Fletcher and Fletcher v Bulawayo Waterworks Co Ltd; Bulawayo Waterworks Co Ltd v Fletcher and Fletcher

• Jurisdiction: South Africa
• Court: Appellate Division
• Judge: Innes CJ, Solomon JA and CG Maasdorp JA
• Judgment Date: 04 November 1915
• Citation: 1915 AD 636
• Hearing Date: 06 September 1915

Innes, C.J.:

On May 9, 1914, the defendant company leased from one Slot a piece of ground upon the bank of the Little Umguza River for the purpose of obtaining water to augment the supply which it was under an obligation to furnish for the use of the town of Bulawayo. The lease, which was for a term of three years renewable for two successive similar periods, entitled the lease to sink wells, lay pipes and erect buildings and machinery upon the property. Intending to exercise the rights thus conferred the company sank a well, within what it believed to be

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the boundary of Slot's land, and placed certain sheds, machinery and piping thereon. From this well and by means of this plant water was pumped for the use of the township from August till towards the end of last year. In truth, the well and portion of the plant fell just beyond the boundary of the leased property and within the limits of the plaintiff's adjoining land. This action was brought in the High Court of Southern Rhodesia to settle the disputes which arose in consequence. Upon the pleadings as filed the points raised were the plaintiff's right to an order of ejectment and damages, and to an account of all water taken from the well, and payment of profits; and the defendant's right to retain possession until compensated for the improvements made upon the property. These were put at £500, being the alleged cost of the well; the shed and machinery were removed before the suit came to trial. The trial Court found for the plaintiff for £50 damages and costs, and ordered the defendant to give up possession on payment of £100 in respect of improvements. With this order both parties are dissatisfied. The plaintiff appeals against the award of compensation and the refusal to direct an account of water and profits; and the defendant appeals against the order as to damages and costs.

The main appeal falls into two parts; the one is concerned with the question of compensation, the other relates to the claim for an account of the water taken and of the profits made thereon. The former again resolves itself into three questions: (a) is the defendant company entitled to compensation for improvements? (b) if it is, should the assessed amount be interfered with? (c) is the jus retentionis available in respect of it? Dealing with these points in their order, the only improvement which we have to consider is the well sunk on plaintiff's land; the plant has been removed, and, dogs not enter into the present dispute. In sinking that well the company thought that it was doing so in terms of a lease which would have entitled it to the benefit of the improvement for a definite number of years, at the end of which period the well would have reverted to Slot. But it was mistaken; the well was sank upon land not covered by the lease, and the owners of that land sued for ejectment. Clearly the company was not in law r of the ground upon which it trespassed; it did not hold the land or effect the improvement pro doming but as a more

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occupier, entitled to do what it did but laying no claim to the ownership of the soil. Under these circumstances careful inquiry would have been necessary into the legal position of the company with regard to compensation, were it not for the decision of this Court in Rubin v Botha. The plaintiff in that case had erected certain buildings upon the defendants land, under what he believed to be a binding contract of lease. That document cast upon him the obligation of erecting the said buildings upon the leased property; he was to pay no rent, and at the expiration of the term the buildings were to become the property of the defendant. As a fact, the so-called contract was wholly invalid and of no, effect in law, and the plaintiff was ejected after he had occupied the property for three years. It was common cause that compensation was payable. The dispute was as to the amount. And in order to decide that issue it became necessary to settle the basis of calculation, and therefore the legal rights of the claimant. It was laid down by the considered judgment of the majority of the Court that the plaintiff, though not possessor but a mere occupier, was entitled to be paid for the improvements to the extent to which they had enhanced the value of the property less a deduction for his three years' use and occupation. In other words, the plaintiff was placed in the position of a bona fide possessor, save that his compensation was equitably reduced in view of the particular circumstances. That was, no doubt, a very special case; and its operation is not likely to be extended. But it certainly did decide that a person who had made improvements upon the land of another, not as possessor, but under the mistaken idea that he was a lessee was entitled to compensation on the same basis a possessor, subject to an equitable deduction necessitated by, the special circumstances. And that principle is Inclusive of the company's right to compensation in this case, unless there is some reason to the contrary which was not present in Rubin v Botha. Because here, as there, the improvements were made by a bona fide occupier who believed that he had rights under a lease; and here as there the lease upon which reliance was placed was found to have no operation on the property improved. True the exclusion of such operation was due to different causes in the two cans. But that cannot alter the principle. And the decision in the earlier case must in principle apply to the present dispute. So that the

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company is entitled to-compensation, unless there is some ground, which did not exist in Rubin v Botha, for depriving it of that right.

Now the civil law allowed a very wise discretion to a Judge dealing with relief of this nature. And the Courts of Holland proceeded on the same lines. The general basis, in regard to useful expenditure, was the extent to which the property had been enhanced in value thereby. But in the case of costly improvements it is obvious that a rigid application of that general test might sometimes involve very considerable hardship. And the authorities recognising that an equitable principle should not be so applied as to produce inequitable results, indicated the lines upon which a Court should proceed in order to obviate such results (see Gluck, Vol. 6, sec. 592; Voet, 6, 1, 36). The measure of enhancement would generally be less than the expenditure actually incurred; but if in any instance it proved to be greater, then only the lesser amount was to be awarded as compensation. If the improvements could be separated from the property without damage to the latter, and if in the opinion of the Judge they were such as the owner would not have effected himself, then he was to be allowed to remove them and permit their removal. Where from the nature of things such separation could not be effected, the improvement automatically enured to the benefit of the owner of the property; but he might be released from liability to compensate, if the improvement were not useful to him and the expenditure excessive, regard being had to his means and position. But the owner would not escape the obligation to compensate even under the circumstances last mentioned if he intended to sell the property, and could obtain a substantially higher price by reason of the improvements. Such were some of the principles (not always easy of application in practice) which were indicated for the guidance of Courts in dealing with claims for compensation; but they were not exhaustive, and much was left, as already pointed out, to the discretion of the Judge (see Meyer v Trustees Malan, 1911 T.P.D., p. 659). Only one of them calls for consideration in this case. The improvement with which we have to deal was inseparable from the property improved; and the trial Court was satisfied that it was one which the owner would not have effected himself. But he was holding the land with a view to selling it,

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and the Court found that the price which it would fetch in the market had been enhanced to the extent of £100 at least by reason of the improvement. That can hardly be considered an unduly excessive amount, and, under the circumstances, it is impossible to interfere with the conclusion of the Court that compensation was payable. There is nothing in the general rules referred to which could take the case out of the decision in Rubin v Botha.

The next question relates to the quantum of the compensation. We were asked by appellants to-reduce the amount awarded. As already remarked the award is not excessive on the face of it. But reliance was placed on the circumstance that an ordinary owner would probably have been satisfied with a shallow well at a cost of about £25. No doubt there was evidence to that effect, but the plaintiff has obtained the benefit of an exceptionally good well yielding a large and permanent supply. It cost the company £500, and after a careful perusal of the evidence on this point I am not prepared to interfere with the learned Judge's estimate of enhancement. Regarded as a matter of calculation, therefore, it must be allowed to stand. Nor do I think that there should be any special reduction founded on the provisions of the company's lease. The equitable principle on which the law awards compensation for improvements is that no man should be allowed to enrich himself at the expense of another. Both elements must concur, benefit to the claimant and detriment to the improver, and both must be borne in mind in assessing the amount. In Rubin v Botha the occupier had erected the buildings intending that after a term of years they should become the free property of the owner of the land. And though he was dealt with by the Court on the same general basis as if he had been a possessor, it was held that there should be a reduction of amount...