MPRDA include a prospecting right, whereas by reference to the definition of "plan" which refers to "prospecting", the intention seems to be that a plan is sufficient for purposes of prospecting rights : possibly the definition of "diagram" should be amended to insert after "real right" the words "(excluding a prospecting right)".

2. As mentioned in 3.2.2, the Chamber suggests the insertion of a further additional definition, namely :

‘ "contract" means a contract relating to a right but excludes a lease, a sublease or a servitude, and excludes any contract which gives rise purely to personal rights;’.

The reasons for this are :

1. to clarify that the intention is indeed that the term ‘contract’ (as used for example in s41 MTRA) relates to rights registrable at the Mining Titles Office;
2. that only contracts which give rise to real rights may be registered (similarly to what is provided in s63 DRA); and
3. that since leases, subleases and servitudes are at common law also contracts, to exclude leases, subleases and servitudes from this definition because leases, subleases and servitudes are dealt with separately in s46 MTRA.

4. Clause 1(e) : s1 MTRA

1. In the definition of "mineral title" the references to "explore, produce" should be deleted because they relate to petroleum and not to minerals.
2. The term "mining right" should be defined, and should refer not only to mining rights granted under s23 MPRDA, but also to mining rights acquired pursuant to a conversion in terms of item 7 in schedule II MPRDA.

5. Clause 1(f) : s 1 MTRA

Some of the concepts proposed to be deleted should be retained since the relevant items will still be capable of being bonded. For example, stands contemplated in item 9, Schedule II MPRDA, are capable of being bonded as appears from ss111 and 132 MRA. The Chamber suggests the following amended definition :

‘ " mortgage bond" or "bond" means a mortgage bond attested by the Director-General specially hypothecating a right granted, acquired, or which remains in force and is registrable at the Mining Titles Office in terms of the Mineral and Petroleum Resources Development Act, 2002, or an interest in any of the aforegoing, including a contract, servitude, lease or sublease, insofar as such aforementioned item is capable of being mortgaged;’.

6. Clause 1(g) : s1 MTRA

It is suggested that the definition of ‘plan’ read :

‘ "plan" means a prescribed sketch plan or locality plan defining the area for which a prospecting right, exploration right, reconnaissance permission, reconnaissance permit, retention permit, mining permit or technical co-operation permit is granted or issued;’.

7. Clause 1(h) : s1 MTRA

In the definition of "prospecting right" :

1. the reference to s16 should be replaced by a reference to s17;
2. reference should additionally be made to prospecting rights acquired pursuant to a conversion in terms of item 6 in schedule II MPRDA.

8. Clause 1(j) : s1 MTRA

1. In the definition of "right", the Chamber suggests the insertion after the word ‘registered’ of the words ‘or capable of being registered’.
2. The Chamber suggests that a definition of ‘servitude’ be inserted, referring to a servitude over a right, this to distinguish these servitudes from servitudes registered in terms of DRA.

9. Clause 5(a) of the Bill : s5(1)(a), (b), (c), (d) and (e) MTRA

1. For the reasons in 3.2.7 above, the Chamber urges the deletion of the proviso to s5(1)(a) and of s10(1)(k) MTRA and of Reg 8 in Chap VIII of the Regulations.
2. For the reasons in 4.2, s5(1)(c) should refer to rights granted "or which remain in force and are contemplated to be registered at the Mining Titles Office" in terms of MPRDA.
3. In s5(1)(d), reference should additionally be made to lapsing.
4. In s4(1)(e) :

1. after "subleases" in the first line, the words "of any right" should be inserted;
2. as in the present s5(1)(m) MTRA, reference should additionally be made to renewal, release and lapsing, and to the possibility of all transactions being "in whole or in part".

10. Clause 5(d) of the Bill : s5(1)(n) MTRA

In view of the retention of s41 MTRA, the Bill should not delete but rather should amend s5(1)(n) MTRA to delete the word "prospecting" where it appears therein.

11. Clause 5(h) of the Bill : s5(1)(t) MTRA

This should refer to any mineral title, petroleum title, permit, permission or any other right.

