SAFLII Note: Certain personal/private details of parties or witnesses have been redacted from this document in
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IN THE HIGH COURT OF SOUTH AFRICA
(EASTERN CAPE DIVISION, BHISHO)
Not Reportable
CASE NO. CA 2/2024
In the matter between:
NTOMBIZANELE SPELITI Appellant
and
N S PROPERTY INVESTMENTS CC First respondent
(Registration no. 2005/1201128/23 )
NESHAL SINGH Second respondent
MERIDIAN REALTY Third respondent
______________________________________________________________________
JUDGMENT
______________________________________________________________________
LAING J
[1] This is an appeal against the whole of the judgment of the court a quo . The
matter concerns an urgent application brought by the appellant for interim relief (part A)
in re lation to the auction of a property in Mdantsane , pending the first respondent’s
production of all receipts of payment of the purchase price (part B) . The appellant
subsequently amended the relief sought (part B) to seek a declarator that she was
entitled to register the property in her name, subject to the registration of a mortgage
bond in favour of the first respondent.
Appellant’s case
[2] The appellant alleged that on 19 September 2017, at East London, she
concluded a deed of sale with the first respondent , represented by the second
respondent, for the purchase of erf 1[…] Mdantsane Unit […]. The purchase price was
R 1,700,000. The appellant was required to pay the amount to the conveyancers
involved , Yazbeks Attorneys , but was later requested by the second respondent to pay
him directly. She made an initial payment to him of R 500,000 and subsequently paid off
the balance in instalments. The second respondent issued her with rudimentary receipts
from time to time but never requested her to pay the transfer costs.
[3] The receipts were lost when heavy flooding occurred some years later . The
appellant requested copies of the receipts from the second respondent, who rebuffed
her. He threatened to evict her from the property if she failed to pay the transfer costs,
which he said that he had communicat ed to her previously.
[4] The appellant had, in the meanwhile, spent more than R 500,000 in convert ing
the property to residential accommodation that she leased to tenants. On 25 February
2023, the appellant was informed by a tenant that the property had been advertised for
auction on 9 March 2023. Attempts made to contact the second respondent proved
unsu ccessful , prompting the appellant’s institution o f urgent proceedings for the relief
described earlier.
Respondents’ case
[5] The second respondent admitted the conclusion of the deed of sale and the
purchase price . He point ed out that R 500,000 had been immediately payable , the
balance of R 1,200,000 having been payable over one year in three separate amounts.
To date, the appellant had only paid R 1,000,000 . Her last payment was on 11 March
2019 , resulting in the first respondent ’s cancell ation of the sale on or about 1 February
2023.
[6] He went on to allege that the appellant had been furnished with copies of all
receipts, as well as a statement of account. The second respondent was adamant that
the appellant’s payments w ere made to the conveyancers ; he never received any
private payment. The transfer costs had not been determined because the appellant
had failed to pay the full purchase price. The appellant had, moreover, enjoyed full use
of the property and received rental income therefrom, but had failed to settle municipal
rates and service charges.
In reply
[7] The appellant denied that she had failed to pay the full purchase price, saying
that she had settled it in full. She also denied ever having received any notice of
cancellation.
Further developments
[8] The appellant obtained interim relief on 7 March 2023. Leave was granted to the
parties for the filing of further aff idavits.
[9] In her supplementary affidavit, the appellant stated that she had sold a separate
property to fund payment of the initial amount of R 500,000. She had paid the amount in
cash to the second respondent . The appellant requested the referral of the matter for
oral evidence in relation to the following issues: whether payment of the purchase price
had been made, and whether the sale had been properly cancelled.
[10] The second respondent, in his supplementary af fidavit, insisted that the appellant
had made her first payment on 22 September 2017, some th ree days after the
conclusion of the sale. He went on to attach copies of the receipts issued by the
conveyancers , as well as a transaction history that reflected a total amount of R
1,000,000 paid by the appellant.
[11] Subsequently , the appellant gave notice of her intention to amend her notice of
motion to include the relief described in the introduction, above. This was , rather
curiously, never opposed.
