THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Reportable
Case No:602/2023


In the matter between:
HEROLD GIE & BROADHEAD INC APPELLANT
and
RICHARD TIMOTHY HARRIS N O FIRST RESPONDENT
PHYLLIS MARY EARLY SECOND RESPONDENT
OSCAR WALTER & ALAN LEAONARD THIRD RESPONDENT
HARVIE BROADHURST N O FOURTH RESPONDENT
ANNELISIE JANSEN VAN
RENSBURG-HATTINGH N O FIFTH RESPONDENT
MICHELE ANN WALLIS N O SIXTH RESPONDENT
SANTAM LIMITED THIRD PARTY

Neutral citation: Herold Gie & Broadhead Inc v Harris N O and Others
(602/2023) [2024] ZASCA 125 (13 September 2024)
Coram: DAMBUZA, NICHOLLS and MABINDLA-BOQWANA
JJA, and TOLMAY and MBHELE AJJA
Heard: 13 May 2024
Delivered: 13 September 2024

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Summary: Statutory interpretation – s 6(4) of the Housing Development
Schemes for Retired Persons Act 65 of 1988 (HDSA) does not provide basis for
a claim by a purchaser of a housing interest in a development scheme , to claim
refund of purchase price entrusted to a legal practitioner under s 6(3)(a) of the
HDSA, where the practitioner has disbursed the entrusted amount to the
developer of the scheme, prior to the developer’s insolvency.

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ORDER

On appeal from: Western Cape Division of the High Court, Cape Town : (Le
Grange ADJP, sitting as a court of first instance):
1 The appeal is upheld with costs.
2 Save for the decision on the second question, t he order of the high court is set
aside and replaced with the following:
‘2.1 The first question is decided in favour of the defendant.
2.2 The third question is referred back to the high court for determination.
2.3 The costs stand over for determination together with the remaining issues.’
3 The case is referred back to the high court for determination of the remaining
issues.

JUDGMENT

Dambuza JA ( Nicholls and Mabindla-Boqwana JJA, and Tolmay and
Mbhele AJJA concurring)

Introduction
[1] This appeal is against a judgment of the Western Cape Division of the High
Court, Cape Town (the high court), given in six consolidated actions. Each action
relates to cancellation of a life rights agreement concluded by each of the
respondents as purchasers, with the St Leger Trust No IT 953/2008 (the developer
or the trust)1, as the developer and seller of the life rights. The main issue is
whether on insolvency of the developer, the purchasers had a claim in terms of s
6(4) of the Housing Development Schemes for Retired Persons Act 65 of 1988

1 also described in the agreement as the ‘grantor’ or ‘nominee’.

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(the HDSA), for repayment of the purchase price by the appellant , Herold Gie
and Broadhead Incorporated (HGB) . This, in circumstances where HGB, into
whose trust account the purchase price for the life rights was paid, had disbursed
the purchase price to the trust before it became insolvent . The high court
determined this issue in favour of the purchasers. It found that the purchasers had
a valid claim in terms of s 6(4) of the HDSA for refund of the purchase price by
HGB, and that the assertions made in their summons supported such a claim.
HGB appeals against the high court judgment with the leave of that court.

The background
[2] Each of the six purchasers bought a ‘life right’ or a ‘housing interest’ in
respect of a specific suite in the St Leger Retirement Hotel located in Muizenberg,
Cape Town.2 Some of the life rights included garages. All the purchasers were
retired persons as contemplated in the HDSA.3 Save for the different purchase
prices paid by the purchasers, and the sizes of the properties to which each life
right related, the facts pertaining to the conclusion and cancellation of the life
rights agreements are similar.

[3] The developer established the retirement hotel as a ‘development scheme’
as envisaged in s 1 of the HDSA. Under that section, read with s 1 of the Sectional
Titles Act 95 of 1986 (Sectional Titles Act), a ‘development scheme’:
‘means a scheme in terms of which a building or buildings situated or to be erected on land
within the area of jurisdiction of a local authority is or are, for the purposes of selling, letting
or otherwise dealing therewith, to be divided into two or more s ections, or as contemplated in
the proviso to section 2 (a) [of the Sectional Titles Act]’.


