A farm in the Worcester area was subdivided in 1987 between two brothers, Andries and Schalk Le Roux. Andries became owner of three portions (Portions 1, 2 and the Remainder) which held registered servitudes (servitudes of aquaehaustus and aquaeductus) over Schalk's farm (Portion 3), the servient farm, to draw water from the Wolvenkloofstroom river running through the servient farm and lead it to dams on the dominant farms. In 2007 Andries sold the dominant farms to the Goudyn Plase Trust (the Goudyn trust). In 2012 Schalk sold the servient farm to the TC Botha Trust (the Botha trust). When the Botha trust took transfer, the Goudyn trust blocked a furrow that had previously allowed water to flow from dam 1 (on the dominant farm) to dam 3 (on the servient farm), claiming this was a personal favour to Schalk not required by the servitude. The Botha trust then drew water directly from an extraction pipe above the original weir. In November 2013, a severe flood washed away the original weir and extraction pipe. The Botha trust erected a new weir 65 metres upstream and new waterworks, including pipes of different diameters feeding the respective farms. The servient farm received water through a 200mm pipe while the dominant farms received water through a 125mm pipe (previously 400mm). The Botha trust did not obtain environmental authorisation for this construction. The Goudyn trust applied to the Western Cape High Court for a declaration of servitudal rights and interdicts requiring demolition of the new weir and structures. The application was dismissed by Binns-Ward J. Leave to appeal was granted by the Supreme Court of Appeal.
The order of the High Court was set aside. By consent, a detailed order was made substituting the High Court's order, providing for: connection of pipes; installation of a water division mechanism splitting water 60/40 (with costs shared equally); recognition of the servient farm owner's right to extract water as riparian owner subject to the settlement terms; permission for the Goudyn trust to install additional pipes; mutual non-opposition to dam enlargement applications; undertakings regarding access and maintenance; requirement for the Botha trust to apply for retrospective authorisation within 24 months at its own cost; provision for restoration of the original system if authorisation is not obtained; and immediate implementation of settlement arrangements subject to obtaining authorisation. There was no order as to costs in either the application or the appeal.
Where parties settle the substantive merits of a dispute on appeal but cannot agree on costs, the court has discretion to make no order as to costs where: (1) neither party achieved clear and substantial success on the issues as originally framed; (2) both parties had legitimate bases for some of their respective positions; (3) making a costs order declaring a winner and loser would be unhelpful to fostering the cooperative relationship to which the parties have committed themselves; and (4) it is equitable in all the circumstances to let costs lie where they fall. Courts do not lightly adjudicate matters where the only remaining issue relates to costs after settlement of the merits.
The court made encouraging observations about the parties embarking on "a new chapter of neighbour relations" and expressed sincere hope that the settlement "heralds in an era of co-operation in place of the past combative contestation." The court noted that the extent of cooperation to which the parties committed themselves in the detailed settlement terms was commendable. This reflects the court's view that practical, negotiated solutions between neighbouring landowners are preferable to protracted litigation, particularly in disputes concerning shared water resources. The court also noted that water use rights are determined by legislation, not solely by servitudes, suggesting that exclusive claims to water extraction may be misconceived.
This case illustrates the court's approach to costs where parties settle substantive disputes on appeal. It demonstrates that costs discretion should be exercised having regard to the totality of circumstances, including the conduct of both parties, whether either achieved substantial success, and the desirability of fostering future cooperative relations. The judgment affirms that courts will not lightly adjudicate matters where only costs remain in dispute after settlement. It also provides guidance on the rights and obligations of neighbouring landowners holding water servitudes, recognizing both servitudal rights and riparian rights, and the importance of practical solutions in ongoing neighbour relations.