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SAFLII Note: Certain personal/private details of parties or witnesses have been redacted from this
document in compliance with the law and SAFLII Policy
REPUBLIC OF SOUTH AFRICA
IN THE HIGH COURT OF SOUTH AFRICA
(WESTERN CAPE DIVISION, CAPE TOWN)
CASE NO: 200/2021
In the matter between:
BERGRIVIER BOERDERY (PTY) LTD Applicant
And
LYNOL JULIUS PIETERSON First Respondent
LE-ANZE CATHERINE PIETERSON Second Respondent
SWARTLAND MUNICIPALITY Third Respondent
Heard: 11-13 December 2023
Delivered: 03 June 2024
JUDGMENT
LEKHULENI J
Introduction
[1] This application is a prototypical example of an abuse of power exercised by
the Master over his Servant, whose abuse culminated in severing the Master and
Servant relationship between the two. This unsavoury relationship climaxed to an
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application in terms of the provisions of the Prevention of Illegal Eviction from and
Unlawful Occupation of Land Act 19 of 1998 ('the PIE Act') in which the applicant
seeks an order for the eviction of the first and second respondent ('the respondents')
from the property situated at erf 1[ …] K[…], also known as 1[ …] P[…] Street, K[…]
('the property').
The Factual Background
[2] The applicant is the registered owner of the property, which the respondents
currently occupy. Mr Bernard Conradie is the sole Managing Director of the
applicant, a juristic person seeking the eviction order against the respondents.
[3] The first respondent began working as a truck driver for Johan Conradie, the
father of Benard Conradie, in Die Tuin Halfmanshof in Porterville on 22 November
1984 at the age of 24. The first respondent's job was to transport employees from
town to the farm daily. In 2010, Bergrivier Boerdery ('the applicant'), duly represented
by Mr Barnard Conradie, purchased the Zanddriftt Nr 149 farm. After 22 years of
dedicated service to Mr Johan Conradie, the first respondent's career took a
significant turn. He began working for Bernard Conradie at the Zanddrift farm in
2010, initially as a labourer and later as a farm manager. However, in 2020, their
relationship, which had been marked by loyalty, soured and was eventually
terminated by mutual agreement.
[4] In 2012, Mr Johan Conradie, the father of Bernard Conradie, informed the first
respondent that there was an opportunity for the previously disadvantaged people to
apply for water rights. Mr Johan Conradie alerted the first respondent of the new
government policy around issuing water use licenses to previously disadvantaged
communities, which could be used as equity contribution for up to 30% of existing
farming operations. Mr Johan Conradie had previously used his resources to register
a Trust for the first respondent, the Lynol Pieterson Family Trust ('the Trust'), in
2010. Mr Johan Conradie was one of the initial trustees of that Trust.
[5] Indeed, the said Trust duly applied for a water use license in terms of section
41 of the National Water Act 36 of 1998, and the application was granted with effect
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from 1 5 December 201 4. The water use license was intended to be used by the
Trust as the equity contribution to acquire 30% in the Bergr ivier Boerdery, the
company which owns the Zanddrift farm on which the water allocation would be
used. According to the respondents, Bergrivier Boerdery used the water allocated to
the Trust for its farming enterprise and has failed to pay the Trust a cent for such
usage.
[6] In 2015, the first respondent and Mr Bernard Conradie discussed the
possibility of the first respondent and his family leaving Porterville, where they lived,
and moving closer to Mooreesburg, where Bergrivier Boerdery's farm is situated. It
was said that this move would benefit the first respondent by shortening his
commute. Pursuant thereto , the respondents began looking at potential houses in
Koringberg and decided to buy a property much closer to the Zanddrift farm than
Porterville, which is 80 kilometres away from the farm. The respondents identified a
property and approached Standard Bank for a loan of R750 000, which was the
property's purchase price, but they could not obtain a loan for the full purchase price.
[7] The respondents approached Bergrivier Boerdery to assist them with a short -
term loan of R180,000 to pay a deposit on the property's purchase price. The
respondents undertook to repay the applicant from the proceeds of selling their
former house in Porterville.
[8] On 16 March 2015, Bergrivier Boerdery, duly represented by Mr Bernard
Conradie, agreed to lend the respondents the amount of R 180,000 as well as the
transfer costs necessary for them to purchase the property that they h ad identified.
Bergrivier Boerdery paid the sum of R 180,000 to the transferring attorney ’s trust
account on 16 March 2015 and an additional amount of R 21071,08 in respect of
transfer costs . In total, Bergr ivier Boerdery paid the sum of R201 071, 08 into the
transferring attorney’s trust account for the benefit of the respondents.
[9] The respondents were in terms of the loan agreement required to repay the
applicant from the proceeds of the sale of their house in Porterville. However, they
could not repay the total loan amount as there was an outstanding bond in their
Porterville property. The respondents sold their Porterville property for R230,000,
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and there were not enough funds left over to settle their full indebtedness to the
applicant. However, on 03 September 2015, the respondents repaid R140,000 to
Bergrivier Boerdery from the proceeds of the sale of their Porterville property.
Pursuant thereto, the respondents remained indebted to the applicant in the amount
of R61 000 being the balance of the total amount paid less the R140,000 paid to
Bergrivier Boerdery.
[10] The respondents occupied their new house in Koringberg, and in 2017, there
was a discussion between the respondents and Mr Barnard Conradie on the sale of
this property. The relevant terms of the said discussions are in dispute. As it will
appear later in this judgment, the discussions are germane to determining the
applicant's eviction application against the respondents. The relevant terms of the
said discussions, as articulated by Mr Barnard Conradie, are that the first respondent
approached him and advised him that the respondents had fallen into arrears with
their bond repayments regarding the property and that Standard Bank was
threatening them with foreclosure.
[11] To assist the respondents and ensure they would not be left homeless, Mr
Barnard Conradie asserted that Bergrivier Beordery agreed to purchase the property
from respondents and settle their outstanding liability with Standard Bank. Mr
Conradie stated that he advised Mr Pieterson that if he could come up with the
money, he could purchase the property from Bergrivier . Mr Conradie asserted that
the first respondent was given a right of first refusal in respect of the property.
[12] In addition, Mr Bernard Conradie averred that he informed the respondents
that they could continue residing at the property for a nominal rental amount of R450
per week, which, according to him, was far below the market-related rental for similar
properties in the area. Subsequently, the applicant and the respondents entered into
a sale agreement in which the respondents sold their property in Koringberg to the
applicant. On 26 February 2018, Bergrivier Boerdery paid the purchase price of
R655,000 (outstanding amount on the bond) to the transferring attorneys and took
the transfer of the property.
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[13] On 28 February 2018, Bergrivier Boerdery and the respondents entered into a
written lease agreement in respect of the said property. The lease agreement was
for a fixed period of 24 months. The respondents were required to pay rent of R450
per week and be liable for electricity, water, refuse removal, and other municipal
service charges for the property.
[14] Meanwhile, the respondents gave a different version to that of the applicant
regarding the circumstances that led to the sale of this property . The respondents
disputed the version proffered by Mr Bernard Conradie on the circumstances leading
to the sale of their property . At the hearing of this application, the first respondent
testified that towards the end of 2017, Mr Bernard Conradie approached the first
respondent and informed him that the first respondent would no longer be able to
pay the mortgage bond on his house. The first respondent questioned Mr Conradie
why that would be the case, and in response, Mr Conradie told him that he would
reduce the first respondent's salary to R1200 per week as he could no longer afford
to pay him R15,000 per month. The first respondent asserted that he told Mr
Conradie that he disagreed with what Mr Conradie wanted to do and that between
him and his wife, they would continue to service the bond as they had been doing
until then.
[15] The first respondent stated that Mr Conradie subsequently reduced the first
respondent's salary to R1200 per week . Later, Mr Conradie then came to the first
respondent’s house and stated that the first respondent would not afford to pay the
mortgage bond on the property anymore, but he would help them by having the
applicant purchase the property from them for the outstanding amount on the
mortgage bond which was R660 000 at the time. The first respondent asserted that
Mr Conradie also informed them that they could reside on the property and that
when the dividends for the water use license started being paid out , they would
repurchase the house from the applicant . The respondents denied that they were
struggling to pay the bond or that they told Mr Conradie that they could not pay the
bond instalments. The respondents further asserted that they were up to date with
their bond account and had not received any demand whatsoever for any arrear
instalment from Standard Bank.
