City Deep Ltd v Johannesburg City Council
Jurisdiction | South Africa |
Judge | Galgut J |
Judgment Date | 18 December 1972 |
Citation | 1973 (2) SA 109 (W) |
Hearing Date | 18 December 1972 |
Court | Witwatersrand Local Division |
Galgut, J.:
H This is a review of taxation in terms of Rule 48 of the Uniform Rules of Court. The bill of costs was drawn reflecting fees of R16 324,82 and disbursements of R169 615,34. The amounts taxed off were; fees, R8 645,10; disbursements, R117 209,45 allowing R7 679,72 fees and R52 408,89 disbursements. The applicant for review is the City Deep Ltd. and the respondent is the City Council of Johannesburg. I will refer to the parties as 'City Deep' and 'The Council' respectively. A short statement of the preceding events is necessary.
Galgut J
The Council decided to establish a new market, and for this purpose sought to acquire an area of ground on the Heidelberg Road to the South/East of Johannesburg, which belonged to City Deep. This decision A was taken many years before the actual notice of expropriation was served but it was common knowledge that the Council intended to erect its market in the area in question. The land in question is 191,5 acres in extent. Since 1956 the Council had negotiated with City Deep for acquisition of the land for the purpose of the new market. The parties B had tried to reach agreement as to the compensation payable. All the efforts failed. In 1957, the De Swardt Commission of Enquiry was appointed by the Administrator to enquire into and report upon the propriety of the Council acquiring this site for its market and an abattoir. This Commission recommended that the City Deep's ground be acquired for the Market. After the Commission had made its report, further discussion took place between the parties, but no figure was C ever agreed upon. There was a wide divergence of opinion between the City Deep and the Council as to the value of the land. Negotiations to resolve this dispute continued to prove abortive. In or about March, 1966, it became apparent that the matter would have to be brought to D finality, and as no settlement had been reached it was inevitable that the compensation would have to be decided by arbitration. Matters came to a head in May, 1966, when the Council made its final offer which was rejected. On 18th April, 1967 a notice of expropriation was issued and served in accordance with the provisions of Ord. 64 of 1903, the statutory procedure being complied with. The Ordinance requires that E once a notice of intention to expropriate has been served and the period for objecting thereto has expired or alternatively once the objection has been overruled by the Administrator acting after a commission of enquiry has been held, it is necessary for the parties to treat. If no agreement can be arrived at in the treating process, then F the matter of compensation is required to be submitted for decision by arbitration. The arbitrator appointed was Mr. I. A. Maisels, Q.C., of the Johannesburg Bar. The City Deep put forward a claim for compensation in an amount exceeding 2,6 million rand, the Council offered compensation in an amount of R500 000. The amount awarded was R977 500. The Council was also ordered to pay the costs of the arbitration which G costs included the costs of three counsel. Further, the arbitrator ordered that the reasonable qualifying fees of nine named expert witnesses had to be paid by the Council. The arbitrator, in his judgment, summarised the contention of the two parties. City Deep was referred to as the claimant. The arbitrator says;
'The claimant contended that the northern section should be treated as having had at the time of the expropriation in April, 1967 -
H an industrial-commercial potential, i.e. that the land was capable of being laid out as a township with what are known as industrial/commercial rights; such a township would ordinarily have its erven subject to a condition as that the erf and buildings erected and to be erected thereon shall be used solely for such industrial and/or commercial purposes (e.g. factories, warehouses, workshops and the like) as may be approved in writing by the local authority and other purposes incidental thereto; or
a purely commercial potential, i.e. that a township could have been laid out with rights of user of land for commercial purposes in the sense of its use mainly for warehouses; such a township would ordinarily have its erven subject to a condition such as that the erf shall be used solely for
Galgut J
such commercial purposes as offices, storerooms, warehouses and the like and other purposes incidental thereto as may be approved in writing by the local authority; or
a combination of (a) and (b).
