City of Cape Town v Helderberg Park Development (Pty) Ltd (429/05) [2006] ZASCA 91; [2007] 1 All SA 517 (SCA); 2007 (1) SA 1 (SCA); 2007 (6) BCLR 628 (SCA) (31 August 2006)

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City of Cape Town v Helderberg Park Development (Pty) Ltd (429/05) [2006] ZASCA 91; [2007] 1 All SA 517 (SCA); 2007 (1) SA 1 (SCA); 2007 (6) BCLR 628 (SCA) (31 August 2006)

Links to summary

THE
SUPREME COURT OF APPEAL
OF
SOUTH AFRICA
Reportable
Case No 429/05
In
the matter between:
THE
CITY OF CAPE TOWN Appellant
and
HELDERBERG
PARK DEVELOPMENT
(PTY)
LTD Respondent
Coram: HARMS, MTHIYANE,
NUGENT, CONRADIE JJA and THERON AJA
Heard: 17 AUGUST 2006
Delivered: 31 AUGUST
2006
Subject: Expropriation;
determination of market value; effect of s 12(5)(f) of the
Expropriation Act 63 of 1975; Pointe Gourde principle.
Neutral Citation: This
judgment may be referred to as City of Cape Town v Helderberg Park
Development (Pty) Ltd [2006] SCA 93 RSA
J U D G M E N T
HARMS JA:
BACKGROUND
[1] This is an expropriation case and the issue on
appeal concerns the amount of compensation payable to the
dispossessed owner. In
particular, the question relates to the effect
on the determination of compensation of the so-called Pointe Gourde
principle as reflected
in s 12(5)(f) of the Expropriation Act 63 of
1975.
[2] The problem can be illustrated by means of an
example even though the facts of this case are somewhat different. An
owner of land
applies for the rezoning of the land from agricultural
to commercial. The local authority grants the rezoning subject to the
condition
that a portion of the land must be set aside as public open
space. The owner accepts the condition. Later the local authority
expropriates
the public open space for use as a public park. Is the
owner entitled to compensation based on the assumption that the
expropriated
land was zoned commercial and not public open space?
[3] The plaintiff, Helderberg Park Development (Pty)
Ltd, is the owner of a property, which fell within the municipality
of Helderberg,
Western Cape. On 4 December 2000, the municipality
became part of the City of Cape Town (the appellant) and all its
rights and obligations
were assumed by the latter and it was
therefore cited as the defendant in the High Court. For ease of
reference I intend to refer
to the plaintiff (the present respondent)
as ‘Helderberg’, and I shall not distinguish between the two
local authorities and
simply refer to them interchangeably as ‘the
local authority’.
[4] The local authority expropriated a strip of land
25 metres wide and 1,037 ha in extent along the one border of the
property
during August 2000 for the purposes of a stormwater canal, a
sewer line and a walkway.
[5] Relying on the provisions of s 12(1)(a)(i) of the
Act, Helderberg claimed compensation in the amount of R1 386 260,92
representing
its assessment of the market value of the expropriated
portion. In addition, Helderberg claimed an amount of compensation
for actual
financial loss under sub-para (ii).
1
The court below (Allie J) awarded the sum of R705 160 under sub-para
(i) – together with a
solatium
calculated in accordance with
sub-sec (2) and interest under sub-sec (3) – but dismissed the
claim under sub-para (ii). The High
Court also dismissed a
counterclaim by the local authority which was based on an alleged
overpayment made to Helderberg as a result
of a calculation based on
the wrong assumption that the area expropriated was 1,583 ha and not
1,037 ha. On this basis the local
authority had paid Helderberg R304
000. Its case in the court below and before us was however that the
market value of the expropriated
strip amounted to no more than R207
400.
[6] The local authority lodged an appeal and Helderberg
a cross-appeal. The sole issue on appeal is whether the High Court
erred in
its determination of the compensation payable under sub-para
(i). Helderberg accepts the findings of the High Court in relation to
sub-para (ii). Our assessment of the compensation payable will
therefore determine both the appeal and the cross-appeal and
simultaneously
the outcome of both the claim and counterclaim.
