Expropriation Bill [B4-2015]: clauses 12 to 24 deliberations, with Deputy Minister

Public Works and Infrastructure

27 October 2015
Chairperson: Mr B Martins (ANC)
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Meeting Summary

The Committee continued with deliberations on the official list of proposed amendments to the Bill (A-list) accompanied by the B version of the Bill incorporating all the proposed amendments into the Bill. A DA member pointed out that the factors that had been highlighted in clause 12(1)(a), (b), (c), (d) and (e) had no direct monetary value and it was difficult to see how these factors would affect the compensation. There was a proposal that the Department should add a clause 12(2)(g) that would focus on the actual financial loss that had been incurred by the expropriated owner. Deputy Minister Cronin explained that the introduction of a clause 12(2)(g) would be construed as factors not to be taken into consideration. The Department was aware that there might be a financial loss incurred by the expropriated owner but there might also be a financial gain and this would be determined by what is “just and equitable” based on the five factors to be taken into consideration.

A UDM MP pointed out that there was a lengthy discussion during the public hearings that government needed to take into account the way it offered compensation in cases where all members of a given community were to be relocated wholesale. The emphasis was on the need for government to restore the lifestyle of the members of the community that had been resettled and this should be incorporated in clause 12(1). Deputy Minster Cronin explained that land reform and land restitution could involve expropriation in order to restore land or provide land to people that had been expropriated. It must be noted that section 25(5), (6) and (7) deal with land reform but did not deal with the factors that had been flagged by UDM. The Department was proposing to include the provisions of the Prevention of Illegal Eviction from and Unlawful Occupation of Land Act (PIE) and Extension of Security of Tenure Act in the process of compensation.

Deputy Minister Cronin indicated that the Department had made substantive proposed amendments to clauses 17 to 20. Members proposed that in clause 17 there should be a provision for instances where the court has determined that the expropriated owner had been underpaid. Some Members suggested that there was a need to insert “so as long as it is urgently required” after “temporarily” in clause 22(1) and this was to ensure that the 12 month period for the right to use property on a temporary basis was not abused. Members suggested the use of “temporarily” in clause 22(5) was too wide and open to different interpretations. It was proposed that there should be a timeframe for the submission of a written offer of compensation to the owner or the holder. Deputy Minister Cronin agreed that there was substance to the proposal to reduce the 45 days for the submission of a written offer of compensation to 30 days. He repeated that for normal cases of expropriation, payment must be made once the right of possession has been transferred to the expropriating owner. The Department suggested that payment for urgent expropriation could be made “within a reasonable time” or stipulate a date for the depositing of payment.

Meeting report

The Chairperson pleaded with Members to stick to the point without making long speeches and also allow other Members to disagree as there would be disagreements. The Committee needed to conclude this process in order for the Department to incorporate all the suggestions into a final version of the Bill possibly by next week.

Clause 12: Determination of compensation
Mr K Sithole (IFP) asked for the criteria that was to be used to determine if compensation was “just and equitable” in clause 12(1). It was important for the Committee to be given a possible interpretation of “unlikely” in clause 12(2)(b) especially in a court situation. He suggested that the word “therefor” in clause 12(2)(e) should be replaced by “therefore”.

Mr M Filtane (UDM) said that there was a lengthy discussion during the public hearings that government needed to take into account the way it offered compensation in cases where all members of a given community are to be relocated wholesale. The emphasis was on the need for government to restore the lifestyle of the members of a community that had been resettled and this should be incorporated in clause 12(1).

Dr Q Madlopha (ANC) questioned the need for government to ensure that the expropriated community was not worse off than before, as the Bill mainly focused on expropriation and not land reform. There is consensus that the expropriated owner would be compensated but it would not be the responsibility of government to restore the former lifestyle of the expropriated owner. It was highlighted that process of expropriation would take into consideration “the current use of the property” and “the history of the acquisition of the property”.

Ms Dreyer pointed out that the factors that had been highlighted in clause 12(1)(a), (b), (c), (d) and (e) had no direct monetary value and it was difficult to see how these factors would affect the compensation. She proposed that the Department should add a clause 12(2)(g) that would focus on the actual financial loss that had been incurred by the expropriated owner.