In the court a quo
[12] Dealing with the requirements for final relief, Monakali AJ held that the appellant
had breached the deed of sale and had failed to rectify same, despite the first
respondent’s having placed her in mora . The appellant had failed to demonstrate a clear
right to prevent the respondents from proceeding with the auction of the property. The
learned judge went on to hold that no injury had been committed or could reasonably
have been apprehended because the appellant had failed to pay the full purchase price;
the first respondent had been entitled to cancel the sale and advertise the property for
auction.
[13] The court a quo also considered the availability of an alternative remedy within
the context of section 27(1) of the Alienation of Land Act 68 of 1981 (‘the Act’). After
distinguishing the case law relied upon by the appellant, Monakali AJ pointed out that
there was no evidence that the appellant had ever demanded transfer of the property .
She was, however, entitled to claim damages, which was a suitable alternative remedy.
[14] Regarding the request for referral for oral evidence, the learned judge held that a
genuine dispute of fact had never arisen . The matter was capable of determination on
the papers. The court a quo discharged the rule nisi and ordered the appellant to pay
costs on an attorney -and-client scale.
On appeal
[15] The appellant sought leave to appeal, which was granted. In that regard,
Monakali AJ accepted that it was common cause that the appellant had paid at least R
1,000,000 for the property. Consequently, there was a reasonable prospect of success
since another court could find that section 27(1) of the Act was relevant; more than 50%
of the purchase price had been paid, potentially entitling the appellant to the statutory
remedy indicated .
[16] The grounds of appeal can be distilled to the following , viz. the court a quo erred
or misdirected itself in finding that: (a) the appellant had failed to demonstrate a clear
right for final relief ; (b) the facts did not bring the appellant within the protection afforded
to a purchaser by section 27(1) of the Act ; (c) the sale had been properly cancelled ; (d)
there was no dispute of fact and that the matter should not be referred for oral evidence;
and (e) the appellant should be liable fo r costs on a punitive scale.
Issues to be decided
[17] The grounds of appeal form the basis for the issues to be decided. In argument,
counsel relied primari ly on section 27(1) of the Act as a basis upon which to assert that
the appellant had demonstrated a clear right. The contention that the sale had not been
properly cancelled was not pursued with equal enthusiasm, but rem ains relevant to the
issue, overall, of whether the appellant was entitled to final relief.
[18] The referral or otherwise for oral evidence constitutes a separate issue
altogether. Finally, it will be necessary to decide the issue of costs. A brief overview of
the applicable principles follows .
Legal framework
[19] The requirements for a final interdict har dly need to be restated. An applicant is
required to demonstrate a clear right, an injury actually committed or reasonably
apprehended, and the absence of any other satisfactory remedy.1
[20] Turning to the provisions of the Act, the relevant portion provides that:
’27. Rights of purchaser who has partially paid the purchase price of
land.
(1) Any purchaser who in terms of a deed of alienation has undertaken
to pay the purchase price of land in specified instalments over a period in
the future and who has paid to the seller in such instalments not less than
50 per cent of the purchase price , shall, if the land is registrable, be
entitled to demand from the seller transfer of the land on condition that
simultaneously with the registrati on of the transfer there shall be
registered in favour of the seller a first mortgage bond over the land to
secure the balance of the purchase price and interest in terms of the deed
of alienation.
(2) …
(3) If for whatever reason the seller is unable, fails or refuses to tender
transfer within three months of the receipt of the demand refer red to in
1 Setlogelo v Setlogelo 1914 AD 221. The case is a locus classicus and the principles stated therein are
well established.
subsection (1), the purchaser may cancel the relevant deed of alienation,
in which case the parties are entitled to the relief provided for in section
28(1):2 Provided that nothing contained in this subsection shall detract
from any additional c laim for damages which the purchaser may have.’