12. Clause 5(i) of the Bill : new s5(1)(v) MTRA

1. This should refer additionally to all renewals, modifications, amendments, abandonments, cancellations and lapsings.
2. After the word "certificates" the words "made, approved, remaining in force, or".
3. In the light of 4.2 above, the Chamber proposes the insertion of the following new s5(1)(w) MTRA :

"(w) register reservations, permissions, rights and leases, referred to in item 9 in schedule II to the Mineral and Petroleum Resources Development Act, 2002 and all transactions relating thereto contemplated in or pursuant to the said item 9.".

13. Clause 8 of the Bill : s8 MTRA

1. For the reasons in 3.2.8, the Chamber suggests that the permissive "may" should be replaced by the directory "shall", but that s8(1) be prefaced by the words "subject to s6(1)(e),".
2. Section 8(2) seems to contain a typographical error whereby the reference to sheriffs and messengers of the Court has been omitted.

14. Clause 10 of the Bill : s10(1) MTRA

1. The Chamber suggests the retention of s10(1)(j) to enable regulations to be made in respect of forms not otherwise provided for.
2. In the light of comment 3.2.7, the Chamber requests the removal of the reference to destruction of records in s10(1)(k) MTRA.

15. Clause 12 of the Bill : s12 MTRA

Please see the comments and suggested amendments in 2 above.

16. Clause 13 of the Bill : s13 MTRA

It seems to the Chamber that ss13(1) and (2) should be subject to s13(3), and not that s13(3) should be subject to ss13(1) and (2) : please compare the existing proviso to the existing s13(1).

17. Clause 14 of the Bill : s14 MTRA

The current provisos (i) to (vi) to s14(1) could still have application and the Chamber suggests their retention. In relation to proviso (v) please see comment 3.2.4 in regard to marital status.

18. Clause 15 of the Bill : s15 MTRA

Dependent on how the word ‘contract’ is ultimately defined, it is suggested that s15(2) read :

‘(2) Subject to subsection (1), no contract (other than a cession of a mortgage bond), servitude, lease or sublease shall be registered unless it has been attested by a notary public.’.

19. Clause 16 of the Bill : s15A MTRA

The current wording of 15A(1) corresponds to that in s15A DRA (read with Reg 44A in force in terms of that Act), in casting liability only in respect of certain aspects, on the relevant conveyancer. This was negotiated at the time with the law societies on the basis that a conveyancer can accept liability only in regard to those aspects in regard to which the conveyancer can satisfy himself or herself. The proposed amendment to s15A(1) MTRA casts open-ended responsibility on conveyancers and does not harmonise with the corresponding provision in DRA. In preference to the proposed amendments to s15A(1) MTRA, the solution would be to include in the amending Regulations to be made in terms of MTRA, a regulation similar to Reg 44A made in terms of DRA.

20. Clause 17 of the Bill : s16 MTRA

 

1. In regard to the deletion of most of s16 because of its references to aspects concerning marital status, please refer to comment 3.2.4 above. For the reasons there stated, the Chamber suggests that s16 not be amended in the manner proposed in clause 17 of the Bill, although the Chamber agrees that details of the holder’s identity number or registration number should additionally be provided as suggested in the proposed amended s16(1).
2. In regard to the above the Chamber submits that it is desirable that the provisions of MTRA remain in harmony with the corresponding provisions in DRA. Section 16 MTRA corresponds with s17 DRA.

21. Clause 19 : s17

1. Chap IV in which s17 falls deals only with transfers and cessions, and not with mortgage bonds in themselves, so that a reference to mortgage bonds should not appear in s17(1) and has in fact correctly been retained in s31(1) MTRA.
2. A typographical error has occurred in the first line of s17 where, if reference to mortgage bonds is, notwithstanding 5.21.1 above, to be retained, the wording should refer to "deeds of transfer, mortgage bonds, and cessions of mortgage bonds". Other cessions of rights (i.e. excluding cessions of mortgage bonds) are not executed by conveyancers in accordance with s17, but by notaries in accordance with the new s15(3) (which corresponds with the old s17(2)).The proposed s17 therefore currently conflicts with the proposed s15(3) in that regard.