2 In the life rights agreements a life right is defined as: ‘the housing interest as defined in the Act [the HDSA],
and in this agreement is the right of the occupant and occupant’s spouse where applicable, to occupy the Suite and

use the Garage, mentioned in the Covering Schedule, for the remainder of the life of the occupant, and subject to
the provisions of Section 7 of the Act, for the life of the Occupant’s Spouse and in any event subject to the terms
and conditions of this agreement.’
3 In s 1 of the HDSA a retired person is a person who is 50 years of age or older.

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[4] In addition to payment of the purchase price, the purchasers had to pay to
the developer a specified monthly service fee or levy.4 The levy was payable until
termination of the life right . On termination of the agreement a portion of the
purchase price would be repaid by the developer to the purchaser , or to the
purchaser’s estate, subject to certain conditions. 5 Clause 16.4 of the agreement
specified the fo rmula for computation of the amount of the purchase price
refundable to each purchaser or the executor of their estate, on termination of the
agreement. The purchasers would also be entitled to 50% of the interest earned
on the re-sale of their life rights.

[5] On payment of the purchase price the purchasers took occupation of their
units during the period June 2009 to November 2011. During June and July 2009,
the purchasers authorised HGB, in writing, to pay to the developer all the moneys
that had been entrusted to it as the purchase price in respect of the life rights.
HGB released the funds to the developer accordingly.

[6] In a letter dated 24 October 2014, the purchasers cancelled their life rights
agreements and each demanded a refund of the ir purchase price. They alleged
that they had not been furnished with the certificates of compliance contemplated
under s 6(1)(a) of the HDSA6 and s 14(1)(a) of the National Building Regulations

4 Clause 7.1 of the Life Right Agreement.
5 Clauses 15.1 and 15.2. P27 In terms of Clause 15.2 the first condition for repayment was the return of the
Certificate of Life Rights to the trust or an affidavit furnished by the purchaser or the executor of purchaser’s
estate stating that: (a) the deponent is the legal holder of the Certificate of Life Rights, (b) the certificate got lost
or destroyed, and that (c) despite a diligent search for the certificate, it had not been found.
The second condition was vacation of the suite by the occupant and by his/her spouse where applicable. The third

was that (to the satisfaction of the trust) the suite had been reinstated to the same condition it was in when the
occupant (and spouse) took o ccupation. The last condition was resale of the suite and the purchase price and all
amounts payable prior to occupation of the suite by the new purchase had been paid to and received by the trust.
6Section 6(1)(a) of the HDSA provides that:
(1) Subject to subsection (3) and notwithstanding any other law, no developer may by virtue of a contract receive
any consideration or any part thereof, unless—
(a) an architect or a quantity surveyor has issued a certificate that the housing development scheme concerned has
been erected substantially in accordance with any applicable officially approved building plans and town planning
scheme and applicable local authority by-laws, and is sufficiently completed for the purposes of utilization of the
housing interest concerned;

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Standards Act 103 of 1977 (the NRBA) 7. They alleged that the developer failed
to inform them, prior to the conclusion of the agreement, that use and occupation
of the retirement hotel, as contemplated in the agreement, would not be ‘legally
possible’, despite being aware that the required certificates could not be issued.

[7] On 17 Febru ary 2016 , the developer was placed under provisional
sequestration, and an order of final sequestration was granted on 9 March 2016.8
The purchasers duly lodged their claims for refund of the purchase price with the
trustees of the insolvent developer’s estate. They received concurrent dividends.9
In October 2017 , they instituted action proceedings against HGB , claiming a
refund of the purchase prices which had been paid into HGB’s trust account.

Proceedings in the high court
[8] The purchasers’ claims for reimbursement of the purchase prices was
founded on the provisions of s 6(4) of the HDSA. This section entitles a purchaser
in a scheme developed in terms of the same Act, to a refund of the purchase price
held in a legal practitioner’s trust account, where the developer of the scheme
becomes insolvent.

