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THE CONTEXT SURROUNDING THE EVENTS

"I will get the money, even if I have to borrow or steal it," were the words used by the current owner of the farm Boomplaats, Willem Pretorius, after being served with the notice of expropriation.

The events surrounding the Lydenburg restitution claim, involving the farm Boomplaats, has attracted huge media and public interest. When reflecting on this restitution claim and the expropriation notice that had been served on the owner, it is important to take the context into account. Below follows an outline of the facts pertaining to the case.

DINKWANYANE COMMUNITY

The Dinkwanyane community bought the farm Boomplaats 29 JT, Lydenburg District, Mpumalanga for the amount of 50 000 Pounds Sterling from white people in 1906 and held the land in terms of registered title as per Deed of Transfer No. T9826/1911. The community also had interests on the land in terms of customary law.

The very same land was later classified as a so-called "Black-spot" from which the Black owners were to be moved, since the land did not fall under the so-called Scheduled Areas in terms of the then Native Land Act (Act 27 of 1913) and the so-called Released Areas in terms of the Development Trust and Land Act (Act 18 of 1936). After prolonged negotiations involving the now defunct Department of Native Affairs (later known as the Department of Bantu Affairs and Development), the members of the community were therefore forcibly removed. The removals took place between 1957 and 1961.

The dispossession was effected under or for the purpose of furthering the objects of a law which would have been inconsistent with the prohibition of racial discrimination contained in section 9(2) of the Constitution of the Republic of South Africa, 1996 (Act 108 of 1996). The dispossession was effected in terms of section 13(2) of the Development Trust and Land Act, 1963 (Act 18 of 1936).

The property was expropriated in terms of Section 13(3)(a) of the said Development and Trust Land Act, 1936 (Act 18 of 1936) on 16 November 1960 by the now defunct Department of Native Affairs. It was transferred to the State after expropriation.

WILLEM PRETORIUS

Mr Willem Pretorius bought 1270,9042 hectares of the land (part of the farm) from the State in 1982 for the amount of R119 000,00. Karel Joubert owns the other part of the farm. It is important to note that Pretorius paid R93,60 per hectare, despite the fact that two other landowners adjacent to his farm bought their farms also in 1982 for R266,00 and R338,00 per hectare respectively.

The second important factor is that Pretorius acquired two loans with low interest for a period of 25 years from the State. His interest rates were respectively 5% and 8% p/a.

MARKET VALUE AND STATE ASSISTANCE

The policy of the State with regard to compensation to the current landowners is to use the market value of their farms. To arrive at the market value an independent and professional valuer is always appointed, with the case of Pretorius as no exception. The valuer determined the market value of the farm as R2,1 million. However, the valuer unfortunately did not take into account either the purchase price or the value of the "soft loans" Mr Pretorius got when acquiring the property, due to the fact there was at that stage no documentary evidence that Mr Pretorius did receive any State assistance in the acquisition of the property. Mr Pretorius was aware of this fact and therefore continuously denied that he ever received State assistance in acquiring his property.

The second independent valuer had to be appointed after evidence was uncovered that Mr Pretorius did indeed receive two loans to the value of R119 000.00 and R35 000.00 respectively in 1984 for a period of 25 years from the now defunct Agricultural Credit Board. The repayment terms of the loans stipulated that the first loan would be paid with an interest of 5% per annum, and the second one at 8% per annum. In real terms, Mr Pretorius is servicing his loans with annual payments of approximately R8 443 p.a. and R3 278 p.a. respectively.

As indicated the first valuer determined the market value of the farm at R2,1m, while the second value concluded that it is worth R1,5m. The difference of R600 000,00 emanates from different assumptions on a number of issues over the farm. The first valuer, for example, put down the amount of R1 700,00 per hectare for dry lands while the second valuer reached R1 400,00 per hectare for the same portions. While the second valuer estimated grazing land on the farm at R850,00 per hectare the first valuer reached the amount of R1 300,00 per hectare for the same grazing area.

The Commission on Restitution of Land Rights fortunately have access to statistics on comparable sales within the vicinity, which are all in line with conclusions by the second valuer. It was furthermore suggested by the Commission on Restitution of Land Rights that Mr Pretorius should consider appointing an independent and professional valuer at his expense to value the farm, after which it will be possible for him to make comparisons between the valuation reports. Unfortunately, Mr Pretorius refused to consider this option. The Land Claims Court will hopefully resolve the matter.

