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[2014] ZACC 22
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Florence v Government of the Republic of South Africa (CCT 127/13) [2014] ZACC 22; 2014 (6) SA 456 (CC); 2014 (10) BCLR 1137 (CC) (26 August 2014)
Links to summary
CONSTITUTIONAL COURT OF
SOUTH AFRICA
Case CCT
127/13
In the matter between:
ISABEL JOYCE
FLORENCE
.................................................................................................
Applicant
and
GOVERNMENT OF THE
REPUBLIC OF SOUTH
AFRICA
..........................................
Respondent
Neutral citation:
Florence v Government of the Republic of South
Africa
[2014] ZACC 22
Coram:
Moseneke ACJ, Skweyiya ADCJ, Cameron J, Dambuza
AJ, Froneman J, Jafta J, Khampepe J, Madlanga J, Majiedt AJ, Van der
Westhuizen
J and Zondo J
Heard on:
18 February 2014
Decided on:
26 August 2014
Summary:
Restitution of Land Rights Act 22 of
1994
—
section 33
— purposes of equitable redress —
method of escalating past loss to present-day value
Restitution of Land Rights Act 22 of
1994
—
section 35
— remedial powers — a court’s
power to award costs of erecting a memorial plaque
ORDER
On appeal from the Supreme Court of
Appeal (hearing an appeal from the Land Claims Court):
1. Leave to file
the supplementary record is granted.
2. Condonation is
granted.
3. Leave to appeal
is granted.
4. Leave to
cross-appeal is granted.
5. The appeal is
dismissed.
6. The cross-appeal
is upheld.
7. There is no
order as to costs.
JUDGMENT
VAN DER WESTHUIZEN J (Cameron J,
Froneman J and Majiedt AJ concurring, and Khampepe J concurring only
on the cross-appeal):
Introduction
[1]
“
You
can’t repeat the past”, the narrator says to Jay Gatsby
in F Scott Fitzgerald’s iconic novel.
[1]
Hopelessly romantic and ever optimistic, Gatsby responds: “Can’t
repeat the past? Why of course you can!” If
only we could
repeat, re-run or re-shape history to avoid the injustices of the
apartheid era. But we cannot. Perhaps the best
that can be done is to
try to redress past injustices by enacting and applying legislation
under the Constitution of our young
democracy to deal with some of
the consequences of the apartheid regime’s treatment of the
majority of South Africans.
[2]
The
Promotion of National Unity and Reconciliation Act
[2]
is one example. The Restitution of Land Rights Act
[3]
(Restitution Act) is another. It represents an attempt to address
evictions, forced removals and past dispossession of land. The
Group
Areas Act
[4]
– one of the
cornerstones and most pernicious pieces of apartheid legislation –
used race to determine the area in
which people were allowed to live.
Many were deprived of their homes and land because of the colour of
their skin. The members
of the Florence family are among them.
[3]
One
of the underlying questions is whether restitution should act as a
means of reversing the injury itself, knitting the bones
of history
together as if no fracture had ever occurred, or instead as a salve
for an ever-gaping wound. Section 25(7) of the Constitution
[5]
promises that persons or communities dispossessed of property as a
result of racially discriminatory laws or practices are entitled
to
restitution of the property or to equitable redress. The
Restitution Act provides for the fulfilment of this promise.
Ms
Florence, the applicant, asks this Court to decide what constitutes
equitable redress under the Restitution Act. Is it
always
appropriate for a court – when making an award in the form of
financial compensation – to convert past property
into
present-day monetary terms using the Consumer Price Index (CPI)?
[6]
This is what the Land Claims Court did and the Supreme Court of
Appeal confirmed. Ms Florence argues that this does
not give
sufficient effect to the right to restitution or equitable redress
and applies for leave to appeal against the Supreme
Court of Appeal’s
decision.
[4]
The Government, the respondent, opposes the
application. In addition, it applies for leave to cross-appeal
and asks this Court
to set aside the Supreme Court of Appeal’s
decision to order the state under the Restitution Act to bear the
costs of a memorial plaque on the property, as a form of symbolic
relief.
Issues
[5]
The main appeal questions the concept of
equitable redress under the Constitution and the Restitution
Act. The cross-appeal
requires us to decide whether
interference with the Supreme Court of Appeal’s discretion
under the Restitution Act in directing
the state to bear the costs of
the erection of a memorial plaque is justified.
[6]
Subsidiary questions are raised:
(a)
Should condonation for the late filing of
documents be granted?
(b)
May this Court interfere with the exercise
of discretion by the Land Claims Court and the Supreme Court of
Appeal?
(c)
Should leave to appeal be granted?
(d)
What is the meaning of “equitable
redress” in the Restitution Act? In light of this, what
is the purpose of financial
compensation?
(e)
Is the CPI an appropriate means of
converting past loss into present-day monetary terms?
(f)
If not, are alternatives available?
(g)
What is the significance of section 33 of
the Restitution Act?
(h)
Given the above, is interference with the
Land Claims Court’s exercise of discretion warranted?
(i)
What order should follow if the decision by
the Supreme Court of Appeal is set aside?
(j)
Who should bear the costs of this
application?
Factual background
[7]
The Florence family lived in a house called
Sunny Croft on Erf 44408 (the property) in present-day Rondebosch,
Cape Town, from December
1952 until November 1970. On 9 January
1957 Mr Florence (the applicant’s husband) and his two brothers
entered into
a written agreement to purchase the land from the owner,
Dr Yeller. It was agreed that the purchase price was to be
paid off in instalments every month for 13 years and 10 months.
These instalments were met.
[8]
The area in which the land was situated was
classified a “White Group Area” in terms of the Group
Areas Act which prevented
the transfer of the property into
Mr Florence’s name, as he was not classified as “white”.
On 16 October
1970 Mr Florence, his brothers and Dr Yeller
agreed to cancel the sale and the Florence family was refunded an
amount of R1 350.
Because of the area’s
classification and harassment by the authorities, the family was
forced to leave in November 1970.
[9]
On 14 December 1995 Mr Florence launched a
restitution claim, in his own right and on behalf of his two
brothers, in terms of the
Restitution Act. The claim initially
sought restoration of the entire plot of the property. Given
subsequent development
on the land, however, this was not feasible.
The claim was therefore amended to seek equitable redress in the form
of financial
compensation, as well as the erection of a memorial
plaque.
[10]
In
June 2009, after her husband died, Ms Florence was substituted in the
claim as the applicant. In March 2010 she and the
current owner
of the property reached a private agreement in terms of which the
current owner consented to the erection of a memorial
plaque on the
property and withdrew his opposition to the Florence family’s
claim. The Florence family approached the
Land Claims Court for
a determination of their claim, orders awarding them just and
equitable compensation and the costs of erecting
the memorial
plaque.
[7]
Land Claims Court
[11]
The case in the Land Claims Court turned
on—
(a)
the nature and extent of the 1970 loss (and
the amount of compensation this warranted);
(b)
the appropriate method for conversion for
equitable redress;
(c)
Ms
Florence’s claim for a
solatium
;
[8]
(d)
the costs of erecting the plaque; and
(e)
the costs of litigation insofar as they had
not been met by the Land Claims Commission.
Only (a) to (d) are relevant before this
Court.
[12]
The
requirements for a claimant to qualify for restitution are listed in
section 2 of the Restitution Act.
[9]
The Land Claims Court held that it was not in dispute that the family
had a right in land and that they were dispossessed
of this right in
terms of past racially discriminatory legislation. It further
held that the family had effectively paid
off the purchase price at
the time of their dispossession and therefore should be compensated
as the
de
facto
owners
of the property.
[13]
The
Land Claims Court then determined the extent of the loss.
[10]
Despite receiving R1 350 from Dr Yeller, the Land Claims Court
found that the Florence family had been under-compensated
for their
dispossession by R30 513 as at October 1970. Thus the
R1 350 could not be considered just and equitable
compensation
for the property so as to disqualify the Florence family from
bringing a restitution claim under the Restitution Act.
[11]
[14]
Having
regard to the purposes of the Restitution Act, the need to give its
provisions a generous interpretation, as well as the
factors listed
in section 33,
[12]
the Land Claims Court found that it would be just and equitable to
convert the family’s 1970 financial loss to its present-day
value in order to accommodate “changes over time in the value
of money”, as captured in section 33(eC) of the Restitution
Act.
[15]
This
raised the issue regarding the most appropriate method for
conversion, which primarily involved the interpretation of section
33(eC). The Land Claims Court followed its own precedent in
Farjas
LCC
[13]
and found that using the CPI for conversion accords with the proper
interpretation of the phrase “changes over time in the
value of
money”,
[14]
which is “what a person can buy with the money”.
[15]
[16]
The Court found that “changes over
time in the value of money” entails concepts different from an
investment.
An investment relates to interest earned from
money. Interest accrues as the proceeds of money and is not its
actual value;
the value of money is not changed because interest is
earned. Since interest is conceptually different from the value
of
money as stated in section 33(eC), an investment index is not a
suitable method for conversion. The CPI measures the actual
value of money and is therefore more appropriate. On the basis
of this calculation, the Land Claims Court determined Ms Florence’s
under-compensation to be R1 488 890.
[17]
In
addition to this award, the Land Claims Court gave Ms Florence
R10 000 as a
solatium
,
in recognition of the emotional hardship and trauma of forced removal
and in acknowledgement of the family’s dignity and
worth.
[16]
But it declined to find in her favour on the memorial plaque.
First, the Court held that it lacked jurisdiction because
the issue
was subject to a private agreement between the current landowner (who
was the first respondent in the case before the
Land Claims Court)
and Ms Florence. Second, the Court held that there was no
need to decide the issue, since it had
already awarded a
solatium
which served a similar purpose to an award for the costs of erecting
a memorial plaque.
Supreme Court of Appeal
[18]
Ms Florence appealed to the Supreme Court
of Appeal on the—
(a)
use of the CPI as a method of conversion;
(b)
costs of erecting the memorial plaque; and
(c)
costs of litigation insofar as they have
not been met by the Land Claims Commission.
[19]
The
Supreme Court of Appeal regarded itself bound by its own decision in
Farjas
,
[17]
which confirmed the finding in
Farjas
LCC
that
the Land Claims Court is entitled to use the CPI to determine changes
over time in the value of money. It held that the
Land Claims
Court did not misdirect itself in applying the CPI.
[20]
However, the Supreme Court of Appeal did
not agree with the Land Claims Court that it had no
jurisdiction to order payment
of the costs of the memorial plaque.
It found that the agreement between Ms Florence and the current
landowner did not entail
a waiver of any right she had to claim the
costs of erecting the plaque from the state.
[21]
Instead,
the Supreme Court of Appeal held that the Land Claims Court had
jurisdiction to decide this issue because of its remedial
powers
under the Restitution Act, which include ordering the payment of
“any alternative relief”.
[18]
The Supreme Court of Appeal held that the order to pay for the
memorial plaque qualifies as alternative relief because it
is of
symbolic significance and spiritual importance to the family and
addresses the hurt and injustice they suffered.
[22]
Finally,
since each party had been partially successful, the Supreme Court of
Appeal concluded it was fair and just that each party
pay its own
costs. Ultimately, however, section 29(4) of the Restitution
Act
[19]
meant that the Land
Claims Commission was responsible for the costs of the litigation.
Condonation
[23]
Ms Florence filed a supplementary volume of
documents late, the day before the hearing. This Court’s
practice directions
require that, if a party files additional
documents which are not part of the record, it should be done at
least ten days prior
to the hearing. Ms Florence applied for
condonation for this late filing. The application is not
opposed, nor does
the late filing cause prejudice or adversely affect
the administration of justice. I would grant condonation.
Leave to appeal – main appeal
[24]
Restitution
of land rights and land reform “sit in the heartland of the
protective, restitutionary and land reform design
of section 25 of
the Constitution.”
[20]
This matter requires that the Restitution Act, which gives content to
section 25(7) of the Constitution, be interpreted.
It is also
in the interests of justice to grant leave to appeal. The Land
Claims Court is a specialist court
[21]
exercising power in a forum “where the conflicting values as
embodied in the constitutional property clauses take on concrete
form.”
[22]
This
Court has held that it would be slow to hear appeals from specialist
courts unless important issues of principle are
raised.
[23]
The Land Claims Court’s interpretation of section 33 of the
Restitution Act, which was confirmed by the Supreme Court
of Appeal,
raises important issues.
[25]
Although
many were dispossessed of their property under apartheid, this Court
still has to determine an appropriate approach for
measuring
compensation under the Restitution Act. Certainty on the
contours and content of equitable redress under the Restitution
Act
would benefit the broader public, which has an interest in how such
claims are resolved given South Africa’s “historical
chasm on the issues of land dispossession and land restitution.”
[24]
This case raises important issues of principle with large practical
effects. Even though this judgment may not formulate
a precise
test for determining financial compensation in all cases, greater
direction should be given.
[25]
There are also reasonable prospects of success regarding whether the
Land Claims Court and the Supreme Court of Appeal applied
the CPI
rigidly and formalistically. It is therefore in the interests
of justice to grant leave to appeal.
Interference in the exercise of
discretion
[26]
It
has to be determined whether this Court may interfere in the
exercises of discretion of the Land Claims Court and the Supreme
Court of Appeal. Generally, an appeal court may interfere with
a lower court’s exercise of discretionary power only
if that
power was not properly exercised.
[26]
In
the context of restitution this principle has been emphasised by the
courts.
[27]
Discretionary
power is not exercised judicially if applied capriciously; if the
court was moved by a wrong principle of law or an
incorrect
appreciation of the facts; if it did not bring its unbiased judgment
to bear on the issues; or if it did not act for
substantial
reasons.
[28]
As
to the main appeal, I return to this question after a more thorough
analysis of the decisions and the relevant legal issues.
But it
is convenient first to examine whether the Supreme Court of Appeal’s
exercise of discretion in ordering the state
to pay for the memorial
plaque should be overturned. This is what the Government asks
for in the application to cross-appeal.
Leave to appeal – cross-appeal
[27]
The
Government argues that neither the Land Claims Court nor the Supreme
Court of Appeal has jurisdiction to order the state to
pay the costs
for the erection of a memorial plaque, because the settlement
agreement between the landowner and Ms Florence
was a private
affair in which the state had no role. It further contends that
the Supreme Court of Appeal failed to consider
that the forced
removal of the community to which the Florence family belonged has
already been recognised in the District Six
Museum. Payments to
the Florence family will be coming from the public purse. Given
that other legislation like the
National Heritage Resources Act
[29]
(NHRA) exists to preserve South African heritage, the Government
maintains that the Supreme Court of Appeal’s order overstepped
the Court’s authority.
[28]
Ms
Florence contends that the Supreme Court of Appeal’s
interpretation of section 35(1)
[30]
of the Restitution Act was within its discretion, given the vast
remedial powers conferred by this section. Moreover, the
Supreme Court of Appeal’s substitution of its own decision for
that of the Land Claims Court was the judicial exercise of
discretion.
[31]
There
are no grounds for this Court to substitute its preferences for those
of the Supreme Court of Appeal.
[29]
The Supreme Court of Appeal correctly
decided that the Land Claims Court mistakenly held that it lacked
jurisdiction. The
mere fact that the landowner agreed to permit
the erection of a memorial plaque does not preclude the Land Claims
Court’s
remedial discretion. The contract simply
established that the family is not prohibited from erecting the
plaque. Nor
does directing the state to pay for the plaque
infringe privity of contract or force the state into the private
relationship between
Ms Florence and the landowner. It merely
obliges the state to cover certain costs, up to a prescribed limit –
and a
fairly modest one at that. Both the Land Claims Court and
the Supreme Court of Appeal therefore had jurisdiction to exercise
their remedial discretion.
[30]
The
Government’s argument that the NHRA deprives courts of
jurisdiction also fails to persuade. Although the NHRA empowers
heritage authorities to manage the national estate, nothing in the
statute or its wording gives these authorities exclusive power
or
implies that they have sole jurisdiction to direct the establishment
of memorials, so as to preclude a court from ordering the
erection of
a plaque. A close reading of the NHRA (particularly sections 3,
30 and 35) reveals that the authorities perform
largely
administrative and organisational functions. Moreover, there is
no precedent that supports the interpretation that
the authorities
have sole jurisdiction to the exclusion of courts. Two
statutory presumptions accord with this view.
First, Acts
should be read harmoniously – nothing in the NHRA contradicts
this presumption. Therefore, a court’s
wide remedial
powers under the Restitution Act and the provisions of the NHRA
should be read together.
[32]
Second, there is a presumption against ousting a court’s
jurisdiction. In
Metcash
Trading Limited
the
Court stated:
“
Although
the [Value-Added Tax] Act vests jurisdiction to vary or set aside
assessments . . . there is nothing in section 36 to suggest
that the
inherent jurisdiction of a High Court to grant appropriate other or
ancillary relief is excluded. The section does
not say so
expressly nor is such an ouster necessarily implicit in its terms,
while it is trite that there is a strong presumption
against such an
implication.”
[33]
[31]
This
Court will refrain from setting aside a decision on appeal if the
only reason is that it would have come to a different conclusion
on
the facts.
[34]
Moreover,
this Court has held that determining compensation in a particular
case (especially for sentimental damages) involves
the exercise of a
discretion, in which the Court will be particularly reluctant to
intervene. In
Dikoko
(dealing with the law of defamation) a majority of the Court declined
to interfere with damages awarded by a lower court.
