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[1990] ZASCA 77
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Sher NO and Others v Administrator of the Transvaal (606/88) [1990] ZASCA 77; 1990 (4) SA 545 (AD); (23 August 1990)
Case
No 606/88
IN THE SUPREME COURT OF SOUTH
AFRICA
APPELLATE DIVISION
In the matter between:
NORMAN NATHAN SHER N O
First
Appellant
JULIUS FEINSTEIN N O
Second
Appellant
NEVILLE SWEIDAN N O
Third
Appellant
LAWRENCE ALFRED MEYEROWITZ N
O
Fourth Appellant
ARTHUR JACOB AARON N O
Fifth
Appellant
ROBERT LAPEDUS N O
.
Sixth
Appellant
YUDEL BACHER N O
Seventh
Appellant
LAWRENCE TRAKMAN N O
Eighth
Appellant
BERNARD HERBERT N O
Ninth
Appellant
and
THE ADMINISTRATOR OF THE
TR
Á
NSVAAL
Respondent
CORAM:
CORBETT CJ, BOTHA,
MILNE, STEYN JJA et
NICHOLAS AJA.
DATE OF HEARING
: 17 May
1990
DATE OF JUDGMENT
: 23 August
1990
JUDGMENT
2
JUDGMENT
NICHOLAS
AJA:
I
am
with respect unable to concur in the judgment
prepared
by Milne JA. In my opinion the appeal should be dismissed.
The main issue
at the trial before McCreath J was the value in terms of s.12(l) of
the Expropriation Act, 63 of 1975, ("the Act"),
of the land
expropriated by the Administrator of the Transvaal for the purpose of
the Wendywood High School.
(I
shall
for convenience refer to
the Transvaal
Provincial Administration as "the TPA".)
The
expropriated land is situated in the municipal
area
of Sandton. It is 8,5 hectares in extent, and its Deeds Office
description is "Portion 3 of the Farm Harrowdene 4 Registration
Division IR Transvaal".
(I
shall
refer to it either as "Portion 3" or as "the
expropriated portion".) Prior to the expropriation it formed
part of
3
land
28,7113 hectares in extent, described as "The remaining
extent
of the Farm Harrowdene 4 Registration Division IR Transvaal".
(I
shall refer to it as "the RE".) .
The part of the RE which remained after the excision of Portion 3
will be referred to
as "the rest of the RE".
The principles which apply in the
assessment of proper compensation for ground which has been
expropriated are well-established. In
terms of s.12(1)(a)(i) of the
Act the compensation payable is the amount which would have been
obtained for the property if on the
date of the notice of
expropriation it had been sold on the open market by a willing seller
to a willing purchaser, that is, an amount
equal to the fair and
reasonable market value of the expropriated ground on the date of
expropriation. The "willing seller"
and the "willing
purchaser" are not the person expropriated and the expropriator,
but a notional willing seller and a notional
willing buyer
negotiating with
4 each other on an equal footing,
both of whom are f ully informed about the ground at the date of
expropriation - its advantages
and disadvantages and its
potentialities and everything which affects it. In determining the
reasonable market value, it is accordingly
necessary in the first
place to establish the potential of the expropriated ground on the
date of expropriation, not as realised
actualities, but as reasonable
possibilities.
Various methods are available to
ascertain the market value of the expropriated ground. The four main
methods are: (a) the comparative
or market data approach; (b) the
income investment or economic approach; (c) the land residual
technique; and (d) the cost method.
(Jacobs,
The Law of
Expropriation in South Africa
, p 67.) In the present case only
methods (a) and (c) have possible relevance.
Where it is appropriate, the
comparative approach
5 is the method of choice. See
Minister of Water Affairs v Mostert & Others
1966 (4) SA
690
(A), where Wessels JA said at 723 E:
"Both the seller and the
purchaser will exercise an intelligent judgment in deciding upon the
purchase price and will thus be
guided by the evidence as to a fair
market price afforded by comparable sales of similar land in the area
concerned at the relevant
time. Comparable transactions, particularly
where the sales are concluded after objective and impersonal
bargaining, afford the most
satisfactory evidence of a fair market
value because it demonstrates how circumstances have affected the
minds of purchasers and
sellers."
Actual transactions in the market
provide direct evidence of market value only if the properties are
comparable or if they are such
that they can properly be compared by
making adjustments for differences between them. Truly comparable
sales are those which relate
to similar
6 ground in the same area as the
expropriated ground and which were concluded at about the date of
expropriation. Because of the difficulties
which may arise where
there are variables, transactions which are said to be comparable
must be considered with great care and circumspection.
See
Minister
of Agriculture v Davey
1981 (3) SA 877
(A) where the difficulties
and problems are discussed at 902 E - 903 B. The "market"
is the open mairket as distinguished
from dealings restricted to
members of a limited class such as members of a family. In
I.R.C.
v Clay
1914 (3) KB 466
(CA) at 475, it was said that market value
"is such amount as land might
be expected to realise if offered under conditions enabling every
person desirous of purchasing
tó come in and make an offer,
and if proper steps were taken to advertise the property and let all
likely purchasers know
that the land is in the market for sale."
(See also p 478.)
7
Method (c)
was described by Ogilvie Thompson JA in
Estate Marks v Pretoria
City Council
1969 (3) SA 227
(A) as follows at 248 - 249:
"The
residual land value method is a complicated exercise involving
specialised skills in several spheres. The first step is
to determine
the optimum development of which the land proposed to be purchased is
capable. If it is to be properly done, that entails
the preparation
of a comprehensive building project, complete with plans and
specifications, which complies with all rele-vant building
regulations and town-planning provisions. Thereupon the cost of
erecting such a building has to be carefully cal-culated, as also
the
estimated nett rentals to be derived from the building. Such nett
income is then capitalised at the rate of interest which the
prospective purchaser expects from his investment. From this
capitalised value, the total cost of the project is deducted, and the
residual figure represents the amount which the purchaser
8 would probably be prepared to
pay for the
site in question. As the learned
Judge a
quo
succinctly put it,
after such a projected
scheme has been worked out,
'a buyer expecting a certain
return on his investment would know that he could afford to pay the
residual value of the land so arrived
at in order to give him his
expected return.'
The validity of a residual land
value projection vitally depends upon three basic factors, namely,
(a) the development costs of the
projected building; (b) the
anticipated nett income from the project; and (c) the nett yield
required by the prospective purchaser.
Error in the calculation of
either of the first two of these factors will obviously materially
affect the result; and, as will appear
more clearly hereafter, even a
very small alteration in the yield expected has a profound effect
upon the ultimate figure representing
the value of the land."
Later in the original judgment
there appears an important
9 important paragraph which has
been omitted from the judgment as reported, namely,
"That is
not, however, to say that
I
am
of opinion that the learned Judge should
necessarily have determined the value of those erven at the aggregate
figure derived by applying
McIntosh's residual land value method. As
I
have already
indicated, relatively small variations in any one of the three basic
factors of that method of
valuing land
produce material divergences in
the figure
ultimately reached. Provided that important fact is appreciated, the
method doubtless has many merits particularly,
I
venture to suggest, as a comparative check
upon the ultimate figure attained by the application of more
conventional methods of valuation
- but,
because
of the imponderables inherent in it,
the
residual land value method of land valuation should, in my opinion,
be regarded with circumspection by the Court.
Cf.
Cripps op
.
cit
. who,
at 4-200, indicates
that residual land
value is not always an
10
acceptable
method of valuation."
Ogilvie
Thompson JA was discussing the residual land method of valuation in
relation to land which it is proposed to acquire as an
investment,
namely, for the erection thereon of a building from which income is
to be derived by way of rentals. It is debatable
whether the method
can usefully be applied to land which it is proposed to subdivide and
to re-sell as township erven.
It is to
be noticed that the use of the residual land value method does not do
more than provide a figure for the amount which the
notional buyer
could afford to pay, and thus would probably be prepared to pay. It
does not itself give the exchange value of the
land.
Where an
accurate valuation is not possible because of a paucity of evidence,
the compensation court does not adopt a
non possumus
attitude.
Its approach is
11
necessarily like that adopted by a
court in assessing damages, when, lacking clear proof, it must make
do with such relevant data
as are available. Illustrative of that
approach is
Hersman v Shapiro & Co
1926 TPD 367
at 380:
"But where the best evidence
available has been produced, though it is not entirely of a
conclusive character and does not permit
of a mathematical
calculation of the damage suffered, still, if it is the best evidence
available, the Court must use it and arrive
at a conclusion based on
it."
See also
Enslin v Meyer
1960 (4) SA 520
(T) at 523 - 524, and
Mkwanazi v Van der Merwe &
Another
1970 (1) SA 609
(A) at 631 . On the application of the
principle to expropriation cases, see
Dormehl v
Gemeenskaps-ontwikkelinqsraad
1979 (1) SA 900
(T) where Van
Dijkhorst AJ said at 909 G - H:
"h Hof moet met die gegewens
wat voorgelê is, hoe karig ookal, tot 'n bevinding kom na
12
die beste van sy vermoë al
sal die resultaat neerkom op 'n ingeligte skatting."
The amount which the expropriated
property would have realised if sold on the date of the expropriation
notice in the open market
by a willing seller to a willing buyer is
at best a matter of inference or estimate. This is not a f ield in
which the judge ordinarily
has the specialised knowledge which is
reguired for the drawing of the proper inferences, and consequently
he must depend largely
on the testimony of experts. (See
Estate
Marks
(
supra
) at 253.)
In this case the plaintiffs relied
on the expert evidence of Dr WillemGerke, and the TPA relied on that
of Mr Norman Griffiths.
Gerke is a qualified
land-surveyor, town-planner and valuer. He has extensive experience
in these fields both in his professional
capacity and as a township
13
developer on his own account. He was well-acquainted with the area of
Randburg-Sandton in which the RE was situated, having been
personally
involved in a great deal of the development there.
At the
relevant date the RE was zoned under the Sandton Town-planning Scheme
"Agricultural Purposes", but it was common
cause there
would have been no problem in having it rezoned as "Special
Residential".
