Haffejee NO and Others v eThekwini Municipality and Others

The applicants, trustees of the YGM Haffejee Family Trust, owned property on the banks of the Umgeni River in Durban, earmarked for a municipal flood-control canalisation project. In 2005 the eThekwini Municipality issued a notice of expropriation under the Expropriation Act 63 of 1975, fixing a date of expropriation without first determining or offering compensation. Ownership and possession were transferred, and eviction proceedings were later instituted. Compensation was only offered after expropriation, initially at 80% of market value and later in full, but the Trust rejected the offers, disputing the constitutional validity of the expropriation process. The Trust challenged the constitutionality of provisions of the Expropriation Act, arguing that section 25(2)(b) of the Constitution requires compensation to be determined before a valid expropriation can occur. The High Court dismissed the challenge and granted eviction. Leave to appeal was ultimately sought in the Constitutional Court.

Leave to appeal was refused and the constitutional challenge to the Expropriation Act failed; the eviction order granted by the High Court remained effective.

This case authoritatively clarified that under South African constitutional law, expropriation may validly occur before compensation is finally determined, provided compensation is just and equitable and subject to agreement or court determination thereafter. It affirmed the constitutionality of the Expropriation Act’s procedural framework and balanced property protection with the state’s ability to pursue public and developmental objectives.