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Last Updated: 4 September 2004
THE SUPREME COURT OF APPEAL
OF SOUTH
AFRICA
Case no: 114/03
In the matter between:
ZUBEIDA ABRAMS
Appellant
and
IQBAL KAZI ALLIE NO
First Respondent
ABDUL RAZAK MAHATEY NO
Second Respondent
THE DEPARTMENT OF LAND AFFAIRS
Third Respondent
PROVINCIAL ADMINISTRATION: WESTERN
CAPE :
DEPARTMENT OF PLANNING,
LOCAL GOVERNMENT AND HOUSING
Fourth Respondent
REGIONAL LAND CLAIMS
COMMISSION, WESTERN
CAPE Fifth
Respondent
______________________________________________________________
Coram: HOWIE P, SCOTT, FARLAM, LEWIS JJA et PONNAN AJA
Date of hearing: 20 FEBRUARY
2004
Date of delivery: 26 MARCH 2004
Summary: Restitution of a
right in land in terms of Act 22 of 1994 – meaning of
‘dispossessed’ – underlying
object of acquisition to implement
past racially discriminatory law or practice – on the facts market value
the equivalent
of just and equitable compensation – marginal difference
between what claimant received in 1979 and court’s determination
of what
market value would then have been.
JUDGMENT
SCOTT JA/...
SCOTT
JA:
[1] This is an appeal from the Land Claims Court. It concerns a
single-storeyed, semi-detached dwelling (‘the property’
or
‘the subject property’) known as 3 Lever Street, Walmer Estate, and
situated on the lower slopes of Devils Peak adjacent
to District Six. Until 1980
the property was owned by Mr Bawa Mahatey who was born in India. In 1971 he let
the property to the appellant.
Although of Indian extraction, she was classified
as ‘coloured’ under the relevant apartheid legislation. On 13 June
1975, in terms of the now repealed Group Areas Act 36 of 1966, the area was
declared a ‘coloured’ group area. On the
same day certain provisions
of the now repealed Community Development Act 3 of 1966 were declared to be
applicable to the area. The
following year, on 21 May 1976, the Community
Development Board, established in terms of s 2 of the latter Act, gave notice
that
it had prohibited for a period of 10 years the subdivision of land or the
erection or alteration of buildings in the same area. Subsequently
and after
being invited to do so, Mahatey sold the property to the Community Development
Board for a total amount of R11 599.50.
Transfer was effected in February of the
following year. The appellant remained in possession as a tenant of the Board.
She not only
maintained the property but over the years effected a number of
substantial improvements. Although still registered in the name of
the Community
Development Board, the property later vested in the National Housing Board and
thereafter in the Provincial Housing
Board of the Western Cape. The latter, in
order to encourage home ownership, embarked upon a scheme of selling off its
properties
to tenants on a non-profit basis. The appellant, as a first time
home-owner and a tenant of long standing, was considered an eligible
purchaser
under the scheme and in terms of a deed of sale dated 18 November 1997 purchased
the property at a cost to her of the modest
sum of R5 197.21. However, the
provincial authorities representing the Provincial Housing Board either
overlooked or were unaware
that Mahatey had previously lodged a claim for the
restitution of the right to the property in terms of the Restitution of Land
Rights
Act 22 of 1994 (‘the Act’) and that notice of that fact had
been published in the Gazette. The error was discovered before
transfer to the
appellant was effected and in due course Mahatey’s claim was referred to
the Land Claims Court.
[2] The court
(Meer AJ sitting with an assessor), after hearing evidence, held that Mahatey
had been dispossessed of a right in land
as a result of past racially
discriminatory laws or practices within the meaning of s 2(1)(a) of the Act and
that the market value
of the property as at the date of the dispossession, being
the just and equitable compensation which Mahatey should have received,
was the
sum of R11 810, ie R210.50 more than the amount he actually received. On the
basis of these findings the court directed the
Department of Land Affairs (the
third respondent) to expropriate or otherwise acquire the property from the
Provincial Administration:
Western Cape: Department of Planning, Local
Government and Housing (fourth respondent) in order to restore it to the
claimants (the
first and second respondents), being the executors of the estate
of Mahatey who had died during the trial. The claimants, in turn,
were ordered
to pay the Department of Land Affairs the sum of R11 599.50, being the amount
received for the property in 1980 (without
regard to currency depreciation),
against registration of transfer.
