A Limpopo property company has won a landmark appeal against the South African National Roads Agency after a court found the government body had dramatically undervalued expropriated land in Hoedspruit. The Supreme Court of Appeal ruled on 1 April 2026 that the High Court had applied the wrong legal framework when it awarded Nad Property Income Fund just R933,509.52 — a figure the SCA has now set aside entirely.
The dispute goes back a decade. SANRAL expropriated a portion of Nad’s Hoedspruit property on 25 July 2016 to make way for a road project, acting at the request of the Minister of Transport under the SANRAL Act. What followed was a bitter legal fight over what the Constitution actually requires when the state takes someone’s land.
Nad argued the compensation owed was at least R16.98 million, based on the property’s potential as a community shopping centre site. SANRAL, on the other hand, insisted it owed a fraction of that — just R190,777.40. The High Court split the difference in its own way, arriving at R933,509.52 plus interest, but clearly satisfied neither party.
The appeal brought the constitutional heart of expropriation compensation into sharp focus. SCA Judge David Unterhalter was unsparing in his criticism of the High Court’s approach, describing its error as one “of no small consequence.” He made clear that compensation for expropriation is not a discretionary exercise where a court picks a number it considers fair — it must meet a defined constitutional standard.
How SANRAL’s Hoedspruit Expropriation Case Exposed Flaws in the Court’s Valuation Methodology
The SCA ruled that the High Court had skipped a critical step. According to the Constitutional Court’s established two-stage framework, a court must first determine compensation under section 12(1) of the Expropriation Act, then separately assess whether that figure meets the constitutional requirement of being “just and equitable” under section 25(3). The High Court collapsed both stages into a single discretionary inquiry, and the SCA said that was legally indefensible.
Central to the valuation dispute was the question of what the expropriated land could realistically have been used for. Nad’s valuer assessed the land’s highest and best use as a community shopping centre, calculating that the expropriation wiped out approximately R16.9 million in development value. SANRAL’s experts countered that more modest retail or small-business use was the realistic ceiling, putting compensation at around R1.62 million.
The High Court sided with SANRAL’s more conservative view, reasoning that any reasonable buyer would have known SANRAL might acquire the land. That awareness, it argued, would have dampened the development potential and therefore the compensation owed. The SCA dismissed this logic as oversimplified — the mere existence of an expropriation risk does not automatically extinguish a property’s potential value or bar development entirely.
Another problem was the High Court’s handling of the property’s actual transaction history. Nad purchased the property in 2015 for R7.75 million and later sold the remainder after expropriation in 2022 for R14.5 million. Rather than interrogating why the remainder appeared to be worth more post-expropriation than the whole was before it, the court used a basic pro rata square metre calculation from the original purchase price to reach its figure. The SCA was blunt: the court “did not resolve the paradox; it simply evaded it.”
The SCA noted the price differences could reflect general market movement between 2015 and 2022, or even the possibility that Nad initially bought the property at below-market value — but these were questions that needed proper expert analysis, not judicial guesswork.
Importantly, the SCA stopped short of determining the final compensation figure itself. It found the evidentiary record too thin and the expert testimony too underdeveloped to reach a defensible number. The case has been remitted to the High Court for further evidence and argument, with SANRAL’s cross-appeal on costs dismissed with costs awarded against it.
This ruling is a significant reminder that expropriation compensation in South Africa is not a matter of state discretion or rough fairness — it is a constitutional obligation with a defined standard. For property owners facing expropriation, and for public entities like SANRAL that routinely acquire land for infrastructure, the message from the SCA is the same: get the methodology right, or face the consequences in court.