Expropriation without compensation (EWC) is something the IRR’s Head of Policy Research has been warning South Africans against for quite some time. South Africa desperately needs an economic kick start. Covid-19, the resultant lockdowns and other factors have banded together to give the already ailing economy a thrashing. Many businesses have had to close their doors – and many more people have lost their jobs. Expropriation without compensation would deter further investment and destroy investor confidence, as property rights essentially erode. Below, Anthea Jeffery remarks that many have tried to downplay the damage the EWC bulls would cause, “by stressing that state decisions on ‘nil’ compensation, if not agreed with the owner, will have to be ‘approved or decided’ by the courts.” But which courts, asks Jeffery? “Not the established high courts, nor the Supreme Court of Appeal. Rather, this task will fall to the new land courts to be established under the Land Court Bill (the Bill) of 2021. Yet there has been little media coverage of what the Bill says and how these new courts will differ from the ordinary courts of the land.” – Jarryd Neves
EWC and the tilting of the courts in favour of the state
By Anthea Jeffery*
In September 2021 a new opinion poll commissioned by the IRR showed that only 5% of South Africans think land reform should be one of the two top priorities for the government to address. It also showed that most people (79%) want policies that promote growth and jobs, rather than land expropriation without compensation (EWC).
Two EWC bills – the Constitution Eighteenth Amendment Bill of 2021 and the Expropriation Bill of 2020 – could nevertheless be pushed through Parliament before year end, once the legislature reconvenes on 2nd November 2021 after the local government election.
Many commentators have tried to downplay the enormous damage these EWC bills are sure to cause by stressing that state decisions on ‘nil’ compensation, if not agreed with the owner, will have to be ‘approved or decided’ by the courts.
But which courts will decide? Not the established high courts, nor the Supreme Court of Appeal. Rather, this task will fall to the new land courts to be established under the Land Court Bill (the Bill) of 2021. Yet there has been little media coverage of what the Bill says and how these new courts will differ from the ordinary courts of the land.
Judges and lay assessors
The judges of the Land Court will be appointed by the president on the advice of the Judicial Service Commission and the judge president of the new court. However, many of the judges appointed to the Land Court will have no judicial experience, as they need not be judges at the time of their selection. (The Bill says ‘at least half’ should already be judges, but only if this is ‘practicable’.)
The Bill adds that all the judges appointed must ‘have experience in the field of land rights matters’. This could encourage the appointment of land activists with a disdain for private property rights and an ideological preference for EWC. Many of the Land Court’s judges may thus be less independent in deciding on ‘nil’ compensation than ordinary high court judges would be.
The Bill also allows for the appointment of ‘not more than two assessors’ to adjudicate in any given dispute, together with the single judge who would otherwise preside. These assessors are to be appointed under procedures to be laid down by the justice minister by regulation. However, the Bill is silent as to what safeguards, if any, are to be applied to ensure that only ‘fit and proper’ people are brought in as assessors.
Where two assessors are appointed in this way, they will have the power to overrule the presiding judge on all questions of fact. (Questions of law will be decided by the judge, who will also rule on whether any given question is one of law or fact.) Yet in many instances the disputes before the Land Court will turn primarily on questions of fact – which poorly qualified and partisan assessors will then be empowered to decide.
Decisions on the amount of compensation to be paid will doubtless be tagged as questions of fact to be decided in this way. Whether the criteria for the payment of ‘nil’ compensation under the Expropriation Bill have been met – for example, whether owners have ‘abandoned’ their land and buildings by ‘failing to exercise control’ over them – will doubtless also be regarded as questions of fact to be decided in the same way.
Procedure and evidence
Though the usual high court rules of procedure will generally apply, the Land Court will also be empowered to ‘conduct any part of any proceedings on an informal or inquisitorial basis’. In addition, it will be expected to follow only those procedural rules that ‘facilitate the expeditious handling of disputes and the minimisation of costs’.
Unnecessary delays in litigation should of course be avoided, but complex issues often require detailed investigation and careful analysis before appropriate decisions can be taken. The established rules of procedure have been developed over centuries to help ensure that issues are properly aired and justice is done to both parties. These rules need to be upheld, rather than eroded or curtailed.
The Land Court will also be able to ‘admit [any] evidence, including oral evidence, which it considers relevant and cogent to the matter being heard, whether or not such evidence would be admissible in any other court of law’.
In addition, the Land Court will be able to take account of ‘hearsay evidence’ regarding ‘the circumstances surrounding the dispossession of a land right’. It must ‘give such weight’ to hearsay or otherwise inadmissible evidence as ‘it deems appropriate’.