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[16] Notably, the respondent stated that they paid R750,000 as the purchase price
of the house in 2015. By the time of the alleged sale of the house in 2017, the
outstanding balance was already R655,000. This was the price at which Mr Conradie
took over the house without compensating the respondents for the capital they had
already put into it or the property's appreciation value. The respondents further
asserted that a lease agreement was concluded with the applicant in terms of which
they would pay rental in the sum of R450 per week while they were waiting for Mr
Conradie to pay the dividends to their Trust from which dividends (arising from the
water rights) the respondents would then buy back the house from the applicant. The
respondents denied the version of Mr Conradie on the reasons that led to the sale of
their property.
[17] On 28 February 2020, the lease agreement terminated by the effluxion of time
and continued thereafter on a month- to-month basis. During June 2020, the
applicant sought to sell the property occupied by the respondents to acquire
additional capital to fund its business. Mr Conradie verbally notified the respondents
that they had to vacate the property by 31 August 2020. The applicant sold the
property to one Van den Berg and secured alternative accommodation for the
respondents in Koringberg.
[18] On 27 August 2020, the respondents' legal representatives addressed the
correspondence to Mr Conradie, advising him that the respondents would not vacate
the property. During the same period, Mr Conradie called the first respondent to his
office. He informed him that he would terminate the first respondent's services as
their trust relationship had broken down. The applicant thereafter instituted eviction
proceedings against the respondents.
[19] The respondents opposed the eviction application and raised several
defences to the applicant's application. Firstly, the respondents averred that Mr
Bernard Conradie abused the Broad- Based Black Economic Empowerment
legislation to gain access to scarce water rights. Once he had used the respondents
to obtain the water rights for his farming business, he discarded them like dirt and
treated them like lepers.
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[20] Secondly, the respondents asserted that Mr Conradie abused his privilege on
education and, with the assistance of his qualified attorney, stole the proceeds of the
sale of his house in Porterville and thereafter used the respondents' water rights for
his own commercial benefits without paying the respondents a cent for it and in the
process leaving the respondents with a usage bill of more than one million rands.
The respondents contended that since the water use license was issued, the
applicant used it and expanded its farming enterprise by planting various crops,
including butternuts, almonds, and watermelon. Notwithstanding, the applicant
refuses to pay the Trust or the first respondent for the use of the Trust's water use
rights. Simply put, the respondents asserted that Bergrivier Boerdery, the applicant
herein, is using water rights allocated to the Trust. In return, the applicant is not
paying dividends or 30% of its net profits for such usage.
[21] Thirdly, the respondents contended that Mr Barnard Conradie expropriated
without compensation when he unilaterally reduced the first respondent's salary from
R15,000 to R4800 per month. According to the respondents, Mr Conradie knew that
it would be difficult for the respondents to continue paying the bond on their property.
Nonetheless, the respondents contended that they were not in arrears with their
bond repayments when Mr Conradie unlawfully decreased the first respondent’s
salary and offered to buy their house and further told them that they could
repurchase it from the applicant once the respondent received their dividends of 30%
equity in the applicant.
[22] The eviction application was set for a hearing in the opposed roll. Following
the allegations in the relevant founding and opposing affidavits, a dispute of facts
arose. Consequently, Fortuin J then referred the following issues for the hearing of
oral evidence:
22.1 Whether the Trust and or Mr Pieterson and or Ms Pieterson are entitled
30% shareholding in Bergrivier Boerdery and or any dividends in return for the
Trust making available its water use rights in terms of the water use license
issued to the Trust by the National Department of Water Affairs;
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22.2 Whether the Trust and the applicant (Bergrivier) entered into the co-
operation agreement annexed to the replying affidavit and whether such
agreement currently governs the relationship between the Trust and Bergrivier
Boerdery;
22.3 Whether or not Bernard Conradie coerced Mr Pieterson and or Ms
Pieterson into selling the property known as 152 Palmiet Street Koringberg to
Bergrivier Boerdery;
22.4 Whether Mr Bernard Conradie, on behalf of Bergr ivier Boerdery
represented to Mr P ieterson that he w ould be entitled to re- purchase the
property once Bergrivier Boerdery had paid to the Trust any dividends to
which the T rust alleges it was entitled to as a consequence of the 30%
shareholding referred to above;
22.5 Whether Bergrivier Boerdery utilised the Trust’s water use allocation in
terms of the water use license since the license was granted in 2014;
22.6 Whether Bergrivier Boerdery paid to the Trust any money for any use
of the water allocated under the water use license since 2014;
22.7 Which party bears the obligation to pay all water use charges, cost s,
fees, tariffs, penalties, interest , and other amounts which are or become
payable in respect of the water use license and the water abstracted in terms
thereof.
Discussion
[23] Indeed, evidence was presented, and Mr Barnard Conradie and the two
respondents were called to testify in this matter. For the purposes of this judgment, I
will not repeat their evidence word for word but will refer to it when addressing the
questions raised above.
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[24] For the sake of convenience, I will deal with the issues raised above ad
seriatem.
Is the Trust and/or Mr Pieterson entitled to 30% shareholding in Bergrivier
Boerdery and to the payment of Dividends?
[25] The second respondent was the first witness to testify. She is married to the
first respondent. The second respondent testified that Mr Conradie attended at her
house and told her and her husband (first respondent) that they needed to sell their
house in Koringberg to the applicant, and that her husband would get 30% dividends
from the applicant and that an amount of R655 000 would be deducted from the
dividends. In her evidence in chief, Ms Pieterson testified that the respondents had
agreed to sell the house to Bergrivier Boerdery because Mr Barnard Conradie had
told them that Mr Pieterson had 30% shareholding in Bergrivier Boerdery and that Mr
Pieterson would receive dividends from the shareholding. According to her, she was
not aware of an agreement between the Trust and the applicant that provided that
the shares in the applicant would only be transferred to the Trust after the water use
license was rectified to show that the holder of the water use license was Bergrivier
Boerdery and not the Trust.
[26] Meanwhile, the first respondent (Mr Pieterson) averred in his answering
affidavit and in his evidence in chief that in 2010, Mr Barnard Conradie took over the
farming activities from his father and started Bergrivier Boerdery (Pty) Ltd, the
applicant herein. The first respondent asserted that he continued his employment
with the applicant until August 2020. The first respondent further averred that
because Mr Bernard Conradie wanted to expand Bergrivier Boerdery, he needed
additional irrigation water as the already available quantity was insufficient. Mr
Conradie needed to apply to the Department of Water Affairs for a water use license
that would allow the utilisation of irrigation water from the Bergrivier Government
Water Scheme for the expansions planned.
[27] As part of the water use license requirements, the first respondent asserted
that Mr Conradie needed to satisfy the Black Economic Empowerment provisions of
the National Water Act 36 of 1998, in terms of which he needed to offer a 30% equity
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stake to a Black Economic Enterprise. The Black Economic Enterprise would be
applying for the license to use the water on Mr Conradie's farm. According to the first
respondent, the water use rights being applied for would, once approved, be the
Black Economic Enterprise's contribution to acquire 30% in Bergrivier Boerdery.
[28] When he started working for the applicant in 2010, Mr Johan Conradie
registered the Lynol Pieterson Family Trust (the Trust) on his behalf . This entity was
used as the black economic empowerment enterprise that applied for the water use
license in favour of Bergrivier Boerdery. In return, the Trust would have 30% equity
in the Bergrivier Boerdery. The first respondent further testified that although the
water use license was approved and allocated to the Trust for the benefit of
Bergrivier Boerdery, Mr Barnard Conradie has not taken any steps to formali se the
30% equity share. However, he continuously brought him under the impression that
the Trust owned 30% of Bergrivier Boerdery.
[29] Mr Peterson asserted that he has accordingly accepted that the Trust was
entitled to 30% dividends in Bergrivier Boerdery and that as a beneficiary of the
Trust, his family would receive financial benefits from the applicant. Over time, and
when he asked Mr Benard Conradie about the 30% equity, the latter told the first
respondent that there was a problem in how the Department of Water Affairs worded
the water use license in that the license lists the Trust as the owner of the applicant
and that the 30% equity share could only be affected once this error has been
rectified. For this reason, an application for an amendment of the water use license
was made to the Department of Water Affairs and Sanitation in 2017.
