ISABEL JOYCE FLORENCE Applicant
GOVERNMENT OF THE REPUBLIC OF SOUTH AFRICA Respondent
Neutral citation:Florence v Government of the Republic of South Africa  ZACC 22
Coram: Moseneke ACJ, Skweyiya ADCJ, Cameron J, Dambuza AJ, Froneman J, Jafta J, Khampepe J, Madlanga J, Majiedt AJ, Van der Westhuizen J and Zondo J
Heard on: 18 February 2014
Decided on: 26 August 2014
Summary: Restitution of Land Rights Act 22 of 1994 — section 33 — purposes of equitable redress — method of escalating past loss to present-day value
Restitution of Land Rights Act 22 of 1994 — section 35 — remedial powers — a court’s power to award costs of erecting a memorial plaque
On appeal from the Supreme Court of Appeal (hearing an appeal from the Land Claims Court):
1. Leave to file the supplementary record is granted.
2. Condonation is granted.
3. Leave to appeal is granted.
4. Leave to cross-appeal is granted.
5. The appeal is dismissed.
6. The cross-appeal is upheld.
7. There is no order as to costs.
VAN DER WESTHUIZEN J (Cameron J, Froneman J and Majiedt AJ concurring, and Khampepe J concurring only on the cross-appeal):
“You can’t repeat the past”, the narrator says to Jay Gatsby in F Scott Fitzgerald’s iconic novel.1 Hopelessly romantic and ever optimistic, Gatsby responds: “Can’t repeat the past? Why of course you can!” If only we could repeat, re-run or re-shape history to avoid the injustices of the apartheid era. But we cannot. Perhaps the best that can be done is to try to redress past injustices by enacting and applying legislation under the Constitution of our young democracy to deal with some of the consequences of the apartheid regime’s treatment of the majority of South Africans.
The Promotion of National Unity and Reconciliation Act2 is one example. The Restitution of Land Rights Act3 (Restitution Act) is another. It represents an attempt to address evictions, forced removals and past dispossession of land. The Group Areas Act4 – one of the cornerstones and most pernicious pieces of apartheid legislation – used race to determine the area in which people were allowed to live. Many were deprived of their homes and land because of the colour of their skin. The members of the Florence family are among them.
One of the underlying questions is whether restitution should act as a means of reversing the injury itself, knitting the bones of history together as if no fracture had ever occurred, or instead as a salve for an ever-gaping wound. Section 25(7) of the Constitution5 promises that persons or communities dispossessed of property as a result of racially discriminatory laws or practices are entitled to restitution of the property or to equitable redress. The Restitution Act provides for the fulfilment of this promise. Ms Florence, the applicant, asks this Court to decide what constitutes equitable redress under the Restitution Act. Is it always appropriate for a court – when making an award in the form of financial compensation – to convert past property into present-day monetary terms using the Consumer Price Index (CPI)?6 This is what the Land Claims Court did and the Supreme Court of Appeal confirmed. Ms Florence argues that this does not give sufficient effect to the right to restitution or equitable redress and applies for leave to appeal against the Supreme Court of Appeal’s decision.
The Government, the respondent, opposes the application. In addition, it applies for leave to cross-appeal and asks this Court to set aside the Supreme Court of Appeal’s decision to order the state under the Restitution Act to bear the costs of a memorial plaque on the property, as a form of symbolic relief.
The main appeal questions the concept of equitable redress under the Constitution and the Restitution Act. The cross-appeal requires us to decide whether interference with the Supreme Court of Appeal’s discretion under the Restitution Act in directing the state to bear the costs of the erection of a memorial plaque is justified.
Subsidiary questions are raised:
Should condonation for the late filing of documents be granted?
May this Court interfere with the exercise of discretion by the Land Claims Court and the Supreme Court of Appeal?
Should leave to appeal be granted?
What is the meaning of “equitable redress” in the Restitution Act? In light of this, what is the purpose of financial compensation?
Is the CPI an appropriate means of converting past loss into present-day monetary terms?
If not, are alternatives available?
What is the significance of section 33 of the Restitution Act?
Given the above, is interference with the Land Claims Court’s exercise of discretion warranted?
What order should follow if the decision by the Supreme Court of Appeal is set aside?
Who should bear the costs of this application?
