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in compliance with the law and SAFLII Policy
REPUBLIC OF SOUTH AFRICA
IN THE HIGH COURT OF SOUTH AFRICA
GAUTENG DIVISION, JOHANNESBURG
Case No.: 008581-2023
(1) REPORTABLE: NO
(2) OF INTEREST TO OTHER JUDGES: NO
(3) REVISED: NO
15 Sep 2025
In the matter between:
DAVEYTON HEALTH HOLDINGS (PTY) LTD Applicant
and
CITY OF EKURHULENI METROPOLITAN MUNICIPALITY First Respondent
METROPOLITAN MUNICIPALITY: CITY OF EKURHULENI Second
Respondent
REGISTRAR OF DEEDS Third Respondent
J U D G M E N T
PILLAY, AJ
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Introduction
1. In the main application, Daveyton Health Holdings (Pty) Ltd, the applicant, seeks
an order of specific performance compelling transfer of a property which it
purchased from the first respondent (“the Municipality” ) in May 2016. The
property concerned is Erf 2[ …], Daveyton, Extension 7 Township, Daveyton,
which is about 5,0981 hectares in extent (“the Property”).
2. The Municipality opposes the application and brings a counter -application in
which it seeks an order reviewing and setting aside the sale agreement
concluded between the applicant and the Municipality during May 2016. The
Municipality also tenders the repayment of the purchase price to the applicant as
well as any ancillary amounts paid.
The facts
3. It is common between the parties that:
3.1. The immovable property forming the subject matter of these proceedings, is
owned and currently registered in the name of the Municipality
3.2. In August 2014, the applicant, made an unsolicited bid for the property . As
part of that bid, the applicant indicated that it intended to establish a private
hospital on the property in question.
3.3. On 26 February 2015, the Municipal Council adopted a resolution as follows
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“That, having taken into account the requirements of Regulation 7 of the
Assets Transfer Regulations, 2006 and amended, the proposed transfer of Erf
2[…], Daveyton Extension 7 Township Daveyton, approximately 5 0981 ha in
extent (indicated on the attached sketch – plan marked Annexure “A) BE
APPROVED and that the said immovable capital asset be SOLD for purpose
of a private hospital, subject to the standard conditions contained in the
Council’s Land Disposal Framework and Guidelines and Supply Chain
Management Policy as well as the further conditions outlined in the report.
That the City Manager or nominee BE AUTHORISED to do the necessary to
give effect to the above.”
4. I pause to mention that there was a dispute between the parties as to whether
this resolution was taken on 26 February 2015 or 2016. While the
Municipality initially contended that it was taken in 2016, by the time the
matter was argued, they accepted that the decision was taken on 26 February
2015.
5. On 17 May 2016, the a pplicant and the Municipality’s representative and
concluded a written sale agreement. The applicant duly paid the full purchase
price under the agreement.
6. The immovable property w as not transferred to the a pplicant. Instead , what
transpired is, inter alia, the following:
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5.1 In February 2022, the Municipality received complaints relating to the
sale of the property. It was also informed that the matter had been
referred to the public protector;
5.2 On 13 June 2022, Gauteng Treasury sent an initial response to the
Municipality’s request for feedback . The content of this response is
significant and can be gleaned from the subsequent letter from G PT
dated 20 March 2024. According to that subsequent letter, in the initial
response, the Municipality was informed by Gauteng Treasury that the
unsolicited bid was not undertaken in accordance with section 113 of
the MFMA and Municipal Supply Chain Management Regulation 37. It
also advised that the the Munic ipality should advertise the sale of land
through a competitive bidding process to award it to the highest scoring
bidder.
5.3 On 3 August 2022, the applicant received an email from the
Municipality’s attorney’s notifying them that they received instructions
to pend the transfer until further notice;
5.4 On 3 February 2023, this application was instituted;
5.5 On 17 March 2023, the Muni cipality’s attorneys addressed a without
prejudice letter to the applicant’s attorneys indicating that they are
instructed to proceed with the transfer of the property. On the same
date, the applicant’ s attorneys accepted the offer subject to the
provision of a reasonable timeline for registration of transfer and a
tender for wasted costs;
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5.6 On 20 March 2023, the Municipality’s attorneys confirmed the
settlement agreement and indicated that transfer was anticipated to
take between 2 to 3 months. They also tendered wasted costs on a
party and party scale.
5.7 On 26 June 2023, the Municipality’s attorneys requested information to
enable the Municipality to proceed with transfer from the applicant’s
attorneys. They also sought the payment of transfer costs.
5.8 On 29 November 2023, the applicant made payment of transfer costs
of R83 281.
