NAD Property Income Fund (Pty) Ltd v The South African National Roads Agency SOC Limited and Another

NAD Property Income Fund (Pty) Ltd owned Erf 215, Extension 6, Hoedspruit. At the request of the South African National Roads Agency SOC Limited (SANRAL), the Minister of Transport expropriated a portion of the property on 25 July 2016 in terms of s 41 of the SANRAL Act. NAD claimed compensation under s 41(5) of the SANRAL Act read with s 12 of the Expropriation Act 63 of 1975. The parties could not agree on compensation: NAD claimed nearly R17 million based on the property’s alleged potential use as a community shopping centre, while SANRAL contended compensation of approximately R190 000 based largely on actual sales and limited potential use. The Limpopo High Court rejected both parties’ expert valuations, determined compensation on a pro rata square-metre basis derived from the historic purchase price, added a solatium, and awarded NAD approximately R933 509 plus interest and punitive costs. NAD appealed the compensation award and SANRAL cross-appealed the costs order.

The appeal was upheld with costs, including the costs of two counsel. Paragraphs 1 and 2 of the High Court’s order were set aside. Part of the costs order was set aside, while the attorney-and-client costs for specified trial dates remained intact. The matter was remitted to the High Court for the hearing of further evidence and argument on compensation. The cross-appeal was dismissed with costs.

This judgment is significant for clarifying the correct constitutional and statutory framework for determining compensation for expropriation in South African law. It reaffirms the binding authority of Du Toit v Minister of Transport and rejects the notion that courts enjoy a true discretion in determining just and equitable compensation under s 25(3) of the Constitution. The case underscores that compensation determinations are objective, fact-based, and fully appealable on correctness, and it provides important guidance on the treatment of market value, potential use, and risk in expropriation cases.