In Gerke's
opinion it was not possible in this case to apply the "comparable
approach" in determining the value of Portion
3. It would, he
said be almost a futile exercise to look for a comparable transaction
because in the case of land bought for township
purposes so many
differences can arise, such as general location, size, the
availability and cost of services, and the potential
for
sub-division. He accordingly adoptéd what he called "a
static residual valuation or calculation" in "a
before-
14 and-after approach". He
said that this was a different kind of thing altogether from the
normal land residual technique. That,
he said, has been rejected "as
being (im)practical and very dangerous to rely on because there are
so many factors that go into
the costs of a building and factors that
are unknown". In his approach the calculations were relatively
few in number and had
relatively small margins of error.
Gerke made two
calculations: the first in relation to the RE, which he set out in
Exhibit
"I",
which
is headed "Viability Calculation before Expropriation"; and
the other in relation to the rest of the RE which he set
out in
Exhibit "J", which is headed "Viability Calculation
after Expropriation". Each of the exhibits has two
parts. The
first part is headed "ESTIMATED REVENUE" and sets out the
number of residential erven, the estimated price per
erf, and the
total estimated revenue.
15 The second
is headed "ESTIMATED EXPENDITURE" and includes items such
as bulk water supply, external sewer works, internal
water
reticulation, roads and storm water construction, internal sewers and
electricity. Exhibit
"I"
concludes with an "Expected Net
Surplus on Sale" of R4 975 356; exhibit "J" with an
"Expected Net Surplus
on Sale" of R3 172 456. The
difference between these two figures, namely R1 802 900, was Gerke's
valuation of Portion 3.
There are obvious similarities
between the usual residual land value technigue and Gerke's static
residual valuation: both involve
a projection of costs and income.
There are also obvious differences: the one is a complicated exercise
involving specialised skills;
the other is a rough and ready method
involving rule of thumb estimates and assumptions. Gerke said in his
evidence that the word
"static" connotes that the various
16
inputs are taken as at the date of
valuation, and explained -
"Now we
all know that prices change, the costs of services go up, the costs
of road making go up, the costs of what you sell
the land for in
three or four years' time when you are really going to sell it is not
going to be the same as if you sell it today.
But rather than to try
to project all these to the future and then discount them back again
to the relevant date
I
take
it as at that relevant date what the income and what the expenditure
would have been. In other words then, referring to EXHIBIT
I,
I
estimate what residential erven would
have sold for, assuming they had been sold at that date. Even though
it might be a year or two
before
I
would
sell them. Similarly in regard to the estimated expenditure what the
cost would have been at the relevant date. Basically in
the long term
or medium term they tend to increase both on the income and the
expenditure side. Those practically cancel out. My
personal
17
experience has been that the
actual profit has always been in excess of what was originally
estimated."
Ogilvie Thompson JA's caution in
regard to the use of the normal residual valuation technique applies
a
fortiori
to Gerke's method, which, it is apparent, is only a
crude and unscientific variant of the usual technique. The
development costs
are a matter not of calculation but of estimate, as
is the expected income from the sale of erven. In township
development, time
and the cost of money are of the essence. Gerke's
method takes no account of the different times at which various costs
will be incurred
and items of income will be received. It ignores the
factor of interest, which over the years between the date of the
purchase of
the land and the time when income can be expected to
begin flowing may be substantial. Gerke's method did not relate to
the real
world, but was based on assumptions for which there was no
warrant other
18
than what
Gerke said was his experience. He admitted under cross-examination
that his method was not mentioned in any text-book, and
was not used
by valuators. He himself said,
"(The
method) is not a certainty. It
obviously
has dangers in it too.
I
mean
I
cannot deny
that, but....
I
do
not know of a
better way."
He said
that similar methods are used by township developers for their
purposes, but qualified this by saying:
""....when
I
say that
township developers,
and including myself,
have done this kind of
exercise in the past
of course in practice
in the real world one
most of the time has
the offer of a
particular property at a
particular price.
Not everybody estimates
it the same way,
I
mean uses the same
figures
And this valuation will then
show
whether
I
am
prepared to buy or whether
I
am
not prepared to buy."
19
Apart from the aforegoing, Gerke's
approach was subject to a more serious fundamental objection. It is
in the economic nature of a
seller of property to exact the best
price he can, and in that of a buyer to pay only what he must. The
result of these opposing
forces is an agreed price. Gerke's exercise
is focussed, not on what the owner would require and the township
developer would have
to pay (which Gerke ignores) but on what the
developer could afford to pay without loss (and it should be added,
without profit).
It is a theoretical exercise, entirely unconnected
with the realities of the market place.
Counsel for the appellants
referred to' the unreported case of
Estate Milner en Andere v Die
Stadsraad van Thabazimbi
(TPD 6 September 1982) as a case where
the Court had adopted Gerke's approach. Whether or not the court was
correct in so doing,
an important distinguishing feature is that in
that case Gerke applied a "risk-reward
20
factor"
in order to determine what portion of the estimated
surplus
could be paid for the land and what portion could
be
regarded by the notional developer as his profit. In
the
present case Gerke applied no such factor: he treated
the
whole of the estimated surplus as the value of the
land,
and made no provision for developer's profit. This
would,
no doubt, be a source of gratification to a seller,
who
as the owner of "raw land" would reap the rewards
to.be
gained
from a developed township. But the result bears no
relation
to market value.
Gerke gave
this explanation for his omission to provide for developer's profit.
He said that the land had potential for development
for office
purposes: it was possible that there could be laid out on it an
"office park", in which a number of low bulk
office
buildings, usually designed by a single architect, are located in a
parklike setting. He did not attempt to place a value
on
21
this
potential. His approach was that a developer would say:
"I
am prepared to go in for this scheme of
buying for development of an office park
but
I
am not
going to pay more for it than
I
will
be able to recoup if everything goes
wrong.
He would then calculate what he
could
recoup and he would say that is the
maximum
I
am prepared to
pay for it."
He
was of the opinion that the profits which a township developer stood
to make if an application for rezoning to
office
use was successful warranted a purchase of the land
on
a "fall-back" basis: he would pay a price which would
allow
a disposal of the land without a loss in the event of
the
failure of application for rezoning. The "fall-back"
price
was the price that would be paid for
the
land with its potential for a residential township. In order to
obtain the land with its office potential,
the developer
would have been prepared to
forego the usual developer's
22
profit.
Gerke's
scenario may be imaginative and
ingenious,
but it bears no relation to the realities of
land-dealing.
Fundamental to it is the existence of an
office
potential for the land. That is necessarily a
matter
of opinion, but an opinion which is not based on
facts
is mere speculation. The uncontradicted evidence
given
by townplanners in this case was that a thorough
investigation
was a necessary prerequisite. None was
made.
Gerke said first that a grant of office rights was a
realistic
probability, and then, under cross-examination,
a
reasonable hope. That was insufficient
to
have any
impact on a potential buyer's
thinking. . It was the view of McCreath J that an office potential
for the RE was at best a hope. In
my view it was rather in the nature
of a
pipe dream.
But even
if there were such a potential, it is
23
not apparent that a potential
developer, even one as sanguine about the prospects as Gerke claimed
to be, would be prepared to stage
this scenario. Why should he forego
the usual developer's profit when determining the price to be offered
for the land? And why should
he be prepared to lock up his capital
unproductively while he awaited the outcome of an application for
office rights? In the meantime
(a period of 3 years was mentioned as
a possibility) he would be paying or losing interest and would have
to pass up such other business
opportunities as might offer.
In my opinion Gerke's valuation
was fatally flawed at its foundation.
McCreath J took a similar view. He
considered that, notwithstanding the advantages which in an
appropriate case can be gained from
the "static residual"
valuation and
24 the "before and after"
approach, Gerke's evidence in this case was unacceptable and could
not be relied upon. In consequence,
the learned judge said, the trial
court had "no option but to fall back on the comparable sales
approach adopted by Mr Griffiths".
Griffiths said in his evidence
that he was a Fellow of the Royal Institution of Chartered Surveyors,
a qualification which he obtained
by examination in 1967. He arrived
in South Africa in 1968 and became a member of the South African
Institute of Valuers. He joined
the firm of Richard Ellis, which he
described as having the largest staff of valuers of any firm in South
Africa. Since he became
a director and shareholder in 1978, he has
controlled the valuation side of the business. Over the years the
firm has amassed a wealth
of information cm valuations on most types
of property in the' country. It monitors the South African property
market on an ongoing
basis.
25
In this matter he was approached
by the State Attorney to consider the value to be placed on the
expropriated property. His initial
objective was -
"to fully understand,
interpret and research the actual market which existed in general and
in specific terms at the expropriation
date to the extent of
identifying the thoughts which were curreht in minds of buyers and
sellers at the expropriation date from the
backdrop of the market
which existed at that time, as to what factors would be influencing
them and then to go further and actually
research in the market and
see what real world buyers and sellers were actually doing by
establishing information on sales which
had occurred at or about that
time."
Griffiths first read many
documents which provided the background of the case; he visited the
Sandton Municipality to discuss with
the townplanners and the valuers
aspects relating to the property; he caused Deeds Office searches
26
to be made in order eventually to
"arrive at a hard core of comparable evidence"; and he
inspected the property, had ongoing
discussions with township
developers and researched relevant financial aspects.
He adopted the comparable approach
which Gerke rejected as inappropriate. He took into consideration a
number of transactions relating
to agricultural land with a township
potential in the same general area, viz a transaction relating to the
RE itself and transactions
relating to land described in the evidence
as Hurlingham Extension 5, Benmore Gardens Extension 3, "The
King David Site"
and Portions 20, 34, 41 and 46 of Waterval 5
IR. On the basis of these transactions, Griffiths formed the opinion
that on the relevant
date the RE was to be valued at R55 000 per
hectare, giving a total value of Rl 579 million which Griffiths
rounded up to Rl,6 million.
As "a check", Griffiths
said, he then performéd a
27 residual calculation in the
usual manner, which he set out in Exhibit "N". This gave a
residual value for the RE of Rl
347 243 which, rounded up to R1 350
000, resulted in a yalue of R46 923 per hectare.
