Expropriation Bill: DPWI response to submissions & deliberations, with Minister

Meeting report

The Chairperson welcomed the Committee Members, the Minister of Public works and Infrastructure, the delegation from the Department of Public Works and Infrastructure and all those in attendance at the meeting. The Committee was almost at the tail end of its deliberations on the Expropriation Bill. After having gone through clause by clause in the previous meetings, today the Committee would be receiving responses from the legal advice of the Department. Members had raised many issues and the Department was expected to respond to those issues. The Department was the author of this Bill. The Committee had taken the Bill from province to province, listened to oral presentations and dealt with written submissions on this Bill.

The Chairperson asked the Committee Secretary to present the agenda.

The Committee Secretary, Ms Nola Matinise, said that the Committee would be receiving some feedback from the Department on the issues raised while the Committee was considering the Expropriation Bill clause by clause.

The Chairperson handed over to the Department and the Minister.

Advice on Portfolio Committee queries

Minister Patricia de Lille commended the Committee for all the work it had put in for this Bill, the public hearings and the dedication that it had shown in dealing with the Bill. The Department had been asked to give some advice on the Committee’s queries. The Department was here to respond to those queries for the Committee’s consideration. The Minister was joined by Adv Uday Naidoo and some officials from the Department. Adv Naidoo would take the Committee through some of the Department’s proposals to the Committee.

Adv Uday Naidoo, Advocate of the High Court and Member of the Cape Bar, and Adv Geoff Budlender had considered the Committee’s queries and had prepared a written note. It had been circulated to the Committee members the previous day. It was a 20-page document that covered, not all, but most of what they thought were the most important concerns that Committee members raised during deliberations. There were other matters that he thought would require input which they did not have an opportunity to consider and comment on in this note. If the Committee required and the Department instructed, he would provide a supplementary note on the balance of those issues. He canvassed the matters that were covered in the note.

The Committee had raised several queries about items that were defined in clause 1 of the Bill. The note addressed the more important items on pages two to ten. The note then canvassed matters in clauses 2, 3 and 5. The note addressed the topic of mortgagees which spanned various clauses. That issue was referred to on pages 15 to 17 of the note. The note then dealt with clause 7 which was the notice of intention to expropriate. Under that heading, an alternative more streamlined model was proposed for the expropriation process and one that addressed the Committee’s concerns about the possibility of property being expropriated before compensation had been agreed to or decided. Lastly, the note made some concluding remarks.

He started with some of the Committee’s comments regarding clause 1 and certain definitions in the Bill. He addressed the long title.

Long Title

The advocates, over the last few years, had provided advice to the Department, under the various Ministers. Over time the advice had filtered through to the Committee and found its way into iterations of the Bill. There was a point in time when work on the Bill reached a standstill and some of the advice did not find expression through the Bill after certain amendments. It was important to reiterate some of that advice now, particularly in response to the concerns raised by members. The first was the issue of the long title. The Committee raised concern that the long title referred to ‘nil compensation’. The response was that the Constitution did contemplate nil compensation for expropriation if it was just and equitable. Notionally, it was a possibility under the Constitution. It would be inappropriate for the Bill to exclude that notional possibility and therefore constrain what the Constitution permitted. It was appreciated why the members raised this concern. It was because the long title did not put nil compensation into context by explaining that all expropriation must be subject to compensation which was just and equitable, as a general proposition. In exceptional cases, it might be notionally possible for nil compensation to be paid where the circumstances dictated. It was hoped that for the matter of proper contextualising the place of nil compensation that the Committee would accept the proposal in paragraph 7 of the note. The proposal was to amend the long title to provide for the following matters, ‘expropriation for a public purpose or in the public interest; to regulate the procedure for the expropriation of property for a public purpose or in the public interest, including the payment of compensation; to identify certain instances where the provision of nil compensation may be just and equitable for expropriation in the public interest; to repeal the Expropriation Act 63 of 1975, and to provide for matters connected therewith’. The Expropriation Bill repealing the Expropriation Act was a matter that had been omitted from the long title, but which was necessary to include. He moved on to clause 1 and the various definitions that the Committee had queried.

Clause 1

The Committee had raised a concern about intangible property being included in the definition of ‘court’ and in the definition of ‘property’. Property was defined broadly with reference to section 25 (1) of the Constitution. He addressed the notion of ‘intangible property’. The Constitutional Court had been clear that it would be inadvisable to attempt to define, prescriptively, under the Constitution. Property under the Constitution, section 25, had a far more elastic meaning than property as traditionally understood under common law. If the Bill were to restrict itself to traditional notions of property under the common law it would create unnecessary tension between the Bill and the Constitution. The aim of this Bill was to promote symmetry between section 25 of the Constitution and the primary legislation, which it would embody. The starting point was that there was this difference between constitutional property and traditional property under the common law. Traditional property under the common law did not always include intangible property. There were some types of properties that the Constitution recognises despite the fact that they were intangible because they had some significant value or utility to the holder. An example was a grocer’s license to sell alcohol. Another example was the right to claim unjustified enrichment. If someone had a contract that failed to comply with the National Credit Act and credit was extended, the contract was invalid, but money had already passed hands. There was a right under the common law to reclaim that money and that right was itself recognised as constitutional property. If that property was limited in any way, that would need to be a constitutionally justifiable limitation. If it was capable of being deprived then it stood to reason that it was also capable of being expropriated, acquired by the state for a public purpose or in the public interest. The problem was that if the Bill did not recognise that type of constitutional property as property under the Bill it would be providing insufficient protection to owners or holders of that type of property. That was something the Bill should avoid. The best way of avoiding that situation would be to ensure a perfect symmetry between the definition of property under the Bill and the evolving notion of property under the Constitution.