[21] The case law to which c ounsel referred in support the appellant’s interpretation of
the Act will be examined in the discussion below. The main authorities in this regard
were the decisions of the Constitutional Court in Botha and Another v Rich NO and
Others3 and Beadica 231 CC and Others v Trustees, Oregon Trust and Others .4
[22] Regarding the referral for oral evidence, Van Loggerenberg comments as
follows:
‘In resolving to refer a matter to evidence a court has a wide discretion. In ever y
case the court must examine an alleged dispute of fact and see whether in truth
there is a real dispute of fact which cannot be satisfactorily determined without
the aid of oral evidence … The test is a stringent one that is not easily satisfied .’5
[23] The learned writer comments further:
‘As a general rule, decisions of fact cannot properly be founded on a
consideration of the probabilities unless the court is satisfied that th ere is no real
and genuine dispute on the facts in question, or that the one party’s allegations
are so far -fetched or clearly untenable or so palpably implausible as to warrant
their rejection merely on the papers, or that viva voce evidence would not dis turb
the balance of probabilities appearing from the affidavits. ’6
2 Section 28(1) deals with the consequences of deeds of alienation which are void or terminated. The
provisions allow a purchaser to recover that w hich he or she has performed in terms of the deed, together
with interest as well as any necessary expenditure incurred, or improvements made to the land.
3 2014 (4) SA 124 (CC).
4 2020 (5) SA 247 (CC).
5 DE van Loggerenberg, Erasmus : Superior Court Practice (Jutastat e-publications , RS 23, 2024) , at D1
Rule 6 -37. Footnotes omitted.
6 Op cit , Rule 6 -39-40. Footnotes omitted.
[24] Finally, in relation to costs, it is trite that a court enjoys a discretion in making an
award. This must, however, be exercised judicially upon consideration of the facts and
the decision must be fair to both sides.7
Discussion
[25] The issues will be discussed under separate headings. The question s pertaining
to what interpretation must be given to section 27(1) of the Act and whether the sale
was cancelled are two aspects that form part of the enquiry into whether the appellant
demonstrated a clear right to the final relief sought. They will be considered together
under that heading .
Demonstration of a clear right
[26] As a point of departure, it is necessary to remark that the appellant’s reliance on
section 27(1), in terms of her amended notice of motion, amounted to the introduction of
a new cause of action. The provision is correctly invoked where there has been only
partial payment of the purchase price. In her founding papers, however, the appellant
asser ted that she had made payment of the purchase price in full. This ought not to
have been tolerated by the court a quo , but, to the extent that it dealt with the argument
in some detail, it is necessary to address the issue below.
[27] The relevant provisions of the Act must be considered in greater detail. To that
effect, c ounsel cited Botha , where the Constitutional Court, per Nkabinde J, held that:
‘A plain reading of section 27(1) reveals that it seeks to protect the rights of a
purchaser who has paid not less than half of the purchase price. The section
states that a purchaser ‘ shall… be entitled to demand … transfer’ (emphasis
7 Fripp v Gibbon & Co 1913 AD 354. The principles have been followed in a long line of cases, including
the recent decision of the Constitutional Court in Public Protector v South African Reserve Bank 2019 (6)
SA 253 (CC).
added). Plainly, this section requires the presence of the following jurisdictional
facts before the purchaser can enjoy the protection under it. First, the purchaser
must have undertaken to pay the purchase price in specifi ed instalments.
Second, the purchaser must have paid to the seller in such instalments not less
than 50% of the purchase price. Third, the property in question must be
registrable. Section 27(1) itself does not state any other requirement.’8
[28] The learned judge continued as follows:
‘Section 27(1) should not be read in isolation. An examination of s 27(3) reveals
that it provides a further protection to a purchaser. The word “may” in s 27(3) is
used to give a purchaser power. This view is fortified by the words “shall” and
“may”, the use of which in the same section is not insignificant. It needs to be
stressed, however, that courts may, in appropriate circumstances , construe the
word “may ” as mandatory even though it is permissive on the face of the section.
