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IN THE LAND CLAIMS COURT OF SOUTH AFRICA
HELD IN RANDBURG
Decided on: 23 June 2011
In the matter between:
CASE NO: LCC57/2009
PLAINTIFF
FARJAS PROPRIETY LIMITED
AND
MINISTER OF AGRICULTURE AND
LAND AFFAIRS
FIRST DEFENDANT
REGIONAL LAND CLAIMS COMMISSIONER
DEFENDANT SECOND
CHIEF LAND CLAIMS COMMISSIONER
Third Defendant
AND
CASE NO: LCC58/2009
RAINY DAYS FARMS PROPRIETY LIMITED
Plaintiff
and
MINISTER OF AGRICULTURE AND
LAND AFFAIRS
First Defendant
REGIONAL LAND CLAIMS COMMISSIONER
Second Defendant
CHIEF LAND CLAIMS COMISSIONER
Third Defendant
JUDGMENT
MIA AJ:
[1] Farjas (Pty) Ltd and Rainy Days Farms (Pty) Ltd (hereafter referred to as the plaintiffs) are
companies with limited liability registered in terms of the Companies Act. The companies owned the
two properties, described as Sub 4 of 3 of the Farm Whispers No. 13893 in extent of 8,0648 hectares
and sub 5 of 3 of the Farm Whispers No. 13893 in extent of 26,7228 hectares (hereafter the
properties) both situated in Pietermaritzburg, KwaZulu-Natal. The land had been purchased with a
view to developing a township thereon. It was rezoned and plans were drawn for the layout of the
township scheme. The plaintiff companies seek compensation for the expropriation of the two
properties. The properties were expropriated with effect from 24 June 1991 in terms of the
Expropriation Act, Act 63 of 1975 (hereafter the Expropriation Act) by the Minister of Housing (House
of Delegates) of the then Republic of South Africa. For the purposes of this matter the two actions
were heard together as the evidence led was relevant to both matters.
[2]
Farjas (Pty) Ltd received compensation in the amount of R260 000 for Lot 4 and Rainy Days
Farms (Pty) Ltd received compensation in the amount of R280 000 for Lot 5 as a result of the
expropriation of the properties. An amount of R10 000 was initially offered as solatium to each plaintiff
but was never paid to the plaintiffs. The plaintiffs were dissatisfied with the compensation received
and instituted action in the High Court in terms of the Expropriation Act for increased compensation.
When the Restitution in Land Rights Act, Act 22 of 1994 (hereafter the Restitution Act) was passed,
the plaintiffs withdrew the action in the High Court and lodged a claim for restitution of the properties
which had been expropriated. The claims were initially rejected and the decision was taken on review
in terms of section 36 of the Restitution Act. The Regional Land Claims Commissioner was ordered to
reconsider the claims. (See Farjas (Pty) Ltd and another v Regional Claims Commissioner
KwaZulu-Natal [1998] 1 All SA490 (LCC).
[3]
The plaintiffs' claim was later accepted and a valuation of the properties was undertaken by
expert valuers. This was in keeping with the Department's policy to ascertain the market value of
properties. A further opinion was sought at the instance of the defendants from Nicholas Maritz and
Associates (hereafter "Maritz"). Maritz considered the valuation of the properties by a number of
experts and found that the plaintiffs were under compensated in the amount of R656 000, being R276
000 for the farm owned by Farjas (Pty) Ltd and R380 000 for the farm owned by Rainy Days Farms
(Pty) Ltd. Maritz further recommended that R20 000 be paid as solatium for the two properties. He
expressed the view that the amounts of R 276 000 and R380 000 should attract interest at a rate of
16.25%, which is stipulated in section 26(1) the Exchequer Act, Act No 66 of 1975 (hereafter the
"Exchequer Act"), and is the rate referred to in the Expropriation Act, Act 63 of 1975, calculated from
the date of expropriation. The Exchequer Act was repealed in its entirety by section 87 of Act 1 of
1999 except sections 28-30 which are not applicable in casu.
