THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT

Reportable
Case No: 52/2016

In the matter between:

MINISTER OF RURAL DEVELOPMENT
AND LAND REFORM

FIRST APPELLANT

THE REGIONAL LAND CLAIMS
COMMISSIONER, EASTERN CAPE                     SECOND APPELLANT

and

IVOR LEROY PHILLIPS

RESPONDENT

Neutral citation: Minister of Rural Development and Land Reform v Phillips
(52/2016) [2017] ZASCA 1 (22 February 2017)

Coram:
Leach, Tshiqi and Zondi JJA and Makgoka and Schippers AJJA

Heard:
21 November 2016

Delivered: 22 February 2017

Summary: Award of financial compensation made to redress a dispossession
of a right in land under the Restitution of Land Rights Act 22 of 1994 :
principles applicable to the determination of redress : no reasonable prospect of
another court finding the Land Claims Court had erred in its determination.

________________________________________________________________

ORDER
________________________________________________________________

On appeal from: Land Claims Court of South Africa, Randburg (Meer AJP
and assessor sitting as court of first instance):

1 The application for condonation of the late filing of the record of the
proceedings in the court a quo and reinstatement of the appeal is dismissed, and
the appeal is struck from the roll.
2 The applicants are to pay the respondent‟s costs, such costs to include the
costs of two counsel.
________________________________________________________________
JUDGMENT
________________________________________________________________

Leach JA (Tshiqi and Zondi JJA and Makgoka and Schippers AJJA
concurring)

[1] The applicants sought and obtained leave to appeal to this Court against
an order made by the Land Claims Court that the respondent be paid
R14 785 000 under the Restitution of Land Rights Act 22 of 1994 (the
Restitution Act) pursuant to his having been dispossessed of certain farming
properties in the Eastern Cape under a past racial law for which he had not
received just and equitable compensation. They also sought to appeal against an
order that they pay costs on the scale as between attorney and client.

[2] The applicants, however, allowed their appeal to lapse by failing to file
the record timeously, and on 27 October 2015 the Registrar of this Court
addressed a letter to that effect to the parties.1  As a result, the respondent
served a letter on the applicants (respectively on 30 November and 1 December,
2015) demanding satisfaction of the judgment. The same letter was served on
the State Attorney, Mthatha on 15 January 2016. This eventually appears to
have provoked a reaction as, on 22 January 2016, the applicants launched the
present application seeking an order condoning their failure to lodge the appeal
record timeously and re-instating their appeal. The primary exculpatory factor
they relied upon was a professed difficulty in obtaining a record from the
company charged with its transcription.

[3]   This relief was opposed by the respondent. In doing so he drew attention to
various correspondence that had passed, as well as an affidavit from the
transcribers, in support of an argument that there had been dilatoriness on the
part of the applicants and the State Attorney. That may well have been the case
but this matter may be determined without any decision on that issue. Indeed
the matter was argued essentially on the merits of the proposed appeal, it being
the respondent‟s contention that there was no reasonable prospect of success in
the appeal and, consequently, on that ground alone the application ought to be
dismissed. In this way, the merits of the appeal were ventilated in this Court in
order to determine whether the appeal, which had been provisionally enrolled,
should be heard or struck from the roll.

[4] I therefore turn to deal with the merits of the respondent‟s claim that was
upheld in the court a quo. It was based on an allegation that he had been
dispossessed of his rights in land as a result of a past racial law, namely, the

1 Rule 8(3) of the Rules of the Supreme Court of Appeal provides: „If the appellant fails to lodge the record
within the prescribed period or within the extended period, the appeal shall lapse.‟

Development Trust and Land Act 18 of 1936 (the Development Act). The land
in question were the farms Thibet Park 346, Otterford 347, Portion 1 of Keys
Poort 149 and the remainder of Keys Poort 149, situate in the division of
Queenstown and Tarkastad, in the Eastern Cape. Although registered as four
separate entities, the first two were historically treated as the farm Thibet Park
whilst the latter two were known as the farm Keys Poort. They were referred to
collectively by the court a quo as „the subject properties‟ and, for convenience, I
intend to use this collective nomenclature as well.

