THE SUPREME COURT OF APPEAL OF SOUTH AFRICA

JUDGMENT

Reportable

Case No: 20563/2014

In the matter between:

MINISTER OF WATER AND ENVIRONMENTAL
AFFAIRS

APPELLANT

and

I M KARAN t/a KARAN BEEF FEEDLOT

RESPONDENT

Neutral citation: Minister of Water and Environmental Affairs v Karan Beef

Feedlot (20563/2014) [2015] ZASCA 157 (9 October 2015).

Coram:
Navsa, Theron, Petse and Saldulker JJA and Van der

Merwe AJA

Heard:
11 September 2015

Delivered:
9 October 2015

Summary:
Water ─ interpretation of permit issued in terms of
s 62(2I)(a)(i) of the Water Act 54 of 1956 ─ meaning of permit clear from
words used and context ─ contrary result sought by respondent could only be
achieved by variation of the permit on review ─ respondent elected not to
pursue review ─ liability of respondent for payment of levies in respect of
water supplied by the Trans-Caledon Tunnel Authority not established.

______________________________________________________________

ORDER
______________________________________________________________

On appeal from: Gauteng Division of the High Court, Pretoria (De Klerk AJ
sitting as court of first instance):
1 The appeal succeeds to the extent set out in the varied order, with costs,
including the costs of two counsel.
2 The order of the court a quo is varied by deleting paragraph 1 thereof.
______________________________________________________________

JUDGMENT
______________________________________________________________

Van der Merwe AJA (Navsa, Theron, Petse and Saldulker JJA
concurring):

[1] The respondent, Mr I M Karan t/a Karan Beef Feedlot, is the owner of
land riparian to the Suikerbosrand River, in the district of Heidelberg. That
land is utilised for purposes of irrigation and a feedlot, requiring vast quantities
of water. The water is abstracted from the Suikerbosrand River in terms of
rights granted to the respondent under the now repealed Water Act 54 of
1956 (Water Act).

[2] On 28 September 1993 permit number B2/2/16(3062) (the permit) was
issued to the respondent. The permit was issued on the authority of the
Minister of Water Affairs and Forestry (Minister), the legal predecessor of the
appellant, the Minister of Water and Environmental Affairs. I deem it
necessary to reproduce the permit in full:
‘PERMIT

:
B2/2/16(3062)
PERMIT HOLDER
:
MESSRS KARAN ESTATES
PROPERTY
:
PORTION 5 (PORTION OF PORTION 2) OF THE
FARM ELANDSFONTEIN 412 IR; SIZE 985,7855 HECTARES: HEIDELBERG
DISTRICT, TRANSVAAL

SUIKERBOSRAND RIVER STATE WATER CONTROL AREA: PERMIT IN TERMS
OF SECTION 62(2I)(a)(i) OF THE WATER ACT, 1956 (ACT 54 OF 1956)
Under the powers vested in me by Government notice 966 of 19 Mar 1989, I, Claus
Triebel, in my capacity as Manager, Water Sources, in the Department of Water
Affairs and Forestry, herewith issue a permit in terms of Section 62(2I)(a)(i) of the
Water Act, 1956 to the above permit holder to extract a maximum quantity of
657 000mᵌ (six hundred and fifty-seven thousand cubic metres) of water per year
from the Suikerbosrand River for industrial purposes (feedlot) on the above property,
subject to the following conditions:
1.
The availability of the allocated quantities of water and the quality thereof for
any specific purpose is not guaranteed.
2.
No new waterworks may be erected or no changes made to existing water
works without prior job authorization in terms of Section 62(2H) of the Water Act,
1956, having been obtained.
3.
This permit is of a temporary nature and in no way represents a permanent
water allocation. The right is reserved to review or to cancel the permit after
reasonable prior notice.
4.
Authorized officers of the Department of Water Affairs and Forestry shall have
free access to the specific water works at all reasonable times, for purposes of
monitoring and control over the extraction of water.
5.
All possible precautions must be taken to the satisfaction of the Department
of Water Affairs and Forestry not to pollute the specific river in any way.
6.
A tariff of 28,4 cents per cubic metre water and that can be adjusted from
time-to-time shall be charged for the actual quantity of water used.
7.
This permit does not absolve the permit holder from complying with the
provisions of the Water Act, 1956.
8.
This permit replaces Permit B2/2/16(3062) dated 21 October 1986.’
(Emphasis added.)
The conditions of the permit reflect the department’s appreciation of water
being a scarce natural resource.