Exhibit "N"
was subjected to severe and detailed criticism by Mr Heher, who
submitted that the calculation was unreliable,
of small relevance and
inaccurate in its content. There is substance in the criticisms, but
in my view, counsel for the plaintiffs
was wasting his powder. There
was nothing to shoot at. Griffiths himself said that this was not a
calculation of the value of the
land. All that it indicated was a
realistic figure which a developer might consider that he could
afford to pay. Its accuracy depended
very much on input. It was no
more than a check, and he did not base his valuation on it. Even as
"a check" it can,
I
think,
be ignored.
The RE had formerly been owned by
a company named
28
Harrowdene
Estates (Pty) Ltd. The shareholders were Isaac Wilfred Jacobson and
Barney Jacobson, who wished to put the company into
liquidation. In
pursuance of this, and in terms of deeds of sale dated 16 June 1983,
the RE was transferred in undivided shares to
three family trusts set
up by the Jacobsons, viz the
I
W
Jacobson Trust (one half), the Jacqueline Harrowdene Trust (one
quarter) and the Irene Harrowdene Trust (one quarter). Members of
the
families of Isaac and Barney were the beneficiaries of these trusts,
which are represented in these proceedings by the plaintiffs.
The
total price for which the RE was sold to the three trusts was R1 661
000 (which represents
aprice
per
hectare of R57 851).
Griffiths said that this
transaction had a "certain relevance" - "within the
test of comparability it is said that
the best comparable is the
subject property on its date of expropriation. This sale took place
29
approximately
three months after the expropriation". He did not accept that
comparability was excluded because this was an "inter-family"
transaction. He considered that "the parties in setting up these
trusts obviously wanted to go
totally
arm's length For that purpose they employed
an
external valuer.... and asked him effectively to put the numbers on
the transaction." He referred to the fact that in Exhibif'X"
(which was the agreement between Barney Jacobson and the Irene
Harrowdene Trust), for example, there was provision for the payment
of interest on the purchase price at a rate of 1 % over prime
overdraft rate after a period of grace.
McCreath J
said in his judgment that the figure of R1 661 000 was admittedly
based on a valuation by a Mr Balme which had been obtained
by the
plaintiffs, and that because the valuer had not been called as a
witness, the valuation itself could not be regarded as evidence
before
30
the court.
There were however two factors which led him to conclude that the
transaction was not one which could be disregarded. The
one was that
the interest stipulated was not nominal - it was not less than the
interest which would be payable by a person who was
in fact dealing
on the open market. The other was the fact that "this was the
fair market valuation which the plaintiffs themselves
regarded the
whole of the remaining extent of Harrowdene to be (at any rate for
transfer duty purposes)".
In my
opinion this transaction was not in itself evidence as to the market
value of the RE. It was not a market transaction in the
sense that
the price and'other terms were hammered out in the heat of
competition. They were
prima facie
imposed by Isaac and Barney
Jacobson (there was no evidence to the contrary) and the price does
not afford objective evidence of
what would have been paid by a
willing buyer to a willing seller. That is not to say,
31
however,
that this transaction was entirely irrelevant as
submitted
by Mr Heher. It was relevant as an admission by
the
plaintiffs as to the value of the RE on the date of the transaction.
It was argued by Mr Heher that because the
plaintiffs
were laymen with no knowledge of land values, any
admission
by them was either inadmissible or valueless.
I
do not agree. An admission by a party of
facts which are
not within his personal
knowledge is admissible as evidence
of the
truth of the facts asserted in the admission. (See
S
v Naidoo
1985 (2) SA 32
(N) at 34 -
36.) The weight to
be attributed to such an
admission depends -
"....
on the circumstances under which it is made and in particular the
source from which (the party) derives his knowledge and
the
confidence which he reposes in its reliability."
(
ibid
at 36 H
per
Thirion J).
In his
judgment in the court a
quo
McCreath J made
32
an apt
quotation from Davies,
Law of Compulsory Purchase and
Compensation
, 1978 at 42:
"The
best way to understand market value is to imagine going to an
experienced and competent valuer and asking him for his advice
as to
the likely price which he would expect a particular property to fetch
if it were to be sold."
This, said
the learned Judge, is exactly what the plaintiffs did in this case.
And the confidence which they reposed in the reliability
of Balme's
valuation is demonstrated by the fact that they solemnly swore to it
on affidavit.
In my
opinion, although this transaction was not evidence against the TPA,
it was cogent evidence against the plaintiffs.
In regard
to the other transactions relied on by . him, Griffiths's conclusion
was that in 1982 developers were paying between R30
000 and R40 000
per hectare for land in
33
this
area with residential township potential. Making a
direct
comparison with one of the properties (Hurlingham 5
for
which R4 million was paid), the figure for the RE, which
had
a third of the number of erven, would be R4
million/3 or
Rl,3
million. And on a similar comparison with another
property
(Benmore Gardens 3), one reached a value of R40 000
a
hectare. Making an adjustment for the higher prices in
1983,
he considered that "a fair figure on the whole of
Harrowdene
would be R55 000 per hectare, which gives us a
figure
of R1 579 million, call it 1,6 million".
Mr Heher
subjected Griffith's evidence on these and the other "comparable"
transactions to a rigorous analysis, which demonstrated
that none of
them could safely be used for the purpose of direct comparison. Mr
Heher said that each of the properties
"possesses
so many characteristics of its own which differs from those possessed
by the
34
others and
by the expropriated land and the Remaining Extent of Harrowdene,
which require to be adjusted in order to strike a balance,
that
reliable comparison is excluded".
The
submission appears to me to be a just one. It appears, however, that
Griffiths also used these transactions not for the purpose
of direct
comparison but as source material to provide a guide of what raw land
with a potential for residential township development
was costing in
1982. He said:
"I
think comparability is a little bit of a
difficult term because obviously every
property is different, every property is
unique and in looking at what we call
comparable sales we are looking for
transactions
which have some similarities or
some
conclusions which can be drawn from
those
transactions. There may only be one
or two
relevant facts that we consider to be
relevant
on those transactions. We are not
saying
that one property every single feature
35
has to be
taken into account. There may be one or two features but one is
trying to establish what was happening in the marketplace,
what
people were buying and selling and what money they paid when they
bought and sold and why they paid the amounts they paid."
Under
cross-examination it was laid to his charge that he was juggling with
differences between one property and another, with the
result that
"comparability is thrown out of the window". He denied the
imputation. He said that "it is taking logical
assessments from
the evidence that one has". When it was put to him that on his
approach comparability depended purely on the
ability of the valuer
to juggle successfully, he replied, "It is the ability of the
valuer to draw meaningful conclusions from
aspects of comparable
sales". And again, "It is a judgmental
assessment
of the information one has ". He said further
that he
did not apply other sales on a direct comparison to
36 the RE.
He drew conclusions from the sales which gave a picture of the market
in 1982, and then moved on to the market in 1983,
when there had been
an upward movement. Further on in the cross-examination he explained
what he meant by comparability:
"Comparability
is looking at what has happened in the marketplace, establishing what
that means, establishing why that happened
and saying as that
happened how does it impact on one's judgment of what this
property
is worth in March 1983
I
am
putting
a bottom line and
I
am
putting a top
line and
I
am saying that in between there is
where
the subject property must lie, and
these
(properties) are the bottom line".
What
Griffiths appeared to be saying here was that he used
the
so-called comparables in order to provide data on the
basis
of which he, as a valuer using his experience, knowledge and
expertise, made a judgmental decision. It
was
argued that his conclusion defies logical analysis.
I
37
am
inclined to agree that in the result it amounted to no more than a
crude generalisation. But this does not lead to a rejection
of
Griffiths's evidence as argued by Mr Heher. In
Pietermaritzburg
Corporation v South African
Breweries Ltd
1911 AD 501
Innes JA remarked at 516:
"It
may not be always possible to fix the market value by reference to
concrete examples. There may be cases where, owing to
the nature of
the property, or to the absence of transactions suitable for
comparison, the valuator's difficulties are much increased.
His duty
then would be to take into consideration every circumstance likely to
influence the mind of a
purchaser,
There being no concrete
illustration
ready to hand of the operation of all these considerations upon the
mind of an actual buyer, he would have to employ
his skill and
experience in deciding what a purchaser, if one were to appear, would
be likely to give. And in that way he would to
the best of his
ability be fixing the exchange value of the property."
38
In my view that was the position
here. If, as seems to be the case, there were no transactions
suitable for direct comparison, Griffiths
could only employ his skill
and experience on the data which were available to decide what a
purchaser would have been likely to
give for the RE.
Griffiths
calculated the value of Portion 3 by applying the rate of R55 000 per
hectare derived from the value of the whole of the
RE. He said that
in his opinion there were "no material features which
can
be converted into monetary terms to suggest that the value of that
portion is any different than the R55 000 per hectare which
I
place on that whole. So the R55 000 per
hectare times eight and a half hectares is R467 000". This he
rounded up to R470 000.
It was contended on behalf of the
plaintiffs however that the figure of R55 000 per hectare could not
39
fairly or
properly apply
pro rata
to the 8,5 hectares of Portion 3. The
learned trial Judge was inclined to agree that the value of Portion 3
was greater than the
portion of the RE which remained after
expropriation. It was in certain respects better situated and had
other advantages. Moreover,
the development of the RE as a whole
would also have been financially advantageous to the owner.
"Even
if regard is had to the evidence as a
whole
and that which was observable at the
inspection
in
loco
,
I
have no given facts on
which
to determine an additional value for
the
expropriated portion in relation to the
whole
once Gerke's method of evaluation is
rejected.
I
have given this
aspect of the
matter earnest consideration
in view of the
factors
I
have mentioned. It seems to me
that
in view of the fact that
I
consider
that
there is merit in the contention that
the
expropriated portion has some
additional
value
I
would be entitled to adopt the figure
which
can be determined from the transaction
relating
to the subject property itself, that
40
is the whole of
the remaining extent of Harrowdene when transfer was passed from the
Company to the trusts. This would have the effect
that the valuation
of Gerke (?Griffiths) of R470 000 is increased to a figure of R491
750 and that is the figure which
I
propose
to adopt."
