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[2015] ZASCA 157
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Minister of Water and Environmental Affairs v Karan Beef Feedlot (20563/2014) [2015] ZASCA 157 (9 October 2015)
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THE SUPREME
COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Reportable
Case No: 20563/2014
In
the matter between:
MINISTER OF
WATER AND ENVIRONMENTAL AFFAIRS
APPELLANT
and
I M
KARAN t/a KARAN BEEF
FEEDLOT
RESPONDENT
Neutral
citation:
Minister
of Water and Environmental Affairs v Karan Beef Feedlot
(20563/2014)
[2015] ZASCA 157
(9
October 2015).
Coram:
Navsa,
Theron, Petse and Saldulker JJA and Van der, Merwe AJA
Heard:
11 September 2015
Delivered:
9 October 2015
Summary:
Water
─ interpretation of permit issued in terms of s 62(2I)
(a)
(i)
of the Water Act 54 of 1956 ─ meaning of permit clear from
words used and context ─ contrary result sought by respondent
could only be achieved by variation of the permit on review ─
respondent elected not to pursue review ─ liability of
respondent for payment of levies in respect of water supplied by the
Trans-Caledon Tunnel Authority not established.
ORDER
On appeal from:
Gauteng
Division of the High Court, Pretoria (De Klerk AJ
sitting as court of first instance):
1
The appeal succeeds to the extent set out in the varied order, with
costs, including the costs of two counsel.
2
The order of the court a quo is varied by deleting paragraph 1
thereof.
JUDGMENT
Van der
Merwe AJA (Navsa, Theron, Petse and Saldulker JJA concurring):
[1]
The respondent, Mr I M Karan t/a Karan Beef Feedlot, is the owner of
land riparian
to the Suikerbosrand River, in the district of
Heidelberg. That land is utilised for purposes of irrigation and a
feedlot, requiring
vast quantities of water. The water is abstracted
from the Suikerbosrand River in terms of rights granted to the
respondent under
the now repealed Water Act 54 of 1956 (Water Act).
[2]
On 28 September 1993 permit number B2/2/16(3062) (the permit) was
issued to the respondent.
The permit was issued on the authority of
the Minister of Water Affairs and Forestry (Minister), the legal
predecessor of the appellant,
the Minister of Water and Environmental
Affairs. I deem it necessary to reproduce the permit in full:
‘
PERMIT
:
B2/2/16(3062)
PERMIT
HOLDER :
MESSRS KARAN ESTATES
PROPERTY
:
PORTION
5 (PORTION OF PORTION 2) OF THE FARM ELANDSFONTEIN 412 IR; SIZE
985,7855 HECTARES: HEIDELBERG DISTRICT, TRANSVAAL
SUIKERBOSRAND
RIVER STATE WATER CONTROL AREA: PERMIT IN TERMS OF SECTION
62(2I)(a)(i) OF THE WATER ACT, 1956 (ACT 54 OF 1956)
Under
the powers vested in me by Government notice 966 of 19 Mar 1989, I,
Claus Triebel, in my capacity as Manager, Water Sources,
in the
Department of Water Affairs and Forestry, herewith issue a permit in
terms of Section 62(2I)(a)(i) of the Water Act, 1956
to the above
permit holder to extract a maximum quantity of 657 000mᵌ
(six hundred and fifty-seven thousand cubic metres)
of water per year
from the Suikerbosrand River
for industrial purposes (feedlot)
on the above property, subject to the following conditions:
1.
The availability of the allocated quantities of water and the quality
thereof
for any specific purpose is not guaranteed.
2.
No new waterworks may be erected or no changes made to existing water
works without
prior job authorization in terms of Section 62(2H) of
the Water Act, 1956, having been obtained.
3.
This permit is of a temporary nature and in no way represents a
permanent water
allocation. The right is reserved to review or to
cancel the permit after reasonable prior notice.
4.
Authorized officers of the Department of Water Affairs and Forestry
shall have
free access to the specific water works at all reasonable
times, for purposes of monitoring and control over the extraction of
water.