[3] The order is likely to result in
the eviction of the appellant and her family from the property where she has
lived for more than
30 years. Leave to appeal was refused by the court a
quo but granted by this court. The third, fourth and fifth respondents abide
the judgment of the court.
[4] Counsel for the appellant attacked the
correctness of the judgment of the court a quo essentially on four
grounds. He submitted, first, that Mahatey was not a person
‘dispossessed’ of ownership of the property
within the meaning of s
2(1)(a) of the Act; second, and even if he was, that such dispossession was not
‘as a result of past
racially discriminatory laws or practices’
within the meaning of the same subsection; third, that he was paid ‘just
and
equitable compensation’ within the meaning of s 2(2) of the Act at the
time of the dispossession; and fourth, that the remedy
granted by the court a
quo was in any event wholly inappropriate, given the circumstances.
[5] The relevant part of s 2 of the Act reads as follows:
‘2 (1) A person shall be entitled to restitution of a right in land
if –
(a) he or she is a person dispossessed of a right in land after 19 June 1913 as a result of past racially discriminatory laws or practices; or . . .
(2) No person shall be entitled to restitution of a right in land if –
(a) just and equitable compensation as contemplated in section 25(3) of the Constitution; or
(b) any other consideration which is just and equitable,
calculated at the time of any dispossession of such right, was received in respect of such dispossession.
(3) . . . .’
[6] It
is necessary to relate in some detail the preceding events and the circumstances
surrounding the purchase of the property by
the Community Development Board. In
1952 Mahatey and his brother inherited nine properties from their father. These
were initially
held jointly but in 1965 they divided the properties between
them. Mahatey became the sole owner of a shop at 48 Coventry Road, two
semi-detached dwellings at 7 and 7A Princess Street, a semi-detached dwelling at
49 Duke Street and the subject property at 3 Lever
Street. The subject property
and 49 Duke Street were adjoining properties and shared a common wall. Mahatey
lived at 49 Duke Street
where he remained until his death. As previously
mentioned, he let the subject property to the appellant in 1971. The rent was
initially
R25 per month but later increased to R50 per month. In about 1974
Mahatey took back one room of the subject property which he required
for his two
sons. It appears that a door was made in the common wall providing access from
49 Duke Street and the existing door into
the rest of 3 Lever Street was blocked
with furniture.
[7] On 13 June 1975 the area in which Mahatey’s
properties were situated was proclaimed in the Gazette to be an area for
occupation
and ownership by members of the ‘coloured group’ in terms
of s 23 of the Group Areas Act. The same Gazette contained
a proclamation in
terms of s 51 of the Community Development Act declaring sections 16 to 23 and
29 to 37 of the latter Act to be
applicable to the area.
[8] On 21 May
1976, in terms of s 15(2)(e) of the Community Development Act, the Community
Development Board gave notice in the Gazette
that ‘in furtherance of an
urban renewal scheme’ subdivision of land and the erection or alteration
of buildings in the
area were prohibited for a period of 10 years. Section
15(2)(e) empowered the Board to give such notice ‘if it is satisfied
that
it is expedient to do so in furtherance of a slum clearance scheme or an urban
renewal scheme...’. The effect of this
notice was to afford to the Board a
preferent right to purchase all property in the area. In this regard, s 15(5)(a)
of the Community
Development Act provided:
‘Any owner of immovable
property in an area in respect of which any notice under subsection (2)(e) is in
operation, who desires
to dispose of such property, shall offer such property
for sale to the board, and the board shall thereupon have a preferent right
to
purchase such property at a price agreed upon between it and the owner
concerned, or (if within sixty days after the date on
which the offer was made
the board and such owner fail to agree as to the price to be paid) at a price
fixed as if the provisions
of section 14 of the Expropriation Act, 1975, were
applicable in respect thereof.’
On the same day as the publication of
the notice, Mahatey was notified in writing by the Department of Community
Development that
the subject property had been included in the list of affected
properties compiled in terms of s 29(1) of the Community Development
Act. In
terms of s 1 of that Act an ‘affected property’ was property owned
or occupied by a disqualified person in terms
of a proclaimed group
area.
