City of Cape Town (CMC Administration) v Bourbon-Leftley N.O. and Another (10663/01) [2004] ZAWCHC 13 (6 April 2004)

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[2004] ZAWCHC 13
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City of Cape Town (CMC Administration) v Bourbon-Leftley N.O. and Another (10663/01) [2004] ZAWCHC 13 (6 April 2004)

not
reportable
in the high court of South Africa
(cape of good hope provincial division)
Case No 10663/01
In the matter between:
CITY OF CAPE TOWN
(CMC ADMINISTRATION) Plaintiff
and
W D BOURBON-LEFTLEY n. o. First Defendant
M M BOURBON-LEFTLEY n. o. Second Defendant
(in their
capacities as trustees for the time being
of the
W D
Bourbon-Leftley Family Trust
)
judgment: delivered 6 april 2004
Griesel J:
In
this action the plaintiff claims payment of the amount of
R1 715 480,54 from the defendants in respect of water
supplied
by the plaintiff from a pipeline from the Wemmershoek Dam
and utilised by the defendants on their farm
Môrelig
in the
district of Paarl. At all relevant times since November 1992 the
farm was registered in the name of the W D Bourbon-Leftley
Family Trust
(the trust),
which conducts a commercial
fruit-farming operation thereon. The trustees of the trust are the
nominal defendants herein, represented
throughout by the first
defendant, Mr William Bourbon-Leftley
(Bourbon-Leftley Snr)
.
For convenience I refer to the defendants simply as
‘the
trust’
.
The
plaintiff’s main claim is based on a servitude registered against
the title deed of the farm in 1964. In terms of the servitude,
the
farm was entitled to an overall annual allocation of 33,3 million
gallons (151 536 kilolitres) potable water from the
Wemmershoek
pipeline
(the overall allo­cation)
. The overall
allocation is divided into three different categories:
a free annual
allocation of 20 million gallons (90 920 kilolitres)
(the
free allocation)
;
a further maximum
allocation of 13,3 million gallons (60 616 kilo­litres)
per
annum
at a discounted rate –
of 1/- (10c) per
1 000 gallons (2,2 cents per kilo­litre) for the first
6,666 million gallons (30 308 kilolitres);
and
1/6 (15c) per
1 000 gallons (3,3 cents per kilolitre) for the remaining
6,666 million gallons (30 308 kilolitres).
This
case is largely concerned with liability for a
fourth
category
of water – not mentioned in the servitude – namely the excess
over and above the overall allocation. It is common cause
in this
regard that, for a number of years from approximately 1993 to 2001,
the trust had exceeded its overall allocation of water.
The
plaintiff contends that it was a tacit term of the servitude â€“
‘…
that, should the trust exceed its maximum annual allocation
of water from the pipeline of 151 536 kilolitres, then the
trust
would pay the plaintiff for the excess water utilised at a
rate equivalent to that charged to other parties entitled to similar
rights to draw water from the pipeline’.
The
plaintiff’s main claim has been calculated on the foregoing basis.
Its alternative claim is based on delict, alleging that
it suffered
damages as a result of the negligent, alternatively intentional,
misappropriation of the water by the trust. The trust
opposes both
grounds of the claim, disputing
inter alia
the tacit term
relied upon by the plaintiff.
Factual Background
The
following facts have been agreed between the parties or are common
cause on the evidence before the court. During the early
1950’s,
the Municipality of Cape Town, the predecessor in title to the
plaintiff, was in the process of planning a dam to be
built in the
Wemmers River near Fransch­hoek to supply drinking water to the
inhabitants of Cape Town. Negotiations between
representatives of
the municipality and approximately ten farmers riparian to the
Wemmers River
(the riparian owners)
took place with regard to
the effect of the dam on the existing water rights of the riparian
owners. It was proposed on behalf
of the municipality that, in
future, the farmers would draw their water from a pipeline to be
installed and maintained by the municipality.
The negotiations
culminated in a meeting, held on 7 March 1950, when the following
proposal by the munici­pality was unanimously
accepted on behalf
of the riparian owners:
‘
The pipeline will be maintained at no cost to yourselves. We
will also supply 240 million gallons per annum free; 80 million
gallons per annum at 1/- per 1000 gallons and 80 million
gallons per annum at 1/6d. per 1000 gallons.’
