M Bisunder Farming CC v Regional Land Claims Commission (KZN)

The second respondent (Waterfall Community Claimants) submitted a land claim in May 1998 for the farm Kruisfontein 963 Portion 91 of Portion 42 under the Restitution of Land Rights Act No. 22 of 1994. The first respondent (Regional Land Claims Commission - KZN) investigated the claim, published a section 11 notice, and obtained a valuation of R1,742,000 in June 2007. On 30 July 2007, the first respondent made a written offer to purchase the farm from the applicant (M Bisunder Farming CC) for R1,742,000. The applicant accepted this offer on 6 August 2008. After nearly two years of silence, the applicant launched this application on 22 October 2010 seeking payment of the purchase price and interest. The parties only commenced communication on 2 December 2010. At the hearing on 6 October 2011, the parties requested time to settle and subsequently agreed on the purchase price of R1,742,000, leaving only the issue of interest and costs to be determined by the court.

• Whether the first respondent was in mora (default) in making payment of the purchase price
• Whether the applicant was entitled to interest at the legal rate of 15.5% on the purchase price
• Whether mora ex re or mora ex persona applied to the circumstances
• What costs order should be made

a) Application for mora interest is dismissed. b) First respondent to pay applicant's costs on a party and party scale.

In land restitution purchase agreements under the Restitution of Land Rights Act No. 22 of 1994, where payment is conditional upon the signing of a section 42D agreement by all parties, the debtor does not fall into mora until that agreement is signed, as the date for payment is not fixed until that event occurs. Neither mora ex re nor mora ex persona can be established where: (1) there is no express or tacit stipulation fixing a date for payment independent of the signing of the agreement (precluding mora ex re); and (2) no valid demand (interpellatio) has been made by the creditor (precluding mora ex persona). Consequently, interest on delayed payment cannot be claimed until the conditions precedent for the payment obligation have been fulfilled.

The court observed that it is the practice of the Land Claims Court that costs orders should only be granted if circumstances justify the same. The court noted that while there was significant delay on the part of the first respondent (nearly two years of silence following acceptance of the offer), this delay did not constitute mala fides. The court recognized that the applicant had no option but to launch the application to reach finality on the matter, despite ultimately failing on the substantive relief sought (interest). This suggests that in land restitution matters, the court may take a pragmatic approach to costs where applications serve to move stalled processes forward, even where the applicant does not succeed on all issues.

This case clarifies the application of mora principles in the context of land restitution purchase agreements under the Restitution of Land Rights Act No. 22 of 1994. It establishes that for interest to accrue due to delay in payment, there must be either a fixed date for payment arising from the contract itself (mora ex re) or a valid demand by the creditor followed by failure to pay (mora ex persona). The case demonstrates that in land restitution matters, payment obligations typically crystallize only upon the signing of the section 42D agreement by all parties, not merely upon acceptance of an offer. It also illustrates the Land Claims Court's approach to costs in restitution matters, recognizing that applications may be necessary to move matters forward even where substantive relief is not ultimately granted.