Tshwane City v Blair Atholl Homeowners Association

• Jurisdiction: South Africa
• Citation: 2019 (3) SA 398 (SCA)

Tshwane City v Blair Atholl Homeowners Association
2019 (3) SA 398 (SCA)

2019 (3) SA p398

Citation	2019 (3) SA 398 (SCA)
Case No	106/2018; [2018] ZASCA 176
Court	Supreme Court of Appeal
Judge	Navsa ADP, Swain JA, Dambuza JA, Mokgohloa AJA and Mothle AJA
Heard	December 3, 2018
Judgment	December 3, 2018
Counsel	T Strydom SC (with T Mkwanazi) for the appellant.; KW Lüderitz SC (with GW Amm) for the respondent.

Flynote : Sleutelwoorde

Contract — Interpretation — Evidence — Approach to — Parol evidence — Evidence on negotiations.

Practice C — Trial — Separation of issues — Approach to be adopted — Uniform Rules of Court, rule 33(4).

Headnote : Kopnota

The City of Tshwane and the Blair Atholl Homeowners Association had come to an agreement concerning the supply of water to a residential estate (see [1]). A dispute arose as to the interpretation of one of the agreement's D provisions, and this culminated in the Association approaching a High Court for an order that the 'normal rate' meant the 'bulk' rate charged to a municipality (see [15], [17] – [23] and [26]).

In the ensuing action, both the City and the Association called witnesses to testify as to the meaning of the provision. These witnesses were asked to, and did, interpret the provision (see [27], [29], [36] – [37], [41] and [71]).

The E High Court found for the Association, and the City appealed to the Supreme Court of Appeal (see [45] – [46]).

The SCA confirmed the approach to be taken to interpreting documents (see [61], [69]); that the parol evidence rule was of continued application (see [66]); and that evidence on prior negotiations was inadmissible (see [76] – [77]).

In F this regard, the parol evidence as to the meaning of the disputed provision was inadmissible (see [68]). The SCA further held that issues were to be separated under rule 33(4) only after careful thought to the implications of doing so, and not where the issues were inextricably linked to other issues (see [2] and [51]). Any order of separation was also to carefully circumscribe the issue or issues to be separated (see [2]).

The order here was only made at the conclusion of the separated proceedings, G and where the separated issue was inextricably linked to others (see [27], [47] and [54]).

Appeal upheld; the order of the High Court set aside; and replaced with an order that the 'normal rate' was not the 'bulk' rate for municipalities; and that the remaining issues were remitted to the High Court for adjudication (see [80]). H

Cases cited

Southern Africa

Bastian Financial Services (Pty) Ltd v General Hendrik Schoeman Primary School 2008 (5) SA 1 (SCA) ([2008] ZASCA 70): referred to

Blair Atholl Homeowners Association v City of Tshwane I [2017] ZAGPPHC 519: reversed on appeal

Consolidated News Agencies (Pty) Ltd (in Liquidation) v Mobile Telephone Networks (Pty) Ltd and Others 2010 (3) SA 382 (SCA): referred to

Coopers & Lybrand and Others v Bryant 1995 (3) SA 761 (A) ([1995] 2 All SA 635; [1995] ZASCA 64): referred to

Delmas Milling Co Ltd v Du Plessis 1955 (3) SA 447 (A): J considered

2019 (3) SA p399

Denel (Edms) Bpk v Vorster 2004 (4) SA 481 (SCA) ((2004) 25 ILJ 659; A [2005] 4 BLLR 313; [2004] ZASCA 4): dictum in para [3] applied

Johnston v Leal 1980 (3) SA 927 (A): referred to

KPMG Chartered Accountants (SA) v Securefin Ltd and Another 2009 (4) SA 399 (SCA) ([2009] 2 All SA 523; [2009] ZASCA 7): considered

Marquard & Co v Biccard & Another 1921 AD 366: referred to

Natal Joint Municipal Pension Fund v Endumeni Municipality 2012 (4) SA 593 (SCA) B ([2012] 2 All SA 262; [2012] ZASCA 13): considered

Swart en 'n Ander v Cape Fabrix (Pty) Ltd 1979 (1) SA 195 (A): referred to

Van Aardt v Galway 2012 (2) SA 312 (SCA): considered

Van Wyk NO v Rottcher's Saw Mills (Pty) Ltd 1948 (1) SA 983 (A): considered.

Western Cape Department of Social Development v Barley and Others 2019 (3) SA 235 (SCA) C ([2018] ZASCA 166): referred to

England

Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 All ER 98 (HL) ([1997] UKHL 28): referred to

Rainy Sky SA v Kookmin Bank [2011] UKSC 50 ([2012] Lloyd's Rep 34 (SC); [2012] 1 All ER 1137): referred to D

Wood v Capita Insurance Services Ltd [2017] UKSC 24: referred to.

