George Moerasrivier Boerdery (Pty) Ltd v Director of Animal Health, Department of Agriculture, Land Reform and Rural Development and Another

The applicant, a poultry farming company in the George area, had to destroy all its chickens, eggs, manure and feed on two farms following an outbreak of Highly Pathogenic Avian Influenza (HPAI) in May and June 2021. The destruction was carried out in accordance with governmental avian flu protocol. The applicant applied to the Director of Animal Health for compensation under section 19(1) of the Animal Diseases Act 35 of 1984. The Director initially rejected the claim, awarding nil compensation on the basis that HPAI-infected and in-contact chickens have no value. The applicant objected to the Minister, who appointed an internal panel. The panel recommended that the Director's decision be set aside and that the Director consult with the applicant to settle at an acceptable compensation value. The Minister set aside the Director's decision and ordered the Director to consult with the applicant to settle at an acceptable compensation value. After reconsideration, the Director again determined nil compensation, reasoning that HPAI-infected and in-contact chickens and eggs have no market value. The applicant launched a review application under PAJA to set aside this second decision.

• Whether the review application was premature for failure to exhaust internal remedies under section 23 of the Animal Diseases Act
• The proper interpretation of section 19(2) of the Animal Diseases Act 35 of 1984, particularly whether the Director has an unfettered discretion to determine 'any amount' as compensation or must base compensation on the fair market value of a healthy animal or thing
• Whether the Director's decision of 30 January 2023 was reviewable under PAJA on the basis that it was not authorised by the empowering provisions
• Whether the court should substitute the Director's decision with an order for the full amount claimed or remit the matter for reconsideration

1. The Director's decision of 30 January 2023 awarding nil compensation was reviewed and set aside. 2. The applicant's compensation claim was remitted to the Director for reconsideration, with a direction that the destroyed animals or things must be valued on the basis that they were in a healthy state. 3. Save as aforesaid, the application was dismissed. 4. Each party was ordered to pay its own costs.

Under section 19(2)(a) of the Animal Diseases Act, the Director's discretion to fix compensation is not unfettered. The phrase 'any amount fixed by him in accordance with any criterion deemed applicable by him' must be read together with 'the applicable compensation, based on a fair market value of the animal or thing'. The yardstick remains the fair market value of a healthy animal, as established by the Supreme Court of Appeal in Minister of Agriculture v Bluelilliesbush Dairy Farming. The Director cannot award nil compensation on the basis that infected animals have no value.

The court observed that the papers ran to almost 800 pages largely because the applicant launched a wide-ranging attack including allegations of bias and bad faith which were not demonstrated. The case ultimately boiled down to one of statutory interpretation. The court also noted that nothing prevents the Director from making a fresh determination once her decision is set aside, dismissing any suggestion that she is functus officio.

This case clarifies the interpretation of section 19(2) of the Animal Diseases Act following the 2009 amendment of regulation 30, affirming that despite the removal of prescribed compensation percentages, the Director is still bound to base compensation on the fair market value of a healthy animal. It reinforces the principle from Bluelilliesbush that the purpose of compensation under the Act is to encourage farmer cooperation with disease control measures by ensuring they are not left worse off. The case also illustrates the application of separation of powers in the context of substitution relief under PAJA.