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[2010] ZAFSHC 11
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Bartsch Consult (Pty) Ltd v Mayoral committee of the Maluti-A-Phofung Municipality (4415/2008) [2010] ZAFSHC 11 (4 February 2010)
FREE STATE HIGH
COURT, BLOEMFONTEIN
REPUBLIC OF SOUTH
AFRICA
Case No. : 4415/2008
In
the matter between:
BARTSCH CONSULT
(PTY) LIMITED
Applicant
and
MAYORAL
COMMITTEE OF THE
Respondent
MALUTI-A-PHOFUNG
MUNICIPALITY
HEARD ON:
3
DECEMBER 2010
JUDGMENT:
EBRAHIM,
J
DELIVERED ON:
4
FEBRUARY 2010
[1] 1.1 This is an
application for the review and setting aside of a decision taken by
the respondent on 12 December 2007 to expropriate
property owned by
the applicant and described as Portion 1 of Erf 985, Harrismith
Extension 18, Registration Division Harrismith,
Free State Province
(“the property in issue”).
On 8 January 2008
notice of the respondent’s decision was communicated to the
applicant by the delivery of an expropriation
notice which reads as
follows:
“’
At the Maluti-a-Phofung
Municipality MAYORAL COMMITTEE meeting held on the 12 December 2007
it was resolved to expropriate and vest
in the Municipality
PORTION 1 OF ERF 985
HARRISMITH EXT 18
REGISTRATION DIVISION HARRISMITH
FREE STATE PROVINCE
THE REGISTERED OWNER BEING BARTSCH
CONSULTANCY PTY LTD
REGISTRATION NUMBER 2001 / 002421 /
07
(a sketch plan of the
said property is herewith attached marked annexure ‘A’)
The purpose of such expropriation
being for the construction of Municipal roads in the area of the
Municipality and for doing all
things necessary in connection with
and ancillary to the construction of such roads.
The date of expropriation and
possession being the 10
th
JANUARY 2008.
Compensation in the sum of R122 824,40
is offered as compensation in respect of the said erf.
Your attention is drawn to the
provisions of section 9(1) and section 12(3)(a)(ii) of the
Expropriation Act 63 of 1975 the provisions
whereof you are required
to acquaint yourself with.’”
On request the
respondent elaborated on the stated reasons as follows:
“’
The purpose as set out
in the Notice of Expropriation, is for the construction of municipal
roads in the area of the municipality,
the main purpose being to
rebuild a part of King Street in order to create a connection between
King Street and the N5 which will
comply with existing and future
traffic requirements.’”
It is common cause
between the parties that the decision taken by the respondent was
taken pursuant to the empowering provisions
contained in section 2
and section 5 of the Expropriation Act, 63 of 1975. Section 2 of
the Act reads as follows:
“
2. Power of Minister to
expropriate property for public and certain other purposes and to
take the right ot use property for public
purposes.
(1) Subject to the provisions of this
Act the Minister may, subject to an obligation to pay compensation,
expropriate any property
for public purposes or take the right to use
temporarily any property for public purposes.
(2) The power of the Minister in terms
of subsection (1) or any other law to expropriate any property, shall
include the power to
expropriate, when any property is so
expropriated, so much of any other property which, in the opinion of
the Minister, is affected
by such expropriation as the Minister may
for any reason deem expedient.
(3) The power of the Minister in terms
of subsection (2) to expropriate property which, in the opinion of
the Minister, is affected
by an expropriation, shall, in the case
where only a portion of a piece of land is expropriated in terms of
this section, include
the power to expropriate the remainder of such
a piece of land if the owner so requests and satisfies the Minister
that due to
the said partial expropriation the said remainder has
become useless to the owner, or if the Minister, after consultation
with
the Minister of Agriculture, is satisfied that the said
remainder is or is likely to become an uneconomic farming unit.
(4) If the Minister negotiates with an
owner of property for the acquisition thereof by means of agreement
and the owner requests
the Minister that the property be
expropriated, the Minister may, subject to the other provisions of
this Act, expropriate such
property.”
Subsection 5 of the Act
reads as follows:
“
5. Exercise by local
authority of power to expropriate property or to take the right to
use property temporarily.
(1) If a local authority has the power
to expropriate property or to take the right to use property
temporarily, such power may
only be exercised,
mutatis
mutandis
, in accordance
with the provisions of this Act.
(2) For the purposes of the
application of subsection (1) any reference in this Act to the
Minister and the State shall be construed
as a reference to the local
authority concerned.”