He moved on to discuss the definition of ‘court’. The criticism was that ‘court’ should not include courts that had jurisdiction over intangible property. For the reasons he had provided as to the definition of property, the jurisdiction of courts should not be constrained to dealing with only those kinds of properties that were recognised under common law. The suggestion from members of the Committee and the Department was that the removal of Magistrates’ Courts be considered in favour of the High Court, with its various divisions, and courts of similar status as the High Court, in terms of section 170 of the Constitution. The thinking behind including Magistrates’ Courts, under the Bill, was to make access to courts more readily available who did not live in urban areas and also for people who might not be able to afford access to the High Court. That was the original thinking behind the inclusion of Magistrates’ Courts. It was supported by the fact that under the Promotion of Administrative Justice Act (PAJA), the Minister of Justice may designate certain Magistrates’ Courts as courts having jurisdiction in respect of administrative matters. That was the judicial review of administrative action. In terms of section 9 (A) of PAJA, the Minister may also appoint certain magistrates who had gone on training and acquired skills and expertise to preside over administrative disputes. The Department had raised a valid concern, however. Magistrate’s Courts were not courts of record. One magistrate might give a decision in a certain matter whereas a different magistrate might give a completely different decision. That was not desirable. Magistrates’ Courts, generally, lacked the expertise, capacity and experience of judges in the High Court. Most importantly, Magistrates’ Courts had limited monetary jurisdiction. In order to accommodate challenges to decisions to expropriate and also disputes about the amount of compensation, it would be necessary to increase the monetary jurisdiction of the Magistrates’ Courts. That was not something that lay within the competence of the Department of Public Works. This Committee would need to engage with the Department of Justice and possibly undergo a further round of public consultation in order to alter the jurisdiction of the Magistrates’ Courts. Having considered those reasons, it seemed better to exclude Magistrates’ Courts from the definition of ‘courts’ under the Bill. Instead opt for the High Court, with its various divisions, and any court that may be created in terms of section 170 of the Constitution, of the same status as a High Court.

He had also been asked to consider the relevance of the Land Court Bill on the definition of ‘court’ under the Expropriation Bill. He had studied the Land Court Bill as much as he could, given the limited time, to try and understand exactly what kind of jurisdiction it was intending to confer on the new Land Claims Court. He had been very puzzled. One would have expected that the Land Court Bill would have said in simple terms what the jurisdiction of the Land Court would be in respect of matters relating to land. Unfortunately, it did not. The jurisdiction clause stated that the Land Claims Court had jurisdiction exclusively in respect of matters over which it had jurisdiction. That was circular and empty. It did not give substantive content to what the court’s competence really was. He discussed the powers of the appeal court in the Land Court Bill and the powers of the Land Court. All it said was that the Land Court had exclusive powers to determine matters which fell within its jurisdiction as well as any incidental matter which, in its opinion, might be just and equitable for it to determine. This was a very imprecise parameter. For that reason, it would be inadvisable for the Expropriation Bill to pin the jurisdiction of the courts under it to the Land Court Bill because of these technical reasons. There was also a more general reason. The Land Court Bill was not yet law. It would be ill-advised for the Expropriation Bill to define the ambit of courts’ jurisdiction in respect of law that does not yet exist. The simplest and most effective definition for ‘court’ would be a high court and a court of similar status. If in the future Parliament passed the Land Court Bill, having tightened up the jurisdictional issues that he had raised, then it would happily fit within the definition of court under the Expropriation Bill as it was proposed. The jurisdiction of the Land Court was not something that this Committee needed to be concerned with at all.

The Committee raised a query about the definition of ‘deliver’. It was a good concern. Why was email not included in the definition of deliver? It was a concern that had merit. The email method should be included in the authorised means of delivery, but it would not be necessary to amend the definition of ‘deliver’ to do so. Instead, email could be included as a mode of delivery under clause 24 (4) and simplify the language of the definition of ‘deliver’ in clause (1). It could be referred to as ‘the mode of delivery authorised in terms of section 24’. He added one qualification. Like with the transmission of fax, there may be glitches with the email system. To ensure that delivery was effective, the Committee might want to consider requiring that delivery by email be followed up with the delivery of snail mail.

The DA also raised a concern about the definition of ‘disputing parties’. What lay at the core of the query was a concern as to why the definition of ‘disputing parties’ did not include parties who dispute the decision to expropriate but only parties who dispute the amount of compensation. There was a reason for this that stemmed from section 25 of the Constitution. He wanted to allay fears. The Bill did not preclude any party from approaching a court to dispute the decision to expropriate. He noted clause 21. It was expressed in clause 21 (6) that courts were not deprived of the power to determine any matter relating to the application of the Act and that any person may bring that matter to court for determination. Section 34 of the Constitution, the right of access to court, was given full effect in terms of clause 21 (6) of the Bill. The reason for limiting the definition of ‘disputing parties’ to those persons who did not agree on the amount of compensation offered by an expropriating authority was found in the language of section 25 (2)(b) of the Constitution. It provided that property may be expropriated in terms of a law of general application subject to compensation, the amount of which and the time and manner of payment of which have either been agreed to by those affected or decided or approved by a court. The Constitution made a distinction between the decision to expropriate and the amount of compensation that was to be settled on. A decision to expropriate was an administrative act. It was the expropriating authority, an organ of state, exercising expropriation powers in terms of legislation that made that decision. It was not a court that made that decision. The manner in which an affected person may challenge that decision was the traditional route of judicial review under PAJA. The Bill, in clause 21 (1) foreshadowed that. Compensation was treated differently. The Constitution said that compensation may either be agreed to, that was between the expropriating authority and the affected person or may be decided or approved. The person who decided or approved was not the expropriating authority. It was the court. There was no administrative decision that was taken in respect of the amount of compensation. During the expropriation process, the administrator makes an offer of compensation. If the offer was accepted, then there was agreement and the first condition in clause 25 (2)(b) of the Constitution was met. If there was no agreement, then the parties must go to court. It was not a matter that an expropriating authority can decide on of its own accord. The Constitution invests the power to decide the amount of compensation, when there was no agreement, in a court. A separate mechanism from judicial review under PAJA was required to determine non-agreement or dispute about the amount of compensation. Clause 21 of the Bill attempted to regulate that matter of dispute and compensation. The term ‘disputing party’ was a convenient shorthand for an expropriated owner, an expropriated holder or another interested party which may include a mortgagee in respect of the issue of compensation. The mechanisms which the Bill prescribed for resolving that dispute was mediation or determination by a court for the purposes of section 25 (2)(b) of the Constitution. He hoped that clarified why the definition of ‘disputing parties’ did not include any dispute on the question of whether the expropriation was lawful. It precludes a challenge to the decision to expropriate but it excludes it for its own purposes. The definition of ‘disputing parties’ was limited to the resolution of compensation under clause 21 of the Bill. It was a subtle point. He asked if there were any questions that he could respond to on that point?