[5] The subject properties were farmed as if they were a single unit, the
respondent having stated in a memorandum of 29 April 1977 that „there is not
even a fence on the boundary between my said two farms‟ and that this had
been the position for several generations. Indeed, the Otterford portion was
acquired by an ancestor of the respondent in November 1891 while the
remainder of Thibet Park and Keys Poort were purchased by the respondent‟s
father in 1955. They were held in the respondent‟s name by way of a Deed of
Transfer No 19325 of 1971.

[6] It was the respondent‟s case that in 1977 he had sold the subject
properties under duress to the South African Development Trust for R475 000,
a sum which he contended did not constitute just and equitable compensation as
envisaged in s 2 of the Restitution Act. The farms were acquired from him for
subsequent incorporation into the so-called „Republic of Ciskei‟ after the area in
which they were situated had been declared to be a „released area‟ for
occupation solely by black persons under the terms of the Development Act.
They were indeed later incorporated into Ciskei and, today, form part of what is
known as the Tsolwana Game Reserve.

[7]   The respondent claimed that he had sold under duress and that, in all the
circumstances, he had been dispossessed of the subject properties. He therefore
lodged a claim under the provisions of s 2 of the Restitution Act on 28
December 1998, seeking equitable redress in the form of financial
compensation for this dispossession. This was the beginning of a long and
drawn-out process which eventually culminated in the order of the court a quo
against which the applicants seek to appeal.

[8]   A period of almost six years elapsed before the second applicant, in a letter
dated 16 August 2004, accepted the respondent‟s claim as valid. On 8
November 2006, negotiations between the second applicant and the respondent
resulted in an offer to pay the respondent R6,9 million. This was rejected and
no further progress was made until 18 August 2010, when the Land Claims
Court granted a mandamus compelling the second applicant to refer the
respondent‟s claim for adjudication. It was only pursuant to this that, on 13
November 2010, the second applicant referred the claim to the Land Claims
Court under the provisions of s 14(1) of the Restitution Act. In doing so, the
second applicant disputed that a valid claim had been lodged under s 2 of that
Act. The basis for it doing so was its contention that the compensation the
respondent had received at the time of his dispossession constituted just and
equitable compensation as contemplated under s 2(2). However, the merits of
the claim, namely, that the respondent had suffered a dispossession when he
had sold the farms under duress, remained undisputed.

[9] The matter was set down for trial on 6 May 2013. As appears from what I
have said, at that stage the sole issue was whether the respondent had received
just and equitable compensation at the time of his dispossession, such
dispossession being at that stage common cause. Shortly before the trial,
however, the second applicant delivered a notice of amendment seeking to

withdraw the admissions contained in the referral; in particular, the admission
that the respondent had been dispossessed. After a pre-trial conference, the
respondent agreed to the amendment and to the trial proceeding solely on the
question of whether there had been a dispossession of his rights in land when he
sold the subject properties in 1977.

[10] Accordingly, the Land Claims Court then proceeded to decide as a
separate issue whether there had been a dispossession as envisaged by the
Restitution Act. After hearing evidence, it held in favour of the respondent and,
on 9 May 2013, granted an order declaring that the respondent had indeed been
dispossessed of rights in land in respect of the subject properties. Subsequently,
on 30 July 2013, the Land Claims Court dismissed an application for leave to
appeal against that order.

[11]   The applicants, however, persisted in disputing that the respondent had
been dispossessed, and petitioned this court for leave to appeal. In doing so they
contended, inter alia, that the respondent, as a white person, did not fall within
the category of those who are entitled to restitution under the Restitution Act
and that the Land Claims Court had erred in finding to the contrary. They went
on to allege that even if the respondent was within the class of persons entitled
to restitution, he had not been dispossessed of rights in land in that the sale
under coercion or duress could not be regarded as a dispossession. All of this
flew in the face of a long list of judgments, unnecessary to mention in this
judgment, but which the applicants argued were merely obiter.

[12] In any event, the application for leave to appeal to this court was refused,
as was a subsequent application for leave addressed to the Constitutional Court.
That brought finality in the respondent‟s favour on the issue of whether there
had been a dispossession. Accordingly only the issue of compensation remained

to be determined. In this convoluted way the matter returned to the court a quo,
in mid-June 2014, for it to determine what compensation the respondent should
be paid as equitable redress.

