THE SUPREME COURT OF APPEAL
REPUBLIC OF SOUTH AFRICA

JUDGMENT

Reportable

Case No: 276/2011

In the matter between

MOKALA BELEGGINGS (PTY) LTD
FIRST APPELLANT

WILLEM HENDRIK STEYN SNYMAN
SECOND APPELLANT

and

MINISTER OF RURAL DEVELOPMENT AND
LAND REFORM

FIRST RESPONDENT

THE DIRECTOR-GENERAL OF THE
DEPARTMENT OF LAND AFFAIRS

SECOND RESPONDENT

THE CHIEF LAND CLAIMS COMMISSIONER            THIRD RESPONDENT

THE REGIONAL LAND CLAIMS
COMMISSIONER: GAUTENG AND NORTH
WEST PROVINCE

FOURTH RESPONDENT

THE DEPUTY DIRECTOR: FINANCE,
DEPARTMENT OF LAND AFFAIRS

FIFTH RESPONDENT

THE MINISTER OF FINANCE

SIXTH RESPONDENT

THE REGISTRAR OF DEEDS

SEVENTH RESPONDENT

MAHLANGU ATTORNEYS

EIGHTH RESPONDENT

BAROLONG BA GA MARIBA COMMUNITY            NINTH RESPONDENT

Neutral citation: Mokala Beleggings (Pty) Ltd & another v Minister of Rural
Development and Land Reform and others (276/11) [2012] ZASCA 21
(23 March 2012)

Coram:
MPATI P, NAVSA, SNYDERS, MAJIEDT and WALLIS JJA

Heard:
27 FEBRUARY 2012

Delivered:
23 MARCH 2012

Summary:
Mora interest – interpretation of clauses in contract
affecting mora interest – mora ex re and mora ex persona.

______________________________________________________________

ORDER
______________________________________________________________

On appeal from: Land Claims Court (Randburg) (Mia AJ, sitting as court of
first instance):
1.
The appeal is upheld.
2.
The first to fourth respondents are ordered jointly and severally to
pay the costs of the appeal.
3.
The order of the court below is set aside and substituted with the
following:
‘(a)   The first to fourth respondents are ordered to pay interest to
the first applicant at the rate of 15.5 per cent per annum on the
amount of R1 450 000 (one million four hundred and fifty thousand
rand) from 28 November 2009 until 30 June 2010 and on the further
amount of R1 450 000 (one million four hundred and fifty thousand
rand) from 8 December 2009 until 12 July 2010;

(b) The first to fourth respondents are ordered to pay interest to the
second applicant at the rate of 15.5 per cent per annum on the
amount of R1 475 000 (one million four hundred and seventy
five thousand rand) from 8 December 2009 until 23 June 2010
and on the further amount of R1 475 000 (one million four
hundred and seventy five thousand rand) from 28 November
2009 until 2 July 2010.
(c) The first to fourth respondents are ordered jointly and severally
to pay the costs of the application.’
______________________________________________________________

JUDGMENT
______________________________________________________________

MAJIEDT JA (MPATI P, NAVSA, SNYDERS and WALLIS JJA concurring):

[1] ‘Interest is the life-blood of finance’ said Centlivres CJ six decades ago
in Linton v Corser.1 The learned Chief Justice made this observation in the
course of finding that there is no reason to draw a distinction between
contractual interest and mora interest. This appeal concerns the latter and the
crisp issue is whether a purchaser who deliberately delays effecting the
transfer of property and payment of the purchase price can be held liable for
mora interest. The appellants, as unsuccessful applicants for, inter alia, an
order awarding them mora interest in the Land Claims Court, Randburg (the
LCC) before Mia AJ sitting as court of first instance, are before us with leave
of this court.

1 Linton v Corser 1952 (3) SA 685 (A) at 695G-H.

[2] The appellants were the registered owners of fixed property on which
the Snyman family farmed. The property was the subject of a land claim which
the appellants conceded. They subsequently agreed to sell the property to the
State. Two agreements of sale were drawn up as the property consisted of
two separate pieces of land and each appellant owned one of these. I shall
revert presently to the salient terms of the agreements which were signed by
the purchaser on 29 January 2009. The State, as purchaser, was to appoint
the conveyancers in terms of the agreements, which is contrary to usual
practice. The eighth respondent, a firm of attorneys and conveyancers, was
duly appointed in this regard. The agreements provided that transfer was to
be effected to the land claimants, namely the Barolong ba ga Mariba
community, the ninth respondent (the community), although the National
Department of Land Affairs (the department) was stipulated as purchaser, but
nothing turns on this. Of  importance is that the agreements provided that ‘the
transferring attorney undertakes to effect the transfer of the [properties] in the
name of the purchaser within 2 (two) months from the date of signature of
[the] agreement by all parties concerned’.2

[3] It was common cause on the papers that the conveyancers were ready
to lodge papers in order to effect the transfer during the middle of June 2009.
They were instructed, however, by their client, the department, to delay
lodgement, first until 1 July 2009, then to October 2009 and eventually
indefinitely. The reason given for this instruction was that the department had
no funds in its budget to pay the purchase price. This, too, became common
cause. These delays caused the appellants to dispatch, by registered post,
written letters of demand, which I will discuss in more detail shortly.