…It is th us correct that the purchaser is entitled to cancel the deed of alienation
in terms of s 27(3) and in terms of s 28(1) to recover from the seller , among other
things, that which she has paid plus interest on any payment made , as
suggested in Dongwe .9 But the argument advanced by the trustees , relying on
Dongwe and academic authority, is that the purchaser’s only remedy if the seller
refuses to honour her demand for transfer is cancellation. This, they said, follows
from the fact that the section only mentions cancellation. It does not mention
specific performance. But specific performance is what Ms Botha sought in her
counter -application. Essentially, she sought an order compelling the trustees to
register the property and s ign all documents necessary for transferring the
property into her name.
8 Botha , at paragraph [34].
9 Dongwe NO v Slater -Kinghorn NO and Another [2009] ZAKZPHC 71.
…The trustees’ argument cannot be sustained. The starting point is that at
common law a contracting party is entitled to specific performance in respect of
any contractual right. Section 27(1) creates a contractual right implied by law.
The purchaser is therefore entitled to specific performance in respect of that right
unless the legislation means to depart from the common law position. The
section indicates no meaning of t his kind. ’10
[29] It is clear from the passage above that the facts in Botha were different to those
in the present matter. The purchaser had already made demand for transfer and the
instalment sale agreement was still in existence when proceedings were instituted. That
is not the situation here. There is no evidence on the papers that the appellant ever
made demand for transfer of the property in question. There is also no evidence to
suggest that the contract of sale between the parties was still extant . In that regard, the
second respondent attached to his answering affidavit a copy of a letter, dated 1
February 2023, in terms of which the appellant was afforded ten days to remedy her
failure to pay the full purchase price , as well as the outstanding municipal rates and
service charges , failing which the agreement would be terminated . The appellant
denied, in reply, that she had ever received the letter, but could not refute that it had
been sent to her address by registered post . It must be noted that t he deed of sale did
not stipulate how the sale should be cancelled in case of breach, but a registered letter
sent to the appellant’s chosen domicilium would surely have been acceptable
notification.11
[30] Consequently, section 27(1) of the Act does not assist the appellant. Despite her
having satisfied the three jurisdictional facts mentioned in Botha ,12 the underlying
contract of sale has already been cancelled. The appellant cannot demand transfer
because she no longer enjoys any enforceable contractual right to that effect. Such an
interpretation is supported by the provisions of section 27(3), which indicate that, in the
10 Botha , at paragraphs [35] to [37].
11 Despite the increasing unreliability of the South African Post Office, the dispatch of registered letters to
defaulting consumers in terms o f section 129(1) of the National Credit Act 34 of 2005 is just one example
of the legal acceptab ility of the method in question.
12 Botha , at paragraph [34] .
event of the seller’s inability, failure or refusal to tender transfer, the purchaser may
cancel the deed of alienation and claim damages ; Botha is authority for the principle
that the purchaser is not precluded from claiming specific performance. In either
scenario, the provisions in question contemplate a situation where the underlying
contract has not yet been terminated.
[31] The other authority relied upon by counsel was Beadica . In that matter, t he
Const itutional Court consider ed the proper constitutional approach to the judicial
enforcement of contractual terms and the public policy grounds upon which a court
could refuse to do so.13 Theron J, for the majority, dealt with the decision in Botha and
commented as follows:
‘In a unanimous judgment, this Court held that Ms Botha’s right to claim transfer
was preserved, despit e her being in arrears. In this regard, it said that depriving
Ms Botha of her entitlement to transfer of the property in terms of section 27
“would be a disproportionate sanction in relation to the considerable portion of
the purchase price she has already paid , and would thus be unfair”.
…This Court also refused to enforce the seller’s right to cancel the sale
agreement, on the basis that cancellation of the sale agreement would be “a
disproportionate penalty for breach” and unfair in the circumstances of the case,
particularly where three -quarters of the purchase price had already been paid.