[9] Some two years later on 21 September 1978 the Department of
Community Development addressed a letter to Mahatey inviting him to
offer 49
Duke Street and the subject property for sale to the Board in terms of s
15(5)(a). The relevant part of the letter reads:
‘As you may already be
aware . . . this Department is assisting the Municipality of Cape Town with a
renewal scheme of Walmer
Estate.
In terms of the redevelopment plan drawn up
for this specific area the abovementioned properties, owned by you, are affected
by future
redevelopment and will accordingly have to be acquired by the
Department.
In the circumstances I wish to enquire whether you will be
prepared to offer erf 12376 and Rem. Erf 12377 Woodstock to the Community
Development Board for sale stating a definitive selling price.’
It
appears that shortly thereafter Mahatey was informed that only the subject
property was required. He wrote back on 2 November 1978
expressing his
‘intention to co-operate with your department in the implementation of
your development schemes’ and his
willingness to sell the subject property
to the Board for R18 000. The Department thereafter obtained valuations of the
property
(to which I shall refer later in this judgment) and by letter dated 14
December 1978 rejected the offer of R18 000 and made a counter
offer of R10 545
plus 10 per cent, viz R1 054, in terms of s 41 of the Community
Development Act. Section 41(2) made provision for the addition of 10 per cent to
any compensation
agreed upon, subject to a limit of R10 000. On 27 January 1979
Mahatey rejected the ‘offer of R11 599’ but at the same
time reduced
his asking price to R15 000.
[10] In the meantime, Mahatey had entered
into negotiations to sell 7 and 7A Princess Street to the respective tenants.
Both dwellings
were ultimately sold on 23 January 1979 at a price of R13 500
each. Negotiations for the sale of the subject property continued.
In June
1979 Mahatey reduced his asking price to
R13 300. On 27 September
1979 he finally agreed to a price of R11 599.50 and a Deed of Sale was signed by
the parties on 11 and 12
December 1979. Transfer was effected in February 1980.
Mahatey continued to occupy 49 Duke Street. He said that to do so he required
a
permit which was renewed annually. He retained the shop at 48 Coventry Road on
the same basis. Eventually he was told that there
was no need to obtain a permit
every year.
[11] Against this background I turn to the first question in
issue which is whether Mahatey was ‘dispossessed’ of the
property
within the meaning of s 2(1) of the Act. ‘Dispossessed’ is not
defined in the Act. The Shorter OED gives the
following meanings of
‘dispossess’: ‘to put out of possession; to deprive of the
possession of; to dislodge; oust’.
The ordinary meaning of
‘dispossessed’ in the context of the section makes it clear, I
think, that what is contemplated
is a deprivation of possession in consequence
of some outside agency. It need not be physical force. But a sale freely and
voluntarily
entered into followed by transfer would clearly not result in a
dispossession within the meaning of the section. There would have
to be an
element of compulsion which induced the alienation of the property. It follows
that merely because the purchaser is the
Community Development Board exercising
its preferent right, as opposed to some other purchaser, would not be enough.
What is required,
therefore, is an element of compulsion of such a nature that
without it there would have been no sale. (Compare Dulabh and another v
Department of Land Affairs 1997 (4) SA 1108 (LCC) at 1118B-1120E.) There was
no disagreement between counsel as to the test to be applied. The question
debated
before us was whether on the facts there had been such an element of
compulsion.
[12] On behalf of the appellant it was contended that despite
Mahatey’s ipse dixit to the contrary, it was clear from his conduct
that he in fact was a willing party to the sale of the property. Counsel
referred
in particular to Mahatey’s willingness ‘to
co-operate’ expressed in his letter of 2 November 1978 to the Department
of Community Development and his conduct in selling 7 and 7A Princess Street. He
argued that all this was inconsistent with Mahatey’s
evidence that he was
not a willing seller. I do not agree. The letter of 21 September 1978 addressed
to Mahatey inviting him to sell
49 Duke Street and the subject property
expressly stated that the properties will ‘have to be acquired by the
Department’.