[32]
Moseneke J wrote:
“
It
must however be emphasised that the mere fact that the damages seem
high is no reason to cut them down. In other words, the mere
preference of a court with appellate power is not sufficient to upset
a damages award. The standard at issue is not whether or
not the
trial court is correct but whether there is a glaring
disproportionality between the amount awarded and the injury to be
assuaged.”
[35]
He
further stated that a court, when evaluating an appeal related to an
award of damages, should consider the judgment as a whole
to
ascertain how the quantum had been determined.
[36]
The memorial plaque is a form of remedy, akin to damages, over which
the Land Claims Court and the Supreme Court of Appeal
have a wide
discretion.
[33]
Section
35(1) of the Restitution Act sets out the relief which the Court may
order. There are several options but no indication
whether they
are conjunctive or disjunctive and therefore no indication whether a
court can order several forms of relief in section
35(1) or just one
form. “Alternative relief” in section 35(1)(e) is
similarly ambiguous. It could mean
relief that is different
from and mutually exclusive to the relief in section 35(1)(a) to
(d). However it could also
mean relief that is different from –
not the same as – but not mutually exclusive to the relief in
section 35(1)(a)
to (d). In other words, section 35(1)(e) does
not necessarily have to exclude any of the relief mentioned in the
earlier
sections. If the first interpretation is preferred, a
court could never award different forms of relief together and the
court’s remedial powers would be unduly constrained. I
favour the second interpretation, that a court can order relief
in
terms of section 35(1)(a) to (d) together with “alternative
relief” in terms of section 35(1)(e). This interpretation
accords with this Court’s recognition that section 35 generally
confers extensive remedial powers.
[37]
And
it is in line with the generous, rather than formalistic,
interpretation of the Restitution Act, which best achieves its
purposes.
[38]
[34]
The costs of the memorial plaque fall under
section 35(1)(e) because it is a form of relief alternative, but not
mutually exclusive,
to an award of financial compensation which falls
under section 35(1)(c). The Land Claims Court had broad
discretion to determine
an appropriate remedy and, accordingly, to
award both forms of relief; as did the Supreme Court of Appeal.
There is no reason
to interfere with the Supreme Court of Appeal’s
discretion.
[35]
Restitution
is not only directed at righting the wrongs of spatial apartheid, but
also at carrying out “important symbolic
work by acknowledging
histories of injustice and their impacts on individuals, families,
and communities.”
[39]
The Government itself recognised in argument that a
solatium
may
be awarded by a court to recognise the dignity and worth of those who
have been affected by forced dispossessions.
[36]
It cannot, then, be said that the Supreme
Court of Appeal’s exercise of discretion fell outside the ambit
of the purposes
of the Restitution Act. Nor can it be said that
the Supreme Court of Appeal failed to take into account relevant
balancing
factors. It considered countervailing factors like
the significance of the plaque for the Florence family and other
families
from the area and the possibility of usurping the functions
of other state institutions. The exercise of discretion is not
mechanical and a court does not have to check a laundry list of
factors in order to decide properly.
[37]
There is no reason to interfere with the
Supreme Court of Appeal’s exercise of discretion. Leave
to cross-appeal should
be refused.
Restitution
and equitable redress
[38]
Was the Land Claims Court’s use of
the CPI as a dispositive factor when determining equitable redress in
the form of financial
compensation appropriate? This hinges on
the purpose of equitable redress, linked to the right to restitution,
contained
in the Restitution Act.
[39]
Ms Florence argues that the purpose of
equitable redress is to place the dispossessed owner in the position
she would have been
in if the land had not been taken. She
contends that, although the Land Claims Court seems to accept this,
its ultimate conclusion
that “changes over time in the value of
money” means “what a person can buy with money” –
rather
than interest on an investment – conflicts with this
purpose.
[40]
The
Government states that, in line with section 2(2) of the Restitution
Act,
[40]
compensation must
make up for what was taken away at the time of dispossession.
It is not the aim of equitable redress in
the form of financial
compensation to place a claimant in current terms in the position
they would have been in had the dispossession
not occurred.
Further, section 25(3) of the Constitution
[41]
and section 33 of the Restitution Act
[42]
provide the factors that must be considered when determining if
compensation is just and equitable. These include the general
interests of the state and society. Thus, argues the
Government, the Land Claims Court’s decision correctly balanced
these interests in ordering compensation equivalent to the value of
the land taken at the time of dispossession, which is all the
Restitution Act requires.
[41]
It should be acknowledged that even
restoration could not knit together the bones of history. The
brutality of apartheid irreparably
smashed them. The loss is
more than money or interest on an investment. Even restoration
of the property could hardly
repair the deprivation of years during
which Ms Florence and many others were unable to live in their chosen
homes, and the communities
that were broken apart, because of racist
legislation and policies – less so redress in the form of
money.
[42]
What then is the purpose of equitable
redress? The right to claim restitution of, or equitable
redress for, dispossessed property
derives from the Bill of Rights.
Section 25(7) provides:
“
A
person or community dispossessed of property after 19 June 1913 as a
result of
past
racially discriminatory laws or practices is entitled, to the extent
provided by an Act of Parliament,
either
to restitution of that property or to equitable redress
.”
(Emphasis added.)
[43]
The
Restitution Act similarly defines restitution of a right in land as
either restoration of a right or equitable redress.
[43]
Equitable redress is—
“
any
equitable redress, other than the restoration of a right in land,
arising from the dispossession of a right in land after 19
June 1913
as a result of past racially discriminatory laws or practices,
including—
(a) the granting of
an appropriate right in alternative state-owned land;
(b) the payment of
compensation”.
A
court interpreting the term “equitable redress” must (or
“shall” as stated in the Restitution Act) “have
regard to” a number of factors listed in section 33 in reaching
its decision.
[44]
[44]
Any
determination of appropriate “equitable redress” has to
be case-sensitive, as the term is broad. It would
not be wise
to lay down rigid rules for how it should be understood.
[45]
This does not mean, however, that we cannot give content to the term,
particularly in light of the purposes of the Restitution
Act.
Thus, I discuss what the Restitution Act aims at in principle.
This enquiry logically precedes how we should go
about achieving
these purposes (including, for example, whether the CPI is an
appropriate tool for doing so).
[45]
This
Court has stated that “[t]he Restitution Act must be understood
purposively because it is remedial legislation umbilically
linked to
the Constitution.”
[46]
When
interpreting it, the spirit, purport and objects of the Bill of
Rights must be promoted.
[47]
In
Alexkor
it
held that the Restitution Act operates both on a wide public scale
and a particularised individual one:
“
[A]lthough
it is clear that a primary purpose of the Act was to undo some of the
damage wreaked by decades of spatial apartheid,
and that this
constitutes an important purpose relevant to the interpretation of
the Act, the Act has a broader scope. In
particular, its
purpose is to provide redress to those individuals and communities
who were dispossessed of their land rights by
the government because
of the government’s racially discriminatory policies in respect
of those very land rights.”
[48]
[46]
Given
these purposes, what should we make of Ms Florence’s argument
that because the Restitution Act permits both restoration
and
equitable redress, the latter should generally be equivalent to the
former? In
Mphela
this Court held that “the starting point is that the whole of
the land should be restored, save where restoration is not
possible
due to compelling public interest considerations.”
[49]
This recognises the primacy of restoration. Equitable redress,
including in the form of financial compensation, is
generally “second
prize”. In
Goedgelegen
the Court noted that “the Restitution Act is an enactment
intended to express the values of the Constitution and to remedy
the
failure to respect such values in the past, in particular, the values
of dignity and equal worth.”
[50]
In keeping with the ideal and constitutional value of equality, it
seems that all claimants are entitled to at least roughly
equivalent
compensation – whether or not restoration of the land is
possible.
[47]
In
this context we must consider the parties’ arguments regarding
the time at which compensation must be determined.
Should the
claimant be compensated in a way that puts her in the same position
she would have been in measured: (a) at the time
of dispossession
(that is as if she had been compensated immediately after
dispossession); or (b) at the time of actual compensation?
[51]
The first scenario is argued for by the Government and seems to have
been adopted by the Land Claims Court.
[52]
The second is argued for by Ms Florence. In my view the
second option better accords with the purposive scheme of the
Restitution Act for a number of reasons.
[48]
First,
the law’s default position is that anyone whose property is
taken must be justly compensated.
[53]
In
Goedgelegen
this
Court noted that, in the context of the Restitution Act, “[w]e
must prefer a generous construction over a merely textual
or
legalistic one in order to afford claimants the fullest possible
protection of their constitutional guarantees.”
[54]
So, in these circumstances, is it just to compensate an individual
for the amount she
ought
to
have been paid at the time of dispossession and calculate what that
amount would be worth at the time of compensation?
Such a
conclusion may seem to correspond with the wording of section
33(eC).
[55]
But it does
not provide the fullest possible protection of constitutional
guarantees. After all,
just
and equitable compensation
was
not
made at the time of dispossession. It should be acknowledged
that, although just and equitable compensation ought to have
happened
at the time of dispossession, it did not. The dispossessed
person did not have the power to use the repayment money
as she
wished for more than four decades. In fact, the Florence family
was forced to cancel their purchase of the property
because of
apartheid legislation – an appropriate amount hardly came into
the picture.
[49]
Measuring the position at the time that
actual compensation takes place allows the dispossessed person to
benefit from the appreciation
of the land, or the interest that would
likely have accrued on the monetary value of the property, had they
received just compensation,
in the intervening years. The
claimant ought to receive this benefit because she was deprived of a
low-risk, interest-accruing,
long-term asset, namely property.
It seems unjust to strip someone of such an asset and to replace it
with the present-day
equivalent of a non-interest-accruing amount 44
years later.
[50]
Second, if the law prefers restoration of
land above equitable redress, then – when the former is not
feasible – equitable
redress should generally aim to put
claimants in as good a position as restoration. Were this not
the case, again, there
would be compounded injustice: the claimant
does not have the actual property (which of course will also often
mean that part of
the important symbolic aim of restitution is not
vindicated)
and
she will not be placed in as good a financial position as she would
have been had restoration occurred. The ideal of equality
before the law between those fortunate enough to have their property
restored and those who have to settle for compensation would
not be
achieved. Because compensation assessed at the time of
dispossession will usually be less than compensation assessed
at the
time of actual compensation, the former is more likely to lead to an
irrational disparity between a claimant whose property
is restored
and one who receives financial compensation.
[51]
Third,
using the actual time of compensation is more in line with the
approach to restitution found in precedent.
[56]
None of the cases this Court has heard explicitly dealt with
equitable redress in the form of financial compensation.
[57]
However, the principles espoused indicate that claimants should be
treated as generously as possible. There is little reason
why
claimants entitled to restoration should be treated more favourably
than those who have no option of restoration.
[52]
It
is helpful to consider foreign law when dealing with a right
recognised in the Bill of Rights.
[58]
Some
countries compensate claimants for restitution based on the market
value of property at the time of adjudication of the restitution.
A review of the countries that provide for restitution under national
laws
[59]
reveals that many
adopted a position similar to measuring compensation at the time of
actual compensation.
[60]
[53]
A key component in giving content to
equitable redress, considering South African as well as foreign law
and practices, is that
a claimant should generally be placed in the
position that she would have been in, but for dispossession. Of
course, it cannot
be determinative in every case, as it may not be
possible or desirable for a claimant to be compensated fully so as to
place her
in that position. Many things might have changed over
time. Section 33 of the Restitution Act allows for this by
setting
out the factors to which a court must have regard, some of
which may tip the scale in a fact-sensitive enquiry. It
therefore
seems that measuring at the time of compensation, rather
than at the time of dispossession, is generally preferable, in view
of
the purpose of the Restitution Act. The difference between
the two points in time may or may not matter in every case though.
The CPI
[54]
The
judgments of the Land Claims Court and the Supreme Court of Appeal
give exclusive predominance to the CPI. Published monthly
by
Statistics South Africa, it aims to measure changes over time in the
prices of consumer goods and services that households acquire,
use or
pay for. It measures the changes in the price for a “market
basket of consumer goods”, which is a representative
sample of
what households buy and includes a broad array of goods and
services. While it includes some housing-related considerations
– such as furnishings, rent, maintenance, household equipment
and other owner-occupier housing costs
[61]
–
it
also covers a wide range of other consumables.
[62]
The
CPI quantifies inflation, which affects the amount of goods and
services a household can buy with money.
[55]
Ms Florence argues that the CPI is an
inappropriate method of calculation because it does not achieve
equitable redress and therefore
fails to give effect to the purposes
of the Restitution Act and, in particular, of financial
compensation. She contends that
money used as investment in
property is different from money used for consumption. The
former is a low-risk investment and
amounts to savings. Because
the CPI measures consumption rather than investment it is not
appropriate for calculating compensation
for deprivation of
property. Because it does not compensate for the capital gain
in the value of the property, it results
in an irrational disparity
between the value of restitution in the form of restoration and in
the form of financial compensation.
The money awarded as
financial compensation calculated by using the CPI would not, she
says, be sufficient to enable her to buy
a property anywhere near
equivalent to what the Florence family lost.
[56]
According to Ms Florence, using the CPI
also under-compensates the poor, because it is biased toward spending
patterns of wealthier
households. It fails to take account of
the fact that the impact of inflation is more deeply felt by poorer
families.
She contends that “changes over time in the
value of money” in section 33(eC) of the Restitution Act should
not be
interpreted to mean the CPI, but rather to require an
investment metric.
[57]
The Government argues that section 33(eC)
was correctly interpreted to refer to the CPI, which is the proper
indicator of the measure
of the value of money over time.
Furthermore, using the CPI better achieves the balance between the
public interest (as it
would protect the public purse from larger
payouts) and the interests of those affected, as mandated by section
25(3) of the Constitution.
Ms Florence has not presented
evidence that the money awarded to her would be insufficient to
purchase a home and there is no proof
on the record that the Florence
family falls within lower earning brackets; and so her
contention that using the CPI under-compensates
the poor is
inapposite.
[58]
Neither of the parties disputes that the
CPI relates principally to consumption and is not an investment
benchmark. Their
approach is correct.
[59]
First, the CPI does not track changes in
the immovable property market, both because housing costs are only
one of many items in
the basket of goods and services and because it
measures expenditure rather than returns on investment. The
fact that the
CPI is intended to measure inflation in relation to
spending makes it inadequate for determining the amount of financial
compensation
for the loss of an asset like a home. Homes are
unique because they are the largest investment made by most
individuals.
While they are not typically purchased simply for
their investment value, the appreciation of real estate is often one
of the primary
reasons individuals choose to buy rather than rent a
home and to make a large down-payment.
[60]
Ms Florence’s argument that money may
be used either for savings or consumption is persuasive. Money
used as investment
in a property works differently from money used
for consumption, in that the former is a low-risk, long-term
investment and amounts
to savings. The CPI inadequately
reflects this. The Land Claims Court’s approach provides
an amount of money
sufficient to buy the same basket of consumer
goods today as the Florence family could have bought had they been
financially compensated
in 1970. But this fails to appreciate
that they were not fully compensated in 1970 and were prohibited from
using the money
as they wished. The amount of money reached by
using the CPI is unlikely to be sufficient to buy either the property
lost
or an equivalent property. It seems that using the CPI –
a non investment metric – to calculate the value
of
property which, critically, yields investment value over time, is
inapt.
[61]
Second, using the CPI may result in a
disparity between claimants who have their property restored and
claimants who can only receive
financial compensation. As
argued earlier, if restoration of land, rather than equitable
redress, is given primacy it should
be true that, as a starting
point, equitable redress should ordinarily put people in a position
similar to restoration. Using
the CPI as a means of achieving
equitable redress in the form of financial compensation may often
fail to put a claimant in this
position. Because it measures
inflation rather than capital gains on an investment, claimants may
be compensated less than
they would have been, had they received the
property itself.
[62]
Third,
the CPI is a fairly blunt instrument for equitable redress, as it
uses a nominal basket of goods not consumed by everyone.
The
data put forward by Ms Florence to show that the CPI is
insensitive to the impact inflation has on poorer households is
convincing. This is in part because the larger percentage of
income that poorer families spend on food, is subject to greater
price fluctuations based on inflation.
[63]
Therefore, even if we hope to measure purchasing power in terms of
consumable goods and services with section 33(eC), the
CPI may
under-compensate the poor.
[64]
This consideration is, of course, not specifically related to land,
nor necessarily the Florence family. As the Government
rightly
argued, they did not establish that they themselves came from a
lower-income bracket.
[63]
The
conclusion is inevitable that the CPI is not always the most
appropriate launch pad for determining equitable redress in the
form
of financial compensation for property that accrues investment
value. It is unfortunate, therefore, that other courts
have
used the CPI as a starting point.
[65]
It is even more problematic when used as a fixed determinant of a
claimant’s entitlement to equitable redress.
[66]
[64]
Are any alternatives to the CPI available
to us? And how should section 33 be interpreted as a whole to
give effect to the
purposes of the Restitution Act?
Alternatives
[65]
Counsel for Ms Florence suggested a number
of investment-based metrics as alternative options to the CPI, some
endorsed by experts,
namely the—
(a)
32-day notice deposit rate;
(b)
government bond rate;
(c)
prime overdraft rate;
(d)
mortgage rate;
(e)
ABSA house price index; and
(f)
current market value approach.
[66]
In
order to explain the practical implications of these alternatives, it
is useful to refer to the actual amounts these metrics
will yield
when applied. Dr Wittenberg, who testified for Ms Florence,
[67]
applied
(a) to (d) to calculate the present-day value. The actual
calculations were not disputed by Professor Nattrass
[68]
–
who
also testified for Ms Florence – and Professor Viruly, who
testified for the Government.