[4]
The parties agree that the claims are valid claims in terms of the Restitution Act. They also
agree on the amount of under compensation as indicated by Maritz in respect of the properties. The
dispute however relates to how this sum should be adjusted to the present day to compensate the
plaintiffs for the under compensation of the properties expropriated. The plaintiffs proposed a number
of methods for calculating the change in the value of money to the present day. The defendants did
not agree with the methods used by the plaintiffs or the recommendation of payment of interest
compounded proposed by Maritz. The defendants also disputed the payment of a solatium. Prior to
commencing this action the plaintiffs sought a declaratory order in this Court in 2006 under case
number LCC125/2006. The application was adjourned by agreement between the parties and
subsequently withdrawn by the applicants (plaintiffs herein). The parties request that the outstanding
issue of costs in that application be decided together with the present action. It is common cause
between the parties that the plaintiffs do not seek return of the same land or alternative land and
instead seek equitable redress in the form of financial compensation, adjusted to the present day.
[5]
The plaintiffs have met the requirements in section 2(1) and 2(2) of the Restitution Act. As
indicated it is agreed that the plaintiffs were dispossessed of a right in land as a result of past
discriminatory legislation, it also appears that the parties agree that the compensation received was
not just and equitable as contemplated in section 25(3) of the Constitution of the Republic of South
Act, Act 108 of 1996 (hereafter the Constitution) and section 2(2) read with section 33 of the
Restitution Act.
[6]
Whilst the parties agree that "just and equitable" compensation was not received and on the
amount of under compensation as indicated by Maritz, they do not agree on what informs the
calculation to bring the amount of under compensation to the present day value. The Restitution Act
gives no explicit directives concerning the determination for "equitable redress" in the form of
compensation and how to adjust the value to account for the change in the value of money over time.
In Ex Parte Former Highlands Residents; In re Ash & Others v Department of Land Affairs [2000] 2 All
SA 26 (LCC) and Herman us v Department of Land Affairs: In re Erven 3535 and 3536, Goodwood
2001 (1) SA 1030 (LCC), the parties agreed to use the Consumer Price Index (CPI) to translate the
loss from the date of dispossession to its value at the date of the award.
[7]
It is useful to consider the purpose of the Restitution Act which seeks to undo the damage
resulting from decades of apartheid and the resultant dispossessions. The general principle is that the
purpose of compensation is to place the claimants in the position they would have been in had they
not been dispossessed of their land. In Haakdorlngbult Boerdery CC v Mphela and Others 2007 (5)
SA 596 (SCA) at paragraph 48 Harms JA adopted the approach used in Baphiring Community v Uys
2007 (5) SA 585 (LCC). Harms JA stated:
"In this regard I wish to paraphrase and adopt the approach of Gildenhuys AJ in Baphiring
Community v Uys. Compensation, to be fair (he said), must recompense. The purpose of giving fair
compensation is to put the dispossessed, insofar as money can do it, in the same position as if the
land had not been taken. Fair compensation is not always the same as the market value of the
property taken; it is but one of the items which must be taken into account when determining what
would be fair compensation."
[8]
Section 33 of the Restitution Act lists a number of factors the Court should have regard to in
considering its decision in any particular matter. It provides:
"In considering its decision in any particular matter the Court shall have regard to the following
factors:
(a)
The desirability of providing for restitution of rights in land to any
person or community dispossessed as a result of past racially
discriminatory laws or practices;
(b) the desirability of remedying past violations of human rights;
(c) the requirements of equity and justice;
(cA) if restoration of a right in land is claimed, the feasibility of such restoration;
(d) the desirability of avoiding major social disruption;
(e) any provision which already exists, in respect of the land in question in any matter, for that
land to be dealt with in a manner which is designed to protect and advance persons, or
categories of persons, disadvantaged by unfair discrimination in order to promote the
achievement of equality and redress the results of past racial discrimination;
(e A) the amount of compensation or any other consideration received in respect of the
dispossession, and the circumstances prevailing at the time of the dispossession;
(e B ) the history of the dispossession, the hardship caused, the current use of the land and
the history of the acquisition and use of the land;
(e C) in the case of an order for equitable redress in the form of financial compensation,
changes over time in the value of money;
(f)
any other factor which the Court may consider relevant and consistent with the spirit
and objects of the Constitution and in particular the provisions of section 9 of the Constitution.
