THE SUPREME COURT OF APPEAL OF SOUTH AFRICA

JUDGMENT

Not Reportable
Case No: 1284/16

In the matter between:

RALPH DANIEL JACOBS
(In re: the Farm Uap)
APPELLANT

and

DEPARTMENT OF LAND AFFAIRS
RESPONDENT

Case No: 982/2017

And in the matter between:

RALPH DANIEL JACOBS
(In re: Erf 38)
APPELLANT

and

DEPARTMENT OF LAND AFFAIRS
RESPONDENT

Neutral citation:
Jacobs (in re the farm Uap) v Department of Land Affairs and
Jacobs (in re Erf 38) v Department of Land Affairs (1284/16) and (982/2017) ZASCA
122 (26 September 2019)

Coram:
Ponnan, Swain, Mbha and Zondi JJA and Tsoka AJA

Heard:

19 August 2019

Delivered:

26 September 2019

Summary: Financial compensation as equitable redress under the Restitution of Land
Rights Act 22 of 1994 – dispossession of land rights as a result of racially discriminatory
laws and practices – amounts awarded as compensation in respect of two immovable

properties correctly computed in accordance with the principles laid down in Florence v
Government of the Republic of South Africa 2014 (6) SA 456 CC – both appeals
dismissed with no orders as to costs.

______________________________________________________________________

ORDER
______________________________________________________________________
On appeal from: Land Claims Court, Randburg (Ngcukaitobi and Mpshe AJJ sitting as
court of first instance):
and
On appeal from: Land Claims Court, Cape Town (Murphy J and assessor sitting as
court of first instance):
Both appeals under SCA case number 1284/16 and SCA case number 982/2017 are
dismissed.
_____________________________________________________________________

JUDGMENT
______________________________________________________________________

Mbha JA (Ponnan, Swain and Zondi JJA and Tsoka AJA concurring):

[1] These two appeals, emanating in each instance from the Land Claims Court
(LCC), were heard together as they both concern the same parties and issue, namely,
the determination of the quantum of compensation as equitable redress for a racially
discriminatory dispossession of land rights in terms of the Restitution of Land Rights Act
22 of 1994 (the Act). Although the subject land in both cases differ, the parties in both
are the same. The first appeal is against the judgment and order of the Land Claims
Court of South Africa, Randburg (per Ngcukaitobi and Mpshe AJJ) of 24 October 2016,
in terms of which the respondent, the Department of Land Affairs (the Department), was

ordered to inter alia pay the claimants an amount of R10 million as compensation for the
dispossession of rights in the Farm Uap, situated in Upington. This appeal is with the
leave of the LCC.

[2] The second appeal, which is with the leave of this court, is against the judgment
and order of the LCC, Cape Town (per Murphy J sitting with an assessor) of 6 January
2017, which after a trial on quantum, ordered the Department to pay the appellant
R780 000 as compensation for the dispossession of rights in Erf 38, also situated in
Upington. The argument in both appeals, is that the courts below erred in the
determination of the amounts of compensation payable by not taking into account the
current market value of the properties in question, together with the value of the past
loss of use of the properties. Thus, increased compensation was sought in both
appeals.

[3] I now proceed to consider the relevant factual matrix against which both matters
arose. I start with the first appeal in respect of the Farm Uap. The appellant, acting
personally and as well as in a representative capacity, claimed equitable redress as
provided for in s 25 of the Constitution of the Republic of South Africa, 1996 (the
Constitution) and the Act in the form of monetary compensation, rather than restoration
of the property itself. The claim arose out of the loss of the Farm Uap by Mrs Elizabeth
September and her sons, the predecessors in title to the present claimants.

[4] The appellant alleged that during 1907 the Septembers were dispossessed of the
Farm Uap through a racist fraudulent transfer of the land, the fraud having been
committed by Frederic Coller, an assistant magistrate in his capacity as a Justice of the
Peace, and two attorneys, Ernst Schroder and Jan Willem van Coppenhagen. Mrs
September and her late husband, Abraham September, had executed a joint will (the
joint will). The initial transfer of the farm to their three sons Gert, Niklaas and Abraham
junior on 15 July 1907, was contrary to the stipulation in the joint will that the farm would
only devolve upon their sons after the death of the survivor of them. Further, contrary to
the joint will, the farm was further transferred to one William Robert Brittanicus Thorne,
during October 1911, who in turn transferred the property to W J and M G Holmes for a
consideration of £5000. Thorne and Holmes were white persons. The appellant further
alleged that during 1921 and following the death of Elizabeth September in 1918, the
descendants of Abraham and Elizabeth September including Abraham junior, were
evicted by mounted police armed with sjamboks without any order of court, resulting in
the imprisonment of Abraham junior for a while.