[69]
The
amounts, at the time the witnesses testified, were—
“
1.
Using the CPI: R30 000 is now worth R1 226 250.00
2a. 32-day notice
deposit rate
R1 787 280.19
2b. Bond
yields
R3 341 708.86
3a. Prime overdraft
rate
R8 692 522.65
3b.
Mortgage rate
R8 095 370.39”
[70]
[67]
None of these is without pitfalls. In
the absence of a national housing index, there is no unanimous expert
voice on the optimal
metric. One is only able to evaluate the
alternatives for the purposes of this case in light of the evidence
on record.
[68]
Dr Wittenberg preferred the 32-day notice
deposit rate as it is the only investment rate published by the
Reserve Bank going back
to 1970. This rate is an investment
option with a commercial bank, whereby a client invests and earns
interest on an amount
but can withdraw only a portion of the money
after giving the bank 32 days’ notice. It is, in his
opinion, the
most risk-free investment option available to a private
individual and therefore the most realistic way of calculating the
appropriate
value of financial compensation for housing.
[69]
However, the 32-day notice deposit rate is
by its nature a short-term investment of the kind financial
institutions offer from time
to time. According to
Professor Viruly the investment metric should reflect the
investment period with which we are
dealing; the 32-day notice
deposit rate is not necessarily appropriate for a long-term
investment such as the purchase of a house
more than four decades
ago.
[70]
The government bond rate is also a
risk-free investment metric and has the added benefit of being fairly
long-term. It represents
the rate at which the Government is
able to borrow from the market. Professor Nattrass argued that
although the calculated
value of the property using this metric is
significantly higher than the 32-day notice deposit rate, this higher
burden on the
Government is justifiable since it was then-government
policy that facilitated the forced redistribution of wealth from the
Florence
family to Dr Yeller in 1970. According to Professor
Nattrass this amounted to the Government effectively borrowing the
purchase
price from the family and therefore they are entitled to the
interest rate on that loan. This can be measured by the
government
bond rate.
[71]
This
reasoning seems to go against the purpose of the Restitution Act,
which is not to apportion blame or culpability to anyone,
including
the Government.
[71]
The
scheme envisaged by section 25(7) of the Constitution and the
Restitution Act is reparative rather than punitive in character.
[72]
Justifying a higher amount offered by the government bond rate
because it would be poetic justice – as Professor Nattrass
argues – would subvert this. The Restitution Act after
all represents an attempt by democratic South Africa to address
the
injustice of apartheid South Africa. The burden on the fiscus
is an important consideration since claims are paid from
tax payers’
money to advance a public purpose. Public funds must be used
equitably, with the public interest as an
important
consideration.
[73]
In
addition, government bonds are traditionally not open for purchase by
private individuals, so it would be arbitrary to
use this metric to
convert a private person’s foregone investment into present-day
monetary terms.
[72]
The prime overdraft rate is the lowest rate
that a private borrower could expect when she borrows money to
finance an asset other
than a house. This metric is not
specifically endorsed by any of the experts. However, Professor
Viruly stated that
this measure is a so-called “money-market
rate”, a short-term rate that is problematic for some of the
reasons canvassed
above. Further, the fact that this index is
pegged to assets other than a house makes it inappropriate for
present purposes.
[73]
The mortgage rate, which is also not
endorsed by any of the experts, is tied to the prime overdraft rate
but has the advantage of
being backed by an immovable asset.
The difficulty with both the prime overdraft and the mortgage rates
is that the estimation
calculated by Dr Wittenberg is excessively
high. The same considerations of pressure on the public purse
apply. None
of the experts fully explained or supported the use
of either of these rates. It would be imprudent to rely on
either given
the scant information before us.
[74]
The ABSA house price index, prepared by one
of the major commercial banks, was referred to in passing.
Since this is the closest
version of a housing index we have in South
Africa, it has to be considered an option. Unfortunately, none
of the experts
was confident enough about the make-up of the index to
speak to its appropriateness for claims like the present one.
The
index itself seems to suffer from difficulties similar to those
of the CPI – because it is based on the purchase and selling
prices of ABSA clients and mortgagors, it is heavily influenced by
the class and income levels of ABSA clients and therefore not
an
equitable measure to use when converting past loss into present-day
monetary terms. The index is also only based on the
prices of
houses for which ABSA clients have sought finance and is therefore
not a truly general standard.
[75]
During
oral argument, counsel for Ms Florence suggested using current market
value
[74]
of the property in
question at the time of compensation as a starting point.
According to the particular facts and circumstances
of the case, this
value could be adjusted upward or downward as the purposes of
equitable redress may require.
[76]
A market-value approach may in appropriate
cases have conceptual and practical advantages. If restoration
is primary and equitable
redress through financial compensation comes
into play only because restoration is not feasible, parity between
the two makes sense.
This is best achieved by targeting the
current value of the property, since that property is what would be
restored if this were
possible. This may, when reliable
evidence related to market value is available, be preferable to
determining an amount by
way of an investment metric that targets
average investment yields that are not comparable to investing in
immovable property over
a long period of time.
[77]
Additionally,
at least two section 33 factors in the Restitution Act can be
understood to include the current value of the property
as a
consideration. A court must take into account the requirements
of equity and justice.
[75]
It
must have regard to “any other factor which the court may
consider relevant and consistent with the spirit and objects
of the
Constitution and in particular the provisions of section 9”.
[76]
The current value of property may well be a relevant consideration.
As this measure is perhaps best able to ensure
equivalent
compensation of claimants entitled to restoration and those who are
not. The current value of the property is
also relevant to the
constitutional guarantee of equality before the law
[77]
because it best ensures that complainants to whom the land can be
restored and complainants to whom it cannot are treated equally.
Moreover, section 25 of the Constitution explicitly lists market
value as a relevant factor when determining the amount of
compensation
with respect to compensation for the expropriation of
property.
[78]
[78]
Valuation
of property already takes place in some Land Claims Court cases, as
it did here. It does not seem overly onerous
to require
assessment of the current market value of the property.
Further, this approach is not unheard of in other jurisdictions.
[79]
[79]
It has its pitfalls. One problem, as
illustrated by the current case, is that sometimes the value is
difficult to determine.
Mr Margolius, the property valuer
called by Ms Florence, acknowledges that his valuation would have
been more accurate if he had
had more time. A court cannot rely
squarely on the current value of a property in the absence of
reasonably accurate evidence.
[80]
The value of the property may also have
changed so much over time that the current value unfairly prejudices
or unduly benefits
a claimant. A property may have been
improved; subdivided and commercially developed (as in this case); or
in some other
manner either exponentially appreciated or depreciated
in value, so as to amount to an excessive and unforeseen windfall or
shortfall.
An award for financial compensation inflexibly
pegged to a distorted current market value would not be just and
equitable.
[81]
The current value of the property could
thus be very useful in some instances, but should not be viewed as
solely determinative
of the amount of compensation. The scale
may be tipped by other considerations. The current value of the
property may
in some cases be a good starting point and a court
should then use its wide discretionary powers under section 33 of the
Restitution
Act to temper the value in the circumstances.
[82]
Given
the lack of unanimous support for a particular metric, it risks being
arbitrary to pick one randomly and make it applicable
in all cases.
All of the proffered metrics are problematic. But the 32-day
notice deposit rate – in the circumstances
of this case –
is the least so. For reasons set out later,
[80]
it balances the requisites of redress most closely, without unduly
penalising the public purse.
Section 33
[83]
Given
the above, what meaning should be given to section 33(eC), on which
the Land Claims Court and Supreme Court of Appeal relied
heavily?
[81]
There are
different possible routes.
[84]
The
first – which is tempting – is that “changes over
time in the value of money” does not necessarily refer
to
inflation as measured by the CPI only, but instead to any measure
that is ordinarily fairest in the circumstances to reflect
a change
in economic value over time. This may include the current value
of the property. But the subsection specifically
refers to
changes in the “value of money”. It might be a
stretch to interpret the “value of money”
as referring to
the amount of money needed to purchase the property, simply because
the value of property can be quantified in
monetary terms.
Further, because the market-value measure is already subsumed under
other factors in section 33,
[82]
it would render section 33(eC) irrelevant if it, too, referred to
current value. This would violate the interpretive presumption
that no provision in a statute is superfluous.
[83]
For these reasons it is difficult to come to the conclusion that
section 33(eC) refers to the value of the property.
[85]
The second route is to agree with the
Government’s expert Professor Viruly, and the
Farjas
courts, that the phrase refers to inflation. While the CPI is
problematic when employed in other ways, it is South Africa’s
best known measure of inflation. Therefore section 33(eC) could
be interpreted as referring to the CPI.
[86]
There
are, however, two important caveats. First, the CPI is clearly
not always appropriate when property was intended for
investment and
not consumption. Although current value will generally be
relevant to determining investment claims, not all
rights in land
under the Restitution Act relate to ownership for the purposes of
investment. Some rights in land relate to
ownership for the
purposes of consumption or profit and some do not relate to ownership
at all.
[84]
This is
where the CPI as a measure could be useful: in escalating these kinds
of claims for equitable redress to current
monetary terms.
[87]
Second, the CPI as provided for in
subsection 33(eC) cannot be used as a dispositive factor. It is
not the only factor to
be taken into account. The factors in
section 33 must be balanced and considered with due regard to the
particular factual
context of a case and to the overarching purpose
of the Restitution Act. So the issue is not so much about the
exact meaning
of section 33(eC) and whether it refers to the CPI.
(In this regard I respectfully disagree with the judgment of my
colleague
Moseneke DCJ.) As submitted by Ms Florence, the issue
is that section 33(eC) cannot, alone, be determinative of the
question of what equitable redress in the form of financial
compensation is. None of the section 33 factors can.
Equitable
redress paid out as financial compensation cannot be
rigidly fixed to the CPI. Instead, the other factors in section
33 would
do the conceptual lifting to vindicate the aim that the
claimants be put in a position as close as possible to restoration.
The Land Claims Court’s
discretion
[88]
In view of the broad conceptual and
principled terrain I have attempted to navigate, does the Land Claims
Court’s judgment
warrant interference? I disagree with
the judgment on two points. First, it used the CPI as a
starting point for the
enquiry for equitable redress in the form of
financial compensation. As the CPI aims to measure inflation
related to consumption,
it is inapposite as an exclusive criterion
for determining how the value of dispossessed real property changes
over time.
This is such a case. Second, not only was the
CPI the start of the enquiry, it was also its end point. Once
the Land
Claims Court used the CPI as an escalation measure, it
looked no further. Section 33(eC) – and thus the CPI –
was exhaustive of the question of equitable redress, despite the rest
of section 33. The Land Claims Court’s exercise
of
discretion was moved by a wrong principle of law. This unduly
constrained its assessment of the Florence family’s
entitlement
to compensation. This Court may and should interfere.
Remedy
[89]
If the reliance on the CPI by the Land
Claims Court and Supreme Court of Appeal in
Farjas
and in this case is set aside, the
question is what order would be appropriate. All factors in
section 33 should be considered
in a fact-sensitive enquiry, within
the context of the meaning and purpose of section 25(3)(c) of the
Constitution and of the Restitution
Act.
[90]
The current value of the property may in
many cases be an appropriate point to start. In this case,
however, insufficient
and inaccurate evidence was placed before the
Court. We cannot without more award Ms Florence an amount equal
to the current
value of the property as assessed by the property
valuer.
[91]
It
is tempting to remit the matter to the Land Claims Court to consider
further evidence on the current value of the property as
well as
other relevant factors to reach a decision in light of the guidance
provided by this judgment. It is open to an appellate
court, in
appropriate circumstances, to remit a matter for evidence to be
obtained in the hope that, in doing so, the issues will
be fully
ventilated.
[85]
This
Court, however, will be disinclined to remit when doing so would be
speculative or would involve wasted costs and energy on
further legal
contests.
[86]
Remittal
in this case will delay compensation and justice for the Florence
family even longer. As their claim was lodged prior
to 1998,
they have already been waiting for over fifteen years for the
restitution due to them. We have to finalise this
case with the
best available material before us.
[92]
Although
the experts provided conflicting reasons for favouring one measure
over another, the 32-day notice deposit rate seems –
in this
case – to strike an equitable balance between the need fairly
to redress the Florence family’s loss and the
hesitance to
overburden our young democracy’s public purse. Based on
the evidence of Dr Wittenberg, this rate provides
for Ms Florence to
receive approximately R500 000 more than the CPI rate provides
as at December 2008,
[87]
and
measures investment rather than consumption. While this rate is
a short-term investment rate, it is the only rate published
by the
Reserve Bank going back to 1970. It also does not penalise the
public purse, as some of the other investment measures
may.
[93]
In the circumstances, and based on
available evidence, the most just and pragmatic order would be to
provide a conclusion to the
Florence family’s long quest for
compensation. It would therefore be in the interests of justice
to grant Ms Florence’s
application for leave to appeal and
uphold her appeal to provide for equitable redress calculated by the
32-day notice deposit
rate.
[94]
The
rate should be calculated from the date of dispossession, which is
the end of October 1970. It ought to run up until the
compensation became due and payable, namely upon judgment by the Land
Claims Court on 5 June 2012.
[88]
[95]
When
the Land Claims Court handed down judgment it should not have
escalated the under-compensation from 1970 to 2012 using the
CPI.
The Supreme Court of Appeal did not interfere with that part of the
order but I would. This judgment’s order
would
effectively replace that of the Supreme Court of Appeal and therefore
the order of the Land Claims Court.
[89]
Therefore the escalation of the amount of compensation should be
calculated up to the date of the Land Claims Court’s
judgment –
as if that Court had made that order. Having used the 32-day
notice deposit rate to escalate the amount
of under-compensation as
at the end of October 1970 to the date of the Land Claims Court’s
judgment in June 2012, the amount
of compensation to which Ms
Florence would be entitled is R2 211 732.54.
[96]
From
the date that the Land Claims Court handed down its judgment, up
until payment,
mora
interest
should run on the amount of compensation at the prescribed rate.
[90]
Where an appeal against a judgment succeeds and the amount of the
judgment debt is altered, the amended judgment debt is
of force and
effect retrospectively from the date of the trial court’s
judgment and not from the date of the appeal court’s
judgment.
[91]
This is
the case here.
Conclusion
[97]
On the main appeal, I conclude that the
Land Claims Court did not exercise its discretion properly in
limiting equitable redress
in the form of financial compensation to
the CPI. On the facts of this case and in the interests of
justice, Ms Florence
must be compensated in line with the 32-day
notice deposit rate. I note that regard must be had to the
requirements of equity
and justice and any other factor the Court may
consider relevant and consistent with the spirit and objects of the
Constitution
and in particular the provisions of section 9.
[98]
On the cross-appeal, I find that the
Supreme Court of Appeal properly exercised its discretion.
There are no grounds for interference.
[99]
I would grant the application for
condonation and leave to appeal in the main appeal but refuse leave
to cross-appeal. I would
uphold the main appeal and set aside
the orders of the Supreme Court of Appeal and the Land Claims Court.
Consequently,
I would order the Government to pay
equitable redress in the form of financial compensation to Ms
Florence for the loss of the Florence
family home in the amount of
R2 211 732.54, being the amount of under-compensation
escalated according to the 32-day
notice deposit rate from the
end of October 1970 to the date of the Land Claims Court’s
judgment. The respondent should
accordingly pay
mora
interest at the rate of 15.5% per annum, from the date of the
judgment of the Land Claims Court to the date of payment.
[100]
The above is the most just and equitable
redress in the circumstances of this case. In view of the
history of apartheid land
dispossession, the situation of the
Florence family, the interests of the state and the wording and
spirit of the Restitution Act
and the Constitution, it is the
most suitable outcome for this case in our attempt to address our
undemocratic past and look towards
a future recognising the dignity
of all.
MOSENEKE ACJ (Skweyiya ADCJ, Dambuza AJ,
Jafta J, Madlanga J and Zondo J concurring, and Khampepe J concurring
only on the main
appeal):
Introduction
[101]
This
appeal requires us to decide two prominent disputes. The one is
whether, when a court makes an award of equitable redress
in the form
of financial compensation under the Restitution Act, the CPI is an
appropriate metric to calculate “changes over
time in the value
of money”.
[92]
Ms
Florence vies for an investment based measure and not the
consumption-based CPI endorsed by the Land Claims Court
and the
Supreme Court of Appeal.
[102]
The other dispute is whether the Land
Claims Court had the power to make an order directing the state to
pay for a memorial plaque
the applicant wants erected on the subject
property. This plaque would form part of equitable redress
awarded to the applicant
for the hurt her family suffered when they
were dispossessed of their home under past racially-discriminatory
laws.
[103]
I am thankful to the main judgment for its
narration of the facts and background. Also, I adopt its
decisions on the preliminary
issues. But I see the resolution
of the two disputes differently. On the main claim, the appeal
should falter. I
find no gripping ground to set aside the
decision of the Land Claims Court and of the Supreme Court of
Appeal. On the present
facts and a proper interpretation of
section 33(eC) nothing persuades me that the CPI does not
appropriately measure “changes
over time in the value of money”
in order to calculate financial compensation under the Restitution
Act.
[104]
On the memorial plaque claim, I am inclined
to uphold the Government respondent’s cross-appeal and to set
aside the decision
of the Supreme Court of Appeal. The ruling
statute does not give the Land Claims Court the power to make the
order sought.
Even if the statute did, the claim has been
compromised by a private treaty. I would also make no costs
order relating to
proceedings in this Court.
