Expropriation Bill [B4-2015]: consideration with Deputy Minister

Public Works and Infrastructure

13 October 2015
Chairperson: Mr B Martins (ANC)
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Meeting Summary

The Department produced a Working Draft of the Bill that incorporated all the proposed amendments previously made by the Committee. The Deputy Minister indicated that the Department had introduced the definition of “disputing party” in clause 1, which indicated that the “ disputing party includes an owner, holder of an unregistered right, expropriated owner or expropriated holder that does not accept the amount of compensation offered in terms of clause 14(1)”. The word “claimant” had now been replaced by “disputing party” although the word “claimant” is still retained in some of the clauses but it was felt that claimants are no longer claimants at certain points of the process.

The Deputy Minister highlighted that “property” was previously defined as “not limited to land and includes a right in such property”. However, the Department was strongly advised by senior counsel that the way the Constitutional Court defines property is a moving target, especially section 25 of the Bill of Rights on the property clause. The Department had decided to define property as “contemplated in section 25 of the Constitution” and this was about playing fair and remaining in the space of constitutionality at the same time.

Members raised concern that there was no definition of “property” in section 25 of the Constitution and suggested that the Department needed to contextualise “property” as the Minister had already indicated that the definitions of “property” are to be found in different judgements of various courts. It would be a challenge for the Department to pass a Bill without providing a definition of the key word as this would be left open for any judge to decide what it is and not property.

The Department had also added in clause 3(3) that “the Minister’s power to expropriate property in terms of subsections (1) and (2) applies to property which is connected to the provision and management of the accommodation, land and infrastructure needs of an organ of state, in terms of his or her mandate”. The Department had also improved clause 15(3) by adding that the provision of clause 21(2) which deals with mediation shall apply if (a) “an owner of an unregistered right does not deliver a statement in terms of clause 14(1). This was to prevent the situation where the expropriating authority will use the absence of the response to bypass the possibility of mediation, especially in cases of unregistered rights.

Members pointed out that there seemed to be a contradiction between clause 17(1) which indicates that “an expropriated owner or expropriated holder is entitled to compensation payable” and subsection (2) which indicates that “an expropriating authority must pay by no later than the date contemplated in subsection (1), not less than 80% of the amount or offer of compensation”. The contradiction here was that 17(1) did not mention any portion of compensation to be offered while 17(2) stipulated the 80% offer of compensation.

Meeting report

The Chairperson noted that the Deputy Minister would go through the working draft of the Bill with all the changes proposed by the Committee. Based on this, the State Law Advisers will produce the “B version” of the Bill which the Committee will vote on clause by clause in the next two weeks.

Working draft of the Expropriation Bill: deliberations with the Deputy Minister
Mr Jeremy Cronin, Deputy Minister of Public Works, indicated that the Department had produced a reworked version of the Bill.The latest amendments are shaded in yellow. The deletions are in red and struck through. Insertions are shaded in blue and underlined. The main focus would be on those amendments that are shaded in yellow so the Committee can approve the changes as drafted by the Department.

Preamble
Nothing has been changed.

Chapter 1: Definitions
Deputy Minister Cronin said that the Department had introduced the definition of “disputing party” on page 7, which indicates that the “disputing party includes an owner, holder of an unregistered right, expropriated owner or expropriated holder that does not accept the amount of compensation offered in terms of section 14(1)”. The word “claimant” has now been replaced by “disputing party” although the word “claimant” is still retained in some of the clauses but it was felt that claimants are no longer claimants, at certain points of the process. “Property” was previously defined as “not limited to land and includes a right in such property”. However, the Department was strongly advised by senior counsel that the way the Constitutional Court defines property is a moving target, especially section 25 of the Bill of Rights on the property clause. The Department decided to define property as “contemplated in section 25 of the Constitution” and this is about playing fair and remaining in the space of constitutionality at the same time.

Ms A Dreyer (DA) asked in what way the new definition of property changed from the previous definition, especially on the limit on the property that could be expropriated.

