Estate Marks v Pretoria City Council

• Jurisdiction: South Africa
• Judge: Ogilvie Thompson JA, Rumpff JA, Wessels JA, Potgieter JA and Jansen JA
• Judgment Date: 08 May 1969
• Citation: 1969 (3) SA 227 (A)
• Court: Appellate Division

Estate Marks v Pretoria City Council
1969 (3) SA 227 (A)

1969 (3) SA p227

Citation	1969 (3) SA 227 (A)
Court	Appellate Division
Judge	Ogilvie Thompson JA, Rumpff JA, Wessels JA, Potgieter JA and Jansen JA
Heard	March 10, 1969; March 11, 1969; March 12, 1969
Judgment	May 8, 1969

Flynote : Sleutelwoorde A

Expropriation — Compensation payable — Amount of — Act 55 of 1965, secs. 4 (4), 12 — Properties burdened with fideicommissum — Beneficiaries not B entitled to compensation — Sec. 8 (1) (a) of the Act — Compensation monies to be burdened with fideicommissum — Reinvestment of such monies — Transfer costs and loss of interest — Not claimable — Sec. 8 (1) (a) (ii) of Act — Incorrect valuation by Court — Appellate Division entitled to set such valuation aside if incorrect — Judge not accepting conclusions of expert witnesses — Must motivate his reasons for doing so.

Headnote : Kopnota

C The common law of expropriation provided that the equivalent in value be given to take the place of the property lost: the provisions of sections 4 (4) and 12 of Act 55 of 1965 reveal a similar intention on the part of the Legislature.

D Where land which is subject to a fideicommissum is expropriated under the provisions of Act 55 of 1965, the compensation moneys payable for such land become impressed with the fideicommissum and the fideicommissaries have no separate independent claim against the expropriator.

Transfer costs incurred by an expropriated owner in investing the expropriation moneys in fixed property do not constitute actual financial loss 'caused by the expropriation' within the meaning of section 8 (1) (a) (ii) of Act 56 of 1965 and, consequently, are not E claimable by the expropriated owner under the provisions of that section. The same applies in respect of interest lost in the re-investing of such moneys.

Where a testator has burdened immovable property with fideicommissum, his children to receive the income and his grandchildren the capital, the property not to be sold during the lifetime of the children, then, on the expropriation of such property whilst being administrated by the administrators of his estate, the testator's children have under section F 8 (1) (b) of Act 55 of 1965 no claim for compensation as no 'property' of theirs has been expropriated.

It is very desirable that a Judge - whose function it is to fix the compensation in the light of all the evidence put before him - who declines to accept the conclusions of expert witnesses whose evidence he has, in other respects, accepted should, in his judgment, indicate clearly the reasons which motivate him in so doing.

G A Judge determining compensation under sections 7 (1) and 8 (1) of Act 55 of 1965 is not giving a discretionary decision but a valuation based upon the evidence before him. If therefore the Appellate Division, while giving proper weight to such evidence, finds that the valuation is incorrect it is its duty to set that decision aside.

The decision in the Transvaal Provincial Division in Estate Marks v Pretoria City Council in part confirmed but the amount of compensation H found by that Court to be payable increased.

Case Information

Appeal from a decision in the Transvaal Provincial Division (RABIE, J.). Facts not material to this report have been omitted from the judgment of OGILVIE THOMPSON, J.A.

A. Suzman, Q.C. (with him H. F. Junod and D. J. B. Osborn), for the appellant: The basis on which compensati n is to be determined is governed by sec. 8 (1) of Act 55 of 1965. The sub-section provides,

1969 (3) SA p228

inter alia, one basis of compensation in the case of 'property other than a right' and another in the case of 'a right'.

The basic issue in the trial and on appeal relates to the quantum of A compensation to which the plaintiffs are entitled by reason of the expropriation. The appellants contend that the amount awarded by the Court a quo was too low; the respondent (in its cross-appeal) contending that the amount awarded was too high. In view of the finding of the Court that the defendant expropriated 'property other than a right' and not 'rights', it is proposed in the first instance to approach the B matter on the assumption that this finding is correct. That is to say, the matter will first be dealt with entirely without regard to the effect (if any) of the fideicommissum or other testamentary provisions on the amount of compensation claimable. Accordingly, the claim for compensation will be dealt with under three major heads, viz: (1) the market value of the property expropriated; (2) the value of the rights C expropriated, having regard to the testamentary provisions, and (3) the additional financial loss caused by the expropriation.

