Administrator, Transvaal v Kildrummy Holdings (Pty) Ltd and Another

• Jurisdiction: South Africa
• Judge: Viljoen J
• Judgment Date: 20 July 1978
• Court: Transvaal Provincial Division
• Citation: 1983 (4) SA 960 (T)

Viljoen J:

In pursuance of an application brought by the applicant against the two respondents, my Brother ELOFF directed the second respondent to state, in terms of s 20 of the Arbitration Act 42 of 1965, read with s 97 of the Roads B Ordinance 22 of 1957 (T), as amended, a special case for the opinion of this Court. [*1] The second respondent complied with the order and the special case was set down and argued before me on 11, 12 and 13 April 1978.

The first respondent is the registered owner of certain property on which it was at all material times engaged in laying out four townships, the two relevant to these C proceedings being "Paulshof" and "Paulshof 10". On 24 March 1976 the applicant, acting under powers conferred on him by the Roads Ordinance 22 of 1957 (T), declared certain public roads which encroach upon certain erven, roads and open spaces in these two townships. The applicant in consequence became liable to pay compensation to the first respondent but the parties D were unable to agree on the amount of such compensation and the determination thereof was submitted to arbitration. The second respondent was appointed as arbitrator by the parties.

The arbitration proceedings commenced on 8 March 1977 and were concluded on 12 April 1977. In the arbitration proceedings the first respondent was the claimant and the applicant was the E defendant. In what follows I shall, for the sake of convenience, refer to the first respondent as the claimant, to the applicant as the defendant and to the second respondent as the arbitrator.

Prior to the declaration of the public roads referred to, the claimant had successfully commenced development of these F properties and by 1974 had sold a large number of erven, but its plans for a general residential and business development were disrupted by the declaration of these roads. The claimant pleaded and tendered evidence before the arbitrator that it had suffered financial losses as a result of the proclamation of G these roads; that such losses suffered by it were a direct result of the declaration of these roads, that these losses would actually have been taken into account by a willing seller and a willing buyer, and that they were equivalent in the aggregate to the amount which the land encroached upon by the roads would have realised if sold in the open market.

The defendant, from the outset of the proceedings, contended H that a completely different approach should be adopted for the purpose of arriving at the market value of the land encroached upon by the roads, and to this end sought to have a number of questions of law referred to this Court for its opinion. The practical effect of the differences of approach to the ascertainment of the "market value" of the land

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encroached upon was that the claimant was contending for an award in the vicinity of R2 000 000, whilst the defendant was contending for an award in the vicinity of R221 000. It appears that during the proceedings the arbitrator accepted the A contention put forward on behalf of the claimant that the so-called questions of law were in actuality either questions of fact or questions of mixed fact and law, and he declined to refer these matters to the Court under s 20 (1) of the Arbitration Act 42 of 1965.

On 1 June 1977 the defendant applied to this Court for an order B directing the arbitrator in terms of s 20 (1) of the Arbitration Act 42 of 1966 to state certain questions of law in the form of a special case for the opinion of this Court. This application was argued on 9 - 12 August 1977 before my Brother ELOFF, who on 14 November 1977 delivered a judgment and made C the order above referred to. The judgment is reported as Administrator, Transvaal v Kildrummy Holdings Ltd 1978 (2) SA 124 (T).

As directed the arbitrator has submitted the following stated case:

"2.

The claimant was at the material times engaged in laying out four townships on this property, two of which are referred to hereunder as 'Paulshof' and 'Paulshof 10'. On 24 March 1976 the defendant, acting under powers conferred D on him by the Roads Ordinance 22 of 1957 (T), issued Administrator's Notices 370 and 371 declaring certain public roads which encroach upon Paulshof and Paulshof 10, and thereby became liable in terms of s 91 of that Ordinance to pay compensation to the claimant. The parties being unable to agree on the amount of compensation so payable, the determination thereof was accordingly submitted to arbitration.

3.

E The development by the claimant of the said properties, though incomplete, had been successful and by 1974 it had sold a large number of erven. Its plans for a general residential as well as business development were, however, disrupted by the declaration of the roads and as a result it had suffered financial loss.

