Sher NO and Others v Administrator of the Transvaal (606/88) [1990] ZASCA 77; 1990 (4) SA 545 (AD); (23 August 1990)

Sher NO and Others v Administrator of the Transvaal (606/88) [1990] ZASCA 77; 1990 (4) SA 545 (AD); (23 August 1990)

The Supreme Court of Appeal held that the trial court was correct to reject the static residual valuation method advanced by the appellants' expert, Dr Gerke, as it was unscientific, failed to account for developer's profit and interest, and was not supported by market realities. The court found that, although the comparable sales method used by the respondent's expert, Mr Griffiths, was open to criticism due to lack of truly comparable transactions and arbitrary adjustments, it nonetheless provided the best available evidence. The transaction between the company and the family trusts, while not a perfect arm's length sale, was accepted as cogent evidence of market value against the...

Citation
[1990] ZASCA 77
Parties
Appellant: Norman Nathan Sher N O; Appellant: Julius Feinstein N O; Appellant: Neville Sweidan N O; Appellant: Lawrence Alfred Meyerowitz N O; Appellant: Arthur Jacob Aaron N O; Appellant: Robert Lapedus N O; Appellant: Yudel Bacher N O; Appellant: Lawrence Trakman N O; Appellant: Bernard Herbert N O; Respondent: The Administrator of the Transvaal
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
23 August 1990
Case Number
606/88
Procedural Posture
Civil Appeal / Appeal From Trial Court Judgment on Compensation for Expropriation
Outcome
Appeal allowed in part; compensation increased to R513,500 plus R10,000 solatium, with interest and proportional costs awarded to appellants.
Judges
Corbett, Botha, Milne, Steyn, Nicholas
Legal Topics
Expropriation Act, Compensation for Expropriation, Market Value Assessment, Comparable Sales Method, Residual Land Value Method, Developer Profit
Land and Property Civil Procedure Expropriation Act Compensation for Expropriation Market Value Assessment Comparable Sales Method Residual Land Value Method Developer Profit

Case Brief

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Parties

Norman Nathan Sher N O

Appellant

Julius Feinstein N O

Appellant

Neville Sweidan N O

Appellant

Lawrence Alfred Meyerowitz N O

Appellant

Arthur Jacob Aaron N O

Appellant

Robert Lapedus N O

Appellant

Yudel Bacher N O

Appellant

Lawrence Trakman N O

Appellant

Bernard Herbert N O

Appellant

The Administrator of the Transvaal

Respondent

Procedural Posture

Civil Appeal / Appeal From Trial Court Judgment on Compensation for Expropriation

Legal Issues

  1. 1 What is the proper compensation payable for the expropriated land under section 12(1)(a)(i) of the Expropriation Act?
  2. 2 Is the comparable sales method or the residual land value method appropriate for determining market value in this case?
  3. 3 Should developer's profit be deducted in the valuation?

Ratio Decidendi

The Supreme Court of Appeal held that the trial court was correct to reject the static residual valuation method advanced by the appellants' expert, Dr Gerke, as it was unscientific, failed to account for developer's profit and interest, and was not supported by market realities. The court found that, although the comparable sales method used by the respondent's expert, Mr Griffiths, was open to criticism due to lack of truly comparable transactions and arbitrary adjustments, it nonetheless provided the best available evidence. The transaction between the company and the family trusts, while not a perfect arm's length sale, was accepted as cogent evidence of market value against the...

Court Disposition

Appeal allowed in part; compensation increased to R513,500 plus R10,000 solatium, with interest and proportional costs awarded to appellants.

Orders

  • The amount of compensation payable for Portion 3 of the Farm Harrowdene 4, Registration Division IR, Transvaal, is R513,500, allocated among the trusts as specified.
  • A solatium of R10,000 is added to the compensation in terms of section 12(2) of the Expropriation Act.