[30] Meanwhile, Mr Bernard Conradie, on the other hand, testified that the first
respondent was a member of the Lower Berg River Irrigation Board when water use
rights became available for the BEE projects. According to Mr Conradie, Mr
Pieterson heard about it at the Water Board Meeting and decided to apply for these
rights. To obtain these rights, a commercial partner is necessary because to utilise
the water, you need land and expertise. To this end, Mr Conradie testified that Mr
Peterson approached him and told him he wanted to apply for the water use rights.
He asked Mr Conradie if he would be willing to be his commercial partner.
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[31] Mr Conradie agreed to the proposal but indicated to him that if the T rust
applies for these water rights, he wanted to be a trustee of the Trust so that there
would be transparency to what happens within the application of the water rights. Mr
Conradie further testified that he insisted that the water use rights be issued in the
name of the operating entity (Bergrivier Boedery); otherwise, no shares would be
issued. According to him, it was stated in the original application that the water rights
must be issued in the name of Bergrivier Boerdery; otherwise, no shares would be
issued.
[32] The reason he wanted the license to be issued in Bergrivier Boerdery was
that if the water is not issued in the name of the applicant, the company could not
use the water use license as collateral to loan money from the Bank as the Banks do
not acknowledge water rights issued in a different company. In this case, the water
use license was issued in the name of the Trust, and as a result, he could not issue
shares in favour of the Trust. Mr Conradie testified that Mr Pieterson joined him in
extensive conversations with different banks and got legal opinions to get the
Department of Water Affairs to have the water use licence corrected and issued in
the name of Bergrivier Boerdery.
[33] I had the opportunity to observe the parties during the presentation of oral
evidence in this matter. It became clear and unmistakable to me that the first
respondent was an unsophisticated individual due to his upbringing and lack of
education. He lacks commercial wisdom and could not decipher technical terms
ordinarily used in a commercial environment and or Company law. He did not go far
with his studies. He only went as far as Grade 8 at school. He has been a farm
worker for the better part of his life. He was a truck driver of Mr Barnard Conradie's
father for two decades. He regarded Mr Barnard Conradie, who grew in front of him,
as his mentor. Mr Conradie confirmed during his evidence in chief that he was the
mentor of Mr Pieterson, and that the latter regarded him as such.
[34] Mr Conradie is a qualified farmer with a degree in agricultural science from
Stellenbosch University. He appeared to the court to be an erudite professional with
an impeccable business expertise and acumen. The bargaining and / or negotiating
power between Mr Conradie and Mr Pieters on was undoubtedly skewed and
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uneven. Mr Pieterson's ability to influence Mr Conradie was limited or non-existent.
While the ability of Mr Conradie to influence Mr Pieterson was overwhelming.
Crucially, Mr Barnard was the first respondent's employer. Mr Pieterson was looking
up to Mr Conradie for survival and livelihood. He was vulnerable and at the mercy of
Mr Conradie. The upshot is that this case, in my view, must be viewed from that
perspective.
[35] From the evidence presented, there are reasons for the respondents to
believe that they or the Trust is entitled to 30% of equity in the applicant. The
following reasons bear this out.
[36] It is common cause that the license was issued in the name of the first
respondent’s Trust. The first respondent is a beneficiary of this Trust . The water use
license was issued to the Trust as a measure to redress past imbalances,
particularly the inequitable access to water resources. The issuing of the water use
license was a project by the government which was meant to empower people from
previously disadvantaged groups to have a 30% stake in existing farming
enterprises.
[37] The license was applied for in the Trust's name and intended to be used by
the Trust on the property referred to as Bergrivier Boerdery. In exchange, the Trust
was supposed to receive a 30% shareholding in Bergrivier Boerdery. The motivation
report for the water use licence application prepared by an independent expert,
AgriExpert CC, records the Lynol Peterson Family Trust (the Trust) as the applicant.
Crucially, the Executive Summary of this report in support of the application for the
water use license explicitly stated that the application, together with the required
application forms and supporting documentation, was submitted to the Department
of Water Affairs on behalf of the Trust. The water use rights was for the Trust and it
had was to be registered for use at the applic ant’s farm. The suggestion that the
license had to be registered in the name of the applicant as the owner of the license
and not in the name of the Trust is somewhat misleading.
[38] The Executive summary also notes that the Lynol Pieterson Family Trust is a
registered Black Economic Enterprise that was established to hold an equity stake in
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the commercial farming enterprise - Bergrivier Boerdery (Pty) Ltd. Importantly, the
executive summary of the application notes that on approval, the water use rights
would be allocated and registered for use by Bergrivier Boerdery (Pty) Ltd on the
farm Zandrift Nr 149. Once approved, the water use rights being applied for would be
the Lynol Pieterson Family Trust's contribution to acquire 30% shares in the
Bergrivier Boerdery.
[39] It is abundantly clear from the above that the license had to be issued in the
name of the Trust. The suggestion by Mr Barnard Conradie that the license had to
be issued in the name of Bergrivier Boerdery is farfetched and not supported by
objective facts and evidence before this court. If that was the case, the question that
begs is why the Lyonel Family Trust was involved in the application for a license. As
correctly pointed out by Mr Kilowan, the respondents ’ counsel, from a policy
perspective, the water use license would indeed not be issued in the name of the
applicant because it is not an entity of which the shareholders are members of a
demographic group who needed to be empowered. While Mr Conradie would have
wanted to have the license issued in the name of the applicant, this would have been
inconsistent with the BEE project envisaged by the Department of Water Affairs, of
which Mr Conradie was aware and hence partnered with the T rust to apply for the
water use license.
[40] In addition, Mr Conradie agreed in cross -examination that the Department of
Water and Sanitation was entitled to pursue a policy decision to use water as a
Broad-Based Black Economic Empowerment tool. The proposition that the water use
license had to be issued in the applicant's name before the respondents could have
a 30% shareholding equity in the applicant is false and not supported by objective
facts. In my view, if regard is had to the motivation report for the license by
AgriExpert CC (which Mr Conradie is aware of), the Trust was at all times entitled to
the 30% equity in the applicant after the issue of the water use license.
[41] Furthermore, there is nothing in the scheme implemented by the Department
of Water and Sanitation, which stated that the Trust c ould only get 30% when it
transfers the water license to the company in which it acquires the 30%
shareholding. The fact that the Trust contributed through the water use license to the
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applicant entitled the Trust to 30% shareholding in the applicant. The applicant did
not furnish this court with its financial statements from the date of issuing of the
water use license to the date of the dispute between the parties.
[42] I am aware that dividends are only payable once there is a shareholding. Mr
Barnard Conradie was adamant that he would not issue shares to the Trust as the
water use license was issued in the name of the Trust. Notwithstanding, Bergrivier
Boerdery benefited and continues to benefit from the water use license at the
expense of the Trust. In exchange for the Trust's contribution to the water use rights,
the Trust is entitled to 30% shareholding in the applicant as the Trust’s water use
rights are used at the applicant’s farm. This is consistent with the Broad-Based Black
Economic Empowerment project that the Department of Water and Sanitation
envisaged when the water use license was issued. This was known to the applicant
when the license was applied for, and this is what the applicant and the first
respondent intended when they decided to collectively harness their resources.
[43] The respondents cannot be faulted or critici sed for believing that they are
entitled to 30% of the applicant's equity. Significantly, it is common cause that the
applicant paid no dividends or profits to the Trust since the water use license was
issued until October 2018, when the cooperation agreement was signed. Mr
Conradie contended that the applicant did not use the water allocated to the Trust
and could not pay dividends to an entity that was not a shareholder. Mr Conradie
was adamant that Bergrivier Boerdery owned its own existing lawful water use from
the day the farm was bought. He denied that the farm used the water allocated to the
Trust regarding the water use license.
[44] In my view, this version is concocted and cannot be correct. It must be noted
that Mr Conradie has been working closely with the first respondent. According to
him, they even approached lawyers to vary the water use license to have it issued in
the applicant's name (Bergrivier Boerdery). There is no impediment that Mr Conradie
placed on record that could have stopped them from using the water license while
they were busy with their application to correct the license. There was no need to
correct the licence as it was issued to the rightful applicant, that is, the Trust. Unless
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the applicant’s intention was to thwart or undermine the empowerment objective that
the water stake by the previously disadvantaged was meant.
