4 October, 2017
Appeal Court Judgement on Just and Equitable Compensation
Please refer to the media release received from Agri SA regarding the above matter.
In essence the Court has now set the benchmark for the payment of just and equitable compensation for expropriated land - using
as the base and then making adjustments
for the other factors contained in section 25 (3) of the Constitution, these being:
The current use of the property
The history of the acquisition and use of the property
The extent of direct state investment and subsidy in the acquisition and beneficial capital improvement of the property
The purpose of the expropriation.
This Court ruling has thus brought clarity to the matter and is to be welcomed.
Forestry South Africa
Tel :+27 33 346 0344
Fax: +27 33 346 0399
/ Private Bag X180 Centurion 0046,
Tel +27 (0)12 643 3400, Faks/ Fax +27 (0)12 663 3178
29 September 2017
AGRI SA WELCOMES APPEAL COURT JUDGEMENT ON JUST AND EQUITABLE COMPENSATION
Supreme Court of Appeal handed down its judgement in the case of Uys
van Msiza and others on 29 September
2017. The case dealt with the important question of what constitutes
just and equitable compensation when land is taken for land reform
purposes. The Land Claims Court made an arbitrary deduction of R300
000.00 from the compensation amount, because the land
was being taken for land reform purposes.
Pringle, the chairperson of the Agri SA Land Committee said that Agri
SA joined the proceedings as a friend
of the court and argued that such a deduction was not allowed by the
Constitution. Agri SA argued that market value should always be the
point of departure when just and equitable compensation is calculated.
The Constitution does not represent an outright
rejection of the market based approach to compensation where land
reform is concerned. It simply provides for greater flexibility when
establishing just and equitable compensation.
the approach adopted by the Land Claims Court, Agri SA argued that the
market value of the land owner's
agricultural land may not be arbitrarily reduced in a manner which is
incapable of objective assessment. Such an approach is unfair,
irrational and introduces an element of arbitrariness which undermines
legal certainty on a subject, which is of critical importance
to the agricultural sector and, by its potential impact on food
security, on all South Africans. Agri SA also maintained that the
financial burden of acquiring property for public purposes or in the
public interest should be spread throughout society, and
should not be imposed disproportionately on expropriated land owners.
Court confirmed that the approach taken by the constitutional Court to
the calculation of just and equitable
compensation in the Du Toit v Minister of Transport case that was
decided in 2006, was indeed correct. In that case, the court suggested a
two-staged approach, starting with market value and thereafter adding
or subtracting amounts as the relevant circumstances
in section 25(3) may require to arrive at just and equitable
compensation. The Appeal Court rejected the reasoning of the Land Claims
Court in making a deduction from the market value and found that there
were no facts that justified the deduction of R300 000.00
from the market value.
said that Agri SA had achieved what it had hoped to get by getting
involved in this matter. The Appeal
court has now made it clear that no arbitrary deductions can be done
merely because land was being taken for land reform purposes and that
market value, being the only factor in section 25(3) that was readily
quantifiable, should be the starting point in calculating
just and equitable compensation, which may be more or less than the
Source: Agri SA