On
19 January 1952 this proposal was formalised in a written
agree­ment between the municipality and the riparian owners.
Under this agree­ment, all riparian owners became entitled to a
proportionate share of the annual allocation of free water
as well
as to the additional allocation of water at the prescribed
(dis­counted) rate as envisaged in the earlier negotiations.
It
was also recorded that the agreement would be binding on the City of
Cape Town and its successors in title and upon the riparian
owners
and their respective successors in title and that the rights and
obligations as defined in the agreement would in due course
be
registered against the title deeds of the respective owners in terms
of notarial deeds of servitude.
During
1964 notarial deeds of servitude were duly executed and registered
against the properties concerned, including Môrelig.
In terms of
clause 2 of the servitude in relation to Môrelig, the plaintiff was
obliged to supply, and the owner of Môrelig was
entitled to
receive, the annual allocation as set out above.
1
The servitude thus constituted an agreement between the plaintiff
and the trust when the latter took transfer of the farm on
6 November
1992 from its predecessor in title, Le Fayet
Operations CC
(Le Fayet)
.
After acquiring
the farm, the trust proceeded to replace the existing vineyards on
the farm with fruit trees to produce plums and
citrus for the export
market and, to that end, to place approximately 40 000 hectares
under irrigation. The trust utilised
its allocation of water, as set
out in the servitude. It drew its allocation of water from the
pipeline at two metered outlets
on pipes of 80 mm and 150 mm
in diameter respectively.
The
plaintiff’s officials stationed at the Wemmershoek Dam read the
meters on a regular basis and communicated such meter readings
to
the plaintiff’s accounts department in Cape Town, where monthly
accounts were prepared and sent to con­sumers on the basis
of
such readings.
Towards the end of 1993, Bourbon-Leftley Snr was informed by one of
the plaintiff’s officials at Wemmershoek Dam, a Mr Young
(Young)
,
that according to the plaintiff’s readings, the trust was about to
exceed its maximum allocation of water for that year.
Bourbon-Leftley
Snr immediately started making arrangements to
obtain additional water from alternative sources. Shortly
afterwards, however, the
plaintiff’s officials discovered that
they had been mistaken. On 21 December 1993 Young accordingly
notified Bourbon-Leftley
Snr, and certified in writing, that only
some 60 000 kilolitres of its free allocation had been used by
the trust up to that
stage, thus leaving some 30 000 kilolitres
available for use during the remainder of that year.
Following
this incident, Bourbon-Leftley Snr regularly telephoned the
plaintiff’s officials in Cape Town, mostly speaking to a
certain
Mrs Riecherts, who furnished him with the monthly readings relating
to the water usage by the trust on Môrelig. Throughout
the period
from 1994 to 1998, the monthly readings were recorded by
Bourbon-Leftley Snr in his diary and were totalled annually.
Such
annual totals invari­ably reflected con­sump­tion of
signifi­cantly less water than the trust’s annual allocation
of free water. After 1998 Bourbon-Leftley ceased this practice.
Unbeknown to Mrs Richerts and the plaintiff’s meter readers
stationed at Wemmershoek, the readings obtained by those meter
readers
and commu­nicated to Bourbon-Leftley Snr were incorrect.
It appears that the meter readers misread the meter installed on the
trust’s 150 mm pipeline: the dial of the meter only showed six
digits. This required that each reading had to be multiplied by
a
factor of 10, as indicated on the face of the meter. However, this
was not done, such error being perpetuated until about July
1999,
when the plaintiff’s officials discovered their mistake.
With
effect from July 1999, the meter was read correctly and reflected a
substantial excess by the trust over and above its overall
allocation of water. However, these facts were not drawn to the
attention of the trust. To com­pound matters, accounts prepared
on the basis of the correct readings were erroneously addressed to
the trust’s predecessor in title, Le Fayet, instead of to
the
trust, which did not at any stage receive an account from the
plaintiff in respect of water. It was common cause that any accounts
that may have been sent to Le Fayet prior to July 1999 would have
reflected that no money was owing in respect of water usage on
Môrelig.