[105]
At
the trial, the Land Claims Court spotted four core issues it had to
resolve. First was the extent of the loss suffered
by the
Florence family as a result of the dispossession of their rights to
Sunny Croft in 1970. Second was whether the loss
assessed would
equate to a just and equitable compensation. Third was the time
from which the compensation must be calculated.
Lastly was the
appropriate measure for converting the past financial loss into
present monetary value. There were two other
issues that are
not part of the appeal.
[93]
[106]
The Land Claims Court resolved these
issues in this manner: it found for the Florence family and ordered
the Government to pay equitable
redress in the form of financial
compensation to the Florence family in the amount of R1 498 890.
It found that
by 1970 the Florence family had effectively paid
off the purchase price of Sunny Croft, the property, and should
be treated
as owners. It accorded Sunny Croft a 1970 value
converted into present-day value.
It
assessed the Florence family’s 1970 loss as the agreed market
value of Sunny Croft being R31 778 plus the agreed
removal cost
(R85) less the agreed compensation received at the time of the
agreement (R1 350) which resulted in a nett total
of R30 513.
The Land Claims Court went on and assessed the Florence family’s
equitable redress as the amount of
their 1970 financial loss
at
the time of the dispossession
.
Then the Court used the CPI to convert the assessed 1970 loss of R30
513 to present value of R1 498.890.
[107]
However, the Land Claims Court found
against the Florence family on two issues. It rejected an
investment-based index urged
upon it by the Florence family and
resorted to the CPI to convert their past loss into present-day value
of money. It also
rejected the Florence family’s claim
that the Government should pay their costs for the erection of a
memorial plaque.
Ms Florence approached the Supreme Court of
Appeal and now this Court on these two grievances.
[108]
The
Supreme Court of Appeal dismissed the appeal and upheld the stance of
the Land Claims Court that the CPI is the appropriate
metric for
converting a past loss into present value. The use of the CPI
accorded with a purposive interpretation of section
33(eC) of the
Restitution Act. The trial court was entitled to take judicial
notice of the CPI as an accepted method to calculate
“changes
over time in the value of money”. The Supreme Court of
Appeal pointed out that, in any event, it and
the Land Claims Court
were bound by its earlier decision in
Farjas
[94]
which ruled that the CPI may be resorted to for translating past loss
into current terms. It held further that it could not
be said
that the Land Claims Court misdirected itself in adopting the same
approach. On the costs of erecting a memorial
plaque, the
Supreme Court of Appeal upheld the appeal, dismissed the Government’s
cross-appeal and ordered the Government
to pay the costs for the
erection of the memorial plaque.
Ms Florence’s contention in
this Court
[109]
In this Court Ms Florence urges us to set
aside the decision of the Land Claims Court and by extension of the
Supreme Court of Appeal.
She says both Courts did not exercise
their discretion judicially. This, she advances on five
principal grounds. They
are that the use of the CPI to compute
present-day value of financial loss in 1970 (a) results in an
irrational disparity between
the value of restitution in the form of
land restoration and of restitution in the form of financial
compensation; (b) is inconsistent
with applicable international law
principles; (c) under-compensates poor people; (d) is based on an
incorrect interpretation of
section 33(eC) of the Restitution Act,
and (e) fails to give effect to the purpose of financial
compensation.
Test for appellate interference
[110]
Ms Florence’s case is girded by the
unstated invitation that we replace the exercise of the discretion by
the two preceding
Courts with our own for the reason that the Land
Claims Court or the Supreme Court of Appeal did not use their powers
judicially.
Since those Courts had resorted to the wrong
principle of law, the submission runs, we are at large to prefer our
view to their
assessment of the metric for conversion.
[111]
The power of an appellate court to
interfere with the exercise of a discretion by a court
a
quo
is not without restraint. It
is limited by whether the discretion of the court in issue is
discretion in the strict sense,
sometimes called a strong or true
discretion.
[112]
In a land restitution matter in this Court,
Mpati AJ restated the standard for appellate intervention when the
Land Claims Court
and later the Supreme Court of Appeal had exercised
a discretion:
“
In
coming to its decision on whether or not to order the return of the
whole of the land claimed, the Supreme Court of Appeal exercised
a
discretion. The question whether leave should be granted will
therefore require consideration of the circumstances in which
this
Court will interfere with the exercise by the Supreme Court of Appeal
of its discretion.
The discretion
exercised by the Supreme Court of Appeal in this matter is one in the
strict sense, or as was said in
S v Basson
, a ‘strong’
discretion or ‘true’ discretion, in the sense that a
range of options was available to it.
As such this Court,
exercising appellate jurisdiction, will not set aside the decision of
the Supreme Court of Appeal merely because
it would itself, on the
facts of the matter before the Supreme Court of Appeal, have come to
a different conclusion. It will
only interfere where it is
shown that the Supreme Court of Appeal—
‘
had
not exercised its discretion judicially, or that it had been
influenced by wrong principles or a misdirection on the facts,
or
that it had reached a decision which in the result could not
reasonably have been made by a court properly directing itself
to all
the relevant facts and principles.’”
[95]
[113]
Where a court is granted wide
decision-making powers with a number of options or variables, an
appellate court may not interfere
unless it is clear that the choice
the court has preferred is at odds with the law. If the
impugned decision lies within
a range of permissible decisions, an
appeal court may not interfere only because it favours a different
option within the range.
This principle of appellate restraint
preserves judicial comity. It fosters certainty in the
application of the law and favours
finality in judicial
decision-making.
[114]
However, when a court of first instance,
even though vested with a strict or true discretion, has not acted in
a judicial manner,
an appeal court may intrude to ensure a lawful and
just outcome. The intervention would be in the interests of
justice as
the appeal court imposes fidelity to the law. The
appellate court would be doing no more than correcting an instance
where—
“
the
court [that] has exercised its statutory power capriciously or was
moved by a wrong principle of law or an incorrect appreciation
of the
facts or has not brought its unbiased judgment to bear on the issue
or has not acted for substantial reason.”
[96]
[115]
On the other hand, legislation may allow a
court a weak or fettered discretion which must be exercised in a
restricted or preset
manner only. In that event, if a court
were to veer beyond its limited range of permissible choices, again
an appeal court
would be at liberty to intervene.
May this Court interfere with the
Land Claims Court’s preference for the CPI?
[116]
The
Land Claims Court has a strict and true discretion. It enjoys
wide adjudicative remedial powers.
[97]
Sections 33 and 35 of the Restitution Act confer on it a wide range
of remedial powers geared only towards restoration of
land or other
equitable redress in the form of financial compensation. Under
each of the two species of equitable redress
there are numerous
remedial options open to the Land Claims Court. Beyond these
ample remedial variables available under
section 35,
[98]
section 33 lists factors
[99]
to which a court may have regard in assaying the equitable remedy for
past loss.
[117]
The rationale for this generous
jurisdiction is not hidden. The Restitution Act is truly
ambitious. It hopes to facilitate
and regulate nation-wide land
restoration claims that have accrued in almost a century of
dispossession. The dispossession
of rights in land must have
occurred under many diverse settings. Not all rights are
registered or readily verifiable; nor
would evidence to support
claims be easy to garner. Whilst the equitable redress claim
had to occur under the colour of the
law, the adjudication process
had to be flexible under a court with ample jurisdiction and with a
strict and strong discretion
to make prompt and permissible choices
provided they are just and equitable. These considerations and
more, point to a strict
discretion conferred only on the Land Claims
Court. This Court is constrained not to interfere with that
Court’s remedial
determinations unless they are shown to be
vitiated by decision-making.
Monetary conversion
(a)
Was the appreciation of the facts
incorrect?
[118]
I will now examine the applicant’s
grievances on appeal. Ms Florence starts with a veiled
complaint that the trial court
was influenced by “an incorrect
appreciation of the facts”. Ms Florence’s written
argument half-heartedly
criticised the factual findings of the Land
Claims Court but stopped short of pushing for a re evaluation of
the facts.
That was wise on her part because she advanced no
ground nor can I find any that entitles this Court to alter the facts
found by
the trial court.
[119]
On a closer look it turned out that she
urged us to prefer the expert evidence of her witnesses, Dr
Wittenberg and Professor Nattrass,
who preferred an investment or
capital-gain metric over that of the state expert witness,
Professor Viruly, who urged the
trial court to use the CPI
measure. Thus Ms Florence’s dissatisfaction is not
much more than that the Land Claims
Court was wrong to prefer the
evidence of Professor Viruly as a prudent aid in interpreting the
provisions of section 33(eC) of
the Restitution Act. Thus her
grievance in this Court on the evidence goes no further than that the
Land Claims Court was
wrong in law when it relied on the CPI rather
than a 32-day deposit rate investment yield for calculation of
“changes over
time in the value of money”. The
complaint, if any, that the trial court assessed the facts
incorrectly must fail.
(b)
Interpretation of section 33(eC)
[120]
Ms Florence charges that the decisions of
the Supreme Court of Appeal and of the trial court are based on an
incorrect interpretation
of section 33(eC) of the Restitution Act.
I think this contention is without merit.
[121]
Land
restitution, reform and equitable redress are compelling
constitutional priorities located in section 25(7) of the
Constitution.
[100]
A
claimant dispossessed of property as a result of
racially-discriminatory laws and practices is entitled either to
restitution
of that property or to equitable redress to the extent
provided by an Act of Parliament. That Act is the Restitution
Act.
It has created the Land Claims Court, as a specialist
court charged to administer and interpret the Restitution Act.
As we
have observed, the Court is vested with wide remedial powers
set out in sections 33 and 35. It may order the state to pay
the claimant financial compensation.
[101]
Should the Court so order, it must convert past financial loss of the
claimant to present value. In the words of the
statute, it must
have regard to “changes over time in the value of money”.
[122]
However,
this past-loss conversion consideration does not stand alone.
It is located within the evaluative considerations
listed in section
33. It is but one of several factors to which the Court must
have regard “
in
a particular matter
”.
[102]
Not all factors will be relevant in the decision-making of a
particular case. Some of the listed factors apply to all
claims.
[103]
Two such
generic considerations are that the Court must observe “the
requirements of equity and justice” and
must consider “the
spirit and objects” of the Constitution and in particular its
equality provisions. Other enumerated
factors are limited to
decisions concerned with restoration of a right in land.
[104]
Yet another set of factors relates to compensation only.
[105]
These factors must be seen as a suite of guidelines, when relevant to
a
particular matter
.
The Court must bear them in mind and may not overlook them when it
makes remedial orders permitted by section 35 of the
Restitution
Act.
[106]
[123]
Thus changes over time in the value of
money in section 33(eC) is a factor that the Court may not overlook.
Yet it must always
be understood in the context of its location
in and purpose of the Restitution Act.
[124]
Equitable
redress must be sufficient to make up for what was taken away at the
time of dispossession.
[107]
The amount of compensation has to be just and equitable reflecting a
fair balance between public interest and the interest
of those
affected after considering relevant circumstances listed in section
33 of the Restitution Act. For instance, a history
of hardship
caused by the dispossession may entitle a claimant to a higher
compensation award in order to assuage past disrespect
and
indignity.
[108]
[125]
But
compensation within the scheme of the Restitution Act is neither
punitive nor retributive.
[109]
It is not to be likened to a delictual claim aimed at awarding
damages that are capable of precise computation of loss on
a
“but-for” basis.
[110]
It is a constitutionalised scheme paid out of public funds in order
to find equitable redress to a tragic past. Ultimately,
what is
just and equitable must be evaluated not only from the perspective of
the claimant but also of the state as the custodian
of the national
fiscus and the broad interests of society as well as all those who
might be affected by the order made.
[126]
With
this context in mind, did the trial court misinterpret section
33(eC)? Ms Florence’s charge that the Land
Claims
Court misinterpreted this provision amounts to this. It failed
to give any or sufficient weight to section 33(c),
being the
requirement of equity and justice, and section 33(f), which requires
the Court to consider any factor relevant and consistent
with the
spirit and object of the Constitution. This complaint is not
about the interpretation of a section. Also it
has no merit
because the Court tells us that it has had regard to these
factors.
[111]
[127]
An
additional complaint is that the Court misinterpreted the section
because it did not have regard to a principle known as nominalism
of
currency which is said to underlie all aspects of South African
law.
[112]
I agree with
the Land Claims Court that the principle is irrelevant to the proper
adjudication of this matter. Parliament
has adopted a
conversion mechanism that is meant to ensure that compensation
sounding in money must reflect changes in the value
of past monetary
loss. So our proper concern must be to understand the meaning
of section 33(eC) rather than to impose on
it notions of nominalism
of currency. There is another reason why nominalism of currency
is presently irrelevant. The
claim against the state for
equitable redress is not a civil debt.
[128]
The last interpretive criticism is that the
Land Claims Court was wrong in finding that “changes over time
in the value of
money could only mean loss of purchasing power as
measured by the CPI”. This is not an interpretive
matter. It
rather points towards the kernel difference between
the parties, on which I will focus shortly. I am satisfied that
the Land
Claims Court and the Supreme Court of Appeal have not
misinterpreted section 33(eC). But first let me clear an
important
hurdle on the timing for calculating past loss.
(c)
At which date is financial loss calculated
and what is the purpose of the compensation
[129]
The
Land Claims Court assessed the Florence family’s equitable
redress as the amount of their 1970 financial loss at the time
of the
dispossession.
[113]
It set the financial compensation at R30 513 as an amount that
was consistent with putting the Florence family, insofar
as money can
do it, in the same position they would have been in immediately after
dispossession “calculated at the time
of the dispossession”
and
not
at the time of compensation.
[130]
It is somewhat unclear whether Ms Florence
contests that past loss must be calculated at the time of
dispossession. It appears
not, because the assessed 1970 loss
was agreed upon between the parties. What is clear is that she
disagrees that the purpose
of the compensation is to put claimants in
the same position they would have been in immediately after the
dispossession.
She contends that the object of compensation is
to place claimants in the same position
as
if the land had not been taken. This difference is important
for how one assesses and converts past loss. On the
applicant’s
stance one must imagine the continued ownership of the property and
compensate for its loss and accretion of
capital worth. On the
approach preferred by the trial court, one accepts the loss and
compensates at the point of dispossession
and adjusts the monetary
value to present-day value.
[131]
In my view the
Land Claims Court was correct in calculating the financial loss at
the time of the dispossession and for the purpose
of placing the
Florence family
in the same position
they would have been in immediately after the dispossession.
The starting point and main plank of the Restitution Act is an
acknowledgment of widespread dispossession that occurred since
19
June 1913 and the need for equitable redress in the form of
restoration of land or financial compensation. The legislation
does not warrant an approach that fixes compensation as if the loss
never occurred. Nor does it warrant awarding a full replacement
value of the taken subject property.
[132]
Section
2(2) of the Restitution Act provides powerful indicators in
support.
[114]
First,
it expressly prohibits relief to any person who received just and
equitable compensation or a similar consideration
at the time of
dispossession.
[115]
This
means that the scheme of the Restitution Act makes the time of
dispossession the critical starting point of an assessment
of
financial compensation. The Government is right that the
purpose of the financial compensation is to provide relief to
claimants in order to restore them to a position as if they had been
adequately compensated immediately after the dispossession.
It
must be correct that just and equitable financial compensation does
not aim to restore claimants in current monetary terms to
the
position they would have been in had they not been dispossessed, but
rather the financial loss they incurred at the time of
dispossession. The Land Claims Court was correct to set the
loss at the time of the dispossession as the market value of
the
property less the amount of compensation the applicants had received
at the time of dispossession. This equated to the
nett amount
of R30 513. It is that amount that the Court correctly
converted to present-day monetary value.
[133]
Further
support for this approach is to be found in the very enactment of
section 33(eC) of the Restitution Act. The
scheme of the
Restitution Act undoubtedly aims to compensate financial loss as at
the time of dispossession. That explains
why just and equitable
compensation would have to reflect the change, from the time of
dispossession to the time of compensation,
in the value of money.
If compensation were based on the fiction of continued ownership of
the property, its possible financial
trajectory or capital-gain would
be difficult to compute. The purpose of compensation advanced
by Ms Florence is inconsistent
with the purpose of the Restitution
Act and in any event unwieldy and would lead to over-compensation.
[134]
The Land
Claims Court correctly ordered the Government to pay the Florence
family the equivalent of R30 513 calculated at the time
of
dispossession and transposed to present monetary value.
(d)
Core of the monetary-conversion dispute
[135]
The
core dispute between the parties relates to the appropriate
conversion metric when a court adjusts its award for “changes
over time in the value of money”. The Land Claims Court
considered the expert evidence before it and thereafter resorted
to
the CPI as the appropriate metric for the conversion of historical
loss to present-day value. In doing so, it relied on
its own
earlier decisions
[116]
and
was, in any event, bound by the Supreme Court of Appeal’s
decision in
Farjas.
[136]
Ms Florence
has levelled a number of criticisms at the reasoning in
Farjas
.
She, in effect, invites us to overrule
Farjas
and to hold that claimants for financial compensation can only be
adequately recompensed when their past loss is treated as an
investment and adjusted to present-day value by applying compound
interest and thus recognising their lost capital-gains on the
adjudged historical loss. I am unable to agree. I can
find no misdirection on the part of the Land Claims Court in
following the decision of
Farjas
.
Hence, the invitation to set aside the decision of the Supreme Court
of Appeal in
Farjas
must be declined. I can find no wrong principle of law in it
which entitles us to set it aside.
[137]
Farjas
correctly
held that a claim for compensation under the Restitution Act is in a
class of its own (
sui
generis
).
