The Expropriation Act 13 of 2024 contains a fatal constitutional flaw. Its provision for nil compensation directly conflicts with Section 25 of the Constitution, which is clear and unambiguous about what must happen when the state expropriates property. Section 25(2)(b) states that expropriation may only occur "subject to compensation." It does not say subject to compensation or no compensation. It does not say subject to compensation unless the state deems it unnecessary. The text is peremptory.
Compensation must be paid.Section 25(3) then tells us how that compensation is to be determined, listing five factors to be considered to arrive at an amount that is "just and equitable." The entire architecture of Section 25(3) assumes a positive amount. You cannot balance market value, current use, history of acquisition, state investment, and purpose of expropriation to arrive at nothing. Nothing is not a balance. Nothing is the absence of balancing.The proponents of the Act rely on Section 25(8) and a strained reading of "just and equitable" to mean that zero can be just and equitable. This is constitutional sophistry. If the drafters of the Constitution had intended to allow confiscation without compensation, they would have said so, as constitutions that permit such confiscation explicitly do. They did the opposite.
They entrenched property rights and then qualified them with a social purpose, but always within a compensatory framework.Just and equitable compensation may be below market value. The Constitution explicitly allows that. But below market value is not nil value. To conflate a discount with a complete extinguishment is to erase the distinction between expropriation and confiscation.The Act attempts to do through legislation what could only be done through a constitutional amendment. Parliament cannot, by ordinary statute, define away a constitutional requirement. If the state can take property for nil compensation under circumstances it itself defines in Section 12(3) of the Act, then Section 25(2)(b) becomes meaningless.
The property clause becomes a clause that protects property only until the state decides it does not have to.This is not about whether land reform is necessary. It is. It is about whether the rule of law means anything. The Constitution requires compensation precisely to prevent arbitrary dispossession, to ensure that the burden of a public purpose is shared by the public through the fiscus, not imposed entirely on the individual owner.Nil compensation is not just and equitable. It is not compensation at all. And an Act that provides for it is in direct conflict with the Constitution it purports to implement.
The Free Market Foundation has added its voice to those arguing that the Expropriation Act’s provision for nil compensation conflicts with the Constitution’s clear requirement that compensation must be paid when the state expropriates property.The organisation joined the legal challenge against the Act in the Cape Town High Court as a friend of the court. Its submissions focused particularly on the section that states nil compensation may be just and equitable in certain circumstances.The Constitution provides unambiguously that property may be expropriated only subject to compensation, the amount and manner of payment of which must either be agreed or determined by a court.
Nil is merely a number and cannot be regarded as an amount that is paid. The absence of any payment likewise cannot be treated as compensation. To declare nil compensation constitutionally permissible would be to ignore the ordinary meaning of the words used in the Constitution.Government has argued that the constitutional requirement of just and equitable compensation cannot be interpreted solely according to dictionary meanings and that the just and equitable amount may, in appropriate circumstances, be zero. The Free Market Foundation maintains that two distinct constitutional requirements are involved. The first creates a right to the payment of compensation. The second sets out how the amount is to be determined, taking into account factors such as market value, the purpose of the expropriation and other relevant circumstances.
Nil compensation fails the first test because no amount is paid. It is also difficult to reconcile with the second test, because fixed property almost never has no value. When the state decides that it needs a particular property for a public purpose and is prepared to expropriate it, that decision itself indicates that value is attached to the property.Examples sometimes advanced in support of nil compensation, such as municipal debt exceeding the value of a property or deliberate damage caused by an owner, are rejected. Debt should be recovered through ordinary civil and insolvency processes, while alleged wrongdoing should be dealt with under the criminal law.
Expropriation exists to enable the state to acquire property for a legitimate governmental purpose; it is not a substitute for those legal processes and should not be used to punish owners or settle debts.The court application began early in August. Further argument was postponed because not all legal teams had completed their submissions. The matter therefore remains undecided.
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