[5] The LCC found that on the facts and evidence, the most probable inference to be
drawn was that in order to facilitate the transfer of the farm, the signatures of the
Septembers were obtained by forgery which had occurred in the presence of a Justice
of the Peace. Furthermore, the public officials had failed to enforce the terms of the joint
will. The fraudulent transaction was made possible or facilitated by systemic racism
prevalent at the time. Likewise, the exploitation of the illiteracy of the Septembers, aided
by Schroder, was only possible because of racially discriminatory practices at the time.

This dispossession accordingly fell within the ambit of section 2(1)(c) of the Act and the
Septembers were therefore entitled to equitable redress as provided for in the Act.

[6] The appellant claimed R36, 456 million being the alleged present day value of
the land and an additional R58, 330 million for the loss of the use of the land. He
averred that these amounts were reflective of the current market value of the property
and the patrimonial and financial losses suffered as a consequence of deprivation of
use of the land as a result of the dispossession.  It was common cause that the market
value of the Farm Uap at the time of the dispossession was £5000 and escalated by the
Consumer Price Index (CPI), was R2, 423 million at the time of the trial. The LCC made
an award of R10 million as equitable redress. The issue in this appeal is whether in
arriving at the amount awarded, the LCC erred and if so, whether the award of R10
million should be increased.

[7] I now turn to the facts in the second appeal in respect of Erf 38.  This was a
fairly small residential erf, 929 m² in size.  On 15 July 1893 Abraham September had
been given a quitrent title in respect of the property. In the joint will, Abraham and
Elizabeth September bequeathed the property to their daughter Catharina Beukes (born
September) upon the death of the survivor. Abraham and Elizabeth passed away on 5
July 1898 and 1 April 1918 respectively. In terms of the joint will Catharina Beukes
acquired ownership of Erf 38, where she lived. The annual quitrent in respect of Erf 38
was paid up to the end of 1919, which in all probability was the year in which Catharina
passed away.

[8] After the death of Catharina Beukes, the property was abandoned. Since no
quitrent was paid for almost 6 years, the Governor, pursuant to the provisions of the
Derelict Lands Act 3 of 1879 (the Derelict Lands Act), resumed possession of the
property by endorsement under that Act in September 1925.

[9] On 29 September 2009, the LCC (per Gildenhuys J sitting with an assessor)
found, in a trial on the merits, that the requirements of s 1 of the Derelict Lands Act had
not been properly complied with and that as a matter of law only the estate represented
by the executor, could have formed the intention to abandon, desert and leave derelict
the property. The court held that the prevailing colonial practices of racial discrimination
that existed at the time, justified the conclusion that the failure of the magistrate and the
Master to fulfil their duties to deal properly with the property in that after the death of
Elizabeth September, Erf 38 was not placed in her estate, gave rise to an inference that
the family had been dispossessed of Erf 38 by a racially discriminatory practice.
Accordingly, their descendants were entitled to seek equitable redress in the form of
monetary compensation.

[10] The amount that was claimed in the court below for the dispossession of Erf 38
was R4, 965 million made up of two amounts. The first amount was the present day
value of the property being R2, 45 million, and the second was R2, 515 million, being in
respect of the value of the loss of use of the land since dispossession. The market value
of the property at the time of the dispossession, escalated by the CPI to the time of trial,

was R52 817. The LCC awarded R780 000. Like the first, the issue in this appeal is
whether the award should be increased.

[11] The approach to an appeal in respect of the amount of compensation awarded
by the LCC is trite. This court has explained the approach to be adopted as follows:
‘. . . the Land Claims Court has a strict and true discretion and enjoys wide adjudicative
remedial powers conferred on it, inter alia, under ss 33 and 35 of the Restitution Act.
Consequently, the power of an appellate court to interfere with the exercise of discretion by a
Land Claims Court is not without restraint but is limited by whether the discretion invested in that
court had not been judicially exercised or had been influenced by wrong principles or a
misdirection of the facts or was one that could not reasonably have been made.’1

[12] The legal framework for determining compensation as equitable redress in the
form of just and equitable compensation has been set out by the Constitutional Court in
the case of Florence v Government of the Republic of South Africa.2 The court held that
the starting point in the consideration of adequate compensation is the financial loss at
the time of the dispossession, adjusted for changes in the value of money over time.
This is determined by taking the market value of the property at the time of
dispossession, and applying the CPI to convert that loss to the present value.

