THE SUPREME COURT OF APPEAL
OF SOUTH AFRICA

REPORTABLE
Case number : 415/04

In the matter between :

CITY OF CAPE TOWN
(CMC ADMINISTRATION)

APPELLANT

and

W D BOURBON-LEFTLEY NO

FIRST RESPONDENT
M M BOURBON-LEFTLEY NO
SECOND  RESPONDENT

CORAM :

HOWIE P, NAVSA, BRAND, VAN HEERDEN
JJA et CACHALIA AJA

HEARD :

31 AUGUST 2005

DELIVERED :

15 SEPTEMBER 2005

Servitude entitling farmer to draw water from the appellant's pipeline – maximum allocation
exceeded – whether tacit term that farmer should pay for excess at 'going rate' – alternatively
whether farmer liable in delict for excess water consumed.
________________________________________________________________

JUDGMENT
________________________________________________________________________
BRAND JA/

BRAND JA:

[1] The Wemmershoek Dam near Paarl is one of the sources of
drinking water for the inhabitants of the Cape metropole. Both the
dam and the pipeline connected to it belong to the appellant. The
respondents are the trustees of the Bourbon-Leftley family trust. The
trust drew water from the pipeline for the irrigation of its fruit farm,
Môrelig, in the Wemmershoek Valley. For the water so consumed the
appellant claimed compensation from the trust in an amount of about
R1,7m. When the trust refused to pay, the appellant instituted action
against the respondents as its trustees in the Cape High Court. At the
end of the trial before Griesel J, the claim was, however, dismissed
with costs. The appeal against that judgment is with the leave of this
court.

[2] The issues between the parties can best be understood against
the factual background that follows. It all started in about 1950 when
the appellant decided to build the dam across the Wemmershoek
River. One of the preparatory steps it had to take was to come to
some arrangement with the owners of riparian farms who had hitherto
drawn their water from the river for irrigation purposes. After some

negotiation with those representing the riparian farmers, the appellant
succeeded in reaching an agreement with them at a meeting held on
7 March 1950. All this appears from the minutes of that meeting
introduced in evidence before the court a quo.

[3] The agreement reached at the meeting was eventually
embodied in a document that was signed by the appellant and every
individual riparian owner on 19 January 1952. One of the parties to
the agreement was the trust’s predecessor in title to the farm Môrelig.
What the appellant agreed to, in essence, was to supply the riparian
owners with a maximum allocation of water from the pipeline
connected to the dam in exchange for taking away their riparian rights
and as compensation for allowing a servitude pipeline over their
properties. An overall quantity of 400 million gallons per annum was
allocated to the farmers as a group. The allocation was made in three
categories; a maximum of 240 million gallons free of charge and a
further maximum of 160 million gallons at a rate of 1s per 1 000
gallons for the first half of 80 million gallons and 1s 6d per 1 000
gallons for the remaining half.

[4] Subsequently, this overall allocation was apportioned among
the individual owners concerned and each apportionment registered,
together with the other terms of the 1952 agreement, as part of a
servitude of aqueduct against the title deeds of the individual
properties. In the case of Môrelig, the registration took place in
October 1964. According to the 1964 servitude the share of the
overall allocation allotted to Môrelig, translated into metric terms, was
a maximum of 151 536 kilolitres (or cubic metres) per annum divided
into a free allocation of 90 920 kilolitres and a further 60 616 kilolitres
at a discounted rate of 2,2c per kilolitre for the first half of 30 308
kilolitres and 3,3c per kilolitre for the remaining half.

[5] Other terms of the servitude provided that:
(a)
the appellant would install and maintain the pipeline as well as
a meter at the point of supply for the purpose of measuring the
quantity of water drawn;
(b)
the owner of Môrelig acknowledged that, save for the allocation
in terms of the agreement, he would have no right to take water out of
the Wemmershoek River or any of its tributary streams.

[6] On 6 November 1992 the trust took transfer of Môrelig from its
predecessor in title, Le Fayet Operations CC. In consequence, the
1964 servitude became a binding agreement between the appellant
and the trust. In all its subsequent dealings with the appellant, the
trust was represented by the first respondent, Mr William Bourbon-
Leftley (‘Bourbon-Leftley’), although the farming operations on
Môrelig were later taken over by his son, Mr William Bourbon-Leftley
junior. At the time of the acquisition of Môrelig, Bourbon-Leftley had
some 34 years experience in farming fruit for the export market as the
owner of another farm, Loevenstein, in the district of Paarl.