[45] Mr Barnard Conrade knew that Bergrivier Boerdery could not benefit under
the BEE scheme without the Trust. I am mindful of his desire to use the licence as
collateral; however, that did not deter the applicant from using the Trust’s water
rights. The fact that the license was issued in the name of the Trust did not stop or
serve as an impediment to the extraction of water in favour of the applicant. In any
event, the license was issued in the name of the Trust, consistent with supporting
documents submitted to the Department of Water Affairs when the application was
made.
[46] I must also emphasise that it was Mr Pieterson's unchallenged evidence that
since the issuance of the water use license, the applicant's farm increased its crop
by 190 hectares. According to Mr Peterson, before the issuance of the water use
license in favour of the Trust, the applicant only had water rights for 33 hectares and,
therefore, did not have enough water to plant an additional 190 hectares of crops. It
was Mr Peterson's oral evidence that after the allocation of the water use license to
the Trust, the applicant expanded its agricultural activities by planting 60 hectares of
permanent almond trees, irrigated throughout the year for the last four years. The
first respondent also contended that the applicant planted 30- hectare watermelon
per year for the last four years and 100- hectare butternut per year for the last four
years. This was in addition to the 190 hectares of crops that are irrigated with water,
which came from the water use license allocated to the Trust.
[47] While I accept that the first respondent is unsophisticated, I believe that he
has been a farmworker for many years and understands how the farm and the
expansion work. There are no reasons for this court to reject the first respondent's
version. Of great importance, in the motivation Report made in support of the water
use licence application, which Mr Conradie acquiesced and assented to, Mr
Pieterson is described as an agriculturist through and through, having worked on
various farms since 1981 to the present. The report described him as a person who
started his career as a farmworker on the farm of Dennis Shaw in the Piketberg area
and took the job of a truck driver with Conradie Boerdery in Saron in 1984. He
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worked for 22 years for Conradie Boerdery, mainly in export grape production. In
2003, he was appointed as assistant manager for Moravia Development, an LRAD -
funded farm for previously disadvantaged individuals on the Moravian Church lands
near Moravia.
[48] Significantly, the report states that Mr Pieterson was instrumental in
establishing about 70 hectares of wine grapes and bringing vines to full production.
From this description, it is incontestable that Mr Peterson is highly experienced in
farming, notwithstanding his limited academic qualification. Thus, his testimony on
the expansion of the Bergrivier Boredery after the issue of the water use license to
the Trust must be accepted.
[49] The applicant has never compensated the Trust or the respondents for using
these water rights. Mr Conradie did not deny that he expanded his crop by 190
hectares. Evidently, because he had no other water available, it follows that it came
from the water allocated to the Trust. Notwithstanding, the applicant refused or
neglected to pay for this water and gradually increased the amount owed to the
Department of Water and Sanitation by the Trust for the water used. To the extent
that the applicant used the water allocated to the Trust ever since the issuance of the
water use license created a lawful and legitimate expectation that the respondents
would be entitled to 30% equity from the applicant.
[50] As previously stated, Mr Conradie disputed that he used the water allocated
for the Trust before the co -operation agreement was concluded in 2018. According
to him, the applicant has been using its existing lawful water since the farm was
bought. He disputed that he used the water allocated to the Trust before 2018. From
a conspectus of all the evidence, this version , in my view, cannot be correct. It must
be stressed that as of 31 July 2017 , the Trust was indebted to the Department of
Water and Sanitation for water usage in the sum of R580 510,52. As of 3 1
December 2019, the Trust was indebted to the Department of Water and Sanitation
for water usage in the sum of R1,387,984. 86.
[51] In my view, the Department of Water and Sanitation would not have issued an
account for such an excessively high amount if the water was not used as suggested
17
by Mr Conradie. Mr Conradie gave an implausible explanation of how this account
was incurred. According to him, even though no water was used, the Department of
Water and Sanitation bills clients for the water allocated in terms of the water use
license. I find this explanation far -fetched and implausible. In my view, the
Department cannot issue accounts if there was no water that was used . The account
was issued because water was clearly used for the applicant's benefit. Furthermore,
Mr Conradie asserted that he approached the Department of Water Affairs and
informed them that they had not used the water, and the latter told him they had
stopped billing the Trust.
[52] Mr Conradie did not submit any evidence to prove or substantiate his
proposition. Importantly, in paragraph 25 of the applicant and the Trust’s application
to vary the license in terms of section 50(1), read with section 52 of National Water
Act 36 of 1998, the following is stated that contradicts Mr Conradie’s version:
“Notwithstanding that the LPF T rust cannot benefit from the issue of the
license in the incorrect name, the D epartment continues to issue water
accounts to the LPF Trust, the latest of which is attached hereto to as
Annexure “H”. Our client wishes to settle this account, but insofar as it cannot
commercially benefit from the license at the moment , it is extremely unfair to
demand payment from our client without the license being amended as stated
before.” (emphasis added)
[53] Mr Conradie further contended in his testimony that he wrote hundreds of
emails to the Department of Water and Sanitation to correct the billing as he did not
use the water. Surprisingly, no such e- mails were presented before this court to
confirm his assertion. On the contrary, the documentary evidence presented by the
respondents clearly indicates the amount due for the water usage, which militates
against Mr Conradie's version. Save for his i psi dixit , nothing to the contrary
suggests that the applicant did not use the water rights allocated to the Trust. From
the totality of the evidence, I am satisfied that, indeed, the Trust is entitled to 30%
equity in the applicant as a BEE partner pursuant to the water use rights in the farm
of the applicant.
18
Whether the Trust and the applicant entered into a co-operation agreement?
[54] From the evidence presented at the hearing of this application, i t is common
cause that the parties entered into a co- operation agreement in 2018. According to
Mr Barnard Conradie, the T rust and the applicant had initially agreed that the Trust
would acquire 30% of the shareholding in the applicant on condition that the T rust
successfully applied for and obtained a water use licence registered in the name the
Bergrivier Boerdery for use by the applicant , and in terms of which the applicant
would be entitled to utilize the water allocation pursuant to the water use licence.
[55] Furthermore, Mr Conradie contended that the Trust did not obtain the water
use license in the terms agreed upon and thus was not entitled to 30% of the
shareholding in the applicant, especially because the license was not issued in the
name of the applicant but the Trust. Subsequent thereto , the Trust and the applicant
entered into the co -operation agreement, in terms of which the Trust and the
applicant agreed that given the failure of the Trust to obtain the water use license in
the terms agreed, the Trust would receive payment in an amount equal to 30% of
any net profit after tax generated by the applicant. Mr Barnard Conradie asserted
that in terms of the cooperation agreement, the Trust is liable to pay all water usage
charges, costs, fees, tariffs, penalties, interest, and other amounts which are payable
in respect of the water use license and the water abstracted in terms thereof. It is
incontestable that it is the applicant and not the Trust that benefited from the water
use Rights. In my view, the Trust can only pay this account once all the payments
due to it by the applicant are fully compensated.
[56] On the other hand, the first respondent denied in the answering affidavit the
existence of the co-operation agreement entered between the Trust and Bergrivier
Boerdery in terms of which Bergrivier Boerdery is entitled to use the Trust's water
rights. The first respondent accused Mr Conradie of lying in this regard. However,
during his oral testimony, particularly during cross -examination, the first respondent
conceded that the Trust and the applicant had entered into the co -operation
agreement annexed to the replying affidavit as annexure RA1.
19
[57] To this end, Ms Adhikari, the applicant's Counsel, submitted that from this
contradiction, it is evident that the first respondent has been dishonest to the court.
Counsel argued that the first respondent disingenuously denied in his answering
affidavit the existence of the co-operation agreement entered between the Trust and
the applicant in terms of which Bergrivier Boerdery is entitled to the use of the Trust's
water rights. Ms Adhikari further submitted that the first respondent failed to explain
the contradiction in his different versions. To this end, Ms Adhikari submitted that the
order referring this point for viva voce evidence falls to be resolved in favour of the
applicant, and the respondents' version falls to be rejected.
