IN THE CONSTITUTIONAL COURT OF SOUTH AFRICA
Case CCT 387/21
In the matter between:
MINISTER OF WATER AND SANITATION First Applicant
DIRECTOR-GENERAL: DEPARTMENT
OF WATER AND SANITATION Second Applicant
BLITZKRAAL (PTY) LIMITED Third Applicant
and
CASPER JACOBUS LÖTTER N.O. First Respondent
JACOBUS ANDREAS DU PLESSIS N.O. Second Respondent
JOHANNES CORNELIUS HEUNIS N.O. Third Respondent
and in the matter between:
MINISTER OF WATER AND SANITATION First Applicant
DIRECTOR-GENERAL: DEPARTMENT
OF WATER AND SANITATION Second Applicant
and
FRANCOIS GERHARDUS JOHANNES WIID First Respondent
TORQHOFF BOERDERY (PTY) LIMITED Second Respondent
FRANCOIS GERHARDUS JOHANNES WIID N.O. Third Respondent
REINETTE JEPPE WIID N.O. Fourth Respondent
CAREL JACOBUS VAN PLETZEN N.O. Fifth Respondent
GABRIEL PETRUS VILJOEN N.O. Sixth Respondent
ANTON ANDRÉ STRYDOM N.O. Seventh Respondent
ANTON STEPHANUS VILJOEN N.O. Eighth Respondent
and in the matter between:
MINISTER OF WATER AND SANITATION First Applicant
DIRECTOR-GENERAL: DEPARTMENT
OF WATER AND SANITATION Second Applicant
SIFISO MKHIZE N.O. Third Applicant
DEPUTY DIRECTOR-GENERAL: WATER SECTOR
REGULATION, DEPARTMENT OF WATER AND
SANITATION Fourth Applicant
DEPUTY DIRECTOR-GENERAL: SPECIAL PROJECTS,
DEPARTMENT OF WATER AND SANITATION Fifth Applicant
and
SOUTH AFRICAN ASSOCIATION FOR WATER
USER ASSOCIATIONS First Respondent
EAGLE’S NEST INVESTMENT 3 CC Second Respondent
THUSANO EMPOWERMENT FARM (PTY) LIMITED Third Respondent
Neutral citation: Minister of Water and Sanitation and Others v Lotter N.O. and
Others; Minister of Water and Sanitation and Others v Wiid and
Others; Minister of Water and Sanitation v South African
Association for Water Users Associations [2023] ZACC 09
Coram: Zondo CJ, Baqwa AJ, Kollapen J, Madlanga J, Majiedt J,
Mathopo J, Mbatha AJ, Mhlantla J and Rogers J
3
Judgment: Madlanga J (unanimous)
Heard on: 23 August 2022
Decided on: 15 March 2023
ORDER
On appeal from the Supreme Court of Appeal (hearing an appeal from the High Court
of South Africa, Gauteng Division, Pretoria ). The following order is made in each of
the three applications:
1. Leave to appeal is granted.
2. The appeal is dismissed with costs, including the costs of two counsel.
JUDGMENT
MADLANGA J (Zondo CJ, Baqwa AJ, Kollapen J, Majiedt J, Mathopo J, Mbatha AJ,
Mhlantla J and Rogers J concurring):
Introduction
[1] This is an application for leave to appeal against a judgment of the
Supreme Court of Appeal.1 That Court set aside a judgment of the Gauteng Division of