Rules of court cited

The Uniform Rules of Court, rule 33(4): see The Superior Courts Act and the Magistrates' Courts Act and Rules (Juta 2019) at 54. E

Case Information

T Strydom SC (with T Mkhwanazi) for the appellant.

KW Lüderitz SC (with GW Amm) for the respondent.

An appeal against a decision of the Gauteng Division (Blair Atholl Homeowners Association v City of Tshwane [2017] ZAGPPHC 519). F

Order

1.

The appeal is upheld with costs including the costs of two counsel and the issues that remain, beyond that dealt with in para 2 of this order, are remitted to the court below for further hearing. G

2.

The order of the court below is set aside and substituted with the following:

'1.

It is declared that the reference in clause 6.16.1 of the Engineering Services Agreement to the normal rate of a municipality is not a reference to tariff 6 of the Tshwane Schedule of Tariffs, attached as annexure C to its declaration. H

2.

Costs of proceedings thus far are reserved, pending final determination of the outstanding issues.'

Judgment

Navsa ADP and Mothle AJA (Swain JA, Dambuza JA and Mokgohloa AJA concurring): I

[1] Right at the outset, even before litigation commenced, the essential dispute between the parties was about which of a range of tariffs the appellant, the City of Tshwane Metropolitan Municipality (the City), a local authority operating in terms of the Local Government: Municipal J

2019 (3) SA p400

Navsa ADP and Mothle AJA (Swain JA, Dambuza JA and Mokgohloa AJA concurring)

Structures Act 117 of 1998 A (the Structures Act) and the Local Government: Municipal Systems Act 32 of 2000 (the Systems Act), could charge the respondent, the Blair Atholl Homeowners Association (the Association), for the water it supplies to a housing estate which the latter administers. The court below, the Gauteng Division of the High Court, Pretoria, after the parties had agreed thereto and purportedly acting in B terms of rule 33(4) of the Uniform Rules of Court, made an order of separation which, as will become clear, will have the effect that the essential issue remains unresolved.

[2] Careful thought should be given to a separation of issues and the C issues to be tried separately have to be clearly circumscribed in order to avoid confusion. A decision on a separate issue should be dispositive of a portion of the relief claimed and essentially should serve expedition rather than cause delay in the resolution of the principal issue. In this case the order of separation will have the latter rather than the former result. These are all aspects to which we shall revert later in this D judgment. The background to the appeal is set out hereafter.

[3] During 2003 and 2004, Mr Robert Wray (Wray), the directing mind of Wraypex (Pty) Limited (the developer), started formulating plans to develop a township near Lanseria Airport, comprising a residential golfing estate. At that stage the land envisaged for the development fell E outside of the City's priority development areas. It was located outside the urban development edge. The development was to comprise four extensions, the greater part of which was located within the City's jurisdiction and the remainder within the jurisdiction of Mogale City. A major problem encountered by the developer was that, because the F land was situated outside of the urban edge and beyond priority areas, the City was not yet supplying water to that area nor was it in contemplation in the immediate future. The developer, through Mr James Croswell of Croswell Engineers, entered into discussions with the City to resolve this difficulty and to attempt to persuade the City to facilitate the development of the proposed township by providing water G and other municipal services to the area.

[4] Pursuant to discussions, the developer submitted a Development Scheme Report to the City for approval and suggested that it was prepared to make arrangements with the Rand Water Board for direct bulk water supply and intended to arrange a package plant type sewage H works to cater for the development. The approach to Rand Water did not bear fruit. Thus, the water supply had to be provided by the City. [1]

[5] The City was only prepared to provide water to the area on the basis that the developer fund the construction of a 20 kilometre water pipeline that would enable the water to be supplied to the new development. I It also required the developer to construct an internal and external reservoir and a sewage package plant. This would all have to be done

2019 (3) SA p401

Navsa ADP and Mothle AJA (Swain JA, Dambuza JA and Mokgohloa AJA concurring)

within engineering specifications set by the City. In the discussions A between the City and those representing the developer's interests it was envisaged that a non-profit company would be registered in terms of s 21 of the Companies Act 61 of 1973 (the Companies Act), [2] which would take over the developer's rights and obligations. It was also envisaged that the s 21 company would be responsible for the maintenance of the internal reservoir, the sewage package plant and the internal B water reticulation network. That company would then apply for a metered connection from the City and would arrange for individual homeowners within the estate to pay for their water consumption. Internal water reticulation and maintenance thereof would also be tended to by the s 21 company to be formed. C

[6] After extended discussions and exchanges of written communications as well as several drafts of a...