[58] It is correct that the version proffered in the answering affidavit by the first
respondent on the existence of the co-operation agreement is at variance with his
viva voce evidence in court. In his oral testimony, the first respondent admitted to
this agreement. In my view, this discrepancy in the first respondent's version is
attributable to the first respondent's ignorance on legal matters and his complete
dependence on Mr Bernard Conradie in such cases. The first respondent asserted
that he had signed all the documents that Mr Conradie had directed him to do. He
believed that Mr Conradie, who grew up in front of him , would have his interest at
heart. Considering the first respondent's naivety and ignorance on contractual
matters, particularly the inequality in bargaining power between him and Mr
Conradie, I am of the view that to suggest that he was deliberately being dishonest
and intending to mendaciously mislead the court is not correct.
[59] Notwithstanding, I am of the view that the discrepancy does not go to the
heart of the issues raised in this matter, particularly regarding the cooperation
agreement. At the hearing of the oral testimony, it became evident that , indeed, the
parties entered into a cooperation agreement in October 2018 after they failed to
have the license amended and registered in the name of the applicant. For the sake
of completeness, I deem it appropriate to consider the relevant provisions of this
agreement that are germane to this matter. The cooperation agreement expresses
the intention of Bergrivier Boerdery (the applicant) and the Trust to combine their
respective resources to expand the Bergrivier farming enterprise. Bergrivier
Boerdery and the Trust sought to enter into an agreement whereby the Trust would
acquire 30% of the shareholding in Bergrivier Boerdery on condition that the Trust
20
successfully applied for and obtained a water use license (a) registered in the name
of Bergrivier Boerdery (b) for use by Bergrivier; and (c) in terms of which Bergrivier
Boerdery would be entitled to utilize an additional amount of water ('the maximum
volume') to conduct the Bergrivier Boerdery farming enterprise.
[60] In terms of the cooperation agreement, with effect from 1 October 2018,
Bergrivier Boerdery and the Trust agreed to co- operate by combining their
separately held resources and jointly operating the farming enterprise on the terms
set out in that agreement ('referred to as the arrangement'). The Trust agreed to
make the Trust resources (water used rights) available to Bergrivier Boerdery to give
effect to the arrangement and to ensure that the maximum volume remains
permanently available for use by the Trust or Bergrivier Boerdery exclusively to
conduct the farming enterprise and any expansion thereof. Furthermore, the Trust
agreed to pay all water use charges, payable for the water use license and the water
abstracted in terms thereof.
[61] In exchange for the Trust's contribution to the arrangement, Bergrivier
Boerdery agreed to remunerate the Trust by providing it with full details of the gross
profit and net profit after tax generated by Bergrivier Boerdery as certified by
Bergrivier's auditors. Bergrivier Boerdery undertook to pay the Trust an amount
equal to 30% of any net profit after tax generated by Bergrivier Boerdery. The
agreement between the parties also noted that unless the parties mutually agreed
otherwise, Bergrivier Boerdery would capitalize 50% of the Trust's earnings for
further investment into the farming enterprise, and the remaining 50% of the Trust
earnings would be paid to the Trust within 20 business days after delivering the
earning certificate.
[62] The agreement also records that upon making the application for a water use
license, the Trust was granted the water use licence, which was erroneously
registered in the name of the Pieterson Trust and noted the Pieterson Trust as the
owner of the farm, as a consequence of which Bergrivier Boerdery and the Trust
were unable to give effect to their previous agreement in terms of which the Trust
would be entitled to 30% shareholding in Bergrivier Boerdery. The agreement noted
that in a further attempt to give effect to the intention of the parties, Bergrivier
21
Boerdery and the Pieterson Trust concluded a further agreement in terms of which
Bergrivier agreed, subject to certain conditions, to issue shares in the share capital
of Bergrivier Boerdery in exchange for the Pieterson Trust successfully procuring the
amendment of the water use license registered in the name of Bergrivier Boerdery
and noted Bergrivier Boerdery as the registered owner of the farm.
[63] I have carefully considered the agreement between the parties, and I have
noted that it is clearly biased in favour of Bergrivier Boerdery. The agreement clearly
demonstrates the power imbalance between Mr Peterson for the Trust and Mr
Barnard Conradie for the applicant. Concernedly, the agreement incorrectly records
that the water -use license was erroneously registered in the name of the Pieterson
Trust. As explained elsewhere in this judgment, the Lynol Pieterson Trust made the
application for the water use license in terms of section 41 of the National Water Act
36 of 1998.
[64] Crucially, the Report for the water use license application in terms of the
National Water Act 36 of 1998 submitted in support of the application for the water
license makes it abundantly clear that the water use license had to be issued in the
name of the Trust. On page 5 of the report, it is recorded that "Application is herewith
made on behalf of the Lynol Pieterson Family Trust for an additional 215 hectares,
equivalent to 1 505 00 m3 per annum, of summer water application from the Berg
River". Paragraph 2.2 of the said document specified the farm Zanddrift Nr 149,
situated on the banks of the Berg River, as the property on which the water use is
intended.
[65] Thus, the suggestion that the license had to be issued in the name of
Bergrivier Boerdery does not make sense and is at variance with the objective facts.
The water use license was always going to be registered in the name of the Trust, as
specified in the motivation report. In the bigger scheme of things, it appears that the
applicant intended to use the Trust to front on its behalf to access the scarce water
resources. The applicant's agitation seems to have come about when the Trust was
reflected as the owner of the farm. It appears that is where this supposed error
emanates from.
22
[66] Importantly, the water use license was issued in favour of the Trust as a
measure for Mr Peterson, being a person from the previously disadvantaged group,
to have a 30% stake in the Bergerivier Boerdery. Whilst I understand the reason why
Mr Barnard Conradie wanted the licence to be issued in the name of the applicant,
the suggestion that the license had to be issued in the name of the Bergr ivier
Boerdery is false and unsupported by the application and all the documentary
evidence placed before court. More so, if indeed the Department of Water and
Sanitation made a genuine error in issuing the license in the name of the Trust as
the owner of the farm, I want to believe that it would have long corrected this error
after several applications for variations were made. Bergrivier Boerdery was never
intended to be the licensee of the water use rights. However, the true reasons for the
correction were obscured from the Department of Water Affairs, hence it refused to
approve this change. As the first respondent has correctly conceded, I find that the
Trust and the applicant did enter into a co-operation agreement.
Has Bergrivier Boerdery utilised the Trust's water use allocation in terms of
the water use license since it was granted in 2014?
[67] As discussed above, Mr Peterson's evidence was that since the license was
issued in 2014, the applicant used the water allocated to the Trust. In addition, Mr
Pietersen's evidence was that the applicant's crop increased by 190 hectares, and
butternuts and other vegetables were planted. From the first respondent's testimony,
it is incredibly clear that from the time the water use license was issued to the Trust
in 2014, the applicant used and benefited from it. The Trust incurred an account of
R1,387,984.86 for water rights used by the applicant as of 31 December 2019. As
discussed above, the cooperation agreement regulates the applicant's usage of
water allocated to the Trust from October 2018. From the evidence adduced at the
hearing, the 2018 agreement between the parties is still extant and governs the
relationship between the parties. It is common cause that the applicant used and is
still using water allocated to the Trust. This was pursuant to the cooperation
agreement signed by the parties in October 2018. My finding to the above question
is yes; the applicant has been using the water rights allocated to the Trust since the
license was issued.
23
Has Bergrivier Boerdery paid the Trust any money for using the water
allocated under the water use license since it was granted in 2014?
[68] Paragraph 5.1.2 of the cooperation agreement provides that in exchange for
the Trust's contribution to the arrangement in terms of the agreement, the applicant
shall remunerate the Trust with an amount equal to 30% of any net profit after tax
generated by the applicant for the farming enterprise. Furthermore, in exchange for
the Trust's contribution to the agreement, the applicant agreed to provide the Trust
with an earning certificate setting out the gross profit and the net profit after tax of the
applicant's farming enterprise.
[69] It is common cause that the Trust complied with the agreement and provided
the water to the applicant. The applicant used the water in terms of the agreement
and made huge profits but failed to pay 30% of the net profit after tax due to the
Trust. According to Mr Conradie, Bergrivier Boerdery has not made a profit in the two
years since the cooperation agreement was signed. Mr Conradie stated that
Bergrivier Boerdery informed the Trust that there were no profits and that there
would be no benefits for the Trust. However, in the past financial year (that is,
2021/2022 financial year), Bergrivier Boerdery is recorded as made profit. It is
interesting to note that Mr Conradie did not produce any documents or financial
statements to prove that Bergrivier Boerdery suffered a loss in the first two years .