1 Lötter N.O. v Minister of Water and Sanitation [2021] ZASCA 159; 2022 (1) SA 392 (SCA).
MADLANGA J
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the High Court, Pretoria.2 The High Court judgment concerned three matters.3 The
application before us is about all those three matters. Before the High Court the matters
raised the same central issue: the interpretation of section 25(1) and (2) of the
National Water Act4 (Water Act). That is what is at issue before us. More specifically,
what we must determine is whether a water use entitlement obtained in terms of the
Water Act may be “transferred”5 to a third party and, if so, whether a fee may be charged
for the transfer. To use the state applicants’ terminology, the second part of the question
is whether holders of water use entitlements may “trade” in the entitlements.6
Background
[2] Starting with the Lötter N.O. matter, the Doornkraal Business Trust (Doornkraal)
owns farms in Somerset East in the Eastern Cape . It concluded an agreement with
Britzkraal Properties (Pty) Ltd (Britzkraa l) in terms of which it purchased 30 hectares
of Britzkraal’s water use entitlement for R1 950 000. In terms of section 25(2) of the
Water Act, Britzkraal surrendered its water use entitlement. Doornkraal applied for a
licence in terms of section 41 of the Act in respect of that water use entitlement. To this
end, Doornkraal submitted a detailed motivation that dealt with each of the relevant
considerations for the grant of a licence listed in section 27(1) of the Water Act. The
Director-General of the Department of Water and Sanitation (Director-General), who is
the responsible authority for purposes of section 41 applications and who is the
second applicant in all the three matters before us, refused Doornkraal’s application.
Two of the reasons given for the refusal were that section 25(2) of the Water Act makes
no provision for the transfer of a water use entitlement from one person to another and
2 South African Association for Water Users Associations v Minister of Water and Sanitation; Lötter N.O. v
Minister of Water and Sanitation; Wiid v Minister of Water and Sanitation [2020] ZAGPPHC 252.
3 South African Association for Water Users Associations v Minister of Water and Sanitation (SAAWUA matter);
Lötter N.O. v Minister of Water and Sanitation (Lötter matter); Wiid v Minister of Water and Sanitation
(Wiid matter) [2020] ZAGPPHC 252.
4 36 of 1998.
5 I use inverted commas because – as I explain later – strictly speaking, no transfers take place under section 25
of the Water Act.
6 Here I use “trade” loosely, and I explain this later.
MADLANGA J
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that the Water Act d oes not permit trading in water use entitlements .7 Doornkraal,
through its trustees, instituted proceedings in the High Court for the review and setting
aside of the Director -General’s decision and for a declarator on the meaning of
section 25(2) of the Act.
[3] Coming to the Wiid matter, three agreements were concluded between Mr Wiid,
Torqhoff Boerdery (Pty) Ltd and the trustees of the De Kalk Trust, on the one hand, and
the GP Viljoen Trust, on the other. In the agreements, the GP Viljoen Trust undertook
to surrender three water use entitlements in terms of section 25(2) of the Water Act to
facilitate applications for licences to be made in terms of section 41 of the Water Act in
respect of th e three water use entitlements. In the Wiid agreement the cont ract price
was R5 920 000. In the Torqhoff agreement the contract price was R15 413 333. And
in the De Kalk Trust agreement it was R2 666 667. The purpose of the transfer was to
enhance the combined crop farming operations of Mr Wiid, Torqhoff Boerdery and the
De Kalk Trust in the Hopetow n District of the Northern Cape . Mr Wiid,
Torqhoff Boerdery and the De Kalk Trust applied for licences in terms of section 41 of
the Water Act in respect of th e three entitlements. For the same reasons given in the
Lötter matter, t he D irector-General did not grant the licences. Mr Wiid,
Torqhoff Boerdery and the De Kalk Trust (the latter, through its trustees) brought an
application in the High Court seeking the same relief as that applie d for in the Lötter
matter.
[4] I next move on to the SAAWUA matter. The South African Association for Water
User Associations (SAAWUA) is a voluntary association made up of a number of water
user associations and irrigation boards. SAAWUA, Eagle’s Nest Investments 3 CC
7 The Director-General wrote:
“Kindly note that section 25(2) of the National Water Act (Act 36 of 1998) does not make
provision for the transfer of a water use entitlement from one person to another. A person who
holds an entitlement may only surrender part or all of his/her entitlement to facilitate a water
use licence application to use of water from the same resource in respect of other land that
belongs to that person. The National Water Act therefore does not make provision for the
trading or transferring of water use entitlements between two separate legal entities.”
See Supreme Court of Appeal Judgment above n 1 at para 7.
MADLANGA J
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(Eagle’s Nest) and Thusano Empowerment Farm (Pty) Ltd (Thusano Empowerment)
applied in the High Court for a declarator on the meaning of section 25(1) and (2) of
the Water Act. In bringing suit, SAAWUA acted in its own interest, on behal f of its
members and in the public interest. What triggered the litigation were refusals by the
Director-General of applications for transfers of water use entitlements that Eagle’s
Nest and Thusano Empowerment had made.