It is also common cause
that the decision is reviewable in terms of the provisions of the
Promotion of Administrative Justice Act,
Act 3 of 2000 (“PAJA”).
The thrust of the
applicant’s objections to the decision taken by the
respondent and the principal basis upon which the
applicant calls
upon this court to review and set aside that decision, is that, on
the respondent’s own version, the
applicant’s land will
not be used for the stated reasons, but for the ulterior and
unauthorised purpose of making the
land available to a private land
developer so as to be part of a shopping complex to be developed in
Harrismith. In this sense,
the applicant contends that the said
purpose is not a public purpose as referred to in section 2 of the
Expropriation Act,
63 of 1975 and that the expropriation notice was
therefore invalid. As a second string to its bow, the applicant
contends
that since the re-alignment of King Street does not
traverse the entire property, the respondent’s purpose would
be adequately
served by the expropriation of one third of the
applicant’s property. The decision to expropriate the entire
property
was, according to the applicant, thus unreasonable to the
extent that the stated purpose for the expropriation could not be
said to be a public purpose. These are the principal issues in
this matter.
[2] 2.1 I have considered
these issues against the common cause background of the respondents
stated duty and responsibility towards
the community of Harrismith
and the surrounding areas fed by the town of Harrismith, to promote
and enhance the commercial and
environmental health of the area, by
co-operating with relevant stakeholders to facilitate socio economic
development by means
of healthy growth and employment and wealth
creation. In this manner it is the aim of the respondent to avoid
the fate suffered
by many small South African towns of being
commercially and economically non-viable with the attendant
consequence of unemployment,
poverty and social disfunctionality.
2.2 To this end it has
been the aim of the respondent for the past ten years to exploit the
geographical location of the town of
Harrismith to best advantage, so
as to create access from the National Road Systems serving the
Drakensberg, Bloemfontein, Gauteng,
Pretoria, Natal and the Cape
which passes it at strategic points in order to attract much needed
revenue offered by tourism generally
and the travelling public. In
this regard the development of the area of Harrismith, which is
directly accessible from this National
Road System and more
specifically from the major national road known as the N5 highway, in
a manner which best facilitates and
exposes Harrismith’s
position, is essential. So too is the planning and constructing of
safe access points from the National
Road System into such
development as are approved by the respondent. Without such access
and development, the passing trade represented
by the tourists and
the travelling public would be lost to Harrismith as a major
financial resource.
With this aim in mind,
the respondent embarked on a development drive in which the
applicant and an entity known as the Junction
Group featured as
prominent stakeholders.
[3] I shall now deal with
the historical background, shorn of controversy, to the specific
dispute in this matter.
The development plan of
the respondent encompassed the building of a shopping complex in
the area of Harrismith situated adjacent
to the N5 highway, which
was to be named “The Harrismith Junction Shopping Complex”,
and the re-alignment of pre-existing
roads in Harrismith namely
King Street and McKechnie Street so as to give access from the N5
highway to the shopping complex.
During March 2000 the
applicant, represented by Abraham van den Hoven (“Van den
Hoven”), approached the relevant
authorities of the
respondent in a bid to achieve the development of a site adjacent
to the N5, that is the property in issue,
described as Portion 1 of
Erf 985, Harrismith, with the proposal which was annexed to the
founding papers as “BC41”.
It is clear from the
applicant’s own proposal that the re-alignment of King Street
of necessity required traversing
the property in issue and on to
the N5 highway. The applicant, at that stage, recognised that the
development of the road
system along the lines reflected in its
proposal “BC41” was unavoidable.
During September 2002
the applicant was advised that its proposed development site (the
property in issue) was too small and
that it would not be approved
by the respondent but that the respondent would consider giving its
approval to a development
on a site owned by the Junction Group.
This site lay adjacent to King Street and on the opposite side of
the property in issue
which the applicant had sought to develop.
Pursuant to this, the
applicant commenced negotiations with the owners of the Junction
Group Land to procure such land in order
to develop it as a
shopping complex and to facilitate the access road from the N5
highway on to the development. To this end,
the applicant
approached Ben Deysel (“Deysel”), the managing director
and shareholder of the Junction Group, for
the purpose of
purchasing the Junction Group land. This land comprised farm land
on the farm Dorpsgronden, Harrismith and
had been sold by the
respondent to the Junction Group in terms of a Deed of Sale dated
19 May 2000 on condition that the land
be developed within one year
of registration of transfer of the property into the name of the
Junction Group, failing which
the respondent would repossess the
land at the original selling price.