[9] In addition to pleading that when the developer became insolvent it had not
met its obligation to furnish them with the s 6(1)(a) certificates, the purchasers

7 This section provides that:
(1) A local authority shall within 14 days after the owner of a building of which the erection has been completed,
or any person having an interest therein, has requested it in writing to issue a certificate of occupancy in respect
of such building—
(a) issue such certificate of occupancy if it is of the opinion that such building has been erected in accordance with
the provisions of this Act and the conditions on which approval was granted in terms of section 7, and if certificates
issued in terms of the provisions of subsection (2) and, where applicable, subsection (2A), in respect of such
building have been submitted to it.

building have been submitted to it.
8 The high court stated that the trust was provisionally sequestrated on 17 February 2016. However, it was not in
dispute that the application for sequestration was filed in court on 10 December 2015.
9 Mrs Parry-Davies whose estate is represented by the first respondent, her executor, received R988 836.15. The
second respondent, Mrs Phyllis Early received R R433 384.61, the third respondent, Mr Oscar Walter and Alan
Leonard Harvey Boadhurst NO – R390 495.60, the fourth respondent Mr Jansen van Rensburg -Hatting –
R278 756 50, Mr Clifford Keet (now represented by the fourth respondent, Ms Michelle Ann Wallis NNO, and
the sixth respondent, Mr Edgar Grondel received R397 036.07.

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also pleaded that they cancelled their life rights agreements as communicated in
the letter dated 24 October 2014 from their attorneys, Biccari Bollo Mariano
Incorporated. In t heir replication the purchasers contended that they were not
‘bound’ by the written authority to release the funds wh ich each of them had
signed. They maintained that HGB was not entitled to rely on the authorisations.

[10] HGB filed a special plea asserting that the purchasers’ claims had
prescribed. This was because the purchasers instructed HGB to pay the purchase
prices to the developer during June and July 2009. HGB had immediately acted
on the instructions. However, the summons were served on HGB on 4 October
2017, more than three years after the claimed debts had arisen. Furthermore, Mrs
Parry-Davies10 died on 18 June 2013, resulting in full discharge from exercise of
rights and performance of obligations under the life rights agreements. Therefore,
the executor of her (Mrs Davies’) estate had no locus standi to claim refund of
moneys under the agreement, HGB contended.

[11] Of relevance in this appeal is the plea by HGB, that s 6(4) of the HDSA
finds no application in this case because by the time the trust became insolvent
they had paid to the developer all the moneys that had been entrusted to them by
the purchasers. There were therefore no moneys ‘kept in trust’ as specified in s
6(4) of HDSA.

[12] Pursuant to a request by the parties, the high court separated three questions
for anterior determination as points of law in terms of Rule 33(4) of the Uniform
Rules of Court. The first point of law was formulated as follows:
‘“Whether Section 6(4) of the Housing Development Schemes for Retired Persons Act 65 of
1988 (the ‘HDSA’) can found an action by a purchaser of a ‘ housing interest’ from a

10 The estate of the late Mrs Parry-Davies is represented in these proceedings by the first respondent in his
capacity as the executor of Mrs Davies’ estate. Her husband Dr Davies predeceased her.

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‘developer’ for repayment by a ‘practitioner’ of an amount entrusted as contemplated in
Section 6(3)(a) of the HDSA, by the purchaser to such ‘practitioner’ by virtue of a ‘contract’,
where, in the absence of compliance with the provisions of Section 6(1) of the HDSA and prior
to the ‘developer’ having become an insolvent, as it subsequently did, the ‘practitioner’
disbursed, to or for the account of the developer’, from the trust account of such ‘practitioner’,
an amount equivalent to the amount so entrusted to the ‘practitioner’, as purported released to
the ‘developer’ of the amount so entrusted to the ‘practitioner”.’