The applicant also failed to produce financials for its net profits after tax in the 2021
and 2022 financial years. Mr Conradie did not provide the court with the certificates
envisaged in the cooperation agreement of the losses suffered by the applicant.
These documents are in his control and possession.
[70] I am mindful that the respondents could have requested discovery from the
applicant. However, in a case such as this, there was a duty upon Mr Conradie to
take the court to his confidence and produce all its financial statements or any
certificate of profitability showing that the Bergrivier Boerdery has been running at a
loss for two years after the cooperation agreement was signed. The cooperation
agreement envisaged audited financial statement s. As previously stated, these
documents are in the control and possession of the applicant. Mr Conradie knew that
the issue relating to the 30% equity in the applicant was in dispute and would be
24
germane in this matter. In my view, if the applicant had nothing to hide, the applicant
had a duty to produce these documents to support his assertion. The applicant
provided no evidence whatsoever that it made a loss in the first two years of the
issuance of the water use license, and it did not produce the documents for the net
profits it made, if any.
[71] In addition, the applicant did not provide any evidence whatsoever of the
amount owed to it by the Trust and specifically for what and when it was incurred,
especially bearing in mind that from the record, the attorneys who acted on behalf of
the Trust to amend the license acted pro bono. When the court questioned Mr
Conradie for clarification purposes, Mr Conradie speculated that the Trust could be
indebted to the applicant in the sum of R350 000 to R400 000. No supporting
vouchers or source documents were produced to support this contention.
[72] I pause to mention that Bergrivier Boerdery is seeking an order for Mr
Pieterson and his family to be evicted from a house owned by Bergrivier Boerdery,
which it bought from the respondents. According to the respondent, Mr Conradie
promised them that they would repurchase the house when they receive their 30%
dividends. The respondents contended that Bergrivier Boerdery is indebted to them
in respect of water use rights, which Bergrivier Boerdery does not dispute that it has
used since October 2018. In these circumstances, it becomes inherently obligatory
for the applicant to play open cards and disclose its financials.
[73] What I find very concerning is that Mr Conradie testified that the profits made
in the previous financial year (2021/ 2022) had not been paid over to the Trust
because Mr Peterson made the Trust unmanageable as he did not attend Trust
meetings where important decisions had to be taken. I must stress that this version
of Mr Pieterson making the management of the Trust ungovernable by failing to
attend Trust meetings was not put to Mr Pieterson during cross -examination. This
only emanated from the evidence in chief of Mr Conradie. The court did not have the
opportunity to hear Mr Pieterson's response to this assertion.
[74] Furthermore, nothing was presented before this court to prove that , indeed,
Mr Pieterson was called to attend Trust meetings and failed and or refused to do so.
25
It was not clear from the applicant’s evidence when specifically did Mr Pieterson fail
to attend the Trust meetings. No dates and / or invitations to attend meetings were
presented in court where Mr Pieterson allegedly failed to attend Trust meetings. No
resolution was presented in court of the remaining trustees' decision to remove Mr
Pieterson as trustee for this alleged misconduct . Mr Conradie testified in chief and in
re-examination that about four invitations to attend Trust meetings were delivered to
Mr Pieterson by hand, and the latter signed and acknowledged receipt. These
notices with proof of delivery are in the control and possession of Mr Conradie.
[75] Surprisingly, they were not produced in these proceedings to corroborate his
version, mainly because it was the reason that he removed Mr Pieterson as a
Trustee. Most troubling, there was no decency or courtesy to advise Mr Pieterson
that he has now been removed from his own family trust. Additionally, it must be
noted that according to Mr Conradie, he did not pay the 30% profits because the first
respondent failed to attend Trust meetings. In my view, the applicant had a duty to
prove these allegations. What I find very concerning, which manifests to an abuse of
power over the vulnerability of Mr Pieterson, is the unexplained change of name of
the Lynol Pieterson Family Trust to the Bergrivier Boerdery Werkers Trust.
[76] I cannot accept it that Mr Pieterson on his own decided to have his Trust
changed to Bergrivier Boerdery Werkers Trust. Even if the parties wished to include
more beneficiaries from the previously disadvantaged group in the Trust, the sudden
metamorphosing of the first respondent’s Trust into the name of the applicant is
unexplainable and raises more questions than answers. In my opinion, this
demonstrates an imbalance of power and an abuse of authority. It seems to me that
the Master (employer) abused the loyalties of the Servant (employee) in breach of
the relationship of trust and confidence between the master and his servant. From
the available evidence placed before this court, I am of the view that Mr Barnard
Conradie took advantage of Mr Pieterson's vulnerability and exploited it to his
advantage. The respondents' observation in the answering affidavit that once Mr
Barnard Conradie used them to obtain the water rights, he discarded them like dirt
and treated them like lepers is not farfetched, to say the least. This, in my view, must
not be countenanced.
26
[77] Most importantly, the applicant uses the water rights allocated to Mr
Pieterson's Trust as a BEE partner. From the evidence, he made considerable profits
in his farming enterprise using the water rights allocated to the Trust. This is borne
out by the alleged two payments he made to the Trust. Even so, he could not pay Mr
Peterson or the Trust what was due to him in terms of the cooperation agreement. In
a case like this, I am of the view that Mr Conradie should have made full disclosure.
His ipsi dixit without more is lacking and deficient. It must be borne in mind that this
case was referred to oral evidence to ventilate all the issues properly.
[78] Interestingly, it is unclear which year Mr P ieterson failed to attend Trust
meetings. Crucially, when Mr Conradie was asked about the payment of the 30%
profits in terms of the cooperation agreement, he testified that Mr Pieterson attended
Trust meetings in his office on the farm where he informed him that there were no
profits and showed Mr Pieterson the financial statements of Bergrevier Boerdery. He
further stated that in those meetings, he told Mr Pieterson that there was nothing to
be paid in terms of the cooperation agreement. From this evidence, it is abundantly
clear that the first respondent attended Trust meetings if at all there were such
meetings. It seems to me that when it is convenient for Mr Conradie, he asserts that
Mr Pieterson attended Trust Meetings. When it does not suit him, he vacillates and
avers that Mr Pieterson did not attend Trust meetings. I believe the version that Mr
Pieterson failed to attend Trust meetings is a sheer fabrication that was contrived to
remove him as a trustee.
[79] Furthermore, and in addition to the above finding , what I find very strange is
that Mr P ieterson was working for Mr Conradie. He left his employment in 2020
because of their impasse in respect of the house. Mr Pieterson was on the farm
daily. He regarded Mr Conradie as his mentor. Mr Conradie confirmed that he was
mentoring him. Based on this evidence, the version that Mr Peterson failed to attend
the Trust meetings and that this made it difficult for him to pay the 30% profit to the
Trust is unsustainable.
[80] Crucially, in response to a directive from this court, the applicant delivered to
the court proof of payment made by the applicant to the Trust, the first payment
being made on 19 December 2022 in the amount of R453214.00 and the second
27
payment being made on the 14 March 2023 in the amount of R453214.00. It is not
known what the net profit of the applicant after tax was as envisaged in the co-
operation agreement. Notwithstanding these two payments, since the co- operation
agreement was concluded in 2018, nothing has ever been paid to the first
respondent, who is the beneficiary of the Trust.
[81] During cross -examination, Mr Conradie testified that Mr Pieterson received
nothing because the Trust first had to repay its loans to the applicant, who had to
pay the legal fees and other consultant fees. The debts of the Trust due to the
applicant were not placed before the court save for the say -so of Mr Conradie. In my
view, it was incumbent upon the applicant to place before this court documentary
evidence to substantiate his version that the Trust is indebted to the applicant and
the reason for such indebtedness. Unfortunately, nothing was placed before this
court.