Deputy Minister Cronin responded that all the Department was trying to do was to define “property” in an open- ended way. It must be noted that the Department had been reluctant to provide a definition of “property” for the reason that the way in which courts, particularly the Constitutional Court interprets the meaning of “property” has shifted and this was a complex matter. There was a strong feeling within the Committee that the Department needed to provide the definition of “property” and what had been done was to define it an open-ended way. The definition of “property” does not limit what is to be expropriated and what limits what could be expropriated is what the Constitution says about expropriation. The Act also made it clear that the Minister of Public Works could not expropriate property that does not fall within his mandate, so the limitation to what could be expropriated is contained in a myriad ways and it is unhealthy to limit such to the definition of “property”.

Mr M Dlamini (EFF) complained that there was no consistency in the drafting of the Bill as there was an agreement that “subject to just and equitable compensation” in the Preamble and throughout the Bill should be deleted and replaced by “as contemplated in section 25 of the Constitution”. The Bill at the moment looked like it was an Expropriation and Compensation Bill, while it only needed to focus on the expropriation.

Deputy Minister Cronin responded that it was difficult to follow the suggestion that had been made by Mr Dlamini as the Preamble clearly states that the Department is trying to align the Expropriation Bill to section 25 of the Constitution. All the Department was trying to do at this stage was to try and find a working definition of “property” that will not fall foul of a constitutional challenge.

Mr M Filtane (UDM) accepted the advice that had been provided by senior counsel to provide an open-ended definition of “property” but he pointed out that there was no definition of “property” in section 25 of the Constitution. It was unclear what exactly was causing the Department to avoid providing a definition of “property”.

Deputy Minister Cronin responded that it is indeed true that there is no definition of “property” in the Constitution and the definitions of property are to be found, amongst other things, in court judgements and they are often quite complicated. The Committee had been provided with references and quotations from a number of constitutional challenges related to expropriation, and the vexing issue was mainly on the definition of “property”. The Department deliberately defined property “as contemplated in the Constitution” so as to locate the definition within the Constitution. He urged the Committee not to try and find a perfect and elaborate definition of “property” as that would open us all to constitutional challenges.

Mr Filtane advised that the Department needed to contextualise “property” as the Minister had already indicated that the definitions of “property” are to be found in different judgements of various courts. The Constitution lays the definition of property open to interpretation based on the particular decision that you seek to achieve in a court of law or a particular piece of legislation. The Committee had a similar problem in defining “expropriation” but managed to find each other and it would be good to go that route again in finding the definition of “property”. It would be a challenge for the Department to pass a Bill without providing a definition of the key word as this would be left open for any judge to decide what is and is not property.

The Chairperson said that the Committee had heard the views of Members and these would certainly be taken on board. The purpose of the meeting today was to empower the State Law Advisers so as to be able to provide the Committee with the “B version” of the Bill.

Deputy Minister Cronin mentioned that page 10 of the briefing document, clearly states that “despite the provisions of any law to the country, the expropriating authority may not expropriate property arbitrarily, other than for a public purpose”. The suggestion made by Mr T Walters (DA) was that there is a need to expand “arbitrarily” with the inclusion of a phrase like “or without sufficient evidence”. The Department had taken this suggestion very seriously and this is one of the areas that had been taken to senior counsel. In short, the Department had sought the advice from the senior counsel on the suggestion that had been made and the proposal was that “arbitrarily” should be retained as an umbrella word.

Chapter 2: Powers of Minister to expropriate
Mr Filtane suggested that there was a need to insert an article between the words “requires” and “particular” in chapter 2 on page 10 and this could be an insertion of “a” or “that”.

Deputy Minister Cronin responded that chapter 2 deals with the powers of the Minister to expropriate and the Department had inserted “other than an expropriating property” clause 3(2) on page 10 and this is to avoid another expropriating authority using the backdoor of the Minister of Public Works to expropriate.The Department had also added in clause 3 (3) on page 11 that “the Minister’s power to expropriate property in terms of subsections (1) and (2) applies to property which is connected to the provision and management of the accommodation, land and infrastructure needs of an organ of state, in terms of his or her mandate”. The point made here is that it will be problematic if the organ of state wanted to expropriate for the purposes of, for example, building a dam, as this would not be within the mandate of the Minister of Public Works. It is better for clause 2 to be left without an indefinite article as it may be more than one property that is required to be expropriated.