[5] Interestingly, it is common cause that in about 1998 when publicising the
Water Act, the Department of Water and Sanitation said – in so many words – that
holders may trade in water use entitlements . It did not end there. During the
period 1998 to 19 January 2018 the Department consiste ntly allowed trading in water
use entitlements. But on 19 January 2018 the Department issued a circular in which it
said that section 25 does not allow trading in water use entitlements . This change of
stance serves to explain what informed the Director-General’s impugned decisions.
[6] The High Court dismissed all three applications. In the main, it held that on a
proper reading of section 25 of the Water Act, trading in water use entitlements is not
allowed as it is at variance with section 2 of the Act. Section 2 provides that the purpose
of the Act is “to ensure that the nation’s water resources are protected, used, developed,
conserved, managed and controlled in ways which take into account amongst other
factors . . . redressing the results of past racial and gender discrimination”. On appeal
to it, t he Supreme Court of Appeal was split four -one. The minority agreed with the
High Court’s conclusion. The majority upheld the appeals. It held that section 25(1)
and (2) of the Water Act does permit the temporary or permanent transfer of water use
entitlements from a holder to a third party. The applications are now before us for leave
to appeal. The actively participating applicants are the Minister of Water and Sanitation
and other state functionaries .8 I will simply refer to these state applicants as the
applicants.
8 The Minister of Water and Sanitation is the first applicant in all three applications. In both the Lötter and Wiid
matters the state functionary who, in addition to the Mini ster, is also seeking leave is the
Director-General: Department of Water and Sanitation. And in the SAAWUA matter the additional state
MADLANGA J
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The applicants’ submissions
[7] The applicants contend that the ordinary grammatical meaning of section 25(1)
of the Water Act does not include the transfer of water use entitlements to a third party.
Section 25(1) provides:
“A water management institution may, at the request of a person authorised to use water
for irrigation under the Act, allow that person on a temporary b asis and on such
conditions as the water management institution may dete rmine, to use some or all of
that water for a different purpose, or to allow the use of some or all of that water on
another property in the same vicinity for the same or similar purpose.”
[8] The applicants call that part of this section – which concerns allowing , on a
temporary basis, “a person authorised to use water for irrigation under the Act” to use
some or all of the water for a different purpose – “the first leg”. I will cal l this part of
the section “the first part”, and the rest of the section “the second part”. The applicants
accept, correctly, that th e first part concerns allowing water use by the holder for a
different purpose on the same property in respect of whic h th e authorisation was
granted.
[9] What is in contention is the second part of section 25(1), i.e. allowing the use of
some or all of the water on another property in the same vicinity for the same or similar
purpose. The applicants take issue with the Supreme Court of Appeal’s interpretation
of this part. They contend that this part contemplates temporary use of water for the
same or similar purpose on another property in the same vicinity by the holder, not a
third party. They submit that this interpretation is informed by the fact that the section
refers to use “on another property”, and says nothing about such use being “by another
functionaries who are also applying for leave to appeal are the Director-General: Department of Water and
Sanitation; the Deputy Director-General: Water Sector Regulation, Department of Water and Sanitation; and the
Deputy Director-General: Special Projects, Department of Water and Sanitation. In two of the matters there are
private parties, Blitzkraal (Pty) Ltd in one, and Sifiso Mkhize N.O. in the other. I do not consider it necessary to
itemise all the many respondents in each of these three matters. It is enough that I have identified each matter by
the first respondent (i.e. Lötter, Wiid and SAAWUA).
MADLANGA J
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person or third party”. They also argue that “transfer of water use authorisations” in the
heading under which section 25 fal ls means no more than the transfer of a water
authorisation from one property to another, “and not from an authorised water user to a
third party”. The applicants contend that their interpretation is in harmony with the rest
of the provisions of the Water Act.
[10] I set out the applicants’ submissions on the question whether section 25(1) does
allow the charging of a fee shortly.
[11] Coming to section 25(2) of the Act, this section provides:
“A person holding an entitlement to use water from a water resource in respect of any
land may surrender that entitlement or part of that entitlement—
(a) in order to facilitate a particular licence application under section 41 for the
use of water from the same resource in respect of other land; and
(b) on condition that the surrender only becomes effective if and when such
application is granted.”