In regard to the southern section the claimant contended that the land had a potential for development as a suburban shopping centre and as a A general residential, i.e. flat, area. The Council disputed these contentions. Its case is that the whole area is to be treated as having a potential as residential township and with business sites and with certain flat sites as part of the township. It is common cause that if the claimant's contentions are correct the value of the land expropriated is far greater than it would be if it is to be considered as having simply a residential potential.'
B The arbitration hearing commenced on 24th June, 1968. Hearings actually took place on thirty-four days up to 4th September, 1968. The record shows that it was agreed by both sides to prepare and exchange written arguments. Those written arguments which were over two hundred pages long by each side, were also given to the arbitrator. The proceedings were resumed for argument which commenced on 11th November, and lasted for six days.
C The evidence led at the arbitration proceedings was transcribed into thirty-five volumes with a total of 4 661 pages. There were over one hundred exhibits handed in and these total several thousand folios. From the above it will be seen that the case was long and this in itself D caused it to be difficult. The arbitrator described it as a 'very heavy case'.
Issues canvassed were, areas available for industrial purposes; availability of labour; availability of transport and transport routes; practical difficulties attendant on establishment of townships; principles of town planning; availability of other land for market E purposes. Regard was also had to certain aspects of Government policy in order to ascertain to what extent the suggested development of the area for industrial purposes was compatible with such policy. This involved some investigation into statements made by or on behalf of the Government in or out of Parliament. A further difficulty which confronted City Deep arose from the Physical Planning and Utilisation of F Resources Act of 1967. It was not in force as at April, 1967, but it was known that it was to be enacted. Its broad principles had been foreshadowed in various public pronouncements. Broadly speaking it was known that the Government wished to control industrial developments and, accordingly, it was going to have control over the use of land. The G arbitrator in this regard made a finding that up to 1967 there was nothing to infer that the Government was opposed to establishing
'capital intensive and low Bantu labour intensive industries in urban areas'.
The above factors had to be considered by the experts each in his particular field.
The arbitrator stated that
H 'looking at the matter as a whole, my view is that the site in question is an excellent one for commercial or industrial purposes',
but he found as to the northern section, that the whole or a substantial portion thereof had a commercial potential (used in the sense of warehousing) with a slight prospect of an industrial potential. With regard to the southern section he found that it had, for 6,5 acres, a general residential and for the remainder a special residential potential. He went on to say;
Galgut J
'on all the material before me and giving effect to the various findings I have made I consider I should value the northern section, apart from the amount which I think would be paid for the slight prospect of obtaining industrial rights, at a figure of R850 000. I consider that having arrived at this figure the hypothetical purchaser and seller would consider that something should be added for the prospect of A obtaining industrial rights, slight as I consider this prospect to be. These rights, if obtained, would admittedly be very valuable and would give the entrepreneur great rewards. I consider in a transaction of this magnitude that to add a further R50 000 for this prospect would not be unreasonable. In regard to the northern section therefore as a whole I fix the compensation at R900 000'.
For the southern section he allowed a figure of R75 000 as compensation. B To these figures he added a sum of R2 500 which the parties had agreed was the amount which should be awarded in respect of injurious affection of certain of the City Deep's property. The total amount awarded was, as already stated, R977 500.
Many experts were called. Each, depending on his own field, covered some C of the aspects mentioned above, which included allied matters such as the laying out of a township, survey costs, reticulation costs, endowment and levies imposed by local authorities. In addition the estate agents and sworn valuators who gave evidence as to values, each took into account those of the above matters which fell within their field. All the experts had to consider the effect of the various D possible uses to which the land could be put.
City Deep, in its written contentions submitted in terms of Rule 48 (2) has stated;
'The case was clearly a very difficult and complex one. The attorneys and counsel and the expert witnesses had to qualify themselves and deal with, inter alia, all the following problems:
E Correspondence had passed and documents were exchanged over a period of more than twelve years during which there were negotiations for the acquisition of the site by...
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