Anthea Jeffrey: Soon-to-be-passed Expropriation Bill is unconstitutional

The Expropriation Bill of 2020, soon to become law pending President Cyril Ramaphosa’s approval, faces scrutiny for its constitutional compatibility. The Institute of Race Relations (IRR) has petitioned Ramaphosa, citing multiple clauses as unconstitutional. The bill’s failure to mandate prior court approval for compensation disputes is a key concern. Legal advisors argue this oversight contradicts Section 25(2)(b) of the Constitution. Despite attempts to rectify the issue, the bill remains constitutionally flawed.

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By Anthea Jeffery*

The Expropriation Bill of 2020 (the Bill) has been adopted by Parliament and will become law once President Cyril Ramaphosa gives his assent to it. However, the President may not sign a bill into law if it inconsistent with the Constitution. The IRR has thus sent a letter and a detailed Petition to Mr Ramaphosa setting out the unconstitutionality of many clauses in the Bill and requesting him not to sign it into law.

One of the key defects in the Bill is its failure to include clear clauses requiring an expropriating authority, in the event of an unresolved dispute with an owner, to obtain a prior court order deciding or approving the compensation payable – and otherwise confirming the constitutionality of a proposed expropriation.

The significance of the 1996 Constitution and its Bill of Rights

Some background information is needed here. The Bill is intended to cure the unconstitutionality of the present Expropriation Act, which was adopted in 1975 when the country lacked a binding Bill of Rights. Yet the Bill ignores almost all the relevant safeguards introduced by the 1996 Constitution and authorises expropriation via essentially the same procedures as under the 1975 Act. This makes it just as unconstitutional as the current statute.

When the 1975 Act was adopted, there was no legal principle that prevented the government from empowering the minister of public works to expropriate property via the following procedures:

by completing certain preliminary steps, and then
serving a notice of expropriation on the owner, under which both the ownership of the property and the right to possess it would automatically vest in the minister on the dates specified in the notice.

However, since the Constitution took effect in 1997, South Africa has had the benefit of an entrenched Bill of Rights. This lays down binding criteria for a valid expropriation, guarantees that administrative action will be reasonable and procedurally fair, gives everyone a right of access to the courts, requires judicial authorisation before people may be evicted from their homes, reinforces the principle of equality before the law, and guarantees the supremacy of the rule of law.

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The Bill bypasses these constitutional guarantees by giving all expropriating authorities the power to expropriate by following the same procedures as under the 1975 Act, ie:

by completing certain preliminary steps, and then
serving a notice of expropriation on the owner, under which both ownership and the right to possess the property will automatically vest in the expropriating authority on the specified dates.

The Bill’s list of preliminary steps is longer than that in the Act, and often reflects the impact of the Bill of Rights. However, these increased safeguards matter little because few equivalent protections apply at the point of expropriation. Yet this is when safeguards matter most – and when the requirements in the Bill of Rights must undoubtedly be met if an expropriation is to comply with the Constitution.

The need for a prior court order

At no point in the preliminary processes, as currently set out in the Bill, is the expropriating authority called upon to demonstrate to the owner – let alone the courts – that the proposed expropriation is constitutional. Yet an expropriation cannot pass constitutional muster if:

it is not in fact for public purposes or in the public interest;
the compensation offered does not ‘reflect an equitable balance between the public interest and the interests of those affected, having regard to all relevant circumstances’;
the property to be expropriated includes a person’s home and a court order authorising his or her eviction has not been obtained; or
other relevant constitutional requirements, including the rights to equality, human dignity, administrative justice, and access to the courts, have not been met.

To ensure compliance with these provisions in the Bill of Rights, the expropriating authority must seek and obtain a court order confirming that a proposed and disputed expropriation meets all these constitutional requirements. Moreover, it must do so before it serves a notice of expropriation or seeks to take ownership and possession of the property in issue.

The Constitution does not allow the expropriating authority to act as judge and jury in its own cause. It cannot simply assume the validity of the expropriation, decide on the compensation payable, and forge ahead with taking ownership and possession while leaving it to the expropriated owner to object in court thereafter – if he or she can afford the costs of litigation. This approach makes a mockery of the Bill of Rights and all its guarantees.

Legal advice confirms this need

The IRR’s repeated insistence that a prior court order is needed to ‘decide or approve’ the compensation payable in the event of an unresolved dispute has borne important fruit in the past two years. In advising Parliament on the Bill, Advocate Uday Naidoo referred to an IRR written submission in emphasising – along with Advocate Geoff Budlender SC – that a prior court order on compensation is needed where no agreement has been reached.

In the advocates’ view, Section 25(2)(b) of the Constitution requires a prior court order, for it says: ‘Property may be expropriated only in terms of law of general application…[and] subject to compensation, the amount of which and the time and manner of payment of which, have…been agreed by those affected or decided or approved by a court’ (emphasis added).