22. Clause 20 of the Bill : s18 MTRA

In the light of comment 3.2.4 above, the Chamber suggests the retention of s18 MPRDA, which is the equivalent of s21 DRA.

23. Clause 23 of the Bill : ss21 to 23 and 25 to 30 MTRA

The Chamber has the following comments in respect of the following sections which are proposed to be repealed.

1. s21 (unascertained children : compare s25 DRA) : s56(b) MPRDA provides for lapsing of rights and permits only if there are no successors in title. Although it may be only remotely possible that the Minister will consent in terms of s11 MPRDA to the transfer of a right to children, the possibility does exist and for which s21 MTRA might still be relevant.
2. s22 (partnerships : compare s24bis DRA) : for the reasons in comment 3.2.5 above, it is recommended that s22 be retained.
3. s23 (certificates of registered title in respect of rights held under licence) : the Chamber agrees with the deletion of s23.
4. ss28, 29 and 30 (joint estates, change of marital regime or status : compare ss45 and 45bis DRA) : in the light of comment 3.2.4 above, the Chamber suggests the retention of ss28-30.

24. Clause 24 of the Bill : s24 MTRA

1. The proposed s24(1) is an amalgamation of the old ss24, 25 and 26 MTRA. In order to capture all the relevant concepts, it is suggested that the first few lines of s24 read :

"Certificates of registered title of one or more rights held under one title deed and of undivided shares

(1) Any person who :

(a) holds two or more rights or undivided shares in one or more rights under one title deed, or

(b) is the joint holder of a right, the whole of or shares in which are held by such person and others under one title deed,

may, subject to the further provisions of this Act, apply for a certificate of registered title in respect of one or more of such rights or undivided shares held by him or her therein.".

2. Although the proposed ss24 (3) and (4) are drawn from the current s25(1), the Chamber suggests that they are not necessary or desirable and should be omitted.

25. Clause 25 of the Bill : s31 MTRA

1. Section 31(3) MTRA is equivalent to s50(3) DRA (bonds for building purposes). Many bonds over prospecting or mining rights will be for project funding or financing (compare s11(3) MPRDA), i.e. for building purposes. In the light of the special requirements in s32 MPRDA (equivalent to s51 DRA) in respect of bonds securing future debts, it would be preferable for bonds for building purposes to be treated as bonds securing existing debts, as is achieved by s31(3) MTRA. The Chamber therefore suggests the retention of s31(3), but that after the words ‘building purposes’ be added the words ‘or for the purpose of funding or financing a prospecting or mining project’, being the words used in s11(3) MPRDA. Similar words are used in s27(8)(b) MPRDA dealing with bonds over mining permits.
2. Although the Chamber’s members do not have much interest in mining permits, this would be an opportune juncture for Parliament to address the question of how it is intended to give effect to s27(8)(b) MPRDA which provides that although mining permits are not transferable, they are bondable for project funding or financing. Firstly, unless mining permits are transferable, they will not be capable of being sold in execution on a foreclosure of the bond, which frustrates the object of registering a bond. Secondly, mining permits are merely in terms of the new s5(1)(x)(ii) MTRA, to be recorded and filed. If mining permits are not registered, then a bond similarly will not be registrable over them.

26. Clause 27 of the Bill : s35 MTRA

The proposed s35(4)(b) is drawn from the present s44(4) MTRA but does not correctly reflect the purpose of s44(4) which is to enable a principal bond and a surety bond to appear in the same document. The Chamber suggests that the wording of the current s44(4) be carried forward verbatim into the new s35(4)(b).