The fact that he was later told that the Department did not
want 49 Duke Street at that stage did not affect the position in so far
as the
subject property was concerned. Nor is Mahatey’s apparent willingness to
co-operate of any significance. Once he realised
he would have to part with the
property he had little choice other than to sell or wait for the property to be
expropriated. His
professed willingness is consistent with no more than an
attempt to gain the goodwill of the Department and possibly obtain a better
price. Mahatey was aware that he was a disqualified person who owned property in
a ‘coloured’ group area. He would also
have known of the fate of
disqualified persons in adjacent District Six. Before selling the Princess
Street properties he had received
the Department’s counter offer in
respect of the subject property. He was obviously hoping for more. In these
circumstances,
I can see no reason for rejecting his evidence that he sold the
Princess Street properties in the hope of obtaining a better price
than he would
have obtained from the Department. It follows that in my view the evidence
established that Mahatey was dispossessed
of the subject property within the
meaning of s 2(1) of the Act.
[13] The next question is whether
Mahatey’s dispossession was ‘as a result of past racially
discriminatory laws or practices’.
In contending that it was not, counsel
for the appellant emphasized that the stated reason for the Community
Development Board’s
acquisition of the property was an urban renewal
scheme which was being implemented in conjunction with the Municipality of Cape
Town, and that the statutory provisions in terms of which the Board had acted
were by their nature not racially discriminatory. He
referred in particular to s
15(1)(a) and s 15(2)(e) of the Community Development Act. (The latter section is
referred to in para
8 above.) In terms of the former, the objects for which the
Board was established included –
‘to develop or assist in the
development of such areas, not being areas referred to in section 23(6)(c) of
the Group Areas Act,
as may from time to time be designated by the Minister, to
promote community development in any such area and, after consultation
with the
local authority concerned, to take steps to prevent decay in any such area or to
rehabilitate or assist with the rehabilitation
of any such area or any portion
thereof which tends to decay’.
Counsel pointed out further that only
one of Mahatey’s several properties was acquired by the Board and that
notwithstanding
the former’s disqualified status he was able to retain
both the Duke Street and Coventry Road properties, thus indicating,
so it was
argued, that the acquisition of the subject property was unrelated to race. It
was accordingly submitted that there was
no racial discrimination against
Mahatey in the exercise of his rights in property (cf Richtersveld Community
and others v Alexkor Ltd and another 2003 (6) SA 104 (SCA), para 99, at
137I-J).
[14] Save for references to the Group Areas Act and such terms
as ‘affected property’, the provisions of the Community
Development
Act were so formulated as to suggest that it had as its object such worthy
causes as slum clearance, urban renewal and
general community development
without regard to race. However, the Act has rightly been described as ‘a
true sister Act of
the Group Areas Act’ (S v Samy-Padiachy 1972 (3)
SA 895 (NC) at 901H). The proclamation of areas for the occupation and ownership
by members of a particular racial group
must necessarily result in the
disruption of communities involving the movement and resettlement of different
racial groups. Although
not expressed as such, the principal object of the
Community Development Act was undoubtedly to facilitate such movement and
resettlement.
Indeed, it is apparent from the evidence that it was the operation
of the Community Development Act that resulted in the destruction
of District
Six. The proclamation of Walmer Estate as a ‘coloured’ group area
constituted the first step in a process
that had as its object the ultimate
exclusion of all disqualified persons from owning or occupying land in the area,
including those
of the ‘Indian racial group’. In the event, good
sense prevailed, the Group Areas Act was repealed and the goal of establishing
a
racial group area was abandoned. But for that, Mahatey, as a disqualified
person, would have been obliged in the course of time
to part with all his
properties in the area, whether by sale or expropriation. In all probability it
was considered expedient by
the Board to commence the process with the
acquisition of those affected properties which were in urgent need of repair.
This was
true of the subject property. But further acquisitions would have had
to follow in order to establish the racial group area envisaged.
The purchase by
the Board of the subject property was therefore in reality part and parcel of
that process and hence a step in the
implementation of a racially discriminatory
law. It cannot, in my view, be fairly construed as a transaction totally
divorced from
the underlying scheme to establish a racial group area; nor is it
of consequence that the relevant terms of the Community Development
Act were so
formulated as to be capable of being applied to a scheme not involving racial
discrimination. It follows that the second
ground of appeal must similarly
fail.
[15] The third question in issue is whether Mahatey received just
and equitable compensation as contemplated in s 25(3) of the Constitution
at the
time of the dispossession. Sections 25(1), (2) and (3) of the Constitution
read:
‘25 (1) No one may be deprived of property except in terms of law of general application, and no law may permit arbitrary deprivation of property.
