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[2010] ZACC 20
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Offit Enterprises (Pty) Ltd and Another v Coega Development Corporation (Pty) Ltd and Others (CCT 15/10) [2010] ZACC 20; 2011 (1) SA 293 (CC) ; 2011 (2) BCLR 189 (CC) (18 November 2010)

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CONSTITUTIONAL COURT OF SOUTH AFRICA
Case CCT 15/10
[2010] ZACC 20
In the matter between:
OFFIT ENTERPRISES (PTY) LTD
….............................................................
First
Applicant
OFFIT FARMING ENTERPRISES (PTY) LTD
….....................................
Second
Applicant
and
COEGA DEVELOPMENT CORPORATION (PTY) LTD
…......................
First Respondent
PREMIER OF THE EASTERN CAPE PROVINCE
…............................
Second Respondent
MINISTER FOR PUBLIC WORKS
…........................................................
Third
Respondent
MINISTER FOR TRADE AND INDUSTRY
…........................................
Fourth
Respondent
Heard on : 3 August 2010
Decided on : 18 November 2010
JUDGMENT
SKWEYIYA J:
Introduction
This
matter comes before us by way of an application for leave to appeal
following a judgment of the Supreme Court of Appeal
1
in which that Court confirmed the decision of the South Eastern Cape
Local Division
2
(High Court) and dismissed the appeal with costs. In this Court, the
applicants seek an order compelling the respondents to decide

whether or not they intend to expropriate the applicants’
properties.
The
applicants collectively own approximately 505 hectares of land
within the Coega Industrial Development Zone (Coega IDZ), a
major
government initiative to develop a new deepwater port at Coega and a
surrounding industrial area near the city of Port
Elizabeth in the
Eastern Cape province.
3
The applicants complain that the respondents have, by continued
threats of expropriation of their land and other forms of conduct

over a period of approximately nine years beginning in 2000,
deprived them of their entitlement to the full use, enjoyment and

exploitation of their land. The applicants argue that they have thus
been deprived of their property in terms of section 25(1)
of the
Constitution.
4
The
other complaint by the applicants is that the long history of
threats to expropriate their property is prejudicial in the
light of
the first respondent’s failure to give lawful effect to them,
and it was argued that the failure to take a decision
is
administrative action subject to review as envisaged in the
Promotion of Administrative Justice Act
5
(PAJA). Furthermore, they contend that if this long process were to
culminate in an expropriation of their property, the expropriation

would constitute procedurally unfair administrative action in terms
of section 6(2)(c) of PAJA.
6
The
first applicant is Offit Enterprises (Pty) Ltd; and the second
applicant is Offit Farming Enterprises (Pty) Ltd (applicants).
The
first respondent is the Coega Development Corporation (Pty) Ltd (to
whom I refer interchangeably as the “CDC”
and the “first
respondent”); the second respondent is the Premier of the
Eastern Cape Province (Premier); the third
respondent is the
Minister for Public Works; and the fourth respondent is the Minister
for Trade and Industry (collectively referred
to as the
“respondents”). It should be noted at the outset that
the first respondent is currently operating in the
Coega IDZ, and
has been designated to do so by the Minister for Trade and
Industry.
7
The Department of Trade and Industry holds an “A” class
share in the CDC, and it appears that the only ordinary shareholder

in the CDC is the Eastern Cape Development Corporation (Pty) Ltd
which holds shares on behalf of the national and provincial

government. It should also be noted that it is common cause amongst
the parties that only the Minister for Public Works has the
power to
authorise any expropriation in the Coega IDZ in terms of the
Expropriation Act.
8
In
the directions that were issued in setting this matter down for
hearing in this Court, the parties were directed to address
the
following issues in written and oral argument:
Whether
the applicants have been deprived of their property in
contravention of section 25 of the Constitution;
If
so, by whom;
What
relief are the applicants entitled to?
The main
focus of this judgment will thus be on the issues set out in these
directions.
Before
I proceed further, there is one preliminary issue with which I must
first deal: that is, what type of entity is the first
respondent?
This is important to determine because, although section 8(4) of the
Constitution
9
and our jurisprudence
10
make it clear that the Bill of Rights applies to juristic entities,
whether section 25 is applicable to private entities is less

apparent. The CDC is a private company incorporated in terms of the
Companies Act.
11
However, the CDC is in reality a public entity acting in the public
interest; government has ownership in the company; and it
complies
with the definition of “organ of state” in section 239
of the Constitution.
12
The CDC is, in principle, no different from other entities in which
the government has a measure of
shareholding.
13
Accordingly, I am satisfied that section 25 applies to the first
respondent, and no further consideration need be given to the