Mr K Sithole (IFP) suggested that the word “shall” in clause 3(2) on page 11 should be replaced by “must”.

Deputy Minister Cronin responded that the Department wanted to keep the “shall” so as not to give the Minister of Public Works discretion as to expropriate or not.

Mr Filtane indicated that the authority to expropriate was with the Minister, and as it stands, the use of “shall” suggested that the Minister did not have discretional powers to decide whether or not to expropriate. The Minister must be given the scope to apply his mind on whether or not to do the expropriation and not the organ of state.

Ms Dreyer also agreed that indeed the Minister is the ultimate authority and he/she was the one to ultimately decide whether or not to do the expropriation.

Ms Vuyokazi Ngcoboza, Parliamentary Legal Adviser, suggested that for the sake of consistency, the Department should rather use “must” instead of “shall”, as this had been used throughout the Bill. She also pointed out that it had been highlighted already that in clause 3(2) on page 10 that “if an organ state, other than the expropriating authority, satisfies the Minister that it requires a particular property for a particular purpose or in the public interest, then the Minister shall expropriate that property on behalf of the organ of state”, meaning the discretion to expropriate will be in the satisfaction of the Minister.

Deputy Minister Cronin said that he had been covered nicely by what had just been said by the Parliamentary Legal Adviser, as it correctly pointed out that discretion to expropriate will be in the satisfaction of the Minister. However, it must be remembered that the Minister will not be responsible for the location of the proposed project for the expropriation. The Department agrees that “shall” and “must” means one thing and the Department was happy if there is consensus on the use of “must” for the sake of consistency.

Chapter 3: Investigation and valuation of property
Deputy Minister Cronin mentioned that the Department had deleted “property is required for a public purpose or in the public interest” in clause 5(1) on page 12 and replaced it with “considering the expropriation of property, he or she must, amongst other things, ascertain -” as this was still at the stage of investigation of the possible expropriation.

Members agreed with the suggestion.

Mr Filtane wanted to know if the Department was proposing to deliberately exclude unregistered rights, especially in cases where an organ of state will seek the assistance of the Minister for expropriation purposes in sub-clause 3 on page 11.

Deputy Minister Cronin responded that the Department was trying to give a broad indication of the Minister’s mandate, and this would apply to sub-clause 1 and 2 on page 11. This highlights that the Minister has power to expropriate within his mandate or Public Work’s mandate, which is essentially about managing property and infrastructure needs of an organ of state.

Members agreed with the clarification.

Deputy Minister Cronin indicated that the Department had made an addition in clause 5(5)(b)(i) that if property to be expropriated is land, then “any other organ of state whose functions and responsibilities will be materially affected by the intended expropriation”. This was to ensure that the expropriation of land was not just limited to the Departments responsible for rural development and land reform, for mineral resources and for water and sanitation.

Mr Filtane appreciated that the Department was not trying to limit the expropriation of land to just three departments, but the word “rural” was doing exactly what the Department was trying to avoid as this meant that the expropriation of land would not be relevant when dealing with urban property.

Deputy Minister Cronin responded that the Department had previously made specific reference to three departments that play a substantial role in the space of property. In essence, the addition of “any other organ of state whose functions and responsibilities will be materially affected by the intended expropriation” was to be inclusive even of urban property.

The Chairperson suggested that perhaps the Department needed to write the names of the departments responsible for land expropriation in capital letters.

Mr Filtane wanted to know what would happen if the name of those departments were to be changed in the next few years and there was no sub-clause that accommodated such a case where the name of those departments were changed.

Deputy Minister Cronin responded that there was no need to change the name of those responsible departments in cases where their names had been changed. The name of the Department of Public Works could also be changed but it is already understood that the specific reference is made to the department that was once known as, for example, rural development and land reform.

Mr Gideon Hoon, Principal State Law Adviser, added that it is important to made specific reference to the departments responsible for land expropriation and it was irrelevant whether the name of those departments were changed in the foreseeable future.