[7] I should note that neither party has suggested that
the value of the land should have been determined by means of ‘any
other
suitable manner’ in terms of proviso (bb) of the subsection
instead of in relation to its market value, and none springs to mind.
NATURE OF THE PROPERTY AND ITS HISTORY
[8] It is necessary to deal in some detail with the
nature and history of the property. The property concerned is the
Remainder of
Erf 18835, The Strand. The original Erf 18835, some 52,7
ha, initially formed part of the farm Die Bos No 1056 and belonged to
a
company known as Farm One Nought Five Six Die Bos (Pty) Ltd.
[9] Erf
18835 was more or less rectangular in shape and situated between the
proposed N2 highway on its north-western border and Broadway
Road on
the south-eastern border. The property was later subdivided in stages
into three portions and for the sake of convenience
I shall refer to
the three portions as Phases 1, 2 and 3. If a line were to be drawn
through Erf 18835 from the north-west to the
south-east, Phases 1 and
2 would lie on the one side and Phase 3 on the other. The strip of
land expropriated was a portion of Phase
3 along its border with
Phase 2.
[10] Erf
18835 was zoned as agricultural land but due to its location it had
township development potential. However, by its very
nature it had a
developmental limitation because it was duty bound to receive
stormwater from properties higher up. The maps and
diagrams show a
number of natural water courses, collectively referred to as a
‘river’, crossing the property and collecting
in a relatively
marshy area thereon.
[11] The
owner of the erf (represented by a potential purchaser, to whom I
shall refer as Guldenland) applied for the local authority’s
consent to subdivide the erf by creating a separate property, which
came to be known as Phase 1, and for the rezoning of Phase 1
from
agricultural to sub-divisional area in order to provide for 76
residential erven. The remainder of the erf (the future Phases
2 and
3) was to remain agricultural. This application was granted on 10
December 1992 subject to conditions. These were to form an
agreement
between the owner and the local authority. Important for present
purposes is the condition that the river had to be canalised
to deal
with a 1:50 year flood and that the canal had to be designed in
accordance with a floodwater report prepared some years earlier
by
the local authority’s consulting engineers, Messrs Hill, Kaplan and
Scott.
[12] The
river in the main ran (a) diagonally across Phase 2 (where it
appeared to have been canalised by means of a ditch or furrow)
and
then (b) more or less along the border between Phase 1 and Phase 3.
The local authority additionally required that a condition
be entered
in its favour against the title deed of the property obliging the
owner of the property to allow the conveyance of, inter
alia,
stormwater of any other erf across the property without compensation.
[13] The
owner accepted these conditions, and a Certificate of Consolidated
Title was issued accordingly. Phase 1 was in due course
sold to
Guldenland. Guldenland then considered purchasing another part of the
erf for the development of Phase 2. This again required
consent from
the local authority for the subdivision of the remainder of the erf
(
sans
Phase 1) into two parts, Phases 2 and 3. Guldenland on
behalf of the owner of the remainder submitted a stormwater
management plan
to the local authority in compliance with the
conditions imposed when Phase 1 was rezoned. It proposed that the
section of the river
that bisected Phase 2 (numbered (a) above) be
rerouted to the border between Phases 2 and 3, but to run mainly on
Phase 3. The rest
of the canal (b) was then to be built along the
border of Phases 1 and 3. The local authority accepted these
proposals provisionally
on 20 October 1994.
[14] Later
Guldenland elected not to purchase Phase 2. Instead Helderberg, which
is a related company, during August 1995 purchased
Phase 3 for
developmental purposes in order to establish a township with mixed
uses, predominantly commercial and light industrial
with a smattering
of general residential. The price was R1 625 000. The sale was
subject to the approval by the local authority of
the subdivision.