Dr Madlopha asked about the meaning of “actual financial loss” as the issue of expropriation follows certain criteria including the market value. It was unclear as to whom would be responsible for the determination of the “actual financial loss”.

Deputy Minister Cronin responded that the introduction of a clause 12(2)(g) would be construed as factors not to be taken into consideration. The Department was aware that there might be a financial loss incurred by the expropriated owner but there might also be a financial gain and this would be determined by what is “just and equitable” based on factors included in clause 12(1)(a),(b),(c),(d) and (e).

Ms Dreyer expressed concern that there was no single methodology to be used to determine the “just and equitable compensation”. The priority should be to ensure that there is consistency in the application of these five factors to be considered in the process of compensation.

Deputy Minister Cronin conceded that somehow different situations in the process of compensation would require different adaptions in the way in which compensation is determined but generally it will be guided by these five factors.  

Ms Vuyokazi Ngcobozi, Parliamentary Legal Adviser, responded that clause 12(1) should be seen in the context of section 25(3) and the criteria for “just and equitable compensation” would include a myriad of issues to be taken into consideration. The drafting of the Bill was done in a way not to include the list of factors to be construed as “just and equitable compensation” as this might exclude other factors.  

Mr Andre Meiring, DPW Chief Director: Property Policy; responded that “therefor” in clause 12(2)(e) should be retained as this was an appropriate word in the context of the sentence.

Deputy Minister Cronin responded that indeed the purpose of the Bill was not on land reform but rather expropriation but it must be remembered that there was a consensus on the need to introduce a direct reference to the Prevention of Illegal Eviction from and Unlawful Occupation of Land Act (PIE) in clause 9. The use of the word “unlikely” was to ensure that if there is a significant increase or decline in the value of the land or property as a result of an act of expropriation, then this would not affect the amount to be compensated.

Mr Filtane wanted to clarify that section 25(4)(a) of the Constitution made it clear that “the public interest includes the nation’s commitment to land reform, and to reforms to bring about equitable access to all South Africa’s natural resources”. Therefore, the resettlement of those that had been expropriated should be sensitive to the issues of land reform. The people that had been resettled should be provided with services that they previously enjoyed, for example, the building of a dam or recreational facilities.

Dr Madlopha agreed that section 25(4)(a) of the Constitution covered land reform but maintained that this did not suggest that land reform was part of expropriation.

Deputy Minster Cronin explained that land reform and land restitution could involve expropriation in order to restore land or provide land to people that had been expropriated. It must be noted that section 25(5), (6) and (7) deal with land reform but did not deal with the factors that had been flagged by Mr Filtane. The Department was proposing to include the Prevention of Illegal Eviction from and Unlawful Occupation of Land Act (PIE) and the Extension of Security of Tenure Act in the process of compensation.

Mr Filtane accepted the proposal that had been made by the Department but maintained that there was a need to be specific as to how compensation would be addressed.

Members agreed with the proposal.

Clause 13: Interest on compensation
Nothing has been changed.

Clause 14: Compensation claims
Mr Filtane suggested the insertion of “where possible” after “including a copy of evaluation” in clause 14(1)(c). This was to take into consideration that the expropriated owner may or may not be able to obtain a valuation within the stipulated 20 days and might also incur cost in the attempt to secure evaluation.

Dr Madlopha agreed that it could be impossible for the expropriated owner to obtain an evaluation but the proposal to insert “where possible” would make it impossible to determine the “just and equitable compensation”. In essence, the valuation was an important tool that would be utilised to determine the “just and equitable compensation” to be paid to the expropriated owner or holder of property.

Ms E Masehela (ANC) agreed that a valuation would be an important tool that would be based in the determination of “just and equitable compensation”.

Deputy Minster Cronin responded that the concern of Mr Filtane had already been covered by the inclusion of “if any” in clause 14(1)(c).

Members agreed with the clarification.

Clause 15: Offers of compensation
Nothing has been changed.

Clause 16: Particulars of claims and offers
Mr Filtane suggested that the Department should include an article “and” at the end of “as the case may be” in clause 16(3)(a) as clause 16(3)(b) was still the continuation of the same process.