A plan showing the layout of the four townships referred to and of the declared road is annexed to the claimant's particulars F of claim as annexure 'F'. This, together with other annexures and exhibits hereinafter referred to, should, it is requested, be treated as forming part of the stated case.

4.

Annexure 'E' to the claimant's particulars of claim sets out the steps taken towards the establishment of the said township.

5.

Neither Paulshof nor Paulshof 10 had been approved as at the date of declaration of the roads in terms of s 69 of G the Town Planning and Townships Ordinance 25 of 1965 (T). Once approved, the conditions of establishment in respect of each of these townships will provide for the creation of a building restriction area alongside the declared roads, as indicated in annexure 'F'. The defendant will not approve of the establishment of a township unless the township owner complies with the requirements of the Director of Roads in respect inter alia of building H restriction areas. The nature of such requirements is set out in exh 4 in the arbitration proceedings. But for the declaration of the roads the building restriction areas will not be imposed. The restriction will prevent the building or erection of any building, structure or thing, whether attached to the ground or not, on, above or below the ground level.

6.

The extent to which erven in Paulshof and Paulshof 10 are encroached upon by the declared roads and by the building restriction area is set out in annexure 'L' to the claimant's particulars of claim.

7.

The claimant has alleged, and tendered evidence to the effect, that certain items of loss dealt with hereunder were suffered by it as a direct result of

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the declaration of the roads in question. These items of loss are said by the claimant to be confined to the category of losses which would actually have been taken into account by a willing seller and a willing buyer and to be equivalent in the aggregate to the amount which the land encroached upon would have realised if sold in the open market.

8.

Having regard to the indication by the Court in its A judgment dated 23 November 1977 that it will not be necessary for me to set forth in this statement more than the nature of the claims so as to indicate the context in which the disputes between the parties arise and also so much of the evidence as will elucidate that context, I shall not express any final conclusion on individual items of loss for which the claimant claims compensation.

9.

The claimant alleges in para 9 (a) (i) of its particulars B of claim that on 24 March 1976 it had sold 95 erven in Paulshof. Particulars of these sales are set out in annexure 'M3'. Certain of these sales were rendered void by the declaration of the roads or will be affected by the imposition of the building restriction, and claimant is obliged to repay the amounts received totalling R48 706, and has suffered a loss in respect of the balance still payable under the deeds of sale. The total loss suffered by C the claimant amounts to R155 771.

10.

The claimant further claims in para 9 (a) (kk) of its particulars of claim that up to the date of the declaration of the roads the claimant had earned interest on the balance of the selling price outstanding which it is obliged to refund. Its loss in respect thereof amounts in the aggregate to R21 210.

11.

A further 13 of the erven shown in annexure 'M2' which had D been sold prior to the declaration of the roads have become or will become void because any re-layout will result in these erven being lost and in claimant being unable to effect delivery. The loss in respect of the 13 erven amounts to R120 748 and the claim for interest thereon to R23 407. (Paragraph 9 (b) (i) and (ii) of the particulars of claim.)

12.

In para 9 (c) (i) of its particulars of claim the claimant E sets out the erven which had not been sold but which have been lost in consequence of being encroached upon by the road. The claimant calculates its loss in respect of these erven on the basis that they were saleable erven and has not, in the formulation of its claim, treated the land as being simply land with township potential. The claimant contends that it was correct in so doing in so far as the township of Paulshof is concerned, notwithstanding that that township had not been proclaimed, because individual F lots were in fact saleable. The loss suffered by the claimant in respect of the erven in Paulshof, based upon the current selling price of the lots, is R633 000.

13.

In respect of Paulshof 10, guarantees, the furnishing of which is a prerequisite to the sale of individual lots, had not been obtained. However, fulfilment of this condition was within the power of the claimant and the evidence is that it was not exercised solely in view of the imminent G declaration of the roads and the costs that would be wasted. The claimant's loss in respect of erven in Paulshof 10, based on the value of individual erven, is calculated by the claimant to be R297...