It is a claim against the state and has a reparatory and
restitutionary character. It is neither punitive in the
criminal justice sense nor compensatory in the civil sense. It
advances major public purpose and deploys public funds in
an
equitable way to deal with the egregious and identifiable forms of
historic hurt.
[117]
Fair compensation is not necessarily equal to the monetary value of
the dispossessed property and restitution has little
or nothing to do
with investing or commercial transactions. It has to do with
addressing massive social and historical injustice.
Beyond a
mere calculation of financial loss a court must have regard to
several non-financial considerations listed in section
33 of the
Restitution Act.
[138]
The reasoning in
Farjas
is correct that the application of compound interest or of
capital-gain on a historical loss will threaten the overarching
purpose
of the Restitution Act and the pointed object of compensation
envisaged in sections 33 and 35. It is likely to result in
over-compensation of claimants, an outcome which is at odds with the
purpose of the Restitution Act.
[139]
The
Land Claims Court was indeed entitled to take judicial notice of the
CPI for the good reasons detailed in
Farjas
.
[118]
In this matter, the trial court did not need to resort to that
judicial aid. Ample evidence was led on what the CPI
is and why
it would be an appropriate measure to compensate for inflation but
not for a capital-gain on property which would have
been held as a
long-term investment. I find no misdirection in the trial court
preferring the expert evidence of Professor
Viruly. He
explained cogently:
“
The
value of money for consumption purposes is thus typically adjusted
over time by the CPI [which] compensates for the diminishing
value of
money.”
[140]
And later, Professor Viruly explained the
“value of money” with remarkable clarity:
“
It
is consumption that we are talking about. But it is not even
consumption, it is what happens to the value of money, how
you use
that money is something that we can’t foresee what people over
30 years spend their money on, whether its investment
or consumption
– all we are trying to do here is find a formula which allows
us to measure what has happened to the value
of money, over time, and
for that we have one indicator, the CPI.”
[141]
The CPI essentially generates the
inflation-adjusted value. It ensures that the “consumption
power” of money is
not eroded over time. Perhaps a
clearer explanation of what the CPI is “is an index that
adjusts the value of money
for consumption purposes over time and
compensates for diminishing value of money”. It is thus
fair to say that the
CPI seeks to measure the value of money over
time in order to avoid its diminishing value with the passage of
time.
[142]
The trial court and the Supreme Court of
Appeal rightly refused to apply compound interest or a capital-gain
on the historical loss
of the applicant. Fair compensation is
not always the same as the market value of the property taken; it is
but one of the
items which must be taken into account when
determining what would constitute fair compensation. The
approach urged on us
by Ms Florence will threaten the purpose of the
Restitution Act. It is likely to result in over-compensation of
claimants,
an outcome which is at odds with the purpose of the
Restitution Act.
(e)
International precedent
[143]
Ms
Florence further contends that the Land Claims Court should have
followed international law precedent. The leading international
law case she relies on is
Chorzow
.
[119]
It is said to have established two principles. The one is that
restitution is to be directed at restoring the situation
which would,
in all probability, have existed if the dispossession had not taken
place. The other is that compensation should
be in the form of
restitution in kind. Where this is not possible “payment
of a sum corresponding to the value which
restitution in kind would
bear”.
[120]
[144]
There
are several difficulties with this line of reasoning. The first
is that the
Chorzow
principles are distinguishable because they are applicable to
expropriation of property of foreign nationals. The protection
could be extended to internally displaced people. And seemingly
the compensation should be an equivalent of restitution in
kind.
All three features of the principle apply in a context of
dispossession that is vastly different from ours. Also,
the
Restitution Act does not entitle any claimant to restitution in kind
or its equivalent. It is so that our courts observe
the
principle of primacy of restoration of dispossessed land when
adjudicating land claims under the Restitution Act. Ordinarily
a claimant would be entitled to the dispossessed land provided the
restoration is feasible and does not lead to adverse consequences
set
out in the Restitution Act.
[121]
Also the purpose of the compensation under the principle is to
compensate as if the expropriation never occurred. The
scheme
of the Restitution Act requires courts to determine value at the time
of dispossession and to convert it into the present-day
value of
money. Put differently the principle announced in
Chorzow
is inconsistent with our own statutory scheme. Our duty to
interpret our law consistent with international law arises only
when
international law is not irreconcilable with our own explicit
law.
[122]
(f) CPI
under-compensates poor people
[145]
Ms Florence says the CPI under-compensates
the poor and, therefore, it is not an appropriate factor for
converting historical loss
into present-day terms.
The Government correctly points out that there is no evidence
placed before the trial court
that the Florence family were poor in
the sense of being in the lowest quintile of household income.
If anything, Dr Wittenberg
was of the view that, were the Florence
family in the top quintiles, then the CPI would be a fair measure to
convert their loss.
[146]
In another case where the evidence shows
that the claimants are poor and it appears that a conversion of past
loss based on the
CPI will result in compensation that is not just
and equitable, it will always be in the court’s hands to make
such an adjustment
in the quantum of the compensation that would
eliminate the prejudice. It therefore avails not Ms Florence to
raise prejudice
against or under-compensation of the poor in the
air. The remedial power of the Land Claims Court in section 35
taken together
with section 33 makes it plain that the Court must “in
any particular matter” have regard to many factors. It
must ensure that the compensation is just and equitable and is not at
odds with constitutional values. In this regard, the
right to
equality finds special mention in the section. There is no
merit in the Ms Florence’s assertion that because
the CPI
conversion metric might under-compensate in a given setting, it ought
not to have been applied in this case.
(g) Disparity in
awards
[147]
One of Ms Florence’s objections to
the use of the CPI for the translation exercise is that it results in
an illogical discrepancy
between the value of restitution in the form
of restoration and restitution in the form of financial
compensation. The essence
of this objection is that the
financial compensation ought to allow the Florence family to buy a
new house of equivalent value.
In other words, the extent of
the disparity between the two forms of restitution is the difference
between the CPI and the investment
return. That difference, Ms
Florence says, would be between R1.3 million calculated using
the CPI and R1.9 million calculated
using the 32-day notice deposit
rate.
[148]
Ms Florence’s claim in this case was
not for the restoration of a right to land but was for equitable
redress in the form
of compensation. We have already held that
the purpose of financial compensation is to compensate the claimant
in order to
restore them to the position they would have been in
immediately after the dispossession. Nothing in the scheme of
the Restitution
Act provides that financial compensation shall be an
equivalent of restoration in kind. A claimant is entitled only
“to
the extent provided by an Act of Parliament”.
And the Restitution Act makes it clear that compensation may be
granted
in lieu of the land claimed or that it will be determined as
an equivalent of the restoration of the subject land.
[149]
The appeal on the main claim must fail.
Cross-appeal
[150]
In
my view, the cross-appeal must succeed. The Court’s power
to make a restitution order is derived from section 35
of the
Restitution Act. It is so that it has open to it “a wide
variety of potential forms of relief”.
[123]
However
the Land Claims Court’s power to grant alternative relief does
not include the power to order that the Government
pay for the
erection of a memorial plaque on the dispossessed land.
Consequently the Land Claims Court was correct in concluding
that it
had no power to order the respondent to pay for the erection of a
memorial plaque under section 35 of the Restitution Act.
I
consequently concur in the judgment of Zondo J. Also,
Ms Florence and the present owner of the property have agreed
that a memorial plaque may be erected. Thus Ms Florence’s
claim for the erection of a plaque has been settled by a
private
treaty and for that reason has been compromised.
Order
[151]
The following order is made:
1. Leave to file
the supplementary record is granted.
2. Condonation is
granted.
3. Leave to appeal
is granted.
4. Leave to
cross-appeal is granted.
5. The appeal is
dismissed.
6. The cross-appeal
is upheld.
7. There is no
order as to costs.
ZONDO J (Moseneke ACJ, Skweyiya ADCJ,
Dambuza AJ, Jafta J and Madlanga J concurring):
Introduction
[152]
I have had the opportunity of reading the
judgment prepared by my Colleague, Van der Westhuizen J as well as
the judgment by Moseneke
ACJ. The main judgment grants Ms
Florence leave to appeal on the basis that—
(a) the matter
clearly raises a constitutional issue,
(b) there are
reasonable prospects of success, and
(c) it is in the
interests of justice that leave to appeal be granted.
For the reasons that the main judgment
gives, I agree that leave to appeal should be granted.
[153]
The main judgment concludes that the appeal
should be upheld. I am unable to agree with the main judgment
in this regard.
In his judgment, Moseneke ACJ concludes that
the appeal should be dismissed. For the reasons that he gives,
I agree with
him that the appeal should be dismissed.
[154]
I
would also grant the Government leave to cross-appeal.
[124]
I would do so because the cross-appeal also raises a constitutional
issue, namely, the interpretation of legislation enacted
to give
effect to the Constitution. It raises important issues and
there are reasonable prospects of success for the cross-appeal.
The
main judgment concludes that the cross-appeal should be dismissed.
I take a different view. In my view the
cross-appeal should
succeed. In what follows I explain my reasoning that leads me
to this conclusion. This judgment
deals with the cross-appeal
only.
Brief background
[155]
The main judgment fully sets out the
factual background to this matter. For that reason, it is not
necessary to do the same
in this judgment. It will suffice to
state only those facts that are necessary for a proper understanding
of this judgment.
[156]
In 1970 Mr Florence and his two brothers
were dispossessed of their property as a result of racially
discriminatory laws or practices
of the apartheid government.
No just and equitable compensation was given to them at the time for
the dispossession of their
property.
[157]
The Florence family’s dispossession
of their property was not an isolated incident. Both under
colonial rule and successive
minority white governments, the
dispossession of black people of their land was a critical feature of
their oppression in this
country. In turn black people placed
the restoration of their land at the centre of their struggle for
liberation.
[158]
It was no wonder then that one of the first
pieces of legislation to be passed by the first-ever democratically
elected Parliament
in this country in 1994 was the Restitution Act.
That Act was aimed at addressing the demand for the restoration of
land
to people who had been dispossessed of their land as a result of
racially discriminatory laws or practices. Both the appeal
and
the cross-appeal before us raise the interpretation of certain
provisions of that Act.
[159]
In the present case Mr Florence lodged a
claim under the Restitution Act for the restoration of a right in
land as provided for
in section 2 arising from his and his brothers’
dispossession of a right in land in 1970. The current owner of
the
property was cited in the claim. At some stage, while the
claim was pending before the Land Claims Court, Mr Florence, as
the
applicant then, reached a settlement agreement with the current owner
of the property. In terms of that settlement agreement
Mr
Florence abandoned the claim for the restoration of a right in land.
In return the current owner of the property agreed
that Mr Florence
could put up a memorial plaque concerning the dispossession on the
site. Mr Florence then pursued against
the Government a claim
for equitable redress and a claim for the payment of an amount for
the costs of the erection of the memorial
plaque. In the light
of the settlement agreement, the current owner of the property
withdrew from the proceedings in the
Land Claims Court and has not
taken part in any subsequent proceedings regarding the matter.
[160]
Mr Florence died and Ms Florence replaced
him in these proceedings. The Land Claims Court awarded Ms
Florence an amount of
R1 498 890 as equitable redress which the
Government was ordered to pay. That amount was made up of
R1 488 890 as compensation
for the loss of the right in land
that the Florence brothers had suffered when they were dispossessed
of their property (less an
amount that they had received at the time
of dispossession) and an amount of R10 000 as a
solatium
.
The Land Claims Court dismissed the claim for the payment of an
amount for the costs of the erection of the memorial plaque.
It
held that it had no jurisdiction in respect of such a claim because
the claim arose from a private agreement between the applicant
and
the current owner of the property to which the Government was not a
party.
[161]
In
an appeal to the Supreme Court of Appeal, that Court dismissed the
applicant’s appeal against the amount of compensation
that the
Land Claims Court had awarded her as equitable redress but upheld her
appeal against the order of the Land Claims Court
dismissing her
claim relating to the costs for the erection of a memorial plaque.
The Supreme Court of Appeal held that the
Land Claims Court had
jurisdiction in respect of the claim and could have made an order
under section 35(1)(e)
[125]
of the Restitution Act. It set aside the order of the Land
Claims Court concerning the costs of the memorial plaque.
It
replaced that order with an order that the Government pay an amount
of R50 000 for the costs of a memorial plaque. It
is against
this order that the Government has noted a cross-appeal.
[162]
The cross-appeal raises the question
whether, for the dispossession of a right in land after 19 June 1913
as a result of past racially
discriminatory laws or practices, a
person who is awarded restoration of a right in land or equitable
redress under the Restitution
Act is entitled, in addition to such
relief, to an amount for the costs of the erection of a memorial
plaque. In what follows
I consider the question whether the
applicant is entitled to such a remedy or whether the Land Claims
Court has jurisdiction in
respect of such a claim or whether an order
for the payment of such an amount is competent under the Restitution
Act when an order
for equitable redress has been granted.
Costs of the memorial plaque
[163]
In my view Ms Florence is not entitled to
an amount for the costs of the erection of a memorial plaque, or,
indeed, to any remedy,
in addition to equitable redress. This
view is based on section 25(7) of the Constitution and various
provisions of the Restitution
Act, particularly the terms:
“restitution of a right in land”, “restoration of a
right in land” and “equitable
redress” in sections
1, 2(1), 2(2) and 22 of the Restitution Act. I consider these
and other provisions below.
[164]
Section 25(7) of the Constitution reads:
“
A
person or community dispossessed of property after 19 June 1913 as a
result of past racially discriminatory laws or practices
is entitled,
to the extent provided by an Act of Parliament, either to restitution
of that property or to equitable redress”.
As
this Court said in
Mphela,
[126]
the Restitution Act gives effect to section 25(7) of the
Constitution. The purpose of the Restitution Act is—
“
to
provide for the restitution of rights in land to persons or
communities dispossessed of such rights after 19 June 1913 as a
result of past racially discriminatory laws or practices; to
establish a Commission on Restitution of Land Rights and a Land
Claims
Court; and to provide for matters connected therewith.”
[127]
[165]
Before I go further, it is necessary to
refer to the definitions of certain terms used in the Restitution Act
that, in my view,
require a proper understanding in order to
appreciate the principles underlying the Restitution Act. A
proper understanding
of these different terms is also necessary in
order to follow the analysis of the Restitution Act that leads me to
my conclusion.
I refer below to the key terms and their
respective definitions.
[166]
The phrase “restitution of a right in
land” is defined in section 1 as—
“
(a)
the restoration of a right in land; or
(b) equitable
redress.”
The phrase “restoration of a right
in land” is defined as—
“
the
return of a right in land or a portion of land dispossessed after 19
June 1913 as a result of past racially discriminatory laws
or
practices.”
The term “equitable redress”
is defined as—
“
any
equitable redress, other than the restoration of a right in land,
arising from the dispossession of a right in land after 19
June 1913
as a result of past racially discriminatory laws or practices,
including—
(a) the granting of
an appropriate right in alternative state-owned land;
(b) the payment of
compensation”.
[167]
In order to achieve its object, the
Restitution Act sets out in section 2 the fundamental principle upon
which it seeks to bring
justice to those individuals, families and
communities who were subjected to the indignity of the dispossession
of their land as
a result of past racially discriminatory laws or
practices. Section 2(1)(a) captures the fundamental principle
of the Restitution
Act. It reads:
“
A
person shall be entitled to restitution of a right in land if:
(a) he or she is a
person dispossessed of a right in land after 19 June 1913 as a result
of past racially discriminatory laws or
practices”.
[168]
In essence section 2(1)(a) provides that,
if a person was dispossessed of a right in land as contemplated in
section 2(1)(a), she
“shall be entitled to restitution of a
right in land”.
[169]
Section 2(1) creates a specific cause of
action and prescribes a specific remedy for that cause of action.
The cause of action
that it creates is dispossession “of a
right in land after 19 June 1913 as a result of past racially
discriminatory laws
or practices”. For convenience I
shall refer to this cause of action simply as “dispossession of
a right in land”.
The remedy that section 2(1) prescribes
is “restitution of a right in land.” Accordingly,
where a person lodges
a claim based on that cause of action under the
Restitution Act and satisfies the court that she was dispossessed of
a right in
land, the only remedy that she can be granted is
“restitution of a right in land”. In this regard it
must be
remembered that the term “restitution of a right in
land” is defined as meaning “(a) the restoration of a
right
in land; or (b) equitable redress”. Accordingly,
the remedy of restitution of a right in land can take the form of the
restoration of a right in land or equitable redress. It must
also be borne in mind that “equitable redress” may
take
the form of payment of compensation or the granting of an appropriate
right in alternative state-owned land.
[170]
The “restitution of a right in land”
as defined is the full redress cognisable by the Restitution Act for
the dispossession
of a right in land. Where a statute creates a
new cause of action and prescribes a specific remedy for that cause
of action,
the prescribed remedy is the only remedy available for
that cause of action. Therefore, a claimant who has been
awarded restitution
of a right in land, be it in the form of the
restoration of a right in land or equitable redress, has been awarded
full redress
for the dispossession of a right in land and is not
entitled to any other relief in addition.
[171]
The construction that the remedy of the
restitution of a right in land is the only remedy prescribed by the
Restitution Act for
the wrong of dispossession of a right in land as
envisaged in section 2(1) is reinforced by section 2(2) of the
Restitution Act.
Section 2(2) provides as follows:
“
No
person shall be entitled to restitution of a right in land if:
(a) just and
equitable compensation as contemplated in section 25(3) of the
Constitution; or
(b) any other
consideration which is just and equitable,
calculated at the
time of any dispossession of such right, was received in respect of
such dispossession”.