Issues to be decided
[9]
The plaintiffs identified three issues which they required the court to determine:
1. What is the effect of a delay in payment of compensation and the most apposite method
of redressing this having regard to section 25 of the Constitution and section 33 of the
Restitution Act?
2. What amount would constitute "just and equitable " compensation for the plaintiffs?
3. Whether simple or compound interest is to be applied to the amount determined in (2),
whether the amount should be adjusted for taxation and whether the in duplum rule should
apply?
I do not agree with this exposition of the issues. The parties agree that there was under
compensation. On the date this matter came before me for trial the parties agreed on the amount of
under compensation. The only issue which remains for determination is how the amount of R656 000
should be adjusted to compensate for the change in the value of money over time. The third question
is properly considered in considering the most apposite method of addressing the change in the value
of money over time and need not be considered separately. Further I am of the view that taxation and
the in duplum rule are not factors to be considered and no authority has been placed before me to
indicate the contrary.
[10] It is accepted that the plaintiffs were denied the benefit of just and equitable compensation. Mr.
Jasat was called as a witness for Rainy Day Farms (Pty) Ltd and Farjas (Pty) Ltd. He testified that the
companies intended to develop the properties and hoped to make a tidy profit as a result. The
expropriation denied them this opportunity to make a profit in the township development. The
projections indicating what profit could have been realised do not take into account the risk involved
in investment as well as the costs entailed in investing in a township as intended. It suffices however
to note that Farjas (Pty) Ltd and Rainy Days Farms (Pty) Ltd were denied the opportunity to use the
funds they ought to have received had adequate compensation been paid, i move now to consider
the most apposite method of addressing the change in the value of money over time.
Methods of calculation
[11] A number of experts were called to assist the Court in determining how best to address the
change in the value of money over time to adequately compensate Farjas (Pty) Ltd and Rainy Days
Farms (Pty) Ltd.
Mickey Lowther
[12] Mickey Lowther qualified as an actuary in 1978, was employed by Old Mutual until 1986 where
after he opened his own practice, He specialises in financial services and personal injury matters. Mr
Lowther indicated that no method is perfect. The time value of money underlies all financial systems
and should be the default valuation method. He explained that the expropriation appears to have
been in the nature of a normal commercial transaction, although it was forced upon the plaintiffs. He
did not favour escalating under compensation in line with the index of house prices as it was not clear
that the plaintiffs would invest the money they received in housing. Mr Lowther favoured an
appropriate rate of interest referring to the rate in the Expropriation Act which in his view is not
unreasonable. He was also of the view that the interest appiicable should be compounded. He
regarded the expropriation as a loan forced upon the plaintiffs by the state and indicated that interest
is thus justified. His view was that compound interest is appropriate because simple interest will result
in undercompensation.
[13] He also favoured the two stage approach adopted in Ex parte Former Highlands Residents: In
Re Ash and others v Department of Land Affairs [2000] 2 All SA 26 (LCC) where Gildenhuys J stated:
"In my view, the equitable balance required by the Constitution for the determination of just and
equitable compensation will in most cases best is achieved by first determining the market value of
the property and thereafter subtracting from or adding to the amount of the market value, as other
relevant circumstances may require."
Philip Hellig
[14] Philip Heliig is a consulting actuary and a fellow of the Faculty of Actuaries since 1974 with
twenty years of experience in the insurance industry and considerable experience in all fields of
actuarial work.
[15]
Mr. Hellig did not consider the CPI to be a reliable indicator of the change in value of money
over time. He explained that CPI is a snapshot of goods and services at a particular point in time. It
does not give an accumulated value of money over a period. It allows to some extent for interest rates
but not reinvestment of interest earnings. He also pointed out that the CPI was last rebased in 2008.