This application also involved the rezoning of the land to
‘subdivisional area’ with a mixed bag of uses. The
proposed uses
included, for instance, 112 general residential units covering an
area of 1,8215 ha and retail use on 4,4913 ha, in
all about 26 ha. Of
the 32,5 ha some 6,47 ha was allocated to road reserves, public open
spaces, a detention pond (another aspect
of stormwater management but
which need not be discussed for present purposes) and the stormwater
canal. The application was approved
and the suspensive condition
accordingly fulfilled on 12 December 1995. The approved
sub-divisional diagram shows the 25 m reserve
as described above for
both existing and future canalisation.
[15] Guldenland,
in order to develop Phase 1, undertook the construction of that part
of the canalisation of the river which affected
Phase 1 – numbered
(b) above. The area expropriated was accordingly the portion of land
on Phase 3 which had been reserved for
the rerouted riverbed between
Phases 2 and 3.
[16] The
effect of all this was that the area set aside for the stormwater
canal became sterilised from a develpmental point of view.
The river
had to be canalised and diverted in order to make the land useable
for township development. The canal was consequently
a necessary
precondition for the development of the properties concerned. This
Helderberg knew when it purchased Phase 3 and it,
in other words,
bought some 32,5 ha of land knowing full well that about 6,5 ha of
land could not be used for development purposes.
The price it paid
must have taken this material factor into account.
[17] Realising
that the canal area had no or little commercial value to it,
Helderberg undertook to register, free of charge, a 25
m servitude in
favour of the local authority along the border of Phase 3 for
purposes of a stormwater canal and relief sewer line.
In fact, at the
time of expropriation the necessary diagram was being prepared and
the Surveyor General approved it shortly after
the expropriation.
[18] In
spite of this the local authority chose to expropriate the servitude
area. The reason for the decision is not entirely clear
but there are
indications in the evidence that it may have been due to the
unwillingness of Helderberg to permit the local authority
to use part
of the servitude area for a walkway of 4 m, leaving 21 m for the
canal.
THE STATUTORY SETTING
[19] Compensation for expropriation is by virtue of the
provisions of s 25(2) and (3) of the Bill of Rights a constitutional
issue.
This means that the compensation award has to fulfil the
requirements of the Bill of Rights, more in particular the amount of
compensation
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’ of which the market value of the property is listed
as but one of five.
2
The problem is, however, that apart from state investment, the market
value of the property is the only factor listed in s 25(3)
that is
capable of quantification.
3
As Currie and de Waal point out:
4
‘That makes market value pivotal to the determination of
compensation. Once market value has been determined, the court can
then
attempt to strike an equitable balance between private and
public interests.’
This
can be done by an upward or downward adjustment, having regard to the
other relevant factors.
[20] In
Du Toit
,
5
the Constitutional Court held that compensation must be determined in
two stages. First, the court must establish the amount of
compensation
according to the provisions of s 12 of the Act and then
it has to consider whether that amount is just and equitable under s
25(3)
of the Bill of Rights and make any necessary adjustment.
[21] Section 12(1) of the Act makes it clear that what
has to be determined is the amount of ‘compensation’ to be paid
for the
taking of the property. This may not exceed the market value
of the property (for present purposes the issue of actual financial
loss is discounted). The duty to compensate implies that the owner of
the expropriated property may not be in a better or worse position
as
a result of the act of expropriation. The status
quo ante
must
be restored by means of a money award and ‘the equivalent in value
[must] be given to take the place of the property lost.’
6
That is why it has often been held that the value of a property is
its value in the owner’s hands and not in the hands of the
expropriator.
For instance, in
Stebbing v The Metropolitan Board
of Works
(1870) LR 6 QB 37
, 42 Cockburn CJ said:
7
‘When
Parliament gives compulsory powers, and provides that compensation
shall be made to the person from whom property is taken,
for the loss
that he sustains, it is intended that he shall be compensated to the
extent of his loss; and that his loss shall be
tested by what was the
value of the thing to him, not by what will be its value to the
persons acquiring it.’