Adv Naidoo put the issue thus in addressing the relevant select committee in the National Council of Provinces (NCOP) on 25th October 2023: ‘[Under] the first draft [of the Bill], it was an expropriating authority that not only determined the amount of compensation but also decided to expropriate a property, before the courts [became involved]. The idea was that an administrative decision would be taken and the affected person could take the matter to judicial review…. On reflection, [however], it was clear that this was not the right method and the Bill [needed to be] changed so that it was more consistent with Section 25(2)(b) of the Constitution’.

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This interpretation was questioned by Ms Phumelele Ngema, Parliamentary Legal Advisor, Constitutional and Legal Services Office (in an earlier portfolio committee meeting on the Bill on 30th March 2022). Here, Ms Ngema said ‘she still believed that there were instances where, in terms of section 25(2)(b),…the expropriating authority may determine or decide on the compensation’.

Said Adv Naidoo in response: ‘If the Constitution had meant that a court could only approve and nothing more, then it would relegate the court to the role of a rubberstamping authority. This would be inconsistent with various other provisions of the Constitution, which [empower] the courts to determine rights.’

In another portfolio committee meeting on 19th April 2022, Advocate Geoff Budlender SC elaborated on these points, saying:

There are two ways in which the amount [of compensation] can be fixed. It can be fixed either by agreement by those affected, or it can be decided or approved by a court. There is no provision anywhere in the Constitution which says it can be decided by the expropriating authority. The Constitution does not permit that…

‘Decision’ means something other than ‘approval’. ‘Decision’ means that the court itself decides the amount of compensation, based on the evidence before it… If the administrative expropriating authority could decide the amount of compensation and time and manner of payment, excluding a court, then there would be nothing left for the courts to do. That would be inconsistent with the Constitution.

Section 165 of the Constitution states that ‘the judicial authority of the Republic is vested in the courts’. Judicial authority is about making decisions about…disputes about rights. It is only the courts which can decide disputes about rights. Section 34 [of the Constitution] provides that disputes that can be decided by the application of law are to be decided by the courts or by any other independent tribunal.

For all of these reasons, the legal advisors do not think that section 25(2)(b) of the Constitution means that anyone other than a court can decide the amount of compensation and the timing and manner of its payment if those affected do not agree.

This legal advice provides important recognition of what the Constitution requires. However, the clause inserted into the Bill to rectify the problem identified by Advocates Naidoo and Budlender SC is so badly worded as to leave that problem unresolved.

A badly worded new clause

The new clause, introduced by the National Assembly, is Clause 8(3)(g). This states that a notice of expropriation ‘must contain…the amount of compensation agreed upon or approved or decided by a court under section 19’.

Superficially, this looks clear enough. The problem, however, is that the necessary court order is to be obtained under section 19. And section 19(2) gives either party the right, ‘within 180 days of the date of the notice of expropriation, [to] institute proceedings in a competent court to decide or approve the amount, time and manner of payment of just and equitable compensation’ (emphasis added).

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These provisions are prima facie contradictory. Sub-clause 8(3) states that the notice of expropriation ‘must contain’ both the date of expropriation and the amount of compensation that has either been agreed or ‘approved or decided by a court under section 19’. Yet the right to approach a court under section 19 arises within a 180-day period that begins with ‘the date of the notice of expropriation’. In addition, a valid notice of expropriation cannot be issued unless it contains both the date of expropriation and the amount of compensation to be paid – and neither can be determined until a court has approved or decided the compensation under section 19.

In simple terms, Clause 8(3)(g) means that a court must get involved before a notice of expropriation can be issued, while section 19(2) states that the parties may approach a court only after a notice of expropriation has been issued.

This fatally flawed wording prevents compliance with Section 25(2)(b) of the Constitution. It also means that the unconstitutionality identified by Advocates Naidoo and Budlender SC has yet to be removed.

The Bill remains unconstitutional

To ensure compliance with the Constitution, it is also not enough for an expropriating authority to obtain a prior court order dealing solely with the amount, time, and manner of payment of compensation. This prior court order must also confirm that the proposed expropriation is for a public purpose or in the public interest; that it does not infringe the rights to equality, human dignity, and/or administrative justice; and that any eviction of people from their home as a result of an expropriation has been authorised under section 26(3) of the Constitution.

In the absence of a clear clause requiring prior court orders covering all these issues, the Bill remains unconstitutional. Many other clauses in the Bill are also inconsistent with the Constitution, as explained in the IRR’s Petition to the President. It follows that Parliament should not have adopted the Bill – and that Mr Ramaphosa cannot lawfully sign it into law. Under section 79 of the Constitution, he must instead refer the Bill ‘back to the National Assembly for reconsideration’.