REPORTABLE : YES/NO
CIRCULATE TO JUDGES YES/NO
CIRCULATE TO MAGISTRATES YES/NO
IN THE HIGH COURT OF SOUTH AFRICA
(NORTHERN CAPE HIGH COURT, Kl1MBERLEY)
In the matter between: case no: 430/2025
HEARD ON: 17-02-2025,
14-03-2025
DELIVERED: 25-04-2025
T G BRAAIKUIKENS (PTY) LTD 1st Applicant
LYNETTE HENDRIENA ALERS N.O 2nd Applicant
and
THE MEC:DEPARTMENT OF WATER AND SANITATION,
NORTHERN CAPE PROVINCIAL OPERATIONS 1st Respondent
BOEGOEBERG WATER USERS ASSOCIATION 2nd Respondent
CORAM: WILLIAMS J
JUDGMENT
WILLIAMS J:
1. The first applicant, TG Braaikuikens (Pty) Ltd, is the current owner of units
1, 2 and 3 of the Boegoeberg Settlement, !Kheis Municipality (the
properties}.
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2. The second and third applicants are the trustees of the insolvent estate of
the previous owner of the properties, Mr JG Husselman.
3. The first respondent is the MEC: Department of Water and Sanitation,
Northern Cape Provincial Operations.
4. The second respondent is the Boegoeberg Water Users Association,
which was established during 2003 in accordance with the guidelines of
the National Water Act 36 of 1998 (the Water Act). The functions of the
second respondent include revenue collection (billing agent) for the first
respondent, maintenance of the Boegoeberg Canal and infrastructure ,
control and distribution of raw water, annual reporting of operations to the
first respondent and adherence to environmental legislation . The second
respondent also supplies water to farms, inclusive of the properties , for
irrigation purposes.
5. The applicants brought an urgent application on 16 February 2025 seeking
inter alia the following relief:
5.1 that the respondents be prohibited from spoliating the first applicant
by closing/cutting/suspending the water usage of the first applicant
on the properties ;
5.2 that the respondents be ordered to immediately restore water
usage to the properties; and
5.3 that the respondents be ordered to pay, jointly and severally, the
costs of the application on the attorney and own client scale.
6. After hearing some argument on 17 February 2025 I made an order in the
form of a rule nisi, with return date 14 March 2025 with regard to the relief
sought in paragraphs 5.1 and 5.2 above and granted the respondents
leave to supplement their opposing affidavit. I also made an order that the
application be heard as an urgent application , not merely because the
mandament envisages speedy relief but also because the first applicant
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farms with various agricultural crops, which in the heat of summer requires
irrigation, without which great financial losses could ensue.
7. Background
Mr JG Husselman's estate was provisionally sequestrated on 2 June 2023
and a final sequestration order was granted on 14 July 2023.
8. On 7 May 2024 the second respondent sent an e-mail to the trustees of
the insolvent estate informing them of Husselman 's outstanding water
account in the amount of R1, 008, 974. 02 and warning them that should
the outstanding account not be paid it would be carried over for the
account of the purchaser of the properties and that a directive will be
issued for the closure of the water supply to the properties until payment of
the full outstanding amount.
9. After further correspondence , the trustees, who hold the view that the
issue of Husselman's outstanding water account is one between the
insolvent estate and the second respondent, sent an email to the second
respondent on 22 May 2024 to prove a claim against the insolvent estate
in terms of s44 of the Insolvency Act 24 of 1936.
10. The Deed of Sale for the properties was entered into during February
2024 and the properties were transferred into the name of the first
applicant on 16 October 2024. In terms of the Deed of Sale the first
applicant was to take occupation of the properties on 31 August 2024.