[13]   In determining what redress would be appropriate, the court a quo
undertook as its starting point an assessment of the financial loss suffered by the
respondent at the time of the dispossession. This was in accordance with the
decision of the Constitutional Court in Florence.2 Consequently the primary
issue between the parties in the court a quo was the value of the subject
properties in 1977, and whether the respondent had been under-compensated
when he sold them.

[14]   Turning to the question of value, it should be recorded that the subject
properties are situated to the north of the Winterberg range. They are blessed
with sweetveld grazing which remains palatable and nutritious throughout the
year and provides a relatively low cost, but high quality, food source for
livestock. Together with that of the Smaldeel (a region I shall mention later) the
subject properties fall within an area generally regarded as being one of the best
livestock areas in the country, known to be tick-free and, importantly, largely
disease-free. They also enjoy a high average rainfall of 450-500mm per annum,
falling mainly during the summer and autumn. Moreover, unlike most of the
properties nearby where water is not perennial, the subject properties are
transected by the Swart Kei River which runs through them. Not only is the
river perennial but it is additionally fed by the Limietskloof and Thrift irrigation
dams. Their soils are inherently fertile, there being deep, irrigable soils
straddling the Swart Kei. As a result, drought, that constant enemy of South
African farmers, was not as serious a problem for the respondent as it was to

2 Florence v Government of the Republic of South Africa 2014 (6) SA 456 (CC) paras 129-134.

many others, not only as there was water for stock but fodder was produced
from irrigated lands to provide feed.

[15]   By reason of the way the argument developed in this Court, it is not
necessary to deal in any further detail with the improvements on the subject
properties or the benefits Mother Nature had bestowed upon them. Suffice it to
say that they formed an integral part of the assets used by the respondent and
his three brothers with whom he farmed in partnership. The partnership
conducted a flourishing enterprise. It ran in excess of 1 000 cattle and 10 000
sheep. It had both a race horse stud and a Dorper sheep stud as well as a dairy
herd of some 560 Jersey cows. Three hundred hectares of lands, more than a
third of which which were located on the subject properties, were under
irrigation and provided mainly lucerne at a yield of some 15 tons per hectare
per annum. The subject properties were thus magnificent farms of considerable
value.

[16] The respondent was paid R475 700 for the subject properties in 1977,
being R321 500 in respect of the farm Thibet Park and R154 100 in respect of
the Keys Poort. These were the amounts reflected in a valuation report prepared
by a valuer employed by the State at the time, a Mr Prinsloo. Neither side relied
upon his valuation which was justifiably and stringently criticised by the court a
quo. However, despite the glaring inconsistencies that it contained, and
Mr Prinsloo‟s apparent failure to appreciate the value of the abundance of water
on the subject properties (factors which the court a quo found justified the
rejection of his valuation), both the applicants and the valuers who testified on
their behalf steadfastly maintained during evidence that the amount the
respondent had been paid had amounted to adequate compensation.

[17]   However during the course of argument the applicants changed their
stance, and the court a quo recorded:
„Whilst the [appellants‟] valuers and their counsel maintained throughout that the
[respondent] had been adequately compensated, surprisingly in their heads of argument they
advocated that the sum of R3,209,000 be determined as just and equitable compensation. I
shall attempt to explain the calculation leading up to this as was explained to me. Mr Notshe
said that they had arrived at this figure by adding a solatium of R28,375 calculated in
accordance with s 12 of the Expropriation Act No 63 of 1975 to the market value of
R467,500 as of date of dispossession determined by them, resulting in a shortfall of R20,175
adjusted to a present value of R605,250. They then arrived at a shortfall of 3 to 5 million rand
between the current value of R467,500 which they estimated to be R14,025,000, and the sum
of R17 million, to R19 million which they estimated (without any explanation or motivation)
to be the value of the subject properties, had they remained in the plaintiff‟s possession. They
thereafter estimated (once again without explanation) that R2,6 million would be just and
equitable compensation, and added R605,250 to this figure to arrive at R3,209,000 as a final
just and equitable compensation figure. It is of grave concern that the [applicants] saw fit to
provide such random and unmotivated figures unsupported by evidence only at the stage of
argument.‟

[18] The applicants changed their stance again in this Court. They reverted to
contending that the amount paid to the respondent at the date of dispossession
had been adequate and that no further redress under the Restitution Act was
justified. But as is apparent from what is set out below, the basis of this
contention changed from that adopted during the trial and in respect of which
leave to appeal to this court had been granted – namely that the respondent had
in fact been paid more than the subject properties were worth – to an argument
that even if there had been a substantial under-payment, no further financial
compensation should be paid to the respondent.