[3] During 1986 the Trans-Caledon Tunnel Authority (TCTA) was
established in terms of the Treaty on the Lesotho Highlands Water Project
entered into between the governments of the Republic of South Africa and the
Kingdom of Lesotho. Its main object is the implementation, operation and
maintenance of that part of the Lesotho Highlands Water Project situated in

the Republic of South Africa. The TCTA supplies water to the Vaal Dam via
the Lesotho Highlands Water Project.

[4] The respondent contended that, as a matter of interpretation, the
permit related only to water used for irrigation purposes. He further contended
that he is in any event not liable for payment of levies in respect of water
supplied by the TCTA. The appellant disputed both contentions.

[5] Upon application by the respondent, the court a quo (De Klerk AJ in the
Gauteng Division of the High Court, Pretoria) made the following declaratory
order:
‘1.
In terms of permit number B2/2/16(3062) dated 28 September 1993 the
Applicant is only liable to pay irrigation water use charges.
2.
The Applicant is not liable to pay Trans-Caledon Tunnel Authority charges for
the applicant’s existing lawful water use in terms of permit number B2/2/16(3062)
dated 28 September 1993.
3.
The Respondent is ordered to pay the costs of the application.’
The appellant appeals against this order, with the leave of the court a quo.

The meaning and effect of the permit
[6] In my view the permit should be interpreted against the following
statutory and factual background. Section 62 of the Water Act dealt with
control and use of public water in a government water control area. As stated
in the permit, the respondent’s land fell within such water control area. Section
62 provided that the right to the use and the control of public water in a
government water control area shall vest in the Minister. It accordingly
provided that no person shall use public water on land inside or outside a
government water control area, except by virtue of a provisional right in terms
of s 62(2A), a permission under s 62(2B) or 62(2I), or an allocation specified
in a notice in the Government Gazette under s 62(2F).

[7] Allocations in terms of s 62(2F) were published by the Minister in the
Government Gazette, after following the detailed procedure set out in
s 62(2C) to s 62(2E). The s 62(2F) allocations determined the quantity of

public water permitted for irrigation of specified areas of land in hectares.
Sections 62(2A) and 62(2B) provided for interim rights of use of water,
pending the determination of the allocations in terms of s 62(2F). For present
purposes it is not necessary to refer to the provisions of s 62(2B). However,
s 62(2A), in essence, provided that a landowner with existing irrigation
development in a government water control area ‘shall be provisionally
entitled’ to continue with the existing use of water for irrigation purposes on
that land, from the date of declaration of the particular area as a government
water control area until a notice is published in terms of s 62(2F) in respect of
that area.

[8] Section 62(2I), in effect, provided for an extraordinary concession for
use of surplus water. Inter alia, it provided:
‘(a)
If the Minister is convinced that sufficient public water is available in a
Government water control area due to the occurrence of floods or seepage, the
construction of a Government water work, the fact that rights to, or permissions or
allocations for, the use of public water conferred by or granted or made under this
section are not fully exercised, or any other reason, he may ─
(i)
whether before or after the publication of a notice referred to in subsection
(2F)(a), grant, on such conditions as he may determine, permission to any person to
abstract, impound or store in that Government water control area a quantity of public
water and to use it on a piece of land in that Government water control area for a
purpose specified in the permission, or to use it on a piece of land outside that
Government water control area for urban or industrial purposes.’ (Emphasis added.)

[9] As early as 21 October 1986 (some seven years before the issue of the
permit), the respondent was the holder of two separate rights in terms of s 62
to abstract water from the Suikerbosrand River for use on the land. In terms of
s 62(2A) he was provisionally entitled to the use of 514 600mᵌ of water per
annum for irrigation purposes. On 21 October 1986 he was granted a permit
(number 1026N), which authorised the use of 230 000mᵌ of water per annum
for industrial purposes consisting of a feedlot. That permit was issued in terms
of the then s 12(1) of the Water Act. Simply put, in terms of this permit the
respondent was the holder of a right to abstract water for industrial purposes

(feedlot) over and above the right to use water for irrigation purposes, as
indicated at the beginning of this paragraph.