Ms Phumelele Ngema, Parliamentary Legal Advisor, Constitutional and Legal Services Office, said that she wanted Adv Naidoo to speak on the issue of the words ‘or decided’ in terms of what he had said with regard to section 25 (2). It was only a court that may decide, approve or make a determination on compensation. There was the word ‘agreed’, then there was ‘or decided’ and then there was ‘or approved by court’. Where was ‘decided’ placed in the explanation and legal position he had expressed?

Adv Naidoo noted that in clause 25 (2)(b) of the Constitution there was an important linguistic identifier that explains why ‘decided’ did not mean decided by an administrative body. The Constitution used the conjunctive phrase ‘either/or’. The ‘either/or’ split up two things. On the one hand was the word ‘agreed’. It was agreed either by the expropriator or the expropriated owner. The ‘or’ following the words ‘those affected’ was the other half of the conjunctive phrase ‘either/or’. It was decided or approved by a court. ‘By a court’ referred to both ‘decided’ and ‘approved’. It excluded the possibility that ‘decided’ could mean decided by another authority. If the Constitution had meant that a court could only approve and nothing more, then it would relegate the court to the role of a rubberstamping authority which would be inconsistent with various other provisions of the Constitution, which determined the courts to determine rights. ‘Approved’ implies that the court was satisfied with the offer made and did not alter it. ‘Decided’ signifies that the court might not approve but might make a decision that varied from the offer. The phrase ‘decided or approved’ goes together with the phrase ‘by a court’. It could not be split up. He asked if that answered the question?

Ms Ngema responded that ‘or’ appeared twice in section 25 (2)(b) of the Constitution. The first ‘or’ was used so that it did not use ‘and’. That would mean all the things listed needed to happen all the time that that provision was being dealt with. The first ‘or’ was the one that sought to differentiate what Adv Naidoo had spoken about. She still believed that there were instances wherein terms of section 25 (2)(b), even the expropriating authority may determine or decide on the compensation.  

Adv Naidoo accepted Ms Ngema’s concern. If her hypothesis was correct that the expropriating authority may make a decision, then it would be unnecessary to state, as the Constitution does, that the expropriating authority may agree. If it had the power to determine then consensus would be immaterial. He thought that the first ‘or’ must be read together with ‘either’ so that the means of finalising compensation were twofold. First, agreement or alternatively, decision or approval. The question was, who must decide or who must approve? If the theory put to him was correct then a court may only approve and not decide because the decision was reserved for an administrative body. That would run into tension with the notion that an administrative body may agree and secondly it would signify that all a court may do was say that the administrator was right but nothing else. That could not be correct. Courts were there to make independent decisions about rights and obligations. The third option was that ‘decided or approved’ could mean decided or approved by a court or an administrator. If that were the case, then the Constitution would have said so. The Constitution would not have left an administrator out and mentioned the court instead. There were various contextual factors against the proposition that section 25 (2)(b) of the Constitution permitted an administrator, who made the decision to expropriate, also to make an administrative decision in respect of the amount of compensation. There was a further reason. If one assumed that the Constitution did contemplate that the administrator may make a decision, then a court could not make the same decision in respect of the same matter unless it was exercising a power of review. If that were so, then the court would not be making a decision on the correctness of the administrator’s determination of compensation. Instead, the court would be making a determination about the lawfulness of the process that the administrator followed in determining the amount of compensation regardless of the outcome reached. There were several tensions that existed in relation to the hypothesis that was put to him. He hoped that answered the question. He said that this matter was responded to in a written opinion, and he was happy to provide an excerpt via the Department to the Committee, to satisfy the members’ questions.

He moved on to discuss the definition of ‘expropriating authority’. During the public consultation process, a shortcoming in the definition of ‘expropriating authority’ was identified. He went back to 2013 to explain why ‘expropriating authority’ was defined in the way it had been. There was a case in which a party that had acquired mineral rights under the old apartheid legislation was given an opportunity under the new order legislation to convert those rights into new order rights. The legislation created a window of time in which those old order mineral rights had to be converted into new rights under the MPRDA legislation. Those holders of the old order rights did not do so, and the legislation terminated those rights. The principle was that government recognised that the parties had acquired these rights but that it needed to bring them into modernity. The government gave them an amount of time to do so but if the parties were not going to use that amount of time that they would lose those rights. The parties could not hold onto those rights in perpetuity and prevent those minerals from being exploited for other people and for the nation’s benefit. The Constitutional Court recognised that this was a legitimate purpose in a case much later court case. In 2013, the Constitutional Court was faced with a challenge to this legislation on the basis that the removal of these old order rights amounted to expropriation. The court said that it knew that these parties had these rights and that the legislation took away those rights and therefore they were deprived of those rights. The court did not think that the parties had been expropriated of those rights because the state had not acquired the rights to use it itself. It was not like the government took away someone’s car and was now using it to pursue a public purpose. It was quite different. Government was saying that it may issue permits to other persons to exploit the mineral rights that these parties once had. That was due to those parties not converting those rights in the window of opportunity that it had been afforded. The Constitutional Court held that the distinction between a deprivation, in terms of section 25 (1) of the Constitution, and expropriation, in terms of section 25 (2) of the Constitution, was that the state must acquire the right that was taken or something substantially similar in quality or nature to what had been lost. That had been included in the definition of ‘expropriation’. Expropriation meant acquisition. That was the language that the Constitutional Court used in the majority judgement. It meant acquisition by an expropriating authority or by an organ of state through an expropriating authority.