He explained that it gives an indication of the purchasing power of money alternatively the cost of
services and goods. Mr Heliig's view on the investment of money was that there was an interest rate
applicable as money earns interest when invested but varies according to the nature of the
investment, the terms, risk factors and other factors which impact on the investment. The Absa
Housing Index according to Mr. Hellig is also a snapshot value at a particular point in time. This value
does not take into account the expenses such as improvements, inflation, and scarcity value and
bond interest rates. Mr. Hellig preferred the method utilising the Building Society rates which
assumed a rate of prime minus 4.5% which provides for an increase factor of 8.0677%. This
method he testified is best suited as it deals with financial values which track interest rates and are
widely used. He projected the amounts having regard to the different methods as appears below:
Summary of values
Farjas (Pty) Ltd
Rainy Days
Farms (Pty)Ltd
Initial amount of under
compensation
R276000
R3800O0
CPI
R1017043
R1400277
Building Soc Investment
(prime-4.5%)
R2226685
R305726
Building Society loan (prime
+2%)
R7552326
R10398130
Minimum business returns
(prime)
R5190111
R7145805
Absa Housing Index (med)
R2185879
R3009543
Exchequer Rate (16.25%)
R1128150
R1553250
Gerard Jacobson
[16] Gerard Jacobson qualified as an actuary in 1972 and worked for Legal & General Life
Assurance Company and later African Eagle. His consults in his own company since 1978 and deals
with compensation in persona! injury matters, medical negligence and commercial matters.
[17] Mr Jacobson testified that the current use of the property and the market value of the property
are relevant to calculating fair compensation. In light hereof he favours the ABSA Housing Index or
the ABSA Land Values for New Housing Index. His view was that interest added to the under
compensation would not give a fair value for the under compensation as the investments were held in
property and not cash. He deemed the CPI to be appropriate only if the investor/plaintiffs intended to
use the proceeds of the expropriation to purchase a range of goods and services. Mr Jacobson was
of the view that the correct compensation should be based on the ABSA Housing Price Index or
ABSA Land Values for New Housing Index as follows:
Index
Farjas (Pty) Ltd
Rainy Days Farms (Pty) Ltd
ABSA Housing Index
R2 196 229
R3 023 793
ABSA Land Value
R3 056 563
R4 208 311
Roland Pardey
[18]
Roland Pardey is a registered valuer. He used the "Township development approach" to
determine the residual land value. This he checked by considering comparable sales valuations of
Beacon Hill Country Estate. He used a plan of a proposed subdivision and after allowing for the yield,
the number of sites, servicing costs, the development approval period, sales period and developer's
profit of 45% arrived at a residual land valuation of R1, 216,000. He confirmed that he had applied his
mind to market conditions in June 1991 and whether bulk services were available. He was satisfied
that R1,216,000 was the open market price a purchaser /developer would have paid and a willing
seller would have accepted on 24 June 1991. He personally did not use either the house sales or
land sales indices published by ABSA as they were based on "a mixed bag" of houses and land sales
throughout the country but he took the indices into account as a "bench mark" indicator of values.
International law
[19] At the request of the Court counsel for the plaintiff placed before us the position adopted in
international law in determining compensation for the loss of value in money over time. The trends
that emerged from considering the decisions in other jurisdictions is summarised below.
[20] In arbitrations requiring the evaluation of interest claimed there appeared to be no rational and
uniform approach and the exercise was uncertain and a time consuming process, in International Law
interest is viewed as a form of compensation for the loss of use of money and is recoverable without
proof of actual loss. The damage is assumed in the event of delayed payment as it deprives the
creditor of the ability to invest the money owed. ( K Gotanda 'Awarding interest in international
Arbitration' 1996 90 AJIL 40, referred to in S Ripinsky and K Williams, Damages in International
Investment Law, British institute of International and Comparative Law, London 2008 ).
[21] The methods utilised in determining the amount of interest varies in International Law as well.
Counsel referred the Court to a method referred to as "the investment Alternative Approach" which
referred to the rates of short term US Treasury Bills or US Certificates of Deposit. The rates are
calculated as the average rate during the period of interest accrual. Government bonds of countries
like the USA were considered risk free consequently this would result in fewer fluctuations and a
steady rate. Another method utilised was the "borrowing rate approach" which depended on the credit
rating of a particular party. This method was criticised because it depended on the credit rating of a
party and this would vary depending on the person's rating and that the rating itself would vary during
a particular period. Counsel also referred to decided cases in other countries which applied interest to
the amount of compensation to set off the period for which the claimants were deprived of the land.
interest
[22] Counsel referred us to instances in South African law where an ord for interest was considered
to compensate for the deprivation of money value of the claim. ( see Davehill (Pty) Ltd v Community
Development Board 1988 (1) SA 290 (A), SA Eagle Insurance Co Ltd v Hartley 1990(4) SA 833 (A),
Smith v Arthur 1976 (3) SA 378 (A) and Legal insurance Company Ltd v Botes 1963 (1) SA608 (A)).