[82] From the evidence presented, ever since the water -used license was issued
to the Trust in 2015, the only entities that have benefited tremendously from it and
continue to benefit from it are the applicant and Mr Conradie. The applicant has
eternally contrived a strategy to avoid paying the Trust or the first respondent what is
due to it. The Trust or the first respondent have never reaped the fruits of this license
ever since it was issued to the Trust in December 2014. Unfortunately, the BEE
policy that the Department of Water and Sanitation envisioned to empower the first
respondent as a member of the previously disadvantaged group has been rendered
a dream deferred. From the entirety of the evidence, it is evident that from 2018,
when the co- operation agreement was concluded, the applicant used the water
allocated to the Trust. Considering the two payments disclosed above, it is
reasonable to infer that the applicant made huge profits pursuant to the usage of the
water rights of the Trust.
[83] Mr Pierterson, the beneficiary of the Trust, has received nothing in respect of
the cooperation agreement to date. Notwithstanding, the applicant wants to evict the
respondents from its house even though it has not paid the market value of the
property and not even a cent to Mr Pieterson, the beneficiary of the Trust, in terms of
the co-operation agreement. In my view, this is unconscionable and should not be
28
countenanced by this court. I am further of the firm view that the respondents have
all the reasonable grounds to resist the eviction application of the applicant on the
grounds that the applicant is indebted to the Trust and or to Mr Pieterson for the 30%
profit share pursuant to the co-operation agreement and the equity arising from the
sale of their house. As discussed above, Mr Barnard did not take the court into his
confidence and disclose the losses that the applicant suffered and the alleged debt
due by the Trust to the applicant. It is , therefore, my conclusion that Bergrivier
Boerdery did not pay the Trust any money for using the water allocated under the
water use license since it was granted in 2014.
Which party is obligated to pay for the water use charges abstracted in the
water use license?
[84] From the evidence presented, it is common cause that the Trust was
ordinarily responsible for paying the water use charges, costs, and fees, which
became payable in respect of the water extracted under the relevant license. As
previously stated, from the customer statement issued by the Department of Water
and Sanitation, the Trust was indebted to the Department in the sum of R1,387,
984.86 as of 31 December 2019. Furthermore, in terms of paragraph 4.1.2.2 of the
co-operation agreement, the Trust undertook to pay all water use charges, costs,
fees, tariffs, penalties, interest and other amounts which are or become payable in
respect of the water use license and the water used in terms thereof.
[85] In exchange for the Trust's contribution to the arrangement in terms of the co-
operation agreement, Bergrivier Boerdery agreed to pay the Trust 30% of the after -
tax profits from 31 August 2018. The Trust would, in turn, pay the water account to
the Department of Water and Sanitation. Save for the two payments made, it is
common cause that the applicant never paid the Trust ever since the issuance of the
license despite enjoying the fruits of the license. Save for the two payments made
recently, it is common cause that the applicant did not pay the Trust as envisaged in
the co-operation agreement. The applicant averred that the reason for nonpayment
was that the Trust had been indebted to the applicant and that the first respondent
made the Trust unmanageable.
29
[86] This argument by the applicant does not make sense, to say the least. In any
event, with the first respondent’s limited knowledge of the law and vulnerability, it
seems to me that the Trust was never the first respondent's idea. On a conspectus of
the evidence, it can be reasonably inferred that the Trust was meant to be the tool or
vehicle for the first respondent to put up a front for the applicant.
[87] I must stress that the co- operation agreement does not give the applicant the
power to withhold payment in those circumstances. The ripple effect of the
applicant’s non- payment is that the respondents have not received any benefit
whatsoever from the license that was issued and meant to benefit them as members
of the previously disadvantaged group. Instead, and to the contrary, the great
beneficiaries of the water use license are Mr Conradie and the applicant. The
applicant used the water allocated to the Trust and caused the Trust’s water bill to
increase. In my conclusion, the evidence demonstrates that the water rights
extremely benefitted the applicant. The applicant must provide their financial
statements to the respondents. In my view the parties must jointly hire an
independent forensic accountant to calculate how the water bill should be
apportioned, taking into account the 30% profit owed to the respondents from 2014
to the present, which has not been paid as well as the fair value of the property when
it was sold to the applicant.
Whether Mr Barnard Conradie misrepresented to the respondents when he
purchased their property?
[88] As discussed in paragraph 10 of this judgment, the circumstance under which
the applicant bought the respondent's house is in dispute and, moreover,
questionable. The respondents, particularly the first respondent, contended that Mr
Conradie informed him that he would reduce his salary and, as a result, would not be
able to pay for his house. In the founding affidavit, Mr Conradie asserted that
towards the end of 2017, the first respondent approached him and advised him that
he had fallen into arrears with his bond account with the bank and that they were
threatening him with foreclosure. To assist the first respondent and his family and to
ensure that the respondents will not be left homeless, the applicant agreed to
purchase the property from them and to settle their outstanding liability with Standard
30
Bank. The respondent further suggested that the respondent could continue to
reside on the property at a nominal rental of R450 per week. The respondent agreed,
and accordingly, the parties entered into a sale and a lease agreement.
[89] From the totality of the evidence, I am of the view that the version proffered by
respondents is more plausible than the one asserted by Mr Conradie. The first
respondent testified that Mr Conradie had reduced his salary and informed him that
the first respondent would no longer be able to pay his bond. The respondents were
not in arrears with their bond payments. The bank statements submitted in court
substantiate their version that they were not in arrears with their payments. It follows
that they would not have been in arrears as they had afforded the instalments from
the salary the first respondent was paid.
[90] It appears that Mr Conradie anticipated their house being repossessed since
he unilaterally changed the terms and conditions of employment by reducing the first
respondent’s salary. That on its own is unlawful as no employer is entitled to reduce
the employee’s salary as and when it suits him without due labour processes being
taken into consideration. I find it highly strange how the respondents would approach
Mr Conradie about their bond when they were paying promptly and not in arrears.
The respondent’s version that Mr Conradie reduced his salary and told him that he
would no longer be able to pay the bond is plausible. Mr Peterson testified that even
after his salary was reduced, they paid their bond instalment and were not in arrears.
That demonstrates how dedicated and responsible the respondents were in meeting
their financial obligations.
[91] This version is corroborated by the version of Mr Conradie that he was
prepared to buy the house and only pay the outstanding amount as the first
respondent has been paying the bond with the money, he loaned him. This suggests
that he reduced the first respondent's salary as he alleges it was a loan and informed
the first respondent that he (the first respondent) could no longer afford to pay the
bond. This, in my view, is contrary to the provisions of section 34(1) of the Basic
Conditions of Employment Act 75 of 1997. This is an issue which I would refer to the
Department of Labour for Investigation.
31
[92] In addition, I have concerns about how the property was sold to the applicant.
It must be borne in mind that the respondents bought the property in 2015 for the
sum of R750,000. The property was only sold and transferred into the applicant's
name on 26 February 2018. The applicant paid the sum of R655 000 for the said
property. The respondents had reduced the capital amount of the bond from R750
000 to R655 000 when the applicant , in his terms, conveniently bought the property.
It is incontestable that the property appreciated in value in the three years that it was
registered in the names of the respondents.
[93] If it was a bona fide purchase, it should have been purchased at its market
value and not take the outstanding capital amount as the purchase price. The
interests of the respondents were not considered, as the respondents were
shortchanged. Clearly, the sale benefitted the applicant and not the respondents.
The applicant not only misrepresented the facts; to put it mildly, the applicant
swindled the respondents.
[94] The applicant bought the property at a price far less than its market value
without compensating the respondents for the equity in the property. If it was a bona
fide purchase, the applicant must have paid the respondents the equity in the
property. In my view, it was unconscionable that the applicant would only settle the
outstanding bond amount without paying the respondents the equity in the property
after they had paid for the property for three years and had reduced the property's
capital amount.
[95] During the hearing, Mr Conradie testified that when Mr Pieterson approached
him about the house, he informed Mr Pieterson that he could only assist him by
purchasing the house for the outstanding amount. This was because Mr Pieterson
had been making the monthly bond payments using money that Mr Conradie had
loaned him monthly. To this end, Mr Conradie asserted that he told Mr Pieterson that
he would not pay him the house's market value.
