SAFLII Note: Certain personal/private details of parties or witnesses have been redacted from this document in
compliance with the law and SAFLII Policy
IN THE HIGH COURT OF SOUTH AFRICA
MPUMALANGA DIVISION, MBOMBELA

CASE NO: 1904 /2023
(1) REPORTABLE:NO
(2) OF INTEREST TO OTHER JUDGES: YES
(3) REVISED: YES
DATE 19/02/2025
SIGNATURE

In the matter between:

INGRID MHLONGO FIRST APPLICANT

JAMES KHUMALO SECOND APPLICANT

THUTHANE ADOLPH TJIA THIRD APPLICANT

MAJIANE EVELINE MKHANSI FOURTH APPLICANT

SAMSON MHLONGO FIFTH APPLICANT

FRANK MHLONGO SIXTH
APPLICANT

and

LISBON DEVELOPMENTS (PTY) LTD FIRST
RESPONDENT

MAGIC BREAKAWAYS (PTY) LTD SECOND
RESPONDENT

LEGACY GROUP HOLDINGS (PTY) LTD THIRD RESPONDENT

REGISTRAR OF DEEDS: MPUMALANGA FOURTH RESPONDENT

NOMSA MUHLAWURI MANYIKE FIFTH
RESPONDENT

MADODA ISAAC TJIA SIXTH RESPONDENT

THEMBA TIBANE SEVENTH
RESPONDENT

THE MINISTER OF AGRICULTURE, LAND REFORM
AND RURAL DEVELOPMENT EIGHTH RESPONDENT

This judgment was handed down electronically by circulation to the parties and/or
parties’ representatives by email. The date and time for hand -down is deemed to be 19
February 2025 at 10:00.


JUDGMENT


Mashile J

Introduction

[1] To avoid confusion, the parties shall be referred to as follows:

The First to Sixth Applicants as Applicants unless context requires mentioning their
actual names :
1.1 The First to Third Respondents as Lisbon Developments and where
necessary I will use their actual names;
1.2 The Fifth to Seventh Respondents as the Former Trustees unless
mentioning of their actual names will accord with context;
1.3 Nhlangwini Trust as the Trust;
1.4 Nhlangwin i Community as the Community;
1.5 The two immovable properties that are the subject matter of this judgment ,
as the Trust Properties .

[2] Central to this application is whether the resolution of the Former T rustees taken
on 12 January 2021 and the resultant agreement of sale of land signed by them
concluded with Lisbon Developments on 14 January 2021, should be declared unlawful
and set aside. Once so pronounced, to direct the Registrar of Deeds to cancel deed of
transfer T488/2022 in terms of section 6(2) of the Deeds Registries Act 47 of 1937 and
restore ownership to the Trust. The land comprises two properties described as:

2.1 Portion 6 of the Farm Lisbon 297, situated in the registration division K.U,
in the Mpumalanga Province, in extent 1038,4613 hectares (“Portion 6 of
the Farm Lisbon”) held under certificate of registered title T9256/2015
dated 25/06/15; and

2.2 The remainder of the Farm Lisbon 297, situated in the registration division
K.U, in the Mpumalanga Province, in extent 427,0971 hectares held under
Deed of Transfer T10048/2005.

[3] The grounds of the relief sought are that the Former T rustees did not have
authority to resolve on the matter . As such, the ensuing agreement concluded between
the parties is inexorably unlawful in that the former T rustees disregarded various
mandatory provisions in the Trust Deed. The Former T rustees ignored, among others,
to secure the consent of the Community ( “the community”) for the transfer. In the
second place, they did not have the capacity to transfer land that is jointly owned by the
community unless there was compliance with the trust deed . Lisbon Developments
opposes the application on the basis that , among others, registration of transfer of
ownership in terms of the abstract theory of transfer has occurred. The Trustees knew
and understood the consequence of the agreement that they were signing on behalf of
the Trust and ordinarily therefore pacta sunt servanda should be observed.

Factual Matrix

[4] Following a successful land claim in terms of the Restitution of Land Rights Act
22 of 1994 by the community, the state paid R16 814 000.00 to acquire the land on
behalf of the community. The T rust was registered on 16 February 2004 for purposes of
receiving the land. The land was transferred to the Trust in 2005 to hold for the benefit
of the land claimants, the beneficiaries of the Trust. The properties are 1465 Hectares in
extent. They are situated along the banks of the Sabie River, bordering the Kruger
National Park and the Sabie Sands Game Reserve.

[5] The beneficiaries of the Trust comprise 148 households. Each group includes an
originally dispossessed person, if alive, and their direct descendants. Prior to restitution,
the Trust properties constituted a successful commercial farming enterprise known as
Lisbon Estates , growing and producing subtropical fruit. Subsequent to restitution of the
land to the community, the commercial farming activities declined and ultimately
collapsed. The orchards died and the farming infrastructure fell apart.

[6] The decline and the eventual dissolution of the farming enterprise since the
Trust’s establishment c ould be attributed to poor governance on the part of the various
trustees of the Trust. The governance of the Trust has been typified by non -compliance
with the provisions of its Trust Deed, lack of accountability, self -interest, corruption o f
the Former T rustees and absence of adequate financial and administrative controls.
The Former T rustees , took office in 2011 promising good governance. One of their
major complaints against the trustees who served office before them was that they
allegedly attempted to sell the Trust Properties to an investor at a low price.

[7] The Former Trustees failed to bring about the good governance they had
guaranteed. Annual Financial Statements from 2011 to 2017 record the same
disclaimer to the effect that:

“The Trustees failed to keep accurate management accounts and supporting
documentation since incorporation of the Trust. There is no information
available to review the comparative annual financial statements and minimal
information available to review the current annual financial statements. ” Each
statement then notes that the problem with the record -keeping did not only
relate to the period before the former Trustees were appointed but also during
their period of office.

[8] During 2016, the Former Trustees began a process of putting good governance
in place. This brought about the adoption of the current Trust Deed and the passing of
several resolutions intended to improve the quality of governance. These included
resolutions to:

8.1 Appoint an auditor;
8.2 Appoint a separate firm of auditors to undertake an independent review of
the Trust’s affairs;
8.3 Engage a financial controller (a copy of this resolution is annexed as IM9);
8.4 Register as a taxpayer with SARS;
8.5 Authorise an accountant to negotiate repayment terms with creditors of
the Trust; and
8.6 Appoint a consultant to conduct a beneficiary verification exercise .

[9] Simultaneously with the endeavour to adhere to good governance, the
accounting firm, Mazars, completed Annual Financial Statements for the Trust from
2011 to 2017. Even during the sixth year, 2017, of the trustees ’ term of office, Mazars
recorded that there was “minimal information available to review the current and prior
year annual financial statements ”. It proceeded to “draw attention to the fact ” that the
Trust had accumulated deficits of R2 960 811, which was alarmingly higher than the
deficits of R241 384 recorded in the 2011 Annual Financial Statements.

[10] Lima Rural Development Foundation, a not -for-profit Organisation specialising in
rural development and land reform , was mandated to update and verify the beneficiary
register that the Trust must update annually in terms of clause 13.7 of the Trust Deed.
The beneficiary register had, until that juncture, not been updated in over a decade.
Lima developed a careful plan to ensure that the register was updated in full compliance
with the Trust Deed and was as accurate as possible. This included engaging with each
Beneficiary group to correct, update, or add information that had changed since 2004
with the support of six facilitators.