[12] The applicants argue that this section is meant to facilitate a licence application
in terms of section 41 of the Water Act by the holder, not a third party. A ccording to
the applicants, section 25(2) finds application where the holder wants to use water on a
property other than the property to which the entitlement attaches. So, under this section
as well, a third party does not feature.
[13] On the question whether the Water Act allows the charging of a fee in respect of
transactions concluded in connection with water use entitlements, the applicants’
answer is in the negative. As I indicated earlier, until 19 January 2018 the Department
of Water and Sanitation allowed trading i n water use entitlements. That is, holders of
water use entitlements could surrender their entitlements to facilitate a
section 41 application or allow use of the entitlements by third parties, and do both at a
fee. The question whether a fee is chargeable in terms of the Water Act arises when a
MADLANGA J
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holder: allows water use by a third party in terms of the second part of section 25(1);9
or surrenders a water use entitlement in order to facilitate an application for a licence
by a third party under section 41 as envisaged in section 25(2).10
[14] The applicants submit that very wealthy farmers, who are largely white, have
created an enclave within which a scarce national natural resource is traded, thus
perpetuating the imbalances of the past. This infringe s the right to equality. As a
consequence, continues the submission, an interpretation of section 25(1) and (2) that
sanctions trading in water use is contraindicated. And this interpretation is at odds with
section 2(c) of the Water Act. That is so because this section stipulates that the purpose
of the Water Act is, among others, to redress the results of past racial and gender
discrimination. The applicants also highlight the fact that the predecessor to the
Water Act, the 1956 Water Act,11 made speci fic provision for trading in water use.
They argue that the Water Act makes no similar provision and that this is an indication
that the Legislature has since set its face against trading in water use.
[15] The applicants also argue that interpretatively it does not make sense
that – having paid paltry administrative fees on applying for their entitlements – holders
should enjoy the right to trade in the entitlements at amounts as huge as the sums we
have seen in this matter.12
Jurisdiction
[16] The applicants’ pleaded case raises constitutional issues. They argue that, by
allowing the wealthy “to sell water”, a scarce natural resource held in trust by
the Minister, the Supreme Court of Appeal’s judgment infringes sections 9 (right to
equality) and 27 (right of access to water) of the Constitution. They also submit that
9 That, of course, is if section 25(1) allows the interposition of a third party.
10 That is if, contrary to the applicants’ submissions, the surrender may be in favour of a third party.
11 54 of 1956.
12 The amounts involved in this matter range from R 1 950 000 to R15 413 333. And we have no idea what is
happening in the rest of the market.
MADLANGA J
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the interpretation of legislation must be “seen and utilised as a platform for the
promotion of the Bill of Rights by infusing [the Bill of Rights’] central purpose into the
very essence of the l egislation itself ”.13 For this submission, they implicitly invok e
section 39(2) of the Constitution and rely on this Court’s judgment in
Independent Institute of Education . I say the y implicitly rely on section 39(2) of the
Constitution because at the cen tre of the passage they rely on in Independent Institute
of Education is section 39(2). This Court’s constitutional jurisdiction is engaged.
[17] Additionally, the applicants call in aid section 167(3)(b)(ii) of the Constitution,
arguing that our general juri sdiction is also engaged. It is definitely so that the issues
identified above, which are raised by the applicants’ pleaded case, raise points of law.
As the discussion that follows will show, the points are arguable. They most definitely
are of general public importance. And they ought to be considered by this Court. Thus,
the matter also engages our general jurisdiction.
Leave to appeal
[18] Some of the applicants’ arguments do exercise one’s mind. I cannot dismiss
them as lacking reasonable prospects of success. Also, as I say in connection with our
general jurisdiction, the arguments raise questions of great import to the general public.
Leave to appeal must be granted.
Does section 25(1) permit the use of water by a person other than the holder of a water
use entitlement?
[19] In Cool Ideas Majiedt AJ held that words of a statute “must be given their
ordinary grammatical meaning, unless to do so would result in an absurdity ”.14 Three
riders to this are that: the provisions must be interpreted purposively; the provisions
13 Independent Institute of Education (Pty) Limited v KwaZulu-Natal Law Society [2019] ZACC 47; 2020 (2) SA
325 (CC); 2020 (4) BCLR 495 (CC) at para 2.