[13] The majority judgment (per Moseneke ACJ) explained the approach in the
following terms:

1 Minister of Rural Development and Land Reform & another v Phillips [2017] ZASCA 1; [2017] 2 All SA
33 (SCA) para 33, referring to Mphela & others v Haakdoornbult Boerdery CC & others [2008] ZACC 5;
2008 (4) SA 488 (CC).
2 Florence v Government of the Republic of South Africa [2014] ZACC 22; 2014 (6) SA 456 (CC).

‘[131] In my view the Land Claims Court was correct in calculating the financial loss at the time
of the dispossession and for the purpose of placing the Florence family in the same position
they would have been in immediately after the dispossession.  The starting point and main plank
of the Restitution Act is an acknowledgment of widespread dispossession that occurred since
19 June 1913 and the need for equitable redress in the form of restoration of land or financial
compensation.  The legislation does not warrant an approach that fixes compensation as if the
loss never occurred.  Nor does it warrant awarding a full replacement value of the taken subject
property.

[132] Section 2(2) of the Restitution Act . . . expressly prohibits relief to any person who
received just and equitable compensation or a similar consideration at the time of
dispossession. This means that the scheme of the Restitution Act makes the time of
dispossession the critical starting point of an assessment of financial compensation.  The
Government is right that the purpose of the financial compensation is to provide relief to
claimants in order to restore them to a position as if they had been adequately compensated
immediately after the dispossession.  It must be correct that just and equitable financial
compensation does not aim to restore claimants in current monetary terms to the position they
would have been in had they not been dispossessed, but rather the financial loss they incurred
at the time of dispossession. The Land Claims Court was correct to set the loss at the time of
the dispossession as the market value of the property less the amount of compensation the
applicants had received at the time of dispossession. . . .
. . .
[148] Ms Florence’s claim in this case was not for the restoration of a right to land but was for
equitable redress in the form of compensation.  We have already held that the purpose of
financial compensation is to compensate the claimant in order to restore them to the position
they would have been in immediately after the dispossession.  Nothing in the scheme of the

Restitution Act provides that financial compensation shall be an equivalent of restoration in kind.
. . .’

[14] The following principles emerge from the judgment: The purpose of financial
compensation is to compensate the claimants by placing them in the position they
would have been in immediately after the dispossession, if they had not been properly
compensated then. The first task is to determine the extent of undercompensation at the
time of dispossession, by comparing the compensation that was paid at the time of
dispossession, if any, with the value of the property at that time. If there was under
compensation at the time of dispossession, the amount of undercompensation is
adjusted to its present-day value by the use of the CPI. Just and equitable
compensation does not aim to restore the claimants in current monetary terms to the
position they would have been in had they not been dispossessed, but rather to address
the financial loss they incurred at the time of dispossession. Neither the current market
value nor the value of loss of use of the land is the appropriate measure.

[15] The Court explained that this past-loss conversion consideration does not stand
alone and that it was located within the evaluative considerations listed in s 33 of the
Act. In other words, it is but one of the several factors to which the court must have
regard in any particular matter.3 The court then stated that the amount of compensation
has to be just and equitable, reflecting a fair balance between the public interest and the

3 Section 33 of the Restitution Act lists several factors that must be taken into account in the process of
computation of compensation, for example, the history of the dispossession, the hardship caused, the
current use of the land and history of the acquisition, and use of the land. In the case of an order for
equitable redress in the form of financial compensation, changes over time in the value of money.

interests of those affected, after considering the relevant circumstances listed in s 33 of
the Act. For example, a history of hardship caused by the dispossession may entitle a
claimant to a higher compensation award in order to assuage past disrespect and
dignity.4

[16] Importantly, the court made it clear that in determining what was just and
equitable, the computation of compensation was fundamentally different and was not to
be likened to a delictual claim aimed at awarding damages that were capable of precise
computation of loss on a ‘but for’ basis. It also differed from compensation paid for
expropriation, where the person whose property is expropriated would be entitled to
compensation for the current market value of property, for any actual financial loss
caused by the expropriation, and where the possibility of future loss must be taken into
account in determining compensation. 5

[17] The appellant claimed compensation in respect of the Farm Uap, in the total
amount of R75, 345 million as follows: R17, 015 million as half of the difference
between the current market value of R36, 450 million, and the updated historical market
value of R2, 423 million; and R58, 330 million for the loss of the use of the land. In the
alternative, he claimed R46, 180 million as half of the combined sum of the current
market value of R36, 454 million and the claimed value of past loss of use of R58, 330
million, totalling R93, 780 million. The motivation was that the current market value
stood as a measure to determine higher compensation to assuage past disrespect and

4 Florence fn 2 para 125.
5 Section 12(1)(a)(ii) of the Expropriation Act 63 of 1975.

indignity, including hardship and a gross injustice and violation of the September
family’s human rights.  The suggested apportionment was intended to reflect an
equitable balance between the public interest and the interests of the September family.

