Davey v Minister of Agriculture

• Jurisdiction: South Africa
• Judge: Kumleben J
• Judgment Date: 28 August 1978
• Citation: 1979 (1) SA 466 (N)
• Court: Natal Provincial Division

Kumleben J:

Introduction

By notice dated 6 February 1974 defendant expropriated 311 hectares (ha) of plaintiff's farm, remainder of Spurwing No 14537. This was done in D terms of s 4 of the Expropriation Act 55 of 1956. Before expropriation the farm was 403 ha in extent. (I shall refer to sizes in round figures unless a need for greater accuracy arises.) 309 ha of the farm were expropriated. The unexpropriated portion is, and was at all material times, made up of two properties in the sense that on this portion a registered subdivisional diagram existed. Separate title to each of the E two portions could at any time have been obtained. The one subdivision on the unexpropriated land, referred to in evidence as "sub 14", is 17 ha and the other, which was referred to as "sub 21", is 77 ha is size.

At the pre-trial conference it was agreed that the following improvements existed on the expropriated portion of the farm at the time of F expropriation: A shed 511 sq metres in area; three houses for farm labourers; and a cattle spray race. By the end of the trial it was agreed, or accepted by both parties, that these improvements were to be valued at R10000 in determining the amount of compensation payable. It was also agreed that irrigation equipment, valued at R6262, 70 as at expropriation date, was owned by plaintiff and that this equipment served the G expropriated area at the said date. At the time of expropriation there were two dwelling houses with outbuilding and gardens, one on each of the two subdivisions.

The farm is about 16 kilometres due north of Pietermaritzburg. It is a somewhat attenuated area of land lying approximately on a north/south axis and situated on the southern side of a broad valley through which the H Umgeni River flows in the area known as "The Otto's Bluff". The unexpropriated portion, which is situated on higher ground and overlooks the river and valley, is the southern part of the farm. The expropriated area by contrast is in the main a flat, low lying area of ground with the Umgeni River forming its northern boundary and flowing along the lower (northern) portion of its eastern boundary.

This farm was one of a number of farm properties which were partially or wholly expropriated for the construction of the Albert Falls Dam on the Umgeni River. Before the dam was built various forms of mixed farming

Kumleben J

operations were conducted in the basin now inundated by water and surrounded by the unexpropriated portions of certain of the farms involved. Two Peattie brothers were the largest landowners affected by the A expropriation. Initially they contested the amount of compensation offered to them by the defendant but the cases were settled out of Court soon after their joint trial started. On the property of the one brother there was a lake known as "Peattie's Lake". The Umgeni River flowed close to, and more or less parallel with, the south-eastern side of this lake and the wall of the Albert Falls Dam was built close to the lake on its B eastern side. Prior to expropriation this valley was scenically attractive with the lake and various forms of cultivation to be seen there. The situation of the farm in the valley and in relation to other farms is shown on the map which was handed in as exh "PPP".

The amount of compensation last offered before the commencement of C proceedings was R227500. This sum was offered to plaintiff's attorneys on 17 July 1974 and is the same amount as that contained in the notice of expropriation. The compensation last claimed by the plaintiff before issue of summons was R413022 as set forth in a letter dated 19 February 1974 addressed to defendant. In his amended particulars of claim plaintiff D claimed compensation in an amount of R463800, of which R448800 was claimed in terms of s 8 (1) (a) (i) of the Act as the market price of the expropriated property at the relevant time and R15000 to make good loss and inconvenience caused by the expropriation as provided for in ss (1) (a) (ii) of the said section. The following payments by way of compensation have been made by defendant to plaintiff: 12 March 1974, R204 750; 3 January 1975, R14747; 23 January 1975, R7 337.

E In anticipation of the flooding of the valley on completion of the dam, inspections in loco were held on 30 May 1975 and 8 December 1975. At these visits I was able to form an impression both of the area in general and of most of the farm which were to feature in evidence. The notes of these F inspections, with their accompanying maps, were handed in by consent as exhs "A" and "B". The trial started on 2 August 1976 and continued for the allotted time until 26 August 1976. The case then regrettably stood adjourned for over a year due to my involvement in a criminal case in Durban from 1 September 1976 to mid - August 1977. On resumption of this case further inspections in loco were held in the area concerned and on I G vanhoe, a farm situated about 40 kilometres west of Pietermaritzburg, on 30 October and 1 November 1977. After some further evidence was led, argument commenced and was completed in the first fortnight of November 1977.