It is apparent. that McCreath J
increased by R21 750 the valuation of R470 000 which was based on
Griffiths's valuation of R55 000
per hectare. The figure of R21 750
was arbitrary in the sense that it was in no way related to the
"additional value" of
Portion 3 - it was obtained simply by
applying the f igure of R57 851 which was the rate per hectare
calculated from the price in
the company/trusts transaction and had
nothing to do with the "additional value".
It is clear that the evidence of
Griffiths can be criticized. The method by which he arrived at R55
000 per hectare was not completely
satisfactory, and plainly, if
41 there were anything better on
offer, an assessment on that basis would not be the assessment of
choice. Similarly, Griffiths's
failure to attribute a higher value to
Portion 3 than to the rest of the RE is open to criticism. But this
court will not set aside
the award by the trial court unless it is
satisf ied that it was wrong. See
Estate Marks
(
supra
)
at 253 H. It does not follow merely from the fact that an
unsatisfactory method was used, or that an arbitrary figure was used
by
the trial judge, that the conclusion was incorrect. Griffiths's
view was not out of line with the admission made by the plaintiffs.
As McCreath J said in his judgment, the trial court had "no
option but to fall back on the comparable sales approach adopted
by
Mr Griffiths". He recognized that there might be criticisms with
regard to Griffiths's method, but considered that "(his)
is the
best evidence before the court and the court is therefore dependent
thereon in endeavouring to arrive at
42
a value itself".
I
am in entire agreement.
In
regard to the submission made on behalf of the
appellants
that a solatium of R10 000 should have been
awarded
to each of the plaintiffs,
I
am
on this point in
respectful agreement with
Milne JA.
I
would make the following order:
"The
appeal is dismissed with costs, including the costs consequent on the
employment of two counsel".
H
C
NICHOLAS
CASE NO: 606/88 /wlb IN THE
SUPREME COURT OF SOUTH AFRICA APPELLATE DIVISION
In the matter between:
NORMAN NATHAN SHER N O
First
Appellant
[1st Plaintiff in the Court
a
quo
]
JULIUS FEINSTEIN N O
Second
Appellant
[2nd Plaintiff in the Court
a
quo
]
NEVILLE SWEIDAN N O
Third
Appellant
[3rd Plaintiff in the Court
a
quo
]
LAWRENCE ALFRED MEYEROWITZ N
O
Fourth Appellant
[4th Plaintiff in the Court
a
quo
]
ARTHUR JACOB AARON N O
Fifth
Áppellant
[5th Plaintiff in the Court
a
quo
]
ROBERT LAPEDUS N O
Sixth
Appellant
[6th Plaintiff in the Court
a
quo
]
YUDEL BACHER N O
Seventh
Appellant
[7th Plaintiff in the Court
a
quo
]
LAWRENCE TRAKMAN N O
Eighth
Appellant
[8th Plaintiff in the Court
a
quo
]
BERNARD HERBERT N O
Ninth
Appellant
[9th Plaintiff in the Court
a
quo
]
and
THE ADMINISTRATOR OF THE TRANSVAAL
Respondent
[Defendant in the Court
a quo
]
CORAM: CORBETT
CJ, BOTHA, MILNE, STEYN
JJA et NICHOLAS AJA
DATE OF HEARING: 17 May 1990
DATE OF DELIVERY: 23 August 1990
JUDGMENT
MILNE JA:/
-1-
MILNE JA:
The appellants are the trustees of
three trusts.
These trusts owned in undivided
shares a certain piece of
land in the following proportions:
the
I
W Jacobsen Trust
one
half,
the Jacgueline Harrowdene Trust
one quarter and
the Irene Harrowdene Trust
one.
quarter.
This land (the original land) is
described as follows:
"The remaining extent of the
Farm Harrowdene 4 Registration Division IR Transvaal in extent
28.7113 hectares."
By notice of expropriation dated
25 March 1985 the
respondent, acting in terms of s 2
of the Expropriation Act
No 63 of 1975 (the Act),
expropriated a portion of the
original land. This portion is 8.5
ha in extent and is
described as "Portion 3 of
the Farm Harrowdene 4
Registration Division IR
Transvaal". In the expropriation
notice the respondent offered the
appellants the sum of
-2-
R510 000 as compensation for the
expropriated portion and R10 000 in terms of s 12(2) of the Act. The
total of R520 000 was paid to
the appellants on 25 March 1985.
The appellants and the respondent
did not agree upon the amount of compensation to which the appellants
were entitled under the Act.
The relevant date for
determination of the compensation payable under the Act was fixed as
8 April 1983. This was agreed between the
parties because previous
notices of expropriation were withdrawn as will appear later.
The appellants originally claimed
that the amount which the expropriated portion would have realised if
sold on that date by a willing
seller to a willing buyer was not
-3-
less than R3 million. Orders were
originally sought determining the amount of compensation to which the
trusts were, respectively,
entitled on the basis of that amount. An
additional amount of R30 000 was also claimed in terms of s 12(2) of
the Act. On 17 February
1987 the appellants' attorneys notified the
respondent's attorneys that the amount of the claim was reduced from
R3 million to R1
330 000. A notice of amendment reducing the amount
of R3 million was received by the respondent on 25 May 1987 but this
reduced the
claim not to R1 330 000 but to R1 360 000.
The trial court determined the
amount of compensation to be paid to the appellants in terms of s
12(1)(a)(i) of the Act as the sum
of R491 750 payable as follows: (a)
To the first to third appellants (representing the
I
W
Jacobson Trust) the sum of R245 875;
-4-
to the fourth and sixth
appellants (representing the Jacqueline Harrowdene Trust) the sum of
R122 937,50; and
to the seventh to ninth
appellants (representing the Irene Harrowdene Trust) the sum of R122
937,50.
In terms of s 12(2) of the Act the
sum of R10 000 was added to the sum of R491 750. It was also ordered
that interest was payable
on the sum of R491 750 at the interest
rates prescribed in terms of s 26(1) of the Exchequer and Audit Act
1975, for the period commencing
60 days after 8 April 1983 and
terminating on 25 March 1985. As the amount awarded was less than
that paid by the respondent, the
court ordered the appellants jointly
and severally to pay the respondent's costs including the costs of
two counsel and the qualifying
fees of certain expert witnesses. The
appellants appealed to this court with leave of the trial
-5-court.
Three notices of expropriation
were issued in this matter. The first is dated 30 March 1983 and in
that notice the area expropriated
measured 8.4995 ha. A company,
Harrowdene Estates (Pty) Ltd, was the owner at that time. At the
request of that company the notice
of expropriation was withdrawn and
further expropriation delayed until the transfer of the original land
to the three trusts had
occurred, the arrangement being that when the
property was re-expropriated the market value would be determined as
at 8 April 1983.
It was also agreed between the parties that the
respondent would, in the meantime, be entitled to take possession of
the property.
A second notice of expropriation was issued but also
withdrawn at the request of the owner. Eventually in March 1985 the
original
land was transferred to the three family trusts in undivided
-6-
shares and thereafter, on 25 March
1985, the third notice of expropriation was served.
The respondent initially pleaded
that the amount to which the appellants were entitled in terms of s
12(1)(a)(i) of the Act did not
exceed R470 000 but this figure was
subsequently amended to R510 000 being the amount offered in terms of
the notice of expropriation.
The trial court described the
original land as
follows:
"It appears herefrom that the
property in question lies within the Sandtpn municipal area. It has a
slope from south to north
downwards, roughly; possibly a more
accurate description would be a downward slope in a north-westerly
direction. The plans also
indicate that the expropriated land, as
well as the remainder of the property registered in the name of the
trusts, are adjacent
to the residential areas of Gallo Manor and
Wendywood and are also in the vicinity of two clubs known as the
Cedar Park Club and
the Johannesburg Country Club.
-7-
It does not
appear to be challenged in any way that the area in question is a
good residential area. There appears to be a cert
á
in
difference between the witnesses as to whether it is to be regarded
as an excellent residential area, or a good residential area
although
not in the upper standard of residential areas, but
I
do not think a great deal turns on this
particular aspect. It is also not in dispute that the land is well
located in relation to
recreational, educational and shopping
facilities. It is apparent from the documents before the court that
it is in close proximity
to the M1 freeway between Johannesburg and
Pretoria.
I
have
referred to Kelvin Drive. There is to the immediate west of the
remaining extent, as it is subsequent to expropriation, andalso
to
the west of the expropriated portion of land, an existing street
known as Kelvin Drive. The plans for development of the property
indicate an extension of that street which would have the
effect
of separating the expropriated portion from
the
present remainder. From the evidence it is apparent that the Sandton
municipality had initially planned that this extension of
Kelvin
Drive would be 30 metres wide. This was subsequently changed to a
width of 40 metres."
Although the original land was
zoned in terms of the relevant Town Planning Scheme for use "for
agricultural
-8-
purposes" at the relevant
date, it was common cause that, as at that date, it was ripe for
development for special residential
purposes and indeed the plans for
such development had already been prepared.
The appellants' main witness was
Dr Gerke who was
described by the trial court in
the following terms:
"Dr Gerke, a township
developer in his own right and who is also a town planner and a land
surveyor and also a man with considerable
experience in these
fields".
His evidence was that there were
no sales of land for
township development which were
sufficiently similar to fall
within the category of comparable
sales. He accordingly
attempted to arrive at the
difference between the value of
the original land and the value of
the balance after
expropriation on the basis of what
he called a "static
residual calculation". This
involved determining the
-9-
expenditure in regard to the
lay-out of the township before the expropriation took place as well
as the income to be derived from
the sale of erven in such township.
A similar calculation in regard to the expenditure involved in laying
out a township on the balance
of the remaining extent after the
expropriation of portion 3 aforesaid was also done, as well as.a
calculation of the income which
would be received from the sale of
erven in the latter township. The difference between the net income
was then said to determine
the value of the expropriated portion.