The Committee had raised a query about the Minister’s power in terms of clause 3 (2) to acquire property on behalf of an organ of state that itself did not have powers of expropriation under the legislation. In the definition of ‘expropriating authority’, they had tried to make it consistent with what the Constitutional Court had said in Agri SA. The dissenting judgement in Agri SA had pointed out that the Constitutional Court was not concerned with the possibility of transferring ownership to third-party beneficiaries for land reform and land restitution purposes. That was not what the court was concerned with there. Having reflected on what was raised in the public consultation process, it seemed clear that expropriation, as defined, had to take into account the possibility that an expropriating authority might not itself acquire land or other property for its own use. It might use its powers of expropriation to facilitate what the Constitution required. As matters stood, the definition of ‘expropriation’ was under-inclusive and this was a point Adv Budlender had made when he addressed the Committee on a previous occasion. That was something that needed to be corrected. An expropriating authority would be empowered in terms of legislation to acquire property for a very defined public purpose or public interest. Who defined that? Well, Parliament did. It was in terms of the legislation. It was important to include in the Bill that qualification. An expropriating authority cannot acquire property for a purpose for which it had not been authorised by empowering legislation. The empowering legislation would define the ambit of that power. It may be for health purposes, housing purposes, or education purposes. It was important to link the power to expropriate with the purpose of the expropriation as circumscribed by the empowering legislation which Parliament has created. The proposal of Adv Naidoo and Adv Budlender, in paragraph 30 of the note, was that the expropriating authority should be defined as ‘an organ of state empowered by this Act or any other legislation to expropriate property for a public purpose or in the public interest’. He discussed the definition of ‘expropriation’. The compulsory acquisition of property by an expropriating authority was only one aspect of expropriation. He provided the example of the Department wanting to expropriate land in order to build a dam for a public purpose. There may be instances where an organ of the state which did not have expropriating powers, under the legislation, needed property for a public purpose or in the public interest. An example of this might be a state-owned entity, which was engaged in hugely beneficial public development activities but did not itself have powers of expropriation. It would rely on an expropriating authority to acquire property for its benefit in terms of the expropriating authority’s empowering legislation. That was what the current definition covered. What the current definition did not cover was what he had already explained. The possibility that there may be third-party beneficiaries who were individuals, like labour tenants who had been living on a farm for three generations and had been providing labour services for free to the persons who owned their lands. He provided a list of other potential third-party beneficiaries. Those people and the acquisition of land on their behalf did not fall under the definition of ‘expropriation’ at present. In paragraph 35 of the opinion, it was proposed that the definition of ‘expropriation’ be changed to account for those individuals who were not organs of the state and were not going to use the property for a public purpose but were going to use it for their own purposes in the public interest because there was a public interest in facilitating land reform. The Constitution said so in express terms. The definition of ‘expropriation’ should be, ‘the compulsory acquisition of property by an expropriating authority or a third-party beneficiary for a public purpose or in the public interest’. Who was a third-party beneficiary? It included those individuals who would receive land in terms of a land restitution process in the public interest. A third-party beneficiary would also include those organs of state who did not have expropriation powers themselves but who might need the property for a public purpose, like the Industrial Development Corporation. The phrase ‘third-party beneficiary’ was broad enough to encompass those organs of state that the current definition catered for as well as individuals who should acquire the land in the public interest. The definition would facilitate direct transfers to be made to those third-party beneficiaries without the state having to become the owner itself and then transfer the land to the third-party beneficiary. It cut out an unnecessary step in the process and it was not something novel. Many established democracies around the world catered for this facility. The protection to ensure that it was not abused by third parties who were not going to use the land for a public purpose or in the public interest was built into the definition of ‘expropriation’ as had been proposed. There was the qualification, ‘third-party beneficiary for a public purpose or in the public interest’. This definition was proposed not only to cater for the beneficiaries of land reform but also to protect those who would lose property for land reform purposes or for any other public purpose where a third party, which was not an expropriating authority, might be the beneficiary. Land reform was constitutionally required. Direct transfers of property were contemplated in the Constitution where the beneficiaries become the owners in terms of an expropriating process. As the Bill stood, those who might be affected by the implementation of that process were not adequately protected. If the definition stood as it was, then a person who was affected by expropriation for land reform purposes would not receive the guarantee of just and equitable compensation under the Bill. This would be because the definition of expropriation did not include those third-party transfers in the public interest. Defining expropriation as Adv Naidoo and Adv Budlender had proposed guaranteed protection to those who would be affected by the loss of their property through third-party transfers. It was an important point.