[11] By December 2017, 103 of the 148 households had been updated with their
information logged in an electronic database with all information required by the Trust
Deed that could be updated regularly in future annual updates. The next stage was to
verify the information in two ways – through considering and confirming the new register
at a general meeting and through specific endorsements from each group of their own
data. The Applicants allege that by February 2017 , Mr Themba Tibane one of the
Former Tru stees (“Mr Tibane”) , was no longer cooperating with Lima to assist them with
the information required to prepare a register compliant with the Trust Deed. Instead, he
was engaging with Lima with “a significant degree of frustration and possibly even
aggression ” and was obstructing their further progression. This is denied by Lisbon
Developments whose counter allegation is that Tibane held the opinion that the
converse was in fact true because Lima was perceived to be stalling the process.

[12] Shortly following the report aforesaid, the Former Trustees terminated the
mandates of Lima and that of the current attorneys of record of the Trust. Prior to the
termination of verification, Lima had successfully validated 103 out of the 148 groups
and had compiled an updated registe r of beneficiaries with those updated details. While
the Former T rustees were still enthused to ensure that renewal of the Trust occurred,
few resolutions were executed. The Trust, however, later drifted back into dysfunction.
Most conspicuous and significant was the absence of verified list of beneficiaries.

[13] The Former Trustees have for the past 5 years failed to comply with any
provision in the Trust Deed. This failure expressed itself as set out below:

13.1 No independent trustee was appointed as required by clause 5;
13.2 There was failure to replace d eceased trustees as required in terms of
clause 7;
13.3 A register of resolutions maintained by the trustees did not exist and no
minutes of meetings were kept;
13.4 No proper accounting records were maintained as required by clause 9.1;
13.5 No annual budget was prepared and approved as required in terms of
clause 9.2;
13.6 No annual financial reports were prepared and presented to members at
an AGM as required in terms of clause 9.3;
13.7 The books , records and accounts of the Trust were not reviewed annually
by the Auditors of the Trust, as required in terms of clause 9.4;
13.8 No binding rules and procedures had been determined and stipulated for
the good governance of the Trust as contemplated in clause 12;
13.9 The register of beneficiaries was not maintained; and
13.10 No election was held to replace the Former Trustees before their term of
office expired.

[14] The Former Trustees did as they pleased, the concept of accountability sounded
completely foreign to them. They generated income for themselves and the Trust by
leasing portions of the Properties to tourism operators. In consequence of the strategic
geographic location of the Trust Properties , the Former Trustees have received many
proposals for the development of the Trust Properties for tourism and commercial
purposes. Every one of those enterprises has failed in the face of the Former Trustees’
corruption, self -interest, and/or lack of capacity.

[15] The majority of the community supports developing the Trust properties in a
sustainable manner that will benefit them over the long term. They accept that a
commercial partnership will need to be established with a developer or developers with
the money and resources to do so. However, any such agreement should be negotiated
and concluded in an open and transparent fashion in close consultation with the
beneficiaries a nd should accrue to the best advantage of the beneficiaries over the long
term.

[16] The Applicants allege that in or around November 2022, rumours circulated
among them that the Former T rustees had sold the Trust properties to a developer,
Legacy, which they know as the developer of an adjacent upmarket resort known as
Elephant Point. These claims generated considerable distress among the community
members . The Former Trustees denied that they had concluded an agreement of sale
in terms of which they had sold the Trust P roperties. That said, they acknowledged that
they had only entered into a lease agreement with Legacy Hotels and Resorts Group.

[17] To quell the speculations of the sale of the Trust P roperties , Mr Madoda Isaac
Tjie (“Mr Tjie”) who is also one of the Former Trustees, went so far as to provide the
community with a sworn statement wherein he declared that he confirms that he knew
nothing about the sale of the Trust P roperties. Additionally, he maintained that he had
not given anyone a power of attorney to sell them. He confirmed that he was only aware
of the existence of a lease agreement between the Trust and Lisbon Developments. Mr
Tjie’s efforts to allay the disquiets of the community aside, their discontentment
nonetheless elicited a vain attempt to seize occupation of the property.

[18] Lisbon Developments, which had taken transfer of ownership of the Trust
Properties on 25 January 2022, successfully secured an order interdicting the
community from occupying them. The suspicion of the sale of the properties was
confirmed in early January 2023 when the Trust was placed in possession of a copy of
a Deed of Transfer. The Deed of Transfer established beyond doubt that the Trust
Properties had been sold to Lisbon Developments on 14 January 2021 for an amount of
R7 500 000.00 , which doubled to R15 Million due to Lisbon Developments failing to
register transfer within twelve months.

[19] The community was devastated by the news of the sale of the Trust P roperties
especially as the sale had always been emphatically denied by the Former Trustees.
The Applicants aver that t he Community knew nothing about the sale, was not
consulted and as such, could not have agreed. Lisbon Developments challenges these
claims by the community pointing out that there were meetings of the households, which
properly endorsed the sale of the properties. In any event, Lisbon Developments
alleged registration of transfer of ownership had already happened such that the
process had by then become irreversible.

[20] When the current attorneys of record of the Applica nts came on board, they
immediately enquired from the attorneys of Lisbon Developments what the terms and
conditions of the sale agreement were. The attorneys of the Applicants maintained that
any registration of transfer of ownership was invalid. They also requested a copy of the
sale agreement and tendered reconsideration of any transaction between the Trust and
Lisbon Developments after the appointment of an independent trustee. On 31 January
2023, the attorneys of the Applicants again wrote to the attorneys of Lisbon
Developments requesting that they be provided with:

20.1 The resolution of the Former Trustees purporting to authorise Mr Tibane ,
to sign the power of attorney to give transfer;
20.2 Any record or document that could serve as corroboration that there has
been a vote taken by the group representatives , the representatives of
beneficiary households as defined in the Trust Deed , to approve the sale
of the Trust properties to Lisbon Developments as required in terms of the
provisions of clause 10 of the Trust Deed;
20.3 Details of all payments made by Lisbon Developments to the Trust since 1
January 2020 including those of the bank account to which the payments
were made ; and
20.4 Copy of the sale agreement.

[21] On 1 February 2023, the attorneys of Lisbon Developments wrote back and
provided the following to the attorneys of the Applicant s:

21.1 The Power of Attorney granted by Mr Tibane on which the transferring
attorneys also relied to effect transfer;
21.2 Copy of current letters of authority;
21.3 Register of the group representatives of the Trust;
21.4 Resolution of the group representatives by which they resolved to “support
and approve of the commercialisation and transfer of the Lisbon farm to a
Newco” on 4 and 5 January 2021; and
21.5 A resolution of the Former Trustees dated 12 January 2021, which
authorised Mr Tibane to “negotiate, sign and conclude” the sale
agreement and Subscription and shareholders ’ agreement on the Former
Trustees ’ behalf.

[22] In addition, the letter stated the following:

22.1 That t he purchaser, Lisbon Developments, had made payment into the
bank account of the Trust in the amounts below –
22.1.1 R7 500 000.00 into the Trust’s banking account on 14 January
2021 ;
22.1.2 R6 500 000.00 on 25 January 2022;
22.1.3 R1 528.42 on 16 March 2022; and
22.1.4 R804 471.58 to the Bushbuckridge Municipality on behalf of the
Trust to secure a clearance certificate;
22.2 The attorneys of Lisbon Developments confirmed that their clients were
not willing to disclose the sale agreement; and
22.3 Detailed some of the essential terms of the transaction.

[23] The attorneys of Lisbon Developments refused to furnish the attorneys of the
Applicants with a copy of the sale agreement or the subscription and shareholders’
agreement. They stated that their client was neither obliged nor willing to make copies
of the sale and subscription and shareholders agreements available to the attorneys of
the Applicants . They proceeded to say that they would, at the appropriate time and if
lawfully required to do, furnish copies thereof.