During February 2003,
the respondent informed Van den Hoven, on behalf of the applicant,
that a final decision concerning the
acquisition of the property in
issue, was to be taken on 12 February 2003.
The applicant was aware
that the road re-alignment of King Street over the property in
issue would of necessity have to take
place in the context of the
proposed development of the shopping complex and that the sale of
the property in issue to the
applicant in order create the
necessary access into the Junction Group land in respect of which
the respondent was considering
giving its approval to the
development of the shopping complex, was an integral part of the
approval for that development and
the only way in which the
respondent would agree to the sale of the property in issue to the
applicant was on the basis that
it was assured that the Junction
Group land upon which the development would be approved, would be
acquired by the applicant.
However, the applicant
and the Junction Group were at odds with each other regarding
agreement to sell and purchase the Junction
Group land. From
relevant correspondence it appears that the applicant had gathered
the impression from deliberations he had
with Deysel, concerning
the sale to him of the Junction Group land, that an agreement
between them had been reached. He conveyed
this in correspondence
to the respondent on 4 February 2004. No written correspondence
was addressed by Deysel to the applicant
concerning their
discussions about the land.
Prior to the respondent
making a decision in regard to the applicants proposed development,
which would include the sale of
the property to the applicant, the
chairperson of the Development Planning and Housing Port Folio
committee of the respondent
conducted an in-depth investigation
into the development as proposed by the applicant, its effects on
the community and the
necessity for the road configuration around
the development. A full report was drawn up by the said
chairperson for submission
to the mayoral committee of the
respondent, which was charged with the responsibility of making the
decision as to whether
or not to approve the sale of the property
in issue to the applicant and the applicant’s proposals in
respect of the
development. The report recommended the King Street
re-alignment as proposed by the applicant in its proposal. The
report
was dated 7 April 2003 and at a meeting of the respondent on
16 April 2003, the applicant’s development proposal was
supported in principal. Subsequently the respondent gave its
approval for the sale of the property Portion 1 of Erf 985
Harrismith
(“the property in issue”) (“the
property”) to the applicant.
On 22 July 2004 Van den
Hoven addressed a letter to Deysel recording
(1) that he accepted that
Deysel had refused to sell the Junction Group land to the applicant;
(2) the applicant had
purchased Portion 1 of Erf 985 Harrismith from the respondent and
that the applicant would not register a
right of way over this
property if the sale of the Junction Group land to the applicant was
not effected. The applicant concluded
by urging Deysel to reconsider
his position.
3.10 On 23 July 2003 a
Deed of Sale was concluded between the respondent and the applicant
conditional upon the development by
the applicant of the proposed
Harrismith Junction Shopping Complex within two years of signature of
the agreement failing which
the respondent would repossess the land
at the original sale price.
3.11 The applicant
persisted with its efforts in the meantime to buy the Junction Group
land but was unsuccessful ultimately, because
Deysel had decided to
bid for the shopping complex development along similar lines to the
initial approval of the development site
as proposed by the
applicant; Deysel, however, would only be in a position to develop if
he was assured that the required access
from the N5 highway via the
King Street re-alignment was going to happen.
3.12 To stop Deysel from
developing the land, Van den Hoven attempted to persuade the
respondent to repossess the Junction Group
land and on 7 September
2004 he wrote to the respondent on this basis, saying that the
Junction Group had not complied with its
obligations in terms of the
Deed of Sale to develop the land and that therefore the land ought to
be returned to the respondent.
Accordingly a deadlock in regard to
the re-alignment and the shopping complex development was reached
which was detrimental to
the community of Harrismith.
3.13 On 30 March 2007,
a meeting with the respondent was held for the purposes of deciding
whether or not to approve the re-alignment
of King Street. The
recommendation of the municipal manager was that the re-alignment be
approved and it was understood that in
order for the development of
the area to proceed, the applicant’s property had to be
reclaimed. On the basis of legal opinion
obtained by the respondent,
it was of the view that the attempt to repossess the applicant’s
property in the normal way on
the grounds of non-compliance with the
conditions of sale, would involve a further and lengthy delay in the
development process.
The respondent at that stage was also relying
on a cost contribution of R1,5 million from the South African
National Roads Agency
Ltd (SANRAL) for the construction of the
re-alignment of King Street, which commitment was limited in duration
to the end of SANRAL’s
2008/2009 financial year which ended 31
March 2009.
3.14 On 12 December
2007, the respondent resolved the deadlock in regard to the
development of the area by taking a decision to
expropriate the
applicant’s property.