horizontal application of section 25.
Legislative framework
Section
25(1) of the Constitution contemplates the deprivation of property,
and states that “[n]o one may be deprived of
property except
in terms of law of general application, and no law may permit
arbitrary deprivation of property.” The Coega
IDZ is governed
by the Manufacturing Development Act and the regulations
14
promulgated in terms of section 10 thereof. Whilst the 2000
regulations required an applicant for an IDZ operator permit to show

control over the land by way of ownership, lease or option, the 2006
amended regulations are far less stringent and require only
that
control is shown in “the detail and manner as indicated in the
guidelines”.
15
It is in terms of the amended regulations that the CDC’s final
operator permit was issued. The guidelines provide as follows:
“
The
term control of the land refers to ownership of the land by the party
applying for the IDZ operator permit and includes holding
of an
option over the land that will allow for ownership or servitude of
the land at the instance that the IDZ operator permit
is granted. A
spes
for
control in the near future may also qualify, but the applicant must
clearly set out what the nature of that control obtained
will be, as
well as the likelihood of that realising.”
16
The
operator permit does, however, provide that the CDC must submit
bi-annual reports to the Board
17
on its progress made in respect of expropriation proceedings.
Provision is made in the amended regulations,
18
the guidelines
19
and the operator permit for the possibility of certain portions of
land that fall within the designated area of the Coega IDZ
to be
excised at the decision of the Board. In particular, clause 14 of
the operator permit issued to the CDC states:
“
Should
the Board be of the opinion that after some period of deliberations
and/or a final court order/decision (i.e. where no further
appeal is
available, or where a further appeal is not advisable), the CDC will
not be able to obtain control of the area currently
indicated as
subject to expropriation proceedings, or any part thereof, the Board
may recommend to the Minister to amend the Operator’s
permit so
as to exclude that specific area or portion thereof.”
To date, no application for excision has been made by the CDC.
Background to the present matter
As I
have already mentioned, the first respondent has been tasked with
the development of the Coega IDZ. The first respondent
received a
provisional operator permit in February 2002, which was extended
from time to time as required.
20
A final operator permit was granted to the CDC in August 2007 in
terms of the amended regulations. The applicants own property

falling within the designated area of the Coega IDZ, comprising 8.1%
of that area. This is the only land within the Coega IDZ
over which
the CDC has, as yet, been unable to obtain control.
Previous attempts at expropriation
The
Premier has on two previous occasions attempted to expropriate the
applicants’ land for the purpose of transferring
it to the
CDC. According to the applicants, these attempts seemingly arose at
the instigation of the first respondent. However,
both these
attempts have been set aside, and there has to date been no actual
expropriation of any of the applicants’ land.
The
first attempt was made in February 2005, and was set aside by
Ebrahim J on the basis that the Expropriation Act did not confer
the
authority on the Premier to expropriate property.
21
Although Ebrahim J granted leave to appeal to the Supreme Court of
Appeal, the appeal was withdrawn. The Premier made a further
attempt
at expropriation in March 2007, this time attempting to expropriate
a road running through the applicants’ property.
When this was
challenged by the applicants, the respondents opted not to contest
the application and it was set aside by Plasket
J by an order of
court in April 2007.
22
Whilst
there is nothing wrong in law with seeking to expropriate only a
portion of land, such as a road, the respondents appear
to have gone
about this improperly in the past. It seems to me that it was at all
times open to the CDC to legitimately seek
to have the applicants’
land expropriated, provided that it complied with the law in its
attempts to do so. There have
been no attempts to expropriate since
April 2007, and no application has ever been made by the CDC to the
Minister for Public
Works for the expropriation of the applicants’
property.
23
However, it is clear that all the parties are now aware and in
agreement that it is only the Minister for Public Works who is

authorised to approve an application for expropriation.
24
Conduct prior to August 2007 of which the applicants complain
The
applicants and the first respondent have been engaged in
negotiations for the sale of the land since 2000. There are a number

of instances of conduct by the CDC of which the applicants complain,
which culminated in the launch of the High Court proceedings
in
August 2007.
25
In addition to the attempted expropriations to which I have referred
above, the conduct complained of can be grouped into three

categories: the spoliation of the applicants’ land; the
re-zoning application; and the ongoing threats of expropriation.
There
have been three instances of “spoliation”. In 2004, the
CDC’s employees erected a vibracrete fence around
a gravesite
on the applicants’ land; in September 2006,
plant
and earth-moving equipment was moved onto the applicants’
land, but we are told that the CDC ensured that the contractor