[24] The Applicants state that they were unaware of the resolution of the group
representatives taken on 4 and 5 January 2021 held at Huntington and Belfast Villages,
respectively. They add that they, together with the other community members, do not
remember any notices of general meetings ahead of those dates. They maintain that
this was also the experience of James Khumalo, Majiane Eveline Mkhansi, Samson
Mhlongo and Thut hane Adolph Tjia who are themselves group representatives .
Constable Ngwenya who is alleged to have been part of the meetings of 4 and 5
January 2021, has deposed to an affidavit denying that he was part of such meetings
where he certified the resolution . He also denies having ever utilised the police stamp
outside of the Hazyview Police Station .

[25] The Applicants further allege that the resolution was compiled by Messrs Tibane
and Eloff Shikaya (“ Mr Shikaya ”) during house -to-house visits to beneficiary
households. Tibane and his associates said that they were updating the personal details
of group repre sentatives for the purposes of forthcoming elections and requesting their
nominations for candidates to be elected as trustees. Group representatives were asked
to provide their identity numbers and cell phone number, which they then recorded in
writing in a register. The person who provided the details was then asked to confirm the
correctness of the details r ecorded in the register by signing their name in the space
provided.

[26] The Applicants aver that at no time did Mr Tibane or his associates advise the
persons who signed the register that by affixing their signatures, they were voting for a
resolution to sell the Trust properties. They gave no indication that the register was a
resolution of the group representatives authorising the trustees to sell the properties.
Tjia denied signing the resolution on oath. The signature of the late Former Trustee, Ms
Grace Tryphina Mokoena (“ Ms Mokoena ”), is disputed. A comparison of her signature
on 12 January 2021 resolution and the 2017 Trust Deed looks different. It is common
cause that an expert forensic examiner, Mr Cecil Greenfield (“Greenfield”) , confirmed
that the signature on the resolution was “probably not written by her ”.

[27] The Applicants assert that the resolution of 12 January 2021 professedly
authorises Mr Tibane to negotiate and conclude two agreements, the sale of the Lisbon
farm to Lisbon Developments (Magic Breakaways ) and the subscription and
shareholders ’ agreement. Once Mr Tibane has done so, the resolution empowers the
legal advisor of the Trust, Mr Mculu , or any of the Former Trustees, to sign all
documents and do all that is necessary to give effect to the agreements including the
signature of documents for purpos es of transfer of the property as it is intended in the
agreement of sale. The Applicants point out that the draft agreements were not
annexures to either resolution , instead, the resolutions were attached to the agreements
subsequently negotiated and concluded by Messrs Tibane and Bart Dorrestein (“ Mr
Dorrestein ”). The resolution was therefore drafted and signed after the agreements ha d
been prepared when the converse should have been.

[28] On 8 February 2021, Mr Tibane alone, contrary to the provisions of the resolution
of 12 January 2021, signed a power of attorney to pass transfer of the Trust properties
to Lisbon Developments. The Trust has since 20 January 2022, when the trustees’ term
of office expired in terms of Clause 5.2(i) of the Trust Deed, been without trustees and is
adrift.

[29] On 2 February 2023, the attorneys of the Applicants wrote to the Master of the
High Court setting out the Former Trustees’ misconduct. They requested the Master to ,
firstly, d emand an accounting from the Former Trustees and secondly, advise the them
that they have no authority to act. On 16 February 2023, the attorneys of the Applicants
wrote to the attorneys of Lisbon Developments wherein they again asked for a copy of
the sale agreement. Responding on 17 February 202 3, the attorneys of Lisbon
Developments reiterated that they were unwilling to disclose the sale agreement.
However, they attached a copy of a letter addressed to the Former Trustees, dated 1
December 2020, outlining the terms of reference reflecting the discussions between the
Former T rustees to be used in drawing up the agreements to be concluded between the
Trust and Lisbon Developments .

[30] The Applicants gained sight of a development plan for the properties, which
demonstrates the developers ’ intentions in a graphic form. From the “terms of
reference ” and the development plan, as the Applicants understand, the essential terms
of the transaction, at least as it was conceived in 2020, include:

30.1 The sale agreement and a subscription and shareholder’s ’ agreement
concluded with Magic breakaways in relation to the parties’ interests in the
“developer” being Lisbon Developments;
30.2 The Trust owns, or will own, 20% of the shares in Lisbon Developments,
with “a Legacy Group company” (presumably Magic breakaways) owning
the balance, 80%. In principle, the Trust will own 20% of any enterprise
that engages in development activities on the properties;
30.3 Certain parts of the properties, identified as the “residential golf and
riverfront components”, would be developed independently of the
developer (Lisbon Developments) by the Legacy Group, and the Trust
would be paid R300 000.00 in respect of every erf sold;
30.4 The developer would apply for the establishment of “various townships” on
the properties with a view to sell the erven in those townships;
30.5 The developer would develop the balance of the property, which was not
separately identified in the “agreement”;
30.6 The residential riverfront components and townships to be established
may well comprise of over 200 erven;
30.7 There is no indication given as to how Lisbon Developments was to be
capitalised or how it would be financed. It is unlikely that the Trust is in any
position to contribute other than the properties.

[31] The Applicants do not know to what extent the agreements concluded between
the Former Trustees and L isbon Developments support what is in the terms of
reference. Beyond the 20% stake, there is no detail on how the Trust will participate in
Lisbon Developments. Additionally, t he Trust has received R15 000 000.00 from Lisbon
Developments. It is not contested that not a cent of the amount has been distributed to
the community. Moreover, there has been no accounting to the community on how the
funds were expended.

[32] Tendering confidentiality to the attorneys of Lisbon Developments, the attorneys
of the Applicants again on 20 February 2023 sought access to the agreements. The
Applicants now believes that most, if not all, of the funds paid by Lisbon Developments
have been embezzled by the Former Trustees. The community has received various
reports that the Former Trustees have been making extensive cash withdrawals from
the bank account of the Trust held at Standard Bank, Hazyview branch.

[33] The Applicants now believe that the video posted by Mr Tibane on social media
where he is depicted with bundles of cash constitutes the source of their concerns , that
there have been unauthorised cash withdrawals from the banking account of the Trust.
Numerous requests to the Former Trustees to disclose bank statements have fallen on
deaf ears. Attempts by the attorneys of the Applicants to obtain the bank statements
from Standard Bank have proved vain in that it would neither disclose the bank
statements nor confirm that it has frozen the banking account of the Trust, as per the
request contained in the letter of the attorneys of the Applicants dated 3 February 2022.

[34] The community was incensed when it learned of the sale of the Trust properties.
Whatever semblance of trust that existed between them and the Former Trustees has
collapsed. The Former Trustees have since November 2022, when confronted by the
community, persistently denied that they had sold the properties. They did so even
when they were presented with the Deed of Transfer, which represents incontrovertible
evidence of the existence of the sale. In the meantime, Lisbon Developments continues
to use the properties.

[35] On 18 April 2023, the application for township establishment for Lisbon
Developments on the properties was considered by the Municipal Planning Tribunal. On
19 April 2023, the attorneys of the Applicants wrote to the Tribunal noting that the
developer did not notify the community of the hearing despite knowing of the
preparations, exchange of papers and hearing of this application. The letter implored
the Tribunal not to grant the application. The tribunal granted the application, the letter
urging it to the contrary notwithstanding.

[36] The Former T rustees have also refused to disclose the sale and subscription and
shareholders’ agreements to the community or to make available copies of the Trust’s
bank statements or otherwise to account for the moneys received by them. The Former
Trustees have recently made several attempts to convene meetings of the group
representatives to nominate and elect new trustees. These meetings took place at a
Hotel in Hazyview. The community does not trust the Former Trustees to oversee a
trustee nomination and election process.