[19]   In advancing his case that he had been paid substantially less than he
ought to have been, the respondent relied upon the expert testimony of

professional associated valuers, Mr Henderson and Prof Tainton, the latter
being a professor emeritus at the University of KwaZulu-Natal. In their
valuations of the subject properties, they relied upon what has become known
as „the Smaldeel norms‟ for land values. Produced by a committee of
agricultural and property experts, these norms were based on the market value
of a broad spectrum of agricultural properties in the so-called „Smaldeel‟.  This
is a high rainfall area situated between the Keiskamma and Kat rivers, south of
Alice and in the vicinity of Fort Beaufort, and renowned for the high quality of
its livestock grazing. The Smaldeel norms were designed to achieve a measure
of uniformity of land values in the area as the government of the day was
determined to incorporate a number of farms in the Smaldeel region into Ciskei,
and needed an empirical basis to assess compensation for the farmers whose
land was to be acquired for this purpose. This led to the appointment of a
committee of experts in the field of pastoral science and agriculture who were
mandated to determine an acceptable set of norms which could be used to value
these properties. Although these norms were only finally agreed upon in 1981, a
few years after the respondent had been dispossessed of the subject properties,
they were regarded by Mr Henderson and Prof Tainton to be appropriate for use
in the present case. This was as they took into account market transactions that
had occurred at a similar time and as the grazing and rainfall of the Smaldeel
are similar to that of the subject properties.

[20]   Whilst the court a quo did not slavishly follow the evidence of the
respondent‟s valuers, it did accept the use of the Smaldeel norms as a means to
determine market value. On the other hand, it rejected the evidence given by the
valuers who testified for the applicants, Messrs Voges and Taylor, who had
relied for their valuation of the subject properties upon a list of sales provided
by a firm of accountants as possible comparable transactions, and had then
merely done a so-called „desktop‟ valuation without even inspecting the various

properties. The only relevance of the 12 transactions they had relied upon came
from a similarity of veld types and did not take account of any of the other
important features of the subject properties.

[21]   In dealing with this evidence, the court a quo stated, quite correctly, that
„it is trite that a comparable transaction which has not been properly
investigated affords little assistance and that our courts have rejected valuations
on the grounds that valuers have not investigated sufficiently the transactions on
which they have relied‟. It went on to say:
„The fact that the defendants‟ valuations of the subject properties and the 12 transactions
were compiled on a desktop basis without visiting the properties led to inaccuracies in the
recordings of the extent and nature of the irrigation on both the subject properties and the 12
transactions. Crucially in respect of the subject property the defendants‟ reports largely
ignored the existence of 110 hectares of irrigated land. It is difficult to comprehend how the
defendants‟ valuers could have considered that a desktop valuation could suffice for the
purposes of the determination of value in a complex restitution claim. It is disquieting that
they saw fit to rely on this method especially in a disputed claim. A desktop valuation is a
procedure which flies in the face of accepted valuation practice requiring proper
investigation.
Then too in respect of the alleged comparable properties the defendants‟ initial report
contains no reference to arable, irrigable or irrigated land. In the table subsequently filed
irrigated land is indicated on some of the properties, but without explanation. The
discrepancies between the desktop valuation and the schedule is a cause for criticism, as is
the failure to provide the requested supporting maps, photographs, collateral evidence and the
failure to access relevant historical documents. Simply to have based the valuation and
analysis of the subject properties on the deeds of transfer, topo-cadastral maps and aerial
photographs was conduct unbefitting of a diligent valuer. So too, the failure to do their own
research and the acceptance without more of the instruction not to inspect the subject
properties. All things considered, the basic data that the defendants‟ valuers had was
insufficient to do a reliable valuation based on the comparable sales method or to determine
if the sales were arm‟s length transactions.‟