11. On 3 June 2024 the attorneys for the second respondent e-mailed a letter
to the attorneys for the trustees, currently also the attorneys for first
applicant, informing that they had received instructions from the second
respondent to assist it in proving its claim against the insolvent estate of
Mr JG Husselman for the outstanding water charges in terms of s 44(4) of
the Insolvency Act. The letter indicated that such a claim would be a
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preferent claim and sought to obtain the relevant claim documents for
completion by the second respondent.
12. The trustees' attorneys complied with the above request and dispatched
the aforementioned claim documents, no doubt satisfied that the claim for
the outstanding water charges would be dealt with in accordance with the
Insolvency Act.
13. However on 11 September 2024 the attorneys for the second respondent
sent an e-mail to the attorneys for the trustees, indicating that they had
advised their client to escalate the matter to the relevant authority (the
Department of Water and Sanitation (the Department) with specific
reference to s59 of the Water Act.
14. On 15 October 2024 Mr JG Husselman was served personally with a
notice to suspend or withdraw entitlement to use water, in terms of s54( 1)
of the Water Act by the Department for failure to pay the water use
account in the amount of R1. 23 million as at 31 August 2024.
15. The notice indicated that the Department was aware of the fact that the
properties had been sold by the trustees of the insolvent estate and that
transfer of the properties into the name of the new owner would take place
soon. The notice f_urthermore gave Mr Husselman the opportunity to make
representations in writing within 14 days of receipt of the notice should
there be compelling reasons why a suspension or withdrawal of
entitlement to use water should not be imposed, failing which the
Department would immediately suspend or withdraw his entitlement to use
water in terms of s54(3) of the Water Act.
16. On 10 December 2024 the first applicant was served with a notice of
intention to suspend or withdraw entitlement to use water in terms of
s54( 1) of the Act.
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17. The attorneys for the first applicant thereafter sent an e-mail to the second
respondent's attorneys requesting that any action envisaged by the
second respondent or the Department be stayed until a meeting of the
parties can be held during January 2025 to establish whether the matter
can be amicably resolved without any litigation. The response from the
second respondent's attorneys' office was that the relevant attorney was
on leave and would only be back in office on 7 January 2025.
18. On 31 January 2025 the first applicant received a further notice or
directive from the Department in terms of s 53(1) and (2) of the Water Act,
to pay the outstanding water use accounts within 5 days, failing which the
Department will carry out any works by closing the water supply in terms
of s 53(2) of the Act and take any steps necessary to rectify the
contravention and recover the costs thereof from the first applicant.
19. On the morning of 12 February 2025 the attorneys for the applicants e
mailed a letter dated 6 February 2025 to the Department , setting out the
history of the matter and the process to be followed in order to prove a
claim against the insolvent estate. The relevant portion of the letter reads
as follows:
"4. The amount due by Mr JG Husselman to the Boegoeberg Water
User Association up until date of provisional sequestration , being 2
June 2023, is subject to the provisions of the Insolvency Act 24 of
1936, and therefore the Boegoeberg Water User Association
should prove a claim against the Insolvent estate in terms of
Section 44 of Act 24 of 1936.
5. If the Association could prove, by submitting their claim in terms of
Section 44 of the Insolvency Act, that the amount due is a liability
relating to an incident of the ownership of that property (as provided
for in Section 89(5) of Act 24 of 1936), such a claim for the amount
then due would on the probabilities be a claim against the Insolvent
Estate.
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6. Be that as it may, the claim will be required to be submitted and
would then be investigated by the trustees of the insolvent Estate in
terms of section 45 of Act 24 of 1936, if it has been proven under
Section 44 of Act 24 of 1936, after which you would be informed
accordingly .
7. Please take note further that in accordance with the duties of the
trustees of the insolvent Estate, the property on which the water
rights are registered have been realized by the trustees, and in fact
sold to TG Braaikuikens (Ply) Ltd on 12 February 2024 and a copy
of the deed of sale is attached hereto as Annexure "A" for your
convenience.
8. The aforesaid property has been registered in the name of TG
Braaikuikens (Pty) Ltd.
