Bongo Safaris (Pty) Ltd and Others v Minister of Rural Development and Land Reform and Others

The applicants (Bongo Safaris (Pty) Ltd, Thabana Safaris (Pty) Ltd, and Engelzakis & Swart Farms Pty Ltd) concluded sale agreements with the respondents for the purchase of land. After the contracts were signed, the fourth respondent indicated that there were no funds available to satisfy the respondents' obligations under the agreement and could not indicate when funds would become available. The respondents failed to respond to correspondence from the applicants' attorney regarding payment. The applicants approached the Land Claims Court seeking enforcement of the agreement. The respondents failed to file a notice of appearance within the prescribed time. On the eve of the hearing date (30 April 2010), the matter was settled regarding prayers 1-5, with the respondents having complied with prayers 1 and 2 and agreeing to prayers 3, 4, and 5. The only remaining issue was costs.

• Whether the applicants were entitled to costs following the respondents' default in complying with the sale agreement
• Whether a costs order on an attorney-client (punitive) scale was justified against the State
• Whether the court should exercise its discretion to award costs despite the matter being settled

The Court granted prayers 1-5 of the notice of motion (the substantive relief having been settled). The Court awarded costs to the applicants but declined to award costs on a punitive (attorney-client) scale, presumably awarding costs on the ordinary party-and-party scale.

The binding legal principles established are: (1) When the State concludes sale agreements for land purchases in the context of land reform, it has an obligation to ensure funds are available to satisfy such agreements or to address delays timeously and appropriately without prejudicing the contracting parties. (2) The State's mere assertion of lack of funds, without proper explanation or communication, does not excuse non-compliance with contractual obligations. (3) Where a private party is forced to approach court to enforce an agreement against the State due to the State's default, costs will ordinarily follow the event in favour of the successful private party, absent particularly powerful reasons to the contrary. (4) However, a punitive costs order on an attorney-client scale requires evidence of malicious or vexatious conduct, which is not established merely by the State's failure to perform due to funding constraints.

The Court made non-binding observations expressing concern about the pattern of matters coming before it where funds allocated for land purchases to satisfy land claims had been exhausted, without further explanations being provided. The Court commented that it had heard in a number of matters about such funding exhaustion, implying systemic issues with land reform funding and administration. The Court also observed that the respondents' inability to pay and silence on the matter causes unnecessary apprehension and anxiety to landowners who have concluded enforceable contracts, highlighting the human and practical impact of the State's administrative failures in land reform implementation.

This case is significant in South African land claims jurisprudence as it addresses the issue of the State's obligations when concluding land purchase agreements in the context of land reform. It establishes that the State cannot simply cite lack of funds as a reason for non-compliance with contractual obligations without properly communicating with the other party and taking appropriate steps. The judgment emphasizes the importance of ensuring funding is available before concluding agreements and the need for timeous and appropriate communication when delays occur. It also provides guidance on the application of costs principles in land claims matters where the State is a party, balancing the protection of private parties' rights against considerations of public funds, while confirming that powerful reasons are required not to award costs against the State when a private litigant succeeds.