M Bisunder Farming CC v Regional Land Claims Commission (KZN) and Another (LCC188/2010) [2011] ZALCC 13 (27 October 2011)

IN THE LAND CLAIMS COURT OF SOUTH AFRICA

HELD IN RANDBURG

CASE NO: LCC188/2010

Decided on: 27 OCTOBER 2011

In the matter between:

M BISUNDER FARMING CC …........................................................................Applicant

And

REGIONAL LAND CLAIMS COMMISSION (KZN) …............................First Respondent

WATERFALL COMMUNITY CLAIMANTS …....................................Second Respondent

JUDGMENT

MPSHE AJ:

Introduction:

[1] This is an application for payment of the agreed purchase price. The applicant accepted the offer to purchase the farm Kruisfontein 963 Portion 91 of Portion 42 (the farm) in the amount of R1, 742000 (one million seven hundred and forty two thousand rand). Prayers to the Notice of Motion read as follows:

1. That the first respondent be and is hereby ordered and directed within specified time to be determined by this Honourable court, to comply with the offer of purchase of the farm Kruisfontein 963 portion 91 of portion 42 in extent of 78.7924 hectares, made by the first respondent to the applicant and which offer was accepted by the applicant, for reasons more fully described in the founding affidavit of the applicant hereto;

2. That the first respondent be and is hereby ordered to purchase the farm Kruisfontein 963 portion 91 of portion 42 in extent of 78.7924 hectares for the second respondent, in terms of the provision of Restitution of Land Rights Act No.22 of 1994.

3. That the First Respondent is hereby directed and ordered to pay current market value of the property to the applicant which is R2.800 000.00 (two million eight hundred thousand rand) within specified reasonable period of time to be determined by this Honourable Court;

4. That the First Respondent should be declared to have infringed the applicant’s rights contained in Section 33 of the Constitutional of the Republic of South Africa, Act No.108 of 2000 and promotion of access to Justice Act No.3 of 2000;

5. That the First Respondent be ordered and directed to pay to the applicant all costs incurred by applicant as a result of them

bringing this application;

6. That the First Respondent be and is hereby ordered and directed to pay costs of this application on an attorney and client scale;

7. That the Second Respondent be and is hereby ordered to pay costs of this application on an attorney client scale but only in the event of them opposing this application; and

8. Applicant be granted further or alternative relief.

A founding affidavit by Ishwerdevi Bisunder is used in support of the application.

Background.

[2] During or about 2nd May 1998, the second respondent submitted a claim with the first respondent in terms of the provision of Restitution of Land Rights Act No.22 of 1994 (hereinafter referred to as “the act”), in terms of which the second respondent claimed Kruisfontein 963 portion 91 of portion 42 in extent of 78.7924 hectares (hereinafter referred to as the farm). This claim was allocated the reference number of: KRN6/2/2/E/20/0/0/9.

[3] After the abovementioned claim by the second respondent, the first respondent investigated the claim and caused a notice in terms of Section 11 of the Act, to be published in the Government Gazette.

[4] On the instruction of the first respondent, a valuation of the farm was conducted by C.B Richard Ellis and D.A.T White on the 1st June 2007, and the market value was said to be R1 742 000 (One Million Seven Hundred and Forty Two Thousand Rand).

[5] Pursuant to the valuation of the farm, a written offer of R1 742 000 (One Million Seven Hundred and Forty Two Thousand Rand) was made to the applicant by the first respondent in respect of purchasing of the farm from the applicant on the 30 July 2007.

[6] The applicant accepted the offer of R1 742 000 (One Million Seven Hundred and Forty two thousand Rand) made by the first respondent on the 6 August 2008.

[7] There is no evidence as to what happened after the acceptance of the offer by the applicant on the 6 August 2008. It would appear however, that applicant communicated with first respondent telephonically on the 2 December 2010 for the first time.

[8]The application was launched on the 22 October 2010.

[9] The parties started following only on 2 December 2010 after silence of almost two years.

[10]On the 6 October 2011 being date of hearing, parties requested court for an indulgence to try and settle the matter.

[11]On the 7 October 2011 parties informed court that:

[11.1] an agreement has been reached that first respondent will purchase the property in the amount agreed upon on the 6 August 2008, being R1742 000 (One Million Seven Hundred and Forty Two Thousand Rand Only)

[11.2] that the only issue to be decided upon by the court is the issue of interest at the legal rate of 15.5%, that argument and submissions will be confined to this aspect and costs.

[12] This then disposed of prayers1, 2 and 3 to the Notice of Motion. By implication applicant abandoned prayer 4 to the Notice of Motion.

Interest:

[13]The parties had agreed that only the issue of interest is to be argued. Applicant applied for an amendment to prayer 3 to the Notice of Motion.

[14] First respondent objected and made submissions. I allowed the amendment application.