[37] The community attended the meetings that were held at the Hazyview Hotel. The
community was determined that the Former Trustees should provide them with specifics
of the sale and to account for the R15 million paid into the bank account of the Trust. In
consequence, the Trust is no longer operational. The Former Trustees have sold the
properties to a private developer and have done so:

37.1 Without the knowledge and consent of the community;
37.2 Without disclosing the terms of the sale;
37.3 Through a closed and obscure process to which only they have been privy
for a fraction of the properties’ value;
37.4 In circumstances where there are a number of credible developers who
would leap at the opportunity to partner with the Trust, to develop the
properties on terms negotiated and agreed upon in a transparent and
open manner; and
37.5 By the use of fraud and deception.

[38] As though the above was not enough, it appears highly likely that the Former
Trustees have misappropriated the proceeds of the sale for themselves. They have sold
the land from which the community and their ascendants were forcibly removed – land
that was reclaimed a nd restored for the benefit of the community and its descendants.
They have done so clandestinely, dishonestly and without any regard to the rights and
interests of the community. It is against the above backdrop that the Applicants have
decided to approach this Court for an order to set aside the sale and transfer of the
Trust properties.

Assertions of the Parties

[39] The Applicants contend that the sale agreement is unlawful i n that the land was
held in a Trust. The Trust Property Control Act 57 of 1988 ( “Act 57 of 1988”) provides
that the trustees must be properly constituted in accordance with the Trust Deed, must
act collectively and in line with the provisions of a Trust Deed to bind the Trust. The
Applicants add that section 6(1) of Act 57 of 1988 further stipulates:

“Any person whose appointment as trustee in terms of a trust instrument, section
7 or a court order comes into force after the commencement of this Act, shall act
in that capacity only if authorised thereto in writing by the Master.”

[40] The Trust Deed prescribes that a minimum of five trustees, including an
independent Trustee, must be in office. It is not contested that when the purported sale
and share subscription agreements were concluded and the properties transferred to
Lisbon Developments, the Trustees did not quorate as there was no independent
Trustee as the Trust Deed prescribes.

[41] Over and above the lack of authority of the Trustees to bind the Trust, the
transactions were contaminated by fraud.

[42] The Applicants also assert that the substance of the sale and the share
subscription agreements are void for illegality as the intention of these agreements is to
achieve indirectly what the Subdivision of Agricultural Land Act 70 of 1970 (“ Act 70 of
1970 ”) forbids. The land is sold subject to the approval of the Minister – this is exactly
what Act 70 of 1970 prohibits, and the jurisprudence renders such agreements invalid.

[43] The register of group representatives relied upon by Lisbon Developments and
the other opposing Respondents is not the register of beneficiaries required by the Trust
Deed and cannot be used to prove membership or representative status. As a result,
less than the required 66% of group representatives (based on the official register of
beneficiaries) signed the resolution. Furthermore, the signature and the police stamp on
the resolution were obtained under false preten ces, as the police officer did not witness
the meetings as claimed by Lisbon Developments and the other opposing Respondents.

[44] The abstract theory of transfer applies to the intention to transfer the community’s
land to Lisbon Developments. In the context of the Transfer of the land, the validity of
the underlying agreement is indispensable. Thus, once such a transaction is
contaminated by fraud and unlawfulness the transaction will stand to be set aside. In
this case, both exceptions are met. The Trust had no intention of transferring its land in
the circumstances.

[45] The reliance of Lisbon Developments on section 28(2) of the Alienation of Land
Act 68 of 1981 (“Act 68 of 1981”) is misguided insofar as it seeks to justify an otherwise
unlawful agreement. Section 28(2), said the Applicants, applies to formality defects
under section 2(1) of the Act, not to substantive contractual invalidity or illegality.
Section 28(2) cannot cure the Trustees ’ lack of capacity under Act 57 of 1988 , the fraud
committed, or the illegality under Act 70 of 1970 . Accepting the respondents ’
interpretation of section 28(2) would render section 28(2) an absurd and illogical
provision, validating any invalid or illegal land transaction upon payment and transfer of
the property. The Applicants referred this Court to the matter of Legator McKenna I nc
and Another v Shea and Others .1

[46] On the contrary , Lisbon Developments argues that the abstract theory applies
without any exception as asserted by the Applicants. For Lisbon Developments only two
requirements must be satisfied for registration of transfer of ownership into the name of
another to occur. The two requirements are delivery of the immovable property to the
party intending to take transfer together with a real agreement. Both the transferor and
the transferee of the immovable property must possess intentions to pass ownership
and to become the owner respectively. Insofar as Lisbon Developments is concerned,
the prerequisites have been discharged.

[47] Lisbon Developments asserts that there is no merit in the contention that the
signature of Ms Mokoena was forged. Lisbon Developments’ attitude to this is that Ms
Mokoena authorised Mr Tibane to sign on her behalf and that this was witnessed by
their attorney, Mr Mculu.

[48] To the argument of the Applicants that the Former Trustees did not quorate when
they signed the sale of shares and share subscription agreements in that the Trust
Deed requires that there be an independent trustee, Lisbon Developments states that to
the extent that Mculu ha d been assisting the Former Trustees, he was fulfilling the role
of an independent Trustee notwithstanding that he had not been formally appointed as

1 Legator McKenna INC and Another v Shea and Others 2010 (1) SA 35 (SCA).
envisaged in Act 57 of 19 88. Lisbon Developments then introduces the concept of a de
facto independent trustee acknowledging that Mr Mculu may not have been appointed
but because he has been acting in that capacity, the court should accept that the
requirement has been satisfied.

[49] Turning to the prohibition contained in section 3 of Act 70 of 1970 , Lisbon
Developments argues that the sale agreement provides that the Trust would sell the
Trust properties to Lisbon Developments, which would in turn sell to Magic Breakaways.
Magic Breakaways would take transfer on the understanding that it would
simultaneously register separate titles for the residential golf/river front components and
transfer the remainder of the properties back to Lisbon Developments, free of any
consideration, to enable Lisbon Developments to develop the balance of the property as
envisaged in clauses 1.6.1 and 1.6.3. Additionally, concludes Lisbon Developments, the
transaction is not a sale of land but a donation and as such, section 3 of Act 70 of 1970
does not find application.

Issues

[50] While I have already captured the core of the issues in paragraph 1 of this
judgment supra , I deem it important to take a step back and mention that the resolution
of the Former Trustees taken on 12 January 2021 was preceded by another taken on 4
and 5 January 2021 wherein the group representatives resolved to support and approve
of the commercialisation and transfer of the Lisbon farm to a Newco . The Court is
tasked with the duty to decide the validity of the resolution taken on 4 and finalised on 5
January 2021.

[51] Another resolution whose validity this Court ought to determine is dated 12
January 2021 taken by the Former Trustees. This resolution authorises the Former
Trustees to negotiate and conclude two agreements with Lisbon Developments ( Magic
Breakaways in its capacity as a Trustee of a company yet to be formed ). These
agreements were the sale of the farm Lisbon and the subscription and shareholders’
agreement . The Former Trustees in turn authorised one of them, Mr Tibane, to
negotiate, conclude and sign on behalf of the Trust. Thereafter, Mr Mculu, a legal
advisor of the Trust, or any of the other Trustees to append their signatures thereon.

Legal Framework

[52] The provisions of the Trust Deed , as the constitution and a document that
governs the operation of the Trust, are significant to understand whether the conduct of
the Former Trustees lived up to expectation. It is against that backdrop that I proceed to
set out some of the important provisions of the Trust Deed.