[96] In my view, this version is illogical and does not make sense at all. For almost
three years, the respondents have been paying the bond. They reduced the capital
on the bond account from R750 000 to R655 000. It is incontestable that the house
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as an immovable property had appreciated from the date the respondents bought it
to the date it was sold to the applicant. I find it highly unlikely and cannot accept that
Mr. Conradie loaned money to the first respondent monthly for three years to pay the
bond. This simply does not make sense. What complicates and compounds the
difficulty in Mr Conradie's version is that it is not known how much the first
respondent was allegedly indebted to him regarding the alleged loan account. It is
not known how much he paid the first respondent as a loan monthly. It is implausible
that Mr Conradie would pay the first respondent a salary and a loan monthly for three
years. This version simply does not make sense and should be rejected. A
conspectus of all the evidence leads to the in eluctable conclusion that the applicant
owes the respondents a substantial sum for the equity of the property. I am therefore
satisfied that Mr Barnard Conradie misrepresented the true facts to the respondents
when he purchased their property.
Should the respondents be evicted from the House in question?
[97] The applicant seeks an eviction order of the respondents from the house in
question. As discussed above, the house is registered in the applicant's name. The
PIE Act prohibits unlawful evictions and regulates the procedure to be followed for
the eviction of unlawful occupiers. Before an eviction order is granted, the court must
consider all the relevant circumstances. In the locus classicus case of Port Elizabeth
Municipality v Various Occupiers 2005 (1) SA 217 (CC) at para 11, the court stated:
“The prevention of illegal eviction from an unlawful occupation of land act 19 of 1998
was adopted with the manifest objective of overcoming the above abuses and
ensuring that evictions, in the future, took place in a manner consistent with the
values of the new constitutional dispensation. Its provisions have to be interpreted
against this background.”
[98] The PIE Act endows the courts with the right and duty to make an eviction
order which must be just and equitable. The courts are not permitted to passively
apply the PIE Act but must probe and investigate the surrounding circumstances,
particularly where the occupiers are vulnerable. ( See Occupiers of Erven 87 and 88
Berea v De Wet N.O and Another 2017 (5) SA 346 (CC) at para 15). This begs a
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legitimate question of whether the respondents are ‘ unlawful occupiers ’ in this
property within the meaning of the PIE Act and whether it is just and equitable to
issue an eviction order in circumstances where there were agreements that were not
fulfilled by the applicant and with circumstances that were deliberately made by the
applicant to impoverish the respondents. I do not think for a moment that the
respondents are unlawful occupiers of this property. Section 1 of the PIE Act, in
relevant part, defines an 'unlawful occupier' as:
'(a) person who occupies land without the express or tacit consent of the
owner or person in charge, or without any other right in law to occupy such
land.’ (my emphasis)
[99] Evidently, an unlawful occupier occupies land without the consent of the
owner or without any other right in law to occupy. ( See Residents of Jeo Slovo
Community, Western Cape v Thubelisha Homes and Others (Centre on Housing
Right and Evictions and Another, Amici Curiae) 2010 (3) SA 454 (CC) 144). It is not
automatic that upon the applicant's application for the eviction of the respondent, the
respondent must be evicted from the property. Each case must be assessed on its
own merits. Even if unlawfulness is established, it does not mean that an eviction
order will automatically be granted. I am fortified in this view by the dictum of the
Constitutional Court in Port Elizabeth Municipality v Various Occupiers 2005 (1) SA
217 (CC), at para 31, where the court stated:
“Even though unlawfulness is established, the eviction process is not
automatic and why the courts are called upon to exercise a broad judicial
discretion on a case by case basis. Each case, accordingly, has to be decided
not on generalities but in the light of its own particular circumstances. Every
situation has its own history, its own dynamics, its own intractable elements
that have to be lived with (at least, for the time being), and its own creative
possibilities that have to be explored as far as reasonably possible. The
proper application of PIE will therefore depend on the facts of each case,
and each case may present different facts that call for the adoption of different
approaches.”
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[100] In the present matter, the applicant bought the property from the respondents
under very dubious circumstances. The respondents did not receive a fair and
reasonable value for the property when it was bought by the applicant. In my opinion,
the respondents have the right to demand a fair value for the property before they
can be evicted. Section 4(8) of PIE requires a court to grant an eviction order if the
court is satisfied that all the requirements set out in section 4 have been met and if
no valid defense has been raised by the respondent. In my view, a valid defense has
been raised in this case.
[101] To compound it all , it is indisputable that the respondents are impecunious
pensioners. The first respondent worked for the Conradie family loyally and distinctly
from his youth until hi s employment was terminated in 2020. As a person from the
previously disadvantaged group, he applied for and was granted a water use license
through his Trust.
[102] Since the water use license was granted, it has been used and exploited to
the benefit of the applicant and Mr Conradie. The applicant expanded its farming
enterprise pursuant to the water use license. The applicant continues to date to
enjoy and exploit the benefits of the water use licence issued to the Trust of the first
respondent at the expense of the respondents . Sadly, the first respondent has not
received any benefits from the license in question, not even a cent. Despite this, the
applicant is seeking an eviction order against the respondents, as it allegedly
requires the funds from the sale of the house to maintain its business operations.
[103] Equally, it is beyond question that the respondents require the funds arising
from the proceeds of the sale of their property to the applicant. The respondents or
the Trust are still waiting to be paid the 30% net profit arising from the water use
license to buy their own property so that they may enjoy the years of retirement that
lie ahead of them. Ordering the respondents' eviction under these circumstances
would result in a great injustice to the respondents. Th us, the order sought by the
applicant in this case, is unconscionable and cannot be countenanced.
Conclusion
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[104] In my view, the respondents have raised a substantive defence to the
applicant's application for eviction. From the totality of the evidence, I am of the view
that it will not be just and equitable in these circumstances to grant an eviction order
against the respondents.
[105] The fact that shares have not been issued does not prevent the applicant from
paying 30% of its shareholdings to the Trust as was envisaged when the water use
license was applied for. In the same way, notwithstanding that no shares have been
issued, the applicant and Mr Conradie have continued to reap the fruits of the water
rights allocated to the Trust . I am of the opinion that the applicant must properly
comply with the cooperation agreement and promptly pay what is due to the Trust to
enable it to settle the account with the Department of Water and Sanitation and to
benefit the beneficiary. Alternatively, to the extent that the applicant solely benefited
from the water use rights, it must settle the water account. Until those disputes are
resolved positively to the benefit of all involved, the eviction of the impecunious
respondents is incompetent, and it, therefore, fails.
.
[106] Finally, whilst I note that no counterclaim has been raised on behalf of the
respondents, however emanating from the stated issues that this court was asked to
determine, what came out prominently at the hearing of this matter is that the
respondents are being owed by the applicant. Despite these proceedings being
clothed as eviction proceedings, the bottom line is that the issues are much broader
than that. It would have delayed the finalisation of this matter if this court were to
order that the respondents file their counterclaim. Based on the evidence presented,
it is abundantly clear that the applicant is indebted to the respondents for the fair
value of their property. I believe that an expert should be appointed by the parties to
calculate the amount owed to the Trust for the 30% shareholding from 2014 to date
and to determine the entitlement of the respondents to the proceeds from the sale of
their property at fair market value.
Costs
[107] The respondents were legally represented in this matter by Mr Kilowan, who
was acting pro bono. Notwithstanding, the respondents must have incurred some
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actual costs in the form of disbursement s and travelling expense to attend court in
connection with this application. In my view, it would be appropriate to compensate
them for the actual costs they have incurred.
Order
[108] For all these reasons, the following order is granted:
108.1 The applicant’s application for the eviction of the respondents is hereby
dismissed.
108.2 The findings made in the subheadings above are incorporated into this
order.
108.3 The applicant is ordered to pay the actual costs incurred by the
respondents in opposing this application.
108.4 The Registrar of this court is directed to forward a copy of this
judgment to the Department of Labour to investigate the alleged salary
reduction of the first respondent.
108.5 The Registrar is also directed to forward a copy of this judgment to the
Master of the High Court—Cape Town so that the Master can investigate how
the first respondent was removed as a trustee and how the Lynol Pieterson
Family Trust was changed to Bergrivier Boerdery Werkers Trust.
108.6 Both parties should jointly appoint an independent forensic accountant
to calculate the 30% share of the Trust from 2014 to date. The accountant
must also assist in determining the fair value of the impugned property when it
was sold to the pplicant.
LEKHULENI JD
JUDGE OF THE HIGH COURT
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APPEARANCES
For the applicant: Adv Adhikari
Instructed by: TSP Attorneys
42 Keerom Street
Cape Town
For the Respondents: Adv Kilowan
Instructed by: Pro bono Counsel