9. You are therefore informed to determine the specific amount due by
Mr JG Husselman up until date of provisional sequestration, being 2
June 2023, for which amount you will have to prove a claim in
terms of Section 44 of Act 24 of 1936.
10. The amount due by the Estate is therefore in dispute as referred to
above, and such dispute can only be resolved if the Association
determines the amount due on date of sequestration and proves a
claim for such an amount in terms of section 44 of the Insolvency
Act. Therefore, a determination should be made as to any water
use after the date of sequestration , which is the liability of the
Insolvent Estate.
11. Lastly, please take not further that if you close the water supply or
suspend the water usage as you are threatening in your Directive
dated 31 January 2025 without following the steps as advised and
set out hereinabove, you would be spoliating our clients, which
spoliation will be met by an urgent application to the High Court,
Kimberley to prohibit you from spoliation. The costs of such an
application will be for your account."
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20. Notwithstanding the aforesaid, and without any response to the applicants'
attorneys, the respondents closed off the water supply to the first
applicant's properties on the afternoon of 12 February 2025 which in turn
led to the urgent application initially brought on 17 February 2025.
The issues between the parties
21. It is not in dispute that the use of the water was an incidence of
possession of the properties and that the right to the water enjoyed by the
first applicant is capable of protection by the mandament van spolie (see
Impala Water Users Association v Lourens NO and Others 2008(2) SA
495 (SCA).
22. It is also common cause that the first applicant was in peaceful and
undisturbed possession of the right to the water and that the respondents
disturbed that possession.
23. The only issue with regard to the mandament van spolie is whether the
respondents ' actions were lawful or not.
24. Other than the above, the respondents raised two points in limine which
can easily be disposed of. The first is that the first respondent's decision
to cut off or suspend the water rights of the first applicant constituted an
administrative action and as such the appropriate procedure to be followed
was to seek a review of the decision in terms of the Promotion of
Administrative Justice Act 3 of 2000 (PAJA). This point can safely be put
to bed in light of the judgement in the Impala matter (supra).
25. The second point in limine raised was one of misjoinder in that the second
and third applicants (the trustees) have no locus standi since it is clear
from the papers that the applicants rely on the first applicant's disturbed
possessions for the relief claimed. The submission is not entirely correct.
The issue between the parties is whether the interference with the first
applicant's right was lawful. In this regard it has been the position of the
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trustees that the Insolvency Act is applicable, as can be seen inter alia
from the letter dated 6 February 2025 addressed to the Department. The
actions of e respondents interfere with the statutory obligations of the
trustees. The trustees therefore not only have a direct and substantial
interest in the subject matter but their involvement in the matter provide a
proper factual basis upon which a decision can be made {see Transvaal
Agricultural Union v Min of Agriculture and Land Affairs and Others
2005(4) SA 212 {SCA) at 227F). There is therefore no merit in this point in
limine.
26. Returning then to the lawfulness of the respondents' actions. The
applicants do not dispute that the respondents have the right, in terms of
the Water Act to suspend water usage in certain circumstances . SS 59(3)
and {4) of the Act read as follows:
"59 (3) If a water use charge is not paid-
(a) Interest is payable during the period of default ....
(b) The supply of water to the water user from a waterwork or
the authosization to use water may be restricted or
suspended until the charges together with interest have been
paid.
(4) A person must be given an opportunity to make
representations within a reasonable period on any proposed
restriction or suspension before the restriction or suspension is
imposed."
