Business Venture Investments 900 (Pty) Ltd v City of Ekurhuleni Metropolitan Municipality (20/28475) [2021] ZAGPJHC 544 (13 October 2021)

REPUBLIC OF SOUTH AFRICA

IN THE HIGH COURT OF SOUTH AFRICA

(GAUTENG LOCAL DIVISION, JOHANNESBURG)

Case number: 20/28475

REPORTABLE: NO

OF INTEREST TO OTHER JUDGES: NO

REVISED

In the matter between:

BUSINESS VENTURE INVESTMENTS 900 (PTY) LTD

Applicant

And

CITY OF EKURHULENI METROPOLITAN MUNICIPALITY

Respondent

Delivery: This judgment is handed down electronically by circulation to the parties' legal representatives through email and released to the court's library. The date for hand-down is deemed to be 13 October 2021.

Summary: Application to compel reasonable particulars in terms of section 10(7) read with section 10 (8) of the Expropriation Act. The Municipality

expropriating a farm and offering Nil compensation to the owner. Owner of the farm requesting reasonable particulars in terms of the Act after its offer was rejected by the Municipality. The request for reasonable particulars intended to assist the owner to assess whether to accept the offer made by the Municipality. Provisions of section 10 not applicable once action proceedings instituted in terms of section 14 of the Act.

JUDGMENT

MOLAHLEHI J

[1] The issue in this application is whether the respondent, the City of Ekurhuleni Metropolitan Municipality (the Municipality) should in terms of section 10(8) of the Expropriation Act (the Act),[1] be compelled to deliver its reply to the applicant's request, for reasonable particulars in terms of section 10(7) of the Act.

[2] The relief sought by the applicant arose from the expropriation of the farm previously owned by the applicant, Business Venture Investment 900 (Pty) Ltd, a company registered in terms of the company laws of the Republic of South Africa. property. The farm was expropriated by the City of Ekurhuleni Metropolitan Municipality (the Municipality).

[3] On 6 February 2019, the Municipality issued a Notice of Expropriation, of portion 406 of the Farm Driefontein 85 IR (the property),

measuring 33 6847 hectares. The expropriation, which was done in terms of section 9(3) of the Housing Act (the Housing Act),[2] took effect by operation of the law on 30 April 2019.

[4] It is common cause that the Municipality did not offer compensation in its Notice of Expropriation but did advise the applicant of its right under section 9 of the Act, which provides the right to an owner whose property has been expropriated to deliver within sixty days of the date of Notice a statement indicating the amount claimed as compensation.

[5] It would appear that the applicant did not object to the expropriation of the property. It delivered its written statement in terms of section 9 of the Act on 8 April 2019 and offered accept to compensation in the sum of R30 050 000.00.

[6] On 1 April 2020, the parties reached an agreement as to the time frame within which the Municipality was to make its offer of compensation. In compliance with this agreement, the Municipality addressed a letter dated 17 April 2020 to the applicant in which it, amongst others, stated the following:

"4.1. In response to the owner's offer, the CEMM (the Municipality) records herein that it rejects the owner’s claim and is not prepared to pay the claimed amount as compensation, as it is of the view that the said amount does not constitute a just and equitable compensation envisaged in Section 25 of the Constitution, 1996."

[7] The Municipality further stated in the same letter that:

"4.4. For reasons fully stated hereunder, the CEMM (the Municipality) offers Nil compensation being the sum in the amount of R0.00 (Zero Rand). Consequently, the CEMM shall provide hereunder substantive yet non-exhaustive grounds for making an offer of Nil compensation as just and equitable compensation."

[8] Following the above offer, the applicant addressed a letter to the Municipality on 24 August 2020 requesting reasonable particulars in terms of section 10(7) of the Act. According to the applicant, the Municipality failed to respond to this letter and accordingly, it instituted these proceedings.

[9] Section 10(7) of the Act provides as follows:

"...the owner may from time to time ask for reasonable particulars regarding the Minister's offer of compensation, and particulars so asked for shall be furnished within a reasonable time."