Ms S Graham (DA) said that she wanted to discuss the organs of state. She appreciated what was said covering the organs of state. She noted clauses 3 (2) and 3 (3) of the Bill. She did not believe it was covered by the definition of ‘expropriating authority’ because these were organs of state that were not expropriating authorities. They had not been given the same powers under any enabling legislation, yet the Minister was expected to expropriate on their behalf. In the document, it stated that the Minister may then do so only if they were satisfied. The Bill stipulated that the Minister must. That was one of the reasons the DA raised that issue. The Minister was compelled under this proposed Bill to expropriate on behalf of an organ of state that was not recognised as an expropriating authority. It then went on in the next section to give other things that that land could be used for that do not qualify under the definitions of public interest and public purpose. It applied specifically to the organ of state’s own policy objectives or the things that they were trying to achieve. It said that it was connected to the provision and management of the accommodation, land and infrastructure needs of the organ of state. Her issue around that was that she did not know why the Minister had to be compelled to expropriate on behalf of an organ of state that was not defined under this Bill or enabling legislation, looking at the definition of an expropriating authority. Expropriation was happening outside the definition of public interest and public purpose because it was for their own needs. The DA’s proposal was that clauses 3 (2) and 3 (3) be removed. The DA believed that those sections did not fall within the ambit of what the law was saying in terms of those definitions. She wanted clarity on that matter.

Adv Naidoo said that there was a response in the note to the first aspect of the question on whether the Minister’s power was discretionary or not. He referred to paragraph 29 of the note and the previous note that he was not sure if the Committee had received. It was the note that Adv Budlender had presented last. The language of the Bill said ‘must’ but ‘must’ needed to be read in conjunction with the Minister being satisfied that the property was indeed required for a public purpose or in the public interest. He understood the point that the public purpose or public interest might not be clearly expressed enough. He discussed the discretionary element. He noted clause 3 (2). It stated that ‘if an organ of state, other than an expropriating authority, satisfies the Minister’. That meant the Minister does have to apply their mind to whether the organ of state had met the requirements of public purpose or public interest. Subclause (2) needed to be read in conjunction with subclause (1), the Minister may expropriate property only if it was for a public purpose or in the public interest. If the Minister exercises that power at the instance of an organ of state, it could only be within the remit of what clause 3 (1) permitted. The Minister needs to thoroughly satisfy herself that whatever the organ of state sought to achieve was aligned with the means and the expropriation. The point about the public purpose and public interest was re-emphasised in clause 2. The Minister needed to be satisfied that the organ of state-required property for a public purpose or in the public interest. The word ‘required’ was important. It meant that it was necessary for fulling a public purpose or being in the public interest. It could not be used for a purely private purpose or purely private interest. To the extent that the organ of state requested particular property which would service its own accommodation, land and infrastructure needs, these needs must be necessary for a defined public purpose or in the public interest. The reason for including the phrase ‘provision and management of the accommodation, land and infrastructure needs’ was because the request was being made by a very particular expropriating authority. It was the Minister of Public Works. The provision and management of accommodation and infrastructure fell within the Minister of Public Works mandate as defined in legislation. Could an organ of state relying on clause 3 (2) request of the Minister of Public Works to expropriate land for purposes that fell outside the provisions and management of accommodation, land and infrastructure? The answer was no. There may be other legislation such as under the Water Act. He provided an example of the Higher Education Act where land was required for education purposes but not necessarily for accommodation or infrastructure purposes. A different expropriating authority might be the one to whom an organ of state which itself did not have expropriating powers would need to make that request. That was not the purpose of this Bill to define. That may be a substantive provision that another piece of legislation needed to define. This Bill did not confer powers of expropriation on organs of state. Instead, it created a framework for the process of expropriation for other expropriating authorities to exercise their substantive powers of expropriation in terms of other empowering legislation. The only exception to that was the power of expropriation conferred on the Minister of Public Works in terms of clause 3. It was for that reason that the language of clauses 3 (2) and 3 (3) were selected. Who was an organ of state? An organ of state was a legal term that was defined in section 239 of the Constitution. It was not limited to the departments in national and provincial spheres of government. It was not limited to municipalities. It was not limited to Ministers. It could even be, as the Constitutional Court has said, a private organisation that had assumed constitutional functions. Just as SASSA did when it assumed the constitutional function of rolling out social income grants. It was for only that particular purpose. Because the notion of an organ of state was so elastic, it should not be restrained beyond what the Constitution envisaged. He discussed a public purpose.

He noted the discussion on page 8. The Bill currently defined ‘public purpose’ with reference to the empowering legislation. That was alright but something more was required. ‘Public purpose’ was defined under the ambit of the empowering legislation. If Parliament passed an Act for health purposes and empowered an expropriating authority to expropriate for health purposes, that power may be exercised only for health purposes. It was important to ensure that when that power was exercised that the property was actually used for the purpose and not simply taken. It could not just sit as a state asset unutilised. The purpose identified had to be a purpose that was actually going to be realised. If government wanted to take land for building a dam, then it had to be reasonably possible that the dam was going to be built. For example, it would not be in the public interest to expropriate land at the top of Table Mountain for building a dam because it was not a realisable purpose that was connected to the exercise of that power. In paragraph 39 of the note, it was proposed that the definition of ‘public purpose’ was elaborated on and tightened by including the requirement that the property concerned would be used for the identified public purpose. It was to be used for a specific beneficiary, the public. When property was taken for a public purpose the public must be the direct beneficiary of that taking. There was academic authority, on which the court had not yet pronounced, which suggested that the difference between public purpose and public interest was that the public purpose envisages use by the public directly. Public interest meant that the public would not be the direct beneficiaries of it but there still was an important public objective served by the expropriation. Land reform was a classic example. Hopefully, that also addressed the definition of ‘public interest’ which the note dealt with briefly in paragraphs 41, 42 and 43. The reason why the words ‘direct’ and ‘indirect’ had not been used was because this was not a matter the courts had pronounced on. While the academic view was persuasive it would be better to allow the courts to develop this jurisprudence. Public purpose did require the public to use the asset once it was taken.