[22]   In the light of these findings, the court a quo rejected the valuations of the
applicants‟ experts. Guided by certain of the evidence of the respondent‟s
experts, it donned its mantle of „super valuator‟3 and, after having closely
analysed various other sales of properties which it held were comparable in
various respects with the subject properties, concluded that when dispossessed
in 1977, the respondent had been under-compensated by an amount of
R568 909 (being R315 653 in respect of Thibet Park and R253 256 in respect of
Keys Poort).

[23]   That sum, when transposed in terms of an agreed index to the current
value of money under s 33(eC) of the Restitution Act, is equivalent to an
amount of R16 427 889. To that figure the court a quo made a downward
adjustment, following the approach laid down by Moseneke ACJ in the
majority judgment in Florence where it was said:
„[124] Equitable redress must be sufficient to make up for what was taken away at the time
of dispossession. The amount of compensation has to be just and equitable reflecting a fair
balance between public interest and the interest of those affected after considering relevant
circumstances listed in s 33 of the Restitution Act. For instance, a history of hardship caused
by the dispossession may entitle a claimant to a higher compensation award in order to
assuage past disrespect and indignity.
[125] But compensation within the scheme of the Restitution Act is neither punitive nor
retributive. It is not to be likened to a delictual claim aimed at awarding damages that are
capable of precise computation of loss on a “but-for” basis. It is a constitutionalised scheme
paid out of public funds in order to find equitable redress to a tragic past. Ultimately, what is
just and equitable must be evaluated not only from the perspective of the claimant but also of
the State as the custodian of the national fiscus and the broad interests of society, as well as
all those who might be affected by the order made.‟

3 As to which see Southern Transvaal Buildings (Pty) Ltd v Johannesburg City Council 1979 (1) SA 949 (W).

[24] In the light of this dictum, the court a quo felt that the requirements of
justice and equity dictated that a downward adjustment of 10% would be
equitable to take account not only of the respondent‟s perception, but to also
take into consideration the concerns of the national fiscus in a strained economy
and as the interests of a society in which many land claims still have to be
settled. Applying such a deduction to the current value of the respondent‟s
calculated 1977 loss, it arrived at the sum of R14 785 00 ultimately awarded.

[25] The court a quo‟s determination of the value of the subject properties in
1977 was the essential finding which the applicants sought to impugn in their
application for leave to appeal. They contended that the court a quo had erred
both in rejecting their expert witnesses and accepting the evidence of those of
the respondent. They also contended that the punitive costs order granted
against them was not justified. In granting leave to appeal, the court a quo
stated that it was mindful of the fact that valuation is not an exact science and it
felt that another court could come to a different decision relating to its
valuation. It was thus apparent to the court a quo that, save for the costs issue,
the only relevant issue was that of the value of the subject properties in 1977.

[26] That it was indeed the relevant issue is borne out by the applicants‟ heads
of argument filed in this court.  They were devoted almost entirely to the
question of the value of the subject properties in 1977, and traversed the
appropriateness of the use of the Smaldeel norms, the comparable transactions,
the rainfall capacity of the properties and allegedly inconsistent and unreliable
information which was taken into account – before concluding that the
respondent‟s experts as to value ought to have been rejected and that the
evidence of their valuators, that the subject properties had not been under-
valued, ought to have been accepted.

[27] However, at the outset of the hearing before this Court, no sooner had the
difficulties which the court a quo had with the applicants‟ experts been put to
him, leading counsel for the applicants promptly conceded that the applicants‟
experts had been correctly discredited and that their evidence could not be
relied upon, and that the court a quo had been entitled to have regard to the
respondent‟s evidence as to value. Not only was this a correct concession that
had to be made, but it was one that ought to have been obvious and made before
the trial in the court a quo. And to all intents and purposes, it effectively
abandoned the cardinal issue raised in the appeal.

[28]   In addition, the applicants‟ counsel further conceded that the amount
determined by the court a quo could be regarded as being just and equitable
financial compensation for the dispossession the respondent had suffered.
However, he argued that it was not proper „redress‟ as referred to in s 25(7) of
the Constitution and s 33 of the Restitution Act.

