R1bn Mala Mala land claim precedent is overturned by court

Posted on:
21 Jul 2016
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By: PBM

The legal precedent which resulted in the painfully high R1bn settlement in the Mala Mala land claim has been overturned by a recent judgement from the Land Claims Court.

 In the case of Mr Philemon Msiza, represented by the Legal Resource Centre, the Land Claims Court awarded ordered a settlement of R1.5m, to be paid to the owners who were claiming R4.4m.

The Legal Resource Centre (LRC) has described this judgement as ground breaking in that it “clar­i­fies that mar­ket value must not be given more value than other fac­tors listed in sec­tion 25 of the Con­sti­tu­tion”

 The judgement “has changed the approach taken in Mhlangan­isweni Com­mu­nity v Min­is­ter of Rural Devel­op­ment and oth­ers (known as the Mala Mala judg­ment), where mar­ket value was given more weight than other fac­tors listed in sec­tion 25 (3) (a) – (e) of the Con­sti­tu­tion, which resulted in more than R1 bil­lion being paid to the own­ers of the reserve on behalf of the com­mu­nity.”

Here follows the LRC statement:

On the 05 July 2016, the Land Claims Court (LCC) handed down a ground break­ing judg­ment deal­ing with the fac­tors listed in the prop­erty rights sec­tion of the South African Con­sti­tu­tion and specifically com­pen­sa­tion for expro­pri­a­tion (sec­tion 25 (3) (a) – (e) of the Con­sti­tu­tion). The Judg­ment clar­i­fies that mar­ket value must not be given more value than other fac­tors listed in sec­tion 25 (3) (a) – (e) of the Con­sti­tu­tion.

The court found in favour of Mr Phile­mon Msiza, rep­re­sented by the Legal Resources Cen­tre, in a mat­ter that has been ongo­ing for more than a decade.

As a labour ten­ant, Mr Phile­mon Msiza’s father made a land claim more than ten years ago. This was a claim for the land on which he lived and which he utilised for graz­ing and grow­ing crops. Mr Msiza’s father passed away before the claim was finalised and our client was appointed as rep­re­sen­ta­tive of the estate. Dur­ing 2004, with the assis­tance of LRC, the mat­ter went to court and was found in favour of Mr Msiza. His late father was declared a labour ten­ant and awarded land.

The dis­pute has arisen due to the fail­ure of the Depart­ment of Rural Devel­op­ment and Land Reform to offer the own­ers of the land com­pen­sa­tion for the same amount that was found to be the value of the land. As a result, the Depart­ment of Rural Devel­op­ment and Land Reform and the own­ers could not come to an agree­ment.

In 2012, with the assis­tance of LRC, Mr Msiza brought an appli­ca­tion to the LCC ask­ing the LCC to deter­mine the pur­chase price in terms of sec­tion 23 of the Land Reform (Labour Ten­ants) Act No. 3 of 1996, read with sec­tion 25 of the Repub­lic of South Africa.

Under sec­tion 25 of the Con­sti­tu­tion, other fac­tors listed when deter­min­ing com­pen­sa­tion for expro­pri­a­tion include the cur­rent use of the land, the his­tory of the acqui­si­tion of the land, the extent of invest­ment in the land and the pur­pose of the expro­pri­a­tion.

The mat­ter was heard in the LCC in Novem­ber 2015. The expert val­uer called on behalf of the own­ers declared the mar­ket value to be R4, 360 000.00 (four mil­lion, three hun­dred and sixty thou­sand rands). The expert val­uer called on behalf of the gov­ern­ment val­ued the prop­erty at R1, 800 000.00 (one mil­lion eight hun­dred thou­sand rands). Fol­low­ing argu­ment, the LCC reserved the judg­ment.

In the judg­ment handed down yes­ter­day, the court found that mar­ket value is not more impor­tant than any other fac­tors listed in sec­tion 25 (3) (a) – (e) of the Con­sti­tu­tion. All fac­tors listed in sec­tion 25 (3) of the Con­sti­tu­tion must be given the same value.

The LCC decided that the just and equi­table com­pen­sa­tion to be paid by the Director-General and the Min­is­ter for the Depart­ment of Rural Devel­op­ment and Land Reform is R1 500 000 (one mil­lion five hun­dred thou­sand rand) for the acqui­si­tion of the prop­erty for Mr Msiza, and directed them to make this pay­ment to the own­ers of the land within 60 days of the judg­ment.

Fur­ther­more, the Director-General and Min­is­ter are directed to take appro­pri­ate steps to ensure that the prop­erty is reg­is­tered in the name of Mr Phile­mon Msiza within 90 days of the judg­ment.

This judg­ment has changed the approach taken in Mhlangan­isweni Com­mu­nity v Min­is­ter of Rural Devel­op­ment and oth­ers(LCC156/2009) (known as the “Mala Mala judg­ment”), where mar­ket value was given more weight than other fac­tors listed in sec­tion 25 (3) (a) – (e) of the Con­sti­tu­tion, which resulted in more than R1 bil­lion being paid to the own­ers of the reserve on behalf of the com­mu­nity.

info@probonomatters.co.za

 

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