5.
All possible precautions must be taken to the satisfaction of the
Department
of Water Affairs and Forestry not to pollute the specific
river in any way.
6.
A tariff of 28,4 cents per cubic metre water
and that can be
adjusted from time-to-time
shall be charged
for the actual
quantity of water used.
7.
This permit does not absolve the permit holder from complying with
the provisions
of the Water Act, 1956.
8.
This permit replaces Permit B2/2/16(3062) dated 21 October 1986.’
(Emphasis
added.)
The
conditions of the permit reflect the department’s appreciation
of water being a scarce natural resource.
[3]
During 1986 the Trans-Caledon Tunnel Authority (TCTA) was established
in terms of
the Treaty on the Lesotho Highlands Water Project entered
into between the governments of the Republic of South Africa and the
Kingdom of Lesotho. Its main object is the implementation, operation
and maintenance of that part of the Lesotho Highlands Water
Project
situated in the Republic of South Africa. The TCTA supplies water to
the Vaal Dam via the Lesotho Highlands Water Project.
[4]
The respondent contended that, as a matter of interpretation, the
permit related only
to water used for irrigation purposes. He further
contended that he is in any event not liable for payment of levies in
respect
of water supplied by the TCTA. The appellant disputed both
contentions.
[5]
Upon application by the respondent, the court a quo (De Klerk AJ in
the Gauteng Division
of the High Court, Pretoria) made the following
declaratory order:
‘
1.
In terms of permit number B2/2/16(3062) dated 28 September 1993 the
Applicant is only
liable to pay irrigation water use charges.
2.
The Applicant is not liable to pay Trans-Caledon Tunnel Authority
charges for
the applicant’s existing lawful water use in terms
of permit number B2/2/16(3062) dated 28 September 1993.
3.
The Respondent is ordered to pay the costs of the application.’
The
appellant appeals against this order, with the leave of the court a
quo.
The
meaning and effect of the permit
[6]
In my view the permit should be interpreted against the following
statutory and factual
background. Section 62 of the Water Act dealt
with control and use of public water in a government water control
area. As stated
in the permit, the respondent’s land fell
within such water control area. Section 62 provided that the right to
the use and
the control of public water in a government water control
area shall vest in the Minister. It accordingly provided that no
person
shall use public water on land inside or outside a government
water control area, except by virtue of a provisional right in terms
of s 62(2A), a permission under s 62(2B) or 62(2I), or an
allocation specified in a notice in the Government Gazette
under
s 62(2F).
[7]
Allocations in terms of s 62(2F) were published by the Minister
in the Government
Gazette, after following the detailed procedure set
out in s 62(2C) to s 62(2E). The s 62(2F) allocations
determined
the quantity of public water permitted for irrigation of
specified areas of land in hectares. Sections 62(2A) and 62(2B)
provided
for interim rights of use of water, pending the
determination of the allocations in terms of s 62(2F). For
present purposes
it is not necessary to refer to the provisions of
s 62(2B). However, s 62(2A), in essence, provided that a
landowner
with existing irrigation development in a government water
control area ‘shall be provisionally entitled’ to
continue
with the existing use of water for irrigation purposes on
that land, from the date of declaration of the particular area as a
government
water control area until a notice is published in terms of
s 62(2F) in respect of that area.
[8]
Section 62(2I), in effect, provided for an extraordinary concession
for use of surplus
water. Inter alia, it provided:
‘
(a)
If the
Minister is convinced that sufficient public water is available in a
Government water control area due to the occurrence
of floods or
seepage, the construction of a Government water work, the fact that
rights to, or permissions or allocations for,
the use of public water
conferred by or granted or made under this section are not fully
exercised, or any other reason, he may
─
(i)
whether before or after the publication of a notice referred to in
subsection
(2F)
(a)
,
grant, on such conditions as he may determine, permission to any
person to abstract, impound or store in that Government water
control
area a quantity of public water and to use it on a piece of land
in
that Government water control area for a purpose specified in the
permission
,
or to use it on a piece of land
outside
that Government water control area for urban or industrial purposes
.’