[4] When the letters of demand proved fruitless an urgent application was
launched in the LCC for various orders, including a claim for mora interest.
The urgent application elicited a positive response from the department

2 Clause 5.2 of the agreements.

inasmuch as payment of 50 per cent of the purchase price was made to the
first appellant on 30 June 2010 and the balance on 13 July 2010 and to the
second appellant on 23 June 2010 and 2 July 2010 respectively.3 Registration
of the transfer of the properties was also effected. But the department
opposed the claims for mora interest and for a punitive costs order against it.
The LCC declined to grant mora interest and made the normal costs order. In
the result the claim for mora interest forms the sole subject of this appeal.

[5] The appellants’ case for mora interest was based firstly, on mora ex re
in reliance on clause 5.2 of the contracts and secondly, on mora ex persona
by virtue of the written letters of demand. Shortly before the hearing of the
matter in the court below, the appellants gave notice of an amendment of their
Notice of Motion in terms whereof it relied on mora ex re as the main cause
and in the alternative on mora ex persona. It was common cause in the LCC
that the State was in mora regarding the performance of its obligations before
the application was brought. However, it resisted the claim for mora interest
on the ground that it was not obliged in law to pay interest. The LCC decided
the matter on the basis that the agreement did not make provision for the
payment of interest; that payment of the purchase price depended on the
registration and transfer of the property and that the appellants (as applicants)
failed to show when registration was effected and when payment was
received in order to calculate a date from which interest should run.

Mora ex re: clause 5.2 of the agreements

[6] It is well established that ‘mora’ simply means default or delay and that
it finds application when the consequences of a failure to perform a
contractual obligation within the agreed time are determined.4 Where a
contract fixes the time (either expressly or tacitly, but with certainty as to when

3 The agreements made provision for payment of 50 per cent of the purchase price within 30
days after the date of signature of the agreement and for payment of the balance thereof
within 10 working days of the date of registration of transfer.
4 Scoin Trading (Pty) Ltd v Bernstein NO 2011 (2) SA 118 (SCA) para 11.

it will arrive) for performance, mora ex re flows from the contract itself and
there is no need for a demand to place the debtor in mora.5 The award of
interest to a creditor where the debtor is in mora in respect of the payment of
a monetary obligation in terms of an agreement is, in the absence of a
contractual obligation to pay interest, based upon the principle that the
creditor is entitled to be compensated for his loss arising from the fact that he
was not paid on the due date.6 The loss is calculated on the basis of allowing
interest on the capital sum owing over the mora period.7

[7] As stated, the appellants rely on clause 5.2, set out above, for mora ex
re. In its judgment the LCC came to the startling conclusion that clause 5.2 is
to be regarded as pro non scripto, since the Registrar of Deeds, and not the
department’s conveyancers, is responsible for effecting the registration of
transfer of the property. This is a material misdirection.8 What was required of
the LCC was to interpret the clause, not to summarily dismiss it in the fashion
that it did. While the provision is, on the face of it, plain and unambiguous, it is
fraught with difficulties. The conveyancers, represented by the department,
furnished an undertaking to have the registration of transfer effected within
two months of the date of signature of the agreements. This was a tall order.
But the clause cannot be interpreted as fixing a date for transfer because the
actual date of transfer is always dependent on various events extraneous to
the conveyancer, as it happened in this case. A subdivision and consolidation
of the two properties sold by the different legal entities (the appellants) had to
be effected. In order to obviate further delays, the first appellant agreed to an
amendment of its sale agreement by altering the description of the property,
thereby eliminating the need for a subdivision and consolidation. An
addendum to that sale agreement was consequently entered into on 15 May
2009. A further cause for delay in the registration of the transfer was that the
clearance certificate in respect of one of the properties had been lost and a

5 Ibid.
6 Bellairs v Hodnett and another 1978 (1) SA 1109 (A) at 1145D-E.
7 Bellairs at 1145E-F; J van Zijl Steyn, Mora Debitoris volgens die Hedendaagse Romeins-
Hollandse Reg, pp 84 – 85.
8 Counsel for the department conceded this point during argument.

new one had to be obtained from the municipality. Thus the date on which the
conveyancers were first ready to lodge transfer documents was the week
following on 11 June 2009. These examples illustrate that clause 5.2 could
not and did not establish mora ex re. That being the case, one is constrained
to consider the breach provisions in the sale agreements and the written
notices, as I do next.