He discussed the definition of ‘owner’ and ‘unregistered right holder’. He noted that from the outset the schema of the Bill was modelled on the Expropriation Act. The distinction was made under that Act between registered rights and unregistered rights. The thinking was that ‘owner’ would be defined to mean those who had registered rights and those who had unregistered rights would be ‘holders of rights’. That distinction seemed fine at the time. But what about owners who did not have their rights of ownership registered and were not required to have their rights of ownership registered? That was a large category of people. Parliament did not want to create legislation that was awkward and unintelligible to a reasonably educated public who picked up the statue and wondered where they fit into it. It was proposed that the definition of ‘owner’ not be restricted to those who held registered rights. It included those who had registered rights where those rights were required to be registered for ownership to vest. When someone acquired property by transfer then that right would have to be registered. If someone required a servitude other than under common law of usage or some other means that did not require legislation, then that had to be registered in the deeds registry. Shares might need to be registered for rights of ownership to vest. Ownership should not be limited to that. There was a category of things that can be owned without registration being required. The qualification in the definition was inserted, ‘where the ownership of the property or right in question is registered, means the person in whose name such property or right is registered’. The qualification did not exclude ownership where ownership was not required to be registered. There was however a problem. In order for someone to appreciate that an owner of a property that was not required to be registered was not going to be treated as a holder of rights, the definition of ‘holder of rights’ must exclude everyone who fell within the definition of the owner. These were mutually exclusive things. A ‘holder of a right’ was someone who had a right that did not need to be registered. That would include people who had cars and people who owned Golden Arrow busses. Something needed to be done to clarify that owners who were not required to have their rights of ownership registered did fit under the definition of ‘owner’ and not under the definition of ‘holder of a right’. The note proposed paragraph 47 in the opinion.

He discussed the definition of ‘valuer’. He noted that when this process started the Property Valuers Profession Act was in its infancy as far as coming to effect was concerned. A ‘valuer’ was defined in relation to that statute. Two points arose on further reflection. Currently, there was old order legislation that still empowered and still provides for the existence of the Land Affairs Board. The Land Affairs Board still had powers, technically, under the statute to value land. The valuation of land, in terms of this Bill, should not be limited to valuers under the Property Valuers Profession Act. If the Land Affairs Board was abolished, then that would be a matter for another day which another piece of legislation would take care of. It was important for this Committee to remember was that it should not cut the Land Affairs Board off unduly. That was a matter for a different Committee and on a different day. The qualification in the definition of ‘valuer’ where ‘in relation to land’ appeared, should be omitted. It would not affect those persons registered as a professional valuer under the Property Valuers Profession Act. This was because the Property Valuers Profession Act pertains to only valuation of immovable property. Property was not limited to land. Movable property was property under the Constitution. Rights to restitution were property under the Constitution. He advised that the definition of ‘property’ must be in sync with what the Constitution envisaged so that it was not under-inclusive and potentially inconsistent with the Constitution.

He discussed how that had a bearing on valuation. If property, other than immovable property, was going to be required for a public purpose or in the public interest and was to be expropriated then there needed to be a process to ensure that the expropriating authority ascertained the suitability of that property. The expropriating authority needed to ascertain the fitness of that property for the intended purpose and whose interests might be affected by taking that property for a public purpose or in the public interest. Clause 5 of the Bill was designed to ensure that the expropriating authority did its homework in that regard. Clause 5 governed the investigation phase. Clause 5 did have subclauses that pertained only to land. The rest of clause 5 was not limited to land and it was perfectly capable of applying to other kinds of property. It was very important that it did apply to other kinds of property. If it did not then when that bus was needed for a public purpose or in the public interest and there was no statutory obligation on an expropriating authority to inspect that bus beforehand to ensure that it was safe, roadworthy, capable of transporting people then the Constitutional requirement for fitness of purpose would not be served. That would be constitutionally problematic. Accessing the suitability of the property and determining its fitness for purpose would in part indicate to the expropriating authority whether it should expropriate. Another important variable in that assessment was how much the expropriating authority was going to have to pay for it. If it was too expensive, then despite it being fit for purpose the expropriating authority may want to look at alternatives to justify that expense. The only way it could know that was if it received a valuation beforehand. The statute did not comprehensively regulate who could value what property. For that reason, it was proposed that the definition of ‘valuer’ be more generous in its ambit so that a ‘valuer’ was defined as any person who is suitably qualified to value property and that referred to property other than land. The definition includes those valuers whom statute requires to value land and those who were registered under the Property Valuers Profession Act. For all other kinds of property there needed to be valuation. Legislation had not yet comprehensively prescribed who those persons must be and so it would be appropriate for the Bill to require those people to simply be qualified. A qualification was usually something that was regulated by a professional body. This Bill, if the amendment in paragraph 53 of the note was adopted, will have foreseen the development in the law.

Ms Graham said that she was thrilled to see the amendments that were being made because they made a huge difference in terms of the protection of everybody that was touched by the Act. She noted one thing that Adv Naidoo had not addressed which she had raised much later on in the deliberations. She believed that it needed to be discussed. That was the definition of ‘land’. ‘Property’ was defined as being under section 25 of the Constitution. ‘Land parcel’ was defined as a specifically designated item of property. ‘Land’ was referenced throughout the Bill. There was no clear definition of ‘land’ that spoke to exactly what that incorporated. When a valuation of land was done was the valuer valuing the land? Was the valuer valuing the land and the improvements? If an expropriating authority was expropriating for the purposes of land reform, would the equipment be valued to keep it as a going concern? She also noted the water rights on the property. She was concerned that there was no clear definition or attempt to define ‘land’ as it was envisaged under this Act. That could also become problematic going forward.