[53] Clause 5.7 of the Trust Deed prescribes that: “The Independent trustee shall
be an independent person with the appropriate professional qualifications, training
and experience to perform their duties under this Trust Deed and to advise the
Trustees in relation to matters of good governance, Trust administration and on
commercial and financial matters. ” Dealing with vacation of the office of a trustee,
Clause 6, among others, provides that a Trustee shall vacate his office if his period
of office comes to an end.

[54] Clause 8 in relevant parts lays down that:
1“8.3 A quorum shall comprise most of the Trustees ;
8.4 All questions arising at meetings shall be decided by a majority of votes
of the Trustees present at the meeting, unless the question so arising
requires the consent of all the Trustees or the consent of anyone else in
terms of this Trust Deed.
Save as otherwise provided herein, the following rules shall apply regarding
meetings:
Meetings of the Trustees may be convened by the Chairperson, the
Independent Trustee or any other Trustee;
Meetings shall be called on no less than 7 (seven) days ’ notice in writing;
In the ordinary course the notice should specify the time and venue of the
meeting, the business to be dealt with and, to the extent practicable, the draft
minutes of the previous meeting and any other documents or reports that the
convener deems requisite .”

[55] Clause 9 deals with the duties of the Trustees and it provides that the Trustees
shall:

“9.1 Maintain proper accounting and other records of all transactions
concluded by them in their capacities as such ;
9.2 Prepare and approve an annual budget for the Trust, to be presented
to members at the Annual General Meeting of the Trust;
9.3 Cause to be drawn as at the last day of February each year or such
other date as the Trustees shall from time to time decide, an account of the
administration of the Trust disclosing the Trust Fund, and all receipts and
payments made to the Trust in which the Trust Fund is held or invested, to be
presented to members at the Annual general Meeting of the Trust;
9.4 Procure that books and records of the Trust and the account referred
to above be subjected to an independent review annually by the Auditors;
9.5 Furnish the Master with such information regarding the affairs of the
Trust to which they may be entitled;
9.6 Maintain proper minutes of all meetings of Trustees and all decisions
taken from time to time;
9.7 The Trustees shall refrain from holding or disposing of Trust Property for
their personal benefit or for the benefit of their estates and generally shall act
in a prudent and responsible manner as can be expected from persons who
are in charge of the affairs of another person.”

Authority

[56] To the extent that all the Applicants are all beneficiaries, they all have a direct
and substantial interest in the subject matter of this litigation. Their locus standi
cannot be impugned. That said, Lisbon Developments subtly but obliquely objects
to the locus standi of the First Applicant in that her name does not form part of the
listed beneficiaries. However, Lisbon Developments acknowledges that she is the
daughter of the Fifth Applicant. Once that admission is conceded, her locus standi
too cannot be contested. It was on the same basis that the Court in Matsau and
Others v Mokhobo2 concluded.

[57] Capturing the essence of the conclusion of the Court a quo , the Supreme
Court of Appeal in Standard Bank v July stated as follows :3

“[2] The high court held that although as a general rule only an executor can
claim on behalf of an estate, there is an exception to this principle, known as the
Beningfield exception, which allows beneficiaries of an estate to claim where the
executor will not or cannot. Dawood J considered that since the executor of the
estate was himself deceased , the beneficiaries could make claims against a
person who had taken transfer of immovable property when not entitled to do so.
She held that the applicants had locus standi to make the claims…”

[58] I refer to the July case , supra , which puts it beyond hesitation that the Applicants
in this matter still have locus standi notwithstanding that the Trustees who sold the Trust
Properties are not in office anymore. If this Court concludes that the Former Trustees
who negotiated, concluded and signed the agreements had no authority to do so, it will
follow as a matter of course that the Applicants in this matter have locus standi , the fact
that the Former Trustees are not in office aside.

[59] Turning to the lawfulness or unlawfulness of the agreements, it is apparent that
the source of the opposing views between the parties is the question of whether the
Former Trustees had authority to give Messrs Tibane and Mculu the right to negotiate,
conclude and sign the sale, subscription and shareholders ’ agreements. If the
Applicants are correct, the Former Trustees could not have passed to Mr Tibane and/or

2 Matsau N.O. and Others v Mokhobo [2019] ZAFSHC 150 .
3 Standard Bank v July [2018] ZASCA 85 at para 2.
Mr Mculu or any other Former Trustee a right which they did not have. Similarly, Mr
Tibane and/or Mr Mculu or any other Former Trustee could not have done the same in
respect of Lisbon Developments. The converse will hold if Mr Tibane and/or Mr Mculu or
any other Former Trustee had authority.

[60] The aforegoing was recognised in Van der Merwe and Another v Taylor and
Others4 where the Constitutional Court stated:

“At common law, ownership of property passes from one person to another when
the following general requirements, amongst others, are met. First, the transferor
must be capable of transferring ownership. Second, the transferee must be
capable of acquiring ownership. Third, the transferor must have the intention to
transfer ownership and the transferee the intention to receive ownership.”

[61] It is trite that the abstract theory applies to the registration of transfer of land in
this country. Crudely, if firstly, a transferor is legally able to transfer land and the
transferee is legally capable of acquiring it and secondly, there is intention to pass and
receive ownership on both sides respectively, the abstract theory will have been
satisfied. While that is the position, the exception is that the underlying contract must
not be characterised by illegality. Should that be the case, the transaction will be
rendered null and void. Thus, in Oriental Products (Pty) Ltd v Pegma 178 Investments
Trading CC and Others ,5 the Supreme Court of Appeal held as follows:

“The old adage, nemo plus iuris ad alium transferre potest quam ipse haberet , as
formulated by Ulpian (Digest 50.17.54), applies: no one can transfer more rights
to another than he himself has (using Hiemstra and Gonin’s translation for
safety’s sake). Applied to this case it means that Qu had no rights to ownership
and, in the absence of the owner’s authority, he could not have transferred
ownership to the first purchaser. And because the first purchaser did not become

4 Van der Merwe and Another v Taylor and Others 2007 (11) BCLR 1167 (CC) ; 2008 (1) SA 1 (CC) para
40.
5 Oriental Products (Pty) Ltd v Pegma 178 Investments Trading CC and Others [2011] 3 All SA 173 (SCA)
para 26; see also Legator McKenna Inc and Another v Shea and Others 2010 (1) SA 35 (SCA) para 22.
the owner it, in turn, was unable to transfer ownership to the second purchaser.
All this, in my respectful view, has nothing to do with the abstract system of
transfer which, in any event, is a well established principle of our law.”

[62] Section 6(1) of Act 57 of 1988 states that any person whose appointment as
trustee in terms of a trust instrument, section 7 or a court order comes into force after
the commencement of this Act, shall act in that capacity only if authorised thereto in
writing by the Master. Section 6(1) of Act 57 of 1988 must be read together with Clause
2 of the Trust Deed , which defines trustees as those persons “who are at present jointly
acting as trustees , who have been appointed by the Master by virtue of Letters of
Authority issued on 14 July 2014 ”.

Analysis

Validity of the Group Representatives’ Resolution of 5 January 2021

[63] The Trusts execute transactions through the medium of Trustees. For those
transactions to have legal effect, the persons acting on behalf of the Trusts as Trustees
must have been lawfully appointed in terms of the Trust Deed and properly authorised
to act by the Master in terms of Act 57 of 1988. Additionally, the Trust Deed lays down
the procedure to be followed when a meeting of the Trustees is envisaged. A meeting of
the Trustees can be called by the chairperson or any of the Trustees. In terms of Clause
8.6.2, m eetings shall be called on not less than seven days ’ notice in writing. The
notice should specify the time and venue, the business to be dealt with and, to the
extent practicable, the draft minutes of the previous meeting and any other
documents or reports that the convener deems essential. See, Clause 8.6.3 of the
Trust Deed.

