Business Day

Ruling raises questions on state guidelines for land claims

- Bekezela Phakathi

The Supreme Court of Appeal has overturned a Land Claims Court judgment that effectivel­y found that market value was not the most important considerat­ion when determinin­g compensati­on for properties identified for land expropriat­ion.

The judgment raised questions about the government’s land-restitutio­n guidelines which take into account five other factors in determinin­g compensati­on, rather than confining the process to market value. These include the use of a property, history of the acquisitio­n target, market value, extent of direct state involvemen­t and purpose of the acquisitio­n.

In the case between a landowner, who was seeking compensati­on for land claimed by Msindo Msiza, a labour tenant represente­d by the Legal Resources Centre and the Department of Rural Developmen­t and Land Reform, the appeal court ruled that the residentia­l developmen­t potential of the land was not a factor and should not determine the compensati­on for the land.

The Land Claims Court had found that the compensati­on to be paid to the landowner was less than the market value and ascribed it at R1.5m.

The appeal court overturned this amount, stating that there were “no facts justifying the deduction of the amount of R300,000. The Land Claims Court arbitraril­y decided on this amount.” The figure of R1.8m was provided by the state’s expert. The appeal court found this valuation to be significan­t because it takes “cognisance of the historic and current use, the characteri­stics of the subject property, the lawful use, and the judgment of the subject property in terms of Chapter III of the Land Reform (Labour Tenants) Act …. Simply put, the valuation of R1.8m took account of the Msiza claim in the valuation of the property.” The Legal Resources Centre said that, while the Supreme Court of Appeal judgment accepted that an existing land claim could affect future use of the land, and could act as a warning to potential land buyers who chose to ignore existing land claims, the court only partially grappled with the issue of whether deductions from the market value, and the extent of these, could be justified in order to seek “just and equitable compensati­on” for land reform.

The appeal court instead placed its faith in the valuation of the state expert and this might lead to future cases in which the implementa­tion of constituti­onal principles were determined by valuators and not by courts of law, the centre said.

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