VALUATION WHEN A PORTION IS EXPROPRIATED
[22] In this case a portion of a larger property was
expropriated. There appear to be four possible methods of determining
the market
value of the expropriated portion in such an event
8
but in this discussion I intend to deal only with those that are
remotely relevant. The main method is the ‘before and after’
method which has been described in these terms:
9
‘The
expropriated portion may be valued as the difference between the
value of the whole before the expropriation and the value
of the
remainder after the expropriation. This method is known as the before
and after method of valuation. One valuation is made
of the whole
property as it was immediately before expropriation, and another of
the remainder as it is immediately after expropriation.
The
difference between the two valuations is the value of the
expropriated portion. Such a valuation includes the diminution in
value
of the remainder.’
This
method has received judicial recognition.
10
[23] It
has been recognised that this method may not necessarily be the
appropriate method to adopt. It may, for instance, be more
appropriate to use a per unit valuation, eg, per hectare for a farm.
11
But this alternative method will in the present instance make no
difference to the conclusion. From the facts recited it is apparent
that if one were to determine the market value taking into account
the most profitable likely legal use of the expropriated property
one
would arrive ineluctably at a negligible value. Phase 3 is worth more
or less the same with or without the expropriated strip
and
Helderberg has lost little in measurable terms because of the
expropriation. In the light of the conditions imposed the canal
is a
given and it has little commercial worth to the owner. It is
consequently not surprising to note that the expert witnesses were
agreed that, applying these measurements, Helderberg was not entitled
to any compensation.
POINTE
GOURDE AND SECTION 12(5)(f)
[24] Helderberg sought to avoid this conclusion by
relying on the provisions of s 12(5)(f). Subsection (5) contains a
number of so-called
disregards, ie, factors that have to be
disregarded in determining the compensation payable under s 12(1).
12
These were developed over time and reflect an attempt to codify
principles developed by courts over many years, especially in
England.
13
A conspectus of them reveals that they are intended to ensure that
the expropriated owner does not derive any advantage (or suffer
any
disadvantage) from the expropriation, and is only entitled to
compensation.
14
[25] The relevant part of disregard (f) is in these
terms:
‘any enhancement or depreciation, before or after the date of
notice, in the value of the property in question, which may be due
to
the purpose for which or in connection with which the property is
being expropriated or is to be used . . . shall not be taken
into
account [in determining the amount of compensation]’.
[26] Disregard (f), it is generally accepted, has it
origin in the
Pointe Gourde
judgment by the Privy Council
15
where Lord MacDermott said that it –
‘is well settled that compensation for the compulsory acquisition
of land cannot include an increase in value which is entirely
due to
the scheme underlying the acquisition.’
That the principle also applies in the
reverse (in the sense that an authority cannot by its own project
destroy the potential of
land and then expropriate it on the basis
that it did not have that potential) was recognized in
Melwood
.
16
Although the rule creates problems and doubt has been cast on its
general applicability and on whether it should have been used at
all
in
Pointe Gourde
(which is in any event not a typical example
of the application of the rule) legislatures in many countries whose
expropriation principles
are derived from English examples have
attempted to formulate the principle in legislative jargon, and not
always happily.
17
Much emphasis has been placed in some other jurisdictions on
identifying the underlying ‘scheme’ in order to determine whether
the disregard applies,
18
but counsel correctly pointed out that para (f) of our Act does not
refer to a ‘scheme’ and that we should not be misled by relying
on those authorities.
19
[27] On the other hand, although this
Court has said in
Kersay
20
that disregard (f) must be interpreted literally, that was said in
relation to an expropriation that occurred in 1990. The provision
must, in the light of s 39(1) of the Bill of Rights, be interpreted
in such a manner as to promote the spirit, purport and objects
of the
Constitution which, for present purposes, is the requirement that
compensation must be just and equitable. The postulate in
Kersay
that double compensation is possible by virtue of disregard (f)
cannot, in the light of the Constitution, be correct.