27. The first applicant does however dispute the quantum of the water charge
due by it by virtue of the provisions of the Insolvency Act and specifically
s89 thereof. The relevant portions of s89 read as follows:
"Costs to which securities are subject
89. (1) The cost of maintaining , conserving , and realising any
property shall be paid out of the proceeds of that property, if sufficient,
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and if insufficient and that property is subject to a special mortgage,
landlord's legal hypothec, pledge, or right of retention the deficiency shall be
paid by those creditors, pro rata, who have proved their claims and who
would have been entitled, in priority to other persons, to payment of their
claims out of those proceeds if they had been sufficient to cover the said
cost and those claims. The trustee's remuneration in respect of any such
property and a proportionate share of the costs incurred by the trustee in
giving security for his proper administration of the estate, calculated on the
proceeds of the sale of the property, a proportionate share of the Master's
fees, and if the property is immovable, any tax as defined in
subsection (5) which is or will become due thereon in respect of any
period not exceeding two years immediately preceding the date of the
sequestration of the estate in question and in respect of the period
from that date to the date, of the transfer of that property by the
trustee of that estate, with any interest or penalty which may be due
on the said tax in respect of any such period, shall form part of the
costs of realisation.
(2)
(3)
(4) Notwithstanding the provisions of any law which prohibits the
transfer of any immovable property unless any tax as defined in subsection
(5) due thereon has been paid, that law shall not debar the trustee of an
insolvent estate from transferring any immovable property in that estate for
the purpose of liquidating the estate, if he has paid the tax which may have
been due on that property in respect of the periods mentioned in subsection
(1) and no preference shall be accorded to any claim for such a tax in
respect of any other period.
(5) For the purposes of subsections (1) and (4) "tax" in relation to
immovable property means any amount payable periodically in
respect of that property to the State or for the benefit of a provincial
administration or to a body established by or under the authority of
any Jaw in discharge of a liability to make such periodical payments, if
that liability is an incident of the ownership of that property."
(own emphasis)
28. The argument on behalf of the applicants is that it is clear from s 89(5) that
the amount payable to the respondents is in fact a tax and that therefore s
89(1) is applicable . Therefore the amount due by Mr Husselman is for a
maximum period of two years before the sequestration, for which the
respondents should prove a claim in terms of s 44(4) of the Insolvency
Act, thereafter from date of sequestration to date of transfer of the
properties, the water charges are costs in the administration of the
insolvent estate and from date of transfer, the new owner (the first
applicant) would be liable for the charges reckoned from such date.
29. The first applicant does not deny his liability as aforesaid and has
undertaken to pay such amount should the second respondent provide it
with the water charges calculated from 31 August 2024.
30. The respondents rely for their entitlement to the full outstanding amount
from the first applicant on the provisions of s 60 of the Act which state the
following:
"Water use charges are charges on land.
60(1) A charge made in terms of section 57(1) including any interest is a
charge on the land to which the water use relates and is recoverable from
the current owner of the land without releasing any other person who may
be liable for the charge."
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31. Mr Olivier who appeared for the respondents, relied on the judgment of
Nxumalo J in this division in the matter of Saunderson v Boegoeberg
Water Users Association (338/22) [2022] ZANCHC 86 (12 August 2022),
where the learned judge held, with regard to s 60(1) of the Act, at
paragraph 63 of the judgment that:
'It is clear from the foregoing that whether the disputed amount was
allegedly incurred when the applicant was neither the owner of any of the
imposed properties, or did not receive or utilize any water from the
respondent at the relevant period, is immaterial. The heart of the matter is
that as matters stand, the charges made in terms of section s 57(1),
including any interest, are a charge on land to which the water use relates
and is recoverable from the current owner of the land."
32. The Saunderson matter can however be distinguished from the present
matter in that the Insolvency Act did not come into play in Saunderson. In
this regard Mr Olivier countered with the argument that the water usage
charges by the respondents do not constitute taxes for purposes of s89 of
the Insolvency act. He referred to the matters of Greater Johannesburg
Transitional Metropolitan Council v Galloway NO and Others 1997 (1) SA
248(w); Fedbond Participation Mortgage Bond Managers (Ply) Ltd v Steve
Tshwete Local Municipality 2012 JAR 0545 (GNP); and Eastern
Metropolitan Substructure of the Greater Johannesburg Transitional
Council v Venter NO 2001(1) SA 360 (SCA) in support of this argument.