3.15 No development of
the area as proposed has commenced to date nor has any construction
of the re-alignment commenced.
[4] 4.1 Prior to
addressing the issues in this matter, it is necessary to ascertain
what is meant by the phrase “public purposes”
in the
context of the provisions of the Expropriation Act, 63/1975. A
useful exposé of the historical judicial interpretation
of the
phrase was given by Steyn AJ in
FOURIE
v MINISTER VAN LANDE EN ‘N ANDER
1970 (4) SA 165
(O) at 170E – 175. The learned judge concluded
that it was the intention of the legislature that the phrase should
bear
the same meaning as its established interpretation and that it
should be understood in the broad sense as referring to things
affecting
the entire population of the local public and not only to
things concerning the State or the Government. In coming to this
conclusion
one of the authorities relied on by Steyn AJ was
RONDEBOSCH
MUNICIPAL COUNCIL v TRUSTEES OF THE WESTERN PROVINCE AGRICULTURAL
SOCIETY
1911 AD 271
where at 283 – 284 Innes JA held:
“The
word ‘public’ is one of wide significance, and it may
have several meanings, between some of which, in spite
of their
common origin, there are very real differences. In a broad sense it
is commonly applied to things which pertain to or
affect the people
of a country or a local community. The expressions ‘public
opinion’, ‘public road’,
‘public place’,
‘public hall’,
are instances of the use of
the word in that general way. On the other hand, it is frequently
employed in a more restricted sense
to denote matters which pertain
not to the people directly but to the State or the Government which
represents the people. Thus
the public accounts signify the
Government accounts; public revenue and public lands denote the
revenue and the lands of the State;
and the public service means the
Government Service. Hence, as it seems to me, public purposes may
either be all purposes which
pertain to and benefit the public in
contradistinction to private individuals, or they may be those more
restricted purposes which
relate to the State, and the Government of
the country, - that is, governmental purposes.”
And, at page 286, after
analysing the evidence, he goes on:
“Under
all the circumstances, I have come to the conclusion that the
expression ‘public purposes’ in this section
must be
confined to such purposes as are constitutionally required and
created by the Government of the country, and may, therefore,
be
termed Governmental purposes. It seems unnecessary to attempt to
define the limit of such purposes; but it does not follow
that they
should be confined to purposes exercised through persons or bodies
under the direct control or in the immediate service
of the State.”
4.2 With the advent of
the new constitutional democracy in South Africa, property owners
were accorded protective rights by the
enactment of section 25 of the
Constitution of the Republic of South Africa, Act 108 of 1996 (“the
Constitution”),
which prohibited arbitrary deprivation and
expropriation of their property. Section 25(1) provides that no
person may be deprived
of his or her property except in terms of a
law of general application. The Expropriation Act 63 of 1975 is such
a law. Section
25(2) of the Constitution provides that property may
only be expropriated for a public purpose or in the public interest
subject
to payment of compensation.
The Expropriation Act,
63 1975 limits the power to expropriate to public purposes while
section 25(2) of the Constitution extends
that power to incorporate
expropriation in the public interest. In as much as the provisions
of the Expropriation Act may
be viewed as being inconsistent with
those of section 25(2) of the Constitution, the Act must be
interpreted by “reading”
in the contrary provisions in
the Constitution so that the correct legal position at present is
that the relevant statutory
requirements for a valid expropriation
in terms of the Constitution and the Expropriation Act is that the
expropriation must
be for a public purpose or in the public
interest.
[5] 5.1 I turn now to an
analysis of the evidence in the present matter in the context of
these established legal principles in
order to determine the issues
in this case, which is whether the expropriation was for an ulterior,
unauthorised and unreasonable
purpose as opposed to being for a
public purpose. Mr. Bester, on behalf of the applicant, referred me
to the authority of
HAMABAL
FRAMJEE v SECRETARY OF STATE FOR INDIA
1914 ILR 39 Bombay 279 (I) where the following was stated:
“The
argument for the appellants is really based upon the view that there
cannot be a ‘public purpose’ in taking
land if that land
when taken is not in some way or other made available to the public
at large. Their Lordships do not agree with
this view. They think
the true view is well expressed by Bachelor J where he says ... in my
opinion, the phrase, whatever else
it may mean, must include a
purpose, that is, an object or aim, in which the general interest of
the community, as opposed the
particular
interest of individuals
, is
directly and vitally concerned.”
(My
underlining.)
