Ramah Farming v Great Fish River Water Users Association and Others

• Jurisdiction: South Africa
• Judge: Griffiths J
• Judgment Date: 13 October 2020
• Court: Eastern Cape Division
• Hearing Date: 13 October 2020
• Citation: 2021 (2) SA 547 (ECG)
• Counsel: DH de la Harpe SC for the applicant. EAS Ford SC for the first respondent. A de V la Grange SC for the second respondent.
• Docket Number: 2614/2019

Griffiths J:

Introduction

[1] This matter has at its heart the correct interpretation of the National Water Act (the Act). [1] In a nutshell, the applicant contends that the retention and sale of certain water use entitlements by a predecessor in title contravened the provisions of the Act and is unenforceable.

The claim and counterclaim

[2] The applicant has sought a declaratory order relating to certain alleged water use entitlements in respect of its immovable properties. The orders it seeks are couched in the following terms:

'1.

That the applicant's lawful water use entitlement in respect of Lot 67 and Lot 68 in the Great Fish River Settlement, is declared to be:

1.1

250 000 cubic metres for use on 20 hectares of land in respect of Lot 67, Great Fish River Settlement; and

1.2

305 000 cubic metres for use on 24 hectares of land in respect of Lot 68, Great Fish River Settlement;

in accordance with and in terms of the declarations of water use as an existing lawful water use in terms of s 32(2) of the National Water Act 36 of 1998 (annexed to the notice of motion and marked A and B respectively).

2.

The first respondent is ordered to deliver to the Applicant the volumes of water provided for in the declarations (annexed to the notice of motion marked A and B).

3.

The first respondent is ordered to pay the applicant's costs of this application jointly and severally, the one paying the other to be absolved, with any other respondent who should unsuccessfully oppose this application.'

[3] The first and second respondents [2] have opposed the application and the second respondent has, by way of a counterclaim, sought an order in the following terms:

'1.

Declaring that the applicant in its capacity as owner of Lots 67 and 68, Great Fish River Settlement, is possessed of an unencumbered right, title or interest in and to the listed/scheduled water use entitlements in relation to those two properties that is limited to 12 and 2,8 hectares of listed/scheduled water use entitlements respectively, which entitlements accrued to the said properties pursuant to agreements of sale entered into between the applicant's predecessors in title and the sale that the applicant had concluded with its immediate successor in title, Mr Henry Norman Stewart Cloete.

Griffiths J

2.

Declaring that insofar as any additional listed/scheduled water use entitlements that had been conditionally sold and had already been conditionally surrendered (and delivered) to the Second Respondent by a predecessor in title of the applicant for use on the Remainder of the Farm Juriesbaken 105, Middelburg are still attached to Lots 67 and 68, Great Fish River Settlement, the applicant, as successor in title, took possession of those properties subject to an encumbrance in the form of an obligation, as contemplated in s 25(2) of the Act, to provide its co-operation in respect of and support to the finalisation of the process of effecting the transfer of such balance of the listed/scheduled water use entitlements for use on the Remainder of the Farm Juriesbaken 105, Middelburg under authority of a licence to be issued in terms of s 41 of the Act.

3.

Directing the applicant to sign all documents and do all things necessary to procure the insurance of a licence under s 41 of the Act for the use of the additional listed/scheduled water use entitlements relating to Lots 67 and 68, Great Fish River Settlement (to which the Applicant has in para 1 above been declared not to possess any unencumbered right, title or interest) on the Remainder of the Farm Juriesbaken 105, Middelburg.

4.

Directing that should the applicant fail [or] refuse to sign all the documents or take all the steps referred to in para 3 above within 14 days of the granting of the order, the Sheriff of this Honourable Court be authorised to sign all such documents and take all such steps on behalf of the applicant.'

The background

[4] The facts giving rise to the contrary positions held by the parties are largely common cause. The applicant is the owner of, inter alia, Lots 67 and 68 which are situated in the Great Fish River Settlement. It is also the holder of declarations [3] of a water use entitlement as an existing lawful water use in terms of s 33(2) of the Act. Such water use entitlements are intended to be used for irrigation of the lands situated on such lots. The first respondent controls the water works by which the water is extracted from the Great Fish River.

