Mokala Beleggings (Pty) Ltd and Another v Minister of Rural Development and Land Reform and Others

The appellants were owners of two parcels of agricultural land subject to a land restitution claim by the Barolong ba ga Mariba community. They conceded the claim and entered into two written agreements of sale with the State, represented by the Department of Land Affairs, in January 2009. The State undertook to purchase the land for restoration to the community, appointed its own conveyancers, and agreed that transfer would be effected within two months of signature. Although the conveyancers were ready to lodge transfer documents by mid-June 2009, the Department instructed them to delay lodgement because it lacked budgetary funds to pay the purchase price. As a result, transfer and payment were deliberately delayed. The appellants sent written demands by registered post in October 2009 placing the Department on terms. Partial and final payments were only made in June and July 2010 after urgent proceedings were instituted in the Land Claims Court. The Land Claims Court refused to award mora interest. The appellants appealed to the Supreme Court of Appeal.

The appeal was upheld. The order of the Land Claims Court was set aside and replaced with an order directing the first to fourth respondents to pay mora interest at 15.5% per annum on specified amounts to both appellants for defined periods, together with the costs of the application and the appeal.

The case is an important authority on mora interest in South African contract law, particularly in the context of State land reform transactions. It clarifies the distinction between mora ex re and mora ex persona, confirms that the State is not exempt from liability for mora interest due to budgetary constraints, and reinforces that registered-post demands complying substantially with contractual notice provisions can validly place a debtor in mora.