FMF takes Expropriation Act fight to the high court

• FMF joins High Court case as friend of the court, challenging the constitutionality of the Expropriation Act's nil compensation provisions.
• Rule of Law Project argues Section 12(3) attempts to introduce expropriation without compensation through ordinary legislation.
• Court ruling could shape the future of property rights, land reform and constitutional interpretation in South Africa.

FMF joins landmark constitutional challenge

South Africa's debate over property rights and land reform has entered a decisive new phase, with the Free Market Foundation (FMF) joining one of the country's most significant constitutional property cases.

Through its Rule of Law Project, the FMF has been admitted as an amicus curiae (friend of the court) in the Western Cape High Court proceedings challenging the constitutionality of the Expropriation Act of 2024.

The application, brought by AfriForum and IRR Legal, is one of several legal challenges now before the courts and is expected to have far-reaching implications for property ownership, investor confidence, land reform and constitutional law.

The Rule of Law Project filed its written submissions on 15 July, with oral arguments now underway.

The FMF's constitutional argument

Rather than challenging the entire Act, the FMF's intervention focuses on what it believes is its most constitutionally problematic provision, Section 12(3).

This section permits government to expropriate property for "nil compensation" under certain circumstances. According to the FMF, this directly conflicts with Section 25(2) of the Constitution, which requires that expropriation must be subject to compensation, with the amount either agreed between the parties or determined by a court.

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"Section 25(2)(b) of the Constitution is unambiguous: expropriation is subject to compensation. Nil is not an amount. The absence of payment is not payment," says Dr Martin van Staden, Head of Policy at the Free Market Foundation.

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He argues that interpreting "nil compensation" as constitutionally valid ignores both the ordinary meaning of the Constitution and the intention of its drafters.

Attempting through legislation what parliament rejected?

One of the FMF's central arguments is that Parliament is attempting to achieve through ordinary legislation what it failed to achieve through constitutional amendment.

The organisation points to the failure of the Eighteenth Constitutional Amendment Bill in 2021, which sought to amend Section 25 to explicitly allow expropriation without compensation.

According to the FMF, Section 12(3) effectively reintroduces that concept despite Parliament's failure to secure sufficient support for the constitutional amendment.

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"Ordinary legislation may not rewrite a constitutional standard that Parliament itself could not change through constitutional amendment," says Van Staden.

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The FMF argues that allowing legislation to alter constitutional protections would undermine the supremacy of the Constitution.

Why the FMF says Section 12(3) is irrational‍

The Rule of Law Project further argues that Section 12(3) fails the constitutional test of rationality. Sections 12(1) and 12(2) of the Act already require compensation to be determined according to the constitutional standard of what is "just and equitable", taking into account the facts of each case.

Legal challenge targets constitutionality of nil compensation provisions

‍The FMF argues there is no rational basis for Parliament to prescribe a specific amount, namely nil, when compensation should always be determined individually by a court. The organisation says government has failed to provide any coherent constitutional justification for this provision.

International law also comes into play‍

The FMF's submissions also rely on customary international law.

It argues that compensation for expropriation has long been recognised internationally, dating back to Hugo de Groot (Grotius) in On the Law of War and Peace (1625).

The organisation notes that this principle has since been affirmed by institutions including:

• The Permanent Court of Arbitration
• The Permanent Court of International Justice
• The SADC Tribunal
• The African Court on Human and Peoples' Rights

According to the FMF, interpreting Section 25 as allowing uncompensated expropriation could place South Africa at odds with international legal norms while potentially creating the anomaly that foreign investors receive compensation protections unavailable to South African citizens. 

Part of a wider legal battle

The FMF's application forms part of a broader legal challenge to the Expropriation Act.

The Democratic Alliance is separately challenging the legislation on procedural and constitutional grounds, arguing that flaws exist in the manner in which the Act was passed through Parliament. Unlike the FMF and AfriForum, however, the DA's case is not primarily focused on the issue of nil compensation.

Other organisations, including the Association for Rural Advancement (AFRA), have entered the proceedings in support of the legislation, arguing that the Act is necessary to advance constitutionally mandated land reform.

The combined proceedings are expected to become one of the most closely watched constitutional cases affecting South African property rights in recent years.

What the court's decision could mean

The High Court's judgment could have implications well beyond the Expropriation Act itself.

A ruling in favour of the challengers may redefine the constitutional limits of expropriation powers and reinforce protections around private property rights. Conversely, if the Act survives constitutional scrutiny, it will establish an important legal precedent for future land reform measures.

Given the significance of the issues at stake, appeals to the Supreme Court of Appeal or the Constitutional Court are widely expected regardless of the High Court's decision.

The FMF has already confirmed that its Rule of Law Project intends to remain involved throughout the litigation, including any future appeal proceedings.

Summation

The High Court challenge to the Expropriation Act represents one of the most significant constitutional property rights cases since the adoption of South Africa's democratic Constitution.
 
While the broader litigation encompasses several legal arguments, the FMF's intervention focuses squarely on whether Parliament can lawfully authorise expropriation for nil compensation through ordinary legislation.
 
 The court's decision will not only determine the future of Section 12(3) but could also shape the constitutional boundaries of land reform, property rights and investor confidence in South Africa for years to come.

DOWNLOAD Report by Martin van Staden on Constitutional Land Reform

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