(2) Property may be expropriated only in terms of law of general application ─
(a) for a public purpose or in the public interest; and
(b) subject to compensation, the amount of which and the time and manner of payment of which have either been agreed to by those affected or decided or approved by a court.
(3) The amount of the compensation and the time and manner of payment must be just and equitable, reflecting an equitable balance between the public interest and the interests of those affected, having regard to all relevant circumstances, including─
(a) the current use of the property;
(b) the history of the acquisition and use of the property;
(c) the market value of the property;
(d) the extent of direct state investment and subsidy in the acquisition and beneficial capital improvement of the property; and
(e) the purpose of the expropriation.’
In Ex Parte
Former Highland Residents; In Re Ash and others v Department of Land Affairs
[2000] 2 All SA 26 (LCC), para 35, at 40e-f Gildenhuys J expressed the view
that
‘. . . the equitable balance required by the Constitution for the
determination of just and equitable compensation will in
most cases best be
achieved by first determining the market value of the property and thereafter by
subtracting from or adding to
the amount of the market value, as other relevant
circumstances may require’.
This approach has been followed in the Land
Claims Court (see eg Khumalo and others v Potgieter and others [2000] 2
All SA 456 (LCC), para 23, at 465a-c) and was adopted by the court a quo.
It was not contended in this court that the approach was incorrect and on the
facts of the present case there would appear to be
no reason for holding
otherwise.
[16] The court a quo, after considering the factors
listed in s 25(3) of the Constitution and other relevant circumstances, came to
the conclusion that
there was nothing to warrant an upward adjustment of the
market value of the property to arrive at just and equitable compensation
within
the meaning of s 25(3) of the Constitution at the time of the dispossession. In
other words, it held that in all the circumstances
of the case just and
equitable compensation was the equivalent of market value. Counsel for the
respondent contended that there should
have been an upward adjustment. I am
unpersuaded that such an adjustment would be justified. As previously mentioned,
the property
was occupied by the appellant who remained on as a tenant of the
Community Development Board after the dispossession. It is true
that Mahatey had
to give up the room occupied by his two sons but it appears that by then they
had reached adulthood and proceeded
to establish homes of their own in Rylands
Estate. Mahatey and the other members of his immediate family continued as
before to live
next door at 49 Duke Street with little, if any, disruption. The
subject property at the time of the dispossession was, moreover,
in a poor state
of repair. The roof was rotten, the ceilings had been damaged by the rain and
there were holes in the floor although
otherwise structurally sound. Immediately
upon acquiring the property the Community Development Board spent a relatively
large sum
of money repairing the roof, presumably to prevent further damage. As
previously suggested, it was probably the poor state of repair
that motivated
the Board to acquire the property when it did. In Mahatey’s land claim
form dated 25 June 1995 and in subsequent
correspondence (all of which was
handled by Mahatey’s son-in-law who played a major role in the prosecution
of the claim) much
was made of an alleged sentimental attachment to the subject
property. It was said that the property had been the family home for
generations
and that Mahatey’s father had expressed the wish that the property be
given to Mahatey’s daughter, ie the
wife of the son-in-law just mentioned.
However, in evidence it became apparent that there was little to justify the
alleged sentimental
attachment; the property had never been the family home and
Mahatey’s father had expressed no such wish. Not only had Mahatey
never
discussed the property with his father but the latter had died prior to the
birth of his granddaughter. In all the circumstances,
I am satisfied that the
approach adopted by the court a quo was correct.
[17] This brings
me to the question of the market value of the property. Mr Willem van Rijswijk,
a valuer of Cape Town, gave evidence
on behalf of the claimants. He placed a
value of somewhere between R15 500 and R18 000 on the property as at the
relevant time, viz December 1979. However, he found himself in an
invidious position; he had no knowledge of the condition of the property some 22
years
previously nor of the properties which formed the subject matter of the
transactions on which he sought to rely as being comparable;
he had also
attempted to value the property with a minimum of investigation because of time
constraints. Ultimately, the transactions
on which he relied were shown not to
be comparable at all. The court a quo found itself unable to set any
store by his evidence and rejected his valuation in its entirety. This finding
was not challenged
on appeal.