[7] Môrelig was acquired through the trust to extend the fruit
farming operations on Loevenstein. Shortly after acquisition, the trust
therefore proceeded to replace the existing vineyards on the farm
with fruit trees to produce plums and citrus for the export market. To
that end, 40 hectares were placed under irrigation. On 18 February
1993 application was made, on behalf of the trust, to the appellant’s
city engineer, for the installation of a metered outlet of 150 millimetres
from the pipeline. The reason advanced for the request was that the
existing 80 millimetre outlet would not satisfy the requirements of the
trust’s new irrigation system. The application was approved by the

engineer in March 1993. From then onward, the trust drew its
allocation of water from the pipeline at two metered outlets. While
water drawn from the old 80 millimetre outlet was primarily used for
domestic purposes, the water from the new 150 millimetre outlet was
used for the irrigation of fruit trees.

[8] The appellant’s officials stationed at the Wemmershoek Dam
read the meters installed at these outlets on a regular basis and
communicated their readings to the appellant’s accounts department
in Cape Town. Towards the end of 1993, Bourbon-Leftley was told by
one of the senior officials at the Wemmershoek Dam, a Mr Young,
that according to the appellant’s readings, the trust was about to
exceed its maximum allocation of water for that year. Bourbon-Leftley
immediately started making arrangements to obtain additional water
from other sources. Shortly thereafter, however, Young informed
Bourbon-Leftley in writing that he had been mistaken in that the trust
had only withdrawn some 60 000 kilolitres at that stage, which left
about 30 000 kilolitres of its free allocation available for the remainder
of that calendar year.

[9] As a result of this experience, Bourbon-Leftley, over the period
from 1994 to 1998, regularly telephoned the officials at the appellant’s
accounts department in Cape Town, mostly speaking to a Mrs
Riecherts, who furnished him with the monthly readings relating to
water consumption on Môrelig. Throughout this period the monthly
readings were recorded by Bourbon-Leftley and totalled annually.
These totals reflected consumption of far less water than the trust’s
annual allocation of free water. In fact, during some of those years it
was as little as 33 000 kilolitres and it never exceeded 52 000
kilolitres in any given year. As a consequence, so Bourbon-Leftley
testified, he ceased his practice of making these inquiries at the end
of 1998.

[10] Unbeknown to the appellant’s officials involved, including Mrs
Riecherts, the readings obtained by the appellant and communicated
to Bourbon-Leftley, were not correct. The errors resulted from a
persistent misreading by the appellant's meter readers of the meter
which was installed at the trust's new 150 millimetre outlet in 1993.
The misreadings occurred because the meter readers had failed to
multiply the reading on the meter by a factor of 10 as they were
required to do by the instructions appearing on the face of the meter

itself. This error was perpetuated until eventually discovered by one
of the appellant’s officials in about July 1999.

[11] With effect from July 1999 the metre was read correctly. These
correct readings showed that the trust’s consumption of water had
exceeded, not only its free allocation, but its overall maximum
allocation of 151 636 per annum by a substantial margin. However,
these facts were only communicated to the trust much later. Though
water accounts were prepared by the appellant’s account department
on the basis of the correct readings since July 1999, problems were
compounded by the fact that these accounts did not reach the trust
because they were erroneously sent to the postal address of the
previous owner of Môrelig, Le Fayet Operations CC.

[12] This state of affairs continued until 7 November 2001 when a
final demand was hand-delivered, on behalf of the appellant, to
Bourbon-Leftley junior on the farm. This was the first intimation
received by the trust that its annual consumption of water exceeded
not only its allocation of free water, but its overall allotment in terms of
the 1964 servitude. Bourbon-Leftley thereupon immediately arranged
for alternative sources of water for irrigation on Môrelig with the result

that the trust did not exceed its overall allocation in 2002 while its
excess use in 2003 was negligible.

[13] The final demand delivered to the trust was essentially for
payment of the amount claimed in these proceedings, ie
R1 696 758,58. It is alleged to be owing by the trust for the water
consumed in excess of its maximum annual allocation over the period
of three years between 1 January 1999 and 31 December 2001.
According to the appellant's records that were formally admitted by
the respondents at the trial, the actual quantities used by the trust
over that period were: 309 840 kilolitres during 1999, 348 629
kilolitres during 2000 and  265 852 kilolitres during 2001.