Deputy Minster Cronin responded that these were two totally different processes so the inclusion of an article “and” was not required.

Members agreed with the explanation.

Clause 17: Payment of amount offered as compensation
Ms Dreyer asked for the date for the payment of compensation as this was not clear in clause 17(1). This was important in order to ensure that the expropriated owner or holder of the property was aware of the precise date on which the payment of compensation would be made.

Mr Meiring responded that Clause 8 Notice of Expropriation made reference to the date on which the expropriating authority will take possession of the property. It was highlighted that two separate dates must be indicated in the notice of expropriation: the date which causes ownership to vest in the expropriating authority and the date stating when the right of possession would pass to the expropriating authority. The Department decided to change “possession” to “right to possession” because the actual possession need not take place but the right to possess passes to the expropriating authority. In essence, it would not be “just and equitable” to give the expropriated owner the money on the date of passing of right of possession and expect them to be out of the property within, for example, an hour. The state has a right to take possession but needed to be careful in the taking actual possession. The Department was clear that the payments of expropriated amount would be done electronically, so the money would be available immediately.

Members agreed with the clarification.

Mr Filtane proposed that in clause 17 there should be a provision for instances where the court had determined that the expropriated owner had been underpaid.

The Chairperson responded that there was no need to make that provision as all the conditions would apply in the payment of compensation.

Members agreed with the explanation.

Clause 18: Property subject to mortgage bond or deed of sale
Deputy Minster Cronin stated that in clause 18(1) the Department had deleted “to the claimant concerned”

Clause 20: Payment of municipality property rates and other charges out of compensation money
Nothing has been changed.

Clause 21: Deposit of compensation money with Master
Deputy Minster Cronin indicated that the Department had proposed that the word “may” in clause 20(1) should be replaced by “must”. There was also a deletion of “subject to section 18(2), pay the” in clause 20(2) and the word “to” in the similar clause had been replaced by “with”. The phrase “has jurisdiction to” in clause 20(4) had been deleted and replaced by “of competent jurisdiction may”.

Mr Filtane said that it was difficult to reconcile the word “may” in clause 20(1) and “must” in clause 20(2) as this allowed the expropriating authority to hold back the money and therefore causing undue delays.

Deputy Minster Cronin responded that the use of “must” in clause 20(1) indicated the conditions under which the payment must be made while “may” in clause 20(2) indicated the situation where there was a dispute or doubt as to the person who is entitled to receive compensation payable in terms of this Act.

Mr Filtane still requested more clarity on the use of “may” in clause 20(1) and “must” in clause 20(2) as at the time where payment had to be effected, the process would have been dealing with the given person or persons. Therefore, the use of “may” created uncertainty as the expropriating authority at this stage should be handing over the compensation amount to the Master and the expropriating authority should not be involved after the courts had dealt with the adjudication process.

Ms Ngcobozi responded that the use of “must” might create complication as the parties involved are still in dispute about the compensation amount. The use of “must” would also compel the expropriating authority to hand over the compensation amount to the Master even though the disputing parties are still in a process of negotiation.

Deputy Minister Cronin agreed with the explanation that had been provided by the Parliamentary Law Adviser. He saidd that the use of “may” or “must” here was not a big issue and it was up to the Committee to decide on the word to be used.

The Chairperson suggested that it was best to retain “may” in clause 20(1).

Clause 21: Mediation and determination by court
Nothing has been changed.

Clause 22: Urgent expropriation
Ms Dreyer suggested the insertion of “so as long as it is urgently required” after “temporarily” in clause 22(1) and this was to ensure that the 12 month period for the right to use property on a temporary basis was not abused.

Members agreed with the addition.

Ms Dreyer expressed concern that the expropriating authority in clause 22(2)(a) was not required to bring an urgent application to a court for an urgent expropriation to validate its action before taking such a step.

Ms Masehela clarified that the focus was on the land to be expropriated but the land would be used temporarily because of an urgent need, for not more than 12 months. The whole process of expropriation would still go on and the consideration of “just and equitable compensation” was still going to be factored in.

