Natal Estates Ltd v Community Development Board and Others

• Jurisdiction: South Africa
• Judge: Leon J
• Judgment Date: 18 March 1985
• Citation: 1985 (3) SA 378 (D)
• Hearing Date: 19 February 1985
• Court: Durban and Coast Local Division

Leon J:

The plaintiff carries on business as a grower and miller of sugar cane. The first defendant is the Community Development Board while the second and third defendants are farmers of Trenance Estate, Mount Edgecombe. At all material times and in particular on 27 June 1979 the second and third J defendants were the registered owners of certain immovable property situate at Mount Edgecombe, Natal, described as:

Leon J

"Sub Trenance of the farm Riet Rivier No 842, a portion of A which is situate in the Mount Edgecombe Health Committee (Malaria) Area, the whole being situate in the county of Victoria, province of Natal, in extent 3118,9891 acres."

The plaintiff leased from the second and third defendants a certain portion of this property in terms of a written unregistered agreement of lease concluded on 18 August 1967.

By notice of expropriation dated 27 June 1979, addressed to the B second and third defendants, the first defendant:

(a)

expropriated a certain portion of the property;

(b)

declared that the expropriation would take effect on 28 June 1979, from which date the ownership in respect of the expropriated property would pass to the first C defendant;

(c)

required the second and third defendants, in terms of the Expropriation Act 63 of 1975, inter alia to:

(i)

indicate the total amount claimed by the second and third defendants as compensation in accordance with the provisions of s 12 (1) (a) of the Act;

(ii)

furnish to the defendant the name and D address of the lessee of the expropriated property and a certified copy of the relevant lease.

On or about 16 July 1979 the second and third defendants furnished the first defendant with the name and address of the plaintiff and with a copy of the lease in terms of s 9 (1) (d) E (i) of the Act.

The whole of the expropriated property fell within the area of the land constituting the leased property and formed portion of the leased property. The first defendant took possession of the leased property on 1 August 1979.

By reason of the expropriation of the property the rights which F the plaintiff had in respect of expropriated land were terminated on the date of expropriation, in terms of s 22 of the Act.

It is the plaintiff's case that by reason of the provisions of s 13 (1), read with the provisions of s 12 (1) (b) of the Act, the first defendant is obliged to compensate the plaintiff in an amount not exceeding an amount to make good any actual G financial loss or inconvenience caused by the expropriation.

The plaintiff has alleged that it has suffered actual financial loss caused by the expropriation in an amount of R667 558, which is made up as follows:

(a) loss of farming profits	R447 906
(b) loss of milling profits	R219 652
	R667 558

It accordingly claims that sum from the first defendant, which has not paid it, but offered R40 000 in writing which the plaintiff declined to accept. The compensation payable by the I first defendant falls to be determined by this Court in terms of s 14 (1) (b) of the Act in that the expropriated property falls within the jurisdiction of this Court and the amount of compensation claimed exceeds R100 000.

The second and third defendants have been joined in that, as the former registered owners of the expropriated property to whom compensation is also payable in terms of the Act, they may J by reasons of the

Leon J

A provisions of s 12 (5) (h) (iii) of the Act have a direct and substantial interest in the order which this Court is called upon to make, determining the amount of compensation payable to the plaintiff. No relief is sought against these defendants save that, in the event of them unsuccessfully opposing the plaintiff's claim for compensation, the plaintiff reserves the B right to claim costs against them.

A number of matters were put in issue on the pleadings. Thereafter a Rule 37 conference was held in which certain admissions were made and the parties also agreed to endeavour to settle the quantum of milling profits and farming profits. At that stage it was recorded that it was the standpoint of the C defendants that milling and farming profits were not items to be taken into account as part of the valuation of the rights of the plaintiff under the lease.

Thereafter the issues were narrowed further. When the matter came before me the only issue which the parties wished me to decide was whether the plaintiff in addition to farming profits D was entitled to compensation for loss of milling profits. In the event of my ruling in favour of the plaintiff the parties had agreed that the quantum of such loss was to be determined by a referee. The parties further agreed that, whatever my ruling, costs should be reserved.

Section 22 of the Act provides:

"If a notice of expropriation relates to the expropriation of E land, all rights in respect of such land not registered or recorded against the title deed thereof or in an office referred to in s 7 (4)... shall terminate on the date of expropriation and the State shall, subject to the provisions of ss 13 and 19, not be obliged to pay any compensation for such rights."

Where, as here, the rights were not registered, the effect of the section is that the State shall not be obliged to pay any F compensation for such rights except to the extent provided for in s 13 or 19.

Section 19 is not relevant to the facts of this case but s 13 is. That section provides:

"13.

Payment of compensation in respect of certain unregistered rights in respect of property expropriated -

(1)...