[29] On this issue, it was contended that the court a quo had misdirected itself
by approaching the matter on the basis that it was bound to compensate the
respondent, which is not the same as determining redress. In this regard it was
argued that there had been a failure to distinguish between just and equitable
compensation payable in term of s 27(3) of the Constitution and equitable
redress assessed in terms of s 25(7) of the Constitution (this being a ground of
appeal inserted into the applicants‟ notice of appeal by way of a purported
amendment dated 17 May 2016). Moreover, in considering what redress was
appropriate, it was argued that the court a quo had also erred in deciding that
any amount at all should be paid to the respondent in that (a) he had been able
to procure another farm with what he had been paid for the subject properties ─
albeit in Molteno a hundred kilometres away ─ and (b) if the respondent had
built up his new farm, its current value should be taken into account as he might

well be in at least as good a position today as he may have been had the
dispossession not taken place.

[30] There is no merit in these contentions. It is quite clear from the judgment
of the court a quo, and its reference to the judgment in Florence, that it was
fully aware that although the land values were an important factor, it was not
the sole criterion relevant to what was appropriate redress. And in regard to the
second leg of this argument, it is now well established that what a dispossessed
person does with whatever compensation is received from the dispossession has
little to do with whether that compensation was adequate or not.4 As Moseneke
ACJ said in Florence:5
„This means that the scheme of the Restitution Act makes the time of dispossession the
critical starting point of an assessment of financial compensation. The government is right
that the purpose of the financial compensation is to provide relief to claimants in order to
restore them to a position as if they had been adequately compensated immediately after the
dispossession. It must be correct that just and equitable financial compensation does not aim
to restore claimants in current monetary terms to the position they would have been in had
they not been dispossessed, but rather the financial loss they incurred at the time of
dispossession. The Land Claims Court was correct to set the loss at the time of dispossession
of the market value of the property less the amount of compensation the applications had
received at the time of dispossession.‟6
This is precisely what the court a quo did in the present case, and the argument
that it erred or misdirected itself in doing so cannot be sustained.

[31] Counsel for the applicants also argued that no redress ought to have been
awarded as, when the respondent had been dispossessed, he was not obliged to
sell and could have remained in possession until the subject properties were

4 Haakdoornbult Boerdery CC & others v Mphela & others 2007 (5) SA 596 (SCA) para 43 referred to with
approval in Florence para 132. See further Ndebele-Nolzun dza Community v The Farm Kafferskraal 2003 (5)
SA 375 (LCC) para 29.
5 Para 132.
6 See further Florence para 148.

expropriated. Had that occurred he would have had the right to challenge the
amount at which the subject properties were expropriated and thereby recover
adequate compensation. It would therefore be wrong, so the argument went, to
allow him to obtain compensation now for what he had lost when he had failed
to avail himself of that opportunity in the past.

[32] This overlooks the fact that the threat of expropriation was indeed one of
the factors that led to the dispossession as it would have entailed a long drawn-
out process without certainty as to the amount the respondent would receive and
without any certainty as to his future. But even more importantly, the argument
in this regard is merely an echo of that which was made by the applicants in
their unsuccessful applications both to this court and to the Constitutional
Court. It was then alleged that there had been no dispossession as the
respondent‟s rights in land had been taken in exchange for compensation which
he had the right to challenge. Indeed, the applicant‟s argument that it would not
be just and equitable to afford relief in the circumstances amounts in essence to
an argument that there was no dispossession, an issue which has already been
finally determined against the applicants. The present matter must therefore
proceed on the basis that there was a dispossession. The sole issue in these
proceedings is the amount of financial compensation to be paid as redress, and
it ill behoves the applicants to argue that no redress should be paid despite there
having been a dispossession.