The Florence family lived in a house called Sunny Croft on Erf 44408 (the property) in present-day Rondebosch, Cape Town, from December 1952 until November 1970. On 9 January 1957 Mr Florence (the applicant’s husband) and his two brothers entered into a written agreement to purchase the land from the owner, Dr Yeller. It was agreed that the purchase price was to be paid off in instalments every month for 13 years and 10 months. These instalments were met.
The area in which the land was situated was classified a “White Group Area” in terms of the Group Areas Act which prevented the transfer of the property into Mr Florence’s name, as he was not classified as “white”. On 16 October 1970 Mr Florence, his brothers and Dr Yeller agreed to cancel the sale and the Florence family was refunded an amount of R1 350. Because of the area’s classification and harassment by the authorities, the family was forced to leave in November 1970.
On 14 December 1995 Mr Florence launched a restitution claim, in his own right and on behalf of his two brothers, in terms of the Restitution Act. The claim initially sought restoration of the entire plot of the property. Given subsequent development on the land, however, this was not feasible. The claim was therefore amended to seek equitable redress in the form of financial compensation, as well as the erection of a memorial plaque.
In June 2009, after her husband died, Ms Florence was substituted in the claim as the applicant. In March 2010 she and the current owner of the property reached a private agreement in terms of which the current owner consented to the erection of a memorial plaque on the property and withdrew his opposition to the Florence family’s claim. The Florence family approached the Land Claims Court for a determination of their claim, orders awarding them just and equitable compensation and the costs of erecting the memorial plaque.7
Land Claims Court
The case in the Land Claims Court turned on—
the nature and extent of the 1970 loss (and the amount of compensation this warranted);
the costs of litigation insofar as they had not been met by the Land Claims Commission.
Only (a) to (d) are relevant before this Court.
The requirements for a claimant to qualify for restitution are listed in section 2 of the Restitution Act.9 The Land Claims Court held that it was not in dispute that the family had a right in land and that they were dispossessed of this right in terms of past racially discriminatory legislation. It further held that the family had effectively paid off the purchase price at the time of their dispossession and therefore should be compensated as the de facto owners of the property.
The Land Claims Court then determined the extent of the loss.10 Despite receiving R1 350 from Dr Yeller, the Land Claims Court found that the Florence family had been under-compensated for their dispossession by R30 513 as at October 1970. Thus the R1 350 could not be considered just and equitable compensation for the property so as to disqualify the Florence family from bringing a restitution claim under the Restitution Act.11
Having regard to the purposes of the Restitution Act, the need to give its provisions a generous interpretation, as well as the factors listed in section 33,12 the Land Claims Court found that it would be just and equitable to convert the family’s 1970 financial loss to its present-day value in order to accommodate “changes over time in the value of money”, as captured in section 33(eC) of the Restitution Act.
This raised the issue regarding the most appropriate method for conversion, which primarily involved the interpretation of section 33(eC). The Land Claims Court followed its own precedent in Farjas LCC13 and found that using the CPI for conversion accords with the proper interpretation of the phrase “changes over time in the value of money”,14 which is “what a person can buy with the money”.15
The Court found that “changes over time in the value of money” entails concepts different from an investment. An investment relates to interest earned from money. Interest accrues as the proceeds of money and is not its actual value; the value of money is not changed because interest is earned. Since interest is conceptually different from the value of money as stated in section 33(eC), an investment index is not a suitable method for conversion. The CPI measures the actual value of money and is therefore more appropriate. On the basis of this calculation, the Land Claims Court determined Ms Florence’s under-compensation to be R1 488 890.
In addition to this award, the Land Claims Court gave Ms Florence R10 000 as a solatium, in recognition of the emotional hardship and trauma of forced removal and in acknowledgement of the family’s dignity and worth.16 But it declined to find in her favour on the memorial plaque. First, the Court held that it lacked jurisdiction because the issue was subject to a private agreement between the current landowner (who was the first respondent in the case before the Land Claims Court) and Ms Florence. Second, the Court held that there was no need to decide the issue, since it had already awarded a solatium which served a similar purpose to an award for the costs of erecting a memorial plaque.
Supreme Court of Appeal
Ms Florence appealed to the Supreme Court of Appeal on the—
use of the CPI as a method of conversion;
costs of erecting the memorial plaque; and
costs of litigation insofar as they have not been met by the Land Claims Commission.