[64] The Applicants do not recall attending a meeting of the group representatives
on 4 and 5 January 2021 during which they supported and approved the
commercialisation and transfer of the Lisbon farm to a N ewco . The Applicants point
out that if this meeting took place, it was not convened in terms of the provisions of
the Trust Deed because they were not notified nor were they told what the meeting
would be about.

[65] The recollection of the Applicants concerning the resolution of the group
representatives is that the resolution was compiled by Messrs Tibane and Shikaya
during their house -to-house visits to beneficiary households. They told the group
representatives that they were updating the personal details of group representatives for
the purposes of forthcoming elections. They asked the group representatives to
nominate them as candidates to be elected as Trustees. They requested the group
representatives to provide their identity numbers and cell phone numbers, which they
then recorded in writing in a register. The group representatives confirmed the
correctn ess of their particulars by appending their signatures to the document.

[66] The Applicants state that Mr Tibane or his associates did not inform the group
representatives who signed the register that by so doing, they were voting for a
resolution to sell the Trust Properties. It is against that background that Tjie’s denial that
he did not sign a resolution to sell the Trust properties must be understood. Lisbon
Developments is steadfast that a meeting of the group representatives took place as
alleged by them. As I understand it, whether a meeting was held on 4 and 5 January
2021, as alleged by Lisbon Developments is immaterial because it is apparent that it
was not convened as contemplated in the Trust Deed. Similarly, and accepting that the
group representatives signed it during house -to-house visits to household beneficiaries,
it would remain invalid because it would have been obtained under false pretences and
again, not in line with the Trust Deed.

[67] With the above background in mind, the group representatives could not have
authorised the Former Trustees to conclude the sale and subscription and shareholders
agreements because they were ignorant that by furnishing their details and signing, they
were sanctioning the Former Trustees to negotiate, conclude and sign a sale and
subscription and shareholders agreements. Equally, the Former Trustees in turn could
not have authorised Mr Tibane to negotiate, conclude and sign the agreements. Lastly,
even if Mr Tibane’s signature was accompanied by that of Mr Mculu or anyone of the
Former Trustees, they could not have passed a right that they did not have to Lisbon
Developments. See, the Legator case supra . What i s worth noting here is that contrary
to the provisions of the resolution of the group representatives, assuming that it was
valid, Mr Tibane was not authorised to sign the agreements alone.

[68] Finally, on the matter of the resolution of the group representatives, Constable
Ngwenya’s sworn statement is extremely damning on the integrity of Messrs Mculu and
Dorrestein. He denies that Mr Mculu requested him to be present at a meeting of 5
January 2021 where the group representatives of the beneficiaries signed a resolution.
He further specifically denies that he was at the meeting where he stamped the
“Resolution to Support and Approve of the Commercialisation and Transfer of the
Lisbon Farm to a Newco ” with two different stamps, the one being a SAPS stamp from
the Hazyview Police Station, the other, a certification stamp signed by him, “D
Mgwenya” , with personal number 2[...] and the rank of constable.

[69] Constable Ngwenya add ed that he has never used the SAPS stamp outside the
boundaries of the Hazyview Police Station. He state d that he uses the certification
stamp solely for the purpose of certifying copies of original documents. He recalls
assisting Mculu to certify a large number of documents at the Hazyview Police Station
but does not remember the exact date. That said, when he did so, it was in the absence
of the group representatives. He clarified that the surname on the certification stamp
alleged to have been certified by him is Mgwenya, not Ngwenya.

[70] In addition, he said that the persal number 2[...] was assigned to him when he
served as a Reservist with SAPS until 30 November 2020. Thereafter, he was
appointed to the rank of Constable on 1 December 2020. As such, by 5 January 2021,
he was a Constable with a new persal number of 7[...], which he would have duly
entered on the document on that date. The allegations of Messrs Dorrestein and Mculu
on his participation at the meeting of 5 January 2021 are completely inaccurate.
Constable Ngwenya’ assertions are deeply disturbing because it means that he was not
at the meeting, nor are the stamps used at that meeting his. This of course raises the
question whether the stamps were forged especially in view of the mistakes in the name
and his persal number.

Validity of Trustees Resolution of 12 January 2021

[71] Turning to the resolution of the trustees dated 12 January 2021, it emerged that
the signature of Ms Mokoena on the resolution was different from her normal signature .
The conclusion of a forensic expert, Mr Greenfield, on the matter was that the signature
was probably not hers. Following this revelation and confirmation by Greenfield, Messrs
Tibane and Mculu belatedly strove to explain away the inconsistency in Ms Mokoena’s
signature. Ms Mokoena, who has since passed on, had just undergone a hip opera tion,
was frail and her hands shaky, they said, had requested Mr Tibane to sign on her
behalf.

[72] Mr Mculu confirmed having heard Ms Mokoena give the direction, noticed, and
witnessed Mr Tibane sign the resolution. The excuse of Messrs Tibane and Mculu must
be rejected as it is manifest that its objective is to counter the adverse finding of
Greenfield on the signature of Ms Mokoena. The explanation is nonsensical because if
it is correct that Ms Mokoena had requested Tibane to sign on her behalf, why was it
necessary for him to imitate her signature instead of appending his own where she
would have signed? Why did he pretend that it was Ms Mokoena personally who
signed?

[73] The discrepancy in the signature of Ms Mokoena would have been so glaring to
anyone warranting explanation especially co-trustees who often worked with her. Thus,
the inference that Messrs Tibane and Mculu deliberately elected to keep silent on the
signature issue is unavoidable. It was only when they noticed that it had been
uncovered and brought to the surface that they came up with the above obviously
contrived explanation. Why did Messrs Tibane and Mculu behave in the manner they
did? The answer is unmistakable – they forged Ms Mokoena’s signature.

[74] Clause 5.1 of the Trust Deed provides that t he Trust shall have no more than 7
(seven) trustees and no less than 5 (five) Trustees including an independent trustee.
Section 6(1) of Act 57 of 1988 is clear that a trustee appointed in terms of a Trust
Deed, section 7 or a court order, shall act in that capacity only if authorised thereto in
writing by the Master. In the same vein, Clause 2 of the Trust Deed describes trustees
as those persons currently jointly acting as Trustees to whom the Master has issued
letters of authority . The assertion that Mr Mculu has been a de facto independent
Trustee envisaged in the Trust Deed cannot stand because the provisions of section
6(1) are expressed in peremptory terms.

[75] To the extent that it was argued on behalf of Mr Mculu that he has been capably
advising the Trustees and diligently performing the duties of an independent Trustee as
envisaged in Act 57 of 1988, I need point out only that the evidence of Constable
Ngwenya is extremely perturbing as he has not only refuted the allegations but has
shown that they are false. Additionally, the fact that Mr Mculu only proffered an
explanation of the inconsistency in the signature of Mokoena after noticing that
Greenfield had found that the signature was “probably not written by her ” militates
against the notion of an unimpeachable individual suitable to advise the trustees on
matters of this nature.