[33] As was held by the Constitutional Court in Mphela,7 and reiterated by
that court in Florence,8the Land Claims Court has a strict and true discretion
and enjoys wide adjudicative remedial powers conferred on it, inter alia, under

7 Mphela & others v Haakdoornbult Boerdery CC & others 2008 (4) SA 488 (CC) paras 25-26.
8 Florence para 112.

ss 33 and 35 of the Restitution Act.9 Consequently, the power of an appellate
court to interfere with the exercise of discretion by a Land Claims Court is not
without restraint but is limited by whether the discretion invested in that court
had not been judicially exercised or had been influenced by wrong principles or
a misdirection of the facts or was one that could not reasonably have been
made. Bearing that in mind, in the light of what I have set out above the
discretion exercised in the court a quo in this matter in regard to the financial
compensation to be awarded, appears to me to be immune from appellate
interference.

[34] So too does the award of costs on a punitive scale. It was argued on the
applicants‟ behalf that costs on a punitive scale was unjustified. However in
dealing with the question of costs, the court a quo correctly emphasized that the
second applicant, the Regional Land Claims Commissioner, is tasked by the
Restitution Act to support claimants and to assist them.10 The court went on:
„From the protracted history of this matter it would appear that the [respondent] received
very little support from the second [applicant]. In fact the Regional Land Claims
Commissioner, who is supposed to play a mediatory role, sided completely with the State as
a defendant and opposed the claim vehemently. It is also extremely disconcerting that the
Regional Land Claims Commissioner changed its stance so drastically from 2007 when a
settlement offer was made to the [respondent], presumably on the basis that he did not
receive just and equitable compensation, to the stance that the [respondent] was over
compensated, and thereafter once again changed to ultimately arrive at its current stance. The
various valuation reports obtained by the Regional Land Claims Commissioner are also
suggestive of an attempt to thwart the [respondent‟s] claim and not to assist. I note also my
concern that despite repeated attempts by the Court to get the parties to settle, the stance of
the [applicants] was intransigent in this regard.‟
Then after referring to authorities in which it had been held that officials such
as the second applicant are „functionaries who have to receive and investigate

9 Florence paras 116-117.
10 See in this regard s 6(1) of the Restitution Act which sets out the general functions of the Commission.

the . . . claim in an objective, fair and responsible manner‟11 and that the second
applicant‟s conduct in particular had been untenable, the court a quo concluded
that costs on a punitive scale was merited.

[35]  Counsel for the applicants sought to criticise this reasoning in the light
of the facts of the present case. However, at first blush, the second applicant in
particular certainly did change its stance from offering to settle the claim by
paying millions of rand to contending that in fact no amount at all should be
paid. Indeed she has since persistently shown a lack of objectivity and has
relied on clearly fallacious reasoning and allegedly comparable transactions
which in truth were nothing of the sort.

[36] Moreover, the court a quo also exercised a judicial discretion in regard to
the costs. In this instance too, interference with that discretion can only be
justified in instances where it is found that the court of first instance did not act
judicially, or acted upon a wrong principle, or was influenced by wrong
principles or a misdirection of the facts, or reached a decision which could not
reasonably have been made by a court properly directing itself to all the
relevant facts and principles.12 In the light of what I have already mentioned,
there is no reasonable prospect of the applicants succeeding in establishing a
basis to interfere with the discretion exercised by the court a quo in regard to
costs.

[37]   In any event, as for the reasons already given the applicants have no
prospect of success in regard to the merits of the dispute, it also becomes
relevant that it is trite that leave to appeal to this court need not be given where
the issue relates solely to the question of costs. That is a longstanding policy,

11 Hlaneki & others v Commission on Restitution of Land Rights & others [2006] 1 All SA 633 LCC para 30.
12 See Dobsa v Dlamini Advisory Services; Dlamini Advisory Services v Dobsa (050/2016) [2016] ZASCA 131
(28 September 2016) para 14 and the authorities therein cited.

now fortified by s 16(2)(a)(ii) of the Superior Courts Act 10 of 2013. There are
no exceptional circumstances present which justified departure from this rule
and there is thus no reason to allow an appeal solely in regard to costs.

[38] For these reasons there is in my view no reasonable prospect of an appeal
succeeding. That being so, the application for condonation and the
reinstatement of the appeal must fail.

[39] It is therefore ordered:
1 The application for condonation of the late filing of the record of the
proceedings in the court a quo and reinstatement and the appeal is dismissed
and the appeal is struck from the roll.
2 The applicants are to pay the respondent‟s costs, such costs to include the
costs of two counsel.