This
state of affairs persisted until 7 November 2001, when a final
demand was addressed and hand-delivered to the trust on
behalf of
the plaintiff, claiming immediate payment of the amount in issue in
these pro­ceedings, which represents the total
of the previous
three years’ water consumption by the trust. This was the first
intima­tion that the trust or Bourbon-Leftley
Snr received from
the plaintiff that the trust had been exceeding its free allocation
in terms of the servitude on a regular basis.
The record shows that
the actual water usage on the farm during the period covered by the
present claim was as follows:
1 January to
31 Decem­ber 1999: 309 840 kilolitres;
1 January to 31
Decem­ber 2000: 348 629 kilolitres;
1 January to
31 Decem­ber 2001: 265 852 kilolitres.
The
applicable rate charged to and paid by other riparian owners in
respect of excess water is the so-called
‘miscel­laneous
plus 25%’
tariff. Should the trust be found to be liable to
pay for ex­cess water at this rate, then it would be liable for
payment of
the amount claimed in the particulars of plaintiff’s
claim, based on the above rate.
Upon
receipt of the demand for payment, the trust denied all liability
and maintained that attitude throughout, thus giving rise
to the
present litigation.
To
sum up thus far, it appears from the evidence that for a prolonged
period the trust had been regularly exceeding its overall
allocation
of water. The trust was repeatedly, but erroneously, informed by the
plaintiff’s officials that it was well within
the bounds of its
permitted allocation. The plaintiff, on the other hand, was aware –
at least since July 1999 – of the fact
that the trust was
exceeding its allocation. After discovering the true facts, the
plaintiff’s officials continued on a regular
basis to read the
water meters on the farm in question. Knowing the true facts, the
plaintiff for a further period of more than
two years failed to
commu­nicate such knowledge to the trust or to send it any
accounts. Instead, the trust was permitted to
continue exceeding its
overall allocation.
It
was submitted on behalf of the plaintiff that the trust – in the
person of Bourbon-Leftley Snr and later also his son – was
aware
of the error made by the plaintiff and of the actual water usage on
the farm. This was denied on behalf of the trust. Although
Bourbon-Leftley Snr testified that he had a feeling
(’n gevoel)
that the readings provided to him by Mrs Riecherts were on the low
side and that the trust might have been using more water, her
repeated communications of the figures reassured him and he did not
deem it necessary to investigate further or to raise this issue
with
her or with any other person at the municipality. As he put it on
more than one occasion in the course of his evidence:
‘Wie was
ek om met haar syfers te stry?’
Based
on the evidence as a whole, including that of Bourbon-Leftley Snr
and Jnr, both of whom made a favourable impression as witnesses,
I
am unable to find as a fact that they knew of such excess
consumption. The matter must therefore be decided on the basis that
both parties were unaware of the error in the meter readings until
July 1999, when the plaintiff discovered the error. Thereafter,
the
trust remained ignorant of the true state of affairs until November
2001.
Tacit Term
In
approaching the question as to whether or not the plaintiff is
entitled to rely on the alleged tacit term as pleaded, the following
succinct summary of the legal position by Nienaber JA in
Wilkins NO v Voges
2
serves as the starting point:
‘
A tacit term, one so self-evident as to go without saying, can
be actual or imputed. It is actual if both parties thought about a
matter which is pertinent but did not bother to declare their
assent. It is imputed if they would have assented about such a
matter
if only they had thought about it – which they did not do
because they overlooked a present fact or failed to anticipate a
future
one. Being unspoken, a tacit term is invariably a matter of
inference. It is an inference as to what both parties must or would
have had in mind. The inference must be a necessary one: after all,
if several conceivable terms are all equally plausible, none
of them
can be said to be axiomatic. The inference can be drawn from the
express terms and from admissible evidence of surrounding
circumstances. The onus to prove the material from which the
inference is to be drawn rests on the party seeking to rely on the
tacit term. The practical test for determining what the parties
would necessarily have agreed on the issue in dispute is the
celebrated
bystander test. Since one may assume that the parties to
a commercial contract are intent on concluding a contract which
functions
efficiently, a term will readily be imported into a
contract if it is necessary to ensure its business efficacy;
conversely, it
is unlikely that the parties would have been
unanimous on both the need for and the content of a term, not
expressed, when such
a term is not necessary to render the contract
fully functional.