removed the equipment and that the land be rehabilitated; that same
month, a butterfly reserve was established by the CDC on
the
applicants’ property, but the CDC tendered apologies on behalf
of its employees and offered the applicants a bank guarantee
to
cover the costs of fencing the butterfly reserve. Whilst it is not
clear what was done about the first instance complained
of, it
appears that the other two complaints were rectified by the first
respondent in due course, and no permanent damage persisted.
Regarding
the re-zoning application, it is apparent that the applicants sought
to have their property re-zoned from being an agricultural
zone to
being an industrial zone for the purpose of establishing an
industrial park. From the correspondence that was placed
before this
Court, it appears that the CDC asked for the application not to be
considered until the appeal regarding the expropriation
of land had
been finalised, and the required environmental documentation had
been submitted. Accordingly, no decision regarding
the re-zoning
application was taken.
The
third category of conduct of which the applicants complain comprises
the crux of their grievance: the repeated threats of
expropriation
that have been made by the CDC. As I have already indicated, the
applicants and the first respondent have been
involved in
negotiations for the sale of the property since 2000. However, these
have been unsuccessful due to the inability
of the parties to agree
on the selling price, and it appears from the correspondence that
what began as amicable negotiations
became more strained over time
as the parties failed to reach an agreement.
Despite
threatening to expropriate on numerous occasions, the CDC has never
made an application to the Minister for Public Works
for any
expropriation. In June 2007, after the two attempted expropriations
had been set aside, the applicants wrote to the CDC
and the Premier,
indicating that they intended to commence marketing the property on
the open market. They indicated further
that they were proceeding on
the basis that the CDC and the Premier “have no further
interest in pursuing the acquisition
of [their] property whether by
private treaty or expropriation”. They advertised the property
for sale in a national newspaper
(20 June 2007) at a selling price
of R40 million, and advertised the property as being “situated
in the heart of the Coega
Industrial Development Zone”.
In
response to this advertisement, the first respondent published an
advertisement in the same newspaper (26 June 2007), which
read as
follows:
“
In
reference to the press release sent to the media on behalf of Pam
Golding Properties about a ‘prime Coega site available
for
purchase’.
These are the facts:
The land referred to falls
within the proclaimed Industrial Development Zone (IDZ) boundary. The
Coega Development Corporation (CDC)
is in discussions with all land
owners within the IDZ to acquire their land, and is offering to
purchase this land at reasonable
market rates. The CDC has largely
succeeded with the option to purchase land, but where this option
does not yield positive results,
an alternative to expropriate land
in order to secure the control of land over the proclaimed IDZ
boundary will be taken. The CDC
has resorted to the expropriation
process in the past.
The same principle applies in
this case.”
The
applicants contend that this advertisement has diminished the market
value of their property, as indicated by the fact that
the highest
offer that they have since received has been of R30 million. It
warrants mention at this juncture that the selling
price sought by
the applicants has considerably increased since the negotiations
began, which can presumably be attributed to
the developments in the
area undertaken by the CDC. In 2001 the applicants were willing to
accept approximately R2.2 million
for the properties; in March 2003
the asking price had increased to R7 million; and by November 2003
the applicants were seeking
a price of R15.5 million. In June 2007
the applicants advertised the properties for R40 million on the
open market.
Change in circumstances from August 2007
There
is an important distinction to be drawn between what occurred prior
to August 2007 and what occurred thereafter. The significance
of
this is that in August 2007, the first respondent received its final
operator permit that was issued in terms of the amended
regulations.
As I have already stated, the amended
regulations afforded the CDC more leeway than they had whilst
operating in terms of the
provisional operator permit under the 2000
regulations. Accordingly, there was no longer the stringent
requirement
on the CDC regarding its control over the
applicants’ land, as this was removed by the amended
regulations. It follows
that there was no longer a pressing need for
the CDC to seek to have the applicants’ property expropriated,
and the CDC
has since taken no further steps to follow through on
the published possibility of expropriation. The change in
circumstances
once the final operator permit was granted to the CDC
had critical consequences for the argument proffered by the
applicants
in this Court: the source of the challenge shifted from
one focussed on the “law of general application” to an
argument
based on “conduct” that took place outside the
terms of that law. I will return to this issue in more detail below.
Proceedings before the High Court
Against
the backdrop of the advertisement, the applicants instituted
proceedings against the respondents in the High Court in
August
2007.
26
The applicants sought a declaratory order that any expropriation of
the applicants’ property, at the instance of any of
the
respondents for the benefit of the CDC, was neither permissible nor