He argues that the
present matter is one in point where the respondent based its
decision to expropriate on the particular interest
of a third party,
being the Junction Group, to develop the Harrismith Junction Shopping
Complex and in doing so to utilise the
applicant’s land for its
own benefit. It seems to me that Mr. Bester seeks to place a
sinister emphasis on this aspect of
the case for obvious reasons. In
as much as it has always been the respondent’s case that the
necessary access through the
re-aligned King Street to the shopping
complex to be developed was very much an objective in deciding to
expropriate the applicant’s
property, the applicant had no
quarrel with it when he was pursuing attempts to acquire the Junction
Group land in order to develop
the shopping complex on that land
himself. Be that as it may, I see the matter somewhat differently
and as akin to the circumstances
dealt with by the Appeal Court in
the matter of
ADMINISTRATOR,
TRANSVAAL, AND ANOTHER v J VAN STREEPEN (KEMPTON PARK) (PTY) LTD
[1990] ZASCA 78
;
1990 (4) SA 644
(A) where Smalberger JA dealt,
inter
alia
,
with the legal position regarding expropriations for the use and
benefit of a third party. The facts of that matter were briefly
that
the first appellant, the Administrator of the Transvaal, had, under
notice, declared the existence of a public provincial
road being road
51 which encroached upon the eastern boundary of the respondent’s
property. The second appellant, a private
company, owned a private
railway line connecting one of its factories at which products of
national and strategic importance were
manufactured, with its source
of raw materials. The line traversed road 51 in two places via level
crossings. In order to relieve
congestion at the intersection of
road 51 and road P91-1, both roads were to be upgraded and a new
interchange was to be constructed.
Second appellant’s railway
line was to be relocated to the western edge of road 51 to eliminate
the level crossings. The
retention of the railway line was central
to the planning of any new roads. Part of the respondent’s
property encroached
upon by road 51, included an area to be located
within the road configuration, to accommodate the new railway line.
The respondent
challenged the first appellant’s right to
declare a broadened road reserve to accommodate second appellant’s
railway
line on his property and at the same time the second
appellant required from the first appellant an undertaking that it
would enjoy
the same unrestricted rights on the new line that he had
enjoyed on the old existing line. Fearing extensive financial losses
if the respondent’s challenge was successful, and the road
construction delayed, the first appellant expropriated respondent’s
property intending to transfer the property to the second appellant.
The railway lines had already been constructed on the respondent’s
property. The respondent objected to the validity of the
expropriation notice on the basis that the first respondent was not
empowered to expropriate the respondent’s land in order to
establish a railway line, that the first and second appellant were
trespassing on respondent’s land and that the purpose of the
expropriation notice had been to legitimise such trespass.
It was
argued that the empowering provisions in the relevant Ordinance did
not authorise the road construction and more particularly,
it could
not be interpreted so as to confer upon the Administrator the power
to acquire the land of one person (the respondent)
in order to
transfer it to another (the second appellant) for the latter’s
use and benefit. Smalberger JA held,
inter
alia
,
(1) that it was
apparent from the history of the matter that when road 51 had been
declared one of the underlying purposes of
the declarator was the
accommodation within the road reserve of the second appellant’s
railway line and that the real purpose
of the expropriation notice
was not to legalise a trespass but to accommodate the railway line.
(2) The relevant road
Ordinance provided for two separate and distinct set of circumstances
in which the first appellant might
acquire land: he might do so
(a) for the
construction and maintenance of a road (the primary purpose) or
(b) for any purpose in
connection with the construction or maintenance of any road (the
secondary purpose) and that a valid distinction
could be drawn
between the opinion formed by the first respondent with regard to the
acquisition of the respondent’s property
for the primary
purpose and his decision to acquire that land in connection with that
primary purpose, that is for the secondary
purpose.
(3) that the words “or
for any purpose in connection with the construction and maintenance
of any road” in the empowering
Ordinance resulted in the
widening of the first appellant’s power to acquire land in
terms of that Ordinance so as to enable
the construction of roads to
be effected in the most efficient way, in the public interest.
(4) It was a necessary
inference that the legislature had intended the expression to have a
relative wide meaning, bearing in
mind the planning and construction
of a road involved consideration of policy in regard to the
regulation of traffic, economic
considerations and the benefit of the
public generally, i.e. the construction must have been reasonably
expedient.
(5) The test of
expediency would be satisfied if the purpose for which the first
appellant’s power of expropriation had
been inextricably
associated with the construction of road 51 or had been an integral
incident of the construction of the road
or had been causally
connected with the construction of the road.