This differs from the usual residual calculation in that it takes
revenue and costs as if
they were, respectively, received and
incurred at the date of expropriation without making any allowance
for the delay inevitably
experienced in obtaining the necessary
approval of a proposed township. Gerke also adopted the approach that
the original land had
a potential for development for office purposes
and more particularly
-10-
for development as an "off
ice park". This type of development apparently envisages office
buildings which are of a relatively
low height and set in park-like
surroundings. On the basis of this approach he considered that a
prospective purchaser would have
been prepared to abandon the 30%
profit for which a developer would normally allow, in the hope of
realising this potential and on
the basis that, should that
particular potential not materialise, he would be able to develop the
property as a residential township
on a "break-even" basis.
The main witness for the
respondent was Mr
Griffiths, who is described by the
trial court as
"a valuer of several years
standing and with considerable experience of township land and the
development of townships although
not possessing any personal
experience as a township developer of any great note ...".
The respondent also called two
town planners namely Mr
-11-
Malherbe and Mr Ferero. Neither of
these persons is a
valuer but each is a town planner
"of considerable experience
and each is well acquainted with the town planning principles to be
applied and the town planning
provisions applicable within the
municipal area of Sandton at the time of the expropriation."
Malherbe was in the employ of the
Sandton Municipality at
the time of the expropriation. The
respondent's witnesses
were of the view that there were
comparable sales and that
the value of the expropriated
portion should be determined
having regard to such sales.
The learned trial judge, after
considering the
evidence of Gerke, summarized his
views as follows:
"I
am
of the view that Gerke' s evidence in this particular case, and
without in any way criticizing his integrity, is unacceptable and
cannot be relied upon. In consequence the court has no option but to
fall back on the comparable sales approach adopted by Mr Griffiths."
-12-
The effect of the evidence of
Griffiths is
summarized by the trial court as
follows:
"... what Griffiths did was
to establish what he called a bottom line and a top line for the sale
of township property during
1982 and the limits whereof were
approximately between R30 000 and R40 000 per hectare. He accepted
the fact, which indeed was common
cause, that there was an increase
in the values in the property market between 1982 and 1983. Having
regard to that factor and to
the várious sales, and making
adjustments for those differences with regard to location and area
which might be required,
as well as to the improvements situated on
certain of the properties, he ultimately arrived at a unit value of
R55 000 per hectare
for the 28.7113 ha comprising the whole of the
remaining extent of Harrowdene [the subject land]. On this basis he
concluded that
the value of the expropriated land, namely Portion 3
aforesaid, was R467 500 at the relevant date, which he rounded off to
R470 000
to arrive at his valuation."
The trial court did not however
fix this figure as the value
of the
expropriated property but the figure of R491 750.
I
shall, at a later stage, deal with
how the learned judge
arrived at this figure.
-13-
I
am,
with respect, unable to agree with the trial
court's finding that Gerke's
approach to the valuation of
the expropriated portion was "not
entirely objective" or
that he was "ill-prepared".
In my judgment, however,
Gerke's approach was faulty in
several material respects.
There is some substance in the
criticism advanced on behalf
of the respondent that Gerke's
static residual valuation is
not really a valuation but "merely
another viability study"
aimed at what the owner of the
balance of the original land
after expropriation could afford
to pay for the expropriated
portion. As the trial court points
out, furthermore, this
method
"... takes income and
expenditure as at a fixed date, being the date of the original
expropriation without making any allowance
for a time factor in
regard to the application for and approval of a township on the
property and discounting the figures arrived
at in order to make
provision therefor."
It was common cause in the appeal
that it wóuld be
-14-
reasonable to
assume a period of three years between the date of application and
the date of approval of a township even if it were
for a purely
residential township. Mr Heher, for the appellants, submitted that
this factor was taken into account in the 30% that
would normally be
deducted from the value of the land as representing the developer's
profit. It was not, in fact, taken into account
in Gerke's main
calculation but
I
shall
deal with that point in a moment. 30% is taken to represent the
profit that the hypothetical developer would require to make
on his
expenditure in return for his time, labour and expertise. It does
not, as
I
understand
Gerke's evidence, take into account the loss of interest to the
developer on his capital outlay during the three years
which would
elapse before the township was approved. It is true that Gerke said
that in his experience (which was very considerable)
the price of
township stands rose faster than the costs of development,
-15-
but that does
not deal with the point that the developer would loose interest on
what he had paid for the property -either in the
form of interest on
overdraft if he had borrowed money for that purpose or loss of
interest on an alternative form of investment.
If one were to take
Gerke's . starting figure of R1,8 million and, as he suggests one
should do, deduct the developer's 30% profit,
this gives a figure of
R1,26 million as the figure which Gerke suggests a developer could
afford to pay for the expropriated portion.
Simple interest cm this
amount calculated at 15% over a period of 3 years would amount to
R567 000.
I
agree
with the trial court's comment that the loss of interest would have
made the whole proposition unacceptable for any purchaser.
The basis
on which Gerke suggested that the usual developer's profit of 30%
should be omitted from his calculation was that the original
land had
a potential for office park development. The developer would, so he
said,
-16-
have been
prepared to omit this figure from his calculations of the worth of
the property because if such development were permitted
his profits
would be very great and if it were not permitted he would "break
even" with a residential development.
I
agree with the learned judge's finding that
the prospects of an office park development were not shown to be such
as to be likely
to influence the price which a hypothetical developer
would be prepared to pay. In any
event,
even if such prospects had been demonstrated it is by
no
means clear to me why it would follow that the developer would, in
consequence, not include any allowance at all for his profit
in his
calculations.
For these
reasons
I
do not
think that the rejection of Gerke's approach can be faulted.
The trial court found that
"criticism can be
-17-
levelled at the residual
calculation done by Griffiths"
inter alia
because he at no
time did any residual
calculation on the balance of the
property after
expropriation or on the
expropriated portion itself. He
said, however,
. "criticism though there may
be with regard to the method adopted by Mr Griffiths it is, in my
judgment the best evidence before
the court and the court is
therefore dependent thêreon in endeavouring to arrive at a
value itself."
I
consider
that Griffiths' evidence is open to serious criticism. In the first
place
I
agree
with the learned judge
a guo
that his residual calculation is not reliable. Quite apart from the
fact that he made no
residual calculation
in respect of the expropriated portion,
and
that he failed to take into account that the seller is entitled to
use monies paid on account of the purchase price of land prior
to
actual proclamation providedhe puts up
-18-
adequate guarantees, he projected
present day income and expenditure for three and a half years and
then discounted them back to the
present day. This, as Gerke
demonstrated, was fallacious.
There are, however, more serious
objections. They may summarized as follows:
He misconceived the nature of
"comparable sales" with the result that he took into
account sales that were not truly comparable.
In establishing what he called "a
bottom line and a top line" for the sale of township property
during 1982 he failed
to take into account factors which invalidated
the "bottom line figure".
He simply took the average value
per hectare of the original land and applied that to the .
expropriated portion without taking
into account:
-19-
(i) the greater value per hectare
of the expropriated portion because of its better physical features;
(ii) the fact that the
expropriated portion was able to be developed more densely than the
balance i.e. was able to produce more erven
per hectare;
(iii) the value of the
expropriated portion as
part of the original land i.e. he
valued
it as if it were a property
considered
in isolation.
(d) He failed to give proper
weight to the most
important of the comparable sales
which he said he
relied on namely the sale of the
original land
itself.
As to (a)
:The learned trial
judge quoted a portion
-20-
of the judgment
of Muller JA in
Minister of Agriculture
v
Davey
1981 (3) SA 877
(A)
at 902E - 903B and it bears
repetition:
" The comparative method of
determining the market value of expropriated property is, of course,
well-established. This Court
has from time to time said that,
generally speaking, prices paid for comparable properties in the
neighbourhood afford the most satisfactory
guide in determining
market value. But, it has also stated that evidence of such
transactions should be considered with great care
and circumspection
(
Minister van Waterwese v Von During
1971(1) SA 858 (A) at
871A). This is necessary because the weight and cogency of such
evidence depends to a very large extent upon
the degree of similarity
of the comparable sales. In applying this method of valuation, the
Court must be satisfied that the transactions
are sufficiently
similar to afford a fair comparison. This is always a question of
degree as to which no hard and fast rules can
be laid down. The first
matter to be considered, in such a case, is whether the land sold is
similar, and here regard must be had
to factors such as the location
of the land, its size, physical characteristics, purposes,
surroundings and so on. It is also necessary
to look at the sale
itself. The purchase price should not be accepted without further
analysis because factors such as the time of
the sale, the
circumstances of the sale -
-21-
whether it is a free open market
transaction, or a forced sale, or a sale under special circumstances
- and the conditions of sale,
may all have a bearing on the purchase
price agreed upon. Evidence may also show that, for some reason or
another, a particular sale
is out of line with the prevailing market
value of such land. (See Cripps Compulsory Acquisition of Land 11th
ed paras 4-193, 194;
American Jurisprudence 2d vol 27 "Eminent
Domain" paras 427 and 429; Gildenhuys Onteieningsreg at
132-134.)
There is a further reason why
evidence of comparable sales should be considered with
circumspection. It is often necessary to make
adjustments to allow
for the effect of dissimilarities. When this occurs - and it happens
more often than not - two problems arise.
The first is that the more
adjustments one is reguired to make, the less cogent the evidence
tends to become. The second is that,
if adjustments are made, it is
often very difficult to put a money value on them."
The concluding words of this
passage suggest that where it is reasonably practicable to put a
money value on the dissimilarities then
that should be done. In my
view Griffiths failed to do so even when it was reasonably
22-
practicable to do so. Furthermore,
he did not follow the
guide-lines laid down in
Davey
's
case (
supra
) as to what was
a comparable sale. In the first
place he demonstrated that
he has a rather curious notion of
what is a comparable
property. Having said that
"where there are aspects
which make the thing [i.e. the property] patently dissimilar it may
not prevent it from being used as
a comparable"
the following passage then occurs
in his evidence:
"I
am
sorry, you say if there are aspects which make it
patently
dissimilar it may not prevent it from being used as
a comparable? No because there
may be aspects of the
property which have comparability.