Members agreed with the suggestion.

Consultation with municipality during investigation
Deputy Minister Cronin said that the Committee had already agreed that the Department perhaps needed to delete “existing and future engineering services, infrastructure, houses and town planning” in clause 6(1) and replace it with “municipal planning” as this was a neater and simpler way than trying to produce the list of the areas that may be impacted by expropriation.

Members agreed with the replacement.

Deputy Minister Cronin pointed out that the Department had added that “the municipal manager must deliver a written response to the request contemplated in subsection (1) to the expropriating authority within 20 days of receiving the request or within a reasonable timeframe to be agreed between the expropriating authority and municipal manager or determined in terms of section 25” in clause 6(3). This was done in order to reduce pressure or allow flexibility in the processing of the request contemplated in section (1).

Members agreed with the addition.

Deputy Minister Cronin indicated that the Department had introduced an indefinite article “the” before “municipal council” in clause 6(4).

Chapter 4: Intention to expropriate and expropriation of property
Deputy Minister Cronin stated that the Department had deleted “estimated” in clause 7(e), on page 17, and replaced it with “intended date of expropriation”. It must be noted that at this stage there is still an intention to expropriate and therefore it was appropriate to only refer to the intention to expropriate.

Members agreed with the replacement.

Deputy Cronin said that the Department had welcomed the suggestion that had been previously made by the Committee to delete ‘”publish such notification” in clause 7(b)(iii) and replaced by “in writing within a reasonable time and must publish a notice of his or her decision not to proceed in terms of section 24(2)”. This was to ensure that in cases where there is an intention not to proceed with an expropriation of property, then the owner or the holder of the property right must be informed of such in writing and this should be done within a reasonable time.

Chapter 5: Compensation for expropriation
Deputy Minister Cronin indicated that the Department had deleted “to the extent that it is” in clause 12(2) and replaced with “unless there are special circumstances in which it would be”.

Members agreed with the replacement.

Compensation claims
Deputy Minister Cronin corrected that the Department had deleted “form” in clause 14(1)(c) and replaced with “forms”.

Offers of compensation
Deputy Minister Cronin also pointed that there was a deletion of “to” in clause15 subsection (2) and replaced by “from”. The Department had also improved clause 15, subsection (3) by adding that the provision of section 21 (2) which deals mediation shall apply if (a) “an owner of an unregistered right does not deliver a statement in terms of section 14” (1). This was to prevent the situation where the expropriating authority will use the absence of the response to bypass the possibility of mediation, especially in cases of unregistered rights or (b) “the claimant does not accept the offer of compensation contemplated in subsection (1), by written reply within 20 days, or within such additional time as may be permitted in terms of section 25”. It must be highlighted that section 25 is the section that allows for the extension of time in the process of expropriation.

Members agreed with the improvement.

Mr Filtane said that there seemed to be a contradiction between clause 17(1) on page 31 which indicates that “an expropriated owner or expropriated holder is entitled to compensation payable” and then 17(2) indicates that “an expropriating authority must pay by no later than the date contemplated in subsection (1), not less than 80% of the amount or offer of compensation”. The contradiction is in the fact that 17(1) did not mention any portion of compensation to be offered while 17(2) stipulated the 80% offer of compensation.

Deputy Minister Cronin responded that the Department had already discussed with the Committee on the reasons not to allow compensation to be less than 80% and the 80% refers to the last offer to be made by the expropriating authority. Essentially, all 17(1) is saying is that compensation must be paid by no later than the date which possession is taken by the expropriating authority. In contrast, 17(2) says the amount paid must not be less than 80% and the reason for allowing slightly less than 100% of the final offer, was that there may be unpaid bills in the property to be expropriated. This was not in any way instructing that the Department must pay 80% of the compensation.

Mr Filtane made a follow up question that the most bothersome word in clause 17(1) was “payable” and this allowed the person to be given a full amount of compensation. He suggested that perhaps the Department needed to delete the word “payable” and replaced it “as contemplated in subsection (2)” so as to ensure that there is reconciliation between the two subsections.