Adv Naidoo said that there was a presumption that Parliament knew what the common law was when it enacted legislation. ‘Land’ as common law includes all the pertinences which accede to the land. The term was accession. Everything attached to the land becomes part of the land. That would include physical structures, like a house or a barn or a pool. It would also include water towers, windmills, and electricity poles if they were not already owned by the state. It would also include, unless specifically excluded, rights in land. Part of the valuation of the subject property would also be valuating structures and rights that had an impact on that property or which were attached to the property. If the subject property was the dominant tenement and had rights over a neighbouring property that would form part of the valuation of the subject property for the expropriation. This was because it had greater valuer than just what lay within its four corners. The common law conception of ‘land’ and ‘accession to land’ covered the position fully. He would be hesitant to try to incorporate the common law into the definition of ‘land’. It was vast, expansive and liable to change. It should be left to the presumption which generally lies in statutory interpretation. That Parliament intended the common law meaning to apply to a legal term of art where it was used. He had not considered the Valuers Act and how value buildings and rights are attached to the land. It was something he could come back to the Committee on if required. He imagined that section 25 (3) guided the valuers that an overly rigid approach would be problematic. He could not offer a definitive answer on that at this point.

Clause 2

He discussed clause 2 (2). This was a matter that has raised concern among members of the Committee and the public. That was the distinction that was drawn between expropriating property from state-owned corporations or state-owned entities, on the one hand, and expropriating property from everyone else, mostly members of the public. The wisdom of this distinction had been questioned and in his view, correctly so. There were good reasons for interrogating why this distinction was there. One was a fundamental, conceptual reason. Why should consensus be sought where a power of expropriation was sought to be exercised? Expropriation did not require consent. Consent was irrelevant and very often property was taken without consent. For the Bill to import consent as a precondition for expropriation conflicts with the very notion of expropriation. If consent was required, then why not simply transfer? Why does the Expropriation Act need to prescribe a mechanism that the object of which the expropriating authority could already achieve using negotiation? For that reason, it was redundant. It created an irrational distinction between members of the public, whose consent was not required, and SOEs and SOCs, whose consent was required. There seemed to be very little reason for justifying that distinction. It may even be arbitrary. If property was required for public purpose or in the public interest for an expropriating authority and it sat in the ownership of another public entity that also required, it for a public purpose or a in the public interest then there may be a contestation of public purposes and public interests at stake. If the expropriating authority exercised its powers to expropriate there may also be a basis for the public entity who owned the property, who needed it for public purpose or public interest, to counter expropriate. That was something that could be resolved outside the ambit of the Bill. The Bill did need to regulate that situation necessarily. It may require some thought. He appreciated the law advisors’ point that this clause was inserted to accommodate section 41 of the Constitution. Section 41 of the Constitution applied to organs of state in different spheres of government and not necessarily SOEs or SOCs. Meeting the needs of section 41 of the Constitution might not be achieved by clause 2 (2) in any event. This was a matter that the Committee needed to decide because it was a policy consideration. He had merely highlighted the legal factors that should inform that policy decision. If the investigative phase was concluded properly it would not require consent. Nothing in the Bill should require consent. There was at a very early stage an obligation to obtain the property through a purchase before an expropriating authority resorted to the power of expropriation. That was something that Parliament chose to add in because of various concerns but it was not legally required because government already had the power to conclude a private purchase agreement. It did not need an Expropriation Act to give it that power. The clause was superfluous, but it also imposes an unnecessary precondition on the constitutional power to expropriate. That was a decision that the Committee and Parliament had taken. There was no problem with it from a constitutional perspective, but it did limit the exercise of the expropriation power by setting this as a precondition.

Clause 3

He discussed clauses 3 (2) and 3 (3) of the Bill. Clause 3 (3) provided that ‘the Minister’s power to expropriate property in terms of subsections (1) and (2) applies to property which is connected to the provision and management of the accommodation, land and infrastructure needs of an organ of state, in terms of the Minister’s mandate’. He noted that the qualification ‘in terms of the Minister’s mandate’ was not necessary. It also suggested that the Minister’s mandate might extend beyond what was already defined in Acts of Parliament. It was not advisable for the Bill to permit the Minister’s mandate to be extended other than through measures that served before Parliament itself. The phrase ‘in terms of the Minister’s mandate’ added nothing. It could also mean that if something did not fit under the Minister’s undefined mandate that the Minister could not expropriate property for an organ of state. He provided an example of an organ of state which would not normally fit under the Minister’s mandate, but it needed property for an infrastructural purpose. Without the phrase ‘in terms of the Minister’s mandate’, the Minister could expropriate property on its behalf where it required it for a public purpose or in the public interest. If that was subordinated to an undefined Minister’s mandate, then there was the risk that it might constrain what the Minister could do even further. Legislation should not provide for language that was unnecessary and potentially counterproductive. He recommended that it be deleted.

Ms L Mjobo (ANC) said that by the look of things she doubted that the Committee would finish today. She proposed that the meeting end at 11am.

The Chairperson said that proposal would be put to the Committee.

Mr E Mathebula (ANC) said that he thought the meeting was going to be shorter than it was currently. He thought that matters would be raised at the end of the presentation. He wanted to ask a question. It related to the matters that Adv Naidoo had started with. He was not sure if he should ask his question. He had been taking notes and thought that questions would be asked once Adv Naidoo had finished going through the presentation.

The Chairperson responded that if the questions related to what Adv Naidoo had already presented then she would allow Mr Mathebula to ask those questions. She asked the Committee to discuss the issue raised by Ms Mjobo of time and note that the Committee had a sitting in the afternoon. If Mr Mathebula’s questions related to what had already been said by Adv Naidoo then he would be allowed to ask his questions.

Mr P Van Staden (FF+) suggested that if the meeting stopped and the Committee had to come back for another meeting that Adv Naidoo come back with responses to all the queries raised. Adv Naidoo could then address all the matters that were raised in the Committee. He proposed that the Committee go that route.