[28] The purpose of disregard (f) is in the present
context (as the High Court of Australia put it) –
‘
to
ensure that a resuming [expropriating] authority does not employ
planning restrictions to destroy the development potential of
the
land and then assess compensation for its resumption [expropriation]
on the basis that the destroyed potential had never existed
. . . The
principle applies in cases where there is a direct relationship
between the planning restriction and the scheme of which
resumption
is a feature and extends to cases where there is merely an indirect
relationship, provided that the planning restriction
can properly be
regarded as a step in the process of resumption . . .’.
21
Van Dijkhorst J explained:
22
‘It goes against the grain that the council can by setting its
sights on a property for future acquisition, freeze its use when
all
its neighbours are rezoned with concomitant enhancement in their
values, and then later argue that there was no depreciation
as there
had not been any enhancement. Surely that would not be a disregarding
of the scheme underlying the later expropriation.
It is in fact an
enforcement of such scheme.’
APPLICABILITY
OF DISREGARD (f) TO THE FACTS
[29] Reverting to para (f), the question
is whether there was, before the date of expropriation, a
depreciation of the value of the
strip of land ‘due to the purpose’
for which (or in connection with which) the property was
expropriated. I think not. Part of
the land never had deveopment
potential because part of it was river. The relocation of the river
to the border of Phase 3 was done
by the owner of the property,
albeit with the concurrence of the local authority, in order to make
the remainder of the land useful
for development purposes. At the
time when the conditions were imposed by the local authority it was
not done in order to freeze
development of the strip but in order to
enhance the utility and the value of the whole of the property.
Without acceptance of the
local authority’s conditions the land
would have remained agricultural. There was accordingly never a
depreciation of the value
of the expropriated strip. Irrespective of
whether the strip was expropriated, a portion of the land had no
development potential.
There was, accordingly, no causal link between
the imposition of the condition, the value of the property and the
expropriation.
23
The English Court of Appeal, I may mention, came to a similar
conclusion in a similar case, albeit on a statute that had the
‘scheme’
requirement, by holding that the value of the strip was
not due to any scheme but simply to a condition on the planning
permission.
24
[30] Helderberg’s argument, in the end, was that we
have to assume that the local authority, absent the requirement of
canalisation,
would have awarded proportionally greater developmental
rights to Helderberg. In other words, the local authority would have
granted
in respect of the strip developmental rights comprising
general residential of 5,6 per cent of the expropriated 1,037 ha and
commercial
and industrial rights in respect of the balance of the
area. On this assumption Helderberg’s expert witness based her
valuation
of R1 386 260,92. The underlying assumption fails in two
major respects. First, there is the total lack of evidence to support
it
and, secondly, developmental rights could not have been given in
respect of the whole of the property once the owner chose to locate
the canal on Phase 3.
IS
THE ASSESSMENT JUST AND EQUITABLE?
[31] That brings me to a consideration of the question
of what would be fair and equitable compensation in the circumstances
of the
case. The local authority’s evidence and argument was that
an amount calculated according to the agricultural value of the strip
(which was R20 per sq m or R207 400 according to the uncontested
evidence) would be appropriate.
[32] Are there any relevant
circumstances that justify an upward adjustment? Helderberg’s
counsel could not point to any when asked
during the argument. In
fact, if one simply limits oneself to the considerations listed in s
25(3) of the Bill of Rights, they point
in the other direction. The
strip’s use current at the time of expropriation was to deal with
stormwater and that will remain its
use and this was the main purpose
of the expropriation. As such the strip had little (if any)
commercial value to the owner, so little
that the owner was prepared
to register a
servitude
in favour of the local authority free of charge. The strip has also
little commercial value to the local authority. But, more
importantly,
when Helderberg purchased Phase 3 it bought a piece of
land with a strip designated for canalisation and thereby sterilised.