The Supreme Court of Appeal regarded itself bound by its own decision in Farjas,17 which confirmed the finding in Farjas LCC that the Land Claims Court is entitled to use the CPI to determine changes over time in the value of money. It held that the Land Claims Court did not misdirect itself in applying the CPI.
However, the Supreme Court of Appeal did not agree with the Land Claims Court that it had no jurisdiction to order payment of the costs of the memorial plaque. It found that the agreement between Ms Florence and the current landowner did not entail a waiver of any right she had to claim the costs of erecting the plaque from the state.
Instead, the Supreme Court of Appeal held that the Land Claims Court had jurisdiction to decide this issue because of its remedial powers under the Restitution Act, which include ordering the payment of “any alternative relief”.18 The Supreme Court of Appeal held that the order to pay for the memorial plaque qualifies as alternative relief because it is of symbolic significance and spiritual importance to the family and addresses the hurt and injustice they suffered.
Finally, since each party had been partially successful, the Supreme Court of Appeal concluded it was fair and just that each party pay its own costs. Ultimately, however, section 29(4) of the Restitution Act19 meant that the Land Claims Commission was responsible for the costs of the litigation.
Ms Florence filed a supplementary volume of documents late, the day before the hearing. This Court’s practice directions require that, if a party files additional documents which are not part of the record, it should be done at least ten days prior to the hearing. Ms Florence applied for condonation for this late filing. The application is not opposed, nor does the late filing cause prejudice or adversely affect the administration of justice. I would grant condonation.
Leave to appeal – main appeal
Restitution of land rights and land reform “sit in the heartland of the protective, restitutionary and land reform design of section 25 of the Constitution.”20 This matter requires that the Restitution Act, which gives content to section 25(7) of the Constitution, be interpreted. It is also in the interests of justice to grant leave to appeal. The Land Claims Court is a specialist court21 exercising power in a forum “where the conflicting values as embodied in the constitutional property clauses take on concrete form.”22 This Court has held that it would be slow to hear appeals from specialist courts unless important issues of principle are raised.23 The Land Claims Court’s interpretation of section 33 of the Restitution Act, which was confirmed by the Supreme Court of Appeal, raises important issues.
Although many were dispossessed of their property under apartheid, this Court still has to determine an appropriate approach for measuring compensation under the Restitution Act. Certainty on the contours and content of equitable redress under the Restitution Act would benefit the broader public, which has an interest in how such claims are resolved given South Africa’s “historical chasm on the issues of land dispossession and land restitution.”24 This case raises important issues of principle with large practical effects. Even though this judgment may not formulate a precise test for determining financial compensation in all cases, greater direction should be given.25 There are also reasonable prospects of success regarding whether the Land Claims Court and the Supreme Court of Appeal applied the CPI rigidly and formalistically. It is therefore in the interests of justice to grant leave to appeal.
Interference in the exercise of discretion
It has to be determined whether this Court may interfere in the exercises of discretion of the Land Claims Court and the Supreme Court of Appeal. Generally, an appeal court may interfere with a lower court’s exercise of discretionary power only if that power was not properly exercised.26 In the context of restitution this principle has been emphasised by the courts.27 Discretionary power is not exercised judicially if applied capriciously; if the court was moved by a wrong principle of law or an incorrect appreciation of the facts; if it did not bring its unbiased judgment to bear on the issues; or if it did not act for substantial reasons.28 As to the main appeal, I return to this question after a more thorough analysis of the decisions and the relevant legal issues. But it is convenient first to examine whether the Supreme Court of Appeal’s exercise of discretion in ordering the state to pay for the memorial plaque should be overturned. This is what the Government asks for in the application to cross-appeal.
Leave to appeal – cross-appeal
The Government argues that neither the Land Claims Court nor the Supreme Court of Appeal has jurisdiction to order the state to pay the costs for the erection of a memorial plaque, because the settlement agreement between the landowner and Ms Florence was a private affair in which the state had no role. It further contends that the Supreme Court of Appeal failed to consider that the forced removal of the community to which the Florence family belonged has already been recognised in the District Six Museum. Payments to the Florence family will be coming from the public purse. Given that other legislation like the National Heritage Resources Act29 (NHRA) exists to preserve South African heritage, the Government maintains that the Supreme Court of Appeal’s order overstepped the Court’s authority.
