Union Government v Jackson and Others

• Jurisdiction: South Africa
• Judge: Schreiner ACJ, Van Den Heever JA, Hoexter JA, Fagan JA and Steyn JA
• Judgment Date: 13 March 1956
• Citation: 1956 (2) SA 398 (A)
• Court: Appellate Division

C Fagan, J.A.:

These two matters which were dealt with together at the original hearing and in the arguments on appeal, concern the valuation by the Water Court of two farm properties expropriated by the Government. An appeal by the owners of the farms against the judgment of D the Water Court was heard by the Transvaal Provincial Division, and an appeal by the Government against the judgment of the latter Court, which increased the valuation, is now before us.

In order to give the background to the issues we are called on to decide I can do no better than to quote that part of the judgment delivered by ROPER, J., in the Provincial Division which contains a resumé of the E salient facts. I have to preface the quotation by a reminder that the parties therein referred to as the appellants are now the respondents and that the Government, which in the Provincial Court was the respondent, is now the appellant. The learned Judge said:

'This is an appeal against the valuation by a Water Court of two farm properties, with the improvements thereon, which have been expropriated at the instance of the Minister of Lands for the purposes of an F irrigation scheme in the district of Potgietersrust known as the Sterk River Irrigation Scheme. One of these two farms. Klipplaatdrift, was owned by the appellant D. C. Jackson. Its total area was 3,116 morgen and it was riparian to both banks of the Sterk River, 2,441 morgen being on the left bank and the remainder, 675 morgen, on the right bank. Only the 2,441 morgen on the left bank were expropriated. The other farm, Klipfontein, in extent 3,261 morgen, adjoins Klipplaatdrift but is not riparian to the Sterk River. This farm was owned by the appellants H. D. Jackson and J. O. Jackson, sons of D. C. Jackson, the latter having a G life usufruct over the farm. The whole extent of this farm has been expropriated.

The matter reached the Water Court under the provisions of sec. 41 (5) of the Land Settlement Amendment Act, 42 of 1944, which provides that in the event of an owner refusing to accept the compensation offered by the Minister for ground of which he is expropriated either party shall have the right to have this amount determined by the Water Court in accordance with the provisions of sec. 98 (3) of the Irrigation Act, 8 H of 1912. Under the latter provision the compensation awarded in the case of appropriation of land is not to exceed -

(a) (i)

the fair market value of the land without improvements; plus

(ii)

the fair value of any useful or necessary improvements thereon; plus

(iii)

the fair value of any luxurious improvements thereon, not exceeding the actual cost of such improvements; plus

(iv)

a sum to make good any actual inconvenience or loss likely to be caused by the expropriation.

The sub-section contains a proviso that the Water Court 'may in its discretion

Fagan JA

add to the values referred to in sub-paras. (i) and (ii) of para. (a) . . . an amount not exceedng one-fifth of such values whenever it is satisfied that the property in question was not acquired for speculative purposes at any time after a date five years prior to the authorisation of such work.'

The notices of expropriation served upon the appellants were dated the 29th October, 1951, the prices offered by the Minister being £20,500 for A the portion of Klipplaatdrift and £9,750 for Klipfontein. Being dissatisfied with these prices, the appellants invoked the statutory provisions referred to above. After a lengthy hearing the Water Court made the following award:

In respect of the portion of Klipplaatdrift:

(a)

the value of the land without improvements was fixed at £5 10s. per morgen.

(b)

The value of the improvements thereon was determined at £4,714.

(c)

Under the proviso to sec. 98 (3) of Act 8 of 1912 the appellant B D. C. Jackson was awarded 15 per cent upon the amounts referred to in (a) and (b).

(d)

In terms of sub-para. (iv) he was awarded a further sum of £500 on account of loss due to the severance of the expropriated from the unexpropriated portion of the farm, and a sum of £350 to cover the cost of removing the appellants' livestock and movables from the farm. These items amounted to the total sum of £21,709 8s.

In respect of Klipfontein:

(a)

C The value of the land was fixed at £3 10s. per morgen.

(b)

Nothing was awarded for improvements.

(c)

In terms of the proviso to sec. 98 (3) of Act 8 of 1912, the appellants H. D. and J. O. Jackson were awarded seven and one-half per cent upon the amount mentioned in (a). These items resulted in a total sum of £12,202 8s. 8d.