[10] In terms of Section 5 of the Act, reference to "the Minister" is construed as referring to also the local authority.

[11] Section 8 of the Act provides:

"If the Minister or the owner fails to comply with a request in terms of subsection (7), the court may, on application, issue an order directing him to comply therewith."

[12] The applicant contends that the respondent refused to respond to the request for reasonable particulars despite the demand.

[13] The applicant's Counsel argued that he applicant is entitled to particulars requested because the respondent has offered Nil compensation for the expropriation where the farm on its valuation roll is R26 million. According to him, the applicant requires the particulars to assess whether the offer is reasonable or not. In reply, he contended that the institution of litigation concerning the request for reasonable particulars does not exclude the provisions of section 10 of the Act.

[14] The respondent's Counsel contended that the purpose of section 10 is to facilitate the negotiations process to assist the applicant in assessing whether to accept the offer made by the respondent. This process does not apply once litigation has commenced as envisaged in section 14 of the Act.

[15] In the present matter, the applicant notified the respondent of its intention to institute action proceedings to determine compensation

in the letter dated 1 September 2021. At the hearing of this matter, the applicant had commenced with action proceedings seeking

compensation for the expropriated farm.

[16] The applicant is entitled to reject the offer of the Municipality and institute action proceedings to determine compensation in terms of section 14 of the Act. The right to claim compensation is also provided for in section 25(2) of the Constitution, where there is a disagreement between the parties about the compensation offered by the State.

[17] In my view, section 10 is intended to assist the owner whose property has been expropriated with information to assess his or her position concerning the price that the Municipality may have offered as compensation. This is to facilitate the negotiations on the price, and that objective cannot sustain once the owner of the property has instituted action proceedings as envisaged in section 14 of the Act.

[18] In any case, the response to the request for reasonable particulars appears in the letter dated 31 August 2020 from the respondent wherein the following is stated:

"1. We refer to the above matter and acknowledge receipt of your letter dated 24 August 2020. Therefore, we record that our client's offer dated 17 April 2020 in response to your client's offer dated 8 April 2019, is comprehensive and contains all relevant particulars in respect of our client's offer for Nil Compensation as a Just and equitable Compensation contemplated in Section 25 of the Constitution 1996. And thus our client has nothing more to add or subtract insofar as its offer is concerned." (my underlying)

[19] Prayer 1 in the Notice of Motion is for an order directing the respondent in terms of section 10 (8) of the Act to deliver its reply to the applicant's request for reasonable particulars.

[20] In my view, the above response from the respondent may well be an answer which the applicant was not looking for, but it is a reply. The information as to why the Nil compensation was offered by the Municipality is set out in the 48 pages letter by the Municipality dated 17 April 2020. Some of the factors which influenced the approach adopted by the respondent are:

(a) the debt owed by the applicant, which is in the sum of R3 358 101.71.

(b) the potential cost to be incurred in rehabilitating the land for constructing social housing development.

(c) The respondent used the land which was zoned for agricultural purposes as a Mining dump.

(d) Costs to be incurred in determining the toxicity of the chemical contained in the slime dams,

[21] In other words, the respondent is saying in the above letter that there is no further information beyond that which has already been stated in the letter. It is then for the applicant to assess whether it accepts the offer or not. If it rejects the offer, as it would appear to be the case, then the available avenue to address its dissatisfaction is to invoke the provisions of section 14 of the Act as stated above.

[22] For the above reason, I find that the applicant's application stands to fail.

Order

[23] The application is dismissed with costs.

JUDGE OF THE HIGH COURT,

GAUTENG DIVISION, JOHANNESBURG

Representatives:

For the applicant: Adv. I HLALETHOA

Instructed by: MACROBERTS INCOPORATED

For the respondent: Adv WR MOKHARI SC and : Adv AM MTEMBU

Instructed by; MASHIANE MOODLEY & MONAMA INC

Date of the hearing: 30 JULY 2021

Delivered: 13 OCTOBER 2021

[1] Act number 63 of 1975.

[2] Act number 107 of 1997.