lawful; in the alternative, they sought an order compelling
any of
the respondents desirous of expropriating their properties to do so
within a period of one month.
27
The
applicants justified the relief sought on the following bases: any
attempt to expropriate for the benefit of the CDC could
never be for
a lawful purpose as the CDC was operating in the Coega IDZ
unlawfully; it would not be competent for any of the
respondents to
attempt to expropriate in terms of either sections 2 or 3 of the
Expropriation Act;
28
and that given the long history of the matter, any attempt to
expropriate at such a late stage would amount to unfair
administrative
action in terms of PAJA.
29
In
relation to unfair administrative action, the applicants submitted
that any attempt to have the property expropriated, at the
instance
of any of the respondents, in view of the history of the matter and
the impact that this has had on the value of the
property, would be
unlawful and unfair administrative action. Additionally, that the
first respondent’s failure to have
the applicants’
property expropriated within a reasonable period constituted
administrative action in the light of the
repeated threats of
expropriation levelled at the applicants. If this argument were
accepted by a court, it would place the first
respondent in the
untenable position of being condemned either if it initiated
proceedings to have the property expropriated
as well as if it did
nothing, as both would amount to unlawful administrative action in
the view of the applicants. This argument
was correctly rejected.
The
High Court accepted for the purpose of its judgment that the CDC’s
conduct amounted to an unlawful deprivation of the
applicants’
property. However, the High Court held that this did not entitle the
applicants to the relief that was sought,
and dismissed the
application. The High Court rejected the applicants’ argument
regarding the invalidity of the operator
permit, finding that it was
not competent for the applicants to collaterally challenge the
validity of the fourth respondent’s
issuance of the operator
permit to the CDC. The High Court held further that the
expropriation of the applicants’ property
for the purposes of
advancing the Coega IDZ would be a lawful purpose, and that, even if
the operator permit were invalid, it
would not invalidate the
expropriation as it would not impact on the lawful purpose of the
expropriation.
Proceedings before the Supreme Court of Appeal
On
appeal before the Supreme Court of Appeal,
30
the applicants challenged the decision of the High Court on a number
of bases, and sought the same relief that had been sought
in the
High Court. The grounds of appeal included, inter alia, that the
High Court had failed to have sufficient regard to the
ongoing
deprivation suffered by the applicants; that it erred in its
interpretation of the regulations and its finding that it
was not
competent for the applicants to challenge the validity of the
operator permit issued by the Minister for Trade and Industry;
that
it erred in finding that there was no unfair administrative action;
and that it erred in holding that even if the operator
permit had
been issued unlawfully, an expropriation may nonetheless be in the
public interest or for a public purpose.
31
The
Supreme Court of Appeal dismissed the matter, holding that an
expropriation for the benefit of the CDC would be permissible
in
terms of both sections 2 and 3(2)(h) of the Expropriation Act,
32
and that, although the CDC’s operator permit was valid, the
fact that a permit may be flawed did not necessarily taint
all the
activities undertaken in terms of that permit.
In
addressing the unfair administrative action argument, the Supreme
Court of Appeal held that the failure to expropriate did
not amount
to administrative action as it did not constitute a deprivation of
property in terms of section 25(1) of the Constitution.
In reaching
this conclusion, the Supreme Court of Appeal relied, almost
exclusively, on the
Reflect-All
33
judgment of this Court. The Supreme Court of Appeal held further
that the failure to decide to expropriate did not amount to
a
“failure to take a decision” in terms of section 6(2)(g)
of PAJA. The “insuperable bar”, as Wallis
AJA described
it, was that:
“
[T]he
administrative action sought to be condemned is action that can only
occur in the future. In other words, we are asked to
condemn as
unfair something that has not yet happened and may not ever happen,
and, if it does happen, may take place in a different
legislative and
economic environment. For all we know, if expropriation is decided
upon in the future, the process will be a model
of administrative
fairness, with the [applicants] being given every opportunity to make
representations, to claim adequate compensation
and the like.”
34
In
refusing the relief sought by the applicants, the Supreme Court of
Appeal held that the fact that an authority having powers
of
expropriation recognises the possibility that it may exercise those
powers at some future stage does not entitle anyone to
compel it to
do so. The Supreme Court of Appeal dismissed the appeal with costs.
Nature of the proceedings before this Court
The
application for leave to appeal to this Court was directed against,
firstly, the findings of the Supreme Court of Appeal regarding
the
unconstitutional deprivation of the applicants’ property in
terms of section 25(1) of the Constitution, and secondly,
that the
granting of the operator permit by the Minister for Trade and
Industry did not comply with section 217(1) of the Constitution
as
required.
35
In an effort to bring clarity to the matter when setting it down for
hearing, this Court distilled the issues raised by the applicants