As to (1): The present case appears to be the first to be decided under the Act of 1965. However, decisions under earlier cognate statutory provisions (both in our law and in English law) appear to be applicable D in relation to the determination of market value (i.e. 'the amount which the property would have realised if sold on the date of notice in the open market by a willing seller to a willing buyer'). The following extracts from the authorities (which are legion) may be cited. (a) All relevant circumstances must be taken into account. Pietermaritzburg E Corporation v SA Breweries Ltd., 1911 AD at p. 516; (b) Land compulsorily acquired must be valued not merely by reference to the use to which it is being put at the time at which its value has to be determined, but also by reference to uses to which it is reasonably capable of being put in the future, i.e. its potentialities; Raja's case, 1939 A.C. at p. 313; S.A.R. & H v New Silverton Estates Ltd., F 1946 AD at p. 838; Cripps, Compulsory Acquisition of Land, 11th ed. (1962), para. 4 - 013 at p. 680; (c) Value and damages must be separately assessed: Illovo Sugar Estates Ltd v S.A.R. & H., 1947 (1) SA at p. 63; (d) Although prices paid on expropriation by the expropriating authority afford some guidance to market value, they are not necessarily the complete test. See Union Government v Jackson and G Others, 1956 (2) SA at p. 424; Minister of Water Affairs v Mostert and Others, 1966 (4) SA at p. 725; Stockbridge Mill Co v Central Land Board, (1954) 2 All E.R. 360 (C.A.); Cripps, loc. cit., para. 4 - 193 at p. 900; (e) The role played by the expert is also a factor. See Robinson Brothers (Brewers) Ltd v Houghton & Chesterle-Street Assessment Committee, (1937) 2 K.B. at pp. 469 - 71. The deceased's H testamentary dispositions have been the subject of several judicial interpretations. In terms of his testamentary dispositions the properties in question were at all material times held subject to a fideicommissum, the effect of which may be summarised as follows: (i) The properties were not to be realised or sold until after the death of all the testator's children; (ii) the children of the testator were to receive the income only from the said properties during their lifetime; (iii) on the death of the last-dying of the testator's children, the properties were to be sold, and the capital

1969 (3) SA p229

was to devolve free and unencumbered upon the lawful descendants of the testator's children (hereinafter referred to as 'the further descendants'). The fideicommissum was endorsed against the title deeds of each of the said properties in terms of sec. 61 of the Administration A of Estates Act, 24 of 1913. The effect of the expropriation on the respective rights of the two groups of beneficiaries was as follows: (a) As to the children: They were deprived of the anticipated income from the various properties, which income (but for the expropriation) would have continued to accrue to them until the death of the last-dying of B the said children; (b) The further descendants: They were deprived of the right to the anticipated proceeds of the corpus, free and unencumbered, on the eventual sale of the properties after the death of the last-dying of the testator's children. The actual financial loss sustained by the two groups of beneficiaries as the result of the expropriation of the properties 'free from the fideicommissum' consisted C of - (i) the present value of the anticipated income from the said properties, for the period from the effective date of expropriation until the computed date of the termination of the fideicommissum: (ii) the present value of the estimated proceeds which the properties would have realised when sold on the computed date of the termination of the fideicommissum. Before dealing in any detail with the learned Judge's D reasons for the finding that the plaintiffs had no claim other than under para. (a) (i) of sec. 8 (1), it is desirable to set out the general purport of the appellants' submissions on this aspect of the case.

Distribution of the various rights comprised in the ownership of the properties: Ownership consists of a bundle of rights. In the present E case, as at the date of expropriation, the various rights comprised in full ownership were split up as follows: (i) the bare dominium was vested in the administrators, in their representative capacity; (ii) the ius fruendi, i.e. the right to the income or rentals from the properties, was vested in the testator's children; (iii) the right to the corpus, when realised on the termination of the fideicommissum after the death of the last-dying of the children, was vested in the further F descendants of the children. The latter group consisted of a clearly defined and ascertainable class, the members of which would be finally determined on the termination of the fideicommissum; (iv) the right of occupation was vested in the respective lessees of the various properties. In so far as any of the leases in question were not G registered against the title deeds, they ipso facto terminated, by virtue of sec. 13 of the Act...