Jazz Spirit 12 (Pty) Ltd & others v The Regional Land Claims Commissioner: Western Cape & others

The second and third respondents (the Sadiens) lodged a land claim in respect of property known as Erf 2274 Constantia (Sillery Farm), claiming they had been deprived of it due to racially discriminatory laws or practices. The appellants opposed the claim. The matter was referred to the Land Claims Court under section 14 of the Restitution of Land Rights Act 22 of 1994. After a protracted trial spanning 21 days from November 2010 to December 2012, the Land Claims Court found that the respondents had indeed been deprived of the property and that the purchase price of R13,550 did not constitute just and equitable compensation. The respondents opted for alternative State land rather than restoration of the original property. The court allocated Erf 1783 Constantia, later varied to a portion of Erf 142 Constantia. Both parties achieved substantial success. The court below made no order as to costs, reasoning that the claimants had succeeded against the State and were State-funded. The appellants appealed against the costs order only. An intervening party (South African Riding for the Disabled Association) applied to intervene and rescind the judgment, claiming it had been occupying Erf 142 Constantia under a lease since 1981 and had effected improvements worth R7.5 million.

• Whether the appeal against a costs order alone is appealable under section 21A(1) of the Supreme Court Act 59 of 1959
• Whether exceptional circumstances existed under section 21A(3) to permit the appeal to proceed despite having no practical effect or result
• Whether the intervening party had standing to apply for rescission under section 35(11) of the Restitution of Land Rights Act when the pending appeal related only to costs
• Whether the trial court exercised its discretion properly in making no order as to costs
• What the approach to costs should be in land restitution matters under the Restitution of Land Rights Act

The appeal was dismissed. No order was made as to the costs of the appeal. The earlier orders dismissing the intervening party's application to intervene (with costs) and striking off the rescission application (with costs) were confirmed.

1. For an applicant to succeed under section 35(11) of the Restitution of Land Rights Act, it must prove that the pending appeal is in respect of the order sought to be rescinded. An applicant must show it is directly and substantially affected by the specific order under appeal. 2. Under section 21A(3) of the Supreme Court Act, 'exceptional circumstances' must be 'markedly unusual or specially different' - the circumstances must meet a high threshold and be carefully examined. In land restitution matters, this threshold may be even higher for costs appeals. 3. Mere considerable costs incurred during a lengthy trial do not, without more, constitute exceptional circumstances under section 21A(3). 4. In land restitution cases under the Restitution of Land Rights Act, the general principle is that there should be no costs orders on appeal absent special circumstances, due to the social justice nature of the legislation and the need to avoid deterring disadvantaged claimants from exercising their rights. 5. The Land Claims Court is not bound by the general principle that costs follow the event due to the social justice legislation it administers. The trend in the Land Claims Court is not to order costs against a party save under exceptional circumstances.

The court made important observations about the policy rationale for limiting costs orders in land restitution matters. Bosielo JA noted that section 6 of the Restitution Act places an onerous duty on the Land Claims Commission to ensure claims are well investigated and properly prepared. The court observed that many people dispossessed of land have been systematically disadvantaged and may be unable to fund adverse costs orders. Imposing costs might dissuade such people from pursuing rights provided for in the Restitution Act, defeating its very object. The court emphasized that costs orders might be 'subversive to the spirit of social justice underlying the Restitution Act.' The judgment expressed that it is crucial for promotion and maintenance of the rule of law that parties approaching courts to resolve land disputes should not be mulcted with costs, particularly where there are no allegations of wilfulness or vexatiousness. The court also noted that the Land Claims Court has discretion in awarding costs and, due to the social justice legislation it administers, tends not to order costs against a party save under exceptional circumstances.

This case establishes important principles regarding costs in land restitution litigation under the Restitution of Land Rights Act. It confirms that the general rule of 'costs follow the event' does not automatically apply in land claims matters due to their social justice nature. The judgment reinforces that costs orders should not be made in restitution cases on appeal absent special circumstances, to avoid deterring disadvantaged claimants from exercising their constitutional and statutory rights. The case also clarifies the requirements for invoking section 35(11) of the Restitution Act for rescission applications and the high threshold for establishing 'exceptional circumstances' under section 21A(3) of the Supreme Court Act in the context of appeals against costs orders only. It demonstrates the courts' reluctance to interfere with trial courts' discretion on costs and the strict approach to what constitutes exceptional circumstances warranting an appeal with no practical effect.