33. These matters all relate to Municipal charges which had to be paid in order
for clearance certificates to be issued before transfer of a property could
be affected. It was held in the Galloway matter that charges such as for
electricity and water, were not taxes for purposes of s 89 of the Insolvency
Act since it was not an incidence of the ownership of the land but arose
out of agreements which were entered into for the provision of the services
and the services themselves. In the Fedbond matter, there was not even
]2
any argument or debate as to whether the applicable rates and taxes
required to be paid for a clearance certificate fell inside the ambit of the s
85 (5) definition (see paragraph 33 of the judgment).
34. In casu s 60(1) states specifically that such water use charges are "a
charge on the land to which the water use relates", and would in my view
constitute a "liability which is an incident of the ownership of that property"
as envisaged in s 89(5).
35. The argument by Mr Zietsman SC for the applicants, is that the provisions
of the Insolvency Act trump those of the Water Act and should prevail. He
pointed out that the only entity which is excluded from the provisions of the
Insolvency Act is the Land and Agricultural Bank of South Africa in terms
of s90 of the Insolvency Act which states as follows:
"90. Land Bank not affected by this Act
The provisions of this Act shall not affect the provisions of any other law
which confer powers and impose duties upon the Land and Agricultural
Bank of South Africa in relation to any property belonging to an insolvent
estate".
36. Mr Zietsman is correct in this respect. However it should also be noted
that in terms of s82(1) of the Insolvency Act which deals with the sale of
property after the second meeting of creditors and the manner of sale.
The first proviso to s82 (1) is of importance. S 82(1) reads as follows:
(1) Subject to the provisions of sections eighty-three and ninety the
trustee of an insolvent estate shall, as soon as he is authorised to
do so at the second meeting of the creditors of that estate, sell all
the property in that estate in such manner and upon such conditions
as the creditors may direct: Provided that if any rights acquired
from the State under a lease, licence, purchase, or allotment of
land is an asset in that estate, the trustee shall, in his
administration of the estate, act in accordance with those
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provisions (if any) which by the law under which the rights
were acquired, are expressed to apply in the event of the
sequestration of the estate of the person who acquired those
rights: Provided that if the creditors have not prior to the final
closing of the second meeting of creditors of that estate given any
directions the trustee shall sell the property by public auction or
public tender. A sale by public auction or public tender shall be after
notice in the Gazette and after such other notices as the Master
may direct and in the absence of directions from creditors as to the
conditions of upon such conditions as the Master may direct. "
(own emphasis)
37. It cannot be disputed that the water use right pertaining to the properties
has been acquired from the State under a licence as circumscribed in Part
2 of the Water Act and is an asset in the insolvent estate. In fact the Deed
of Sale, clause 25.2, specifically states that the water rights form part of
the property sold. Clause 25 also makes provision for the purchaser to
comply with the provisions of s25 of the Water Act to obtain transfer of the
licence in his name and for the parties to apply jointly for a licence in the
name of the purchaser. The Water Act is however silent on any provisions
to apply in the event of the sequestration of the person who acquired the
rights.
38. In these circumstances, in my view, the respondents are required to prove
their claim in respect of the outstanding water usage charges in terms of
s44 of the Insolvency Act. That should be the end of the matter.
39. However, Mr Olivier raised an alternative argument and that is that the fact
that the first applicant admitted liability for the water usage charges from
31 August 2024 to date in any event permits the respondents to invoke the
provision of s59(3) of the Water Act. This concession by the first applicant
does not, in my view, assist the respondents at all. The first applicant did
not admit being in default, in fact he disputed liability for the whole
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outstanding amount as claimed from him by the respondents. In Lourens
NO & Others v Impala Water Users Association (s 34/04) [2006] SASCA
76 (31 May 2006), Brand JA who wrote the majority judgment, deals with
the purpose and structure of ss 5 9 (3) and (4) of the Water Act as follows
in paragraphs 52 and 53 thereof:
"52. In my view a proper reading of the two subsections reveals the
following: when a debtor is in the opinion of the association a defaulter in
the sense of one who has not paid a water charge lawfully raised, it
must allow the debtor to make representations . If those representat ions do
not persuade the association otherwise , it would be entitled to restrict or
suspend the water supply.