14 Cool Ideas 1186 CC v Hubbard [2014] ZACC 16; 2014 (4) SA 474 (CC); 2014 (8) BCLR 869 (CC) at para 28.
See also Chisuse v Director-General, Department of Home Affairs [2020] ZACC 20; 2020 (6) SA 14 (CC); 2020
(10) BCLR 1173 (CC) at para 47.
MADLANGA J
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must be contextualised; and statutes must, as far as is reasonably possible, be interpreted
in conformity with the Constitution.15
[20] Plainly, the first and second parts of section 25(1) of the Water Act are two things
that may be allowed by a water management institution. For the reasons stated above,
I need say nothing more about the first part. Read with the words that introduce both
parts, here is how the second part of section 25(1) reads:
“A water management institution may, at the request of a person authorised to use water
for irrigation under [the Water] Act, allow that person on a temporary basis and on such
conditions as the water management institution may determine . . . to allow the use of
some or all of that water on another property in the same vicinity for the same or similar
purpose.”
[21] The applicants’ interpretation means that the water management institution may
allow the holder to allow her - or himself to use some or all of the water on another
property in the same vicinity for the same or similar purpose. Grammatically, that does
not make sense: the holder allowing her- or himself to use the water on another property
temporarily. What makes sense is that the section means the water management
institution may allow the holder to allow use of some or all of the water on another
property by another person, i.e. a third person.
[22] To put it differently, one of the forms of authority which may be given in terms
of section 25(1) is that the water management institution may authorise (“allow”) the
holder of the water use entitlement to allow the use of some of the water on another
property. Although the authority (the first “allowance”) is given by the institution, it is
the holder of the water use entitlement who then allows (the second “allowance”) the
use of the water on another property. The second “allow” (in the phrase “to allow the
use of”) most naturally refers to the situation where the holder of the entitlement allows
someone else to use the water on nearby land. One would not ordinarily say that the
15 Cool Ideas Id.
MADLANGA J
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holder of a right allows her - or himself t o use the water elsewhere. Of course, if the
question were to be asked whether the section precludes the use of the water by the
entitlement holder on another property, the answer seems to be that it does not. That is
because it seems absurd to permit use of the water on neighbouring property by a third
party but not use on neighbouring property by the holder her- or himself.
[23] If the interpretation contended for by the applicants had been intended, it could
simply have been rendered thus:
“A water management institution may, at the request of a person authorised to use water
for irrigation under [the Water] Act, allow that person, on a temporary basis and on
such conditions as the water management institution may determine, to use some or all
of that water for a different purpose on the same property or on another property in the
same vicinity for the same or similar purpose.”
[24] In sum, sec tion 25(1) is incapable of the interpretation contended for by the
applicants.
[25] When the grammatical difficulty arising from the applicants’ interpretation was
raised during oral argument, the applicants’ counsel countered by arguing that water
use is permissible only if it is sanctioned by section 22(1) of the Water Act. In terms of
section 22(1)(a) water use withou t a licence is permissible only if: that water use is
permissible under Schedule 1 to the Water Act (section 22(1)(a)(i)); 16 that water use is
permissible as a continuation of an existing lawful use (section 22(1)(a)(ii)); 17 or that
16 This Schedule, headed Permissible Use of Water , provides for reasonable domestic water use in a person’s
household directly from a resource to which the person has lawful access, use of water, on land owned by a person,
from a resource situated on the land or forms a boundary of that land, for small non -commercial gardening and
for watering animals which graze on that land, storage and use of run -off water from a roof, for the taking of
water, in emergency situations, from any resource for human consumption or firefighting, for the use and portage
of water for recreational purposes, and the discharge of waste water or water containing waste or run -off into
stipulated conduits like canals, sea outfall, etc.