[172]
In my view compensation awarded to a
claimant as equitable redress under the Restitution Act would
constitute just and equitable
compensation as envisaged in
section 25(3) of the Constitution. Section 2(2) means that
there is no entitlement by anybody
to restitution of a right in land
(which also means there is no entitlement by anybody to a restoration
of a right in land or to
equitable redress) if, at the time of
dispossession of the relevant right in land, just and equitable
compensation was received.
[173]
The fact that a person who was dispossessed
of a right in land and was given just and equitable compensation or
some other just
and equitable consideration at the time of
dispossession is precluded by section 2(2) from claiming restitution
of a right in land
entails the following. It necessarily means
that that person may also not lodge a separate claim for the costs of
the erection
of a memorial plaque on the property even if the current
owner of the land has no objection to its erection. Once a
person
who was dispossessed of a right in land has been granted
restitution in any of its forms, justice has been done and that is
the
end of the matter.
[174]
There is another reason why such a person
would not be able to lodge a separate claim for the costs of the
erection of a memorial
plaque. An applicant for restitution
under section 2(1) is required to lodge a claim with the Land Claims
Commission on Restitution
of Land Rights in terms of section 10 read
with section 11 or to lodge an application with the registrar of the
Land Claims Court
in terms of Chapter IIIA. Under the
Restitution Act only one type of a claim may be lodged. It is a
claim defined in
section 1 as meaning—
“
(a)
any claim for restitution of a right in land lodged with the
Commission in terms of this Act; or
(b) any application
lodged with the Registrar of the Court in terms of Chapter IIIA for
the purpose of claiming restitution of a
right in land”.
The definition of the word “claim”
under the Restitution Act contemplates only a claim for restitution
of a right in
land. So, a person who was dispossessed of a
right in land cannot under the Restitution Act lodge a claim for
anything else
in respect of the dispossession once he or she has been
awarded restitution of a right in land, be it in the form of
restoration
of a right in land or equitable redress. A claim
for an amount for the costs of erecting a memorial plaque falls
outside
the definition of “claim” in the Restitution
Act. Therefore, it is a claim that is not contemplated or
cognisable
under the Restitution Act.
[175]
Furthermore,
section 10(1) of the Restitution Act, which is the section that
provides for the lodgement of claims for restitution,
restricts the
lodgement of claims to claims for restitution.
[128]
Those are claims as defined in section 1 of the Restitution Act.
Section 11 deals with the procedure to be followed
after a claim has
been lodged.
[129]
Section
14 deals with the referral by the relevant regional land claims
commissioner of a claim to the Land Claims Court
when, after
investigation of the claim, he or she is of the opinion that the
claim is ready for hearing by that court. Once
again, the claim
to which reference is made in that section is a claim as defined in
section 1.
[176]
Section 38B(1), which deals with direct
access to the Land Claims Court, makes provision for a person
entitled to restitution of
a right in land and who lodged a claim not
later than 31 December 1998 to “apply to the Land Claims Court
for restitution
of such right” provided, among other things,
that the leave of that Court is first obtained in certain cases.
This
all relates to claims as defined in the Restitution Act.
If the view that that person is entitled to payment of an amount
for
the costs of the erection of a memorial plaque as a separate claim in
addition to the restoration of a right in land or equitable
redress
is correct, why is it then that such a claim cannot be lodged
separately under the Restitution Act?
[177]
Section 22(1) establishes the Land Claims
Court and provides for some of its powers. Section 22(1) reads—
“
[t]here
shall be a court of law to be known as the Land Claims Court which
shall have the power, to the exclusion of any court contemplated
in
section 166(c), (d) or (e) of the Constitution” and, thereunder
appear paragraphs (a) to (d).
Paragraphs (a) to (d) cannot, by any
stretch of the imagination, be said to give the Land Claims Court any
power to make an order
such as the one under consideration in
addition to compensation constituting equitable redress. To
show this, a discussion
of paragraphs (a) to (d) is necessary.
[178]
Paragraph (a) of section 22(1) gives the
Land Claims Court the power “to determine a right to
restitution of a right in land
in accordance with this Act”.
Paragraph (b) gives that court the power “to determine or
approve compensation
payable in respect of land owned by or in
possession of a private person upon expropriation or acquisition of
such land in terms
of this Act”. Paragraph (cB) confers
power “to determine whether compensation or any other
consideration received
by any person at the time of dispossession of
a right in land was just and equitable”. The Restitution
Act grants the
Land Claims Court specific powers to determine whether
the compensation awarded was just and equitable. Once the Court
has
so determined, the claimant has received equitable redress.
That person has received justice and is not entitled to any further
or additional relief, including costs for a memorial plaque.
[179]
Section 22(2) sets out further powers of
the Land Claims Court in paragraphs (a), (b) and (c). Of
these provisions, only
paragraph (c) deserves comment. Under
that provision the Land Claims Court has—
“
the
power to decide any issue either in terms of this Act or in terms of
any other law, which is not ordinarily within its jurisdiction
but is
incidental to an issue within its jurisdiction, if the Court
considers it to be in the interests of justice to do so.”
Section 22(2)(c) was not relied upon by
Ms Florence for the proposition that the Land Claims Court had
power to make the order
sought by her in regard to the costs for the
erection of a memorial plaque nor was it relied upon by the Supreme
Court of Appeal.
Indeed, the main judgment also does not rely
upon it. In my view it cannot be relied upon in this case.
[180]
If Ms Florence sought to rely on section
22(2)(c) for the proposition that it is in the interests of justice
that the Land Claims
Court entertain the claim for the payment of the
costs of a memorial plaque, that case should have been made first and
foremost
before that Court so that it could take a view on the
matter. That case was not made in that Court. In any
event, in
my view it could not have been in the interests of justice
that the Land Claims Court entertain the claim for the costs of the
memorial plaque. Firstly, Mr Florence could and should have
extracted those costs from the current owner of the property as
part
of the settlement agreement. Either he did not try to do so or
he tried but failed and then sought to claim it from
the Government.
Secondly, there is no reason why Ms Florence cannot or should not use
part of the compensation awarded as
equitable redress to pay for the
costs of the erection of the memorial plaque.
[181]
Section
39(2) of the Constitution enjoins that, when interpreting any
legislation, every court must “promote the spirit, purport
and
objects of the Bill of Rights”. Furthermore, it is now
trite that legislation must be interpreted consistently
with the
Constitution whenever this can be done without doing violence to the
language of the legislation.
[130]
The interpretation in this judgment that under the Restitution Act a
claimant under section 2(1) is not entitled to any further
relief in
addition to a restoration of a right in land or equitable redress is
consistent with section 25(7). Section 25(7)
says that a person
is entitled to either the restoration of that property or to
equitable redress. It does not leave room
for any further or
additional relief.
[182]
The view that under the Restitution Act a
person who was dispossessed of a right in land as envisaged in
section 2(1) is entitled
to payment of an amount for the costs of the
erection of a memorial plaque in addition to equitable redress means
that two persons
against whom the same wrong was committed are not
treated equally just because one received her compensation at the
time of dispossession
and the other receives it later. In this
regard I refer to section 2(2) which I have already discussed above.
That
view seems to me to be based upon an interpretation of the
Restitution Act that allows arbitrariness. If at all possible,
a statutory provision should not be construed in a manner that
permits arbitrariness. The construction I give to the
Restitution
Act does not produce any arbitrariness.
[183]
The
arbitrariness lies in the fact that, on that construction of the
Restitution Act, two persons who were dispossessed of properties
on
the same day will be treated unequally when it comes to the relief
they receive. If one of the two was given equitable
redress or
just and equitable compensation for the dispossession of her right in
land at the time of the dispossession, she will
not be entitled to an
amount for the costs of a memorial plaque. However, the one who
did not receive just and equitable
compensation at the time of
dispossession will be entitled not only to restoration of a right in
land or equitable redress if she
claims one, but also to an amount
for the costs of a memorial plaque in addition to equitable redress.
That would be something
to which her colleague who received just and
equitable compensation at the time of dispossession would not be
entitled.
[131]
[184]
In
Makwanyane
[132]
Ackerman J said the following about arbitrariness:
“
Arbitrariness
must also inevitably, by its very nature, lead to the unequal
treatment of persons. Arbitrary action or decision
making is
incapable of providing a rational explanation
as
to why similarly placed persons are treated in a substantially
different way
.
Without such a rational justifying mechanism, unequal treatment must
follow.”
[133]
(Emphasis
added.)
[185]
I do not understand the main judgment to be
to the effect that a person who is precluded by section 2(2) from
entitlement to restitution
of a right in land is entitled to claim an
amount for the costs of a memorial plaque on the basis that section
2(2) says nothing
about such a claim. Of course, the reason why
section 2(2) says nothing about such a claim is that such a claim is
not contemplated
by the Restitution Act. If the view is held
that such a person may lodge such a claim even though he cannot lodge
a claim
for restitution of a right in land since he or she is
precluded by section 2(2) from doing so, then the difficulty
will be:
since such a claim falls outside the definition of “claim”
in the Restitution Act, under what section will such a claim
be
lodged? It, obviously, cannot be lodged under section 10
because section 10 is for the lodgement of claims as defined
in the
Restitution Act. What procedure would apply to it after
lodgement? The procedure in section 11 applicable after
lodgement of a claim will not be applicable to such a claim because
it is for claims as defined in the Restitution Act. Nor
can
such a claim be pursued by lodging an application with the registrar
of the Land Claims Court in terms of section 38B(1)
of the
Restitution Act because such an application also relates to claims as
defined in the Restitution Act.
[186]
In terms of section 2(2) a person who was
dispossessed of a right in land but was awarded just and equitable
compensation at the
time of dispossession is not entitled to
restoration of a right in land or equitable redress under the
Restitution Act. The
question that arises is: would such a
person be entitled to lodge a claim for the payment of the costs for
the erection of a memorial
plaque under the Restitution Act even
though he would be disqualified from lodging a claim for equitable
redress?
[187]
On the approach adopted in this judgment,
he or she would not be able to do so because he or she would have in
effect been afforded
equitable redress. However, on the
approach of the main judgment and the judgment of the Supreme Court
of Appeal, he or she
should be able to do so because those judgments
take the view that a person who was dispossessed of a right in land
is entitled
to claim costs for the erection of a memorial plaque in
addition to equitable redress. However, the question is: under
which
section of the Restitution Act would he or she lodge such a
claim? In my view, there is no such section in the Restitution
Act.
[188]
The main judgment concludes that leave to
cross-appeal should be dismissed. It holds that the Land Claims
Court did have jurisdiction
and that, in setting aside its decision
on this part, the Supreme Court of Appeal was exercising a discretion
and there is no basis
to interfere. In my view, the Land Claims
Court does not have jurisdiction in regard to such a claim as an
independent and
separate claim and does not have power to order the
Government to pay an amount for the costs of the erection of a
memorial plaque
in addition to paying equitable redress. That a
person has been granted equitable redress necessarily means that that
person
has been granted what he or she justly and equitably deserves
for the wrong that was done to him or her.
[189]
The only cause of action upon which Ms
Florence relied is the dispossession of a right in land. Once
she is awarded equitable
redress for that cause of action, she has
been granted justice and has no right to additional relief. To
order the Government
to pay anything further to the applicant in
addition to equitable redress is to make not only an unjust and
inequitable order but
also to make an order that falls outside the
ambit of the Restitution Act. As the Land Claims Court is a
creature of statute,
it has no power to grant an order that falls
outside the Restitution Act and is not provided for by any other
statute. The
issue of the discretion does not even arise.
The Supreme Court of Appeal also has no such jurisdiction or power.
[190]
The
Supreme Court
of Appeal justified its decision to set aside the Land Claims Court’s
dismissal of the claim for the costs of
the memorial plaque on two
bases. The one was that it could not see why such costs should
not fall within the ambit of a
solatium
.
It did not elaborate on this. Assuming that such costs do
fall within the ambit of a
solatium
,
the Supreme Court of Appeal was wrong to overturn the Land Claims
Court’s decision to dismiss this part of the claim because
the
Land Claims Court had awarded a
solatium
in the amount of R10 000 and there was no appeal against that
amount. Therefore, this reason advanced by the Supreme Court
of
Appeal does not support its decision. It supports the
conclusion that Ms Florence’s appeal on this part of the matter
should have been dismissed by the Supreme Court of Appeal.
[191]
The other basis advanced by the Supreme
Court of Appeal was section 35(1)(e). Section 35(1)
confers power on the Land
Claims Court to make various orders. The
orders that the Land Claims Court may make are listed in paragraphs
(a) to (e) of
section 35(1). Under paragraph (a) the Land
Claims Court may order the restoration of land or a portion of land
or any right
in land. Under paragraph (b) it may order the
state to grant a claimant an appropriate right in alternative
state-owned land
and, where necessary, order the state to designate
it. Such an order falls within the definition of “equitable
redress”
in the Restitution Act. Under paragraph (c) the
Land Claims Court may order the state to pay the claimant
compensation.
Such an order also falls under “equitable
redress”. Under paragraph (d) it may order the state
to include
an applicant as a beneficiary of a state support programme
for housing or the allocation and development of rural land.
This
order would also fall within the wide definition of “equitable
redress in the Restitution Act. Under paragraph (e) the
Land
Claims Court may grant the claimant “any alternative relief”.
[192]
The main judgment agrees with the Supreme
Court of Appeal that section 35(1)(e) of the Restitution Act
gives the Land Claims
Court power to order the Government to pay Ms
Florence an amount for the costs of the erection of a memorial plaque
in addition
to equitable redress. The Supreme Court of Appeal
judgment does not examine the meaning and scope of “alternative
relief”
contemplated in section 35(1)(e).
[193]
The
Supreme Court
of Appeal seems to have taken section 35(1)(e) to read “any
appropriate relief”. This is not how
section 35(1)(e)
reads. It reads: “any alternative relief”. In
my view this means that the relief contemplated
in section 35(1)(e)
can only be granted as an alternative to relief under paragraphs (a)
to (d). It cannot be granted
together with such relief.
Alternative relief must be alternative to something. We know
that the relief of equitable
redress was granted in the place of the
relief of the restoration of a right in land that the applicant
abandoned. So, the
question is: as an alternative relief to
what is the amount of the costs for the erection of the memorial
plaque being awarded
to Ms Florence?
[194]
On the Supreme Court of Appeal’s
approach and the approach of the main judgment the answer is: as an
alternative to nothing.
That is contrary to the clear language
of section 35(1)(e). The South African Concise Oxford
Dictionary gives “alternative”
the following meaning:
“
adj.
(1) (of one or more things) available as another possibility.
(of two things) mutually exclusive. (2) of or relating
to
activities that depart from or challenge traditional norms. n.
one of two or more available possibilities”.
In my view the meaning of “alternative”
in section 35(1)(e) is that the alternative relief is mutually
exclusive of
the other forms of relief provided for in section 35(1).
[195]
Section 6(2)(b) supports this understanding
of “alternative relief” in section 35(1)(e).
Section 6(2)(b)
is to the effect that the Land Claims
Commission may “make recommendations and give advice to the
Minister regarding the
most appropriate form of
alternative
relief, if any, for those claimants who do not qualify for the
restitution of rights in land in terms of this Act
.”
(Emphasis added.) It is clear from this provision that
“alternative relief” is applicable in a
case where a
claimant does not qualify for other relief or where such relief is
not appropriate. That is in line with the
ordinary meaning of
the adjective “alternative”.
[196]
Where
a word or phrase appears more than once in a statute, it is presumed
that it bears the same meaning throughout the statute.
[134]
The meaning that “alternative relief” bears in section
6(2) is the same meaning it bears in section 35(1)(e).
Since,
in section 6(2) that phrase means relief that may be or will be made
available to claimants who do not qualify for restitution
of a right
in land, then in section 35(1)(e) the phrase must mean alternative
relief to other forms of relief in section 35(1)(a) to (d).
As equitable redress is competent and appropriate relief was awarded
by the Land Claims Court in this case, it would not have been
competent for that court to grant the applicant relief under section
35(1)(e).
[197]
The meaning the main judgment gives to “any
alternative relief” strains the language of the statute.
The meaning
I prefer accords with the ordinary meaning of the word
and with the purpose of the statute.
[198]
In the circumstances the cross-appeal
should be upheld, the order of the Supreme Court of Appeal relating
to the costs for the erection
of the memorial plaque set aside and
the order of the Land Claims Court on the issue of costs for a
memorial plaque restored.
FRONEMAN J:
[199]
I find myself in the unfortunate position
of the curate given a stale egg at the bishop’s table: I
consider some parts of
each of the judgments of Van der Westhuizen J
and Moseneke ACJ persuasive, others not. As this is only an
explanatory concurrence I shall be brief.
[200]
I agree with Moseneke ACJ that the starting
point for determining financial redress is the value of the property
at the time of
dispossession. The Restitution Act refers to the
position that existed “at the time of dispossession of the
right”.
Section 2(2) speaks of the compensation
payable then and section 33(eC) builds on that by providing for
“changes over
time in the value of money” where financial
redress is at stake. So the starting point is that the claimant
must be
put in a position as close as possible as the dispossessed
owner would have been had she been adequately compensated at the
time.
[201]
That
does not, however, translate without more into the market value at
the time of dispossession, because the compensation that
needed to be
paid at that time must be just and equitable compensation as
determined under section 25(3) of the Constitution.