3
…
A tacit term in a written contract, be it actual or imputed,
can be the corollary of the express terms – reading, as it were,

between the lines – or it can be the product of the express terms
read in conjunction with evidence of admissible surrounding
circumstances.’
4
It
is not the plaintiff’s case that the tacit term relied upon was an
actual
tacit term in the sense of being one which both
parties thought about but did not bother to express. It was conceded
that, on the
probabilities, the issue of what would occur if the
riparian owners’ allocation were to be ex­ceeded was not
something to
which the parties applied their minds. It follows
there­fore that the plaintiff must rely on an
imputed
tacit
term. This entails an enquiry as to whether or not the parties, had
they been asked the appropriate question by an officious
bystander
at the time of the contract, would have answered promptly and with
unanimity. As to what
‘the appro­priate question’
should
be, the parties differ widely: the plaintiff contends that, if the
parties had been asked by an officious bystander what
would happen
if a riparian owner exceeded its allocation of free water as well as
the maximum allocation of water at a dis­count,
their unanimous
reply would have been that the riparian owners should be charged for
the excess water at the going rate.
The
plaintiff’s argument in this regard proceeded as follows: The
servitude makes specific provision for the allocation of a volume
of
water, free of charge, to the owner of the property. In addition, a
further allocation at two specified (discounted) rates is
granted.
Nothing is said as to what would happen should the property owner
exceed its overall allocation of water in terms of the
servitude.
According to the plaintiff, one of only three possible results could
therefore eventuate in relation to this unspecified
(fourth)
cate­gory of water:
Either
the excess water would be provided at no cost; or
the excess water would be
provided at a cost; or
the plaintiff would simply cut
off the supply of water to the property owner.
It was argued that
the first option would be utterly unbusinesslike and could not be
imported as a tacit term into the servitude
on that account alone.
It is also incompatible with the express terms of the agreement.
As
far as the third option is concerned, it was submitted that the
plain­tiff could not simply have taken the law into its own
hands and cut off the water supply, as this would constitute an
interference with the servitudinal rights which, in turn, would
entitle the party affected to rely on the
mandament van spolie
.
It follows therefore, according to the plaintiff, that the second
option had to be accepted as the tacit term to be imported into
the
agreement.
I
think that the plaintiff is probably correct in arguing that, faced
with the limited range of options as set out above, the parties
would probably have agreed that, of course, the riparian owner must
pay for the excess water used at the going rate. I am not satisfied,
however, that the simple question posed on behalf of the plaintiff
is the
appropriate
question for purposes of the present
enquiry, having regard to the peculiar circumstances and
complexities sur­rounding the
present case, as outlined above.
In this regard I agree with counsel for the trust that the question
in the form as suggested by
the plaintiff amounts to an
over-simplification. To my mind, in order to have any relevance to
the present situation, the imaginative
bystander, foreseeing the
scenario herein, should, in addition, have enquired as to what would
happen –
if the owner unwittingly were
to exceed his overall allocation of water for more than 8 years;
if the ’s officials, over a
prolonged period, repeatedly were to misinform the owner by
reassuring him that his actual consumption
was comfortably within
his permissible free allocation;
if such owner throughout the
relevant period never received a single account from the ;
if the aforesaid state of
affairs were caused by the unilateral error of the ’s officials;
if the were to fail to
communicate this fact to the owner or to rectify the error for more
than two years after discovering the
error in relation to the ’s
con­sumption of water, while continuing to supply such owner
with water in excess of his maximum
allocation.
Faced
with this scenario at the time of the conclusion of the agreement, I
have grave doubts whether the pre­decessors in title
of the
present parties would promptly and unanimously have responded to an
officious bystander – either in 1950 or in 1952 or
in 1964 –
that the trust must, of course, pay for the full excess at the going
rate. On the probabilities, one or both of the
parties may well have
responded by saying that, at the very least, they would need to
think about it. This result would, of course,
be fatal for the tacit
term contended for because, as pointed out by Brand JA in
Botha
v Coopers & Lybrand,
5
‘
As een van die partye, byvoorbeeld, sou aandui dat hy eers die
saak verder wil oorweeg of dat hy eers sekere onduidelikhede wil

opklaar voordat hy sy antwoord gee, slaag die beweerde stil­swyende
term nie die toets nie.’