The
sterilisation was a condition for the grant of very valuable
rights to Phase 3 as a whole. Helderberg paid about R1,6m during 1995
for 32,5 ha and it wishes to recoup in the year 2000 some R1,4m for
1,037 ha of useless land. The price it paid for the whole had
to be
based on the fact that the strip had no commercial value. In other
words, the history of the acquisition and use of the property
does
not justify any adjustment. In fact, a downward adjustment could be
justified but since none was suggested and the local authority
is
acquiring ownership (instead of a servitude) of a piece of land which
might affect the open public space requirements on the smaller
Phase
3 and the building lines (matters which were mentioned but not
investigated or quantified), I am prepared to accept that the
amount
proposed by the local authority would be fair and equitable in the
circumstances of the case. I am not thereby suggesting
that an owner
should be entitled to compensation if the expropriated property has
no value merely because there was an expropriation.
25
CONCLUSION
[33] It is not necessary to deal in any
detail with the High Court’s assessment of the compensation because
it did not take into
account the constitutional requirements and did
not perform the two-stage inquiry as laid down by the Constitutional
Court in
Du Toit
.
26
In fairness it must be mentioned that
Du Toit
postdates the
High Court judgment. In addition, the High Court erred in my view in
holding that disregard (f) applied in the circumstances
of the case.
[34] The net effect of the foregoing is
that Helderberg’s compensation is fixed at R207 400. To this has to
be added a
solatium
in terms of s 12(2) which, in the
circumstances, amounts to R15 370.
27
Because the local authority had paid more than the total of these
amounts the issue of interest does not appear to arise. That leaves
the question of costs, which have to be assessed in terms of s 15(2)
and (3) of the Act.
28
In this case the local authority’s offer in respect of the land
itself a few months prior to litigation was R240 000. This is more
than the amount ultimately assessed. It follows that Helderberg has
to pay the costs of the trial under s 15(2)(b) and the costs
of the
appeal.
ORDER
[35] The appeal is upheld with costs and the order of
the High Court is set aside and substituted by the following:
It is declared that the plaintiff is entitled to
compensation of R207 400 in terms of s 12(1)(a)(i) of the
Expropriation Act 63
of 1975.
It is declared that the plaintiff is entitled to
payment of R15 370 in terms of s 12(2) of the Act.
The plaintiff is ordered to repay the sum of R82 130 to
the defendant.
The plaintiff is ordered to pay the defendant’s
costs, including the qualifying fees of Mr D White, in respect of
the claim and
counterclaim.
_____________________
L T C HARMS
JUDGE
OF APPEAL
AGREE:
MTHIYANE JA
NUGENT
JA
CONRADIE
JA
THERON
AJA
1
Section
12(1)  provides as follows:
‘
The amount of compensation to be paid in terms of
this Act to an owner in respect of property expropriated in terms of
this Act,
or in respect of the taking, in terms of this Act, of a
right to use property, shall not, subject to the provisions of
subsection (2),
exceed—
(a) in
the case of any property other than a right, excepting a registered
right to minerals, the aggregate of—
(i) the
amount which the property would have realized if sold on the date of
notice in the open market by a willing seller to a
willing buyer;
and
(ii) an
amount to make good any actual financial loss caused by the
expropriation; and
(b) in
the case of a right, excepting a registered right to minerals, an
amount to make good any actual financial loss caused by
the
expropriation or the taking of the right:
Provided
that where the property expropriated is of such nature that there is
no open market therefor, compensation therefor may
be determined—
(aa) on
the basis of the amount it would cost to replace the improvements on
the property expropriated, having regard to the depreciation
thereof
for any reason, as determined on the date of notice; or
(bb) in
any other suitable manner.’
2
Sec
25(2) and (3) provide:
(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.
3
Former Highlands Residents
concerning the Area formerly known as the Highlands (now Newlands
Extension 2), District of Pretoria:
In re Sonny and others v
Department of Land Affairs
[2000] 1 All SA 157
(LCC) per Gildenhuys J.
4
Iain
Currie and Johan de Waal
The Bill of Rights
Handbook
5 ed 556.
5
Du
Toit v Minister of Transport
2006 (1) SA 297
(CC) para 26-37 per Mokgoro J.
6
Estate
Marks v Pretoria City Council
1969 (3) SA 227
(A) 242H-243A per Ogilvie Thompson JA.