(6) Expropriation,
generally speaking, had to take place for public purposes or in the
public interest and although expropriation
for the benefit of a third
party cannot be for public purposes, it can however be in the public
interest. What is in the public
interest would have to be determined
with reference to the overall practical and economic considerations
of the particular project.
(7) An expropriation
for public purpose which also benefits the third party, is valid.
It was conceded in oral
argument by counsel for the respondent that the respondent required
the applicant’s land for the
purposes of the road
re-alignment in order to create the necessary access from the N5
highway to the shopping complex development
on the Junction Group
land. As such the property was, to the knowledge of the applicant,
an integral part of the development.
That access to the Junction
Group land existed from a pre-existing road namely Du Plessis
Street in Harrismith was of no moment
as it did not facilitate easy
access to the shopping complex, to tourists and the travelling
public on the N5 highway. The
applicant was aware of this and with
this in mind had placed its own bid with the respondent to be at
the helm of the development
of the shopping complex on the Junction
Group land. In the context of the Smalberger dictum in the
VAN
STREEPEN
-case,
it is clear that while the primary purpose of the expropriation of
the applicant’s land was the road configuration,
that is the
re-alignment of King Street and the construction of the interchange
at the King Street/McKechnie Street, N5 junction,
the secondary
purpose of the expropriation was the development of a shopping
complex on land adjacent to this interchange.
The respondent had
envisaged and was committed to the creation of a commercially
viable shopping complex on land in Harrismith
adjacent to the N5
highway, to which the public of Harrismith and the public at large
would have access, in order to enhance
the economy of the town of
Harrismith. To do this, it had decided to upgrade and re-align
King Street so as to create an interchange
with McKechnie Street
and the N5 highway which in its opinion based on expert advice from
a firm of consultants called Techworld,
which provided a written
report on its investigation into the matter forming annexure “BC21”
the applicant’s
founding papers, would enhance traffic safety
by improving safe distances at the proposed interchange, and would
allow access
to the proposed junction shopping complex. This
situation is on all fours with that in
VAN
STREEPEN
save that construction of the interchange and shopping complex has
not been accomplished to date. Nevertheless, a valid distinction
can be drawn between the respondent’s primary purpose in
expropriating the applicant’s land and the secondary purpose
for doing so because the respondent’s expropriation notice
provides for two separate and distinct circumstances in which
it
might acquire the applicant’s land, namely for the primary
purpose of the construction of the municipal roads in the
area of
the municipality, that is for the re-alignment of King Street and
for the secondary purpose of doing all things necessary
“in
connection with and ancillary to the construction of such road”,
namely for the utilisation of the applicant’s
land for the
development of a shopping complex adjacent to the new road
interchange, to be developed. The expression doing
all things
“necessary in connection with and ancillary to the
construction of such road” denoted that which was
reasonably
expedient in relation to the construction of the proposed
re-alignment of King Street. The creation of an access
road from
the N5 highway to the shopping complex on the Junction Group land
was inextricably linked and part and parcel of
the re-alignment.
Accordingly there can be no doubt of the expropriation of the
applicant’s land having been effected
for a public purpose.
The same however cannot be said for the development of the shopping
complex for though it was causally
connected to the respondent’s
decision to expropriate the applicant’s land because the
applicant’s land was
to be utilised by the Junction Group for
the purposes of building the shopping complex together with its own
land, the act
of dispossessing the applicant for the benefit of a
third party (the Junction Group) can never be characterised as a
public
purpose. However, it could qualify as a valid act of
expropriation if it could be brought within the realms of an act
performed
in the public interest. On the facts of this case there
is no doubt in my mind that the shopping complex development was a
development to be erected for the benefit of the public of
Harrismith because, once developed, it would provide strategic
economic advantages to the Harrismith community in the form of
greater financial returns thereby creating a healthier and
wealthier
environment for the public of Harrismith. The clear
intention of the respondent in promoting and pursuing the shopping
complex
development was to stimulate the economy of Harrismith.
Accordingly and in respect of the secondary purpose for which the
applicant’s land was expropriated. I find that the
expropriation was validly done, in the public interest, for a
bona
fide
and lawful purpose.
[6] In the light of the
evidence I am also of the view that there is no basis for holding
that the respondent’s decision to
expropriate the applicant’s
property was so unreasonable that the purpose therefore cannot be
said to be a public purpose.
I refer in this regard to Mr. Bester’s
submissions that only two thirds of the applicant’s property,
and a substantial
portion at that, was not required by the respondent
for the purpose of the re-alignment, that it ought not to have been
expropriated
and that on this basis alone the expropriation should be
set aside because the bulk of the land was not required for public
purposes.