17 In terms of section 32(1) an “existing lawful water use” means a water use—
“(a) which has taken place at any time during a period of two years immediately before the
date of commencement of this Act and which—
MADLANGA J
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water use is permissible in terms of a general authorisation issued under section 39
(section 22(1)(a)(iii)).18 In addition, a person may only use water if the water use is
authorised by a licence under the Water Act (section 22(1)(b)) or if the responsible
authority has dispensed with a licence requirement un der section 22(3)
(section 22(1)(c)).19 The applicants submitted that the inter pretation offered in
paragraphs 20-24 gives rise to use of water that is precluded by section 22(1). Put
differently, such use does not fall under what is itemised in the section and is thus legally
impermissible.
[26] Surely, despite its apparently categorical language, section 22(1) does not tell the
full story on permissible water use. Water use resulting from an authorisation by a
water management institution in terms of section 25(1) is manifestly water use that does
not fall under any of the categories itemised in section 22(1). If the applicants’ argument
were correct, it would mean that water use in terms of section 25(1) (whether under the
first or second part of the section) is impermissible under section 22(1). One need only
say this to show that the applicants’ argument is flawed. The water use resulting from
section 25(1) authorisations does not: fall under the categories contained in
section 22(1)(a); is not authorised by a licence as envisaged in section 22(1)(b); and
does not result from the responsible authority having dispensed with a licence
requirement under section 22(3) as envisaged in section 22(1)(c). That notwithstanding,
section 25(1) does provide for such use in so many words. If the applica nts’ argument
were correct, a line would have to be drawn through the entire section 25(1), because
(i) which was authorised by or under any law which was in force immediately
before the date of commencement of this Act;
(ii) is a stream flow reduction activity contemplated in section 36(1); or
(iii) is a controlled activity contemplated in section 37(1); or
(b) which has been declared an existing lawful water use under section 33.”
18 Section 39(1) provides that a responsible water authority may, subject to Schedule 1, by notice in the Gazette,
generally, in relation to a specific water resource, or within an area specified in the notice, authorise all or any
category of persons to use water.
19 Section 22(3) provides that “[a] responsible authority may dispense with the requirement for a licence for water
use if it is satisfied that the purpose of this Act will be met by the grant of a licence, permit or other authorisation
under any law”.
MADLANGA J
14
there would be no room for the authorisations outside of the terms of the licence
envisaged in section 22. Of course, that would be absurd in the extreme.20
[27] Section 26(1 )(l) provides that the Minister may make regulations “relating to
transactions in respect of authorisations to use water”. The regulations may include
“the circumstances under which a transaction may be permitted”, “the conditions
subject to which a transaction may take place” and “the procedure to deal with a
transaction”.21 I understand a “t ransaction” to involve more than one person. 22 The
applicants did not proffer a cogent argument as to why the second part of section 25(1)
may not involve a transaction in this sense.
[28] In conclusion, section 22(1) must be read harmoniously with section 25(1). The
result is that section 25(1) does provide for water use not itemised in section 22(1).
Thus, the meaning of section 25(1) rendered in paragraphs 20-24 is not only perfectly
acceptable, but is the most apt . That is, the section does permit the introduction of a
third party to enjoy water use in respect of an entitlement held by another person.
Is the licence application envisaged in section 25(2) a licence application by the holder
of a water use entitlement?
[29] According to the applicants, in section 25(2) as well there is no express mention
of a third party . That is true, but one could equally say that the section does not
expressly exclude a third party. To recapitulate, the applicants argue that the section is
meant to facilitate a licence application in terms of section 41 of the Water Act by the
holder of the water use entitlement, not a third party. The applicants’ interpretation of
section 25(2) requires that the square -bracketed words in the quotation that follows be
inserted into the section:
20 As indicated above, an interpretation that leads to an absurdity must be avoided. See Cool Ideas above n 14.
21 My emphasis. All this is to be found in section 26(1)(l)(i)-(iii).
22 This is supported by dictionary meanings of “transaction”. The Oxford English Dictionary defines “transaction”
as “a piece of business that is done between p eople, especially an act of buying or selling” . The Cambridge
English Dictionary defines “transaction” as “an occasion when someone buys or sells something, or when money
is exchanged or the activity of buying or selling something”.
MADLANGA J
15
“A person holding an entitlement to use water from a water resource in respect of any
land may surrender that entitlement or part of that entitlement—
(a) in order to facilitate a particular licence application under section 41 for the
use of water from the same resource in respect of other land [by the person
holding the entitlement to use water].”