Mr Filtane indicated that he could not recall that there is provision for use of one’s property on an urgent basis along the lines of rental.

Deputy Minister Cronin responded that clause 22(2)(a) defined disaster as contemplated in the Disaster Management Act (No57 of 2002) and the court would adjudicate all other items where urgent expropriation would happen. There would be compensation even in cases where there is an urgent expropriation, but the written offer of compensation should be made within 45 days of the notice to use the property.

Members agreed with the clarification.

Ms Dreyer asked for the meaning of the word “temporarily” in clause 22(5) as this was too wide and open to different interpretations. She suggested that there should be a timeframe for the submission of a written offer of compensation to the owner or the holder.

Dr Madlopha responded that clause 22(7)(a) covered the concern that had been raised by Ms Dreyer as it clearly stipulated that the temporary usage of property is 12 months, but could be extended to 18 months.

Ms Dreyer pointed out that the timeframe of 45 days should be shortened as this was too long for the submission of a written offer of compensation. She suggested that the timeframe should be reduced to perhaps 20 days.

Dr Madlopha clarified that the extension of the temporary use of the property from 12 months to 18 months was accommodating unforeseeable situations like disaster.

Ms Dreyer corrected him, saying that her concern was on about the 45 days for the submission of a written offer of compensation and the suggestion was that the timeframe should be reduced to perhaps 20 days.

Deputy Minster Cronin responded that the 45 days for the submission of a written offer of compensation did not mean the payment could not be paid in, for example, in three days and this was just to accommodate a cataclysmic situation. The Department would have no problem in bringing down the timeframe to 30 days.   

Ms Dreyer accepted that in clause 22(6) the expropriating authority was responsible for repairing all the damage during the use of the property but it should be stipulated that the property should be repaired to the same standard as it was before the temporary use of the property.

Deputy Minister Cronin explained that the expropriating authority was responsible for repairing all the damage caused by the use of the property. However, the expropriating authority would not be responsible for repairing damage like disasters or cataclysmic situations.

Ms Dreyer agreed that the expropriating authority would not be responsible for repairing damage like disasters or cataclysmic situations but maintained that there was a need to make it clear that any damage that had been caused by the use of the property should be repaired so it was in the same standard as it was before the temporary use of the property.

Mr Sithole asked why there was a lot of reference to “temporary use” in chapter 7 of the Bill.

Ms Masehela responded that chapter 7 on its own is more focused on the temporary usage of the property; hence there is a lot of reference to “temporary use”.

Mr Filtane asked how it was possible to reconcile the use of “must” in clause 22(5) and “may” in clause 22(9).

Deputy Minster Cronin responded that it was appropriate to use “must” in clause 22(5) as this was an obligation but the situation in clause 22(9) needed the expropriating authority to apply its mind and therefore there was no obligation.

Mr Filtane responded that the explanation offered by the Deputy Minister made it even more confusing and therefore it would be preferable to delete clause 22(9) as the use of the phrase “at any time” could lead to a situation where the expropriated owner might have to wait for an indefinite time.

Dr Madlopha rejected the proposal to remove clause 22(9) as clause 22(5) made it clear that “the expropriating authority must within the suggested 30 days of the notice to use the property temporarily, make a written offer of compensation to the owner or holder”.

Mr Filtane corrected him, saying that his complaint was mainly on the protracted uncertainty in clause 22(9).  

Ms Dreyer reiterated that clause 22(5) should be explicit that the offer to be given must be accepted by the owner of the property to be used temporarily and the timeframe for the submission of the written compensation to the owner or holder.

Dr Madlopha responded that there is a provision in the Bill that all the parties involved had a right to approach the court for any matter where there is dissatisfaction.

Ms Ngcobozi cautioned that Members should not lose sight in reading each clause with other provisions in the Bill as this had a potential to disturb the chronological order of the Bill. The suggestion made by Ms Dreyer that the damaged property should be repaired to the same standard as it was before the temporary use of the property had the potential to create its own complication as would require someone to determine that “same standard”. There was no need to remove clause 22(9) as it was made clear that the expropriating authority “must comply with all relevant provisions of this Act”.