It is important to note that the second valuer reached two important conclusions. Firstly, Pretorius paid less than market value when purchasing the farm in 1982, i.e. Pretorius paid R93,60 per hectare while the market value at the time was between R185,00 - R200,00 per hectare. Secondly, market-related interest rates in South Africa never reached either 5% or 8% between 1984, when Pretorius purchased the farm, and 2000, when the valuation was conducted. Rather, interest rates in South Africa is much closer to the extent of at least 16%.

The second valuer used a formula developed by Judge Geldenhuys of the Land Claims Court in order to determine the value of the disputed farm. This formula emanates from section 25(3) of the Constitution of the Republic of South Africa, and is commonly known as the Geldenhuys formula. The formula is as follows:

A, B, C, D, E, where:

* A = The actual price which was paid by the present owners at the time of acquisition;

* B = The market value of the land including improvements at the time of acquisition;

* C = The present day (current) market value of the land, including improvements, but excluding improvements made by the owner;

* D = The contributory value of beneficial improvements made to the property by the owner since the time of acquisition (a "beneficial improvement" being an improvement which adds to the market value of the property); and

* E = The value of any special benefits which the owner received from the State, e.g. low interest rates, subsidies, etc.

In his report the valuer concluded that the market value of Mr Pretorius's farm is R1,5 million. He furthermore concluded that the interests saved over this 18-year period as a result of the two soft loans, i.e. 5% and 8% instead of the lowest estimated rate of 16%, came to R229 302,00 and R64 222,00 respectively (R293 557,00). After applying the formula, there remains the amount of R848 485,00 which is exactly the amount which the State has offered Mr Pretorius. Despite the accurate measures used to determine the amount of money involved, Mr Pretorius still insists on R2,1 million as arrived at by the first valuer. Any suggestion that the State should not take into consideration the issues of purchase price and soft loans would amount to a breach of the supreme law of this country.

FINAL PURCHASE OFFERS TO LANDOWNERS

After more than two years of negotiations, the State made final offers to the current landowners based on the valuation report by the second valuer. Mr Joubert accepted the offer and signed an agreement with the State. Transfer of his farm into the name of the community is currently being done.

Unfortunately and sadly, the same cannot be said about Mr Pretorius, who indicated that he would fight to the bitter end to achieve his objective. There are however no legal and moral bases whatsoever to make the landowners purchase offers based on the valuation as done by the first valuer, because of its significant errors and omissions.

NOTICE OF EXPROPRIATION

After long and hard deliberations, the State decided to expropriate the farm Boomplaats. This decision was not taken lightly and the State still does not feel satisfied that it eventually had to follow this route. However, the reality is that there was really no alternative.

Pretorius was served with notice of expropriation on Tuesday, 13 March 2001, with the date of expropriation as 20 March 2001. The Pretorius family has until at least 20 May 2001 to leave the farm. However, the notice provides that in case Pretorius has not been able to find alternative accommodation on the stated date he can still make a request for an extension of the period, which the State will in return consider with empathy.

The other important provision of the notice is the amount of compensation the State offers Pretorius (R848 485). Pretorius must within 60 days from the date of expropriation indicate if he accepts the offer or not. If not he should make a counter offer and motivate as to how he has arrived at the counter offer. The Minister of Agriculture and Land Affairs will then consider the counter offer and make a final decision.

Should the final decision by the Minister of Agriculture and Land Affairs not be acceptable to Pretorius he still has until 30 November 2001 to approach the Land Claims Court for adjudication with regard to the amount of compensation.

It should be known that the restitution process in general is subject to the rule of law. The Land Claims Court has been playing a central and pivotal role. The expropriation procedure gives the person expropriated the opportunity to approach the court for determination of the justness and equity of compensation.

To date a total of 12 120 claims have been settled virtually through negotiation. Of this, a total of 97 claims have been settled through the Land Claims Court. The Boomplaats claim is only the second expropriation case to date.

Contact: Kwape Mmela at 082 4861 950

Issued by: Commission on Restitution of Land Rights, 16 March 2001