and directed the parties to address specifically the question of
whether there had been an unconstitutional deprivation of property

in terms of section 25 of the Constitution. The first stage of the
enquiry is to determine whether the applicants have been deprived
of
their property. Only if this question is answered in the affirmative
does it become necessary to determine whether the deprivation
is
unconstitutional.
36
Submissions of the parties before this Court
In
argument, the applicants made it clear that the source of their
challenge was the conduct of which they complain, in that the

deprivation occurred outside of any law or legal provision. The
applicants no longer challenge the validity of the operator permit.

Instead, their cause of action is based squarely on the first part
of section 25(1) of the Constitution which states that “[n]o

one may be deprived of property except in terms of law of general
application”, with the focus being on the conduct of
the
respondents. It was argued that the cumulative effect of the
respondents’ conduct amounted to a deprivation of the
full
use, enjoyment and exploitation of their land. The applicants
challenge the Supreme Court of Appeal’s reliance on
the
Reflect-All
judgment,
37
distinguishing it on the basis that it did not deal with the conduct
of organs of state that had already resulted in deprivation
for a
considerable period of time.
Before
this Court, the applicants have abandoned the main relief that was
sought in the High Court. They now seek only the alternative
relief
in the form of a mandamus compelling the first respondent to take a
decision within a specified period as to whether it
intends to
expropriate the applicants’ property or not.
It is
apparent that there has never been any request for the expropriation
of the applicants’ property before the Minister
for Public
Works, and the first respondent submitted that it has no current
intention to expropriate the land. However, if the
first respondent
does want the land expropriated in the future for its benefit, it
will have to make an application to the Minister
for Public Works.
The
first respondent argues that there has been no deprivation of
property, and that none of its actions amounts to a substantial

interference or limitation of the applicants’ use and
enjoyment of their property. In addition, it is argued that there
is
no evidence that the applicants’ business operations have been
destroyed, nor can the CDC be held solely responsible
for the
difficulties experienced by the applicants in alienating their land.
In view of my finding in this judgment, it is not
necessary to deal
with the alleged involvement of the Premier or the Ministers for
Public Works and for Trade and Industry.
Should the application for leave to appeal be granted?
It is
by now trite that when considering whether to grant an application
for leave to appeal, this Court will need to determine
whether a
constitutional issue has been raised and whether it is in the
interests of justice for leave to be granted. It is clear
in this
matter that there is a constitutional issue that is engaged;
however, the interests of justice determination warrants
further
consideration.
In
this Court, what the applicants initially sought to do was to
establish an infringement of section 25 in order to prove broader

infringements of other rights, in particular the right to just
administrative action. In order to decide whether leave to appeal

should be granted in this case, the specific question that must be
determined is whether it is in the interests of justice for
this
Court to grant leave where the cause of action has morphed into
something quite different from that which was originally
raised by
the applicants.
In
principle, there is nothing wrong with relying on more than one
right to establish a claim. In order for our rights-based
constitutional democracy to thrive, the collection of rights and
protections in the Bill of Rights may be seen as being interrelated

and interdependent. Before this Court, the applicants only
peripherally addressed the intersection of property law and
administrative
law, probably because of the directions issued by
this Court and the applicants’ abandonment of the main relief
that had
been sought in the High Court and the Supreme Court of
Appeal. Although we were told at the hearing that they did not
discard
all reliance on administrative action, the applicants saw
the matter as having “crystallised” into a section 25(1)

challenge. Importantly, the question of deprivation has been fully
ventilated, and I am persuaded that it is in the interests
of
justice for leave to appeal to be granted.
What constitutes a deprivation for the purpose of section 25(1) of
the Constitution?
Before
this Court can decide whether there has been an infringement of
section 25(1) of the Constitution, it must first establish
that
there has been a deprivation of property. As I have already
explained, if there is no deprivation, then it is unnecessary
to
consider the requirements of section 25(1) with which the
deprivation must comply.
In
First National Bank
, it was stated that “[i]n a certain
sense
any interference
with the use, enjoyment or
exploitation of private property involves some deprivation in
respect of the person having title or
right to or in the property
concerned.”
38
This notion was expanded upon in
Mkontwana
,
39
which stated that:
“
Whether
there has been a deprivation depends on the extent of the
interference with or limitation of use, enjoyment or exploitation
. .
. . [A]t the very least,
substantial
interference or limitation that goes beyond the normal restrictions
on property use or enjoyment found in an open and
democratic society
would amount to deprivation
.”
40
I am
in agreement with the
Mkontwana
judgment that there must at
least be “substantial interference” in order to warrant
consideration by this Court in
this matter of whether there has been
an unconstitutional infringement of section 25(1). Indeed, the
applicants argued the matter
on the basis that the respondents’
conduct amounted to substantial interference with their property.
First
National Bank
,
Mkontwana
and
Reflect-All
dealt
with the validity of laws that allowed the deprivation of property
in certain circumstances. The present matter is different
for two
critical reasons. First, the challenge before us is targeted at the
conduct of the respondents, not the legislation;
and second, the
bulk of the challenge comprises threatened rather than actual
conduct. However, despite these differences, the
relevant legal
principles remain pertinent. It is inappropriate to postulate
precise rules to determine what amounts to substantial
interference,
and the enquiry must be context-specific.
Our
jurisprudence is clear that the physical taking of property is not
required to constitute a deprivation, and it suffices for
one or
more of the entitlements of ownership to be impacted upon.
41
Whilst direct or physical interference is not necessary, the impact
must be of sufficient magnitude to warrant constitutional