[30] This insertion entails a limiting qualifier to the otherwise plainly broad language
of the section. The breadth of the language of section 25(2) is magnified by the breadth
of the language of section 41 in terms of which an application for a licence may basically
be made by anybody. Of course, the fate of each application will depend on its merits.
I can think of no interpretative tool that justifies this departure from the plain language
of the section and dictates the insertion suggested by the applicants’ interpretation. Our
courts – including this Court – have consistently held that words cannot be read into a
statute by implica tion unless the implication is necessary in the sense that without it
effect cannot be given to the statute as it stands and that without the implication the
ostensible object of the legislation cannot be realised.23 In this instance, nothing makes
the implication necessary. Thus, the application for a licence envisaged in section 25(2)
may be made by a third party.
Does the Water Act prohibit the charging of a fee in respect of transactions concluded
in connection with water use entitlements?
[31] The Water Act has no provision which expressly prohibits “trading” in water use
entitlements between private individuals.24 Section 29(2), which pertains to conditions
which may be imposed by the responsib le authority when issuing water use licences
under the Water Act, reads:
23 See Rennie N.O. v Gordon 1988 (1) SA 1 (A) at 22E -H and Masethla v President of the Republic of South
Africa [2007] ZACC 20; 2008 (1) SA 566 (CC); 2008 (1) BCLR 1 (CC) at para 192.
24 I use trading in water use entitlements loosely. I must say I am not sure that a water use entitlement is a right
that is capable of being sold in the legal sense. On the face of it, this right cannot be “sold”. In terms of
section 25(2) the holder can at best surrender her or his right in order to facilitate a particular application by
another person. When X surrenders her or his water use right, and a water use right from the same resource is
then granted to Y in terms of section 41, X’s right is extinguished and a new right in favour of Y comes into
existence. So, there is no transfer or sale of the right in the strict legal sense.
MADLANGA J
16
“If a licensee has agreed to pay compensation to another in terms of any arrangement
to use water, the responsible authority may make the obligation to pay compensation a
condition of the licence.” (Emphasis added.)
[32] Section 29(2) appears to acknowledge that it is lawful in terms of the Water Act
to enter into a private transaction relating to the use of water with another person and
that, when this is done, it is in order for such an arrangement to include the payment of
compensation. Additionally, secti on 29(2) permits a licensee’s obligation to pay
compensation to be made a condition of the licence . This is consonant with an
interpretation that a surrender under section 25(2) may be subject to a condition that,
upon the success of a licence application by a third party (the new licensee), the latter
will be liable to pay a fee to the erstwhile licensee.
[33] This interpretation and the provisions of section s 26(1)(l) and 29(2), which are,
respectively, about “transactions” and “compensation” , were put to the applicants’
counsel at the hearing. The response was that section 25 must not be read conjunctively
with sections 26(1)(l) and 29(2). The reason given for this submission was that section
25 was in that part of the Water Act that is substantive or norm-setting, whereas sections
26(1)(l) and 29(2) are in that part of the Act that concerns procedural matters. This
submission is problematic for at least two reasons. First, I am not aware of a rule of
interpretation that says different parts of a statut e dealing with different subject matter
must be compartmentalised such that each can never bear relevance to the interpretation
of the other. Second, courts must interpret legislation contextually. 25 And “context”
includes other provisions of the statute or the statute as a whole. In Hoban Howie JA
held that an interpretative approach that says “context” “is confined to parts of a
legislative provision which immediately precede and follow the particular passage
under examination” is unacceptably narrow.26 He continued by saying that “‘[c]ontext’
25 See Cool Ideas above n 14.
26 Hoban v ABSA Bank Ltd t/a United Bank [1999] ZASCA 12; 1999 (2) SA 103 6 (SCA) at para 20. See also
Association of Mineworkers and Construction Union v Chamber of Mines of South Africa [2017] ZACC 3; 2017
MADLANGA J
17
includes the entire enactment”. 27 So, I cannot agree that section s 26(1)(l) and 29(2)
must play no role in the interpretation of section 25.
[34] Even if procedural, sections 26(1) (l) and 29(2) do refer to “transactio ns” and
“compensation”. From that, it is plain that money may change hands. In line with the
rule of interpretation expressed through the maxim ut res magis valeat quam pereat ,28
those concepts must be given meaning. What then is that meaning? And what do the
transactions relate to? Section 25 is most certainly the substantive enactment
contemplated in the procedural provisions of sections 26(1)(l) and 29(2).