He argued that the true reason for the expropriation was a
financial one, namely the generation of income for the Junction Group
from the development of a shopping complex utilising the applicant’s
land. This argument confuses motive and purpose and
therefore cannot
be sustained. I have already demonstrated in this judgment why I
have found that the respondent’s purpose
in expropriating the
applicant’s land was a public one. The means by way which that
is achieved may or may not be a financial
one. In this particular
matter financial consideration certainly did play a part in
motivating both the applicant and the Junction
Group to bid for the
development. Ultimately the respondent’s decision to
expropriate was also motivated by the desire to
avoid the extensive
financial costs involved in obtaining the transfer of the applicant’s
property back into its name, but
that does not detract from the fact
that the overall reason for the expropriation was for the benefit of
the public of Harrismith.
The financial considerations merely
motivated the respondent to choose expropriation rather than the
costly route of cancelling
the sale agreement and repossessing the
applicant’s land. But the main reason why the applicant’s
contentions must
fail, is because once it is established that the
expropriation is a
bona
fide
one for a public purpose the motives behind the actions of the
respondent are irrelevant to the question whether the power of
expropriation had been validly exercised. See
L.F.
BOSHOFF INVESTMENTS (PTY) LTD v CAPE TOWN MUNICIPALITY
1969 (2) SA 256
(C) at 270C;
OLIFANTSVLEI
TOWNSHIP LTD v GROUP AREAS DEVELOPMENT BOARD
1964 (3) SA 611
(T);
BROADWAY
MANSIONS (PTY) LTD v PRETORIA CITY COUNCIL
1955 (1) SA 517
(AD). In the
BROADWAY
-case
the applicant applied for an order setting aside the expropriation of
his property on the grounds that the power of expropriation
had been
exercised by the responded municipality for an improper purpose. Van
den Heever JA stated:
“
It was contended that
respondent determined to expropriate appellant’s property as
and when it did, not because the property
was then required for road
construction purposes, but solely to prevent the appellant from
building on the property so as to avoid
payment of high compensation
as and when it determined to proceed with the scheme. Respondent
alleges that it is about to put
the project into execution in
sections. However I can find nothing in Ordinance 60 of 1903 to
suggest that a municipality may
not be provident or may exercise its
powers of expropriation only to provide for immediate requirements in
maintaining a balance
between the needs of a municipality and the
environability of property rights. This aspect will no doubt be
taken into consideration
by the administrator under section 6(3) in
judging the propriety of the proposed undertaking and giving his
sanction with or without
modifications or withholding it but it
cannot constrict the purposes for which the power may be exercised.”
In
HUMPHRIES
AND LAMMAS v THE TOWN COUNCIL OF BLOEMFONTEIN
1905 ORC at p. 90 the facts of the case were that as a result of a
great flood disaster in 1904 there was a serious loss of life
and
property in Bloemfontein. The disaster was blamed on the
insufficiency of the natural spruit to carry off heavy rainfall and
the town council proposed to undertake works for the purpose of
widening, straightening and bridging the water course running through
the city by expropriating a portion of an erf belonging to the
plaintiffs under the empowering provisions of Ordinance 21 of 1904.
The plaintiff challenged the expropriation on the basis that a larger
portion than was necessary for the proposed works had been
expropriated. The city engineer in evidence testified that the
expropriation was absolutely necessary and the court held that
it was
bound to give effect to the clear meaning of the empowering Ordinance
unless the plaintiffs could show that the city engineer’s
evidence was not given as a
bona
fide
opinion and that the land was in reality not required. In passing
judgment the learned Judge relied heavily on the
ratio
decidendi
in the leading English case of
STOCKTON
AND DARLINGTON RAILWAY COMPANY v BROWN
9 H.HL at p. 246 which was that extraordinary powers are given to the
persons and/or entities endowed with the power to expropriate
and
made it clear, moreover, that they are the judges of works they
require unless it is proven that they are not acting
bona
fide
.
Lack of
bona
fides
can be proved in one of two ways; either by proving that the land is
to be used for an ulterior collateral purpose or that the
alleged
purpose is so absurd that it cannot possibly be
bona
fide
.
In
PRETORIA
CITY COUNCIL v MODIMOLA
1966 (3) SA 250
(A) at 263G – H Botha JA said this:
“
In the absence of a provision
prescribing a
quasi-
judicial
enquiry as a pre-requisite to the exercise of a power of
expropriation, the act of expropriation is a purely administrative
act ... Where unqualified authority is conferred for the
expropriation of land required for public purposes, an opinion by the
expropriating authority, if fairly and honestly come to, that
particular land is required for such purposes, is all that is
required
for a valid expropriation of that land.”
