Kerksay Investments (Pty) Ltd v Randburg Town Council

• Jurisdiction: South Africa
• Judge: Van Dijkhorst J, McCreath J
• Judgment Date: 29 September 1995
• Counsel: F Vaccaro for the appellant J L Van Der Merwe SC for the respondent
• Hearing Date: 13 September 1995
• Citation: 1997 (1) SA 511 (T)
• Court: Transvaal Provincial Division
• Docket Number: A1575/94

Van Dijkhorst J:

The appellant, owner of erf 843 Ferndale, Randburg, appeals against the D dismissal by the now defunct compensation court of its claim for compensation for the expropriation of a servitude of right of way by the respondent town council over its property.

The compensation court was constituted in terms of the erstwhile s 16 E of the Expropriation Act 63 of 1975 and the expropriation was in terms of the Act. The president of the compensation court held that as there existed a prior right of way and/or right of public parking over the expropriated area, no loss was suffered.

It is necessary to set out the history of the rights pertaining to this property in some detail. Erf 843 Ferndale, Randburg was originally in F terms of the Randburg Town Planning Scheme 1954 zoned as special residential ie for residential purposes. On the application of its then owner Randburg Amendment Scheme 128 of 1974 was passed pursuant to Administrator's Notice 1966 of 6 November 1974. Scheme 128 rezoned erf 843 from special residential to special. The effect was that it could also be used for offices. G

Condition (j) of scheme 128 provides:

'The owner shall register, free of charge, a servitude 1,57 metres wide for road widening purposes and a further servitude of 18,43 metres for public parking purposes over the lot in favour of the council.' H

It is to be noted that the condition itself does not stipulate where the parking area is to be situated. It is not laid down that it is to be next to the widened road. That, however, is evident from the annexed plan.

The Randburg Town Planning Scheme 1976 was approved by Administrator's Notice 1746 dated 29 December 1976. It replaced the 1954 Town Planning Scheme and therewith Amendment Scheme 128. I In the mean time no steps had been taken to exercise any rights or grant the servitudes provided for therein. Proviso (viii) of clause 14(a) which determines by way of a table of use the uses to which the respective erven may be put reads as follows:

'No residential building, hotels, business premises, places of amusement, public garages, social halls, shops or industries or additions shall be permitted in J

Van Dijkhorst J

the relevant use zones unless a right of way for general street purposes is A registered by the owner in favour of the council against the erven or portion of land set out in column (2) of table "C" in the township set out in column (1) and abutting on the streets set out in column (3) and to the widths set out in column (4).'

As far as erf 843 is concerned the street is Oak Avenue and the width B of the servitude is 3,2 metres. Erf 843 is zoned as special.

Proviso (xxv)(i) reads:

'Land shown or zoned for existing public roads or new roads and widening may only be used for such purposes and subject to such conditions as approved in writing by the council.' C

By notice of expropriation effective on 3 April 1990, the respondent expropriated in terms of the Expropriation Act 63 of 1975 for public purposes 'a road widening servitude 147,83 square metres in extent' over erf 843 from the appellant. In terms of ss 7(2)(c) and 12(1)(b) of that Act an amount of R1 401 was offered as compensation, being R1 400 for the improvements and R1 for the land. The improvements were seven big D trees in the servitude area. The area of the servitude is a strip of land 3,13 metres wide and 47,23 metres long, adjacent to Oak Avenue. It is important to note that the area of this servitude overlaps (and covers) the area of 1,57 metres wide demarcated for road widening purposes in condition (j) of scheme 128. It is also relevant that the strip of land 3,13 E metres wide falls within the servitude of right of way of 3,2 metres wide provided for along the frontage of erf 843 along Oak Avenue in the Randburg Town Planning Scheme 1976.