A
further likely response by a riparian owner to the question as to
what would happen if he were to exceed his overall allocation
of
water in a given year, could have been to say that the plaintiff’s
officials would have to contact him immediately and draw
his
attention to the state of affairs. This is in fact what
Bourbon-Leftley Snr testified when asked the same question. His
evidence
in this regard is entirely in keeping with the
probabilities and is moreover borne out by the actual conduct of the
parties in
this case: as pointed out above,
6
when the plaintiff’s officials first thought – erroneously, as
it turned out – that the trust was about to exceed its allocation
of
free
water (not even its
total
allocation), they
immediately notified Bourbon-Leftley Snr of this fact. I find it
inconceivable that the parties would have replied
to the officious
bystander that it would be in order for the plaintiff to continue
supplying the owner with excess water, while
remaining silent about
such excess and then – more than two years later out of the blue –
to present the owner with a massive
account for his excess
consumption, charged at the maximum rate.
A
further reason why the tacit term contended for by the plaintiff
cannot, in my view, be implied, is because it would be contrary
to
the express terms of the servitude. In clause 2 thereof, it is
recorded that the owner is entitled to a certain allocation of
water, free of charge, and
‘’verdere toevoer van water …tot
’n
maksimum
van’
the stipulated volume
(my emphasis). Further­more, clause 6 states
‘dat behalwe
soos hierbo vermeld, erken die Eienaar hiermee formeel dat hy geen
reg het om water te neem uit die Wemmers­rivier
of sy systrome
nie en doen formeel afstand van alle Oewer­regte daarop’.
If
the plaintiff’s tacit term were to be implied, it would lead to
the unintended and absurd consequence that, contrary to the
above-mentioned provisions, all riparian owners would be entitled,
as of right, to use
unlimited
quantities of water from the
pipeline as long as they were prepared to pay for it at the going
rate. I am satisfied that such a
proposal, had it been pointed out
to the original parties, would promptly have been rejected – at
least by the representatives
of the municipality – as completely
unacceptable. The fact of the matter is that the total volume of
water from the pipeline
to which the riparian owners would be
entitled formed the subject of intense debate and negotiation
between the parties prior to
conclusion of the agreement. The
pipeline was intended, after all, to provide drinking water for the
citizens of Cape Town,
not
irrigation water for the riparian
owners of Wemmershoek.
Bearing
in mind that the court does not lightly import a tacit term into an
agreement, I am of the view that the plaintiff has failed
to
discharge the
onus
of proving that the tacit term contended
for ought to be imported into the agreement.
Delictual Claim
The
plaintiff’s alternative cause of action based on delict may be
briefly disposed of. In arguing this part of the claim, counsel
for
the plaintiff relied on the judgments in
Minister van Verdediging
v Van Wyk en andere
7
and
Clifford v Farinha.
8
Both judgments dealt with the
condictio furtiva.
In order to
succeed, the plaintiff has to prove that the trust unlaw­fully
and intention­ally, alternatively negligently,
misappropriated
the water, as a result whereof the plaintiff suffered damages.
In
my view, the plaintiff has failed to prove,
inter alia
, the
elements of unlawfulness and damages. With regard to
unlawfulness
,
it is difficult to com­prehend how there could have been any
‘unlawful misappropriation’
(a euphemism for theft) where
the
‘com­plainant’
is knowingly and voluntarily
supplying the
‘thief’
with the
‘stolen’
commodity.
The plot thickens where the complainant is aware of the true state
of affairs, but the thief is not. This is precisely
what happened
in
casu
after July 1999, when the plaintiff discovered its earlier
error.
As for
damages
, the point made on behalf of the trust is
simply that water, although a valuable and scarce resource, cannot
be sold or marketed
like other commodities. While there is water in
the dam, it inevitably means that the reasonable requirements of the
community
are being met. In the absence of proof that the dam was
empty at any stage during the relevant period, the plaintiff cannot
prove
that it could have sold the water in question to any other
user and hence that it suffered damages. This conclusion renders it

unnecessary to consider the element of intentional or negligent
mis­appro­priation.
