Government should pay $27 million to Interfresh Limited as compensation for the firm’s seven farms that were compulsorily acquired under the land reform programme, the Administrative Court has ruled.
Administrative Court judge Justice Herbert Mandeya ruled that Interfresh successfully proved that the value of the citrus fruit plantations on the farms was $27 million while Government failed to justify its offer of $5 million.
“The court came to the conclusion that the appellants were able to justify the compensation they claimed.
“On the other hand, the respondent (Minister of Lands and Rural Resettlement) was unable to show why the compensation should be based on a single figure and a single year if the Discounted Cash Flow method was used by both parties.
“In fact, clause 2.3 of the document produced by the respondent’s counsel specifically states: ‘Discounted Cash Flow was used. It is considered appropriate in valuation of plantations which have a defined economic useful lifespan’,” ruled Justice Mandeya.
Chief valuation officer in the Ministry of Lands and Rural Resettlement Mr Alec Chilonga failed to convince the court that the befitting compensation for the fruit trees on the seven farms was $5 525 120.28.
Interfresh owned the seven farms — Smithfield Estate, Bloomfield, Clifton, Laurencedale, Goldendale Estate, Remainder of Cornucopia and Yarrowdakle — that were under fruits in various provinces of the country.
In 2013, Government compulsorily acquired the seven pieces of land but in terms of the law, Interfresh was entitled to compensation for the improvements on the farms.
A dispute arose between Interfresh and Government on the value of the fruit trees and other developments on the farms as Government offered $5,2 million while the company claimed $27 million.
The Compensation Committee convened a series of meetings with the parties to determine an appropriate figure for compensation without success.
In March last year, the committee then valued the improvements at about $4 million, which did not go down well with Interfresh.
In April last year, Interfresh filed an appeal at the Administrative Court challenging the decision by the Compensation Committee.
Mrs Melu Matshiya of Wilmont and Bennet law firm appeared for Interfresh while Ms Venrandah Munyoro of the Attorney-General’s Office represented the minister.