[10] By way of two separate letters dated 22 May 1992, the respondent
applied for the increase of the quantity of the s 62(2A) right as well as for
abstracting an increased quantity of water in terms of the permit for industrial
use. He requested that he be permitted to use 809 714mᵌ of water per annum
for irrigation purposes as opposed to the 514 600mᵌ referred to in the
previous paragraph. The basis of this request was that the limit of 514 600mᵌ
of water per annum had been calculated on an incorrect measurement of the
area of land under irrigation. In respect of the permit for industrial use, he
asked for an increase of the quantity of water to 657 000mᵌ per annum, as
opposed to the 230 000mᵌ mentioned above. This was based on the
increased capacity of the feedlot to approximately 30 000 head of cattle per
day.

[11] The relevant officials of the Department of Water Affairs refused both
applications. The respondent thereafter sought and obtained an interview with
the Deputy Minister of Water Affairs and Forestry. They met on 5 November
1992. On 20 January 1993 the Deputy Minister wrote to the respondent in the
following terms:
‘As stated to you during our discussions, the position concerning the prevalence of
water in the Blesbok Spruit and the Suikerbosrand River has improved over the past
few years due to the spillage of purified sewage into it. Consequently, the streams
have a steady flow which, if not intercepted, will eventually end up in the Vaal Dam
from where it will be available for re-use. In light hereof, I declared myself willing to
permit Karan Estates (Pty) Ltd in terms of Section 62(2I) of the Water Act, 1956 (Act
54 of 1956) to extract the requested 657 000mᵌ of water per year from the
Suikerbosrand River, which is now required for the operation of the feedlot, on
condition, inter alia, that the actual quantity of water extracted shall be paid for at the
current tariff for untreated water from the Vaal Dam. Such a concession would result
in your company’s water allocation for agricultural usage, i.e. 822 988 cubic metres
per year being fully available for utilization for such purposes.’

[12] It was thus made clear that the permission (‘vergunning’) for increased
use of water for the feedlot would be given in terms of s 62(2I) ─ surplus
water ─ and that a specified tariff would be payable for such use. No tariff or
fee was payable in respect of the use of water in terms of s 62(2A). This was
concisely summarised in a letter by the Department of Water Affairs to the
respondent dated 1 April 1993, which stated:
‘Consequent to your visit to the Minister, the following allocations shall apply:
Feedlot:
657 000mᵌ per year @ 28.4c/mᵌ (For industrial purposes)
Agriculture:
823 000mᵌ per year, free (Preliminary agricultural allocation)
In order to exercise control over the above-mentioned allocations, the authorizations
will include a requirement that two separate water meters, which must be installed at
your own cost, must be kept in a satisfactory and working condition.’

[13] With regard to the envisaged condition that two separate water meters
be installed, the respondent replied as follows on 14 April 1993:
‘In light of the above, we request that the current water meter and existing installation
be left as they are, that the preliminary agricultural allocation in terms of s 62(2A) be
applied for both irrigation and feedlot, as in the past, until the allocation, ie 823 000mᵌ
has been consumed, and that subsequently the new allocation in terms of s 62(2I) for
industrial purposes, be used for both irrigation and feedlot, on condition that the
allocation of 657 000mᵌ not be exceeded and a remuneration of 28,4c/mᵌ be payable
for the latter.’ (My translation.)
Whether the absence in the permit of a condition in respect of two water
meters indicates that the respondent’s request had been acceded to, is not
necessary to decide.

[14] The statement of the respondent in the founding affidavit that ‘it has
always been my contention that I have since 1993 only been liable for
payment of water use charges at the rate for irrigation water use and not for
water use charges at the rate for industrial water use’, is therefore
disingenuous. On his own version he had paid industrial charges in terms of
the permit for some 14 years without demur.

[15] In my judgment the background that I have set out confirms that the
understanding of the parties at all relevant times was in accordance with the

clear wording of the permit, namely that the permission to use water for the
feedlot had been granted as a concession in terms of s 62(2I) for industrial
purposes and against payment of the specified tariff of 28,4c/mᵌ of water. An
interpretation that the permit authorised use of water for irrigation purposes in
respect of which an unspecified tariff was payable, is in my respectful view not
tenable.

