Minister of Environment, Water and Climate Change v Hippo Valley Estates Limited & Anor

### Preamble
Judgment No. SC 56/19
Chamber Application No. SC 853/181
DISTRIBUTABLE
(52)
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DISTRIBUTABLE	(52)

MINISTER     OF     ENVIRONMENT,    WATER     AND     CLIMATE     CHANGE

v

HIPPO     VALLEY     ESTATES     LIMITED     (2)          TRIANGLE     LIMITED

SUPREME COURT OF ZIMBABWE

HARARE FEBRUARY 18, MAY 28 & JULY 5, 2019.

IN CHAMBERS

J. Dondo, for the applicant

G. Gapu, for the respondent

MAKARAU JA

This is an application for condonation and extension of time within which to note an appeal against the decision of the High Court in terms of s 43 (1) of the Supreme Court Rules, 2018. The application is opposed.

BACKGROUND FACTS

In 1961, the respondents, commercial agricultural estates, concluded two agreements with the relevant authority regulating the supply of raw water to the respondents. This was before the establishment of the Zimbabwe National Water Authority, ZINWA.

It was specifically agreed between the respondents and ZINWA’s predecessor that the parties would jointly review the charges payable by the respondents for the supply of raw water and in the event of the parties failing to agree, the minister responsible for water would fix the charge. The two agreements also provided for the timeframes within which any such new charges would take effect.

On 17 December 2015, the Chief Executive Officer of ZINWA wrote to the respondents advising them that, through the National Budget that had just been announced, Government had reviewed water tariffs for commercial agricultural estates from $9.45 to $12.00 per megalitre. The new tariffs were to take effect from 1 January 2015.

The letter was followed on 6 May 2016, by the publication by the applicant, of the Zimbabwe National Water Authority [Raw Water Tariffs] Regulations, 2016.

Contending, inter alia, that they were ultra vires the enabling Act, the respondents approached the High Court, seeking to have the regulations set aside. On 3 May 2018, the High Court rendered its decision, holding that the Regulations were unlawful and could not stand.

Aggrieved by the decision of the High Court, the applicant filed a notice of appeal to this Court on 22 May 2018. Although the notice of appeal was filed timeously, it was not served upon the respondents and the Registrar of the High Court within the time frame stipulated in the Rules.

At the hearing of the appeal, the above defect in the notice of appeal was raised, resulting in the matter being struck off the roll with an appropriate order of costs. Following the striking off of the matter, the applicant filed this application.

THE APPLICATION FOR CONDONATION.

In the application, the applicant contends that the late serving of the notice of appeal upon the respondents and the Registrar of the High Court was occasioned by a mix up in the offices of the applicant’s legal practitioners. An apology for the oversight is tendered.

In opposing the application, the respondents, while denying the averments made by the applicants on the cause and explanation for the delay, made the point that the applicant does not enjoy good prospects of success on appeal. In fact, the respondents express the view that the applicant has no prospects of success on appeal at all.

THE LAW

In determining this application, I am enjoined to look not only at the delay and the reasonableness of the reasons for such delay, but also on the prospects of success of the intended appeal and the interests of justice.  This is the settled position at law.  The law also enjoins me to consider the above factors together and cumulatively.

ANALYSIS

The applicant filed its first notice of appeal within time.  Had it served the respondents and Registrar of the High Court with the notice on the same date that it filed it with this Court, this application would not have been necessary.

After the matter was struck off the roll on account of the above defect, the applicant did not unduly delay in filing this application for condonation and extension of time within which to note the appeal.

All in all, the applicant has shown that it is serious in its intent to appeal against the decision of the High Court. Thus, if the delay and the explanation for the delay for the non-compliance with the rules were the only considerations, I might have granted the application.

The issue that has exercised my mind is whether or not the intended appeal enjoys any prospects of success.

In setting aside the Regulations, the High Court made three findings. Firstly, it found that in terms of the agreements between the respondents and ZINWA, it was ZINWA that had the power to review the price of water supplied under the contacts. After citing in full the provisions of the contract where the power to review charges is granted to the water authority, the High Court held that the applicant acted outside these agreements when she sought to review the water tariffs for the respondents. Secondly and more importantly, the High Court found that the provisions of the two agreements were similar to the provisions of s 30 of the Zimbabwe National Water Authority Act [Chapter 20.25] which grants to ZINWA and not to the applicant, the power to fix charges for raw water.  Finally, the High Court found that the applicant violated s 56 of the Constitution in that the regulations were published in respect of the respondents only leaving out all the other sectors that draw raw water from water works controlled or operated by ZINWA.

Immediately before disposing of the matter that was before it, the High court in drawing its conclusions reiterated the above three findings in summary as follows:

“The regulations which the respondent published violated

The agreements which the applicants and ZINWA’s predecessors concluded;

Section 30 as read with s 50 of the Act; and

Section 56 of the Constitution of Zimbabwe.”

In attacking the decision of the High Court, the applicant intends to raise the following grounds of appeal:

The learned Judge of the High Court erred in law

in finding as he did that the Zimbabwe National Water Authority (Raw Water Tariffs) Regulations Statutory Instrument 48 of 2016 were ultra vires s 56 of the Constitution of Zimbabwe and s 30 as read with s 50 of the Zimbabwe National Water Authority Act [Chapter 20.25].