Deputy Minister Cronin disagreed with the suggestion as all 17(1) was saying is that compensation was payable and did not say how much is payable.

Ms Dreyer indicated that there is an understanding that 80% was to be paid to the expropriated owner and then 20% was for the unpaid bills on the property. However, the expropriated owner should be given a guarantee that the money offered would be available and it would be put in a trust account and there should be a time period as to when the 20% payment would be made if there are no unpaid bills on the property.

Deputy Minister Cronin replied that interest becomes payable on the retained amount and therefore the final amount must be paid and the Department believed that the mechanism of interest will be a sufficient motivation to ensure that the rest of the amount was paid to the expropriated owner and not unduly delayed.

Chapter 6: Mediation and determination by court
Deputy Minister Cronin stated that the Department had decided to delete the entire clause 21(1) and replaced it with “if the expropriating authority and expropriated owner or expropriated holder do not agree on the amount of compensation, they may attempt to settle the dispute by mediation, which must be initiated and finalised without undue delay by either party”. There was also the replacement of “claimant” in clause 21(2) with “disputing party”. The Department had added that “if the disputing party did not agree to mediation, the expropriating authority must refer the matter a competent court to decide to approve just and equitable compensation provided nothing in this section shall change the ordinary civil onus”.

Ms Dreyer wanted to know the meaning of “civil onus”.

Ms Ngcoboza responded that “civil onus” basically refers to the burden of proof.

Ms Dreyer asked who would be the person responsible for the legal costs as this matter was still not clarified.

Mr Filtane said there was an agreement in the previous engagement that the Department would still need to apply its mind on who would be responsible for the legal costs to be incurred.

Deputy Minister Cronin reminded Members that there was an agreement in the last engagement that the expropriating authority needed to create space for court in the case of lack of agreement on the compensation payment. The issue of “civil onus” must be seen in the context that the state does not need to prove anything in court and therefore the burden of proof is on the claimant. The Constitutional Court has said if the case is successful then the state must bear the cost of litigation, if however, the case is unsuccessful, then the cost must be shared.

Mr Filtane stated that section 25 insofar as it referred to the citizens of the country, was basically unconstitutional as this had the effect of limiting the person from accessing the court.The distinction between “frivolous” and “genuine cases” opens an opportunity for a case within a case, as the judicial officer would be required to determine whether the case was frivolous or genuine.

Deputy Minister Cronin replied that citizens are not just those who get expropriated, as the overwhelming percentage of citizens are those for whom an Expropriation Act is being performed for a public purpose or in the public interest and their interest seems to be protected. There should be a balance between the expropriation of the property for broader public purpose and the expropriation of the property of bigger companies that are fairly rich, hence there is a need to distinguish between frivolous and genuine cases.

Members agreed with the clarification.

[After a 15 minute break, the Committee reconvened.]

Deputy Minister Cronin indicated that it was perhaps true that clause 17 needed to be reworked and the Department would still need to apply its mind on how that clause could be improved.

Members agreed with the suggestion.

Chapter 7: Urgent expropriation
Deputy Minister Cronin mentioned that the Department had decided to delete “in effecting the expropriation” in clause 22(3), on page 37. There was also a deletion of “should” in clause 22(7) and replaced by “if”.

Chapter 9: Related matters
Deputy Minister Cronin indicated that the Department had added clause 24(2), on page 39 which states that “whether publication of a notice in terms of section 7(1) or (7)(b)(iii), a notice of expropriation or other document is required by this Act, publication must take place-“. The Department had replaced “in” with “into in clause 24(7).

Offences
Deputy Minister mentioned that in clause 27(1) on page 42, the Department had deleted “is guilty of an offence and liable on conviction to a fine or to imprisonment for a period not exceeded six months, or to both a fine and such imprisonment, if he she, without a justifiable reason, refuses or” and replaced it with “commits a breach of this Act if that person”.

Amendment of Act
Deputy Minister Cronin said that “only” was introduced in clause 30 and deleted in clause 30(a) and (b).

Transitional arrangement and savings
Deputy Minister Cronin mentioned that there was an addition of “through delivery of a notice of expropriation” in clause 32(1)(a).