Ms Florence contends that the Supreme Court of Appeal’s interpretation of section 35(1)30 of the Restitution Act was within its discretion, given the vast remedial powers conferred by this section. Moreover, the Supreme Court of Appeal’s substitution of its own decision for that of the Land Claims Court was the judicial exercise of discretion.31 There are no grounds for this Court to substitute its preferences for those of the Supreme Court of Appeal.
The Supreme Court of Appeal correctly decided that the Land Claims Court mistakenly held that it lacked jurisdiction. The mere fact that the landowner agreed to permit the erection of a memorial plaque does not preclude the Land Claims Court’s remedial discretion. The contract simply established that the family is not prohibited from erecting the plaque. Nor does directing the state to pay for the plaque infringe privity of contract or force the state into the private relationship between Ms Florence and the landowner. It merely obliges the state to cover certain costs, up to a prescribed limit – and a fairly modest one at that. Both the Land Claims Court and the Supreme Court of Appeal therefore had jurisdiction to exercise their remedial discretion.
The Government’s argument that the NHRA deprives courts of jurisdiction also fails to persuade. Although the NHRA empowers heritage authorities to manage the national estate, nothing in the statute or its wording gives these authorities exclusive power or implies that they have sole jurisdiction to direct the establishment of memorials, so as to preclude a court from ordering the erection of a plaque. A close reading of the NHRA (particularly sections 3, 30 and 35) reveals that the authorities perform largely administrative and organisational functions. Moreover, there is no precedent that supports the interpretation that the authorities have sole jurisdiction to the exclusion of courts. Two statutory presumptions accord with this view. First, Acts should be read harmoniously – nothing in the NHRA contradicts this presumption. Therefore, a court’s wide remedial powers under the Restitution Act and the provisions of the NHRA should be read together.32 Second, there is a presumption against ousting a court’s jurisdiction. In Metcash Trading Limited the Court stated:
“Although the [Value-Added Tax] Act vests jurisdiction to vary or set aside assessments . . . there is nothing in section 36 to suggest that the inherent jurisdiction of a High Court to grant appropriate other or ancillary relief is excluded. The section does not say so expressly nor is such an ouster necessarily implicit in its terms, while it is trite that there is a strong presumption against such an implication.”33
This Court will refrain from setting aside a decision on appeal if the only reason is that it would have come to a different conclusion on the facts.34 Moreover, this Court has held that determining compensation in a particular case (especially for sentimental damages) involves the exercise of a discretion, in which the Court will be particularly reluctant to intervene. In Dikoko (dealing with the law of defamation) a majority of the Court declined to interfere with damages awarded by a lower court.
Moseneke J wrote:
“It must however be emphasised that the mere fact that the damages seem high is no reason to cut them down. In other words, the mere preference of a court with appellate power is not sufficient to upset a damages award. The standard at issue is not whether or not the trial court is correct but whether there is a glaring disproportionality between the amount awarded and the injury to be assuaged.”35
He further stated that a court, when evaluating an appeal related to an award of damages, should consider the judgment as a whole to ascertain how the quantum had been determined.36 The memorial plaque is a form of remedy, akin to damages, over which the Land Claims Court and the Supreme Court of Appeal have a wide discretion.
Section 35(1) of the Restitution Act sets out the relief which the Court may order. There are several options but no indication whether they are conjunctive or disjunctive and therefore no indication whether a court can order several forms of relief in section 35(1) or just one form. “Alternative relief” in section 35(1)(e) is similarly ambiguous. It could mean relief that is different from and mutually exclusive to the relief in section 35(1)(a) to (d). However it could also mean relief that is different from – not the same as – but not mutually exclusive to the relief in section 35(1)(a) to (d). In other words, section 35(1)(e) does not necessarily have to exclude any of the relief mentioned in the earlier sections. If the first interpretation is preferred, a court could never award different forms of relief together and the court’s remedial powers would be unduly constrained. I favour the second interpretation, that a court can order relief in terms of section 35(1)(a) to (d) together with “alternative relief” in terms of section 35(1)(e). This interpretation accords with this Court’s recognition that section 35 generally confers extensive remedial powers.37 And it is in line with the generous, rather than formalistic, interpretation of the Restitution Act, which best achieves its purposes.38