engagement. A court must give consideration to the extent to which
the use and enjoyment of the land has been diminished. As
stated by
the Appellate Division in a different context, “[s]ubstantial
interference is a matter of duration and degree.”
42
Has there been a deprivation of property in the present matter?
The
crux of the issue is whether the series of conduct of which the
applicants complain has deprived the applicants of the full
use and
enjoyment of their property to such an extent that it amounts to a
deprivation. I am not troubled by the applicants’
individual
complaints of the attempted expropriations, which have already been
set aside; or the instances of spoliation, which
appear to have been
rectified; or the re-zoning application, which appears to have
simply been a request to postpone making a
decision until after the
court proceedings had been finalised. Although the cumulative effect
of these coupled with the ongoing
threats of expropriation made by
the CDC have certainly been of some annoyance to the applicants, in
my view this does not amount
to a “substantial interference or
limitation that goes beyond the normal restrictions on property use
or enjoyment”.
43
It is
by now clear that the threats of expropriation were made by the CDC
which has no power to expropriate, and which has yet
to make any
application for expropriation to the empowered functionary. It does,
however, appear that the CDC did always intend
to approach the
appropriate authority prior to the change in requirements in August
2007. Furthermore, these threats relate only
to a potential future
occurrence, for which the CDC and the other respondents would still
need to comply with the legal and administrative
requirements for a
valid expropriation if the threats were ever to come to fruition.
Moreover, the content of the advertisement,
whilst possibly
ill-conceived, was in my view information that the applicants would
have been required to disclose to any potential
buyer in the course
of negotiating the selling price. Apart from the unsubstantiated
assertion that they have suffered a diminution
in market value,
there is no other negative impact apart from uncertainty. In any
event, we are now told that the first respondent
has no current
intention to expropriate the applicants’ land.
The
nature of the complaint does not hold water when compared to what
was held to constitute a deprivation by this Court. There
has been
no deprivation of property as there was in
FNB
,
Mkontwana
and
Reflect-All
. There may perhaps be instances in the
future where the effect of threats of expropriation is so egregious
that it may amount
to a deprivation for the purpose of section
25(1), but that is not so in the case before us. Much of what the
applicants challenge
is nothing more than forceful bargaining, in
which the applicants have willingly participated on occasion.
As I
have already pointed out, once the final permit was issued in terms
of the 2006 amended regulations, it became clear that
the applicants
had to change tack and challenge the “conduct” of the
CDC rather than the underlying law in terms
of which that conduct
took place. As soon as the attack on the provisional operator permit
fell away, the conduct of the CDC
in seeking to acquire the land
before August 2007 becomes justified, albeit that it was
misconceived in failing to approach the
appropriate authority.
Following the issue of the final operator permit in August 2007,
there is nothing further to support the
applicants’ argument
that they have been deprived of their property. Prior to August
2007, the CDC had to acquire the applicants’
land by way of,
inter alia, expropriation, and I have no doubt that the CDC fully
intended to have the land expropriated in order
to avoid having its
provisional operator permit revoked. However, in terms of the final
operator permit under the amended regulations,
this is no longer the
case.
To my
mind, the conduct the applicants complained of is not what was
envisaged by the protection afforded in the property clause
of the
Constitution. One must not forget that property rights are not
absolute.
44
It is inevitable that, with a scheme like the Coega IDZ, landowners
in the designated area will be affected. In this case, however,
at
no time has that scheme disabled the applicants from using or
exploiting their land. The applicants are still free to sell,