It
follows that, for the reasons set out above, the
plaintiff
is not entitled to succeed on either cause of action insofar as it
relates to the
fourth
category of water.
Alternative Basis
The
foregoing conclusion disposes of the bulk of the plaintiff’s
claim, based as it is on the fourth category of water. It does
not,
however, dispose of that portion of the claim – albeit a minuscule
portion – based on the trust’s consumption of its
allo­cation
under the second and third categories, namely the 60 616
kilolitres at a dis­counted rate.
It
is plain from the evidence that the trust, in each of the years in
question, did as a fact utilise its full allocation of water
at a
discounted rate. In terms of the express terms of the servitude, the
trust is accordingly
prima facie
liable to pay for such water
at the rates set out above.
9
The
plea on behalf of the trust does not specifically address this
portion of the claim. The general defence raised was a denial
of the
plaintiff’s tacit term. In the alternative, and if the plaintiff’s
tacit term were found to form part of the agreement,
certain further
alleged tacit terms were raised on behalf of the trust to the effect
that the plaintiff would only be entitled
to demand payment if it
had given the trust prior reasonable notice of the fact that they
were exceeding their maximum annual allocation.
I
find it unnecessary to burden this judgment with a detailed analysis
of those alleged terms. Suffice it for present purposes to
say,
first, that the condition on which the trust’s tacit term is
premised – namely a finding that the plaintiff’s tacit
term has
been proved – is lacking, no such term having been found.
Secondly, the defence raised does not appear to relate specifically
to the second and third categories of water at a dis­counted
rate. Finally, bearing in mind that the
onus
to prove a tacit
term rests on the party seeking to rely on such term,
10
the trust has not, in my view, discharged such
onus
.
It
follows from the foregoing that in respect of the years 1999, 2000
and 2001 the
plaintiff
is entitled to
payment of the following amounts:
30 308 kilolitres @ 2,19974c per kilolitre R666,70
30 308
kilolitres @ 3,2995c per kilolitre R1 000,01
giving an annual total of –
R1
666,71
with a total for the three years of –
R5
000,13
It
follows that judgment must be granted in favour of the
plaintiff
for payment of R5 000,13, together with interest from the time
of
mora
.
Costs
In
view of the limited degree of success resulting from the above
con­clusion, the question arises as to the effect on the

question of costs. It is quite apparent that the bulk of case was
concerned with the alleged tacit term in relation to the fourth
category of water. My conclusion in relation to that issue means
that the
trust
was successful in resisting
the bulk of the
plaintiff
’s claim. I
would esti­mate that the question about the said category
occupied approxi­mately 80% of the time during the
trial. In my
view, it would be fair if the
plaintiff
were ordered to pay 80% of the
trust’s
costs. However, as the parties have not had an opportunity of
addres­sing the question of costs in the light of these
conclusions,
I shall permit either party, on written notice to the
other side, to set the matter down for argument regarding the issue
of costs.
Failing such notice within 10 days from the date of this
judgment, the provisional order will become final.
Order
For the reasons
set out above, it is ordered as follows:
The
defendant
s
are ordered to pay the
plaintiff
an amount of R5 000,13, together with interest on such amount
a
tempore morae
.
Save as aforesaid, the
plaintiff
’s
claim is dismissed.
The
plaintiff
is directed to pay 80% of the
defendant
s’
costs herein.
The order set out in para (c) above is
provisional
. Leave is granted to either party,
on
written notice to the other side, to set the matter down for
argument regarding the issue of costs. Failing such notice within
10
days from the date of this judgment, the pro­visional order as
set out above will become final.
B M Griesel
1
Para
above.
2
[1994] ZASCA 53
;
1994
(3) SA 130
(A). See also
Botha
v Coopers & Lybrand
2002 (5) SA 347
(SCA) at 359D – 360F.
3
at
136I – 137D.
4
at
144C.
5
Footnote
above, para [24] at 360B.
6
Para
.
7
1976
(1) SA 397
(T).
8
1988
(4) SA 315
(W).
9
Para
above.
10
Wilkins
NO v Voges,
n
above, at 137A.