[35] I next deal with the applicants’ point about a paltry administrative fee v ersus
huge fees payable for trading in water use entitlements. I do not think the fact that the
holder of the entitlement pays a small administrative fee is a relevant consideration.
The reality is that a farm with water use rights is worth more than the same farm without
water use rights. Because holders can trade in water use entitlements without selling
the farms themselves, market forces dictate what the fees must be. And there is no
logical reason why there must be a connection between those fees and the small
administrative fee payable at the time of applying for a licence.
[36] In addition, in the absence of a clear enough proscription of trading in water use
entitlements (which there is not), private persons must surely be perfectly entitled so to
trade. There is a marked difference between legal constraints on private persons and
organs of state. The English case of Somerset County Council held:
(3) SA 242 (CC); 2017 (6) BCLR 700 (CC) at para 32 and Liesching v S [2016] ZACC 41; 2017 (2) SACR 193
(CC); 2017 (4) BCLR 454 (CC) at para 34.
27 Hoban id.
28 I would loosely translate this maxim to mean it is better to give effect to something than to render it nugatory.
See AmaBhungane Centre for Investigative Journalism NPC v Minister of Justice and Correctional Services;
[2021] ZACC 3; 2021 (3) SA 246 (CC); 2021 (4) BCLR 349 (CC) at para 77 and Cabinet for the Territory of
South West Africa v Chikane [1988] ZASCA 92; 1989 ( 1) SA 349 (A) at 371. This sensible presumption also
applies to the interpretation of contracts. See, for example, Welch Estate v Commissioner, South African Revenue
Service [2004] ZASCA 40; 2005 (4) SA 173 (SCA) at para 59.
MADLANGA J
18
“Public bodies and private persons are both subject to the rule of law; nothing could be
more elementary. But the principles which govern their relationships with the law are
wholly different. For private persons, the rule is that you may do anything you choose
which the law does not prohibit. It means that the freedoms of private citizens are not
conditional upon some distinct and affirmative justification for which he must burrow
in the law books. Such a notion would be anathema to our English legal traditions. But
for public bodies the rule is opposite, and so of another character altogether. It is that
any action to be taken must be justified by positive law.”29
[37] In sum, I see no impediment to a fee being charged for water use under the
second part of section 25(1) or in respect of a surrender of a water use entitlement in
terms of section 25(2) in order to facilitate a section 41 licence application by a third
party.
Remedy
[38] For these reasons, the appeal falls to be dismissed with costs, including costs of
two counsel.
Epilogue to analysis
[39] The conclusion that I have reached is not dismissive of the state’s concerns that
water, a scarce national resource, is largely in the hands of advantaged white farmers.
On the contrary, I understand why the state may now be seeking to redress the injustice
brought about by this disproportionate enjoyment of water use entitlements. Indeed,
one of the factors to be considered to ensure the achievement of the purpose of the
Water Act is “ redressing the results of past racial and gender discrimination”.30 This
attests to the reality of the racially skewed enjoyment of water use entitlements.
Unfortunately, the existing legislative instrument does not admit of the redress; at least
not in the manner contended for by the applicants in this matter.
29 R v Somerset County Council , Ex parte Fewings [1995] 1 All ER 513 (QB) at 524E -G cited with approval in
Clur v Keil 2012 (3) SA 50 (ECG) at para 15.
30 Section 2(c) of the Water Act.
MADLANGA J
19
Order
[40] The following order is made in each of the three applications:
1. Leave to appeal is granted.
2. The appeal is dismissed with costs, including the costs of two counsel.
For the Applicants:
For the Respondents in the Lotter N.O.
and Wiid matters:
For the Respondents in the SAAWUA
matter:
Rathaga Ramawele SC, Keatlaretse
Magano and Puseletso Loselo instructed
by State Attorney, Pretoria
Gerrit L Grob ler SC and
Jannet L Gildenhuys SC instructed by
Groenewalds Attorneys
Marius Oosthuizen SC and
Jolandie Rust SC instructed by the
Fasken Attorneys