The negligible offer of R1 for the land was based on a valuation of the expropriated servitudinal area taking into account the existing 1976 scheme and the reasoning that in fact what was taken had long ago been rendered valueless. F

To complete the picture, it should be mentioned that no servitude was registered over erf 843 prior to the expropriation. It is common cause that Amendment Scheme 128 of 1974 was passed after application therefor by the then owner of erf 843 and that the Randburg Town G Planning Scheme 1976 was not passed as a result of any request or initiative taken by the appellant or its predecessor in title. Since the coming into operation of the scheme erf 843 retained its zoning as special. No further development by the appellant occurred till well after expropriation. In July 1993 appellant submitted building plans to the respondent for approval and thereafter certain buildings were erected. H

Although the appellant became entitled to claim compensation pursuant to the Randburg Town Planning Scheme 1976 in terms of s 45(1) of the Town Planning and Townships Ordinance 25 of 1965 (T) to the extent of damage suffered, it did not do so.

Prior to the expropriation the respondent had not taken possession or I control over the land to which it was entitled in terms of the 1974 and/or 1976 schemes. After expropriation the road was widened by 3,13 metres.

The appellant claimed an amount of R40 000 as actual financial loss or inconvenience caused to it by the expropriation of the servitude as envisaged in s 12(1)(b) of the Expropriation Act. At the pre-trial conference it was inter alia agreed by the parties J

Van Dijkhorst J

'23.1

that the scheme caused diminution in value of the property; A

23.2

that applicant's claim for compensation is based on the fact that as a result of the expropriation

(a)

a lesser area is available for site development;

(b)

the expropriation is of a servitude and following expropriation, bulk (and coverage) can still be calculated upon the total stand area, including the servitude but the parking requirements under the scheme are such that B development either became more costly due to the need to put additional parking below ground or developers will not develop to full bulk'.

In order to limit the duration of the trial and obviate the leading of evidence the parties further agreed at the pre-trial conference: C

'1.1 If it is legally permissible to take into account the diminution in value of the applicant's property, being lot No 843, Ferndale Township ("the applicant's property") which occurred in consequence of the coming into operation of the Randburg Town Planning Scheme 1976 on 29 December 1976 ("the scheme"), in the calculation of compensation payable to the applicant in terms of s 12(1)(b) of the Expropriation Act 63 of 1975, then the appropriate compensation to be D paid by the respondent to the applicant for the expropriation of a road widening servitude, 147,83 square metres in extent, is the amount of R1 401.

1.2 If it is not legally so permissible, then the appropriate compensation to be paid by the respondent to the applicant for the aforesaid expropriation, is the amount of R40 000. E

The respondent has paid an amount of R1 401 to the appellant.

The effect of this agreement was to submit a limited issue of a legal nature for decision to the compensation court. On that basis the parties closed their respective cases without leading evidence.

The appellant contended that as it was agreed that the scheme of 1976 did cause diminution in value of erf 843 (for which the appellant was at F the time entitled to claim compensation) the matter fell squarely within the principles applied in Kruger v Randburg Town Council case No 16501/90, in which judgment was delivered on 1 September 1992 by Eloff JP in the Witwatersrand Local Division. That case involved erf 824, Ferndale. A servitude of right of way was expropriated over it in 1989 G and the town council contended that as the 1976 scheme provided for such servitude no loss had been suffered and offered R1 as compensation. The Court rejected the expropriatee's argument that the limitation of use created by the 1976 scheme had fallen away as no servitude had been acquired within two years after its promulgation, based on s 44(4) of the Town Planning and Townships Ordinance 1965. The Court held H that the limitations imposed by the scheme were not prohibitions in terms of s 44(1) of the ordinance and therefore did not in terms of s 44(4) expire after two years upon failure to take possession.

It is not necessary to elaborate upon the reasoning as this was not an issue before us, although it had been raised in the compensation court. I

Eloff JP further held that the matter fell squarely within the provisions of s 12(5)(f) of the Act and that the 1976 scheme had to be disregarded.

It was contended that the compensation court was bound by the judgment in Kruger v Randburg Town Council (supra). It was argued that the purpose for which the servitude was taken was for road widening and that this same purpose is to...