This Court therefore crafted an appropriate order, requiring the applicant to pay
all out standing arrears to the trust and to register a mortgage bond in favour of
the trust, prior to the property being transferred into her name.’14
13 Beadica , at paragraph [1].
14 At paragraphs [53] and [54].
[32] Mindful of the potential for misinterpretation of the decision in Botha , the learned
judge referred briefly to the principles enunciated in Barkhuizen v Napier ,15 before
stating that:
‘There has been significant criticism of this Court’s judgment in Botha . Much of
the academic commentary on Botha assumes that Botha is authority for the
general p roposition in our law of contract that a party who breaches its
contractual obligations can avoid the termination of a contract by claiming that
termination would be disproportionate or unfair in the circumstances . This
assumption, which was implicitly endorsed by the Supreme Court of Appeal in
this matter, is based on a misreading of the ratio decidendi (rationale for the
decision) in Botha and rests on a misconception of what that case was about.
Botha did not rewrite the legal position on e quity in our law of contract. This Court
did not hold in Botha that disproportionality or unfairness are separate, self -
standing grounds, upon which a court may generally refuse to enforce
contractual provisions. Botha must be understood within the context of the
relevant statutory scheme in issue. Botha was primarily concerned with the
question of whether the seller’s contractual right to cancel for breach could be
enforced within the statutory scheme created by sectio n 27(1) of the Act.’16
[33] Counsel in the present matter suggest ed that Beadica was authority for the
proposition that the court could not permit the first respondent to cancel the contract of
sale and to enforce the forfeiture clause .17 This would amount to ‘a disproportionate
penalty for breach’ and would be ‘unfair in the circumstances’.18 As I have found,
15 2007 (5) SA 323 (CC). The majority of the Constitutional Court held , inter alia , that, in general, public
policy requires parties to honour contractual obligations that have been freely and voluntarily undertaken.
16 Beadica , at paragraph [59].
17 The forfeiture clause in question p rovided that if the appellant failed to fulfil any of the terms and
conditions of the deed of sale, then the first respondent would be entitled to , inter alia , cancel the sale and
retain all amounts already paid .
18 Counsel appeared to rely on Theron J’s summary, at paragraph [54], of the principles laid down in
Botha . In addition, counsel referred indirectly to paragraph s [71] to [75], where Theron J recognized th at
public policy incorporated the values of fairness, reasonableness, and justice , as we ll as the concept of
ubuntu . Such values played a n important role in the application and development of contractual law
principles to give effect to the spirit, purport, and object of the Bill of Rights. Courts are mandated to
however, the underlying contract of sale has already been cancelled. The appellant
never directly refuted the second respondent’s assertions in this regard other than to
say that she never received notice to that effect. Regarding the forfeiture clause , the
possible application of Beadica must be treated with the utmost care. It cannot be
denied that c onstitutional principles have a direct influence on the determination of
whether a contractual term is contrary to public policy . Nevertheless, a court’s
interference with the principles of pacta sunt servanda must be properly reasoned and
must be based on the facts placed before it. To that extent, Theron J observed as
follows:
‘Indeed, this court has recognised the necessity of infusing our law of contract
with constitutional values. This requires courts to exercise both resourcefulness
and restraint. In line with this Court’s repeated warnings against overzealous
judicial reform, the power held by the courts to develop the common law must be
exercised in an incremental fashion as the facts of each case require. The
development of new doctrines must also b e capable of finding certain,
generalised application beyond the particular factual matrix of the case in which a
court is called upon to develop the common law. While abstract values provide a
normative basis for the development of new doctrines, prudent and disciplined
reasoning is required to ensure certainty of the law.’19
[34] On the facts of the present matter, this is not a case that immediately attracts the
need for the development of the common law. The appellant is not an unsophisticated
litigant , at risk of losing her home . To the contrary, the evidence suggests that she is a
capable businessperson who purchased the property for purely commercial reasons.
The appellant averred, in her papers, that she spent a substantial amount of money in
converting the property to residential accommodation, after which she secured tenants
who occupied the property for several years before the respondents commenced with
auction proceedi ngs. This is not a situation where there was a significant power
develop the common law to remove a ny deviation therefrom and must not lose sight of their role in
transformative adjudication.