[16] In his founding affidavit the respondent pointed out that the definition of
‘use for agricultural purposes’ in the Water Act had with effect from 1 July
1993 been amended to include use for or in connection with an intensive
animal feeding system, ie a feedlot. The respondent’s case in the founding
affidavit was therefore that the appellant ‘. . . was bound by the amended
definition and could therefore not issue the permit to me for industrial
purposes’ and that the permit ‘. . . erroneously referred to industrial use
(feedlot) instead of agricultural use’.

[17] But this is the language of review, not of interpretation of the permit.
The respondent can only achieve what he seeks by variation of the terms of
the permit. However, the respondent deliberately elected not to bring
proceedings for variation of the permit on review. Until such time as the permit
is varied on review, it remains as a fact and has legal effect in accordance
with its terms.1

[18] It must be understood that the Legislature in enacting the National
Water Act 36 of 1998 and its predecessor (the Water Act) was keenly aware

1 See Oudekraal Estates (Pty) Ltd v City of Cape Town & others 2004 (6) SA 222 [2004]
ZASCA 48 (SCA) para 26, and MEC for Health, Eastern Cape & another v Kirkland
Investments (Pty) Ltd t/a Eye & Lazer Institute 2014 (3) SA 481 [2014] ZACC 6 (CC) para
103.

that water was a scarce and unevenly distributed national resource.2 It is
clear, from the terms of the permit itself, that the Minister allowed the use of
surplus water to the respondent in an increased volume conditional upon
payment being made. Payment in itself would bring about a discipline in the
use of water. The problem with using an interpretive exercise, for sidestepping
a review of the permit and resulting in the declaratory order, is that it
discounts these very important factors.

[19] It is of course open to the respondent to apply afresh for a licence to
abstract water for a particular purpose in terms of the National Water Act. In
relation thereto a discretion would be exercised by the responsible authority,
both in respect of volume and purpose, taking into account current levels of
available water and the legislative and constitutional responsibility3 to
conserve water as a resource. If the respondent is aggrieved by such a
decision he would be free to take such legal steps as are available to him.

Trans-Caledon Tunnel Authority levies
[20] The permit did not mention TCTA levies at all. The appellant accepted
that he bore the onus to prove that the respondent was liable to pay the TCTA
levies. At the hearing of this matter, counsel for the appellant referred the
court to s 138F of the Water Act, the relevant portion of which reads:
‘(1) Notwithstanding anything to the contrary contained in any law but subject to the
provisions of subsection (2), the Minister may with the concurrence of the Minister of

2 In this regard see the preamble to the National Water Act 36 of 1998 which reads as follows:
‘RECOGNISING that water is a scarce and unevenly distributed national resource which
occurs in many different forms which are all part of a unitary, inter-dependent cycle;
RECOGNISING that while water is a natural resource that belongs to all people, the
discriminatory laws and practices of the past have prevented equal access to water, and use
of water resources;
ACKNOWLEDGING the National Government’s overall responsibility for and authority over
the nation’s water resources and their use, including the equitable allocation of water for
beneficial use, the redistribution of water, and international water matters;
RECOGNISING that the ultimate aim of water resource management is to achieve the
sustainable use of water for the benefit of all users;
RECOGNISING that the protection of the quality of water resources is necessary to ensure
sustainability of the nation’s water resources in the interest of all water users; and
RECOGNISING the need for the integrated management of all aspects of water resources
and, where appropriate, the delegation of management functions to a regional or catchment
level so as to enable everyone to participate; . . . .’  See also s 27(1) of the National Water
Act.
3 See s 24(b)(ii) and (iii) of the Constitution.

Finance, by notice in the Gazette levy a charge on water which is supplied for use for
any purpose by the State, an irrigation board, a water board, a local authority, the
Rand Water Board or any other supplier in an area for the benefit of which a water
work referred to in section 138A in the opinion of the Minister, has been, is being or
will be constructed.
(2)(a) No charge shall be levied under subsection (1) unless the Minister not less
than 60 days prior to the date on which he intends to publish the relevant notice in
the Gazette, has tabled in Parliament a report containing the particulars required in
paragraph (b).
(i) …
(ii) the water work concerned and the benefit it entails for the users of water who will
be liable for the payment of the proposed charges.’ (Emphasis added.)

