City of Cape Town v Helderberg Park Development (Pty) Ltd

• Jurisdiction: South Africa

City of Cape Town v Helderberg Park Development (Pty) Ltd
2007 (1) SA 1 (SCA)

2007 (1) SA p1

Citation	2007 (1) SA 1 (SCA)
Case No	429/05
Court	Supreme Court of Appeal
Judge	Harms JA, Mthiyane JA, Nugent JA, Conradie JA and Theron AJA
Heard	August 17, 2006
Judgment	August 31, 2006
Counsel	S P Rosenberg SC for the appellant.; T R Tyler for the respondent.

Flynote : Sleutelwoorde B

Expropriation — Compensation — Calculation of — Basis on which compensation to be determined — Expropriation Act 63 of 1975, s 12 — 'Disregards' mentioned in s 12(5)(f) — Principle being that expropriated owner must not derive advantage/suffer disadvantage from expropriation, C but receive only compensation — Section 12(5)(f) to be interpreted in light of s 25(2) and (3) of Constitution.

Expropriation — Compensation — Calculation of — Basis on which compensation to be determined — Expropriation Act 63 of 1975, s 12 — 'Disregards' mentioned in s 12(5)(f) — Whether expropriated land to be valued on basis of value of remainder of erf prior to granting of D development rights, or on basis of value of land with such development rights — Whether depreciation in value to be taken into account in determining amount of compensation to be paid.

Expropriation — Compensation — Calculation of — Basis on which compensation to be E determined — Expropriation Act 63 of 1975, s 12 — 'Disregards' mentioned in s 12(5)(f) — Whether provision applicable — Local authority expropriating portion of property for purposes of water canalisation — Owner having in any event allocated expropriated portion to canalisation — Having purchased property with knowledge of title-deed condition that property to be used to deal with stormwater — Purpose for which property expropriated F neither enhancing nor diminishing value of property and 'disregard' having no application.

Expropriation — Compensation — Calculation of — Basis on which compensation to be determined — Expropriation Act 63 of 1975, s 12 — Two-stage enquiry necessary, viz (1) establishing compensation payable under s 12 G

2007 (1) SA p2

of Act; and (2) deciding whether that assessment is just and equitable under s 25(3) of 1996 A Constitution.

Headnote : Kopnota

The respondent claimed compensation from the appellant local authority for the expropriation by the appellant of a portion of its land for purposes of the canalisation of stormwater. When the respondent purchased the land, it was zoned 'agricultural' but, B on application by the respondent, had been awarded development rights. The respondent, accordingly, claimed compensation in an amount equal to the value of the portion expropriated as land with development rights, contending that that was its market value. The appellant, on the other hand, contended that the market value of the C portion expropriated was equal to its value as agricultural land and that this was the amount of compensation to which the respondent was entitled. The respondent further argued that, in terms of the provisions of s 12(5)(f) of the Expropriation Act 63 of 1975, the depreciation in the value of the portion expropriated, prior to the date of expropriation, due to the purpose for which it was expropriated, had to be disregarded in the determination of the D compensation to which it was entitled. It appeared from the evidence that when the respondent had purchased the land, in accordance with a condition registered against the title deeds to the land, the portion expropriated had been allocated by the previous owner to deal with stormwater, and was indeed being used to deal with stormwater.

Held, that compensation had to be determined in two stages: (1) the amount of compensation payable in terms of s 12 of the E Expropriation Act 63 of 1975 had to be established; and (2) it had to be considered whether that amount was just and equitable as intended in s 25(3) of the Constitution of the Republic of South Africa, 1996 (and the necessary adjustments made). (Paragraph [20] at 9A - B.)

Held, further, that the compensation payable could not exceed the market value of the property expropriated: the duty to F compensate implied that the owner of the expropriated property may not be in a better or worse position as a result of the act of expropriation. (Paragraph [21] at 9B - D.)

Held, further, that the respondent's land was worth more or less the same with or without the expropriated portion and the respondent had lost little in measurable terms because of the expropriation. The canal was a given and it had little commercial worth G for the owner. Applying those measurements, the respondent was, consequently, not entitled to any compensation. (Paragraph [23] at 10B - D.)

Held, further, as to the respondent's reliance on s 12(5)(f) of the Act, that it appeared that the expropriated land had, due to the purpose for which it was expropriated, not depreciated in value before the date of expropriation. Irrespective of whether it was expropriated or not, it H had no development potential. (Paragraph [29] at 13A - E.)

Held, further, as to whether the assessment was just and equitable in terms of s 25(3) of the Bill of Rights, that relevant circumstances included: (1) the portion expropriated would continue to be for stormwater; (2) it had little (if any) commercial value to the I owner; (3) when the respondent purchased the land, the portion expropriated had been designated for canalisation and registered as a condition against the title deed; and (4) the purchase price of the land to the respondent would have taken into account that said portion was not of commercial value. These circumstances did not justify an upward adjustment in terms of s 25(3): the amount proposed by the appellant was thus fair and equitable. (Paragraph [32] at 14A - F.) J

2007 (1) SA p3

Held, accordingly, that the respondent's compensation had to be fixed at an amount equal to the value of the portion A expropriated, as agricultural land. (Paragraph [34] at 14H.)