(Emphasis added.)
[9]
As early as 21 October 1986 (some seven years before the issue of the
permit), the
respondent was the holder of two separate rights in
terms of s 62 to abstract water from the Suikerbosrand River for
use on
the land. In terms of s 62(2A) he was provisionally
entitled to the use of 514 600mᵌ of water per annum for
irrigation
purposes. On 21 October 1986 he was granted a permit
(number 1026N), which authorised the use of 230 000mᵌ of
water
per annum for industrial purposes consisting of a feedlot. That
permit was issued in terms of the then s 12(1) of the Water
Act.
Simply put, in terms of this permit the respondent was the holder of
a right to abstract water for industrial purposes (feedlot)
over and
above the right to use water for irrigation purposes, as indicated at
the beginning of this paragraph.
[10]
By way of two separate letters dated 22 May 1992, the respondent
applied for the increase of
the quantity of the s 62(2A) right
as well as for abstracting an increased quantity of water in terms of
the permit for industrial
use. He requested that he be permitted to
use 809 714mᵌ of water per annum for irrigation purposes
as opposed to the
514 600mᵌ referred to in the previous
paragraph. The basis of this request was that the limit of 514 600mᵌ
of water per annum had been calculated on an incorrect measurement of
the area of land under irrigation. In respect of the permit
for
industrial use, he asked for an increase of the quantity of water to
657 000mᵌ per annum, as opposed to the 230 000mᵌ
mentioned above. This was based on the increased capacity of the
feedlot to approximately 30 000 head of cattle per day.
[11]
The relevant officials of the Department of Water Affairs refused
both applications. The respondent
thereafter sought and obtained an
interview with the Deputy Minister of Water Affairs and Forestry.
They met on 5 November 1992.
On 20 January 1993 the Deputy Minister
wrote to the respondent in the following terms:
‘
As
stated to you during our discussions, the position concerning the
prevalence of water in the Blesbok Spruit and the Suikerbosrand
River
has improved over the past few years due to the spillage of purified
sewage into it. Consequently, the streams have a steady
flow which,
if not intercepted, will eventually end up in the Vaal Dam from where
it will be available for re-use. In light hereof,
I declared myself
willing to permit Karan Estates (Pty) Ltd in terms of Section 62(2I)
of the Water Act, 1956 (Act 54 of 1956)
to extract the requested
657 000mᵌ of water per year from the Suikerbosrand River,
which is now required for the operation
of the feedlot, on condition,
inter alia, that the actual quantity of water extracted shall be paid
for at the current tariff for
untreated water from the Vaal Dam. Such
a concession would result in your company’s water allocation
for agricultural usage,
i.e. 822 988 cubic metres per year being
fully available for utilization for such purposes.’
[12]
It was thus made clear that the permission (‘vergunning’)
for increased use of water
for the feedlot would be given in terms of
s 62(2I) ─ surplus water ─ and that a specified
tariff would be payable
for such use. No tariff or fee was payable in
respect of the use of water in terms of s 62(2A). This was
concisely summarised
in a letter by the Department of Water Affairs
to the respondent dated 1 April 1993, which stated:
‘
Consequent
to your visit to the Minister, the following allocations shall apply:
Feedlot:
657 000mᵌ per year @ 28.4c/mᵌ (For industrial
purposes)
Agriculture:
823 000mᵌ per year, free (Preliminary agricultural
allocation)
In
order to exercise control over the above-mentioned allocations, the
authorizations will include a requirement that two separate
water
meters, which must be installed at your own cost, must be kept in a
satisfactory and working condition.’
[13]
With regard to the envisaged condition that two separate water meters
be installed, the respondent
replied as follows on 14 April 1993:
‘
In
light of the above, we request that the current water meter and
existing installation be left as they are, that the preliminary
agricultural allocation in terms of s 62(2A) be applied for both
irrigation and feedlot, as in the past, until the allocation,
ie
823 000mᵌ has been consumed, and that subsequently the new
allocation in terms of s 62(2I) for industrial purposes,
be used
for both irrigation and feedlot, on condition that the allocation of
657 000mᵌ not be exceeded and a remuneration
of 28,4c/mᵌ
be payable for the latter.’ (My translation.)