27. Clause 28 of the Bill : s37(1) MTRA

Section 37(1) correctly prohibits transfer or cession of a mortgaged right unless the bond is cancelled or the right is released from operation of the bond. Section 56(f) MPRDA however additionally provides that a right lapses on abandonment. The rights of the bondholder are not protected on abandonment. This will not find favour with prospective lenders meaning that it will be difficult to raise project funding. The Chamber thus suggests that s37(1) be amended to cover this and hence to read :

‘(1) No transfer, cession, or lapsing by abandonment as contemplated in section 56(f) of the Mineral and Petroleum Resources Development Act, 2002, of any mortgaged right shall be attested, executed or registered by the Director-General, and no such abandonment shall be of any force or effect, until … ((etc))’.

28. Clause 30(c) of the Bill : s39(5) MTRA

For the reasons in comment 3.2.5, the Chamber submits that the proviso (dealing with partnerships) to s39(5) should not be repealed.

29. Heading to chapter IX MTRA

The heading should be amended to delete the reference to tributing agreements.

30. Clauses 32(a) and (b) of the Bill : ss41(1) and (2) MTRA

The Chamber refers to :

1. comment 5.3.1 above in regard to the distinction between diagrams for mining rights and plans for prospecting rights, and suggests that s41(2) be amended to refer to "diagram (in the case of a servitude or contract relating to a mining right) or plan (in the case of a servitude or contract relating to a prospecting right)";
2. comments 5.3.2 and 5.8.2 above in regard to the insertion in s1 MTRA (clause 1 of the Bill) of definitions of ‘contract’ and of ‘servitude’;
3. comment 5.10 above in regard to the retention of a modified version of the existing s5(1)(n) MTRA (clause 5(d) of the Bill).

31. New s41(6) MTRA

The Chamber suggests that it would be desirable if the following new s41(6), which is similar to the proposed s46(4), were inserted :

‘(6) Whenever any servitude or contract has been, ceded, amended, modified, abandoned or cancelled, either wholly or in part, a diagram or diagrams (in the case of servitude or contract relating to a mining right) or a plan or plans (in the case of a servitude or contract relating to a prospecting ) depicting the relevant part or parts, and such other deeds and documents as may be prescribed, shall be submitted to the Director-General, who shall register such cession, amendment, modification, abandonment or cancellation.’.

32. New s41(7)

In order to protect the rights of holders of servitudes, contracts, and bonds, it is suggested that the following new s41(7) be inserted :

‘(7) No abandonment or consensual cancellation of a right which is subject to a servitude or contract shall be of any effect or be registered save on lodgment with the Director-General of the written consent of the holder of such servitude or contract, unless the abandonment or cancellation of the servitude or contract as the case may be, is simultaneously so registered.’

33. Clause 33 of the Bill : s42(2) MTRA

1. Only reservations in favour of transferors or cedents should be capable of being embodied in a transfer or cession. The words ‘if the reservation is in favour of the transferor or cedent’ should therefore be retained.
2. In the light of comment 3.2.4 dealing with marital status, the whole of the wording proposed to be repealed should be retained.

34. Clause 36 of the Bill : s45 MTRA

Since by virtue of s56(2) MPRDA rights do not lapse on death of the holder if there are successors in title, the possibility, albeit remote, exists that rights could still be subject to a fideicommissum. Section 45 should therefore not be repealed.

35. Clause 37 of the Bill : s46 MTRA

1. Since leases and subleases are contracts, the definition of ‘contract’ suggested in 5.3.2 excludes leases and subleases.
2. The new s46(3) should additionally refer to renewals.
3. The new s46(4) should also require a diagram (in the case of leases or subleases relating to mining rights) or a plan (in the case of leases or subleases relating to prospecting rights) when the lease or sublease itself relates to only part of the area of the right or the lease.
4. The insertion of the following new ss46(5) and (6) is suggested.

‘(5) No abandonment or consensual cancellation of :

(a) a right which is subject to a lease or sublease shall be of any effect or be registered save on lodgment with the Director-General of the written consent of the holder of such lease or sublease;

(b) a lease which is subject to a sublease shall be of any effect or be registered save on lodgment with the Director-General of the written consent of the holder of such sublease,

unless the abandonment or cancellation of the lease or sublease is simultaneously so registered.