[14] The amount claimed is calculated on the premise that the trust
is liable to pay for water used in excess of its overall quota of 151 636
kilolitres per annum at the appellant’s so-called ‘miscellaneous tariff
plus 25%’. This, so the appellant alleged, is the rate paid, inter alia,
by some riparian owners in a position similar to the trust for water
consumed in excess of their overall allocations under the 1952
agreement. Although the respondents denied that the trust was liable
to pay for its excess consumption at the alleged miscellaneous rate

plus 25%, they admitted that, if the trust should be held to be liable to
pay at all, and if that should be found to be the applicable rate, the
appellant would be entitled to judgment in the amount claimed.

[15] The primary basis of appellant’s claim as formulated in its
particulars of claim relied on an alleged tacit term of the servitude
agreement to the effect that:
‘should the trust exceed its maximum annual allocation of water from the pipeline
of 151 536 kilolitres, then the trust would pay the plaintiff for the excess water
utilised at a rate equivalent to that charged to other parties entitled to similar
rights to draw from the pipeline.’

[16] The appellant also formulated an alternative claim which was
founded in delict. Its allegations in support of this claim were, in the
main, that the respondents were liable to it for the damages it had
suffered as a result of the intentional, alternatively negligent,
misappropriation of its water by the trust.

[17] The respondents disavowed liability on either of these grounds.
With regard to the main claim they denied the existence of the
alleged tacit term. In the alternative they pleaded that, if such a tacit
term were found to exist, then the servitude must have been subject

to two further tacit terms. In substance, these two terms seem to
amount to the same thing, namely that the trust would only be liable
to pay for excess water if the appellant had given it fair warning of
such excess use.

[18] The court a quo found that the claim could not be sustained by
either of the two causes of action upon which it was brought. The
appellant's argument on appeal is that the court erred in that it should
have held the trust liable on one of these alternative grounds.

TACIT TERM
[19] A discussion of the legal principles regarding tacit terms is to be
found in the judgment of Nienaber JA in Wilkins NO v Voges 1994 (3)
SA 130 (A) at 136H-137D. These principles have since been applied
by this court, inter alia, in Botha v Coopers & Lybrand 2002 (5) SA
347 (SCA) paras 22-25 and in Consol Ltd t/a Consol Glass v Twee
Jonge Gezellen (Pty) Ltd and another [2004] 1 All SA 1 (SCA) paras
50-52. As stated in these cases, a tacit term is based on an inference
of what both parties must or would necessarily have agreed to, but
which, for some reason or other, remained unexpressed. Like all
other inferences, acceptance of the proposed tacit term is entirely

dependent on the facts. But, as also appears from the cases referred
to, a tacit term is not easily inferred by the courts. The reason for this
reluctance is closely linked to the postulate that the courts can neither
make contracts for people, nor supplement their agreements merely
because it appears reasonable or convenient to do so (see eg Alfred
McAlpine & Son (Pty) Ltd v Transvaal Provincial Administration 1974
(3) SA 506 (A) at 532H). It follows that a term cannot be inferred
because it would, on the application of the well known 'officious
bystander' test, have been unreasonable of one of the parties not to
agree to it upon the bystander’s suggestion. Nor can it be inferred
because it would be convenient and might therefore very well have
been incorporated in the contract if the parties had thought about it at
the time. A proposed tacit term can only be imported into a contract if
the court is satisfied that the parties would necessarily have agreed
upon such a term if it had been suggested to them at the time (see eg
Alfred McAlpine supra at 532H-533B and Consol Ltd t/a Consol Glass
supra para 50). If the inference is that the response by one of the
parties to the bystander’s question might have been that he would
first like to discuss and consider the suggested term, the importation
of the term would not be justified.

[20] In deciding whether the suggested term can be inferred, the
court will have regard primarily to the express terms of the contract
and to the surrounding circumstances under which it was entered
into. It has also been recognised in some cases, however, that the
subsequent conduct of the parties can be indicative of the presence
or absence of the proposed tacit term (see eg Wilkins NO v Voges
supra at 143C-E; Botha v Coopers & Lybrand supra para 25).