7
Recently
quoted in
Waters v Welsh Development Agency
[2004]
UKHL 19
,
[2004] 2 All ER 915
(HL) para 20.
8
Gildenhuys
and Grobler ‘Expropriation’ in 10(1)
Lawsa
(re-issue)
para 205.
9
Gildenhuys
and Grobler ‘Expropriation’ in 10(1)
Lawsa
(re-issue)
para 205.
10
Held
v Administrateur-Generaal vir die Gebied van Suidwes-Afrika
1988 (2) SA 218
(SWA) 255E-F per Berker JP;
Ingersoll-Rand Co
(SA) Ltd v Administrateur, Transvaal
1991 (1) SA 321
(T) 329B-G
per Hartzenberg J, Goldstein and Streicher JJ concurring.
11
Mooikloof
Estates (Edms) Bpk v Premier, Gauteng
2000 (3) SA 463
(T) 472B-473C per Van Dijkhorst J.
12
Section
12(5)  reads:
‘
In
determining the amount of compensation to be paid in terms of this
Act, the following rules shall apply, namely—
(a) no
allowance shall be made for the fact that the property or the right
to use property has been taken without the consent of
the owner in
question;
(b) the
special suitability or usefulness of the property in question for
the purpose for which it is required by the State, shall
not be
taken into account if it is unlikely that the property would have
been purchased for that purpose on the open market or
that the right
to use the property for that purpose would have been so purchased;
(c) if
the value of the property has been enhanced in consequence of the
use thereof in a manner which is unlawful, such enhancement
shall
not be taken into account;
(d) improvements
made after the date of notice on or to the property in question
(except where they were necessary for the proper
maintenance of
existing improvements or where they were undertaken in pursuance of
obligations entered into before that date) shall
not be taken into
account;
(e) no
allowance shall be made for any unregistered right in respect of any
other property or for any indirect damage or anything
done with the
object of obtaining compensation therefor;
( f ) any
enhancement or depreciation, before or after the date of notice, in
the value of the property in question,
which may be due to the
purpose for which or in connection with which the property is being
expropriated or is to be used, or which
is a consequence of any work
or act which the State may carry out or perform or already has
carried out or performed or intends
to carry out or perform in
connection with such purpose, shall not be taken into account;
(g) . . . . . .
(h) account
shall also be taken of—
(i) any
benefit which will ensure [enure?] to the person to be compensated
from any works which the State has built or constructed
or has
undertaken to build or construct on behalf of such person to
compensate him in whole or in part for any financial loss which
he
will suffer in consequence of the expropriation or, as the case may
be, the taking of the right in question;
(ii) any
benefit which will ensure [enure?] to such person in consequence of
the expropriation of the property or the use thereof
for the purpose
for which it was expropriated or, as the case may be, the right in
question was taken;
(iii) . . . . . .
(iv) any
relevant quantity of water to which the person to be compensated is
entitled, or which is likely to be granted to him,
in terms of the
provisions of the Water Act, 1956 (Act No. 54 of 1956), or any
other law.’
13
For
a discussion of the origin and development of disregards, especially
(f) see
Kerksay Investments (Pty) Ltd v Randburg Town Council
1997 (1) SA 511
(T) 522F-524F per Van Dijkhorst J;
Waters v
Welsh Development Agency
[2004] UKHL 19
,
[2004] 2 All ER 915
(HL).
14
Port Edward Town Board v Kay
1996 (3) SA 664
(A) 679B-C per
Nienaber and Plewman JJ;
Randburg Town Council v Kerksay
Investments
(Pty) Ltd
1998 (1) SA 98
(SCA) 106G-I per
Scott JA.
15
Pointe
Gourde Quarrying and Transport Co Ltd v Sub-Intendent of Crown Lands
[1947] AC 565
(PC). The facts were similar to those in
Minister
of Transport v Du Toit
2005 (1) SA 16
(SCA).
16
Melwood
Units Pty Ltd v Commissioner of Main Roads
[1979] AC 426
(PC),
19 ALR 453.
The principle does not only apply in
common-law countries. For Holland see JEFM den Drijver-van
Eijckevorsel
Onteigening
2 ed 69.