[18] Clearly, the appellant’s attempt to justify an increased award is flawed.  The
Constitutional Court has held that using the current value of the property and the value
of past loss of use of land are not the measure of what is just and equitable. If the LCC
had used these measures, this Court would unhesitatingly have held that the discretion
vested in that court had not been judicially exercised or had been influenced by wrong
principles.6

[19] In deciding what would be just and equitable compensation for the dispossession
of the Farm Uap, the LCC had due regard to the factors listed in s 33 of the Act and
accepted, in particular, that the September family had suffered hardship as a result of
being dispossessed and subsequently evicted from their land. This factor justified an
upward movement in the award, ultimately arriving at the figure of R10 million as just
and equitable compensation.

[20] In rejecting the appellant’s claim, the LCC correctly found that the appellant’s
approach seemed to be at odds with the views of the Constitutional Court in Florence,
and that such an approach was based on the ‘fiction’ of undisturbed perpetual
ownership and commercial exploitation of the land. Importantly, the LCC held that if that
approach were to be adopted, the court would open a vortex of speculative claims

6 Phillips fn 1 para 31.

premised on unknown variables of the trajectory of the land and its use, absent the
dispossession. I am unable to fault the reasoning of the LCC. I find, accordingly, that the
appeal in respect of the Farm Uap must fail.

[21] With regard to the claim in respect of Erf 38, the appellant persisted with his
claim in this Court for R2, 45 million in respect of the current value of the land and R2,
515 million in respect of past loss of use of the land. The appellant’s case for increased
compensation rested on two bases: the hardship and suffering caused by the
dispossession,
and
the
large
discrepancy
between
the
adjusted
historical
undercompensation and the present day value of the property.

[22] As I have pointed earlier, the Constitutional Court has affirmed that the Act does
not warrant an approach that fixes compensation as if the loss never occurred.7 Nor
does it warrant, awarding the full replacement value of the subject property. Ineluctably,
this is what awarding the current value would do. The Constitutional Court has also
made clear that it was not the intention of the Act to provide compensation for the loss
of use of the property.

[23] While it can be accepted that there was a sharp increase between the updated
historic value and the current market value of Erf 38, it was common cause that this was
as a result of three related factors: the lengthy period that had passed since the
dispossession; the change in the nature of the property; and the sharp increase in
property values in recent years.

7 Florence fn 2 para 131.

[24] The property has changed fundamentally since the Crown resumed possession
in 1925. A residential property on the outskirts of a rural dorp has become a commercial
property in the central business district of a rapidly developing town. It is so that the
value of the commercial property has grown exponentially in Upington.

[25] But the Constitutional Court has made clear that such a post-dispossession
windfall is not to be attributed to a claimant and be borne by the public purse. If it were,
then similarly any post-dispossession loss of value through, for example, market
collapse or natural disaster, would also have to be borne by a claimant.8

[26] With regard to the appellant’s allegation that the dispossession of Erf 38 caused
the September family hardship through deprivation of a homestead, deprivation of
shelter and being denied access to a home, and that the family had to wander around
the country seeking a livelihood and a place to stay, the LCC found, correctly, that this
was not borne out by the evidence. The undisputed facts are that Catharina Beukes and
her family had a right to Erf 38. The family’s occupation ceased in 1919. There was no
physical dispossession. None of the appellant’s predecessors attempted to occupy the
property until the Crown resumed ownership thereof in 1925. The appellant’s
predecessors abandoned the property and never showed any interest in it. The LCC
correctly found that the hardship caused to the September family, was directly attributed
to the specific dispossession of their Farm Uap, and not Erf 38.

8 Ibid para 80. Per Van der Westhuizen J on behalf of the minority, in a passage with which the majority
did not express disagreement.

[27] In arriving at the compensatory figure of R780 000, the LCC found the historical
market value of R52 817 to be a paltry figure at today’s value and that this was hardly
just and equitable compensation. The LCC took into consideration the present day
value of the land, as one of the factors listed in s 33 of the Act, in arriving at what it
considered to be just and equitable redress. I am unable to fault the LCC in its
reasoning. For all these reasons, I come to the conclusion that the appeal in respect of
Erf 38, must also fail.

[28] It was agreed that in both matters there shall be no order as to costs. In the
result, both appeals under SCA case number 1284/16 and SCA case number 982/2017,
are dismissed.

_______________
B H Mbha
Judge of Appeal

APPEARANCES:

For Appellant:

J Krige
Instructed by:

Chennells Albertyn, Stellenbosch

Honey Attorneys, Bloemfontein

For Respondent:

G M Budlender SC
Instructed by:

State Attorney, Kimberly
State Attorney, Bloemfontein