There may be a particular aspect, the property may have a river
running through it and our property
has not. The fact that it has got
a river running through it does not mean that you kick it out and
kick it into touch as not having
comparability. But there are, say
there can be features of no similarity is what I'm saying but that
does not stop it being a comparable."
Nor was this notion confined to
his evidence under cross-
examination. He revealed a similar
approach in his evidence
in chief. It was presumably this
approach which led him to
-23-
regard the area known as Wendywood
Ext No 8 as a comparable
property. This he regarded as a
comparable area for
residential erven despite the fact
that he was compelled to
concede in cross-examination that
prices obtained for erven
in that township were wholly
against the agreed general
trend of township prices in the
general area under
consideration including the
original land. When this was
put to him, he again demonstrated
to my mind a material lack
of comprehension as to what
constitutes a comparable sale.
"Please,
I
am not suggesting that your statement about
the state of the market was incorrect.
I
am
saying that this township [Wendywood Ext No 8] does not reflect the
state of
the market
That
I
accept, that
this, the conformity of
sales is not in line over that
period with what in fact
happened elsewhere in the stand
market.
Yes.
And it indicates that there were
factors affecting that
township, extraneous factors,
which you have not told His
Lordship about That may be so.
How can you say then that the
stand prices obtained in this township are comparable in any way to
those which would have
been obtained on the subject
property They are evidence
of sales to the extent that any
purchaser of erven in the market at the expropriated date,
expropriation date, had
-24-
alternatives of stands to acquire
and any purchaser must be considered to be a discerning purchaser and
he would look to see what
is available in the market. That is the
real world factual situation of that. But that does not render them
comparable for the purposes
of
ascertaining market value? They
are transactions which
occur in the market. That is what
comparables are about."
Indeed there are passages in his
evidence which suggest that
instead of examining the area with
the object of trying to
find truly comparable sales and
then (after making
appropriate adjustments for
variations of the kind referred
to in
Davey
's case,
supra
)
arriving at some kind of price
trend, he appears to take a
particular sum of money and
thereafter to try to ascertain
what sort of property this
sum would buy at the relevant
date. This is particularly
noticeable when he is dealing with
one of the properties
which he regarded as directly
comparable with the original
land, namely Hurlingham Ext No 5.
After referring to
differences between this property
and the original land he
said:
-25-
"But
I
think once one has gone through all those
and tried
to adjust for them at the end of
the day R4 050 000, that is
what R4 050 000
bought you in 1982, and in using it as a comparable
I
think if we look at our 28 ha of Harrowdene
[the subject land] it does not take an
awful lot of logic to
say that we must be
less than R4 million for the whole of Harrowdene but that is what R4
million bought you in the market."
And then again:
"My adjustment on Hurlingham
was a relativity [
sic
] adjustment on the basis that Hurlingham
at R4 million, that was what you could buy, the R4 million was R30
000 a hectare and my
adjustment was that the rate per hectare on the
subject property would be more."
This impression is confirmed by
respondent's own heads of
argument in which it is stated
that
"Griffiths
determined what a given sum of
money
would
purchase at the relevant time ...".
How, one wonders, does one
determine the given sum. This
savours of putting the cart before
the horse. Furthermore,
having conceded that there were
differences between the
original land and certain of the
properties which he relied
. on as being comparable, and
having said that he made
-26-
adjustments for
such differences it is quite apparent that,
in
fact, he made no adjustments at all or failed to make the
proper
adjustments.
I
refer
again to the property described as Hurlingham Ext No 5. As the trial
judge points out the
total area of this
property was approximately 139 ha but "it
would
appear that the unusuable area for subdivision into erven was
approximately 101 ha." It was the respondent's case that
these
facts were well-known both to the seller, the Johannesburg City
Council and to the purchaser, Gencor. This is the property
which
supposedly provided Griffiths with his "bottom line". The
unit value on the basis that the property sold was 139
ha was R29 169
per ha. If however one takes into account the fact known to both the
contracting parties that of the total area only
101 ha was unusuable,
the unit value is almost R40 000. The "bottom line" was
therefore the same as the supposed "top
line". A further
factor for which it was common cause that allowance
-27-
or adjustment would have to be
made was the major difference in size between the original land and
Hurlingham Ext No 5. Taking only
the usable area of the latter it is
still more than three times the size of the subject land and this
accordingly (a) involved a
greater risk and (b) influenced the cost
of services. In fact, Griffiths himself, when dealing with another
property which he relied
upon as being comparable namely Portion 46
of the Farm Waterval, said that the figure of R80 515 per ha would
have to be adjusted
downwards because, being a smaller property, it
was considered by him to have a higher value than the expropriated
portion. A further
factor for which one would expect him to have been
able to make a reasonably accurate mathematical adjustment was that
the density
of units per hectare able to be "produced" on
the Hurlingham property was only 5,84 residential units per ha as
compared
with more than 8 per ha on the expropriated portion. He did
not even attempt to do so.
-28-
All the other transactions relied
upon by Griffiths (with the exception of the King David School
properties) provided a unit price
either virtually equal to or in
excess of the supposed "top line". Benmore Gardens Ext No 3
provided a figure of R39 591
per ha. This sale occurred just over a
year before the date of expropriation and no adjustment was made for
the Escom servitude and
a major road traversing it in arriving at the
figure mentioned. All the Waterval sales relied upon by Griffiths
provided figures
per ha well in excess of his "top line".
Admittedly adjustments had to be made because of the sizé of
those properties
as compared with the original land and because of
improvements on them but what adjustments had to be made was a matter
Griffiths
found himself unable to explain even in the broadest terms.
The King David School properties yielded a combined unit price of R35
347 per ha but Griffiths himself said
-29-
"I
do
not place a lot of relevance on ... these particular transactions."
The fact that the SA Board of
Jewish Education bought these
properties for a school may have
been a factor influencing
the price so that it would not
have been an ordinary
commercial transaction.
As to (b)
: This has already
been dealt with above.
As to (c)
: Griffiths
adhered obdurately to
the
view that the value of the
expropriated portion bore
the
same rate per hectare of market
value as the value of
the
balance
remaining after expropriation. The trial court
found however that this was
incorrect and that
the
expropriated
portion was
(i) better situated;
(ii) capable of producing a higher
density
of
-30-
development;.and
(iii) that it would be easier and less expensive to develop the
original land as a whole and that the development
of the property as
a whole would result in certain additional advantages to the owner.
It was
conceded by the respondents' counsel that these were factors which
were legitimately taken into account by the trial court.
Griffiths
made no allowance for any of these factors.
As to
(d)
: Griffiths vigorously supported the proposition that the
transaction in terms of which the company sold the subject property
to the
three trusts for
-31-
the sum of R1 661 000 on 16 June
is a
bona fide
and "arm's length" transaction. This
represents a unit price of R57 851 per ha. He nevertheless arrived at
the conclusion
that the original land was worth R55 000 per ha. He
gave no reason for taking the lower figure but it was, presumably, on
the basis
of what he regarded as other comparable sales and in
particular his "bottom line" figure of R30 000 per ha in
the previous
year. For the reasons already indicated this bottom line
figure was not reliable, and furthermore even Griffiths conceded that
there
were a number of material differences between the original land
and all the properties which he regarded as comparable.
The evidence of Griffiths
therefore provided no reliable foundation for a finding that the true
value of the expropriated portion
was R55 000 per ha. In fact, on his
-32-
own
evidence, even if one assumes that he was correct in
simply
taking the value per ha of the expropriated portion
as
the average per ha paid for by the whole of the original land by the
trusts, that value was R57 851 per ha. But as
I
have already pointed out the learned trial
judge found that
it would be incorrect to
take the value_per ha of the
expropriated
portion as the average per ha for the whole. From this it follows "as
the night the day" that the value
per
ha of the expropriated portion in the view of the trial
judge
clearly exceeded the sum of R57 850 per ha.
I
have
already
referred to the fact that Griffiths' figure of
R55
000 per ha works out to a total of R470 000 for the expropriated
portion and that the trial court did not fix
this
figure as the value of the expropriated property but
the
figure of R491 750. Translated into terms of money, it is clear that
what the learned judge did, was to take the
proportion
which the expropriated portion bore to the
-33-
original land
and to allocate that portion of the purchase price of R1 661 000 to
the expropriated portion. He thus took 8.5/28.7113
X
R1 661 000 and arrived at the figure of
8.5/28.7113
R491 740,18 which he then rounded
off to R491 750.
The figure of R1 661 000 is, as
already mentioned, the price which the trusts paid for the original
land. The basic facts relating
to this transaction are not in issue.
In fact it was common cause before us that the original land was
indeed sold by the company,
Harrowdene Estates (Pty) Ltd, to the
three family trusts of which the appellants are trustees for R1 661
000 on 16 June 1983, and
that this price was arrived at on the basis
of a valuation procured by the trustees from a certain Mr Balme (who
in fact valued it
at that figure). This took place just over two
months after the (agreed) date of expropriation. It was submitted on
behalf of the
appellants that, in view of the fact that this was, in
effect, a transaction between, and for the benefit
-34-
of, members of
the family of Isaac Wilfred Jacobson and Barney Jacobson who were the
sole shareholders in Harrowdene Estate (Pty)
Ltd, it could not be
considered to be an ordinary "arm's length" commercial
transaction. There is something to be said
for this proposition. See
Gildenhuys: Onteieningsreg p 272 and the authorities referred to
under Note 8. The trial court however
rejected this argument because
interest was charged on an agreement between Barney Jacobson and the
Irene Harrowdene Trust whereby
the former sold to the latter his
shares in and the loan to the company Harrowdene Estates (Pty) Ltd.
I
do not think this really supports the
learned judge's reasoning. In the first place, this is not the
transaction in terms of which
the transfer of the original property
(and not shares) to the appellants was effected. Secondly, interest
was only payable on the
outstanding balance of the purchase price
from the commencement of the third year from the date of the
agreement. Be that as it may,
if one finds, as did the
-35-
learned judge
a guo
, that
this was an arm's length
transaction then it affords, on
the face of it, the most
reliable evidence of the market
value of the original land
at the date of the expropriation.