(6) No abandonment, consensual cancellation, or cession, of a lease or sublease which is subject to a mortgage bond shall be of any effect or be registered save on lodgment with the Director-General of the written consent of the holder of the bond.’.

36. Clause 38 of the Bill : s47 MTRA

1. In the second line of the proposed s47(3), the word "right" should be a reference to "lease or sublease".
2. The proposed s47(4) does not seem to relate to the topic of terminations as dealt with in s47, nor does it on its wording relate to leases or subleases.

37. Clause 39 of the Bill : ss48 to 56 MTRA

The Chamber has the following comments on the following of the sections which are proposed to be repealed.

1. s51 (surface right permits) : since surface right permits will in terms of items 9(1), (2) and (3) in schedule II MPRDA, remain in force, be registered at the Mining Titles Office, and dealings therewith will be registered at the Mining Titles Office, the Chamber suggests that a new provision such as the new s5(1)(w) suggested in 5.12.3 above, will need to be inserted.
2. s52 (stands) : similarly, items 9(1), (2) and (3) in schedule II MPRDA apply to stands, so that the suggestion in 5.37.1 applies to these as well.
3. s56 (precious stones rights) : section 56(3) refers inter alia to leases of the State’s interest in a precious stones mine in terms of s74 PSA or corresponding provisions of a prior law. Such leases remain in force by virtue of item 9(7) in schedule II MPRDA. Possibly therefore s56 should not be wholly repealed, but could be replaced by the following modified version of the current ss(2) and (3) :

‘After the commencement of the Mineral and Petroleum Resources Development Act, 2002, any registration of any transaction relating to a lease of the State’s interest in a precious stones mine granted under section 74 of the Precious Stones Act, 1963 (Act 74 of 1963) or corresponding provisions of a prior law, shall be effected in the Mineral and Petroleum Titles Registration Office.’.

In implementation of the provisions of item 9 in schedule II, which deals with ‘surface use reservations, permissions or rights’ and with ‘leases of the State’s interest in a precious stones mine’, it would be useful, as clause 50 of the Bill proposes to do in relation to converted rights envisaged in schedule II MPRDA, to embody possibly as new ss56A and 56B in MTRA, provisions cross-referring, insofar as surface use reservations, permissions and rights are concerned, to items 9(1) to 9(6) in schedule II, and insofar as leases of the State’s interest in a precious stones mine are concerned, to item 9(7).

38. Clause 43 of the Bill : s59 MPRDA

For the reasons in 3.2.5, the Chamber suggests that the references to partnerships in s59 MPRDA should be retained.

39. Clause 50 of the Bill : new s67A MTRA

Although the Chamber agrees in principle with the proposed s67A, the heading and wording of it do not currently accord with the wording in the relevant items, being items 4(5) and (6), 5(5) and (6), 6(5) and (6), and 7(5) and (6), in schedule II MPRDA, in regard inter alia to when the period begins running. In order that the wording of s67A will accord with that in the relevant items, the following amended wording is suggested.

‘Registration of rights into which OP26 rights and old order rights are converted

67A (1) The holder of a right into which an OP26 right or an old order right has been converted in terms of the provisions of schedule II to the Mineral and Petroleum Resources Development Act, 2002 must lodge such converted right within 90 days from the date on which he or she received notice of conversion, at the Mineral and Petroleum Titles Registration Office for registration simultaneously with the deregistration at the Deeds Office or the Mineral and Petroleum Titles Registration Office of the relevant OP26 right or old order right as the case may be.

(2) If a mortgage bond has been registered in terms of the Deeds Registries Act, 1937 (Act 47 of 1937) or this Act, over the OP26 right or the old order right, the right into which the OP26 right or the old order right was converted must be registered in terms of this Act subject to such mortgage bond, and the Director-General must make such endorsements on every relevant document and such entries in his or her registers as may be necessary in order to give effect to this subsection (2), without payment of transfer duty, stamp duty, registration fees or charges.’.

40. Clause 52 of the Bill

Please see the comments and suggestions in 2 above.

41. Clause 53 of the Bill

Please see the comments and suggestions in 2 above.

6. CONCLUSION