[76] Perhaps I should also state that it is a conveyancing practice that when parties
conclude a sale in respect of an immovable property, the purchase price is usually
deposited into the trust account of the transferring attorneys until registration of transfer
of ownership to the purchaser. Contrary to the aforegoing, Lisbon paid the purchase
price or part thereof on 14 January 2021 to the Trust , two days following the conclusion
of the agreement. The purchase price was immediately thereafter withdrawn from the
account of the Trust and distributed mainly between Messrs Mculu and Tibane.
Needless to state that registration of transfer of ownership had not occurred at that time.
Was the Trust advised by Mculu to accept payment , the practice that it is paid on the
day of registration notwithstanding? If so, Mculu could not have been a suitable and
capable person to advise the Trustees. Thus, even if the notion of a de facto
independent Trustee or that there had been substantial compliance was to be accepted,
he would still not qualify.

[77] Mr Mculu was never authorised to act as an independent Trustee for the Trust as
contemplated in Act 57 of 1988 and it is common cause that he does not have and
never had letters of authority. The Trustees could not have had a quorum if the
signature of Mokoena was forged and in circumstances where there was no
independent Trustee. Act 57 of 1988 does not accommodate the notion of a de facto
independent Trustee or substantial compliance with a Trust Deed as Lisbon
Developments would have this Court believe. Accordingly, that contention is rejected as
bereft of any merit.

[78] The resolution of the Trustees of 12 January 2021 would remain defective even if
I accept the fallacious assertion on behalf of the Former Trustees that the letter of
authority issued to him by the Master remain valid because it was never withdrawn or
set aside by any court of law. Letters of authority are issued for a specific period and
thereafter, they lapse and do not remain extant until withdrawn as the Former Trustees
would have this Court believe. The meeting of 12 January 2021 could not have been
quorate because , firstly, this Court has rejected the explanation of the discrepancy in
the signature of Ms Mokoena proffered by Messrs Tibane and Mculu. Secondly, this
Court has also accepted that Mr Mculu’s notion of a de facto independent Trustee is
foreign to the provisions of Act 57 of 1988. Accordingly, with or without Tibane, the
meeting of 12 January 2021 did not quorate. Other than the issue of quorum, the
question is whether they had authority especially in view of the invalidity of the
resolution of 5 January 2021, which purported to authorise the Former T rustees to deal
with the Trust properties.

[79] The object of showing the invalidity of the resolutions of the group
representatives and the Former Trustees is to validate the assertion of the Applicants
that both the group representatives and/or the Former T rustees and/or Mr Tibane
lacked authority to sell the Trust properties. The contention of Lisbon Developments that
pacta sunt servanda or that ordinarily parties must be bound by the terms of the
agreements they sign cannot stand. For this contention to succeed , the group
representatives and the Former T rustees must have had authority. On the evidence that
Lisbon Developments has levied before this Court, that conclusion is not possible.

Section 28(2) of the Alienation of Land Act 68 of 1981

[80] The section provides that “any alienation which does not comply with the
provisions of section 2(1) shall in all respects be valid ab initio if the alienee had
performed in full in terms of the deed of alienation or contract and the land in question
has been transferred to the alienee ”. Section 2(1) prescribes that “[n]o alienation of land
after the commencement of this section shall, subject to the provisions of section 28, be
of any force or effect unless it is contained in a deed of alienation signed by the parties
thereto or by their agents acting on their written authority .”

[81] The approach of Lisbon Developments to this provision is that it has performed in
terms of the sale agreement and registration of transfer of ownership of the Trust
properties has occurred. Lisbon Developments assigns a far broader meaning to the
failure to comply with the formalities of reducing the instrument to writing and have it
signed by the parties or their duly chosen representatives. It is not surprising that th is
contention le d it to the conclusion that even if the agreement was characterised by
illegality, the transaction would stand. As such, the transaction is irreversible. The
Applicants’ attitude is that section 28(2) applies only to contracts for the sale of land that
do not comply with the formalities in section 2(1). Its objective, they argue, is not to
render all agreements of contract of sale of land valid regardless of the nature of the
defect in the agreement.

[82] The interpretation of the section preferred by Lisbon Developments flies in the
face of what the S upreme Court of Appeal held in the Legator McKenna Inc case supra .
The Applicants particularly drew the attention of this Court to how the S upreme Court of
Appeal traced and explained the origins of the provision. I cannot do better than simply
quoting the Court:6

“[26] Succinctly stated, the rule [the Wilken v Kohler rule from which section 28(2)
originates] provides that, if both parties to an invalid agreement had performed in
full, neither party can recover his or her performance purely on the basis that the
agreement was invalid. The ‘rule’ has its origin in an obiter dictum by Innes JA
in Wilken v Kohler 1913 AD 135. In context, Innes JA was dealing with
performance under sales of land that were invalid for want of compliance with a
statute requiring the contract to be in writing. In the course of his judgment he
then stated (at 144) obiter , as it turned out, that:
‘It by no means follows that because a court cannot enforce a contract which the
law says shall have no force, it would therefore be bound to upset the result of
such a contract which the parties had carried through in accordance with its
terms. Suppose, for example, an . . . [oral] agreement of sale of fixed property . .
., a payment of the purchase price and due transfer of the land. Neither party
would be able to upset the concluded transaction on the mere ground that . . . it
was in reality an agreement to sell, invalid and unenforceable in law, but which
both seller and purchaser proposed to carry out.’
[27] …it was referred to with apparent approval by this court in Wilkens NO v
Bester [1997] ZASCA 9 at 362F and endorsed by the legislature, specifically with
reference to contracts of the sale of land, invalid for non -compliance with
formalities, in s28(2) of the Alienation of Land Act 68 of 1981.”

[83] The Legator Mckenna Inc case makes it unequivocal that section 28(1) cannot
apply beyond what the legislature intended – to limit its application to contract s that do
not comply with formalities such as those referred to in the section. To expand it beyond
those borders would not only be anomalous but imply that failure to observe the rule of
law may come with benefits. Taken to its logical conclusion, it is conceivable on the

6 Legator McKenna Inc supra para 26 and 27.
approach of Lisbon Developments that a party with no authority to sell a property can
enter into such an agreement and the resultant agreement is valid on the grounds of
section 28(2) of Act 68 of 1981. I agree with the Applicants that this is absurd and, I
would add, would create chaos. As such, the interpretation of Lisbon Developments
cannot find favour with this Court, and it is rejected as unsound and misguided.

Abstract Theory of Transfer

[84] Perhaps it is convenient to go back to what the C onstitutional Court said in the
Van der Merwe case supra . Was the Trust capable of transferring ownership to Lisbon
Developments? The trustees through which a Trust carries out its activities must have
the authority to discharge those duties. The mere fact that Constable Ngwenya denies
the claims by Messrs Dorrest ein and Mculu that he was at the meetings of 4 and 5
January 2021, where he used the Hazyview Police Station stamp and another to certify
documents renders the resolution defective. The resolution cannot therefore be utilised
as a justification to authorise the Former Trustees to negotiate, conclude and sign the
sale and share subscription and shareholders’ agreements disposing of the Trust
properties.

[85] The group representative resolution is also defective for another reason and that
is that the group representatives were not told that they were signing a resolution whose
impact would be to sell the properties to Lisbon Developments ultimately. The
signatures of the group representatives were obtained through false pretences. The
resolution is therefore defective, making the Trust incapable of transferring ownership.

[86] Turning to the resolution of the trustees dated 12 January 2021, the Former
Trustees could not have authorised Mr Tibane to negotiate, conclude and sign the sale,
subscription and shareholders’ agreements because that meeting did not quorate.
Firstly, Mr Mculu was not authorised by the Master to act as an independent trustee.
Secondly, Messrs Tibane and Mculu forged Mokoena’s signature. In the circumstances,
the Trust was incapable of transferring ownership under the abstract theory of transfer.
In the same manner that it was not capable of transferring ownership, the Trust could
not have had the intention to pass ownership.

