Topic: EconomicsFinance

Last updated: February 1, 2019

State to obtain a public benefit at private expense”.Thus the use of both these cases aided in the definitional element of Expropriation which was not in the Constitution which resulted in the award of land as it satisfied both the definition of expropriation contained in the jurisprudence as well as three requirements for expropriation contained insection 25 of the Constitution, thus Enabling section 25 of the constitution to be applied in the case.Sections 25(1-3) serve two purposes .

they recognize existing property right,and even in the recognition, the expropriation for a public purpose or in the public interest is expressly provided for if it complies with the Constitution. section 25(3) refers to expropriation in expression by section 25(4) which states that the notion of the public interest includes South Africa’s commitment to land reform and Sections 25(5-9) are generally concerned with the process of land reform. The State is required to take reasonable legislative and other measures within its available capacities to foster conditions which will allow citizens to gain access to land on an equitable basis an liberate the previously oppressed. According to section25(6) a person/community whose tenure of land is legally insecure as a result of past racially discriminatory laws or practices has the right, to the extent provided by legislature to tenure which is legally secure or to comparable redress.According to section 25(8) the Constitution provides that section 25 should not be construed in a manner which constitutes an impediment to the State from taking legislative and other measures to achieve land, water and related reform in order to correct the results of past racial discrimination, provided that any departure from the provisions of section 25 is consistent with section 36(1) – the limitation provisions. In terms of section 25(9) Parliament is required to enact legislation that deals with security of tenure as required by section25(6) of the Constitution.

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The structure of section 25 is accordingly clear. Existing property rights are protected through the prohibition against deprivation except through a law of general application and a prohibition from passing a law which permits arbitrary deprivation. The State is entitled to expropriate land for a public purpose or in the public interest in terms of section 23 of the land reform Act, expropriation must be subject to compensation which has either been agreed or if no agreement decided by a Court. The amount of compensation need to be fair reflecting an equitable balance between the public interest and the interests of those affected. When determining just and equitable compensation, certain factors listed in section25(3)(a-e) should be taken into consideration. Land reform is one of The objectives of the Constitution. The structure to section 25, which is set out above, has been confirmed by the Constitutional Court in the case of First National Bank of SA Ltd t/a Wesbank vCommissioner, South African Revenue Service and Another; First NationalBank of SA Ltdt/a Wesbank v Minister of Finance 2002 (4) SA 768 (CC) where it was held that subsections 25(4-9):”All, in one way or another, underline the need for and aim at remedying one of the most enduring legacies of racial discrimination in the past, namely the grossly unequal distribution of land in South Africa. Thus the constitutional Court used the three above mentioned cases(Harksen v Lane NO and others 199, Phoebus Apollo Aviation CC v Minister of Safety and Security 2003 and First National Bank of SA Ltd t/a Wesbank v Commissers, South African Revenue Services and another, First National Bank v Minister of Finance 2002)to sought just and equitable compensation of land through the primary application of Section 25 of the constitution and section 23 of the land reform Act The Court used section 25 of the constitution and other factors such as Expert valuers to calculate the Market value which is one of a number of considerations it takes into account as, compensation must be just and equitable.

In determining what is just and equitable, a balance must be struck between the interests of the private and the public. Thus, compensation which is below the market value can be in accordance with the Constitution, if it qualifies as just and equitable.the court applied section 25 of the constitution in the case of Msiza v Director-General for the Department of Rural Development And Land Reform and Others to expropriate the land with compensation by taking into account the purpose of the land as stated in terms of section 25(3) “compensation must reflect an equitable balance between the public interest and the interests of those affected” . This is established by considering each of the factors in turn.Section25(3)(e) makes it clear that the purpose of the expropriation must be considered when determining the amount of compensation.and the history of the acquisition and use of the property is a very specific enquiry based on the facts of each case.

The rationale for this requirement is clear, given South Africa’s history of land dispossession and racial discrimination. Thus it would depreciate the value of the land if it was acquired through post repressive laws of Apartheid and the cost of maintaining the land will be taken into account and whether or not the state stands to make capital income from the land which is not the case in the case of Mr Msiza but it was evident that no actual change occurred to the land in 15 years thus the requested amount of a potential development value of 4.36 million was out of proportion as compared to the market value calculated by the States expert valuers which was 1.5 million as not much money was invested in the land and it was acquired during the Apartheid Era below market value .


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