Press Release: Compensation for expropriation of land for labour tenant to be argued in SCA

For Immediate Release: 31 August 2017

Tomorrow, 1 September 2017, in the Supreme Court of Appeal, the Legal Resources Centre will be representing Mr Philemon Msiza in an important matter challenging the approach taken when determining compensation for the expropriation of land for the purposes of land reform.

The land owners are appealing a judgment handed down in the Land Claims Court (LCC) on 5 July 2016 which found that market value must not be given more value than other factors listed in section 25(3)(a) – (e) of the Constitution (the property clause).

The central issue at the SCA will be what is just and equitable compensation for land reform.

As a labour tenant, Mr Msiza’s father made a land claim for the land which he lived on and which he utilised for grazing and growing crops. Mr Msiza’s father passed away before the claim was finalised and our client was appointed as representative of the estate. During 2004, with the assistance of the LRC, the matter went to court. It was successful and Mr Msiza’s late father was declared a labour tenant and awarded land.

The Department of Rural Development and Land Reform and the owners of the land could not come to an agreement on the compensation that should be paid for the land.

In 2012, with the assistance of the LRC, Mr Msiza brought an application to the LCC asking the LCC to determine the purchase price of the land in terms of section 23 of the Land Reform (Labour Tenants) Act No. 3 of 1996, read with section 25 of the Republic of South Africa.

Under section 25 of the Constitution, factors listed when determining compensation for expropriation include the current use of the land, the history of the acquisition of the land, the extent of investment in the land and the purpose of the expropriation.

The matter was heard in the LCC in November 2015. The expert valuer called on behalf of the owners declared the market value to be R4,360 000.00 (four million, three hundred and sixty thousand rands). The expert valuer called on behalf of the government valued the property at R1, 800 000.00 (one million eight hundred thousand rands). Following argument, the LCC reserved the judgment.

In the judgment of the LCC, the court found that market value is not more important than any other factors listed in section 25(3)(a) – (e) of the Constitution and that all factors must be given the same value.

The LCC decided that the just and equitable compensation to be paid by the Director-General and the Minister for the Department of Rural Development and Land Reform is R1, 500 000.00 (one million five hundred thousand rand) for the acquisition of the property for Mr Msiza, and directed them to make this payment to the owners of the land within 60 days of the judgment and to register the property in Mr Msiza’s name within 90 days of the judgment.

The judgment was appealed.

This judgment has changed the approach taken in Mhlanganisweni Community v Minister of Rural Development and others (LCC156/2009) (known as the “Mala Mala judgment”), where market value was given more weight than other factors listed in section 25(3)(a) – (e) of the Constitution, which resulted in more than R1 billion being paid to the owners of the reserve on behalf of the community.

AgriSA has intervened in the SCA matter as amicus curiae.
ENDS