[21] Reverting to the servitude agreement under consideration, it is
clear, as I have said, that provision is made in express terms for the
allocation of a prescribed volume of water free of charge. In addition,
a further allocation is made at discounted rates. Nothing is said,
however, as to what would happen in the event of the property owner
exceeding its overall allocation of water in all three categories. The
appellant’s case is not that the parties have applied their minds to
such eventuality. What it contends for is that the parties did not think
of this eventuality at all, but that, if at the time of the agreement the
parties had been asked what would happen in this event, their
unanimous response would have been that the owner would pay for
the excess consumption at the going rate. The starting point of the

appellant’s argument in support of this contention was that, in the
given situation, one of only three possible results could eventuate.
First, the excess water could be provided at no cost. Second, the
excess water could be provided at a cost and, third, the appellant
could simply cut off the supply of water to the property.

[22] The first option, so the appellant's argument proceeded, can be
disposed of on the basis that it would be completely unbusinesslike
and incompatible with the express terms of the agreement. Thus far
the argument is obviously sound. As to the third option, the appellant
argued, such conduct on its part would constitute an interference with
the owner’s servitudinal rights which would entitle the owner to rely
on the mandament van spolie (cf Bon Quelle (Edms) Bpk v
Munisipaliteit van Otavi 1989 (1) SA 508 (A) at 513B-E and 516E-H;
Telkom SA Ltd v Xsinet (Pty) Ltd 2003 (5) SA 309 (SCA) paras 9 and
12). Which leaves the second option as the only realistic alternative.
Once this is accepted, the argument concluded, logic dictates that the
parties would inevitably have agreed that the owner would pay for
excess consumption at the going rate.

[23] I am not persuaded by this line of reasoning. In my view it
departs from a wrong premise. Acceptance of the proposition –
doubtful in itself – that the appellant would be guilty of spoliation if it
refused to supply the owner with more water than it was contractually
entitled to, would not on its own justify the conclusion that the owner
could therefore exceed its overall annual allocation with impunity, as
long as it paid for the excess at the going rate. Otherwise stated, to
say that the appellant would not be entitled to cut off the owner’s
water supply would not render a limitation of the owner's right of
withdrawal of water to the quantity of its allocation, unenforceable.
The appellant would be entitled to compel compliance with such
limitation in other ways, for example, by cancelling the agreement –
with or without a claim for damages – or by compelling specific
performance through obtaining a prohibitory interdict.

[24] Upon being asked by the officious bystander what would
happen if the owner exceeded its allocation, the third option available
to the parties was therefore not, as suggested by the appellant, that
the appellant would simply cut off the owner's water supply. Their real
option was to respond that the owner was not entitled to exceed its
overall allocation and that, if it did so, the appellant would have

whatever remedies would be available to it in law. In fact, I believe
that in all the circumstances this was the answer the officious
bystander was most likely to receive from both parties; perhaps with
the rider that if the owner needed more water it could be provided by
the appellant, subject to availability, at a rate to be negotiated.

[25] There are several reasons why I think that the latter option
represents the most likely answer the parties would have given. First,
it appears from the minuted negotiations preceding the servitude
agreement that it was not envisaged that the riparian owners would
require any water in excess of their overall allocations. Second, as
also appears from the same minutes, it was specifically pointed out
by the appellant's representatives during these negotiations, that the
prime purpose of the Wemmershoek Dam was to provide potable
water to the inhabitants of Cape Town and not to supply the farmers
of the Wemmershoek Valley with water for irrigation purposes. In the
circumstances it is improbable, in my view, that the appellant would
have agreed to afford every riparian owner the right to claim unlimited
quantities of water from the pipeline, albeit at 'the going rate'. Third, I
find it unlikely, from the farmers' point of view, that they would have
agreed to buy irrigation water at the going rate paid for drinking water

by the inhabitants of Cape Town without even enquiring what that
rate was likely to be. This unlikelihood is borne out, to an extent, by
Bourbon-Leftley's conduct. Each time he was told that the trust was
exceeding its overall allocation, he made alternative arrangements for
irrigation water. Fourth, I find myself in agreement with the conclusion
arrived at by the court a quo, that a tacit term entitling the riparian
owners to claim more than the quantities allotted to them would be at
odds with their express acknowledgement in terms of the servitude
agreement that, apart from their allocation under the servitude, they
were not entitled to any water from the Wemmershoek River or its
tributary streams. Acceptance of the fact that the owner was not
entitled to exceed its maximum overall allocation would obviously
preclude any agreement on compensation for excess use. The
parties could hardly be assumed to have concluded an agreement on
the basis of what would constitute breach of contract by one of them.