[13] The second point of law was:
‘“Whether Section 6(4) of the HDSA can found an action by a purchaser of [a] ‘housing
interest’ from a developer’ of an amount entrusted as contemplated in Section 6(3) (a) of the
HDSA, by the purchaser to such ‘ practitioner’ by virtue of [a] ‘ contract’ where, prior to the
‘developer’ having become insolvent, as it subsequently did, the purchaser cancelled the
‘contract’”.’

[14] The third question was:
‘“Whether, if Section 6(4) of the HDSA does not apply, the averments in the particulars of
claim, read with the averments in the Defendant’s plea that are admitted by the Plaintiff(s), are
sufficient to sustain an action”.’

[15] The high court determined all three questions in favour of the purchasers.
It found that the argument made by HGB, that the purchasers could not rely on s
6(4) in the circumstances, was inconsistent with the purpose for which s 6 of
HDSA was enacted , i.e. the protection of elderly persons against ‘possible
exploitation or misfortune by a developer’. The conclusion reached by the high
court was also premised on s 78 of the Attorneys Act 53 of 1979 , relating to
regulation of attorneys’ trust accounts. The court found that the purchasers were
the trust creditors of HG B. Consequently, by releasing to the developer the
entrusted moneys that were the equivalent of the purchase prices entrusted to it

entrusted moneys that were the equivalent of the purchase prices entrusted to it
by purchasers, HGB had ‘violated an entrustment under s 6(3)(a) of the HDSA’.

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The court held that s 6(4) confers a statutory right of action on the purchasers to
claim reimbursement of the purchase price in the circumstances.

[16] Thus, the high court held that s 6(4) of the HDSA confers a right of action
on a purchaser who had entrusted purchase price funds to a practitioner , where
such funds or an equivalent of the funds are released to the developer prior to
compliance with s 6 (1) of that Act.

Discussion
(i) The issues referred for separate determination
[17] Rule 33(4) provides that:
‘Special cases and adjudication upon points of law. —
If, in any pending action, it appears to the court mero motu that there is a question of law or
fact which may conveniently be decided either before any evidence is led or separately from
any other question, the court may make an order directing the disposal of such question in such
manner as it may deem fit and may order that all further proceedings be s tayed until such
question has been disposed of, and the court shall on the application of any party make such
order unless it appears that the questions cannot conveniently be decided separately.’

[18] The purpose of this rule is to determine the plaintiff’s claim without the
costs of delays of a trial. The rule facilitates convenient and expeditious disposal
of litigation.11 Against this background, this Court has warned on many occasions
that a decision under Rule 33(4) must be considered carefully.12 The issue(s)
which are to be decided separately must be clearly defined. This is because in
many cases, at first sight , there might appear to be discrete issues that may be
considered separately. However, when properly considered, the issues will be

11 Denel (Edms) Bpk v Vorster 2004 (4) SA 481 (SCA); 25 ILJ 659; [2005] 4BLLR 313 para 3.
12 The City of Tshwane Metropolitan Municipality v Blair Atholl Homeowners Association [2018] ZASCA 176;
[2019] 1 All SA 291 (SCA); 2019 (3) SA 398 (SCA) para 15.

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found to be inextricably linked with the rest of the issues that arise in a particular
case.13
‘And even where the issues are discrete the expeditious disposal of the litigation is often served
by ventilating all the issues at one hearing, particularly where there is more than one issue that
might be readily dispositive of the matter. It is only after careful thought has been given to the
anticipated course of the litigation as a whole that it will be possible properly to determine
whether it is convenient to try the issue separately’.14
Therefore the trial court must give careful consideration to whether a
contemplated separation of issues will result in a convenient, expeditious disposal
of the case before it. Where it appears that separation of issues will not result in
a convenient and prompt finalisation of litigation the court must refuse to order
separate adjudication.15

[19] In this case, as stated, HGB filed a special plea of prescription that remains
undetermined. Furthermore, the purchasers pleaded their cancellation of the life
rights agreements. In addition HGB sought to repel the claim for repayment by
relying on the authorisations to release the purchase price. It seems to me that the
separated questions might be inextricably linked to these issues. Furthermore, the
first question is framed in a complicated manner . Apart from this , the factual
context and the legal framework within which the identified points of law arise
in this case are complex, and have not received much consideration by our courts.
It would have been more convenient to have all the issues fully ventilated in the
same hearing. Nevertheless, we are constrained to considering the appeal on the
issues determined by the high court.