[18] The only other valuer to
give evidence was Mr C L
Gerber, who was called to testify on behalf
of the appellant. In 1979 he was the chief valuer and chief inspector of works
in the
Department of Community Development. He explained that whether the
Department acquired property by purchase or expropriation, its
policy was to pay
market value. On each occasion the Department would obtain valuations from an
internal valuer as well as an outside
and independent valuer appointed on an
ad hoc basis. It would then offer the purchaser or expropriatee first the
lower valuation, and if that was not accepted, the average between
the two, plus
an additional 10 per cent as a solatium. The internal valuer in the case
of the subject property was Mr D J Elrich, who is now deceased but at the time
worked under Gerber.
The independent valuer was Mr I Jacobs. The latter was also
an auctioneer who himself owned property in the vicinity of Walmer Estate.
He
was described by Van Rijswijk as one of the most knowledgeable valuers of
property in the area. He valued the subject property
at R9 000. Elrich’s
valuation was R12 090. The average between the two was R10 545 which, together
with the 10 per cent, was
the amount offered to Mahatey and which he ultimately
accepted. Gerber pointed out, however, that Elrich had made a mistake when
measuring up the property and that his valuation, when adjusted to correct the
error, was R11 740.
[19] Gerber had the advantage of having inspected the
subject property at the time of its acquisition by the Board. He recalled it
as
being in urgent need of repair in the respects previously mentioned. At the time
it had an outside toilet in poor condition and
no bathroom. Subsequently the
Department had all but replaced the roof and the appellant herself had obviously
spent money renovating
the property and adding a bathroom. Gerber also had a
reasonable recollection of the properties which were the subject matter of
the
comparable transactions on which he relied to value the property. Some of these
he had inspected at the time, including the properties
at 7 and 7A Princess
Street which he considered to be far superior to the subject property. The
Princess Street properties, it
will be recalled, were sold by Mahatey for R13
500 each, being a price with which he said he was satisfied. Notwithstanding his
intimate
knowledge of the area at the time, Gerber emphasized the difficulties
associated with determining the market value of property two
decades later. He
stressed the importance of the condition of the subject property and the
comparable properties relied upon in order
to arrive at a fair market
value.
[20] In calculating the market value of the subject property as at
1979, Gerber had regard to sales of vacant land outside the affected
area, eg
land in areas such as Vredehoek and University Estate, from which he established
a norm of R12.50 per square metre as a
starting point. This in fact was a norm
which he himself had established at the time when valuing properties for the
Department and
which had been used by Elrich. Applying this land value to sales
of improved property both in and outside the affected area at the
relevant time
he determined the notional amount paid for the improvements. He then adjusted
this notional amount on the basis of
comparability to arrive at a value for the
building on the subject property of R70 per square metre, to which he added R30
per square
metre for the stoep area. By this means he arrived at a figure of R11
810.
[21] Gerber emphasized, however, that the valuation of immovable
property was not an exact science and that the property, if sold
on the open
market, could well fetch a price of anything between 10 per cent more or 10 per
cent less than the value he had placed
on it. When translating these percentages
to figures he adjusted them slightly to arrive at a range of between a low of R9
700 and
a high of R12 500. He expressed the view that the proclamation had in
fact not depressed the market. This was particularly so, he
said, because the
destruction of District Six had resulted in an abundance of
‘coloured’ buyers.
[22] A perusal of the record reveals
Gerber to have been a knowledgeable witness. His evidence was accepted by the
court a quo, as was the correctness of his valuation. No criticism was
directed at these findings. However, I would make two observations at
this
stage. The first is that in principle the method of valuation employed by Gerber
is not above criticism. Nonetheless, given
the peculiar problems associated with
valuing an affected property, and particularly having to do so some 22 years
after the relevant
date, the method adopted does not strike me as being
unreasonable. Second, it is apparent that the Department of Community
Development
did not attempt to acquire the property for less than market value.
The practice of taking the average of two valuations may be regarded
as somewhat
arbitrary but it was not unfair.
[23] Having accepted the market value of
the subject property at the relevant time to have been R11 810, the court a
quo noted that the amount paid to Mahatey was R11 599.50 and concluded that,
because the latter amount was less than the former, Mahatey
had not been paid
market value, and hence just and equitable compensation, and was accordingly
entitled to restitution of his right
in the property.