Market
value is only one of the factors that need to be considered under the
section. Just and equitable compensation should
be paid also
having regard to the factors set out in section 25(3)(a), (b) and
(e). This appears to me to be the position
accepted by the
Supreme Court of Appeal in
Haakdoornbult
.
[135]
[202]
In the ordinary financial-redress case, the
starting point would be to determine what just and equitable
compensation was payable
at the time of dispossession and then adjust
for “changes over time in the value of money”. That
initial compensation
at the time of dispossession would not always
simply be market value, because market value cannot adequately
compensate for losing
one’s land
because
of racially based dispossession policies
.
Theoretically, therefore, the determination of just compensation at
the time of dispossession should include compensation
for the value
of the dispossessed property.
[203]
I find it difficult, however, to conceive
how one can ever adequately determine proper compensation for people
who were forced to
sell their property at the time of dispossession.
The only way to compensate them for their loss is restoration or, if
restoration
is not possible, something as close as possible in
financial terms to restoration. In this kind of case the CPI,
as representing
the change in the value of money, may be
inappropriate, and the present market value of the property could
serve as evidence of
its inappropriateness. The caution in
relation to the use of current market value is, however, that it must
be present market
value calculated with regard to the comparable use
and location of the property as at the time of dispossession.
[204]
In the case where people who were forced to
sell their property, rather than finding either the CPI or the
present property value
to be the only correct approach, the courts
may be able to determine financial redress in a different manner.
In a case where
the claimant proves that (1) she would not have sold
her property at the time of the dispossession even if she were
properly financially
compensated, and (2) the present market value of
that kind of property is in excess of the CPI-valued increase of
money, a different
method may then be appropriate, having regard to
all the other factors in section 33.
[205]
Has that been shown in this case? I
think so. Firstly, the applicant wanted to keep the property
(that is, she did not
want to sell it); and, secondly, the evidence
of market value, albeit imprecise, showed an upward movement in
excess of the CPI
since dispossession – which was not rebutted.
[206]
These factors were not considered in the
Land Claims Court and, contrary to Moseneke ACJ, I thus consider it
open for us to determine
proper compensation. For the reasons
given by Van der Westhuizen J I agree that under the circumstances
use of the 32-day
notice deposit rate will be just and equitable
compensation.
[207]
For these reasons I concur in the finding
by Van der Westhuizen J in the appeal. I also agree with his
approach in respect
of the cross-appeal.
KHAMPEPE J:
[208]
I have read the judgments of my brothers
Moseneke ACJ, Van der Westhuizen J and Zondo J.
I concur in the judgment
of Moseneke ACJ in the main appeal and in
the judgment of Van der Westhuizen J in the cross-appeal.
For the Applicant: P Hathorn, F Jakoet
and S Harvey
instructed by the
Legal Resources
Centre.
For the Respondent: B Joseph instructed
by the State
Attorney.
[1]
Fitzgerald
The
Great Gatsby
(Charles
Scribner’s Sons, New York 1925) at 110.
[2]
34
of 1995. This Act set up the Truth and Reconciliation
Commission. For examples of the Act’s application,
see
The
Citizen 1978 (Pty) Ltd and Others v McBride
[2011] ZACC 11
;
2011 (4) SA 191
(CC);
2011 (8) BCLR 816
(CC);
Du
Toit v Minister of Safety and Security and Another
[2009] ZACC 22
;
2009 (6) SA 128
(CC);
2009 (12) BCLR 1171
(CC); and
Azanian
Peoples Organisation (AZAPO) and Others v President of the Republic
of South Africa and Others
[1996] ZACC 16; 1996 (4) SA 671 (CC); 1996 (8) BCLR 1015 (CC).
[3]
22
of 1994.
[4]
77
of 1957.
[5]
See
below [42] for the wording of section 25(7).
[6]
See
below [54] for an explanation of the CPI.
[7]
Section
22 read with sections 38B and 35 of the Restitution Act.
[8]
Hermanus
v Department of Land Affairs: In re Erven 3535 and 3536, Goodwood
2001 (1) SA 1030
(LCC) at para 16 explains that a
solatium
is
“[a]n award for non-financial deprivation, irrespective of
what form it takes”. Outside the context of restitution,
an award of a
solatium
is
similarly defined as an award for sentimental damages that is
“intended to neutralise the wounded feelings of the plaintiff
of having to suffer a wrongful act.” See Erasmus et al
“Damages” in
LAWSA
2 ed (2005) vol 7 at para 9.
[9]
The relevant subsections read:
“(1) A
person shall be entitled to restitution of a right in land if—
(a) he or she is a
person dispossessed of a right in land after 19 June 1913 as a
result of past racially discriminatory laws
or practices; or
(b) it is a
deceased estate dispossessed of a right in land after 19 June 1913
as a result of past racially discriminatory laws
or practices; or
(c) he or she is
the direct descendant of a person referred to in paragraph (a) who
has died without lodging a claim and has no
ascendant who—
(i) is a direct
descendant of a person referred to in paragraph (a); and
(ii) has lodged a
claim for the restitution of a right in land; or
(d) it is a
community or part of a community dispossessed of a right in land
after 19 June 1913 as a result of past racially discriminatory
laws
or practices; and
(e) the claim for
such restitution is lodged no later than 30 June 2019.
(2) No person
shall be entitled to restitution of a right in land if—
(a) just and
equitable compensation as contemplated in section 25(3) of the
Constitution; or
(b) any other
consideration which is just and equitable,
calculated at the
time of any dispossession of such right, was received in respect of
such dispossession.”
[10]
The
actual amount due in financial compensation, according to the Land
Claims Court, was the agreed market value at the time of
the sale,
plus the removal costs, minus the agreed compensation received from
Dr Yeller at the time of cancellation. The
Land Claims Court
did not consider the amount refunded to the Florence family by Dr
Yeller to be just and equitable compensation.
[11]
Section
2(2)(a). See above n 9.
[12]
Section
33 reads:
“
In
considering its decision in any particular matter the Court shall
have regard to the following factors:
(a) The
desirability of providing for restitution of rights in land to any
person or community dispossessed as a result of past
racially
discriminatory laws or practices;
(b) The
desirability of remedying past violations of human rights;
(c) The
requirements of equity and justice;
(cA) If
restoration of a right in land is claimed, the feasibility of such
restoration;
(d) The
desirability of avoiding major social disruption;
(e) Any provision
which already exists, in respect of the land in question in any
matter, for that land to be dealt with in a
manner which is designed
to protect and advance persons, or categories of persons,
disadvantaged by unfair discrimination in
order to promote the
achievement of equality and redress the results of past racial
discrimination;
(eA) The amount of
compensation or any other consideration received in respect of the
dispossession, and the circumstances prevailing
at the time of the
dispossession;
(eB) The history
of the dispossession, the hardship caused, the current use of the
land and the history of the acquisition and
use of the land;
(eC) In the case
of an order for equitable redress in the form of financial
compensation, changes over time in the value of money;
(f) Any other
factor which the Court may consider relevant and consistent with the
spirit and objects of the Constitution and
in particular the
provisions of section 9 of the Constitution.”
The Court found that the most relevant
of these factors were section 33(b), (c), (eA), (eB) and (eC).
[13]
Farjas
(Pty) Ltd v Minister of Agriculture and Land Affairs and Others
;
Rainy
Day Farms (Pty) Ltd v Minister of Agriculture and Land Affairs and
Others
[2011]
ZALCC 22
(
Farjas
LCC
)
at para 27.
[14]
Section
33(eC) of the Restitution Act.
[15]
Florence
(Dodgen) v Government of the Republic of South Africa and Another
[2013] ZALCC 11
(Land Claims Court judgment) at para 32.
[16]
In
this regard the Court found it relevant that the Florence family
were members of the Black River Community. The Black
River
Community was all but wiped out due to forced removals in terms of
the Group Areas Act.
[17]
Farjas
(Pty) Ltd v Minister of Agriculture and Land Affairs and Others
[2012]
ZASCA 173
;
2013 (3) SA 263
(SCA) (
Farjas
)
at para 16. The reasoning of the Supreme Court of Appeal in
this case was that the evidence of the experts, who found
that the
CPI was inappropriate, was purely from an investment perspective.
The Court held that in deciding compensation
in terms of the
Restitution Act, the question is not about investment but rather
about what amount would be equitable redress
having regard to the
historic and social injustice of the past and the factors in section
33 of the Restitution Act.
[18]
Section
35.
[19]
Section
29(4) reads:
“
Where
a party cannot afford to pay for legal representation itself, the
Chief Land Claims Commissioner may take steps to arrange
legal
representation for such party, either through the state legal aid
system or, if necessary, at the expense of the Commission.”
[20]
Department
of Land Affairs and Others v Goedgelegen Tropical Fruits (Pty) Ltd
[2007]
ZACC 12
;
2007 (6) SA 199
(CC);
2007 (10) BCLR 1027
(CC)
(
Goedgelegen
)
at para 32. And see
Mphela
and Others v Haakdoornbult Boerdery CC and Others
[2008] ZACC 5
;
2008 (4) SA 488
(CC);
2008 (7) BCLR 675
(CC) at para
24 where this Court held that the interpretation of the Restitution
Act raises a constitutional issue as it gives
effect to section
25(7) of the Constitution.
[21]
Goedgelegen
id
at para 84.
[22]
Mostert
The
Relevance of Constitutional Protection and Regulation of Property
for the Private Law of Ownership in South Africa and in
Germany
(LLD dissertation, University of Stellenbosch 2000) at 311.
[23]
National
Education Health and Allied Workers Union v University of Cape Town
and Others
[2002] ZACC 27
;
2003 (3) SA 1
(CC);
2003 (2) BCLR 154
(CC) at paras
30-1.
[24]
Goedgelegen
above
n 20 at para 32.
[25]
On
the relevance of legal certainty for the interests-of-justice test
see, for example,
Radio
Pretoria v Chairperson, Independent Communications Authority of
South Africa and Another
[2004]
ZACC 24
;
2005 (4) SA 319
(CC);
2005 (3) BCLR 231
(CC) at para 22.
[26]
Ferris
and Another v FirstRand Bank and Another
[2013] ZACC 46
;
2014 (3) SA 39
(CC);
2014 (3) BCLR 321
(CC) at para
28.
[27]
Mphela
above
n 20 at para 26 and
Farjas
above n 17
at
para 16.
[28]
Giddey
NO v J C Barnard and Partners
[2006] ZACC 13
;
2007 (5) SA 525
(CC);
2007 (2) BCLR 125
(CC)
(
Giddey
)
at para 19;
General
Council of the Bar of South Africa v Geach and Others
[2012] ZASCA 175
;
2013 (2) SA 52
(SCA) (
Geach
)
at paras 58-61;
Kekana
v Society of Advocates of South Africa
[1998] ZASCA 54
;
1998 (4) SA 649
(SCA) at 654E-G; and
Ex
Parte Neethling and Others
1951
(4) SA 331
(A) at 335D-E.
[29]
25
of 1999.
[30]
Section
35(1) provides that the Land Claims Court may order—
“
(a)
the restoration of land, a portion of land or any right in land in
respect of which the claim or any other claim is made to
the
claimant or award any land, a portion of or a right in land to the
claimant in full or in partial settlement of the claim
and, where
necessary, the prior acquisition or expropriation of the land,
portion of land or right in land: Provided that the
claimant shall
not be awarded land, a portion of land or a right in land
dispossessed from another claimant or the latter’s
ascendant
unless—
(i)
such other claimant is or has been granted
restitution of a right in land or has waived his or her right to
restoration of the
right in land concerned; or
(ii)
the Court is satisfied that satisfactory
arrangements have been or will be made to grant such other claimant
restitution of a
right in land;
(b) the state to
grant the claimant an appropriate right in alternative state-owned
land and, where necessary, order the state
to designate it;
(c) the state to
pay the claimant compensation;
(d) the state to
include the claimant as a beneficiary of a state support programme
for housing or the allocation and development
of rural land;
(e) the grant to
the claimant of any alternative relief.”
[31]
Dikoko
v Mokhatla
[2006]
ZACC 10
;
2006 (6) SA 235
(CC);
2007 (1) BCLR 1
(CC) at paras 59-60
and
S
v Basson
[2005]
ZACC 10
;
2007 (3) SA 582
(CC);
2005 (12) BCLR 1192
(CC) at para 110.
[32]
See
Petz
Products (Pty) Ltd v Commercial Electrical Contractors (Pty) Ltd
1990
(4) SA 196
(C) at 204H-I (applied in
Arse
v Minister of Home Affairs and Others
[2010] ZASCA 9
;
2012 (4) SA 544
(SCA);
2010 (7) BCLR 640
(SCA) at
558) and
Kent
NO v South African Railways and Another
1946
AD 398
at 405.
[33]
Metcash
Trading Limited v Commissioner, South African Revenue Service, and
Another
[2000] ZACC 21
;
2001 (1) SA 1109
(CC);
2001 (1) BCLR 1
(CC) at para
43 (discussing the Value Added Tax Act 89 of 1991 in relation
to a court’s ability to grant ancillary
relief).
[34]
Mphela
above
n 20 at para 26 and
Farjas
above
n 17
at
para 27.
[35]
Dikoko
above
n 31 at para 95.
[36]
Id
at para 97.
[37]
Goedgelegen
above
n 20 at para 84.
[38]
Id
at para 53 and
Richtersveld
Community and Others v Alexkor Ltd and Another
[2004]
ZALCC 9
;
2001 (3) SA 1285
(LCC) (
Richtersveld
Community
)
at para 36. Note that although
Richtersveld
Community
was overturned on appeal this particular point remains unassailed.
[39]
Hall
“Reconciling the Past, Present and Future” in Walker et
al (eds)
Land,
Memory, Reconstruction and Justice: Perspectives on Land Claims in
South Africa
(Ohio
University Press, Athens 2010) at 17.
[40]
See
above n 9.
[41]
Section
25(3) provides:
“
The
amount of compensation and the time and manner of payment must be
just and equitable, reflecting an equitable balance between
the
public interest and the interests of those affected, having regard
to all relevant circumstances, including—
(a) the current
use of the property;
(b) the history of
the acquisition and use of the property;
(c) the market
value of the property;
(d) the extent of
direct state investment and subsidy in the acquisition and
beneficial capital improvement of the property; and
(e) the purpose of
expropriation.”
[42]
See
above n 12.
[43]
Section
1 of the Restitution Act. There is a difference between the
terminology used in section 25(7) of the Constitution
and section 1
of the Restitution Act. The Restitution Act uses “restoration”
to refer to what the Constitution
identifies as “restitution”,
namely the return of the land or a portion of the land. The
Restitution Act uses
“restitution” to refer to either
restoration or equitable redress in the form of financial
compensation. This
difference does not seem material, since
both sections are referring to a specific remedy: the return of the
whole
–
or
at least a portion of
–
the
property of which persons were previously dispossessed. This
judgment uses “restoration” as it is used in
the
Restitution Act.
[44]
See
above n 12 for the wording of section 33.
[45]
Concerned
Land Claimants’ Organisation of Port Elizabeth v Port
Elizabeth Land and Community Restoration Association and
Others
[2006] ZACC 14
;
2007 (2) SA 531
(CC);
2007 (2) BCLR 111
(CC)
(
Concerned
Land Claimants
)
at para 26:
“
What is
appropriate property restitution or equitable redress in response to
historical dispossession is bound to vary and be
subject to the
specific context.”
[46]
Goedgelegen
above n 20 at para 53.
[47]
Section
39(2) of the Constitution.
[48]
Alexkor
Ltd and Another v Richtersveld Community and Others
[2003]
ZACC 18
;
2004 (5) SA 460
(CC);
2003 (12) BCLR 1301
(CC) (
Alexkor
)
at para 98.
[49]
Mphela
above
n 20 at para 32.
[50]
Goedgelegen
above n 20 at para 55.
[51]
This
issue has not been definitively determined. The Supreme Court
of Appeal in
Haakdoornbult
Boerdery CC v Mphela and Others
[2007] ZASCA 69
;
2007 (5) SA 596
(SCA) (
Haakdoornbult
)
at para 48 stated that the “purpose of giving fair
compensation is to put the dispossessed, insofar as money can do it,
in the same position as if the land had not been taken.”
On appeal, this Court endorsed the Supreme Court of Appeal’s
opinion and found no reason to interfere with its discretion.
See
Mphela
above n 20
at
para 50. Still, the point in time of the “same position”
to which the dispossessed must be returned has never
been pinned
down.
[52]
The
Land Claims Court interprets
Haakdoornbult
id
,
which
focused on whether a party received compensation to the extent that
she is excluded by section 2(2) of the Restitution Act
from
equitable redress or restoration of land (because she already
received compensation or any other consideration which was
just and
equitable), as requiring position (a). But Ms Florence was not
excluded by section 2(2) of the Restitution Act,
and so this
approach fails to persuade.
[53]
See
generally section 25(3) of the Constitution. For a Land Claims
Court decision that goes a bit further, see
Hermanus
above
n 8 at para 25 where the Court stated that “on ordinary
principles of justice, a person who, under compulsion of law,
has
his property taken from him, should be compensated in full”.
[54]
Goedgelegen
above n 20 at para 53.
[55]
See
n 12 above.
[56]
See
Haakdoornbult
above
n 51, which this Court affirmed in
Mphela
above
n 20 at paras 50-9.
[57]
Id.
