Farjas (Pty) Ltd v Minister of Agriculture and Land Affairs for the Republic of South Africa; Rainy Days Farms (Pty) Ltd v Minister of Agriculture and Land Affairs for the Republic of South Africa

The appellants, Farjas (Pty) Ltd and Rainy Days Farms (Pty) Ltd, owned properties on Farm Whispers near Pietermaritzburg intended for township development. The properties were expropriated in 1991 under the Expropriation Act 63 of 1975, and compensation was paid at the time. Dissatisfied, the appellants initially challenged the compensation under the Expropriation Act but later lodged restitution claims under the Restitution of Land Rights Act 22 of 1994. They abandoned restoration and instead sought equitable redress in the form of additional financial compensation adjusted for changes in the value of money over time, as well as payment of promised solatia. Expert evidence proposed various methods for adjustment, including compound interest and property indices. The Land Claims Court applied the Consumer Price Index (CPI) to adjust compensation and rejected claims for solatia.

The appeal was dismissed, except that the costs order of the Land Claims Court was amended to award the plaintiffs party-and-party costs including the costs of two counsel. The appellants were ordered to pay the costs of the appeal.

The case confirms that the Consumer Price Index is an appropriate and equitable method for adjusting historical compensation in restitution claims under section 33(eC) of the Restitution of Land Rights Act. It clarifies that restitution compensation is not assessed on commercial or investment principles and that compound interest is generally inappropriate. The judgment reinforces the wide but carefully constrained discretion of the Land Claims Court and the sui generis, reparative nature of land restitution in South African law.