[53] If the debtor admits being in default, no question of seeking the
sanction of the court arises. If the debtor disputes the association 's claim,
the latter has two courses of action open to it. First, it may proceed to
exercise the statutory power under s 59(3), but it must be ready to ward off
spoliation proceedings , and to discharge the onus which it will bear in
those proceedings to establish both the fact and the amount of the
debtor's alleged liability. Apart from a spoliation order, inability on the
part of the association to discharge this onus may, of course, also give rise
to a claim against it for the damages resulting from its unlawful action."
(own emphasis)
40. In my view the respondents have failed to discharge the onus it bears as
set out in the above quoted paragraphs of the Lourens judgment in that it
has failed to establish the fact of the first applicant's liability i.e. that it has
not paid a water charge lawfully raised, and the amount of the alleged
liability.
41. In addition, the first applicant had not been given a reasonable opportunity
to make representations on any proposed restriction or suspension before
its imposition as envisaged in s 59(4). It will be recalled that the
respondents had served a notice in terms of s 54(1) of the Water Act, an
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intention to suspend or withdraw entitlement to use water due to a failure
to pay the water use account on Mr Husselman which was also addressed
to him on 15 October 2024. At the time the respondents knew full well that
Mr Husselman's estate had been sequestrated and that trustees had been
appointed . On 10 December 2024 a similar notice was delivered to the
first applicant, but when an opportunity was requested to make
representations with a view to settle the dispute, the applicants were
informed that the respondents attorney seized with the matter was on
leave. On 31 January a directive in terms of s 53(1) and (2) of the Water
Act was served on the first applicant. This directive makes no sense in the
circumstance of this matter and appears to conflate a failure to comply
with a registered water use and a notice to carry out works with a failure to
pay a water use account. Be that as it may, this last notification refers to
Mr JG Husselman 's failure to make representations subsequent to the
notice delivered to him and the first applicant's failure to make
representations after receiving its notice of intention to suspend within 7
days, as was required. Despite the last notice in terms of s 53(1) and (2)
not giving the first applicant an opportunity to make representations, the
applicants did in fact do so, albeit late, and it is obvious that these
representation were not considered by the respondents at all. On this
basis also the respondents should not be allowed to invoke the powers
bestowed upon it in terms of s 59(3).
42. It follows that the first applicant is entitled to its spoliation order and all that
remains is the issue of costs.
Costs
43. Mr Zietsman argued that by insisting in proceedif1g to enforce their powers
in terms of the Water Act, after at one stage conceding that their claim
should be proved in terms of s44 of the Insolvency Act (see paragraph 11
herein) and after having been so informed by the trustees on 22 May
2024, 30 August 2024, 3 September 2024, 20 September 2024 and 12
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February 2025, is nothing but and abuse of power on the part. of the
respondents. I agree with this contention. The manner in which the
respondents conducted their interactions with the applicants is also of
concern. I see no reason why the respondents should not bear the costs
of this application on the attorney and client scale.
The following order is made:
(a) Paragraphs 2.1 and 2.2 of the rule nisi issued on 17 February 2025
is confirmed and made final.
(b) The respondents are to pay the costs of this application jointly
and severally, the one paying the other to be absolved on the
scale of attorney and client
CC WILLIAMS
JUDGE
For Applicants :
For Respondents: Adv P Zietsman SC
Phatshoane Henny Attorneys Inc
c/o Van de Wall Inc
Adv J Olivier
Bergh Kotze & Van Staden Inc
c/o Haarhoffs Inc