develop, or make reasonable use of their land. In argument, the
applicants were unable to sustain the contention that there was
bad
faith or abuse of power on the part of the first respondent. It is,
for this reason, unnecessary to enquire into the relevance
of these
considerations in this Court’s evaluation. Additionally, there
is no reason that the first respondent should be
barred from making
an application for the expropriation of the applicants’
property in the future if it so requires for
the benefit of the
development of the Coega IDZ, provided that it does so lawfully.
Accordingly, the appeal falls to be dismissed.
Costs
It
seems to me that this is essentially a private commercial law
dispute over land, which has become unnecessarily barbed because
of
the souring of the relationship between the applicants and the first
respondent as a result of their failure to reach an agreeable
price
for the sale of the applicants’ property. In view of the order
that I make in this case, I find it appropriate that
the applicants
should bear the costs of the litigation before this Court.
Order
In
the result, the following order is made:
The
application for leave to appeal is granted.
The
appeal is dismissed.
The
applicants are ordered to pay the costs of the respondents,
including the costs of two counsel.
Ngcobo CJ,
Moseneke DCJ, Brand AJ, Cameron J, Froneman J, Jafta J, Khampepe J,
Mogoeng J, Nkabinde J and Yacoob J concur in the
judgment of Skweyiya
J.
For the Applicants: Advocate RG Buchanan SC and Advocate SC
Rorke instructed by Rushmere Noach Inc.
For the First Respondent: Advocate MR Madlanga SC, Advocate N Bawa
and Advocate N Mayosi instructed by Fairbridges.
For the Second and Third Respondents: Advocate SJ Grobler SC and
Advocate BJ Pienaar SC instructed by the State Attorney,
Port
Elizabeth.
For the Fourth Respondent: Advocate AE Bham SC
and Advocate T Motau instructed by the State Attorney, Port
Elizabeth.
1
Offit
Enterprises (Pty) Ltd and Another v Coega Development Corporation
and Others
2010 (4) SA 242
(SCA) (per Wallis AJA, with Harms DP,
Lewis JA, Maya JA and Hurt AJA concurring).
2
Offit
Enterprises (Pty) Ltd and Another v Coega Development Corp (Pty)
Ltd and Others
2009 (5) SA 661
(SE) (per Jansen J).
3
Above
n 1 at para 2.
4
Section
25(1) of the Constitution states: “No one may be deprived of
property except in terms of law of general application,
and no law
may permit arbitrary deprivation of property.”
5
3
of 2000. Administrative action is subject to review if there is a
failure to take a decision as contemplated in section 6(2)(g)
of
PAJA. Section 6(2)(g) states: “A court or tribunal has the
power to judicially review an administrative action if the
action
concerned consists of a failure to take a decision.”
6
Section
6(2)(c) of PAJA states: “A court or tribunal has the power to
judicially review an administrative action if the
action was
procedurally unfair.”
7
The
Manufacturing Development Act 187 of 1993 stipulates that the
Minister for Trade and Industry is the responsible Minister,
as
defined in section 1. Section 10(1) of the Manufacturing Development
Act states: “In order to promote and support manufacturing

growth and development within the framework of the economic policy
of the Republic, the [Minister for Trade and Industry] may
. . .
establish, amend, revoke or substitute a programme for manufacturing
development . . . .” The
Regional Industrial Development
Amendment Act 22 of 1998
changed the short title of this Act from
the Regional Industrial Development Act to the Manufacturing
Development Act, as it
is now known.
8
63
of 1975. Section 1 of the Expropriation Act defines the “Minister”
relevant to the Act as the Minister for Public
Works. Section 2(1)
of the Expropriation Act states: “Subject to the provisions of
this Act the Minister may, subject to
an obligation to pay
compensation, expropriate any property for public purposes or take
the right to use temporarily any property
for public purposes.”
Section 3(1) of the Expropriation Act empowers the Minister for
Public Works to expropriate immovable
property on behalf of juristic
persons or bodies. Section 3(2)(h) states: “The juristic
persons or bodies contemplated
in subsection
(
1
)
[include] any juristic person . . . established by or under any law
for the promotion of any matter of public importance.”
9
Section
8(4) of the Constitution states: “A juristic person is
entitled to the rights in the Bill of Rights to the extent
required
by the nature of the rights and the nature of that juristic person.”
10
Investigating
Directorate: Serious Economic Offences and Others v Hyundai Motor
Distributors (Pty) Ltd and Others: In re: Hyundai
Motor Distributors
(Pty) Ltd and Others v Smit NO and Others
[2000]
ZACC 12
;
2001 (1) SA 545
(CC);
2000 (10) BCLR 1079
(CC)
at
paras 17-8.
11
61
of 1973.
12
The
definition of “organ of state” in section 239 of the
Constitution reads, in relevant part, as follows:
“
(b) any
other functionary or institution
¾
. . .
(ii) exercising a public power or performing a public
function in terms of any legislation. . . .”
13
See,
for instance,
Hoffmann v South
African Airways
[2000] ZACC 17
;
2001 (1) SA 1
(CC);
2000 (11) BCLR 1211
(CC) at para 23.
14
Industrial
Development Zone Programme, GN R1224 GG 21803, 1 December 2000 (2000
regulations); amended by the Industrial Development
Zone Programme:
Amendment, GN R1065 GG 29320, 27 October 2006 (amended regulations).
15
The
guidelines to which the amended regulations refer are the
Industrial
Development Zone Programme
Guidelines
(February 2008).
16
Id
at16.
17
The
2000 regulations define “Board” as being the
Manufacturing Development Board as provided for in the Manufacturing