_______________
L E Leach
Judge of Appeal

Appearances:

For the Appellant:

V S Notshe SC (with him T Seneke)
Instructed by:

State Attorney, Mthatha

State Attorney, Bloemfontein

For the Respondent:

H S Havenga SC (with him O H Ronaasen SC)
Instructed by:

Roelofse Meyer Incorporated, Port Elizabeth

Honey Attorneys, Bloemfontein

THE SUPREME COURT OF APPEAL
REPUBLIC OF SOUTH AFRICA

MEDIA SUMMARY – JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL

From:
The Registrar, Supreme Court of Appeal
Date:
22 February 2017
Status:
Immediate

Please note that the media summary is intended for the benefit of the media and
does not form part of the judgment of the Supreme Court of Appeal.

MINISTER OF RURAL DEVELOPMENT AND LAND REFORM

and

IVOR LEROY PHILLIPS

The respondent, Mr Phillips, sold certain farming properties to the South African
Development Trust in 1977. He subsequently instituted action against the Minister
of Rural Development and Land Reform as well as the Regional Land Claims
Commissioner, Eastern Cape in which he claimed compensation under the
Restitution of Land Rights Act 22 of 1994, contending that the sale of the farms in
1977 constituted a dispossession envisaged by that Act for which he had not
received adequate compensation. The Land Claims Commissioner initially
attempted to settle the matter by paying a substantial sum of money but later
adopted the attitude, also taken by the Minister, that Mr Phillips, as a white person,
was not entitled to receive restitution under the Act.

The arguments advanced by the respondents in this regard flew in the face of a
long line of judgments to the contrary. On 9 May 2013 the Land Claims Court

granted an order claiming that Mr Phillips had indeed been dispossessed of rights
of land and that his sale of the properties, which had taken place under coercion
and duress, amounted to a dispossession. The Minister and the Land Claims
Commissioner both applied to the Supreme Court of Appeal for leave to appeal
against this decision. Their application was dismissed as was a subsequent
application for leave to appeal addressed to the Constitutional Court.

Consequently, in June 2014 the matter went back to the Land Claims Court for it to
determine what compensation should be awarded to Mr Phillips as equitable
redress under The Restitution Act. After evidence was led, the Land Claims Court
decided that Mr Phillips ought to be paid a sum of R14 785 000. The Minister and
the Commissioner appealed to the Supreme Court of Appeal against that award.
However, they allowed their appeal to lapse and, when the matter came before the
Supreme Court of Appeal, it was necessary for them to apply for condonation and
reinstatement of their appeal. In considering these questions, the court had regard
to the prospects of the appeal succeeding.

The principal point on which the appeal was based, was the contention that the
Land Claims Court had erred in valuing the farms by having regard to the so-called
‘Smaldeel norms’ which had been used by the respondent’s expert witnesses in
their valuation of the property, and that the evidence of the experts the Minister and
Commissioner had called on value ought to have been accepted. However, in
argument, counsel for the Minister and the Commissioner conceded that their
witnesses had been correctly discredited and that the Smaldeel norms were
appropriate.

The appellants also contended that as the compensation Mr Phillips had been paid
had been used by him to farm successfully, he should not be awarded any further
redress. This the SCA held flew in the face of the judgment of the Constitutional
Court in Florence the Government of the Republic of South Africa 2014 (6) SA 456
(CC) para 132 where it was held that it is correct to set the loss at the time of
dispossession having regard to the market value of the property less the amount of

compensation received at the time of dispossession.

The SCA also rejected an argument that no redress ought to be awarded as
Mr Phillips had not been obliged to sell and could have remained in possession
until his farms had been expropriated when he could have challenged the
compensation.

Turning to the question of costs, the Land Claims Court had ordered the applicants
to pay costs on the scale between attorney and client. The Supreme Court of
Appeal held that there is no reasonable prospect of it being shown that this
discretion had been improperly exercised.

As there was no prospect of the proposed appeal succeeding, the application for
condonation of the late filing of the record for the proceedings and the
reinstatement of the appeal was dismissed, and the appeal was struck from the
roll.