A property company, Nad Property Income Fund, has won an appeal for “just” compensation from the South African National Roads Agency (SANRAL) for the expropriation of its property in Hoedspruit.
The property company argued that the High Court undervalued the land, and noted that the correct amount is R16.98 million. SANRAL argued that it owed only R190,777.40.
However, on 1 April 2026, the Supreme Court of Appeal (SCA) upheld Nad’s appeal and returned the case to the high court for further proceedings, dismissing SANRAL’s cross-appeal with costs.
The case centres around a portion of land expropriated on 25 July 2016 for a road project, after the Minister of Transport acted at SANRAL’s request in terms of the SANRAL Act.
Nad had claimed at least R16.98 million in compensation, while SANRAL argued it owed just R190,777.40.
The high court eventually awarded R933,509.52 plus interest, but that award has now been set aside.
SCA Judge David Unterhalter noted that the main issue with the High Court dispute was how the property should be valued and what compensation is “just and equitable” under section 25(3) of the Constitution.
Judge Unterhalter said this was “an error of no small consequence” and stressed that compensation is not something a court may simply choose from a range of acceptable options.
He noted that compensation is required to meet a defined constitutional standard, and the compensation either meets the standard or it does not.
The SCA said the high court should have followed the Constitutional Court’s two-stage approach.
The first determines compensation under section 12(1) of the Expropriation Act, and then assesses whether that amount is constitutionally “just and equitable”.
However, Unterhalter said the High Court jumped into what it believed was a discretionary fairness enquiry.
“It failed to state or apply the two-stage relationship between the statutory standard of market value and the constitutional standard of just and equitable compensation,” the SCA said.
At the centre of the appeal was the property’s potential use
A major point of contention was the property’s potential use. Nad argued the land’s highest and best use was as a community shopping centre, and that the expropriation effectively destroyed that development potential.
Its valuer relied on comparable sales and calculated compensation at roughly R16.9 million based on the difference in value before and after the taking.
SANRAL’s experts disagreed and argued that the land’s likely use was more modest retail or small business development, and placed compensation at about R1.62 million.
The High Court rejected Nad’s shopping-centre case, finding that a reasonable purchaser would have known that “some action from the side of SANRAL to acquire the expropriated portion was possible and imminent.”
The High Court noted that this undermined Nad’s development argument. However, the SCA said that this reasoning was too simplistic.
The SCA argued that the existence of a risk did not mean the shopping centre’s potential had no value, nor did it create an automatic legal barrier to development.
The SCA also criticised the High Court’s treatment of actual sale prices. Nad bought the property in 2015 for R7.75 million, and then sold the remainder after expropriation in 2022 for R14.5 million.
The High Court found this a paradox, as the property appeared to be worth more after expropriation than before.
Because of this, it then tried to avoid that result by using a simple pro rata square metre calculation based on the original purchase price.
That produced the R891,756.82 figure, to which a solatium was added. However, the SCA said the court had “not resolved the paradox; it simply evaded it.”
It said the differing prices may have reflected market movement or even that Nad “bought the property at a discount”, but that these issues required proper expert engagement rather than judicial guesswork.
The SCA did not decide what Nad should be paid. However, it said the record was too incomplete and the expert evidence too underdeveloped to reach a final figure itself.
“Much more is required,” the court said, particularly on “potential use”, the impact of expropriation risk, and how the available market data should be reconciled.
The matter has now been remitted to the High Court for further evidence and argument. SANRAL’s cross-appeal on costs was also dismissed.
The Supreme Court’s full ruling on the matter is available below.