As the learned judge
himself remarked
"As far as this particular
property is concerned it would, of course, if representing a true
sale on an open market, be the best
possible comparable".
This
proposition was conceded, indeed vigorously supported, in the
respondent's heads of argument. In the judgment prepared by Nicholas
AJA which
I
have
had the privilege of reading, he finds that "... although this
transaction was not evidence against the TPA it was cogent
evidence
against the plaintiffs".
I
have
difficulty with
the notion that the
transaction was not evidence against the .
respondent
("the TPA"). The valuation of Balme and the
ó
ther
documents relating to the transaction were put in and
-35A-
relied
upon by the respondent's counsel during the cross-examination of
Gerke. Moreover, Griffiths in his evidence in chief, having
first
testified as to the experience and (by implication) reliability of
Balme, gave evidence to the effect that this was to be regarded
as an
arms-length transaction and relied upon it as supporting his
valuation. Having rejected the argument that it was not an arm's
length transaction the learned judge must have found that it was
indeed a true sale on an open market. There was no suggestion either
in evidence or in argument that it was an inflated price. Cf
Southern
Transvaal Buildinqs (Pty) Ltd
v Johannesburg City Council
1979(1) SA (W) 949 at 956D. That being so, it follows that the value
per ha of the original land on the basis of a willing buyer
and a
willing seller on the relevant date was at least R57 850. If,
however, one simply allocates the same proportion of this price
to
the expropriated portion as it bears to the balance of the property
then that entirely
-36-
fails to take into account what
the learned trial judge set
out to do namely, to make
allowances for the three factors
already referred to. The allowance
which the learned judge
a quo
in fact made for
these factors was the figure of
R21 750. Here, as in
Davey
's
case
supra cit
, where a
considerable number of adjustments
were required to be made
the court
"... had to place a somewhat
arbitrary money value on such adjustments."
There is evidence that the density
of development on the
expropriated portion was
approximately one quarter higher
than that possible on the balance
remaining after
expropriation and, taking into
account the other factors
which the trial court considered
placed an additional value
on the expropriated portion in
relation to the whole, it is
arguable that a substantially
higher sum than the R21 751
allowed by the court
a quo
should be added. There is,
however, no
means which
I
have
been able to ascertain to
-37-
calculate such
a figure on a rational basis. On the other hand
I
certainly do not think it is unfair to the
respondent
if one were to take the figure
fixed by the trial court.
It follows that, in my view, the
figure which should, on the basis of the trial court's findings, have
been determined as the value
of the expropriated portion, is at least
R513 500 (R491 750 + R21 750). While R21 750 is a relatively
substantial sum, it represents
a small figure expressed in terms of a
percentage. In
Lornadawn Investments (Pty) Ltd v Minister van
Landbou
1980(2) SA 1 (A) the minority of the court regarded this
as a reason for not interfering with the order of the court
a quo
.
See the reasoning of Miller JA at p 18H-19F. This reasoning did not
however recommend itself to the majority. A judge, in determining
the
value of expropriated property is not exercising a discretion.
Estate
Marks v Pretoria City
- 37A -
Council
1969(3) SA 227 (A)
at 253E-F. As Rabie JA pointed
out at p 8B-C there are a number
of decisions of this court
to the effect that an appeal of
the nature under
consideration here is a full
appeal and as stated in
Union
Government v Jackson &
Others
1956(2) SA 398 (A) at p 419F-G
the determination of value
"though it relates to matters
that may in many respects be so uncertain and so difficult to
determine that no one can be dogmatic
about them, nevertheless
purports to be a finding of fact, a logical deduction from factual
data ...".
Consequently, as pointed out by
Corbett JA in
Minister of
Agriculture v Estate Randeree &
Others
1979(1) SA 145 (A) at
157E-F:
"... where it appears,
inter
alia
, that the trial court has adopted the wrong general approach
or has misconstrued the evidence or overlooked vital portions thereof
or drawn incorrect deductions therefrom and as a result of this has
arrived at a valuation which the Court of Appeal considers to
be
incorrect, then, in my view, proper grounds exist for interference on
appeal."
-38-
In that case it was held that the
manner in which the trial court made its determinations was faulty in
several respects and that,
as this had led to incorrect valuations,
there were good grounds for interference. Here, the trial court, in
effect, overlooked the
fact that, on its own reasoning, the
expropriated portion bore a higher value per ha than the balance
after expropriation and that,
on the basis (which it accepted) that
the sale of the subject property itself afforded the "best
evidence" of market value
at the date of expropriation, it
should have added the increased value to the value based on that
sale. The fact, therefore,. that
there is only a relatively small
difference between the sum determined by the trial court and the sum
which should have been determined,
does not relieve this court from
the duty of either making its own determination on the available
material or referring the matter
back to the court
a quo
. In
all the circumstances, it seems preferable that this
-39-
court should
make its own determination on the available material.
I
would accordingly determine the value of
the expropriated portion as R513 500.
The only remaining issues relate
to the question of the
solatium
to be awarded in terms of s
12(2) of the Act, the interest, and costs.
The trial court awarded a
solatium
of R10 000 and
added this to the determination of
R491 750. Although not
foreshadowed in the appellants'
heads of argument, it was
submitted that, on a proper
interpretation of s 12(2), the
amount of R10 000 should have been
added to the amount
payable to each of the plaintiffs.
This argument does not
appear to have been advanced in
the court below and in my
view it must be rejected. Ss (2)
reads as follows:
"Notwithstanding anything to
the contrary contained in this Act there shall be added to the total
amount payable in accordance
with
-40-
ss (1)(a)(i) in respect of all
land, including any portion of a piece of land, expropriated in terms
of the notice of expropriation
in question, an amount equal to 10% of
such total amount, but not exceeding R10 000."
This amount, is in terms, added to
the total amount payable
in respect of all
land
and
not to the amount determined as
the share due to each owner out of
that total amount. Cf
Huddlestone Motors (Pty) Ltd v
SAR & H
1980(4) SA 764 (N) at
767G-H. What has been expropriated
here is the land and not
the appellants' rights in respect
of such land. It surely
could not be suggested that if the
expropriated property had
consisted of 100 ha owned in equal
undivided shares by 100
owners and the value of the
property was determined as
R100 000 then each owner would be
entitled to R1 000 in
respect of his 100th share in
terms of s 12(1)(a) and
R10 000 in terms of s 12(2).
Reliance was sought to be
placed upon the fact that such an
award was made in the
unreported decision of
Boedel
Wyle Milner en Andere v Die
r41-
Stadsraad van Thabazimbi
delivered in the Transvaal Pro-
vincial Division on 18 October
1983. All that appears in
this regard in the judgment in
this regard is the following:
"Ingevolge die bepalings van
artikel 12(2) van die Onteieningswet, 63 van 1975, is die onderskeie
eisers ook geregtig op 'n
solatium
van 10% op die bedrag wat
aan elkeen van hulle betaalbaar is met h maksimum van R10 000 per
eiser."
The learned judge however gives no
reasons for this
conclusion and it appears likely
that the matter was not
argued.
The trial court awarded interest
to the appellants
as follows:
"Interest is payable on the
aforesaid sum of R491 750 at the interest rates prescribed in s 26(1)
of the Exchequer and Audit
Act 1975, for the period commencing 60
days after 8 Aprii 1983 to 25 March 1985."
There was no cross-appeal against
this order and accordingly
the correctness or otherwise of
that order is not an issue
-42-
which is before
this court. The appellants do, however,
seek
an order for interest on the increased amount which, it
was
submitted, this court should award, for the period commencing 60 days
after 8 April 1983 and concluding on 25 March 1985, and
thereafter on
the difference betweeh the increased amount (which
I
have held to be R513 500) plus R10 000, and
the total amount of R520 000 which was paid to the appellants on 25
March 1985. It is,
therefore, necessary to examine the legal basis on
which the trial court awarded interest. If that basis was correct
then this court
can properly award the interest now claimed; if it
was not, the trial court's order will stand because there was no
cross-appeal
against it. Here again the basic facts are not in issue.
Although the original notice of expropriation of 30 March 1983 was
withdrawn,
it was expressly agreed between the appellant and the
respondent that:
-43-
the market value of the
expropriated portion would be determined as at 8 April 1983;
the appellants would give the
respondent beneficial occupation of the property as if that had been
the date of expropriation.
The respondent in fact had the
right to beneficial occupation as from 8 April 1983 and that is the
relevant date when considering
the provisions of s 12(3) of the Act.
Klipriviersoog Properties (Edms) Bpk v
Gemeenskaps-ontwikkelingsraad
1984(3) SA 768 (T). S 12(3) of the
Act provides (omitting portions not material to this case) that.
interest at the standard interest
rate determined in terms of s 26(1)
of the Excheguer and. Audit Act, 1975 shall be payable from the date
on which the State takes
possession of the property in question in
terms of s 8(3). The effect of s 8(3) in the circumstances of this
case is that the State
had the right to take possession of the
property in
-44-
question on the expiry of 60 days
from the date of
expropriation. It was submitted on
behalf of the respondent
that s 12(3) had no application
since the obligation to pay
interest only arises where there
is an expropriation and,
since it is common cause that the
original notice of
expropriation was withdrawn, no
statutory obligation to pay
interest arose. The trial judge
found, however, that there
was nothing in the Act to prohibit
the parties coming to an
arrangement in regard to interest
and that it was implicit
in the arrangement which was made
that
".... if the defendant had
access to the property
no prejudice should result to the
plaintiffs, ... in consequence thereof."
I
agree.
I
would add that
since the respondent insisted
upon the dateof expropriation
being deemed to be 8 April
1983 it cannot be heard to say
that it was not. To hold
otherwise would be to allow
respondent to have its cake and
eat it and, as the learned judge
a
guo
held,
-45-
"... to adopt any other
approach would border on an immoral attitude... ."