However there is a great deal of uncertainty regarding the manner in which courts cater for
inflationary factors and there is no uniform practice.
[23] Counsel relied on Southern insurance Association Limited v Bailey NO 1984 (1) SA 98 (A) to
support their submission that this court has a discretion with regard to the method of addressing
inflation to compensate for the loss of value of money over time. It was submitted on behalf of the
plaintiffs that the Court must take into account cash flow losses suffered during the period of
deprivation of the property. In casu it was submitted that the Court should not only look at the ordinary
market valued adjusted over time but also at the prospective loss suffered by the plaintiffs in respect
of the estimated profit arising from the envisaged development of a township. The amounts of R276
000 and R380 000 adjusted for loss of value over time and for the aforementioned loss was the final
amount to be paid to the plaintiffs. Further that this amount be subject to a rate of interest of either
16.25%, (the Exchequer rate) or 15.5% (the prescribed rate of interest) compounded. Counsel noted
however that equitable redress calculated in terms of the Restitution Act could not result in the
automatic adoption of the provisions of the Expropriation Act and the application of the Exchequer
rate of interest. In this regard it must be born in mind that the plaintiffs in casu elected not to pursue
the action in terms of the Expropriation Act. It cannot be expected that this Court to apply the
Expropriation Act to the exclusion of all the other relevant factors in the Restitution Act.
[24] In determining the value of money over time I am of the view that it was not envisaged that
Section 33 (eC) of the Restitution Act would require application of the compound interest rates and
housing and land indices to determine the "change in the value of money over time". These factors
and methods are all related to investment returns. The international examples referred to by Counsel
for the plaintiffs usually applied simple interest to compensate for the loss of money and did not
always allow for compounding of interest. As indicated earlier there is no uniformity even in
international law and commercial instances must be distinguished from claims for restitution as
provided for in the Restitution Act.
Consumer Price Index
[25] Counsel for the plaintiffs submitted that CPI would merely counter the diminution of the value
of money over time and is only one of the methods employed to counter the inflationary effect on
money over time. Counsel submitted that more is required to equitably redress the wrongs suffered
by the plaintiffs and submits that section 33 (eC) of the Constitution casts a wide ambit to encompass
using compound interest to counter the depressing effects of inflation over time and the "time value"
of money. Counsel submitted that this must be such as to counter the investment return that could
have been obtained had the correct compensation amount been paid timeously. Finally Counsel
pointed out that the State will be unduly benefited at the plaintiffs' expense if CPI is used as full
compensation would not be received.
[26] I am persuaded by Counsel for the defendant's submissions that CPI sufficiently addresses the
loss in the value of money over time. Whilst the plaintiffs would have had the benefit of full
compensation if paid timeously, it is speculative as to whether the money would have been invested
or consumed or whether it would have been reduced by the ordinary risks associated with
investments irrespective of the choice of investment. Counsel for the defendant also submitted that
the Court should take into account the evidence that the properties were purchased for development
of a township. Whilst the lost investment opportunity is noted the profit projection can only be
speculation. A further factor which Counsel drew to the Court's attention is that this matter is
distinguishable from Hermanus v Department of Land Affairs: In RE Erven 3535 and 3536 Goodwood
2001(1) SA 1030 (LCC) at paragraph [34] in terms of the hardship endured. Counsel also highlighted
the consideration in the Hermanus matter by Gildenhuys J, when he referred to the view of Jose
Zalaquett:
".. reparations are indeed important because they convey an acknowledgement of the
victims' dignity. But reparations must be made in such a manner that people do not see
them as an entitlement, payment or trade-off... .For this reason it may be worth considering
whether reparations in South Africa should be emphasised more in their symbolic and
spiritual aspects than in their materia! ones It may be beyond the means of any society to
repair properly what has been a grievance inflicted upon a majority of the population."