Consequently the only
requirements for a valid act of expropriation under legislation
referred to in the
MODIMOLA
-case,
as well as in this case where the empowering provision was the law of
general application, are:
(1) It should comply with
the machinery laid down in the relevant legislation;
(2) It should expropriate
for the purpose there laid down and not for any alternative purpose;
(3) It should be done
honestly or
bona
fide
.
See also
THEUNISSEN
TOWN COUNCIL v DU PLESSIS
1954 (4) SA 419
(O) at 424C where Van Blerk J held:
“
Verder is namens respondent
gewag daarvan gemaak dat die Raad in werklikheid nie die onteiende
grond nodig het nie; dit is nie duidelik
of dit aangevoer slegs as a
faktor om die
mala fides
van die Raad te bewys nie, dan wel of dit ‘n selfstandige
beswaar is nie; indien laasgenoemde die geval is dan dink ek nie
dat
die beswaar gegrond is nie want dit is vir die Raad alleen om te
besluit of die grond benodig word of nie; en as die besluit
dat die
grond benodig word vir die waterwerke
bona
fide
geneem is dan is dit
nie aanvegbaar nie.”
[7] Turning to the
specifics of the present matter, it was conceded by Mr. Bester that
the onus is on the applicant to prove that
the applicant’s land
was not required for the stated purpose and that that onus is not one
which is easily discharged since
the expropriation itself is a purely
administrative act. See
SORRELL
v MILNERTON MUNICIPALITY
1980 (4) SA 660
(C) at 665B. Although it was not submitted by Mr.
Bester that the respondent did not require the land for the purpose
of the road
re-alignment, his challenge was to the fact that there
was an ulterior purpose connected to the re-alignment being in the
form
of the respondent’s approval for the development of the
shopping complex on the applicant’s land by the Junction Group.
In the absence of incontrovertible proof from the applicant,
discharging the onus upon it that the respondent was
mala
fide
and not
bona
fide
in
expropriating applicant’s land, I am driven to the conclusion,
on the basis of what was said by the court in the
MODIMOLA
-case,
the
THEUNISSEN
-case
and the
HUMPHRIES
AND LAMMAS
decision that there is no basis for holding that the respondent’s
decision to expropriate the whole of the applicant’s
property
was unreasonable.
[8] Finally, it is worth
remembering that the fact that the applicant and the Junction Group
were both competitors for the same
development and, as is clear from
the papers, crossed swords at times, this is of no moment in deciding
the
bona
fides
of the respondent. On the papers before me the applicant has
referred to many matters which he regards as being relevant
considerations
and which he no doubt seeks to have this court take
into account in determining the respondent’s lack of
bona
fides
in ignoring them in its deliberations before coming to a decision to
expropriate the applicant’s property. But they too
are of no
consequence in the greater scheme of things because the act of
expropriation is a purely administrative act. Therefore
the mere
fact that the respondent failed to take into account what applicant
deemed to be relevant considerations is not a good
ground for
upsetting the expropriation. See
DURBAN
CITY COUNCIL v JAILANI CAFE
1978 (1) SA 151D
at 153H and 154A and the cases there cited.
[9] There will
accordingly be a dismissal of the application. I have been asked by
the respondent’s counsel to make a punitive
order of costs
against the applicant on the grounds of his vexatious stance in
bringing this application as being indicative of
a malicious drive to
obstruct the planned shopping complex development by withholding
access to that development. I am of the
view that the applicant’s
conduct in persisting with his aggressive efforts to convince the
respondent to grant approval
to him as developer by dispossessing the
Junction Group of its land and his conduct in bringing these
proceedings was motivated
by the proverbial “sour grapes”
syndrom and not by malice.
[10] In the result the
order I make is the following:
The application is
dismissed.
The respondent’s
decision to expropriate the applicant’s property being Portion
1 of Erf 985 Harrismith, Extension
18, Registration Division
Harrismith, Free State Province, is hereby confirmed.
The applicant is ordered
to pay the respondent’s costs on the ordinary party-party
scale.
_____________
S. EBRAHIM, J
On
behalf of applicant: Adv. Andy Bester
With
him:
Adv.
Mpho Makgato
Instructed
by:
Rossous
Attorneys
BLOEMFONTEIN
On
behalf of respondents: Adv. D.C. Fisher
Instructed
by:
Naudes
BLOEMFONTEIN
/sp