13 Denel supra para 3.
14 Ibid.
15 Denel (Pty) Ltd v Vorster [2004] ZASCA 4; [2005] 4 BLLR 313 (SCA); 2004 (4) SA 481 (SCA); (2004) 25
ILJ 659.

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(ii) Whether s 6(4) of the HDSA is applicable
[20] In the summonses t he purchasers set out the salient terms of the life
agreements. They also pleaded the provisions of ss 6(1) and (b), 6(3)(a) and (b),
and 6(4) of the HDSA. Their cause of action was framed in the following terms:
’15 No certificate in terms of s 6(1)(a) of the HDSA was ever furnished to [the purchasers],
nor was any guarantee of the kind mentioned in s 6(3)( b) of the HDSA ever furnished
to [the purchasers].
16 [HGB] was at all times aware that the SLRH was a ‘development scheme’ as
contemplated in s 1 of the HDSA and that the payments into its said trust account
mentioned in 10 above were payments contemplated in s 6(3)(a) of the HDSA.
16A By letter dated 24 October 2014 from attorneys Biccari Bollo Mariano Inc. to SLT, a
copy of which is annexure “Y” to the defendant's plea, the plaintiff lawfully cancelled
the LRA on the grounds set out in the letter, including non -compliance with the
provisions of s 6(1) of the HDSA, and demanded reimbursement of the purchase price
paid under the LRA.
17 Through attorneys Biccari Bollo Mariano Inc., the plaintiff demanded payment from
the defendant by 24 October 2016 of the amount of R2,4 million, being the sum of the
amounts mentioned in 10 above, with interest on R220,000 thereof from 8 May 2009
and on R2,18 million thereof from 2 June 2009.
18 The defendant has refuted liability to make such payment’.

[21] The HDSA regulates sales of life rights in housing development schemes
built for retired persons. A right of occupation is defined in s 1 of the HDSA as:
‘the right of a purchaser of a housing interest-
(a) which is subject to the payment of a fixed or determinable sum of money by way of a
loan or otherwise, payable in one amount or instalments in addition to or in lieu of a levy, and
whether or not such a sum is in whole or in part refundable to the purchaser or any other person
or to the estate of the purchaser or of such other person; and

or to the estate of the purchaser or of such other person; and
(b) which confers the power to occupy a portion in a housing development scheme for the
duration of a lifetime of the purchaser or, subject to section 7, any other person mentioned in
the contract in terms of which the housing interest is acquired, but without conferring the power
to claim transfer of ownership of the portion to which the housing interest relates.’

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[22] Section 6(4) of the HDSA , on which the purchasers’ claims are founded,
must be interpreted within the context of the other provisions of s 6. Section 6(1)
restricts the developer’s entitlement to receipt of the purchase price as follows:
‘6 Restriction on receipt of consideration
(1) Subject to subsection (3) and not withstanding any other law, no developer may by
virtue of a contract receive any consideration or any part thereof, unless-
(a) An architect or a quantity surveyor has issued a certificate that the housing development
scheme concerned has been erected substantially in accordance with any applicable officially
approved building plans and town planning scheme and applicable local authority by-laws, and
is sufficiently completed for the purposes of utilization of the housing interest concerned;
(b) A copy of that certificate has been furnished to the purchaser concerned;
(c) In the case where a housing interest includes a right of occupation, a practitioner has
issued a certificate that the title deed of the land to which the right of occupation has bee n
endorsed as contemplated in section 4 C, in so far as endorsement is required by that section,
and a copy of that certificate has been furnished to the purchaser concerned.’