Whether
the absence in the permit of a condition in respect of two water
meters indicates that the respondent’s request had
been acceded
to, is not necessary to decide.
[14]
The statement of the respondent in the founding affidavit that ‘it
has always been my contention
that I have since 1993 only been liable
for payment of water use charges at the rate for irrigation water use
and not for water
use charges at the rate for industrial water use’,
is therefore disingenuous. On his own version he had paid industrial
charges
in terms of the permit for some 14 years without demur.
[15]
In my judgment the background that I have set out confirms that the
understanding of the parties
at all relevant times was in accordance
with the clear wording of the permit, namely that the permission to
use water for the feedlot
had been granted as a concession in terms
of s 62(2I) for industrial purposes and against payment of the
specified tariff
of 28,4c/mᵌ of water. An interpretation that
the permit authorised use of water for irrigation purposes in respect
of which
an unspecified tariff was payable, is in my respectful view
not tenable.
[16]
In his founding affidavit the respondent pointed out that the
definition of ‘use for agricultural
purposes’ in the
Water Act had with effect from 1 July 1993 been amended to include
use for or in connection with an intensive
animal feeding system, ie
a feedlot. The respondent’s case in the founding affidavit was
therefore that the appellant ‘.
. . was bound by the amended
definition and could therefore not issue the permit to me for
industrial purposes’ and that
the permit ‘. . .
erroneously referred to industrial use (feedlot) instead of
agricultural use’.
[17]
But this is the language of review, not of interpretation of the
permit. The respondent can only
achieve what he seeks by variation of
the terms of the permit. However, the respondent deliberately elected
not to bring proceedings
for variation of the permit on review. Until
such time as the permit is varied on review, it remains as a fact and
has legal effect
in accordance with its terms.
[1]
[18]
It must be understood that the Legislature in enacting the
National
Water Act 36 of 1998
and its predecessor (the Water Act) was keenly
aware that water was a scarce and unevenly distributed national
resource.
[2]
It is clear, from the terms of the
permit itself, that the Minister allowed the use of surplus water to
the respondent in an increased
volume conditional upon payment being
made. Payment in itself would bring about a discipline in the use of
water. The problem with
using an interpretive exercise, for
sidestepping a review of the permit and resulting in the declaratory
order, is that it discounts
these very important factors.
[19]
It is of course open to the respondent to apply afresh for a licence
to abstract water for a
particular purpose in terms of the
National
Water Act. In
relation thereto a discretion would be exercised by the
responsible authority, both in respect of volume and purpose, taking
into
account current levels of available water and the legislative
and constitutional responsibility
[3]
to conserve water as a resource. If
the respondent is aggrieved by such a decision he would be free to
take such legal steps as
are available to him.
Trans-Caledon
Tunnel Authority levies
[20]
The permit did not mention TCTA levies at all. The appellant accepted
that he bore the onus to
prove that the respondent was liable to pay
the TCTA levies. At the hearing of this matter, counsel for the
appellant referred
the court to s 138F of the Water Act, the relevant
portion of which reads:
‘
(1)
Notwithstanding anything to the contrary contained in any law but
subject to the provisions of subsection (2), the Minister
may with
the concurrence of the Minister of Finance, by notice in the
Gazette
levy a charge
on water which is supplied for use for any purpose by the State, an
irrigation board, a water board, a local authority,
the Rand Water
Board or any other supplier in an area for the benefit of which a
water work referred to in section 138A in the
opinion of the
Minister, has been, is being or will be constructed.
(2)(
a
)
No charge shall be levied under subsection (1) unless the Minister
not less than 60 days prior to the date on which he intends
to
publish the relevant notice in the
Gazette
, has tabled in
Parliament a report containing the particulars required in paragraph
(
b
).
