Prinsloo NO v Goldex 15 (243/11) [2012] ZASCA 28 (28 March 2012).

The case involves a dispute between the appellants, Nicolaas Marthinus Prinsloo, Johanna Jacoba de Bruin, and Goldex 15 (Pty) Ltd, and Jacobus Wynand Scheepers. The dispute arose from the sale of a farm named Rykdom in the Limpopo province. The trust, represented by Prinsloo and de Bruin, sold the farm to Goldex for R2.6 million. During negotiations, Prinsloo assured Scheepers, representing Goldex, that there were no land claims against the property. However, after the sale, it was discovered that a land claim had been lodged by the Mapela community.

Goldex then attempted to cancel the sale based on fraudulent misrepresentations by Prinsloo. The trust brought an urgent application to compel Goldex to complete the sale, but the application was dismissed by Webster J. The trust's subsequent attempts to appeal were also unsuccessful. Following this, Goldex and Scheepers initiated an action against the appellants for damages resulting from the alleged fraudulent misrepresentation by Prinsloo.

The respondents alleged that Prinsloo had knowingly misrepresented the absence of a land claim during the sale negotiations. Prinsloo denied being aware of the land claim at the time of the sale. The respondents raised a plea of res iudicata in the form of issue estoppel, arguing that the issue of fraud had already been decided by Webster J in the earlier urgent application.

The appellants contested the application of issue estoppel, arguing that Webster J's finding of fraud was based on untested allegations in motion proceedings and that it would be unfair to bind them to those findings. The court considered the principles of res iudicata and issue estoppel, emphasizing the potential for inequity in applying issue estoppel without proper investigation of the fraud allegations.

Ultimately, the court upheld the appeal, setting aside the order of the court a quo and dismissing the plea of res iudicata in the form of issue estoppel with costs. The judgment highlighted the importance of fairness and equity in legal proceedings, especially concerning the application of issue estoppel based on untested allegations.

The core legal principle underlying the decision is that the application of issue estoppel, as a form of res judicata, should be carefully considered on a case-by-case basis. In this case, the court emphasized the potential for inequity and unfairness in applying issue estoppel based on untested allegations, especially in motion proceedings where disputes of fact are not properly investigated. The court highlighted the importance of ensuring a fair hearing and avoiding potential injustice when deciding whether to uphold a plea of res judicata in the form of issue estoppel.