[5] When the Act came into effect on 1 October 1998, Lots 67 and 68 were owned by Johanna and Johannes Vosloo. Subsequently, and during 2003, Rooiakkers Farming CC (Rooiakkers) purchased both lots from the Vosloo family.

[6] During 2006 Rooiakkers sold the lots to Boompie Onthou CC (Boompie), with transfer being effected during 2007. It appears from the relevant deed of sale that Rooiakkers purported to sell 55 hectares of the 85 hectares of existing water use entitlement for use on all the lots sold, inclusive of Lots 67 and 68, whilst retaining 30 hectares of the existing water use entitlement for itself. The apparent intention was that Rooiakkers would retain 8 hectares of existing water use entitlement in

Griffiths J

respect of Lot 67, and 22 hectares of existing water use entitlement in respect of Lot 68. It was thus further intended that Boompie would not, by virtue of the deed of sale, receive the equivalent water use entitlement in respect of those lots.

[7] During 2008, Lots 67 and 68 were sold by Boompie to one Sanet Ferreira who, in turn and during 2012, sold them on, together with certain other lots, to Vreys Farming CC.

[8] On 9 October 2012 Rooiakkers sold to the second respondent 34,7 hectares of the existing water use entitlements for irrigation of Lots 67 and 68 which it had ostensibly retained after its sale of those lots to Boompie during 2006. The agreement of sale in respect of this transaction recorded that Rooiakkers would remain the owner of the water rights until transfer to the second respondent, but that possession of the water rights was to be given on the date of signature.

[9] Lots 67 and 68 were subsequently sold by Vreys Farming CC, together with certain other lots, to Mr Cloete (the deponent to the founding affidavit) on 4 April 2014, with transfer being effected on 5 September 2014. Because Cloete believed that more water was available for use on the farms than had been represented to him, he instructed an attorney to make inquiries in this regard. It was as a consequence of these inquiries that he realised that more water had previously been available for use on the lots, but that a portion of the water use entitlements had been sold by a predecessor in title. He was also told that transfer of these water use entitlements was still pending and, in the interim, the water was being delivered elsewhere on a temporary transfer.

[10] On 5 November 2016 Cloete sold Lots 67 and 68 together with the other lots that he had purchased to the applicant, of which he is a director. Before transfer took place, he was approached by a representative of the second respondent with a request that he sign certain documentation for a licence application by the second respondent as contemplated in s 25(2) of the Act. Acting on advice from his attorney, he refused to sign these documents as he had not personally agreed to sell or lease such water use entitlements to the second respondent.

[11] It furthermore appears that the first respondent initially took the position that the water use entitlements had been lawfully retained and sold to the second respondent and that the second respondent was accordingly entitled to receive the equivalent amount of water for irrigation purposes. When, however, it became clear that a dispute was looming, the first respondent indicated by way of correspondence that it would stand back as its attitude was that the dispute had arisen between the applicant and the second respondent, and that it ought to be decided by a court. There remains, however, a dispute as to whether the first respondent has continued to provide this water to the second respondent, the applicant contending that it has, whilst the first and second respondents contend that it has not.

Griffiths J

[12] Because of these disputes the applicant approached the third respondent in this regard and was provided with the written declarations referred to above.

[13] It is also common cause between the parties that the subject water use entitlements exist lawfully by virtue of the provisions of s 32(1)(a)(i) of the Act in that they are an existing lawful water use which existed within the period of two years immediately before the date of commencement of the Act, and were authorised by the repealed Water Act.

The Act

[14] The Act came into force on 1 October 1998 and repealed the Water Act [4] which had previously regulated the water dispensation in South Africa. Certain basic principles of the previous dispensation, such as the concept of riparian ownership and the distinction between private water and public water, were abolished. The effect of the Act has been succinctly summarised by Leach AJA (as he then was) in S v Mostert and Another. [5] He said:

'The 1956 Act was repealed and replaced by the 1998 Act which fundamentally reformed South African water law. The common-law distinction between public water and private water was no longer recognised as a basis for entitlement to the use of water. Instead, under s 2 of the 1998 Act, government at national level was granted the overall responsibility for and authority over the country's water resources and their use. Section 3 recognises national government, acting through the minister as the public trustee of the nation's water resources, as having the power to regulate the use, flow and control of all water in the country. Section 4 goes on to...