[23] In relation to this appeal s 6(1)(a) therefore prohibited receipt by the
developer of moneys paid as the purchase prices for the life rights, under the
HDSA, until two conditions had been met. First, an architect or estate agent had
to furnish a certificate that guaranteed that the housing development scheme had
been built substantially in accordance with applicable, approved building plans,
the town planning scheme, and the applicable local authority by-laws. In addition,
the certificate had to confirm that the housing unit to which the life right related,
was suitable for the purposes of utilisation of the housing interest.16 Secondly, a
copy of the certificate had to be furnished to the purchaser.

copy of the certificate had to be furnished to the purchaser.

[24] Section 6(2) is not relevant for determination of this appeal. Section 6(3)
excludes the restriction on release of the purchase price to the developer (imposed

16 Subsections 6(1)(a) and (b) of the HDSA.

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in terms of s 6(1)) in circumstances where the purchase price is paid to a legal
practitioner, an estate agent or the developer. The section reads as follows:
‘Subsection (1) shall not apply to the receipt of any amount-
(a) which the purchaser by virtue of a contract entrusts to a practitioner or an estate agent in
his capacity as such, to be kept, for the benefit of a developer, in the trust account of the
practitioner or estate agent until the provisions of subsection (1) have been complied with; or
(b) which by virtue of a contract is paid to the developer if, before such payment, the purchaser
was furnished with an irrevocable and unconditional guarantee by a banking institution
registered otherwise than provisionally under the Banks Act, 1965 (Act No 2 3 of 1965), a
mutual building society registered otherwise than provisionally under the Mutual Building
Societies Act, 1965 (Act No 24 of 1965), a building society registered otherwise than
provisionally under the Building Societies Act, 1986 (Act No 8 2 of 1986), or a registered
insurer as defined in s 1 of the Insurance Act, 1943 (Act No 27 of 1943 (Act No 27 of 1943),
in terms of which the banking institution, mutual, building society, building society or insurer
undertakes to repay the said amount - to the purchaser, if the provisions of subsection (1) are
not being complied with.’

[25] The exclusion under s 6(3) is premised on the purchase price being kept in
a practitioner’s account, for the benefit of the developer, until the provisions of
subsection 1 have been complied with. It is not in dispute that in this case the
purchasers entrusted the moneys to HGB on this basis.

[26] Section 6(4) empowers a practitioner to immediately repay to the purchaser
the moneys entrusted and kept by him or her as provided in s 6(3). The section
provides that:
‘If, in the circumstances contemplated in subsection (3), the developer becomes an insolvent

‘If, in the circumstances contemplated in subsection (3), the developer becomes an insolvent
before the provisions of subsection (1) have been complied with, any amount kept in a trust
account in terms of paragraph (a) of subsection (3) or the repayment of which was guaranteed
in terms of paragraph (b) of that subsection, shall immediately become payable to the purchaser
concerned by the practitioner, estate agent, banking institution, mutual building society,
building society or insurer concerned.’

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[27] The meaning and purpose of s 6(4) within the context of s 6 is clear. It is
the protective measure provided to safeguard the interests of elderly purchasers
in instances where a developer of a retirement home becomes insolvent before
the guarantees on the suitability of the life right housing unit are in place as
provided in s 6(1). Section 6(4) empowers the practitioner or estate agent to
immediately release to the elderly purchaser, the purchase price that is kept in the
trust account, thus protecting the purchaser from having to compete in the
concursus creditorum. The section is triggered by the developer’s insolvency, in
the circumstances where the purchase price, o r a portion of the price, that wa s
entrusted to the practitioner or an estate agent is ‘. . . kept, . . . in the trust account
of the practitioner . . . ’ as provided under s 6(3)(a).17