Mora ex persona: the written notices

[8] Where a contract does not contain an express or tacit stipulation with
regard to the date when performance is due, a demand is needed to place the
debtor in mora, ie mora ex persona.9 In Linton v Corser, supra, the court held
the purchaser liable for mora interest (it was a case of mora ex persona) for
delaying the signing of the transfer documents and the delivery of the
necessary guarantees. Mora in the present matter concerned a delay in the
payment of the purchase price as a result of the department’s delay in having
the registration of transfer effected by its conveyancers. As stated, the fact of
and the reason for the delay was common cause. The delay was deliberate,
due to the department’s financial constraints and resultant inability to pay the
purchase price. Of course our law does not require fault on the part of a
debtor for a contractual damages claim. All that is required is proof that the
debtor is in mora.10

[9] The sale agreements contained a breach provision. Clause 14.1 made
provision for the prejudiced party to notify the defaulting party to rectify the
default, whereafter the former  would have the right, in the event of a
continued default for 14 days after receipt of the notice, to claim specific
performance or to cancel the agreement or to refer the matter to the LCC for
adjudication. Clause 15.1 set out the parties’ chosen domicilia; in the case of
the purchaser it is stipulated as ‘care of the Chief Land Claims Commissioner

9  Scoin Trading (Pty) Ltd v Bernstein NO, para 12.
10 Scoin Trading (Pty) Ltd v Bernstein NO, para 20.

(ie the third respondent), Department of Land Affairs, 184 Jacob Maré Street,
Pretoria’. Clause 15.3 provided that all notices required in terms of the
agreements were to be in writing and were to be delivered either by hand or
sent by pre-paid registered post. It also contained a deeming provision to the
effect that notices by registered post would be considered as having been
received by the addressee 14 days after it was posted, unless the contrary is
proved.

[10] The appellants, through their attorneys, caused letters of demand to be
sent by registered post. Both letters, although bearing different dates, namely
21 October 2009 in respect of the first appellant, and 28 October 2009 in
respect of the second appellant, were dispatched on 30 October 2009. They
were both addressed to ‘Barolong ba ga Mariba, c/o The Chief Land Claims
Commissioner, Department of Land Affairs, Private Bag X03, Pretoria’, and
copied to the Deputy Director of Finance at the same address and also to the
department’s conveyancers. As stated, the letters were sent by registered
post, but in the case of the copy to the conveyancers, they were transmitted
by telefax. The department took issue firstly with the fact that the letters had
been addressed to the community and not to the department (as the
purchaser stipulated in the agreements) and secondly with the postal address
which was not the address stipulated in clause 15.1 set out above.

[11] The department’s case on the issues raised in respect of these notices
was pleaded in a rather disingenuous fashion. It did not allege that it had not
received the notices. The answer to the alleged dispatch of the notices was
instead a bare denial that the notices had been sent as alleged. The fact that
they had been addressed to the community, instead of the department, was
also raised. But counsel for the department was driven to concede that the
contents of the notices themselves were plain and unambiguous, namely to
put the department on terms regarding the registration of transfer. He
correctly conceded that if the department had indeed received the notices, it
could not have harboured any doubt as to what was required of it. The

department has not raised a real and bona fide factual dispute in its answer. It
contented itself with an evasive answer to which it is bound.11

[12] The failure to state positively that the department did not receive the
letters may have been contrived, since the letters were in fact sent to its
postal address and copied to the Deputy Director of Finance in the office of
the Chief Land Claims Commissioner and to the department’s conveyancers.
Clause 4.6 of the agreements designated the Deputy Director of Finance as
the official responsible for making payment of the purchase price. The
inference is compelling that receipt of the letters could not be denied in view
of this fact.

[13]    In De Beer NO v North-Central Local Council and South-Central Local
Council and Others (Umhlatuzana Civic Association Intervening)12 the
Constitutional Court had to consider the adequacy of notices sent by pre-paid
registered post by a municipal council to a defaulting ratepayer prior to the
institution of court proceedings, in terms of s 105 of the Durban Extended
Powers Consolidated Ordinance 18 of 1976 (N). The court found13 that ‘[t]here
is no evidence of any significant unreliability of the post office nor of any
indication that delivery of notices sent by registered post is hampered by an
unacceptable degree of post office inefficiency. The notice provisions that
require posting are reasonably capable of bringing the hearing to the attention
of the person affected’.