Appeal upheld and the appellant ordered to pay compensation to the respondent in an amount equal to the value of the land expropriated, as agricultural land. (Paragraph [35] at 15C - D.) The decision of Allie J in the Cape Provincial Division in Helderberg Park Development (Pty) Ltd v City of Cape Town set aside and B substituted.

Cases Considered

Annotations

Reported cases

Southern African cases C

Du Toit v Minister of Transport 2006 (1) SA 297 (CC) (2005 (11) BCLR 1053): dictum in paras [26] - [37] applied

Durr and Another v Cape Divisional Council 1986 (2) SA 385 (C): compared

Estate Marks v Pretoria City Council 1969 (3) SA 227 (A): dictum at 242H - 243A applied D

Held v Administrateur-Generaal vir die Gebied van Suidwes-Afrika 1988 (2) SA 218 (SWA): referred to

In re Former Highlands Residents: Sonny and Others v Department of Land Affairs 2000 (2) SA 351 (LCC) ([2000] 1 All SA 157): referred to

Ingersoll-Rand Co (SA) Ltd v Administrateur, Transvaal 1991 (1) SA 321 (T): referred to E

Kerksay Investments (Pty) Ltd v Randburg Town Council 1997 (1) SA 511 (T): dictum at 425F - H applied

Minister of Transport v Du Toit 2005 (1) SA 16 (SCA) (2005 (10) BCLR 964; [2004] 4 All SA 603): compared

Mooikloof Estates (Edms) Bpk v Premier, Gauteng 2000 (3) SA 463 (T): referred to F

Port Edward Town Board v Kay 1996 (3) SA 664 (A): referred to

Randburg Town Council v Kerksay Investments (Pty) Ltd 1998 (1) SA 98 (SCA) ([1997] 4 All SA 121): not followed

Van Zyl v Stadsraad van Ermelo 1979 (3) SA 549 (A): compared. G

Foreign cases

Birmingham City District Council v Morris & Jacombs Ltd (1977) 33 P & CR 27 (CA): compared

Housing Commission (NSW) v San Sebastian Pty Ltd (1978) 140 CLR 196: referred to

Jelson Ltd v Blaby District Council [1978] 1 All ER 548 (CA): compared H

Melwood Units Pty Ltd v Commissioner of Main Roads [1979] AC 426 (PC) (19 ALR 453): referred to

Mount Lawley Pty Ltd v Western Australian Planning Commission [2004] WASCA 149: referred to

Perry v Roads and Traffic Authority of New South Wales [1999] NSWLEC 109: referred to I

Pointe Gourde Quarrying and Transport Co Ltd v Sub-Intendent of Crown Lands [1947] AC 565 (PC): applied

Queensland v Murphy (1990) 95 ALR 493 (HC): dictum at 496 applied

Stebbing v Metropolitan Board of Works (1870) LR 6 QB 37: applied

Waters and Others v Welsh Development Agency [2004] UKHL 19 ([2004] 2 All ER 915): referred to. J

2007 (1) SA p4

Statutes Considered

Statutes A

The Expropriation Act 63 of 1975, s 12(5)(f): see Juta's Statutes of South Africa 2005/6 vol 6 at 2-258.

Case Information

Appeal against a judgment and order of the Cape Provincial Division (Allie J) in an action brought by the respondent/plaintiff against the appellant/defendant in terms of ss 12(1) and (2) of the Expropriation Act 63 of 1975. Cross-appeal by respondent of B compensation order made by the Court a quo. The facts appear from the reasons for judgment.

S P Rosenberg SC for the appellant.

T R Tyler for the respondent. C

In addition to the authorities referred to by the Court, counsel for the parties referred to the following:

Bestuursraad van Sebokeng v M & K Trust & Finansiële Maatskappy (Edms) Bpk 1973 (3) SA 376 (A) at 384E and 385F

Davey v Minister of Agriculture 1979 (1) SA 466 (N) at 472C D

Minister of Safety and Security v Van Duivenboden 2002 (6) SA 431 (SCA) in para [24] at 448H

Minister of Water Affairs v Mostert and Others 1966 (4) SA 690 (A) at 723F

Pietermaritzburg Corporation v South African Breweries Ltd 1911 AD 501 E

Re Lucas and Chesterfield Gas and Water Board [1909] 1 KB 16 ([1908 - 10] All ER Rep 251)

Siman & Co (Pty) Ltd v Barclays National Bank Ltd 1984 (2) SA 888 (A) at 915E

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