[28] The facts of this case are comparable to those in Cierenberg en Andere v
Rorich, Wolmarans18 & Luderitz. In that case too, the applicants in the high court
were retired persons who had bought life rights in terms of the HDSA. The
purchase prices were paid into trust accounts of two firms of attorneys, to be kept
on behalf of the seller. When the seller was liquidated the applicants claimed a
refund from the attorneys of the purchase price funds. Their claims for refund
were founded on s 6(4), the practitioner having released the purchase in the
absence of the s 6(1) certificates. It was not in dispute that the purchasers had
been aware for more than three years that the attorneys had paid the moneys to
the seller. And the court applications in terms of which the refunds were claimed,
were served on the attorneys more than three years after the seller was liquidated.
There the high court upheld the plea of prescription on the basis that the cause of
action was complete because, pending the fulfilment of the s 6(1) conditions there
was a statutory obligation on the attorneys to refund the purchase price to the

was a statutory obligation on the attorneys to refund the purchase price to the

17 Section 6(3)(a) of HDSA.
18 Cierenberg en Ander v Rorich, Wolmarans & Luderitz 2003 (1) SA 40.

15

applicants upon the seller’s insolvency. The period of prescription was completed
before service of the application on the practitioners.

[29] It does not appear to me that the court in Cierenberg undertook a deliberate
interpretative exercise of s 6(4), perhaps because it was clear on all accounts that
the claims by the purchasers had prescribed. And the court in that case considered
directly, the issue of prescription. On a proper interpretation, s 6(4) is not an open-
ended statutory foundation for claims of repayment to purchasers , of moneys
entrusted to practitioners under the HDSA. It is confined to instances where the
developer becomes insolvent whil e there are moneys held in trust by a
practitioner, for the developer’s benefit.

[30] The high court’s conclusion, that the purchasers were HGB ’s trust
creditors, is inconsistent with the language of s 6(3) (a). Under that section the
purchase price is entrusted to the practitioner, ‘to be kept for the benefit of the
developer . . .’. Consequently, under ss 6(3) and (4), it is the developer rather than
the purchaser, that is the practitioners’ trust creditor. Ordinarily, on sequestration
of the developer, the purchase price funds would become part of the developer’s
insolvent estate. Had this not been the case it would have been unnecessary to
protect the purchasers from the concursus creditorum as provided in s 6(4).

Are the averments in the particulars of claim, read with the averments in the
Defendant’s plea that are admitted by the Plaintiff(s), sufficient to sustain an
action?
[31] The high court did not consider this point because, in its view , the
purchasers could validly claim refund in terms of s 6(4). T he issue whether a
pleading lacks averments which are necessary to sustain an action or defence , is
regulated under Rule 23 of the Uniform Rules of Court , under the heading
‘Exceptions and applications to strike out’. Under this Rule an excipient bears the

16

responsibility of establishing that, upon any construction of the particulars of
claim, no cause of action is disclosed. Exceptions are not to be dealt with in an
over-technical manner, and as such a court looks benevolently instead of over -
critically at a pleading. 19 In addition a court has the power to defer consideration
of an exception to the trial, particularly where the issue raised in the exception
appears ‘interwoven’ with the evidence that will be led at the trial. 20 These are
some of the guiding principles that were not ventilated in the high court in relation
to the pleading in this case because of the manner in which the issues were dealt
with in the high court. It would be improper to decide this issue on appeal. The
decision of the high court on this issue must, also be set aside, and the issue must
properly considered together with the rest of the contested issues.

[32] Consequently:
1 The appeal is upheld with costs.
2 Save for the decision on the second question, the order of the high court is set
aside and replaced with the following:
‘2.1 The first question is decided in favour of the defendant.
2.2 The third question is referred back to the high court for determination.
2.3 The costs stand over for determination together with the remaining issues.’
3 The matter is referred back to the high court for determination of the remaining
issues.

___________________
N DAMBUZA
JUDGE OF APPEAL


19 Erasmus and Van Loggerenberg; Superior Court Practice; Vol 2 D1-294.
20 Ibid at D1-301 including the authorities referred to therein.

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Appearances:
Counsel for the appellant: S Olivier SC with him JP White
Instructed by: Clyde & CO, Cape Town
Lovius Block Inc, Bloemfontein.

Counsel for the respondents: J Rogers
Instructed by: Biccari Bollo Mariano Inc, Cape Town
McIntyre Van Der Post Inc, Bloemfontein.