[27] There appears to be no fail proof method of ascertaining the value of money over time having
regard to section 33 (eC) of the Restitution Act. Each of the plaintiff's experts had difficulty with a
particular method. This included the CPI. However I am of the view that CPI adequately caters for the
change in the value of money over time and is an appropriate method to determine compensation to
place the plaintiffs' in as close a position as possible to the position had they not been expropriated.
The projection values for the properties based on CPI were tendered during Counsels address. The
parties were given an opportunity to amend these values to reflect the current actual position.
Counsel for both parties indicated that they are satisfied that the figures provided by Hellig dated 21
September 2010 were the figures applicable in relation to CPI. Hellig assumed a 4.5% adjustment
until the 30 June 2011. The agreed amount of R276 000 under compensation due to Farjas (Pty) Ltd
was adjusted in terms of the CPI and results in an amount of R1 052 376.00 according to Hellig. The
agreed amount of R380 000 under compensation due to Rainy Days Farms (Pty) Ltd was adjusted in
terms of the CPI and results in an amount of R1 454 192. The sum of the two amounts is R2 506
568.00.
Costs
[28] Counsel for the plaintiffs submitted that the court should make an order that it deems just and
equitable, including an order against the State or the Commission. Further that in the present matter
costs should not only follow the result but should be paid jointly and severally on the basis as
between attorney and client. Counsel submitted that the Court would be justified in doing so in light of
the conduct of the State. The Court was requested to note the degrading effects of racial
discrimination based on economic exclusion and exploitation and that the State failed to come to the
aid of the plaintiffs swiftly in paying compensation. Instead it rejected the claim initially and even when
the Commissioner eventually accepted the claim the State refused to settle the claim in accordance
with their own expert's assessment and recommendation. Counsel also submitted that a cost order in
their favour on the attorney client scale would indicate this Court's displeasure at the length of time it
has taken the Commission to attend to this matter. It was also highlighted that the Commission did
not contribute to finding a solution herein and brought no expert evidence to assist in finding a
solution to just and equitable compensation after rejecting their expert's opinion.
[29] Counsel for the plaintiffs submitted that the plaintiffs funded by Mr Jasat had incurred
considerable expense in bringing this matter to court and employing experts to place information
before the Court. An order for attorney client costs will only partially indemnify him against these costs.
Further that in respect of the order for costs related to the experts the plaintiffs should be fully
indemnified. It was also submitted that in view of the request for full argument on international law
and norms that two counsel were justified and the request is made that the order include the cost of
two counsel for preparation of this aspect of the case. Finally that the costs in LCC 125/2006 be
included in this order and a decision be made in the applicants' favour.
[30] Counsel for the defendants submitted that the plaintiff instituted the present action while the
application in LCC 125/2006 was still pending. The plaintiffs only withdrew the application after a plea
of lis alibi pendens was filed and did not tender costs. Counsel submitted that in light hereof the
plaintiff should bear its own costs in the application LCC 125/2006. With regard to the present matter
Counsel for the defendants submitted that it would be unfair for the defendant to be mulcted with
costs on the scale between attorney and client and requests this Court to take into account that the
litigation is based on constitutional social litigation and that it was unforeseen that the defendant's
would become hamstrung by the magnitude of the problem. The Commission was unprepared and
understaffed and was grappling with unprecedented issues and the delays were not motivated by
malice.
[31]
In view of the litigation being in the nature of constitutional litigation there is authority for the
view that the applicants to be granted costs in their favour even in the event that the action is not
successful. I have have had regard to the guidelines suggested in Biowatch Trust v Registrar,
Genetic Resources, and Others 2009 (6) SA 232 (CC), in considering the submissions with regard to
costs. In the latter judgment Sachs J suggested certain guidelines on the proper judicial approach to
be followed in determining cost awards in constitutional litigation. At 239 H-l Sachs J stated:
"Without attempting either comprehensiveness or complete analytical accuracy, depriving successful
parties of their costs.can depend on circumstances such as, for example, the conduct of the parties,
the conduct of their legal representatives, whether a party achieves technical success only, the nature
of the litigants and the nature of the proceedings. I mention these examples to indicate that the
principles which have been developed in relation to the award of costs are by their nature sufficiently
flexible and adaptable to meet new needs which may arise in regard to constitutional litigation. They
offer a useful point of departure. If the need arises the rules may have to be substantially adapted;
this should however be done on a case by case basis. It is unnecessary, if not impossible, at this
stage to attempt to formulate comprehensive rules regarding costs in constitutional litigation."