The Chairperson said that Mr Van Staden was supporting Ms Mjobo but with an addition that Adv Naidoo bring responses to all the questions and comments that the members needed clarity on when it was deliberating clause by clause.

Mr Mathebula appreciated the legal advice and the presentation made by Adv Naidoo. It was up to the Committee to either take on or not to take on the advice based on legal facts that were put forward by Adv Naidoo. He was fully behind the advice given by Adv Naidoo. It did assist the Committee moving forward. This was a Bill that spoke directly to the Constitution. Adv Naidoo had referred a number of times to section 25 of the Constitution. He reiterated that the Committee was still on track. What the Committee had been doing was constitutional. Adv Naidoo had spoken of magistrates. Matters of expropriation, in terms of the Bill, would not be dealt with at the level of the Magistrates’ Courts. Adv Naidoo had highlighted reasons for that. One of the reasons mentioned was that magistrates’ were not courts of record. He agreed with Adv Naidoo on that, however, there were matters that were being dealt with by magistrates and they had been dealt with successfully. He referred to section 34 of the Constitution, which spoke about access to justice. Magistrates were cheaper in terms of access to justice. He agreed with that. That was in line with section 34 of the Constitution. Going to the High Court required an advocate. Going to the High Court was not cheaper. He noted how expensive it was for a client to pay an advocate of the High Court. This brought him to the issue of the utilisation of Magistrates’ Courts. Why should Magistrates’ Courts not be used when they were cheaper and more accessible? Magistrates’ Courts were all over. They were in each and every place, unlike the High Courts. When a matter must be taken to the High Court it needed to be over a certain amount. Not all properties were going to be above that amount. Why could the Magistrates’ Courts not be utilised on properties that were valued under R400 000?

Adv Naidoo said that he was happy to respond in writing. The simple answer was that Magistrates’ Courts, generally, were less able for training, capacity and competence reasons than judges in the High Court to deal with very complex expropriation matters. He accepted that not all expropriations would be complex and not all matters would be about large sums of money. What it would mean was that before approaching a court, if Magistrates’ Courts were to have jurisdiction, an affected person would have to ascertain what the value of compensation in the dispute would be before choosing the correct court. They may be on the borderline and out of caution go to the High Court instead. They would have to make that election and that was not an obvious preliminary hurdle for a layperson to cross. Because it would not be competent for the Bill to increase the monetary jurisdiction of the Magistrates’ Courts, it would be simpler to say that these were the courts that were available. The High Court had jurisdiction throughout the country. There was a possibility of a new court with the same status as a high court being created. It was expected that expropriations would be so wide-scale that every small town in the country would be facing expropriations that might need to serve before the local magistrate because they could not afford lawyers’ fees. It might be creating an invisible legal obstacle in terms of monetary jurisdiction. It also might be creating the risk where the quality might be compromised. Allowing people to go to the Magistrates’ Court, where the level of competence was considered to be less than the High Court, might mean that the matter might need to go to the High Court in any event. Cutting out that tier would promote access to justice in the sense of promoting finality.

The Chairperson said that there was a proposal that the meeting ends at 11am because Adv Naidoo was only on page 12 of the note.

Mr Mathebula thanked Adv Naidoo for the clarity. He indicated to the Committee that looking at the Bill and the advice that was given, the Committee was actually in consensus in terms of the Bill. He noted section 25 (2) of the Constitution, which spoke about expropriation in terms of general application. From what the members had said he believed that there was a consensus with the Constitution.

The Chairperson asked Adv Naidoo to deal with clause 3 (5) of the Bill. It would be the last clause dealt with in the meeting today. She asked him to try and get all the documentation that he had referred to for the Committee’s next meeting. Adv Naidoo would then be able to finish all of the responses. This would be the last meeting for the quarter. The Committee would try and re-work next quarter’s programme so that the meeting with the Department would be one of its first meetings.

Adv Naidoo said that clause 3 (5) was a particularly important point that the Committee raised, and it would be beneficial to reflect on what was said in writing. It was quite a technical and nuanced concept about changes in the purpose of expropriation, after expropriation. What if the purpose fell away? What if the property was needed for another purpose? It required quite a detailed and technical analysis. He wanted to provide a graphic presentation to the Committee to break down the process.

He proposed to move on clause 5 (4) so as to use the remaining time productively. He was also comfortable continuing to go through the advice at the next session.  

The Chairperson said would the Committee be doing justice if it tried to make Adv Naidoo go through the note in such a limited time? The Committee could just listen, take notes and then engage with Adv Naidoo when it came back.

Ms M Hicklin (DA) said that she loved listening to Adv Naidoo, but she believed that the Committee would be doing him a grave injustice if it tried to get him to rush what he was saying. The time was very short. There was a sitting and the busses were leaving for Parliament. She believed that the Committee should end the meeting now.

Ms S Van Schalkwyk (ANC) agreed with Ms Hicklin. The Committee would not be doing justice if it proceeded. She seconded the proposal that the meeting closes. Adv Naidoo indicated that there were other submissions that he had. She asked that he make that available to the Committee in advance so that it could further the discussions on those items as well.

Mr Van Staden supported that proposal. The Committee should stop now and carry on in the next meeting.

The Chairperson thanked the Minister and the Department for bringing its legal team to respond to what the Committee had raised when it was dealing with the Bill clause by clause. Parliament had a sitting and the busses were leaving earlier than normal today. The Committee appreciated the responses by Adv Naidoo in dealing with all the issues that had been raised. The Committee would communicate the programme for the next quarter. The Department should go through all the issues that were raised by the Committee as it went through the Expropriation Bill. The Chairperson noted that today was the last meeting of the Committee in this quarter. Parliament would be closing for recess. The Chairperson wished the members well for the holidays.

The meeting was adjourned.