[21] The respondent has maintained that he derives no benefit from the
Lesotho Highlands Water Project. The appellant was requested to furnish the
court with the notice referred to in s 138F(2)(a) setting out the benefit enjoyed
by the respondent from the Lesotho Highlands Water Project. Counsel for the
appellant conceded, and rightly so, that if the notice did not identify the
respondent as a user who derived benefit from the project, the respondent
would not be liable to pay TCTA levies.

[22] Subsequent to the hearing of this appeal, the court was furnished with
various notices published in the Government Gazette by the appellant during
the period 1988 until 1997, in terms of s 138F(1) of the Water Act.4  In terms
of these notices, the appellant levied a charge on ‘water supplied or made
available by the Government from or by means of any Government water
work in the Vaal River from and including the Grootdraai Dam to the
confluence of the Vaal and Orange Rivers to any person or body for eventual
use for urban or industrial purposes’.

[23] It is common cause that the respondent abstracts water from the
Suikerbosrand River. The Suikerbosrand River is a tributary of the Vaal River.

4 Section 138F of the Water Act was repealed on 1 October 1998 and thus no notices in
terms of this section would be issued after this date.

The respondent’s land is situated upstream of the confluence of the
Suikerbosrand River and the Vaal River. The confluence of the Suikerbosrand
and Vaal Rivers is at Three Rivers near Vereeniging, downstream of the Vaal
Dam. It is a fact, therefore, that water is not supplied or made available to the
respondent by means of any government water work in the Vaal River. For
this reason the respondent is clearly not liable for payment of TCTA levies in
terms of the government notices relied upon and it is not necessary to pursue
the matter further.

[24] In the result I would make the following order:
1 The appeal succeeds to the extent set out in the varied order, with costs,
including the costs of two counsel.
2 The order of the court a quo is varied by deleting paragraph 1 thereof.

_______________________
C H G VAN DER MERWE
ACTING JUDGE OF APPEAL

APPEARANCES:
For Appellant:

N Cassim SC (with her M Manala)
Instructed by:
State Attorney, Pretoria
State Attorney, Bloemfontein

For Respondent:

A B Rossouw SC (with him J H A Saunders)
Instructed by:
Jaco Roos Attorney, Pretoria
E G Cooper Attorneys, Bloemfontein
THE SUPREME COURT OF APPEAL
REPUBLIC OF SOUTH AFRICA

MEDIA SUMMARY – JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL

From: The Registrar, Supreme Court of Appeal
Date: 9 October 2015
Status: Immediate
MINISTER OF WATER AND ENVIRONMENTAL AFFAIRS v I M KARAN t/a KARAN
BEEF FEEDLOT

Please note that the media summary is intended for the benefit of the media and does not
form part of the judgment of the Supreme Court of Appeal

1.
On 28 September 1993 the legal predecessor of the appellant, the Minister of Water
and Environmental Affairs, issued a permit to the respondent, Mr I M Karan t/a Karan Beef
Feedlot (Mr Karan), in terms of the provisions of s 62(2I)(a)(i) of the repealed Water Act 54
of 1956. In terms of the permit Mr Karan was authorised to abstract water from the
Suikerbosrand River ‘for industrial purposes (feedlot)’, on condition that the tariff for
industrial use shall be charged.

2.
Mr Karan contended that, as a matter of interpretation, the permit related only to
water used for irrigation purposes. A dispute also arose as to whether Mr Karan is liable for
payment of levies to the Trans-Caledon Tunnel Authority (TCTA), which supplies water to
the Vaal Dam via the Lesotho Highlands Water Project. Mr Karan approached the Gauteng
Division of the High Court, Pretoria for an order declaring (i) that on an interpretation of the
permit, he is only liable for payment of irrigation charges and (ii) that he is not liable for
payment of TCTA levies. The high court granted the relief claimed and the appellant
appealed to the Supreme Court of Appeal (SCA).

3.
Today the SCA upheld the appeal in respect of (i), but dismissed it in respect of (ii).
The SCA referred to the background of the permit and held that the clear meaning thereof
could not be departed from unless it is varied on review, which the respondent elected not to
do. The SCA also held that as Mr Karan does not abstract water from the Vaal River, he is
not liable for payment of TCTA levies.

--ends--