19 Beadica , at paragraph [76].
disparity between the contracting parties. The forfeiture clause is not an uncommon
feature of similar commercial agreements where, if the purchaser properly complies with
his or her obligati ons, then there is no need for the seller to invoke the remedy
provided.20 The clear infringement of any of the constitutional values mentioned in
Beadica simply does not arise.
[35] In the circumstances, I am satisfied that neither the appellant ’s reliance on
section 27(1) of the Act nor her contention that the sale had never been cancelled w as
sufficient to demonstrate to the court a quo that she had a clear right to interdict the
auction of the property.
Remaining issues
[36] Turning to the remaining issues , it cannot be said that there was a real or
genuine dispute of fact . The appellant merely alleged in her founding papers , without
substantiation, that she had paid the purchase price in full. Her explanation that she had
lost the receipts during a period of heavy flooding in Mdantsane was dubiou s, especially
when she was subsequently able to produce some of the receipts in reply. For a
transaction of this nature , entail ing the purchase of property for a considerable amount
of money, it is odd that someone such as the appellant fail ed to keep a proper record of
the amount s paid either to the first respondent or the conveyancers involved.
Importantly, however, she was unable or simply elected not to deal with the submissions
of the second respondent in relation to the transaction history or the receipts issued by
the conveyancers to the effect that only R 1,000 ,000 was paid .21 The appellant’s
allegation that she had paid the purchase price in full was untenable . She bore the onus
of proof; it is far from clear that viva voce evidence would have upset the balance of
probabilities that emerged from the papers.
20 A forfeiture clause is a standard feature of many instalment sale agreements, whether for the purchase
of household appliances, motor vehicles, immovable property, or otherwise.
21 To the extent that the appellant alleged that the first respondent had not accounted for payments
amounting to R 100,000 over the period of 5 to 18 Decemb er 2017, the amount wa s reflected in both the
transaction history and the receipts issued by Yazbeks Attorneys.
[37] The same could be said regarding whether the sale had been cancelled. The
appellant could not refute that a registered letter of cancellation had been sent to her
chosen domicilium . More was required of her for the court a quo to have been obliged to
refer the matter for oral evidence. The test for referral is strict. I am not persuaded that
the court a quo failed , in this regard, to exercise its discretion correctly .
[38] Finally, in relation to the award of costs, no facts were placed before the court a
quo to have suggest ed that the appellant ought to have attracted t he court’s
disapproval. The court a quo did not address the subject at all, having merely stipulated
the scale in t he order that accompanied its judgment. There was no basis upon which to
have held that a punitive award was appropriate. The appeal succeeds on this ground
only.
Conclusion
[39] Overall, t he respondents have been substantially succ essful. They are entitled to
their costs in terms of the general rule.
[40] In the circumstances, I propose the following order:
(a) The appeal is dismissed, save for the replacement of paragraph 2 of the
order of the court a quo with the following:
‘2. The applicant is order ed to pay the costs of the application on a party -
and-party scale , including the costs of Part A, previously reserved on 7
March 2023 .’
(b) The appellant is directed to pay the respondents’ costs in the appeal.
______________________________
JGA LAING
JUDGE OF THE HIGH COURT
I agree.
______________________________
AS ZONO
JUDGE OF THE HIGH COURT (ACTING)
I agree.
______________________________
KL WATT
JUDGE OF THE HIGH COURT (ACTNG)
APPEARANCES
For the appellant: Adv Simoyi SC
Instructed by: Ronny Lesele Attorneys
46 Leopold Street
King Williams Town
Tel: 043 050 5338
Fax: 086 480 6317
Email: reception@rlesele -attorneys.co.za
Ref: Mr Lesele/Sino/ns_civ01
For the respondent: Adv Mashiya
Instructed by: Singh & Associates
87 Bonza Bay Road
Beacon Bay
East London
Tel: 043 722 3067
c/o Hutton & Cook
King Williams Town
Tel: 043 642 3410
Email: thando@huttco.co.za
Ref: MAT13841
Date heard: 16 September 2024.
Date delivered: 28 January 202 5.