East London attorney wins back ownership of farm after protracted court battle

An East London attorney has, after a long legal battle, won back ownership of a farm in Buffalo City (East London) that he was forced to sell to the municipality under the threat of expropriation.

The attorney, Roger Smith, bought Wembley Farm in 1985. In 1999, facing the threat of the property being expropriated for use as a municipal cemetery, he reluctantly agreed to sell it to the municipality for R670,000. He was also paid a consolation fee of R35,100, removal costs of R5,000 and transfer duty of R43,700.

But the cemetery was never built. The farm, left abandoned, fell into disrepair.

“The house, outbuildings, reservoirs and other infrastructure ... have been vandalised and destroyed,” noted Judge Mbulelo Jolwana in his judgment.

Smith first approached the court in 2008, arguing he had been coerced into the sale under a false pretext — that the land had been designated for use as a cemetery. When it was later found unsuitable for that use, he claimed the original agreement had no legal standing. That case was dismissed on the basis that his claim had prescribed, but he was granted leave to appeal.  

The parties then tried to settle the case. The agreed terms of the settlement included that the ownership of the property would be restored to Smith if he paid the municipality R3.6-million — the sale price plus interest.

“It was further agreed that Smith would pay an additional amount of R4.3-million as a contribution to the costs incurred by the municipality in the litigation before it was settled.”

The municipality also made it a condition of settlement that one hectare of the land would be used to build a fire station.

This was ratified by the Buffalo City council only in 2021, mostly due to delays brought about by the Covid-19 pandemic.

Smith then went to court to have the settlement made an order of court.

On 6 June 2023, his attorney wrote a letter to the municipality’s attorney, attaching the revised settlement agreement and requesting that it be signed and returned to him to facilitate its implementation.

Smith’s attorney further confirmed that he was holding in trust an amount of R7.4-million to be paid to the municipality in settlement.

However, the municipal manager would not sign the settlement agreement. Smith went back to court, complaining that he had been prejudiced by ongoing delays and the municipality’s failure to comply with the terms of the revised settlement agreement.

‘Invalid’

Buffalo City’s municipal manager, Mxolisi Yawa, stated in papers before the court that the municipality was obliged to oppose the application to make the settlement an order of court. He said the council resolution confirming the settlement was “invalid” because it did not comply with the Municipal Finance Management Act.

Yawa argued that the only way Smith could get his farm back was to successfully sue the municipality. He said the council had to consider the fair market value of the property before arriving at a decision.

“It is important to point out that at no stage during the protracted settlement negotiations did [Yawa] communicate to Smith or his attorney that he questioned the validity of the settlement agreement or that he doubted its lawfulness,” said Judge Jolwana.

“It does not appear that he communicated his discomfort about the alleged non-compliance even with the municipality’s own attorney. Instead, there was an unexplained failure to sign the settlement agreement, notwithstanding its formal endorsement thereof through a council resolution that to date is still extant.

“It was only when these proceedings were instituted that, in the answering affidavit, Yawa raised, for the very first time, his concerns about non-compliance with the Municipal Finance [Management] Act.”

The judge said that in the documented history of the case, it had been pointed out that the property could not be used for the purpose for which it was acquired — the construction of a cemetery.

He said the municipality has not made a case that it needed the property, apart from the portion for the establishment of a fire station.

He said this was a restitution of the property and not a transfer as specified in the Municipal Finance Management Act.

“That any property may be expropriated for a legitimate public purpose is not controversial, at least if regard is had to the Constitution,” said Judge Jolwana.

“That legitimate public purpose was the establishment of a municipal cemetery in this case. It is common cause that it later transpired that the property was not suitable for that purpose after the registration of the transfer of the ownership of the property to the municipality had been finalised.

“The property was acquired by the municipality to alleviate its need for land that is suitable for the establishment of a municipal cemetery. Put differently, Smith was deprived of his right to ownership of the property through expropriation or threat thereof for that legitimate public purpose. The legitimate public purpose for which the applicant’s right to have, to use and to keep the property was therefore infringed for a justifiable and legitimate public purpose and in the public interest.

“That was the understanding at the time Smith’s property rights were infringed. Once that public purpose became unattainable, the consequent unlawfulness of Smith’s deprivation of his property rights and the unconstitutionality of that entire process became fatally indefensible, leading to the entire edifice and rationale for the expropriation collapsing.”

Judge Jolwana ordered that the settlement be made an order of court.

He also made a punitive costs order against the municipality, reasoning that, “[Yawa] lamentably chose opaqueness when transparency was required. [He] decided to attempt to renege from the settlement agreement only when he received papers for this application, which it was agreed should be instituted. This he seems to have done without even presenting his views to the Buffalo City council. This, in circumstances in which the municipality’s legal department had no difficulties with the lawfulness of the agreement.”

He ordered that Smith be allowed to claim the maximum in recoverable costs from the municipality. DM