(i)
…
(ii)
the water work concerned and
the
benefit it entails for the users of water who will be liable for the
payment of the proposed charges
.’
(Emphasis added.)
[21]
The respondent has maintained that he derives no benefit from the
Lesotho Highlands Water Project.
The appellant was requested to
furnish the court with the notice referred to in s 138F(2)(
a
)
setting out the benefit enjoyed by the respondent from the Lesotho
Highlands Water Project. Counsel for the appellant conceded,
and
rightly so, that if the notice did not identify the respondent as a
user who derived benefit from the project, the respondent
would not
be liable to pay TCTA levies.
[22]
Subsequent to the hearing of this appeal, the court was furnished
with various notices published
in the Government Gazette by the
appellant during the period 1988 until 1997, in
terms
of s 138F(1) of the Water Act.
[4]
In terms of these notices, the
appellant levied a charge on ‘water supplied or made available
by the Government from or by
means of any Government water work in
the Vaal River from and including the Grootdraai Dam to the
confluence of the Vaal and Orange
Rivers to any person or body for
eventual use for urban or industrial purposes’.
[23]
It is common cause that the respondent abstracts water from the
Suikerbosrand River. The Suikerbosrand
River is a tributary of the
Vaal River. The respondent’s land is situated upstream of the
confluence of the Suikerbosrand
River and the Vaal River. The
confluence of the Suikerbosrand and Vaal Rivers is at Three Rivers
near Vereeniging, downstream of
the Vaal Dam. It is a fact,
therefore, that water is not supplied or made available to the
respondent by means of any government
water work in the Vaal River.
For this reason the respondent is clearly not liable for payment of
TCTA levies in terms of the government
notices relied upon and it is
not necessary to pursue the matter further.
[24]
In the result I would make the following order:
1
The appeal succeeds to the extent set out in the varied order, with
costs, including the costs of two counsel.
2
The order of the court a quo is varied by deleting paragraph 1
thereof.
_______________________
C
H G VAN DER MERWE
ACTING
JUDGE OF APPEAL
APPEARANCES:
For
Appellant:
N Cassim SC (with her M
Manala)
Instructed by:
State Attorney, Pretoria
State Attorney, Bloemfontein
For
Respondent:
A B Rossouw SC (with him J H
A Saunders)
Instructed by:
Jaco Roos Attorney, Pretoria
E G Cooper Attorneys, Bloemfontein
[1]
See
Oudekraal
Estates (Pty) Ltd v City of Cape Town & others
2004
(6) SA 222
[2004] ZASCA 48
(SCA) para 26, and
MEC
for Health, Eastern Cape & another v Kirkland Investments
(Pty) Ltd t/a Eye & Lazer Institute
2014
(3) SA 481
[2014] ZACC 6
(CC) para 103.
[2]
In this regard see the preamble to the
National
Water Act 36 of 1998
which reads as follows:
‘
RECOGNISING
that water is a scarce and unevenly distributed national resource
which occurs in many different forms which are all
part of a
unitary, inter-dependent cycle;
RECOGNISING
that while water is a natural resource that belongs to all people,
the discriminatory laws and practices of the past
have prevented
equal access to water, and use of water resources;
ACKNOWLEDGING
the National Government’s overall responsibility for and
authority over the nation’s water resources
and their use,
including the equitable allocation of water for beneficial use, the
redistribution of water, and international
water matters;
RECOGNISING
that the ultimate aim of water resource management is to achieve the
sustainable use of water for the benefit of all
users;
RECOGNISING
that the protection of the quality of water resources is necessary
to ensure sustainability of the nation’s
water resources in
the interest of all water users; and
RECOGNISING
the need for the integrated management of all aspects of water
resources and, where appropriate, the delegation of
management
functions to a regional or catchment level so as to enable everyone
to participate; . . . .’ See also
s 27(1)
of the
National Water Act.
[3
]
See s 24
(b)
(ii)
and (iii) of the Constitution.
[4]
Section 138F of the Water Act was repealed on 1
October 1998 and thus no notices in terms of this section would be
issued after
this date.