[24] The difference
between the two amounts is, of course, R210.50, which is less than 1,8 per cent
of the amount determined to be
the market value. The amount paid, R11 599.50,
falls well within the range of between R9 700 and R12 500 suggested by Gerber
and
in fact is greater than the midpoint of that range which would be R11 100.
Counsel for the respondent submitted, however, that it
mattered not that the
amount paid was only marginally less than the amount subsequently fixed as the
market value and that once it
was established that the latter amount was less
than the former, the claimant would have crossed the threshold of s 2(2) of the
Act
and would be entitled to restitution, whether by way of restoration of the
property or equitable relief. In support of this submission
she referred to a
schedule at the conclusion of the judgment of the Land Claims Court in Ex
Parte Former Highland Residents; In Re: Ash and others v Department of Land
Affairs, supra, from which it appears that claims for
equitable relief (ie compensation as opposed to restitution of property) were
upheld even where
in one case the difference between the compensation paid in
the 1960’s and the market value subsequently determined, with considerable
difficulty I might add, was as little as R18. The judgment, however, contains no
comment regarding the marginal nature of the difference.
[25] In the
absence of an actual sale of the property to be valued, the determination of its
market value necessarily involves an
estimate of what that property would
realise at a notional sale in the open market. By the very nature of the
exercise ‘only
approximate results can be achieved’. (A Gildenhuys
in 30 Lawsa (first reissue) para 177.) This is all the more so in the
absence of transactions which are directly comparable or where there are
factors
relating to the notional sale, such as in the present case the need to think
away the proclamation, which render the exercise
more complex (cf
Pietermaritzburg Corporation v South African Breweries Ltd 1911 AD 501 at
516). This court has in the past frequently commented on the nature of the
inquiry and hence the approximate nature
of its result. In South African
Railways v New Silverton Estate Ltd 1946 AD 830 at 838 Tindall JA stressed
the importance of bearing in mind that a valuation ‘is to a material
extent a matter
of conjecture’. Ogilvie Thompson JA in Estate Marks v
Pretoria City Council 1969 (3) SA 227 (A) at 253A described a valuation as
‘essentially a matter which is in the realm of estimate’. Botha
JA
in Bestuursraad van Sebokeng v M & K Trust & Finansiële
Maatskappy (Edms) Bpk 1973 (3) SA 376 (A) at 391E similarly described it as
‘noodwendig ’n kwessie van skatting in die lig van al die
omstandighede’.
Nothing, I think, demonstrates this more than the
regularity with which good and honest valuers arrive at relatively widely
different
conclusions.
[26] When determining the value of property,
whether in consequence of an expropriation or otherwise, a court is of course
obliged
to arrive at a particular figure. This is because an award must be in
the form of a determined, or at least readily determinable,
amount. But the
present inquiry is different; it is whether some 22 years previously the former
owner of the property was paid just
and equitable compensation which on the
facts of the case would be the equivalent of market value. To hold that he was
not, when
the difference between what he was then paid and the estimate of
market value made two decades later is less than two per cent, is
to proceed on
the assumption that market value is capable of being estimated with such
precision as not to permit a variation of
less than two per cent. This is quite
clearly not the case and this was established in evidence. Gerber was at pains
to point out
that valuation was not an exact science and that although he had
estimated the value of the property in a particular amount, in the
event of a
sale in the open market the property could realise anything within the range he
estimated. Accordingly, it cannot be said
that the price paid to Mahatey in 1979
was less than market value at the time.
[27] It follows that in my view
the claimants did not cross the threshold of s 2(2) of the Act and the appeal
must succeed.
[28] It is therefore unnecessary to consider the
appropriateness or otherwise of the remedy granted by the court a quo. I
might add, however, that counsel for the appellant argued at length before us
that the restoration of the property, as opposed
to any other relief, was so
unreasonable in the circumstances as to justify interference by this court. He
referred in particular
to the marginal nature of the difference between the
amounts previously referred to, the consequence of the order, viz the
probable eviction of the appellant from her home of 30 years, the substantial
improvements to the property effected by the appellant
and the absence of any
allowance for currency depreciation in determining the amount payable by the
claimants. There is no doubt
much force in these submissions but, as I have
said, there is no need for me to deal with them.