See also
Kwalindile
Community v King Sabata Dalinyebo Municipality and Others; Zimbane
Community v King Sabata Dalinyebo Municipality and
Others
[2013] ZACC 6
;
2013 (6) SA 193
(CC);
2013 (5) BCLR 531
(CC)
(
Kwalindile
);
Goedgelegen
above
n 20;
Concerned
Land Claimants
above
n 45;
Alexkor
above
n 48; and
Transvaal
Agricultural Union v Minister of Land Affairs and Another
[1996] ZACC 22; 1997 (2) SA 621 (CC); 1996 (12) BCLR 1573 (CC).
[58]
Section
39(1)(c) of the Constitution provides: “When interpreting the
Bill of Rights, a court, tribunal or forum .
. . may consider
foreign law.”
[59]
This
Court solicited responses to restitution-related questions from the
Venice Commission, an organization of 68 countries –
including
those considered observers, associate members, and of a special
status – and had eight responses from countries
that provide
for restitution under national laws. Of these eight, however,
only seven provided pertinent information regarding
calculation of
compensation.
[60]
It
seems that Poland, Macedonia, Azerbaijan and Chile provide financial
compensation at least equivalent to market value, where
market value
is measured either at the time the law was passed or at the time
compensation was paid. Croatia has an established
limit for
the amount of compensation, which does not track market value, and
does not provide a helpful guideline with regard
to the appropriate
time at which compensation should be calculated. The Czech
Republic compensates claimants based on the
purchase price and
related costs, though if the market value of the property has
increased, claimants are compensated at higher
rates. This
approach corresponds more closely with measuring compensation at the
time of actual compensation because it
takes into consideration the
present-day value of a home in determining appropriate compensation.
Some countries have specific regard for
the CPI in compensating for wrongful property loss. In Chile,
for example, individuals
dispossessed of real estate are compensated
according to the market value of the property at the time the law
providing for restitution
was published, deducting the value of
improvements made to the property after confiscation, and having
consideration for the
subsequent inflation rate. In other
words, the country also uses the time of actual compensation as a
marker for real estate
claims, but in a varied way: rather than
allowing a claimant to establish market value at the time of the
claim, a claimant is
allowed to establish market value at the time
the restitution legislation was passed. Were we to adopt a
similar position
in South Africa, Ms Florence’s financial
compensation would be equivalent to the market value of the property
in 1994,
rather than at the time of dispossession in 1970. In
Poland, assessing compensation at the time of actual compensation is
more clearly adopted. The amount of compensation for unlawful
expropriation to which a claimant is entitled is determined
based on
the market value of the property at the time of adjudication of the
claim. This compensation is reduced to account
for the amount
of money a claimant was paid at the time of dispossession.
[61]
Interestingly,
owner-occupier housing costs form the largest single piece of the
South African CPI, but the investment component
of home ownership is
excluded from the CPI, as the index is used to measure spending.
See Statistics South Africa “Consumer
Price Index: The South
African CPI Sources and Methods Manual” (2013) version 2,
available at http://www.statssa.gov.za/CPI/index.asp,
at 22 and 34.
[62]
These
include food, beverages, tobacco, clothing, furnishings, health,
transport, communication, recreation and culture, education,
restaurants and hotels, and other miscellaneous goods and services.
Id at 3.
[63]
See
Finn et al “Poverty, Inequality and Prices in Post-Apartheid
South Africa”
UNU-WIDER
Growth and Poverty Project
(2013) at 19 where the authors note that “food is a larger
component within the total expenditure for poorer households
than in
richer households.” And at 36-7 they note:
“
Bread
and cereals have a very high relative weight – poor households
spend 3.5 times more than non-poor households on this
expenditure
category relative to their total expenditures – so that almost
any rate of price increase above inflation would
make this category
a substantial contributor to the gap between poor and non-poor price
indices.”
[64]
Id
at 74: “In other words, the structure of the official CPI
weights resemble more closely the expenditure patterns of wealthier,
rather than poorer, households.” This does not mean,
however, that the CPI is not important in other contexts.
[65]
See,
for example,
Farjas
above
n 17 and
Farjas
LCC
above
n 13
.
[66]
See
[85] and [86] below for a discussion of when the CPI may be one of
the appropriate factors for consideration.
[67]
Dr
Wittenberg is an associate professor of economics at the University
of Cape Town.
[68]
Professor
Nattrass is a professor of economics at the University of Cape Town.
[69]
Professor
Viruly is a professor of property studies at the University of the
Witwatersrand.
[70]
Dr
Wittenberg calculates the escalation of the under-compensation from
October 1970 (when the contract of sale between Dr Yeller
and the
Florence family was cancelled and Dr Yeller refunded the Florence
family R1 350) until December 2008. The
calculations
originally submitted by Dr Wittenberg used the approximate figure of
R30 000 as a starting point. They
also terminated in
December 2008. This judgment has accordingly recalculated the
amount, using the accurate starting figure
of R30 513, up until
June 2012 (the date of the Land Claims Court’s judgment).
Calculations updated to December
2010 were submitted by Dr
Wittenberg. However, I have elected to rely on my own
calculations from December 2008 onwards
due to some uncertainty
about the origin of the 32-day notice deposit rate figures for
certain months.
[71]
Goedgelegen
above
n 20 at para 67. See also para 68 where the Court states:
“
The
claim is against the state. It has a reparative and
restitutionary character. It is neither punitive in the
criminal law sense nor compensatory in the civil law sense.
Rather, it advances a major public purpose and uses public resources
in a manifestly equitable way to deal with egregious and
identifiable forms of historic hurt.”
[72]
Id
at para 68.
[73]
Id.
[74]
The
term “market value” may have some loaded connotations
because of its association with the notion of a free market
and a
particular economic ideology, which at times – and perhaps
particularly in the context of land rights – are
controversial. These connotations are not intended here.
The current value of the property at the time of compensation
is
what is meant.
[75]
Section
33(c), set out above at n 12.
[76]
Section
33(f).
[77]
Section
9(1) of the Constitution.
[78]
Above
n 41.
[79]
Market
value was a factor in a significant number of the Venice Commission
responses. Chile, Sweden, Poland and Azerbaijan
provide
financial compensation at least equivalent to the market value of
the property, either calculated at the time of compensation
or at
the time the law in question was passed.
[80]
See
[92]
and
[93]
below.
[81]
See
above n 12 for the wording of section 33.
[82]
Specifically,
section 33(c) and (f). See [77]
above.
[83]
Case
and Another v Minister of Safety and Security and Others, Curtis v
Minister of Safety and Security and Others
[1996] ZACC 7
;
1996 (3) SA 617
(CC);
1996 (5) BCLR 609
(CC) at para
57 and
Attorney
General, Transvaal v Additional Magistrate for Johannesburg
1924
AD 421
at 436.
[84]
Section
1 of the Restitution Act defines a right in land as—
“
any
right in land whether registered or unregistered, and may include
the interest of a labour tenant and sharecropper, a customary
law
interest, the interest of a beneficiary under a trust arrangement
and beneficial occupation for a continuous period of not
less than
10 years prior to the dispossession in question.”
[85]
See,
for example,
Road
Accident Fund v Mdeyide
[2007] ZACC 7
;
2008 (1) SA 535
(CC);
2007 (7) BCLR 805
(CC) at para
45.
[86]
KwaZulu-Natal
Joint Liaison Committee v MEC for Education, Kwazulu Natal and
Others
[2013] ZACC 10
;
2013 (4) SA 262
(CC);
2013 (6) BCLR 615
(CC) at para
34 and
Everfresh
Market Virginia (Pty) Ltd v Shoprite Checkers (Pty) Ltd
[2011] ZACC 30
;
2012 (1) SA 256
(CC);
2012 (3) BCLR 219
(CC) at para
79.
[87]
See
[66] above. Dr Wittenberg calculated until December 2008; the
difference would have changed since then but the argument
about
pressure on the public purse remains the same.
[88]
The
Land Claims Court elected to calculate the escalation of the initial
value of the dispossession up until March 2012.
There is no
justification given for this date and so the date of the Land Claims
Court’s judgment is the better date as
this is when the
compensation becomes due and payable. See above n 70.
[89]
Occupiers
of Saratoga Avenue v City of Johannesburg Metropolitan Municipality
and Another
[2012] ZACC 9
;
2012 (9) BCLR 951
(CC) at paras 7-8 which quoted,
with approval,
General
Accident Versekeringsmaatskappy Suid-Afrika Bpk v Bailey NO
1988 (4) SA 353
(A) (
General
Accident
)
at 358H.
[90]
Geyser
v Pont
1968
(4) SA 67
(W) at 68 and
International
Tobacco Co (SA) Ltd v United Tobacco Co (South) Ltd (1)
1955 (2) SA 1
(W) at 28. Unless provided for in the
compensatory act – for a more comprehensive discussion of
statutory compensation,
here in the context of expropriation, see
Gildenhuys “Expropriation” in
LAWSA
2 ed (2012) vol 10(3) at para 37. In this case the Restitution
Act does not provide for the accrual of interest.
Interest
accrues on a judgment pursuant to
section 2(1)
of the
Prescribed
Rate of Interest Act 55 of 1975
at the prescribed rate of 15.5%.
[91]
General
Accident
above
n 89 at 353.
[92]
Section
33(eC)
provides:
“
In
considering its decision in any particular matter the Court shall
have regard to the following factors:
. . .
(eC) In the case
of an order for equitable redress in the form of financial
compensation, changes over time in the value of money”.
[93]
These
issues are the amount of financial compensation the Florence family
should receive as a
solatium
for the hurt they experienced as a result of the home dispossession
and litigation costs.
[94]
Farjas
above
n 17.
[95]
Mpela
above
n 20 at paras 25-6. Footnotes omitted.
[96]
Kwalindile
Community
above
n 57 at para 46. See also
Giddey
above
n 28 at para 19;
Mabaso
v Law Society, Northern Provinces and Another
[2004]
ZACC 8
;
2005 (2) SA 117
(CC);
2005 (2) BCLR 129
(CC) at para 20;
Geach
above
n 28 at para 129; and
Kekana
above
n 28 at 654F-G.
[97]
Goedgelegen
above
n 20 at para 84 and
Richtersveld
Community
above
n 38 at paras 14-5.
[98]
The
remedial powers vested in the Land Claims Court in terms of section
35 of the Restitution Act include the power to order the
restoration
of land or any right in land in respect of which a claim is made.
The Land Claims Court may order the state
to grant the claimant an
appropriate right in alternative state-owned land, to pay
compensation to the claimant or to include
the claimant as a
beneficiary of a state support programme for housing or the
allocation and development of rural land.
The Land Claims
Court may also determine conditions which must be fulfilled before a
right in land can be restored or granted,
make appropriate orders to
give effect to any agreement between the parties regarding the
finalisation of the claim and make
such orders for costs as it deems
just.
[99]
The
factors which a court may have regard to include the desirability of
providing for restitution of rights in land to any person
or
community dispossessed as a result of past racially-discriminatory
laws or practices; the desirability of remedying past violations
of
human rights and the requirements of equity and justice. A
court may also consider the feasibility of the restoration
of a
right in land; the desirability of avoiding major social disruption,
the circumstances prevailing at the time of dispossession,
the
history of the dispossession, the current use of the land or any
other factor considered relevant or consistent with the
spirit and
objects of the Constitution.
[100]
This
Court has written much about our regretful history of widespread
dispossession of land from individuals and communities.
I need
not say more. For instance see the following cases:
Kwalindile
above n 57,
Mphela
above
n 20,
Alexkor
above
n 48 and
Goedgelegen
above
n 20.
[101]
Section
35(1)(c).
[102]
See
the introductory phrase in section 33 above n 12.
[103]
Section
33(b), (c), (eB) and (f).
[104]
Section
33(a), (cA), (d), (e), (eB).
[105]
Section
33(eA) and (eC).
[106]
See
Mobile
Telephone Networks (Pty) Ltd v SMI Trading CC
[2012]
ZASCA 138
;
2012 (6) SA 638
(SCA) at para 15 fn 8 and
Minister
of Environmental Affairs and Tourism and Others v Phambili Fisheries
(Pty) Ltd and Another
[2003] ZASCA 46
;
2003 (6) SA 407
(SCA) at para 31.
[107]
See
Haakdoornbult
above
n 51 at paras 36-7
.
In
this case, the government pressured black owners to sell their
family farm called Haakdoornbult, which was located in
a so-called
“white farming area”, to white farmers. With the
purchase price received in 1951, the family was
able to buy a farm
valued at two thirds of that of Haakdoornbult. The Supreme
Court of Appeal answered the question as
to whether or not the
family was entitled to restitution by determining whether the
compensation received at the time of dispossession
was sufficient.
See also
Richtersveld
Community
above
n 38 at para 34.
[108]
Hermanus
above
n 8 at para 11.
[109]
See
Goedgelegen
above n 20 at paras 67-8.
[110]
In
Haakdoornbult
above n 51 at para 60, Harms ADP writing for the Supreme Court of
Appeal expresses that a detailed calculation of compensation
should
be avoided because it makes the restitution process expensive and
counter-productive, heightens emotions and leads to
costly
litigation. He also makes the point that, apart from being
inappropriate, it is impossible to quantify many of the
factors
which need to be considered.
[111]
Land
Claims Court judgment above n 15 at para 19.
[112]
In
SA
Eagle Insurance Co Ltd v Hartley
[1990] ZASCA 106
;
1990 (4) SA 833
(A) at 839F-G nominalism is
defined as a principle which—
“
underlies
all aspects of South African law, including the law of obligations.
Its essence, in the field of obligations,
is that a debt
sounding in money has to be paid in terms of its nominal value
irrespective of any fluctuations in the purchasing
power of
currency. This places the risk of a depreciation of the
currency on the creditor and saddles the debtor with the
risk of an
appreciation
.
”
[113]
Land
Claims Court judgment above n 20 at para 19.
[114]
See
above n 9 for the wording of section 2(2).
[115]
See
Haakdoornbult
above
n 51 at para 35 and
Ash
and Others v Department of Land Affairs
[2000] ZALCC 54
;
[2000] 2 All SA 26
(LCC) at para 24.
[116]
Farjas
LCC
above
n 13.
[117]
Above
n 17 at para 22.
[118]
Id
at para 24.
[119]
Factory
at Chorzow
(
Germany
v Poland
)
(1928) PCIJ Series A No 17 (
Chorzow
).
[120]
Id
at paras 125-6.
[121]
Kwalindile
above
n 57 at para 43;
Mphela
above n 20 at para 43; and
Concerned
Land Claimants
above
n 45 at para 23.
[122]
Glenister
v President of the Republic of South Africa and Others
[2011] ZACC 6
;
2011 (3) SA 347
(CC);
2011 (7) BCLR 651
(CC) at para
115.
[123]
Goedgelegen
above n 20 at para 42.
[124]
Leave
to cross-appeal is required by Rule 19(5) of the Rules of this
Court.
[125]
Section
35(1)(e) reads:
“
The
Court may order—
. . .
(e) the grant to
the claimant of any alternative relief”.
[126]
Mphela
above
n 20 at para 24.
[127]
See
the Preamble to the Restitution Act.
[128]
Section
10(1) reads:
“
Any
person who or the representative of any community which is entitled
to claim restitution of a right in land, may lodge such
claim, which
shall include a description of the land in question, the nature of
the right in land of which he, she or such community
was
dispossessed and the nature of the right or equitable redress being
claimed, on the form prescribed for this purpose by the
Chief Land
Claims Commissioner under
section
16
.”
[129]
Section
11(1) reads:
“
If
the regional land claims commissioner having jurisdiction is
satisfied that:
(a) the claim has
been lodged in the prescribed manner;
(b)
the claim is not precluded by the provisions of
section
2
;
and
(c) the claim is
not frivolous or vexatious,
he or she shall
cause notice of the claim to be published in the Gazette and shall
take steps to make it known in the district
in which the land in
question is situated.”
[130]
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
para 23.
[131]
In
S
v Mhlungu
[1995] ZACC 4
;
1995 (3) SA 867
(CC);
1995 (7) BCLR 793
(CC) at para
8
this
Court had to construe certain provisions of the interim Constitution
to determine whether the interim Constitution applied
to that case.
Kentridge AJ construed the relevant provision to mean that, if the
criminal proceedings concerned had commenced
before 27 April 1993,
the interim Constitution did not apply but, if they commenced after
27 April 1993, the interim
Constitution did apply.
Mahomed J, with the concurrence of a number of the Justices of the
Court, did not agree with Kentridge
AJ’s construction and
thought that it would produce arbitrariness. He said that
Kentridge AJ’s construction
would result in the unequal or
discriminatory treatment of two co-accused in the same case if one
had been served with the indictment
before 27 April 1993 and the
other had been served after 27April 1993. Mahomed J then said:
“
The
literal interpretation would invade all these objectives in its
arbitrary selection of one category of persons who would become
entitled to enjoy the human rights guarantees of the Constitution
and the arbitrary exclusion of another group of persons from
such
entitlement. The Courts must strive to avoid such a result if
the language and context of the relevant provision,
interpreted with
regard to the objectives of the Constitution, permits such a
course. What must be avoided, if this is
a constitutionally
permissible course, is a result which permits human rights
guaranteed by the Constitution to be enjoyed by
some people and
denied arbitrarily to others.”
[132]
S
v Makwanyane and Another
[1995]
ZACC 3
;
1995
(3) SA 391 (CC)
;
1995 (6) BCLR 665 (CC).
[133]
Id
at para 156.
[134]
Head
of Department, Mpumalanga Department of Education and Another v
Hoërskool Ermelo and Another
[2009] ZACC 32
;
2010 (2) SA 415
(CC);
2010 (3) BCLR 177
(CC) at para
70.
[135]
See
Haakdoornbult
above
n 51 especially at paras 46, 48 and 50.