However, the established rules of evidence have also been developed over centuries to ensure the reliability of the information used in adjudicating disputes. These rules are vital in winnowing out misleading and perhaps false allegations and hence in promoting fairness to all parties.
Under the Bill, complex issues relevant to compensation – including the ‘history of the acquisition’ of the land, as the Constitution puts it – could thus be decided on the basis of hearsay and other unreliable evidence that would normally be excluded from consideration.
Mediation and arbitration
When a dispute is lodged with the Land Court, any judge on the court may decide that the matter should instead ‘be referred to mediation or arbitration’. If no such referral is made, the court may also, at any time ‘prior to judgment’, order that the proceedings be stayed while the matter is referred to mediation or arbitration.
The Land Court will select the mediators or arbitrators to be used – and its choice will stand unless the parties can agree on alternatives. The state, which will have the right to intervene as a party in any proceedings, will thus be able to veto any change of mediator or arbitrator to a more independent or expert individual.
The justice minister’s regulatory powers will allow him to set ‘criteria’ for the appointment of mediators and arbitrators and determine their remuneration. He will also be empowered to ‘limit’ any person’s right to be represented by a lawyer in mediation or arbitration proceedings.
The parties to a dispute will be able to insist that any mediation or arbitration should be halted and the matter returned to the Land Court for adjudication. However, taking such a step could have adverse consequences in terms of costs.
In deciding on costs, the Land Court must expressly consider whether the matter ought instead to have been referred to mediation or arbitration. Litigants who resist flawed mediation or arbitration proceedings could thus be penalised via adverse costs orders for supposedly wasting the court’s time on unnecessary litigation.
The Bill further empowers the Land Court to ‘order costs [not only] against a party to the dispute [but also] against any person who represented that party’ in the proceedings before it. Costs orders could thus be made against legal representatives who advise their clients to reject a flawed mediation or arbitration process.
Lawyers could be ordered to pay costs in many other instances too. Though this would be merited for egregious ‘Stalingrad’ strategies, it could also be used to punish lawyers who supposedly prolong hearings by raising merited challenges to hearsay and other unreliable evidence.
That legal representatives will be vulnerable to costs orders in vague and wide-ranging circumstances may make it more difficult for people to find lawyers willing to act for them before the Land Court. Yet if lawyers are often absent from such litigation, this could encourage a shift towards truncated, informal, and inquisitorial proceedings, unhampered by the normal rules of evidence and procedural fairness.
In general, the only court with jurisdiction to hear appeals will be the Land Court of Appeal to be established under the Bill. The Supreme Court of Appeal will be barred from hearing appeals on ‘nil’ compensation and other land disputes, notwithstanding the broad experience and notable expertise of its judges.
Further appeals to the Constitutional Court will still be possible, but only ‘if such an appeal is allowed by national legislation and the rules of the Constitutional Court’. The Expropriation Bill, for one, could thus in time be amended to exclude any further appeal from the Land Court of Appeal to the Constitutional Court – though the apex court would have to agree to this as well.
Tilting the scales of justice
Already the Expropriation Bill is worded in a way that will make it difficult and risky for expropriated owners to contest the amount of compensation, if any, to be paid to them by expropriating authorities. In addition to other obstacles, expropriated owners will probably bear the onus of proof in any such litigation – and will therefore have to pay many of the state’s legal costs, in addition to their own, if they fail to convince the courts of the validity of their compensation claims.
The prospects of incurring such a costs order will be a major deterrent to most people, who will find themselves with little choice but to accept whatever compensation the state has offered. Some owners, however, will nevertheless have the means and the will to resort to litigation – which helps explain why the Land Court Bill is currently being ushered through Parliament.
On its current wording, the Expropriation Bill makes no reference to the Land Court Bill and there is no obvious connection between the two. However, the Expropriation Bill could in time be changed to provide that the only courts with jurisdiction to decide on the compensation, if any, to be paid on expropriation are the Land Court and the Land Court of Appeal.
Once this restriction is in place, the Land Court Bill will so tilt the scales of justice in favour of the state and against expropriated owners that very few will see any point in trying to contest the compensation payable – even where this has unfairly been set at nil for assets acquired at significant cost and often further built up over lifetimes of endeavour.
- Dr Anthea Jeffery holds law degrees from Wits, Cambridge and London universities, and is the Head of Policy Research at the IRR. She has authored 11 books, including People’s War: New Light on the Struggle for South Africa and BEE: Helping or Hurting? She has also written extensively on property rights, land reform, the mining sector, the proposed National Health Insurance (NHI) system, and a growth-focused alternative to BEE.
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