[29] There is, however,
the question of costs to be considered. The practice of the Land Claims Court
has been not to make awards
of costs, save in exceptional circumstances. (See
In Re Kranspoort Community 2000 (2) SA 124 (LCC), para 121, at 184H and
the Ash case, supra, para 86.) In conformity with this practice
the only order as to costs made by the court a quo was a special order
directing the appellant to pay the wasted costs occasioned by ‘the
duration of the proceedings taken up
by the testimony on expenses incurred by
her in renovating the subject property’. The reason for the order was that
the appellant
had sought to rely on false invoices in a futile attempt to
quantify the amount she had spent on renovating the subject property.
(It was
ultimately common cause that she had indeed incurred such expenditure, but in an
amount she was unable to establish.) Notwithstanding
her success on appeal, I do
not think there is any justification for interfering with this award; nor is
there any justification
for making an order in her favour with regard to the
remainder of the costs in that court. However, the position with regard to the
costs of appeal is different. The third, fourth and fifth respondents, all of
whom participated in the proceedings in the court a quo, played no part
in the appeal proceedings and abided the judgment of this court. In the result,
the issue in this court related to
a dispute between private individuals as to
their respective entitlement to the subject property. In the court below the
appellant
enjoyed the benefit of legal aid, but not in this court. It appears
that the Legal Aid Board was only prepared to grant legal aid
to the appellant
on condition that her appeal was handled by a staff member from the
Board’s Cape Town Justice Centre. It was
also not prepared to pay the
costs previously incurred of preparing the appeal record and of counsel’s
heads of argument. The
appellant, not unreasonably, elected to proceed without
legal aid and with her existing legal representatives who have acted on a
contingency basis. In all the circumstances, there seems to me to be no good
reason for departing from the ordinary rule that costs
should follow the
result.
[30] A further issue relates to the costs of preparing and
perusing the appeal record. The appellant’s attorneys wrote to the
attorneys representing the other parties in the appeal requesting them to agree
to the omission from the appeal record of the contents
of two departmental files
of the Provincial Administration which had been admitted in the course of the
trial. The response of the
attorneys representing the first and second
respondents was to request a copy of the files. On being advised that the files
were
already in their possession, they simply ignored the request. The fourth
respondent, which abides the judgment of this court, had
no objection to the
omission. However, the attorneys representing the third and fifth respondents
wrote back insisting that the files
be included. In view of the attitude of the
first, second, third and fifth respondents, the files were included and
accounted for
volumes 8 to 13 and pages 1112 to 1148 of volume 14 (out of a
total of 30 volumes). It was common cause between counsel in this court
that
this portion of the record was unnecessarily included and no reference was made
to it in argument. The attorneys representing
the third and fifth respondents
were afforded the opportunity of furnishing reasons why their clients should not
be held jointly
and severally liable with the first and second respondents for
the preparation and perusal of this part of the record. The response
of the
attorneys was that they had insisted that the files be included in the record as
they had believed them to be relevant. They
added that they had in any event
informed the appellant’s attorneys subsequently that in the absence of the
‘court record’
their clients were unable to state which part of the
record was relevant. As to the first point, I have already indicated that it
was
common cause at the hearing of the appeal that the files in question were
irrelevant. As to the second point, the third and fifth
respondents were
represented at the trial by counsel. They did not require the ‘court
record’ to ascertain whether the
files were relevant or not. I accordingly
propose holding them jointly and severally liable with the first and second
respondents
for the costs in question.
[31] In the result, the following
order is made:
(a) (i) The appeal is upheld.
(ii) The appellant’s costs of appeal are to be paid by the first and second respondents in their capacity as joint executors of the estate of the late Bawa Mahatey, but subject to sub-paragraph (iii) below.
(iii) The third and fifth respondents are jointly and severally liable with the first and second respondents for the costs of preparing and perusing volumes 8 to 13 and pages 1112 to 1148 of volume 14 of the court record.
(b) That part of the order of the court a quo directing erf 12377 Cape Town situated at 3 Lever Street, Walmer Estate, Western Cape, to be restored to the first and second respondents in their capacity as executors in the estate of the late Bawa Mahatey and directing them against registration of transfer to pay the sum of R11 599.50 to the fourth respondent, is set aside and replaced by the following:
‘The application is dismissed.’
D G
SCOTT
JUDGE OF
APPEAL
CONCUR:
HOWIE P
FARLAM JA
LEWIS JA
PONNAN AJA
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