H The said claim for R15 000 for loss and inconvenience was subsequently abandoned by plaintiff. The claim for compensation is thus confined to the amount payable in terms of s 8 (1) (a) (i) of the Act. The compensation to which plaintiff is entitled is the amount which the expropriated property

"would have realised if sold on the date of notice (6 February 1974) in the open market by a willing seller to a willing buyer"

(in the words of the said sub-section) less the increased value, if any, of the unexpropriated portion as provided for in s 8 (4) (g) (ii).

The approach to the concept of a willing buyer and willing seller is thus explained in Bestuursraad van Sebokeng v M & K Trust & Finansiële Maatskappy (Edms) Bpk 1973 (3) SA 376 (A) at 384:

Kumleben J

"Die bedrag van die vergoeding wat in art 8 (1) (a) (i) beoog word, is 'n bedrag gelykstaande aan die redelike en billike markwaarde van die onteiende grond op die datum van onteiening. (Vgl Pietermaritzburg Corporation v South African Breweries Ltd 1911 AD 501 op 515.) Die oogmerk van die Wet is dieselfde as sié van die gemene reg, nl dat die ekwivalent in waarde aan die onteiende toegeken moet word om die plek in te neem van A die grond was hom ontneem is. (Estate Marks v Pretoria City Council 1969 (3) SA 227 (A) op 242 - 3.)

Die gewillige verkoper en die gewillige koper waarna in art 8 (1) (a) (i) verwys word in verband met die bepaling van die billike markwaarde, is nie die onteiende en die onteienaar nie, maar 'n denkbeeldige gewillige verkoper en 'n denkbeeldige gewillige koper wat met mekaar op gelyke voet ondwerhandel, en wat albei ten volle ingelig is oor die op die datum van B onteitening bestande voor - en nadele en potensialiteit van die grond en oor alles wat dit affekteer. (Minister of Water Affairs v Mostert and Others 1966 (4) SA 690 (A) op 722, 726, 727.) Om die billike markwaarde van die onyeiende grond te bepaal is dit dus in die eerste plek nodig om vas te stel wat die potensialiteite van die onteiende grond op die datum van onteiening was, nie as gerealiseerde werklikhede nie maar as redelike moontlikhede."

C In my view a realistic and practical interpretation is to be given to the reference in the above passage to a "fully informed" buyer and seller. Theoretically there is virtually no limit to the enquiries and investigations, which can be made and conducted, to determine the defects attributes, and the potential, of farm land. Information in this regard D can be obtained from pedologists, climatologists, agronomists, agricultural economists and other experts. In addition a detailed analysis and examination of other sales in the area, whether to a greater or lesser extent comparable, can be undertaken. This is the sort of evidence which is customarily led in expropriation cases. But this is not the manner in which a buyer or seller normally sets about deciding upon the price at E which to conclude a sale. The practical steps which would be undertaken differ in each case and cannot be precisely enumerated. Much will depend upon the nature of the property concerned, the extent to which its use or potential use relates to a specialised activity, and upon the amount that is likely to be paid for its purchase. Obviously a more detailed investigation can be expected in the case of the transaction involving a large sum of money. It is, however, to my mind implicit in the test to be F applied that the facts a Court should take into account are those which would be known to a buyer, who has taken such practical steps as are reasonably necessary to become properly acquainted with the property he has in mind purchasing. This appears to be the view taken by BOTHA J in Loubser en Andere v Andere v SA Spoorweë en Hawens 1976 (4) SA 589 (T) G when discussing the relevance of tests conducted on the property in question after the date of expropriation. At 623 the learned Judge said:

"Ek is van mening dat die vrywilligheid van die veronderstelde onderhandelings en die resulterende verkoping tussen die denkbeeldige verkoper en koper vereis dat oorweging gegee moet word aan die resultate van latere, wat ná die onteiening op die grond uitgevoer word, as dit H van so 'n aard is dat dit in die gewone loop van sake in die ope mark gedoen sou geword het deur òf die verkoperò albei, alvorens hulle 'n koopprys sou beding het. Uit diébeskouing volg 'n negatiewe uitvloeisel: dat die resultate van latere toestse op die grond nie toelaatbare gegewens is by die waardebepaling van die onteiende grond as daardie toetse nie in die gewone loop van sake in die ope mark deur die een of die ander of albei van die denkbeeldige partye tot die koopkontark gedoen sou gewees het in die loop van hulle onderhandelinge en voordat hulle op 'n prys...