Agri SA is elated about the outcome of the Melmoth-case in favour of the landowners this week. The outcome brings some comfort to concerned landowners regarding the manner in which experts will deal with the concept of just and equitable compensation.
Controversial land claims
The controversial land claims lodged by five groups of claimants against various farms in the Melmoth area in KwaZulu-Natal has taken a drastic turn during this week when the dispute between the state and the landowners regarding the just and equitable compensation that the state must pay to the landowners, was due to be heard in court. In an attempt to settle the claim, the landowners had offered 9000 hectares of highly productive land to the state.
“The claim, which was originally lodged over 42 000 hectares could have been finalised almost a year ago, had the valuer-general, and the previous minister of Rural Development and Land Reform, Maite Nkoana-Mashabane not intervened in the matter”, said Annelize Crosby, Agri SA Head: Land.
Just and equitable compensation
An agreement was reached in March 2018 between the valuers appointed by the state and the land owners respectively, that just and equitable compensation amounted to approximately R760 million.
The valuer-general, however determined the value of the land at about R420 million. This was of course not acceptable to the landowners. The minister was not prepared to offer more than the value determined by the valuer-general.
“Following a legal battle of 13 years, during which time the landowners were forced to spend millions of Rands, there was still no resolution,” explained Crosby. “The landowners then took further legal action with the help of Agri SA.”
Landowners can approach the Land Claims Court
In a judgement which sets the tone on this issue, acting Judge Canca ruled in the Land Claims Court that landowners are not bound by the determination of value by the valuer-general, but that they can approach the Land Claims Court to determine just and equitable compensation. The dispute regarding compensation was then brought to a head and set down for hearing in the Land Claims Court for 16 to 18 September 2019.
The landowners obtained the services of further experts who lodged reports at court. These experts then met with the experts appointed by the state. At this meeting, the previous agreement between valuers, reached in March 2018, was confirmed. The valuers also agreed that an upward adjustment was merited to reflect the increase in value since March 2018, resulting in an increase in the compensation that landowners were entitled to.
The case took an unexpected turn when the current minister, Thoko Didiza lodged a notice at court a few days before the hearing to the effect that she would abide by the ruling of the court in the matter.
Offer made by the Restitution Commission
One day before the hearing, the minister and the Restitution Commission made an offer to the landowners to purchase the land for a total amount of R805 million. The landowners were prepared to accept this offer. In terms of the relevant rules of court, the dispute between the state and the landowners was then settled on the basis of the offer made by the state and agreed to by the landowners. It follows that the state is also liable for the legal costs of the landowners.
Ever since the dispute regarding compensation arose, Agri SA had wholeheartedly supported the lndowners and contributed a substantial sum to the legal costs, and specifically the cost required to acquire the services of highly qualified experts.
Shortly prior to the hearing, the state still maintained that the landowners were only entitled to the amount of compensation determined by the valuer-general (which was based on the controversial regulations promulgated under the Property Valuation Act.) The landowners were ready to lead expert witness testimony to challenge this approach of the state. The state however acknowledged defeat and made the offer to the landowners. The result is that the compensation that the landowners will receive, is about double the amount determined by the valuer-general.
A positive outcome
“The outcome of the case is positive for other landowners who find themselves in a similar position as the Melmoth landowners,” said Dan Kriek, Agri SA president. “The outcome also demonstrates that the state will likely not get away with making offers which are substantially below market value.”
Agri SA’s view has always been that just and equitable compensation, in most cases, should approximate market value. Agri SA is committed to being involved in test cases to ensure that the interests of landowners are protected when compensation is determined. Agri SA would like to thank and congratulate the very able legal team of, Bertus van der Merwe from Cox and partners, Adv Gerhard Roberts(SC) and Adv Elana Roberts. – Press release, Agri SA