Modderklip Boerdery (Pty) Ltd v President of the Republic of South Africa and Others; Modder East Squatters and Another v Modderklip Boerdery (Pty) Ltd

Modderklip Boerdery (Pty) Ltd owned agricultural land adjoining Daveyton township. From 2000 onwards, a rapidly growing number of people unlawfully occupied a portion of the land, eventually numbering about 40 000 residents. Modderklip obtained an eviction order under the Prevention of Illegal Eviction and Unlawful Occupation of Land Act 19 of 1998 (PIE), but the order could not be enforced because the sheriff required prohibitively high security costs and the SAPS and other organs of state refused to assist, regarding the matter as a civil dispute. With no practical means to enforce the order and no alternative accommodation provided for the occupiers, Modderklip approached the High Court seeking enforcement and constitutional relief against the state. The High Court granted extensive declaratory relief and ordered the state to produce a comprehensive plan to resolve the occupation. The state appealed to the Supreme Court of Appeal.

The appeal was dismissed in substance. The SCA confirmed that the state had acted unconstitutionally and ordered the state to pay Modderklip constitutional damages, effectively compensating it for the loss of use of its land caused by the continued unlawful occupation until such time as the land was lawfully expropriated or the occupation otherwise lawfully terminated.

This case is a leading authority on constitutional damages and the positive duties of the state where private property rights and socio-economic rights intersect. It affirms that the state may be held financially liable where its failure to act results in a de facto expropriation and undermines the effectiveness of court orders. The judgment clarified that property owners cannot be forced to bear alone the social burden of homelessness and land reform failures.