The Chairperson thanked the Minister and the Department for the inputs that had been made on working draft of the Expropriation Bill. He suggested that Members look at each and every clause and deliberate on matters that still needed to be included in order to empower the state law advisers.

Ms Dreyer said that the Committee was still waiting for the Deputy Minister to come back after lunch on a written proposal on some of the issues that had been raised and then the Committee would look at the original version of the Bill together with those parts that had been amended. The Committee could not deliberate on each and every clause as Members had made suggestions today which needed to be taken on board.

The Chairperson suggested that the Committee should adjourn the meeting right now and give the Department an opportunity to refine the issues that had been raised today and then commence after lunch.

Mr Filtane wanted to know if the lunch break would be sufficient time for the Department to refine all the outstanding issues that had been raised today.

Deputy Minister Cronin replied that the Department would be ready after lunch on clause 17.

The Chairperson wanted to make it clear that Members would not be allowed to vote today on the Bill, even if it could deliberate on a clause by clause basis.

Ms E Masehela (ANC) suggested that the Committee should rather continue with deliberation on the Bill this afternoon and note all the inputs made today, as some Members would not be available if the Committee were to meet tomorrow. The Department would still need to deliberate further on the use of “shall” and “must” as there were cases where “shall” and “must” had been used interchangeably.

Mr Sithole asked if the Department would have enough time to redraft the inputs that had been made today.

Deputy Minister Cronin assured the Committee that the Department would have enough time.

Members agreed that the Committee should adjourn and then meet after lunch.

Afternoon session

Deputy Minister Cronin firstly apologised that the Department was not able to do the work that was supposed to have been done during the lunch break. The Department had realised that the task was little bit more complicated than it had anticipated and there was a need to avoid doing a rush job that would have a knock-on impact on other issues that had not been properly considered. The Department had realised that it would not have been satisfied with the work that would had been produced in a very short space of time. The Committee could send an instruction on the A-list (containing the proposed amendments) to be produced by the State Law Advisers. The Department will work very closely with the Parliamentary Law Adviser on clause 17 and this could be tabled by any of the parties next week. The Department was available for consultation with any political party regarding the Bill. In short, the Department had not been able to do a satisfactory rework of clause 17 and would require additional time.

Mr Filtane said there was wisdom in questioning whether the Department would have enough time to draft the inputs that had been made today. There is nothing as ugly and unnecessary as a rushed piece of legislation. The Committee together with the Department still had enough time to rework the Bill and include the inputs that had been made today.

Mr Dlamini again expressed concern that the Bill seemed to be an Expropriation and Compensation Bill. The agreement had been that instead of the inclusion of “compensation” it should rather state “as contemplated in section 25 of the Constitution”, especially since the Committee had provided the definition of what “expropriation” is all about.

Ms Dreyer indicated that it was clear that there would be directly opposing views when it comes to voting on a clause to clause basis. She proposed that the version of the Bill that had been discussed this morning should be amended which the Committee would then base their vote on.

Ms Masehela agreed with the suggestion made by Ms Dreyer and emphasised that the focus should rather be on clause 17 and not on other clauses where there had been agreements already.

Mr Filtane also agreed that the focus of the Department should be on issues that had been flagged that morning, particularly on the definition of “property” and clause 17.

The Chairperson wanted to recap that the purpose of the meeting today was to empower the State Law Advisers to produce an A-list, which is essentially a draft. The Committee would still need to deliberate on the Bill on a clause to clause basis in order to produce a final draft of the Bill. The A-list would contain all the issues that had been raised today, including all the suggestions and deletions that had been made, and next time the Committee met, it would need to deliberate on the A-list that produced by the state law advisers in order for Members to flag all the issues that would need to be added or removed

Mr Dlamini suggested that instead of going clause to clause in the next meeting, the Committee should rather focus on clauses where there were disagreements.

The Chairperson maintained that the Committee would still need to go clause to clause in the next meeting.

Ms Dreyer moved in support of the decision taken by the Chairperson and seconded by Mr Filtane.

The meeting was adjourned.



 

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