The learned Judge of the High Court misdirected himself in law by failing to appreciate that having regard to s 39 (7) of the Water Act, [Chapter 20.24], the appellant is empowered to set a tariff of water charges notwithstanding any agreements to the contrary entered into before the date of the commencement of the Act and hence there was therefore no breach of the water supply agreements by the appellant when appellant set the new tariff for raw water as was done.

The learned Judge of the High Court erred in law and misdirected himself in that he failed to appreciate that s 56 (5) of the Constitution of Zimbabwe recognises fair, reasonable and justifiable different treatment as between different categories of consumers.

The intended appeal essentially raises three issues.  These are derived specifically from and are based squarely on the three findings that the court a quo made. They are whether or not the regulations are discriminatory in contravention of s 56 of the Constitution, whether or not the regulations are ultra vires ss 30 and 50 of the Zimbabwe National Water Act, and whether or not the applicant had the power to make the regulations notwithstanding the agreements between the respondents and ZINWA.

The second issue, whether or not the regulations are intra vires the enabling Act, is the pivotal issue in the intended appeal. It is the dispositive issue. It is the issue upon which all the others rest. Expressed differently, the appeal court will only procced to determine the other two issues after it has determined that the regulations are intra vires the enabling Act. The constitutionality of the regulations only arises after the regulations are held to be valid.  Similarly, whether or not the applicant could make the regulations notwithstanding the specific terms of the agreements between respondents and ZINWA is an issue that can only be raised and determined after the regulations are found to be valid and intra vires the enabling Act.

The applicant has no prospects of success on the second issue relating to the validity of the regulations vis-a vis the enabling Act which is the pivotal issue as stated above. This is so because s 30 of the Zimbabwe National Water Authority Act explicitly reposes the power to fix charges for raw water on ZINWA, acting in with the approval of the applicant. The power or authority is not granted to the applicant. The section reads:

“30 	Water and other charges

The Authority may, with the approval of the Minister and subject to the Water Act [Chapter 20.24], fix charges for-

the sale of raw or treated water from water works operated or controlled by the Authority; and

…………..

…………

………”

The above provision of the law is clear and admits of no ambiguity. It clearly grants the power to fix the charges for the supply of raw water to ZINWA.

The undisputed facts of this matter and the sequence of events show that the review and resultant fixing of the charges for raw water were part and parcel of a budgetary announcement by the government. This is the import of the letter of 17 January 2015 addressed to the respondents by ZINWA.  The letter reads in the relevant part:

“This serves to advise that Government, through the National Budget pronouncement, has reviewed water tariffs for Commercial Agricultural estates…….”

The figures announced in the budgetary statement were the same charges that were gazetted by the applicant in the regulations. In its letter to the applicants referred to above, ZINWA did not seek to “own” the new tariff but instead, attributed it to Treasury.

I further note that no attempt was made to substantially comply with the law by the applicant alleging and proving before the High Court that the tariff that was gazetted was the outcome of an approved application by ZINWA. No such contention is made in the grounds of the intended appeal. No such argument was advanced before me during the hearing of the application for condonation and extension of time within which to note the appeal. In short, it is not the applicant’s case that the gazetted tariff was in fact fixed by ZINWA and approved by the applicant.

It is therefore my finding that the judgment of the High Court that the applicant acted outside the provisions of the enabling Act in fixing the charges of raw water cannot be faulted. Such conduct, unauthorised by the enabling statute, and in fact flying in the face of the express word of the law as it does, cannot be validated on any basis. It cannot result in valid regulations. It is the settled position at law that any conduct that is in violation of the express letter of the law is void and nothing valid can come out of it. The finding by the High Court that the regulations are ultra vires the enabling law, cannot therefore be faulted.

I make the above finding notwithstanding that section 30 of the Zimbabwe National Water Act subjects itself to the provisions of the Water Act [Chapter 20.24].  Section 39 (7) of the Water Act empowers the applicant to fix charges for reallocated water. As correctly found by the court a quo, the provisions of this section are irrelevant in the determination of the issue between the parties. There was no re-allocation of the raw water that was supplied by ZINWA to the respondents before the applicant promulgated the regulations. As indicated above, the regulations embodied a review and fixing afresh of the water charges.

The applicant, in its draft notice of appeal, does not seek to attack the finding of the court a quo in the above regard. It thereby accepts as it must, that the power of the applicant to fix water charges in terms of s39 (7) of the Water Act can only be invoked in respect of re-allocated water.

The applicants intend to rely on the provisions of s39 (7) of the Water Act to argue that the power of the applicant to fix charges for re-allocated water is exercisable notwithstanding any agreements to the contrary. In this regard, they are correct but, that argument will be misplaced in the proposed appeal for the reasons given above that the regulations set aside by the court a quo did not seek to fix charges for reallocated water.

As stated above, whatever merit the other grounds of appeal may have is of no import in this application. This is because the applicant enjoys no prospects of success on the main issue which is dispositive of the appeal.

It is therefore my finding that the applicant, enjoying no prospects of success on the dispositive issue, cannot enjoy any success in the intended appeal. The application for condonation cannot therefore succeed.

Regarding costs of this application, I see no reason why these should not follow the cause.

In the result, I make the following order:

The application is dismissed with costs.

Dondo & Partners, applicant’s legal practitioners.

Scanlen & Holderness, respondent’s legal practitioners.