Deputy Minister Cronin said that there was substance in the proposal to reduce the 45 days for the submission of a written offer of compensation to 30 days. It must be reiterated that the normal expropriation payment must be made once the right of possession has been transferred to the expropriating owner. The Department suggested that the payment for the urgent expropriation could be made within a reasonable time or stipulate a date for the depositing of payment. It was true that clause 22(9) was actually superfluous and it was up to the Committee on whether to remove or retain the clause.

Members agreed with the clarification.

Mr Filtane suggested that clause 22(7)(c) needed to be rephrased as it created the impression that the 18 month period of the extension of temporary use of the property was on top of the 12 months.

Ms Ngobozi indicated that it was up to the Committee to reduce the 45 days for the writing of the notice to use the property temporarily but cautioned against reducing the 45 days to 30 days as this was accommodating unforeseen circumstances which could cause delays. Clause 22(7)(c) was clear that “the period of extension may not exceed a period of 18 months from the date the property was taken for temporary use in terms of subsection(1)”.

Deputy Minister Cronin decided that clause 22(5) should be rephrased to read as follow: “The expropriating authority must make an offer of compensation to the expropriated owner or holder within 30 days from the date on which the notice to use the property temporarily was given, and payment must be made within a reasonable time thereafter; provided that in the event of any disputes the provisions of section 21 applies”. The Department preferred that clause 22(9) should be retained but there was no harm in removing it either.  

Mr Filtane said in clause 22(1) there was a difference between taking a right to use property and taking occupation. They are two different things as the expropriating authority could take the rights of the property without physically occupying the property. Therefore, this required the Department to rephrase clause 22(7)(c) in order to be specific as to whether the reference was on the taking of right to use property or occupying property.

Deputy Minister Cronin requested the Department to be given more time to put some thoughts on the suggestion made by Mr Filtane.

Clause 23: Withdrawal of expropriation
Ms Dreyer proposed the inclusion of a clause 23(2)(d): “If the expropriated property is land and the expropriated owner or holder has already found alternative accommodation, which he/she has either paid for or already financially committed to, unless the expropriated owner or holder provide written consent to the expropriation being withdrawn”.

She also proposed adding clause 23(2)(e): “If the expropriated property is land the expropriated owner or holder has already vacated the premises, unless the expropriated owner or holder provides written consent to the expropriation being withdrawn”. This was to ensure that there was no prevention of the progress of expropriation in cases where the expropriated owner had already vacated the property or made financial commitments.

Deputy Minister Cronin requested the Department be given time to consider the suggested additions made by Ms Dreyer so as to ensure that there were no knock-on effects on other clauses.

Members agreed with the request.

Mr Filtane said that there was a possibility that the state in clause 23(3)(c) was opening itself up for high damages by stipulating that the expropriating owner was liable for all reasonable costs and damages incurred or suffered by a claimant as a result of withdrawal of expropriation. The Department needed to rethink how clause 23(3)(c) could accommodate the interests of both the state and the expropriated owner or holder.

The Chairperson pointed out that even the phrase “for all reasonable costs” was open to different interpretations.

Deputy Minister Cronin once again requested the Department be given more time to consider the matter raised by Mr Filtane in clause 23(3)(c). He indicated that clause 23(2)(a), (b) and (c) are the conditions where an expropriation may not be withdrawn.

Members agreed with the request.

Clause 24: Service and publication of documents and language used therein
Mr Sithole asked if the Department wanted “must" or "may” in clause 24(3). He asked why it was prescribed in clause 24(6) that documents should be in English and other languages are just preferable.

Ms Ngcobozi responded that the use of “must" or "may” in clause 24(3) was referring to instances where it would be compulsory to give documents and where it would not be necessary.

Ms Masehela responded that clause 24(6) basically explained that all documents must be in English unless an addressee has prior to a communication expressed in writing a preference for another language.

Ms Ngcobozi responded that even clause 24(7) addressed the concern that had been raised by Mr Sithole.

Members agreed with the clarification.

The Chairperson stated that the next meeting would focus on finishing the deliberation on a clause by clause basis starting from Clause 25: Extension of time.

The meeting was adjourned.

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