[87] While the abstract theory does not require the existence of a valid underlying
agreement for ownership to pass, the agreement must be lawful. Here the sale
agreement is unlawful because the group representatives could not have authorised the
trustees to negotiate, conclude and sign the sale agreement. Similarly, the Former
Trustees did not have the authority to authorise Tibane to sell the Trust properties to
Lisbon Developments because the signature of Mokoena was forged. The underlying
agreement is tainted by fraud.

The Subdivision of Agricultural Land Act 70 Of 1970

[88] Section 3 of Act 70 of 1970 is entitled Prohibition of certain actions regarding
agricultural land. Section 3 (e) and (f) prescribe that:

“Subject to the provisions of section 2 –
…
(e) (i) no portion of agricultural land, whether surveyed or not, and whether there
is any building thereon o r not, shall be sold or advertised for sale, except for the
purposes of a mine as defined in section 1 of the Mines and Works Act, 1956
(Act No. 27 of 1956); and
(ii) no right to such portion shall be sold or granted for a period of more than
10 years or for the natural life of any person or to the same person for periods
aggregating more than 10 years, or advertised for sale or with a view to any such
granting, except for the purposes of a mine as defined in section 1 of the Mines
and Works Act, 1956;
(f) no area of jurisdiction, local area, development area, peri -urban area or
other area referred to in paragraph (a) or (b) of the definition of ‘agricultural land’
in section 1, shall be established on , or enlarged so as to include, any land which
is agricultural land;
…
unless the Minister has consented in writing.”

[89] Act 70 of 1970 prohibits subdivision of agricultural land unless the Minister has
consented to the subdivision in writing. It is common course that the Trust properties are
in terms of section 1 of Act 70 of 1970 classified as agricultural land. The prohibition
contemplated in section 3 therefore applies. Lisbon Developments asserts that the sales
of the Trust properties do not offend the provisions of Act 70 of 1970. It disagrees that a
closer scrutiny of the sale transaction between the parties lays bare that the sale is in
fact one of a sale of a portion of the Trust properties.

[90] The objective of the sale agreement, they maintain, is that the Trust will sell the
Trust P roperties to Lisbon Developments. Lisbon Developments will in turn sell the
Trust properties to Magic Breakaways, which will take transfer on the understanding
that it will simultaneously register separate titles for residential golf/river front
components. Thereafter, it will transfer the remainder of the Trust properties back to
Lisbon Developments free of any consideration to enable it to develop the balance of
the property as envisaged in clauses 1.6.1 and 1.6.3 of the sale agreement.

[91] Understood as stated above, argues Lisbon Developments, the Trust sold the
Trust P roperties to Lisbon Developments on 14 January 2021. Transfer of the whole of
the properties into the name of Lisbon Developments happened in 2022. It was not a
portion of the trust properties that was transferred but the whole of the properties. In the
circumstances, the argument that it was a portion that was sold stands to be rejected by
this Court, concludes Lisbon Developments.

[92] As I understand the argument of Lisbon Developments , the first and second
sales do not offend the provisions of Act 70 of 1970 because a division only occurs at
the level of Magic Breakaways when it sells or donates it back to Lisbon Developments.
There is no argument that Lisbon Developments acquired the properties not as a
portion but as a whole . Equally , the onward sale by Lisbon Developments to Magic
Breakaways was of the whole of the property. However, that is too simplistic and if this
well-thought scheme were to be countenanced, similar sham scheme designed to
circumvent the application of Act 70 of 1970 would mushroom all over.

[93] Stripped of the veneer, it is manifest that the scheme is a sham. Lisbon
Developments and Magic Breakaways are related. So, one is not dealing with
companies that have no business relationship. The first question is why was it
necessary to complicate the sale transactions – from the Trust to Lisbon Developments,
from Lisbon Developments to Magic Breakaways and then back to Lisbon
Developments? The answer must be that it was thought that way to avoid the
application of Act 70 of 1970. Its true nature is therefore not what this Court is told by
Lisbon Developments and the Former Trustees . Given the conclusion of various Courts
that one ought to examine the true nature of the transaction, it is of no moment that
Magic Breakaways donated it back to Lisbon Developments.

[94] It is not contested that the definition of sale in section 1 of Act 70 of 1970
includes one that is subject to a suspensive condition. The Applicants have referred this
Court to the matter of Geue and Another v Van der Lith and Another7 where the Court
held that agreements subject to a suspensive condition of the Minister approving a
transaction are offensive to Act 70 of 1970. Clause 4 of the sale agreement is
unambiguous in that the sale of the property to Magic Breakaways is subject to the
suspensive condition that Lisbon Developments secures “all necessary approvals from
all relevant authorities for the registration of the separate title”.

[95] Lisbon Developments is mindful of the suspensive condition in the sale because
Clause 12.5 of the subscription and Shareholders’ Agreement prescribes that Lisbon
Developments will be entitled to a refund of the purchase price of R15 000 000.00 plus
accrued interest if it is unsuccessful to secure the approvals from all the relevant
authorities in respect of the registration of the separate title. The Applicants have also
alerted this Court to the decision in Four Arrows Investments 68 v Abigail Construction

7 Geue and Another v Van der Lith and Another 2004 (3) SA 333 (SCA) para 15 and 16.
CC and Another8 where the Court held that the objective of Act 70 of 1970 is broader
than the prohibition of a sale of undivided agricultural land to include even
advertisements of the sale of such land. The Court in the Four Arrows Investments 68
case declared the sale agreement null and void. Given the conclusion of the court, I am
bound to follow in its footsteps and declare the agreement null and void.

[96] In the result, the sale agreement:

96.1 Contravenes the provisions of Act 70 of 1970;
96.2 It is in breach of section 28(2) of Act 68 of 19 81;
96.3 Is illegal in that it was induced by fraudulent representations;
96.4 The Former Trustees lack ed authority to bind the Trust.

[97] Against that background, I make the following order:

1. The resolution of the Trustees of the Nhlangwini Trust (registration
number IT 1476/04) dated 12 January 2021, as well as any agreements
signed by any person in terms of that resolution, are declared invalid, void,
and unlawful.
2. The transfer of the fixed properties known as the remainder of the Farm
Lisbon 297 registration division KU, Mpumalanga and Portion 6 of the
Farm Lisbon 297 registration division KU, Mpumalanga from the
Nhlangwini Trust to the First Respondent is declared unlawful and is set
aside.
3. The Fourth Respondent is directed, in terms of the provisions of section
6(2) of the Deeds Registry Act 47 of 1937, to cancel the Deed of Transfer
T488/2022 within four weeks of the date of service of this order upon the
Lisbon Developments and the Former Trustees .
4. Lisbon Developments and the F ormer Trustees are directed to pay the
costs of the Applicants including costs of two Counsel, where applicable.

8 Four Arrows Investments 68 v Abigail Construction CC and Another 2016 (1) SA 257 (SCA).



B A MASHILE
JUDGE OF THE HIGH COURT
MPUMAL ANGA DIVISION, MBOMBELA


Appearances

Counsel for the Applicant : Adv T Ngcukaitobi SC
Adv N Seme
Instructed by: Richard Spoor Inc
C/O Christo Smith Inc . Attorneys
Counsel for the
1st, 2nd & 3rd Respondent s: Adv A Bishop
Adv S Mathe
Instructed by: Strauss Scher Attorneys
C/O Yuanitha du Plessis Attorneys
Counsel for the
5th, 6th & 7th Respondents: Adv R Godlett
Adv N Tarmohamed
Instructed by: Mculu Inc. Attorneys
C/O Yuanitha du Plessis Attorneys

Date of Judgment: 19 February 2025