Development Act, established in terms of section 2 thereof. Section
2(2) of the Manufacturing Development Act stipulates the
membership
of the Board, and includes, inter alia, officials of the Department
of Trade and Industry, the South African Revenue
Service and the
Department of Finance. The 2006 amended regulations delete the
definition of “Board” without replacing
it with another;
however, both the amended regulations and the subsequent guidelines
continue to make reference to the Board
without more.
18
Regulation
3C of the amended regulations above n 14.
19
Above
n 15 at 13-5.
20
The
CDC was awarded three provisional operator permits in terms of the
2000 regulations, in 2002, 2004 and 2006. The first two
provisional
operator permits were extended for periods of 12 months each as
provided for in the 2000 regulations. However, the
regulations
stipulated that the provisional operator permits could not be
extended for a period exceeding 12 months, which necessitated
the
granting of new provisional operator permits in 2004 and 2006. The
CDC could not receive a final operator permit during this
time as it
was not fully in compliance with the requirements in the 2000
regulations, but this hurdle was removed by the amended
regulations.
21
Offit
Enterprises (Pty) Ltd and Another v Premier of the Eastern Cape
Government and Others
, Case No. 1764/05, South Eastern Cape
Local Division, 31 January 2006, unreported, at para 67.
22
Offit
Enterprises (Pty) Ltd and Another v Premier of the Eastern Cape
Government and Another
, Case No. 559/07, South Eastern Cape
Local Division, 19 April 2007.
23
See
above n 8.
24
Id.
The Expropriation Act confers the powers stipulated in sections 2
and 3 on the Minister for Public Works.
25
Above
n 2.
26
Above
n 2.
27
The
relief sought by the applicants in the High Court was as follows:
“
(a) Subject to paragraph (c)
hereunder, declaring that any expropriation in terms of legislation
in effect as at date hereof of
the Applicants’ properties . .
. at the instance of any of the Respondents for the benefit of the
First Respondent is neither
permissible nor lawful.
(b) In the alternative to paragraph (a), an order
compelling any one of the Respondents desirous of expropriating the
properties
referred to in paragraph (a) for the benefit of the First
Respondent to initiate a lawful expropriation process within a
period
of one month of date hereof;
(c) Paragraph (a) of this order shall not operate in
respect of any lawful process for the expropriation of land for
provincial
road purposes;
(d) An order that the First Respondent pay the costs of
this application and that the remaining Respondents be ordered to do
so,
jointly and severally with the First Respondent, only in the
event that they oppose the application; and
(e) Further and/or alternative relief.”
28
See
above n 8.
29
On
a separate point, the applicants argued in passing that the granting
of the operator permit failed to comply with section 217(1)
of the
Constitution and the
Preferential Procurement Policy Framework Act 5
of 2000
. However, the High Court dismissed this challenge on the
basis that the issuing of a permit did not constitute the
contracting
of goods or services for the purposes of section 217 of
the Constitution, and that the
Preferential Procurement Policy
Framework Act consequently
did not apply. The applicants also did
not succeed in its challenge based on section 217 of the
Constitution before the Supreme
Court of Appeal.
30
Above
n 1.
31
See
a further ground of appeal raised by the applicants, above n 29.
32
Above
n 8.
33
Reflect-All
1025 CC and Others v MEC for Public Transport, Roads and Works,
Gauteng Provincial Government, and Another
[2009] ZACC 24
;
2009
(6) SA 391
(CC);
2010 (1) BCLR 61
(CC) (
Reflect-All
).
34
Above
n 1 at para 44.
35
See
above n 29.
36
In
First National Bank of SA Ltd t/a Wesbank v Commissioner, South
African Revenue Service and Another; First National Bank of SA Ltd

t/a Wesbank v Minister of Finance
[2002]
ZACC 5
;
2002 (4) SA 768
(CC);
2002 (7) BCLR 702
(CC) (
First
National Bank
) at para 46
,
this Court laid down the stages in a section 25 property analysis:
“
(a) Does that which is taken
away . . . amount to ‘property’ for purpose of s 25?
(b) Has there been a deprivation of such property by
the Commissioner?
(c) If there has, is such deprivation consistent with
the provisions of s 25(1)?
(d) If not, is such deprivation justified under s 36 of
the Constitution?
(e) If it is, does it amount to expropriation for
purpose of s 25(2)?
(f) If so, does the deprivation comply with the
requirements of s 25(2)(a) and (b)?
(g) If not, is the expropriation justified under s 36?”
37
Reflect-All
above n 33.
38
First
National Bank
above n 36 at para 57. (Emphasis added.)
39
Mkontwana
v Nelson Mandela Metropolitan Municipality and Another; Bissett and
Others v Buffalo City Municipality and Others; Transfer
Rights
Action Campaign and Others v MEC, Local Government and Housing,
Gauteng, and Others (KwaZulu-Natal Law Society and Msunduzi

Municipality as Amici Curiae)
[2004] ZACC
9
;
2005 (1) SA 530
(CC);
2005 (2) BCLR 150
(CC) (
Mkontwana
).
40
Id
at para 32. (Emphasis added.)
41
First
National Bank
above n 36 at para 57;
Mkontwana
above n 39
at para 32.
42
The
Treasure Chest v Tambuti Enterprises (Pty.) Ltd.
1975 (2) SA 738
(A) at 748H.
43
Mkontwana
above n 39 at para 32.
44
Reflect-All
above n 33 at para 33.