[32] The usual practice in the Land Claims Court has been to order that each party pay its own costs,
Sachs J refers to the decision of Ngocbo J in Affordable Medicines Trust and Others v Minister of
Health and Others 2006 (3) SA 247 (CC) at paragraph 139, where the view is expressed that;
" There may be conduct on the part of the litigant that deserves censure by the Court
which may influence the Court to order an unsuccessful litigant to pay costs."
[33] In considering the above it is clear that costs remain in the discretion of the court. In case number
LCC 125/ 2006 the applicants (plaintiffs in the present matter) withdrew the application. Counsel for
the defendant was of the view that each party should pay their own costs, I agree that it is appropriate
that that each party pay their own costs in LCC 125/2006. Having regard to the submissions of both
parties I am of the view that the defendants could have acted to finalise this matter sooner once they
had received Maritz's recommendation. A figure could have been determined and offered to Farjas
(Pty) Ltd and Rainy Days Farms (Pty) Ltd. The Regional Land Claims Commissioner could have
made attempts to settle this matter a iot sooner. In light hereof I am of the view that costs should be
awarded against the defendants. In the present matter Counsel for the defendants conceded that
plaintiffs are entitled to costs on a party and party scale. In view of the plaintiffs seeking to pursue a
constitutional right and the claim is not vexatious I am of the view that they are entitled to their costs
herein in the present matter. Gildenhuys J noted in Midlands North Research Group and others v
Kusile Land Claims Committee and Others 2010 (5) SA 57 (LCC) at paragraph 39 that:
"The opposing land owners asked for costs on an attorney and client scale. I am not
convinced that a punitive cost order against the Commission is justified. It is well-known that
the RLCC in KwaZulu-Natal suffered and still suffers serious capacity problems and staff
shortages. There was no willful neglect on the part of the RLCC officials, although I do find
the cold shoulder presented to the opposing land owners during the investigation of the claim
regrettable. I am also distressed that the RLCC did not comply or timeously comply with a
number of directives which I gave at pretrial conferences prior to the hearing. However, during
the hearing itself and also at pretrial conferences subsequent to the hearing the RLCC
officials and particularly the counsel and attorney briefed by the RLCC were very cooperative
and supportive of the efforts to find solutions to the many difficulties besetting the case. I will
therefore not make any punitive cost order against the RLCC."
[34] I have considered Mr Ramballi's evidence in relation to the limited capacity the Commission had
to deal with claims. This has been taken into account in other matters heard in this Court as indicated
above. There does not appear to be any malice on the part of the Commission in dealing with the
present matter even though the delay is unacceptably long. The evidence of Mr Ramballi rings true
that the Regional Land Claims Commissioner grappled with difficult questions. In light hereof I am not
satisfied that the plaintiffs are entitled to costs but not on an attorney client scale. I am however of the
view that the costs of two counsel for the preparation of argument herein be paid by the defendants.
Order
[35] In view of the above I make the following order:
1. Farjas (Pty) Ltd is awarded the sum of R1 052 376.00.
2. Rainy Days Farm(Pty) Ltd is awarded the sum of R 1 454 192.
3. Each party shall pay its own costs in the application under case no. LCC 125/2006
4. The plaintiff is entitled to costs herein on a party and party scale and shall include the costs of two
counsel for preparation of address herein.
SC MIA
Acting Judge
Land Claim Court
I agree
Mr. S. Rivett- Carnac
Assessor
Appearances
For the Plaintiffs
Advocate A.J. Dickson SC, assisted by Advocate I. A. Sardiwaila Instructed by Cajee Setsubi Chetty
Inc
For the Respondents
Advocate R. Seegobin SC, assisted by Advocate T Manicum Advocate RAKVahed
instructed by Office of the State Attorney Kwazulu-Natal