[26] The appellant's further argument in support of the proposed
tacit term was based on the evidence that other riparian owners in a
position similar to that of the trust had paid for water consumed in
excess of their allocation at the appellant's 'miscellaneous rate plus
25%'. The difficulty with this argument is, however, that there is no

indication as to why these farmers were prepared to pay this rate. Did
they really do so by way of implementing what they thought to be a
tacit term of the servitude? Or was it done pursuant to ad hoc
arrangements between the appellant and those farmers? Without
knowing the answer to these questions, the payments per se cannot
sustain the inference contended for by the appellant. I therefore
agree with the court a quo's finding that the appellant had failed to
establish the tacit term upon which its main claim relies.

THE DELICTUAL CLAIM
[27] The appellant's alternative cause of action formulated in delict –
not strenuously pursued on appeal – was for damages resulting from
the unlawful and intentional, alternatively negligent, misappropriation
of its water by the trust. In support of the proposition that such an
action is, in principle, available in our law, the appellant sought to rely
on the judgment of this court in Hefer v Van Greuning 1979 (4) SA
952 (A) at 958H (cf also, eg Neethling, Potgieter & Visser Law of
Delict 4 ed p 11; Van der Merwe Sakereg 2 ed p 357; Silberberg &
SchoemanThe Law of Property 4 ed (by Badenhorst, Pienaar &
Mostert) p 244 et seq). I shall approach the matter, without finally

deciding the issue, on the assumption that this foundational
proposition is true.

[28] A substantial part of the appellant's argument under this
heading was attributed to a criticism of the court a quo's conclusion
that it could not find the trust's misappropriation to have been
intentional. This conclusion was primarily based on the acceptance of
the ipse dixit by the Bourbon-Leftleys, senior and junior, that they
were unaware of the fact that the trust was consistently exceeding its
overall allocation. The appellant's contention in this regard was that
these declarations of good faith, especially on the part of Bourbon-
Leftley senior, could not stand up to scrutiny. In support of this
contention it pointed out that Bourbon-Leftley was a farmer of 34
years' experience in fruit farming; that he was well aware of the fact
that the irrigation of fruit trees required at least 4 000 kilolitres per
hectare annually and that he had planted 40 hectares of fruit trees on
Môrelig. He must therefore have known that the trust required a
minimum of some 160 000 kilolitres per annum for its irrigation
purposes. Consequently, he must have appreciated that the
measurements of between 33 000 and 52 000 kilolitres per annum
that he obtained from Mrs Riecherts could not possibly be accurate.

There is considerable merit in this argument. Of course, the argument
gains substantial force when the alternative yardstick of the
reasonable person in Bourbon-Leftley's position, which would satisfy
the element of negligence as a requirement for Aquilian liability, is
applied. However, the view that I hold on the outcome of the appeal
renders it unnecessary to arrive at any final conclusion on the issue
of whether or not the misappropriation by the trust can be ascribed to
the guilty minds of those acting on its behalf.

[29] The court a quo's main reason for dismissing the appellant's
delictual claim was that it had failed to prove any damages. I agree
with this conclusion. The appellant's case is that, but for the
misappropriation by the trust, it would have sold the quantity of the
excess water consumed to other users at its going rate. Bourbon-
Leftley's undisputed evidence was, however, that during the three
year period under consideration, the Wemmershoek Dam was never
empty. Without more, this would give rise to the inference that,
despite the excess use of water by the trust, the appellant's water
supply still exceeded the demand of its potential purchasers. In the
absence of any evidence as to the level of the dam immediately after
the next rains, one simply does not know whether the excess water

that was used by the trust would have flowed down to the sea the
next time the dam reached its maximum capacity. If it did, the
appellant would not have suffered any loss. It follows that, in my view,
the appellant's claim was rightly disallowed on both the contractual
and the delictual bases advanced.

[30] For these reasons the appeal is dismissed with costs.

………………
F D J BRAND
JUDGE OF APPEAL
Concur:

HOWIE P
NAVSA JA
VAN HEERDEN JA
CACHALIA AJA