Department of Land Reform lost the public a ‘morally unconscionable' R85,000 a day

Last week, a judgment by the Supreme Court of Appeal castigated the Department of Land Reform for wasting public money after it failed to make payment on land bought in Mpumalanga and got involved in what judges called "ill-advised and morally unconscionable litigation" to appeal a High Court decision that it must pay punitive interest. 

The Department bought 15 properties to the value of R200 million from land owners in Mpumalanga in 2009. The land was bought for land reform purposes. 

Payment for the land was only made in July 2010 and the department refused to pay interest on the outstanding sum over that period. 

The North Gauteng High Court granted a claim for punitive interest, which was then opposed by the Department. Five judges of the Supreme Court of Appeal found on Friday that the decision to appeal was ill-advised. The judgment states:

‘It remains to observe that the conduct of officials in the employ of respondents evokes strong feelings of disquiet ... Because of their conduct the public purse is much the poorer ... for as long as the purchase price remained unpaid, interest accrued at R84,931 per day. To that must be added the costs of what can only be described as ill-advised and morally unconscionable litigation ...'

The Department of Land Reform now has to pay the initial punitive interest of R22.7 million, interest on this interest, amounting to a further R6.8 million, as well as legal fees likely to be around R2 million. 

I have today called for an internal inquiry into the matter to be conducted. Through poor management and decision-making in the Department, around R30 million was unnecessarily leaked from the public purse. It is this kind of mismanagement that hinders reform, not the willing-seller, willing-buyer model which the Department expediently employs as its scapegoat for failure.

I will also be submitting parliamentary questions to the Minister of Land Affairs, Gugile Nkwinti, to determine:

• Why the department failed to make the initial payment;
• how the decision was taken to oppose the judgment demanding that interest be paid;
• who advised the department at various stages of this process and which officials were involved in the decision made; and
• how officials will be held accountable for the money lost.

Agreements to purchase land for restoration to dispossessed communities should be honoured in accordance with the terms agreed. Land reform is a constitutional imperative and a highly emotive one at that. The department should therefore tread carefully with the limited resources at its disposal to avoid exacerbating the challenges of an already fragile process.  

Statement issued by Athol Trollip MP, DA Shadow Minister of Rural Development and Land Reform, September 26 2012

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