It follows that, in my view, the
appellants are entitled to
interest as claimed on the
increased amount which should
have been awarded.
Finally, there is the question of
costs. While the amount by which the trial court's determination has
to be increased is relatively
small in relation to the total amounts
awarded, it is by no means insignificant and, in my view, the
appellants are accordingly entitled
to the costs of appeal. The costs
of the proceedings in the court.
a quo
fall to be determined by
the provisions of s 15(1)(c) of the Act. The difference between the
compensation awarded and the amount offered
is R21 750. The
difference between the amount of compensation awarded and the amount
last claimed, one month prior to the date for
which the proceedings
were
-46-
for the first
time place on the roll, is R1 308 250. This is on the basis that the
amount last claimed by the appellants one month
prior to that date
was R1 330 000. This was disputed by the respondent on the sole
ground that the letter of 16 February 1987 reducing
the claim from R3
million to R1 330 000 was not a "claim" as envisaged by the
Act. That is beside the point. The question
is whether that was the
amount of the claim at that stage. One would ordinarily ascertain
that amount from the pleadings but
I
do
not think that this is the sole source to be examined. If the
plaintiff has unequivocally and unconditionally stated in a letter
to
the defendant's attorneys that the claim is reduced (or increased) to
a particular amount on the relevant date, then it seems
to me, that
this is as effectual for the purposes of s 15 as a notice of
intention to amend the plaintiffs pleadings. The section
does not
deal with the situation where the claim, having being
-47-
decreased to a
particular figure one month before the relevant date, is thereafter
increased. Presumably this is because the legislature
envisaged that
by then some of the costs of trial would already have been incurred
and that the trial court would exercise its discretion
in terms of s
15(3). The appellants are accordingly entitled to 21
750/1 308
250
ths of their costs in the court below.
In the result
I
would make the following order:
A. The appeal is allowed to the
extent set out below,
with costs including the costs consequent
upon the
employment of two counsel.
B. The order of the court
a quo
is altered to read as
follows:
1. The amount of compensation to
be paid to the plaintiffs in terms of s 12(1)(a)(i) of the
Expropriation Act, No 63 of 1975
-48-
in respect of Portion 3 of the
Farm Harrowdene 4, Registration Division IR, Transvaal, is the sum of
R513 500 payable in the following
manner:
(a) To first to third
plaintiffs
inclusive the sum of R256 750.
To fourth to sixth plaintiffs
inclusive the sum of R128 375.
To seventh to ninth plaintiffs
inclusive the sum of R128 375.
In terms of s 12(2) of the
aforesaid Act there is added to the afbresaid amount of R513 500 the
sum of R10 000.
Interest is payable on the
aforesaid sum of R513 500 at the interest rates prescribed in terms
of s 26(1) of the Exchequer and Audit
Act 1975 for the
-49-
period commencing 60 days after 8
April 1983 and terminating on 25 March 1985 and thereafter on the sum
of R21 750 to date of payment.
4. The defendant is ordered to pay
21 750
of the plaintiffs
costs 1 308 250 ths
including the costs of two
counsel; such costs to include the qualifying fees of Dr Gerke and Mr
Bickley.
STEYN JA: Concurs
SAAKNOMMER: 606/88
IN DIE HOOGGEREGSHOF VAN
SUID-AFRIKA (APPéLAFDELING)
In die saak van:
NORMAN NATHAN SHER NO
Eerste
Appellant
(Eerste Eiser in die hof a quo)
JULIUS FEINSTEIN NO
Tweede
Appellant
(Tweede Eiser in die hof a quo)
NEVILLE SWEIDAN NO
Derde
Appellant
(Derde Eiser in die hof a quo)
LAWRENCE ALFRED MEYEROWITZ
NO
Vierde Appellant
(Vierde Eiser in die hof a quo)
ARTHUR JACOB AARON NO
Vyfde
Appellant
Vyfde Eiser in die hof a quo)
ROBERT LAPEDUS NO
Sesde
Appellant
(Sesde Eiser in die hof a quo)
YUDEL BACHER NO
Sewende
Appellant
(Sewende Eiser in die hof a quo)
LAWRENCE TRAKMAN NO
Agtste
Appellant
(Agtse Eiser in die hof a quo)
BERNARD HERBERT NO
Negende
Appellant
(Negende Eiser in die hof a quo)
en
THE ADMINISTRATOR OF THE
TRANSVAAL
Respondent
(Verweerder in die hof a quo)
CORAM
:CORBETT HR, BOTHA,
MILNE, STEYN ARR et NICHOLAS WAR
AANGEHOOR
: 17 MEI 1990
GELEWER
:" 23 AUGUSTUS 1990
UITSPRAAK STEYN AR
2
Ek het die uitsprake van my
kollegas Milne en Nicholas gelees. Ek stem saam met dié van my
kollega Milne AR, en met die bévele
deur hom voorgestel, maar
voel nietemin genoop om die volgende bykomende opmerkings te maak.
Die Harrowdene verkope aan die drie
familie trusts mag weliswaar die
eindresultaat wees van besluite deur Isaac en Barney Jacobson, maar
die verkoopprys was klaarblyklik
nie deur hulle vasgestel nie. Dit is
gegrond op die waardasie deur Balme, 'n persoon van aansien op sy
gebied.
Die feit dat die verkoopprys en
ander bepalings van die Harrowdene verkope nie op die aambeeld van
mededinging uitgeklop is nie het
nie noodwendig tot gevolg dat dié
transaksies nie 'n betroubare aanduiding is van wat 'n gewillige
koper aan 'n gewillige
verkoper sou betaal het nie. Dit is algemene
kennis en ervaring (na my oordeel altans) dat vele vrye
eiendomsverkope nie "aambeeld
transaksies" is nie maar
nogtans betroubare
3
aanduidings is van markwaarde. Die
"aambeeld element" is ook nie 'n statutêre vereiste
vir die bepaling van daardie
waarde nie.En die blote feit dat 'n
koper en verkoper ooreenkomstig die waardasie deur 'n betroubare
waardeerder hul kontrakprys
bepaal eerder as om dit self op eie
oordeel te probeer vasstel, is geen rede om hul transaksie buite
rekening te laat by die bepaling
van die markwaarde van die betrokke
eiendom nie. Dit is myns insiens trouens 'n versigtige en heel
aanvaarbare wyse van prysbepaling.
En dit is a fortiori so waar die
voornemende koper en verkoper onderskeidelik 'n familie trust en 'n
"familie maatskappy"
is omdat die persone by so 'n
transaksie betrokke in weerwil van die familie element uiteraard
vertrouensposisies beklee teenoor
hul onderskeie ihstellings. Daar is
na my mening geen houdbare aanduiding of suggestie dat dit nie die
geval by die "Harrowdene-Trusts"
transaksie was nie of dat
Balme nie 'n onbevange (en dus objektiewe) oordeel met sy
4
waardasie gevel het nie. Daar is
gevolglik geen goeie rede om daardie transaksie slegs te beskou as 'n
erkenning deur die appellante
maar nie as bewysmateriaal teen die
respondent ten aansien van die markwaarde van die onteiende gedeelte
nie.
Om te beslis dat 'n onteiende
nooit by die begrip "gewillige verkoper" ingesluit kan word
nie en dat sy houding of optrede
altyd buite rekening gelaat moet
word by die bepaling van markwaarde afgesien van die omstandighede
van 'n bepaalde geval, sal na
my mening verkeerd wees. Dit sal maklik
denkbaar tot gevolg hê dat belangrike feite van wesenlike
relevansie soms misgekyk
word met 'n gevolglik verkeerde vasstelling
van markwaarde. Dit is byvoorbeeld denkbaar dat die eienaar van
uiteindelik onteiende
grond voor ontvangs van die
onteieningskennisgewing en in onkunde van die feit dat die onteiening
van sy eiendom oorweeg word of
reeds op besluit is sy betrokke
eiendom teen 'n prys deur hom
5
bepaal vir verkoop aanbied, dat 'n
aantal gewillige, ongebonde, deeglik ingeligte en kompeterende
voornemende kopers wat in staat
is om te betaal, met daardie prys
tevrede is, dat die flinkste een onder hulle dan sy aanbod aanvaar om
die eiendom teen dié
prys te koop terwyl albei van hulle
steeds in onkunde is van die voorgenome onteiening, maar dat die
onteiening daarna geskied voordat
die transaksie behoorlik
gefinaliseer kan word. Indien so 'n feite-kompleks buite rekening
gelaat moet word by die daaropvolgende
bepaling van markwaarde van
die onteiende grond en 'n laer syf er dan in 'n
onteieningsgeding vasgestel word,
sal dit na my mening 'n
onregverdige resultaat wees.
Die reg moet by die beregting van
geskille as't ware sy voete op die grond hou deur al die relevante
feite in ag te neem. Word dit
nie gedoen nie faal die reg in sy doel,
wat die behoorlike regulering van die gemeenskap is, veral deur
vermyding of tempering van
6
geskille en konflikte op
regverdige wyse.
Indien, in die
bogemelde voorbeeld, die gebeure
wat die
onteiening voorafgegaan het nie in aanmerking
geneem is nie, en 'n
markwaarde laer as die reeds
ooreengekome verkoopprys vasgestel
word, sal die tereg
verbysterde onteiende, wat meesal die gewone
"man op
straat of op die plaas" sal wees, sekerlik met
die
oortuiging gelaat word dat die reg se voete nie op die
grond
is nie, in elk geval wat onteiening betref.
Daardeur kan hy maklik
beweeg word om die opmerking te
herhaal wat mnr Bumble teenoor die
heer Brownlow
kwytgeraak het (
OLIVER
TWIST
, hoofstuk 51), of meer nog,
di
é
van George Chapman in
REVENGE FOR HONOUR
III
( ii).
So
'n reaksie sal gewis nie bevorderlik wees vir die
aansien wat die
reg onder die burgery moet geniet om dit
in staat te stel om die
effektiewe en vreedsame ordening
van die gemeenskap te verseker
nie, en behoort gevolglik
vermy te
word.
M T STEYN
AR