[15] The amended prayer then reads as follows:

“The first respondent is hereby directed and ordered to pay current value of the property to the applicant, which is R2.8 million, within specified, reasonable period of time to be determined by this honourable court, alternatively payment of interest on the sum of R1.7 million at the legal rate of 15.5 percent from 8 August 2008 to date of payment.”

[16] This prayer seems to be confusing in that it seeks relief in the payment of R2.8 million alternatively R1.7 million. Applicant,

however hastily submitted that applicant is not pursuing payment of R2.8 million anymore but R1.7 million. The interest sought would then be interest on the capital amount of R1.7 million.

[17] Mr Singh for the applicant submitted that applicant is entitled to the interest as a result of default by the first respondent. He submitted that first respondent was in mora ex re.

[18] Counsel referred to the case of SCOIN TRADING (PTY) LTD vs. BERNSTEIN, GILLIES MARTIN NO1 and handed up the printed judgment.

[19] Our Law has crystallized on mora ex re and mora ex pesona. In case of C & T products (Pty) Ltd v M.H Goldschmist (Pty) Ltd2 the following was said:

“Mora is a wrongful delay or default in making payment, and arises the moment the debtors becomes obliged to pay. The obligation to pay interest on the amount owing likewise arises from the moment the debtor is in mora. mora is generally divided in to two categories, ie mora ex persona and mora ex re arises out of the conduct of the debtor and occurs when due demand (interpellation) has as been upon the debtor, who has failed to satisfy such demand. mora ex re, on the other hand, arises out of the transaction itself and is not dependent upon prior demand. This occurs, for example, where the date for payment is fixed by agreement between the parties.”

[20] In the SCOIN TRADING (PTY) LTD at paragraph 11 and 12 the following is said:

The starting point is therefore an examination of the meaning of mora. The term mora simply means delay or default1. This concept is employed when the consequences of a failure to perform a contractual obligation within the agreed time are determined2. The date may be stipulated either expressly or tacitly and there must be certainty as to when it will arrive.3 Thus, when the contract fixes the time for performance, mora (mora ex re) arises from the contract itself and no demand (interpellatio) is necessary to place the debtor in mora. The fixed time, figuratively, makes the demand that would otherwise have had to be made by the creditor.

Paragraph 12: In contrast where the contract does not contain an express or tacit stipulation in regard to the date when performance is due, a demand (interpellatio) becomes necessary to put the debtor in mora. This is referred to as mora ex persona. The debtor does not necessarily fall into mora if he or she does not perform immediately or within a reasonable time. In this situation mora arises only upon failure by the debtor to comply with valid demand by the creditor. Mora ex persona is so referred as it requires an act of a person (the creditor) to bring it into existence.4

[21] Counsel for the applicant admitted that there was no document from which mora on the part of first respondent could be determined, he then abandoned mora ex re and argued on the basis of mora ex persona.

Also in mora ex persona he admitted that no demand (interpellation) was made by the applicant. Counsel instead referred to the letter written by first respondent dated 13 December 2010.Notably this letter only confirms the existence of the agreement and the purchase price.

[22] This application has no legal basis. The date or time from which payment can be said to be due is dispended upon the signature of all parties to the section 42 D agreement.

[23]This much is clear from the letter dated 30 July 2007 from first respondent which reads thus at paragraph 3 thereof:

The office will prepare a submission to the Chief Land Claims Commissioner for approval of the above-mentioned. On approval of the

above amount, the state commits to pay 50% to the conveyancers attending to registration of the property within 30 days of signing

the sale agreement and the second 50% is paid on transfer.

[24] At the hearing of this application the said agreement had not been signed by all parties. Mr Nqala for first respondent informed the court that the said agreement was prepared in February 2011 and had not been signed.

[25] Application for payment of interest at the legal rate of 15.5% cannot be legally justified and is thus refused.

Costs

[26]. Generally costs are to follow the result. In this matter the applicant has failed on the matter of interest, however I am mindful of the fact that first respondent started doing something only after the launching of the main application. The applicant accepted the offer on the 6 August 2008 and silence followed until this application. It is the practice of this court that costs orders should only be granted if circumstances justify the same. The applicant had no option but to launch this application in order to reach finality on the matter. However, I find nothing mala-fide on the part of the first respondent to justify punitive costs.

Having considered everything I make the following order:

Application for mora interest is dismissed.

First respondent to pay application’s costs on a party and party scale.

_______________

J.M MPSHE

ACTING JUDGE

1(29/10)(2010) zasca 160

2Du Toit v Standard General Insurance Co (Pty) Ltd 1994 (1) SA 682 (W) Thoroughbred Breeder’s Association v Prince Waterhouse 2001 (4) SA 551 (SCA)at F/G 595 A West Rand Estate Ltd v N.Zealand Insurance 1926 A.D 173 at 182-3.

1Wessels law of contract in South Africa vol 2 2ed 1951 para 2857 atp.777.

2RH Christie the law of contract in South Africa 5ed (2006) p544.

35(1) LAWSA 2ed para 220 at 298.

45(1) LAWSA para 222 at 301.