[14]    The appellants have consequently established that the letters of
demand had been received and that the department had been properly placed
in mora. There was no quarrel with the appellant’s contention that, in the

11 Wightman t/a JW Construction v Headfour (Pty) Ltd and another 2008 (3) SA 371 (SCA)
para 13.
12 De Beer NO v North-Central Local Council and South-Central Local Council and Others
(Umhlatuzana Civic Association Intervening) 2002 (1) SA 429 (CC).
13 De Beer para 20.

circumstances, mora interest should commence running 28 days after the
date of dispatch of the letters by pre-paid registered post, ie as from 28
November 2009.14

[15]    It was common cause that the appellants had suffered loss as a result
of the delay. The appellants’ farming enterprise was the main source of
income for the Snyman family. They had sold all their cattle during April 2009
in anticipation of the transfer of the properties to the State, which they had to
vacate within 48 hours of the registration. The appellants were plainly
dependent on payment of the purchase price to re-establish their farming
business or to establish other enterprises from which to derive income. The
financial prejudice and loss flowing from the State’s prevarication is self-
evident.

[16]    Lastly, there is a disturbing aspect which must be addressed. In the
founding affidavit on behalf of the appellants, the deponent relayed advice
that she had received that the department was on record as stating that it only
pays out monies due in respect of agreements entered into (in respect of land
claims), when ordered to do so by a court of law. This damning accusation
was left unanswered by the department. It is troubling that a State department
can adopt such an attitude, which is to be strongly deprecated. It may well be
that the department is under severe strain to meet the financial (and, it seems,
the administrative) demands imposed by the land reform process. The
restitution of land under the Restitution of Land Rights Act 22 of 1994, is not
only a constitutional imperative but a highly emotive issue as well.
Considerable circumspection, diligence and sensitivity are required on the
part of all concerned, including departmental officials. Agreements to
purchase land for restoration to dispossessed communities should be
honoured in accordance with the terms agreed upon, lest the already
demanding challenges of the process are further exacerbated.

14 Calculated on the basis of 14 days’ notice in terms of clause 14.1 added to the 14 days of
the deeming provision in clause 15.3, set out above.

[17]    The appeal must therefore succeed. The matter was not of sufficient
complexity to warrant the employment of two counsel. It is hardly surprising
that in the court below and in the preparation of heads of argument for this
court the appellants, who now seek the costs of two counsel, utilised the
services of one counsel only. The following order is made:

1. The appeal is upheld.
2. The first to fourth respondents are ordered jointly and severally to pay
the costs of the appeal.
3. The order of the court below is set aside and substituted with the
following:
‘(a)   The first to fourth respondents are ordered to pay interest to
the first applicant at the rate of 15.5 per cent per annum on the
amount of R1 450 000 (one million four hundred and fifty thousand
rand) from 28 November 2009 until 30 June 2010 and on the further
amount of R1 450 000 (one million four hundred and fifty thousand
rand) from 8 December 2009 until 12 July 2010;

b. The first to fourth respondents are ordered to pay interest to the
second applicant at the rate of 15.5 per cent per annum on the
amount of R1 475 000 (one million four hundred and seventy five
thousand rand) from 28 November 2009 until 23 June 2010 and on
the further amount of R1 475 000 (one million four hundred and
seventy five thousand rand) from 8 December 2009 until 2 July
2010.

c. The first to fourth respondents are ordered jointly and severally to
pay the costs of the application.’

___________

S A MAJIEDT

JUDGE OF APPEAL

APPEARANCES:

Counsel for appellants
:
H S HAVENGA SC (with him OSCHMAN I)

Instructed by

:
Lourens Attorneys c/o Pieter Moolman

Attorneys, Bryanston

Symington & de Kok, Bloemfontein

Counsel for respondents
:
P NONYANE

Instructed by

:
The State Attorney, Pretoria

The State Attorney, Bloemfontein

THE SUPREME COURT OF APPEAL
OF SOUTH AFRICA

MEDIA SUMMARY – JUDGMENT DELIVERED IN THE
SUPREME COURT OF APPEAL
MEDIA SUMMARY – JUDGMENT DELIVERED IN COURT OF
APPEAL
23 March 2011

STATUS: Immediate

MOKALA BELEGGINGS (PTY) LTD & ANOTHER V MINISTER OF RURAL
DEVELOPMENT AND LAND REFORM AND OTHERS (276/11)

Please note that the media summary is intended for the benefit of the media and
does not form part of the judgment of the Supreme Court of Appeal

The Supreme Court of Appeal (the SCA) today upheld an appeal from the Land
Claims Court which had dismissed the appellants’ claim for mora interest.

The appellants had sold their properties to the Department of Rural Development
and Land Reform for restoration to the Barolong ba ga Mariba community, who had
successfully lodged a restitution claim in respect of the property.

It became common cause that the Department had instructed its conveyancers to
delay the registration of the transfer of the properties due to the Department’s
inability to pay the purchase price, as it had no funds on its budget. The SCA held
that the appellants, as sellers, were entitled to mora interest on the purchase price to
compensate them for their damages suffered as a consequence of the delay in
payment of the purchase price.

The SCA also deprecated the apparent practice by the Department to delay
payment of monies due in instances of land restitution claims.

-- ends --