17
See
in general
Waters v Welsh Development Agency
[2004] UKHL 19
,
[2004] 2 All ER 915
(HL);
Perry v Roads and Traffic Authority of
New South Wales
[1999]
NSWLEC
109
;
Mount
Lawley Pty Ltd v Western Australian Planning Commission
[2004]
WASCA 149
;
Jeremy Rowan-Robinson and CM Brand
Compulsory Purchase and
Compensation
(1995) 158-163
18
But
this is not always so: Douglas Brown
Land Acquisition
4 ed
113 for Australia and Eric CE Todd
The Law of Expropriation and
Compensation in Canada
2 ed 160.
19
There
are even in
Kerksay Investments (Pty) Ltd v Randburg Town Council
1997 (1) SA 511
(T) 522F-524F many references to the ‘scheme’.
20
Randburg
Town Council v Kerksay Invetsments (Pty) Ltd
1998 (1) SA 98
(SCA) 107A-108B.
21
Queensland
v Murphy
[1990] HCA 42
;
(1990) 95 ALR 493
(HC)
496. See also
Housing Commission (NSW) v San Sebastian Pty Ltd
[1978] HCA 28
;
(1978) 140 CLR 196
(HC of Australia).
22
Kerksay
Investments (Pty) Ltd v Randburg Town Council
1997
(1) SA 511
(T) 524F-H. Cf
Durr v Cape Divisional Council
1986
(2) SA 385
(C) per Van den Heever J;
Jelson Ltd v Blaby District
Council
[1978] 1 All ER 548
(CA).
23
Cf
Van Zyl v Stadsraad van Ermelo
1979 (3) SA 549
(A) 571G-572F
on the causal link. Also Douglas Brown
Land Acquisition
4 ed
114-117 for Australia and Eric CE Todd
The Law of Expropriation
and Compensation in Canada
2 ed 165-166
24
Birmingham District Council v
Morris and Jacombs
Ltd
(1977) 33 P & CR 27.
25
Cf
Minister of Transport v Du Toit
2005 (1) SA 16
(SCA) para 8.
26
Du
Toit v Minister of Transport
2006 (1) SA 297
(CC).
27
Section
12(2):
‘
Notwithstanding
anything to the contrary contained in this Act there shall be added
to the total amount payable in accordance with
subsection (1),
an amount equal to—
(a) ten
per cent of such total amount, if it does not exceed R100 000;
plus
(b) five
per cent of the amount by which it exceeds R100 000, if it does
not exceed R500 000; plus
(c) three
per cent of the amount by which it exceeds R500 000, if it does
not exceed R1 000 000; plus
(d) one
per cent (but not amounting to more than R10 000) of the amount
by which it exceeds R1 000 000.’
28
Section
15:
‘
(2)  If
the compensation awarded by the court in any proceedings
contemplated in section 14 (1)—
(a) is
equal to or exceeds the amount last claimed by the owner one month
prior to the date for which the proceedings were for
the first time
placed on the roll, costs shall be awarded against the Minister;
(b) is
equal to or less than the amount last offered by the Minister one
month prior to the date contemplated in paragraph (a),
costs
shall be awarded against the owner in question;
(c) is less
than the amount last so claimed by the owner in question, but
exceeds the amount last so offered by the Minister, so
much of the
costs of the owner shall be awarded against the Minister as bears to
such costs the same proportion as the difference
between the
compensation so awarded and the amount so offered, bears to the
difference between the amount of compensation so awarded
and the
amount so claimed.
(3)  Notwithstanding
the provisions of subsection (2), the court shall in its
discretion decide as to the costs—
(a) in a
case not mentioned in subsection (2);
(b) if any
party did not within a reasonable time comply with reasonable
requests under section 10 (7);
(c) if any
party abused the provisions of section 10 (7); or
(d) if, in
the opinion of the court, the conduct of any party during or prior
to the proceedings, justifies a deviation from subsection (2).’