The claim of the appellant D. C. Jackson for compensation for loss of D his usufruct was rejected. The Court also rejected claims by the appellants for repayment of the sums paid by way of transfer duty upon the acquisition by them of both farms, and claims by the appellants for interest upon the sums awarded to them. No order was made as to costs, this matter having been left for future decision.

The appellants are dissatisfied with these orders and now appeal.

On the argument of the appeal no attack was made on behalf of the appellants upon the Water Court's determination of the value of the E improvements upon Klipplaatrift, nor upon the awards of £500 and £350 to the appellant D. C. Jackson under sub-para. (iv), nor upon the awards of 15 per cent and 71/2 per cent respectively in terms of the proviso. The judgment was, however, challenged upon -

(a)

The assessment of the value of the land at £5 10s. per morgen in the case of Klipplaatdrift and £3 10s. per morgen in the case of Klipfontein.

(b)

The finding of the Court that a certain dam made by the appellants in the bed of a spruit running through Klipfontein F was valueless and not to be taken into account as an improvement on this farm.

(c)

The refusal of interest.

(d)

The Court's refusal to regard the transfer duty paid by the appellants upon acquisition of the farms as a loss caused by the expropriation in terms of sub-para. (iv).

The following is a brief history of the ownership of these farms by the appellants and of the negotiations which preceded their expropriation G and the recourse by the parties to the Water Court. The farms were both bought in 1948 by the appellant D. C. Jackson, to whom I shall in future refer, for the sake of brevity, as Jackson Senior. Klipplaatdrift was acquired by him from the previous owner, one Labuschagne, who was a witness in this case, for himself for £12,000, while Klipfontein was bought by him for his two sons at a price of £6,000, he retaining a life usufruct over the farm. At first a manager was employed to conduct farming operations upon the two farms, but towards the end of 1950 the H manager left. At that time the appellant H. D. Jackson (to whom I shall refer in future as Jackson Junior) was practising as an attorney in Potgietersrust, and the control of the farming operations began to devolve upon him. At first he continued his legal practice in Potgietersrust, going daily to the farm, but he told the Court that it gradually became clear to him that the management of the farm would occupy all his time; it appeared to be worth his while to make the farming of the two properties a full time occupation, and he accordingly went to live on Klipplaatdrift in December, 1950, subsequently selling his legal practice. On the farm he grew crops such as maize, kaffir corn, groundnuts, castor oil and tobacco, and was actively engaged in

Fagan JA

these operations when the notices of expropriation were served in October, 1951. He informed the Court that the farming operations, and particularly the production of tobacco, were successful, resulting in a net profit of £8,000 from an expenditure of £9,000 over the two seasons during which he was resident on the farm.

It appears that the question of the acquisition of the two farms for the A purposes of the irrigation scheme was first raised in August, 1950, when the Secretary for Lands wrote to Mr. Jackson Senior asking him to state the lowest figure at which he would be prepared to sell the portion of Klipplaatdrift on the left bank of the river, and addressed a similar inquiry in regard to Klipfontein to Messrs. H. D. and J. O. Jackson. Jackson Senior replied that he was not prepared to grant an option to purchase a portion of Klipplaatdrift but that he was prepared to grant an option on the whole property for £47,500. The two sons B replied that they were prepared to grant an option to purchase Klipfontein for £20,000. The Secretary wrote in reply on the 9th October, 1950. that the Minister had authorised the purchase of the left bank portion of Klipplaatdrift at £15,000, and of Klipfontein at £8,000. On the 5th December, 1950, these offers were raised to £20,500 and £9,750 respectively. These offers having been refused, on the 15th March, 1951, notices of expropriation were served upon the owners, the offer of compensation in the figures being repeated. These notices, however, were objected to as not complying with the Act. They were C therefore replaced by the notices dated the 29th October, 1951, which formed the basis of the proceedings in the Water Court.

Thereafter an interview took place between Jackson Senior and the Minister of Lands, at which the former appears to have suggested, inter alia, that he should be allowed to hire the two farms for a period of two years. This request was refused by letter dated the 15th December, 1951, but it was stated that the Minister had approved of Mr. Jackson's being allowed to plant and reap his summer crops on the expropriated D properties and to use the barns on Klipplaatdrift, but that he would not be allowed to plant any winter crops, including grain, during the 1952 planting season for such crops.

On the 27th December, 1951, Jackson Senior wrote referring to...