5.9 On 19 December 2023, the Municipality’s Real Estate Department
addressed a letter to the National Treasury requesting comments on
the unsolicited bid. The letter recorded the following:
5.9.1 The Municipality received an unsolicited bid to purchase
Council-owned property;
5.9.2 On 26 February 2015, the Council approved in principle
that the property in question be sold for purposes of a
private hospital;
5.9.3 The unsolicited bid was considered in terms of Land
Disposal Framework and Guidelines as well as the
Supply Chain Management Policy adopted by Council;
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5.9.4 Members of the public and other interested bidders were
invited to submit comments to the unsolicited bid in terms
of section 21A of the Municipal Systems Act and no
comments or representations were received;
5.9.5 In view of the fact that no comments or representations
were received, the requirement to submit the matter to
National or Provincial Treasury Departments fell away;
5.9.6 A deed of sale was accordingly concluded and the seller
paid the price in full. Attorneys were instructed to attend
to the transfer of the property’
5.9.7 Subsequently, illegal occupants using the property for
church purposes also applied to purchase the property.
They however raised allegations of corruption against
Municipal officials and the doctors who purchased the
property. They also approached the Public Protector to
intervene.
5.9.8 The alleged corruption was fully investigated by the
Municipality and the Public Protector and found to be
baseless.
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5.10. On 29 February 2024, the Municipality’s attorneys address a letter to
the applicant’s attorneys stating that they are awaiting positive
comments from National and Provincial Treasury.
5.11. On 20 March 2024, Gauteng Treasury responded that they had already
provided comments but, in view of the latest request from the
Municipality, deemed it prudent to review the matter with a view to
determining whether they would reach the same conclusion. As part of
the review, the GPT raised the following issues
5.11.1. No evidence was presented that the product or
service offered in terms of the bid is a
demonstrably or proven unique innovation concept
as per MSCM Reg 37(2)(a)
5.11.2. MSCM Regulations 37(7)(b) requires the Bid
Adjudication Committee to consider any written
comments and recommendations of the National
Treasury or the relevant provincial treasury.
However, no evidence that suggests that such
comments were deliberated upon during the
meeting held on the 15th of February 2016 as per
the requirement of MSCM Reg 37(4), (5) and (7).
Furthermore, the request for comments were
submitted to the provincial treasury only after the
decision to award was taken by the BAC on 15
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February 2016 and ratified by the Accounting
Officer.
5.11.3. MSCM Regulation 37(6) requires that a meeting of
the Bid Adjudication Committee (BAC) to consider
the unsolicited bid be open to the public. In
addition to that, our assessment further revealed
that after the unsolicited proposal was received,
the (BAC) was not held or open to the public as
provided in the Regulation.
7. Based on these reasons. the GPT cannot confirm compliance with MSCM
Regulation 37 on the unsolicited bid. The Municipality wa s accordingly
advised by the GPT to comply with the requirement of the MSCM Regulation
37 on the unsolicited bid.
8. In light of this correspondence from GPT, the Municipality brought a counter -
application in which the following relief is sought:
9.1. Condonation for the late filing of the answering affidavit and the
delay in issuing the counter-application;
9.2. Reviewing and setting aside the deed of sale written agreement;
and
9.3. Declaring that the deed of sale written agreement be declared of no
force or effect.
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Issues to be determined
10. The opposition by the Municipality to the relief sought in the main application is
confined to attacking the legality of the deed of sale written agreement . The
import of this is that, if the counter -application is not successful, the Municipality
has no opposition to the relief sought in the main application. For this reason,
argument during the hearing of this matter was confined to addressing the merits
of the counter-application for self review.
Discussion
Delay
11. The counter -application impugning the validity of the review application was
instituted on 3 June 2024, more than eight years after the conclusion of that
agreement. Thus the first issue for consideration is whether this delay is
reasonable or not.
12. In Merafong
1 and Gijima2, the Constitutional Court articulated t he reasons for
requiring reviews to be instituted without undue delay include to ensure certainty;
to promote legality and to curb the potential prejudice that would ensue if the
lawfulness of the decision remains uncertain.
1 Merafong Demarcation Forum and Others v President of the Republic of South Africa and Others 2008 (5) SA
171 (CC)
2 State Information Technology Agency SOC Ltd v Gijima Holdings (Pty) Ltd 2018 (2) SA 23 (CC)
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13. In Camps Bay Rate Payers' and Residents' Association 3 the SCA held that a
party applying for condonation must provide a full and honest explanation for the
whole period of the delay. This was affirmed by the Constitutional Court in
Buffalo City Metro Municipality4.
14. The Municipality accepted that it did not provide an explanation for the first five
years after the deed of sale agreement was concluded but relied on the judgment
of the Constitutional Court in Merifon5 in which the Constitutional Court held, in
para 46 thereof that
“Whilst I agree with the criticism levelled against the Municipality for its inordinate
delay in taking steps to deal with its conduct in concluding an invalid agreement,
this has no bearing on the eventual outcome of the matter. The unexplained long
delay in reviewing its unlawful conduct does not cure the invalidity and
unenforceability of the agreement. Inexcusable as it is, the long delay and failure
by the Municipality to review its unauthorised conduct also does not
automatically deprive it of the option of a reactive challenge. Since Merafong
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and Tasima7, it is now clear that a reactive challenge “should be available where
justice requires it to be” and that an organ of state is “not disqualified from raising
a reactive challenge merely because it is an organ of state”.
3 Camps Bay Rate Payers' and Residents' Association v Harrison [2010] 2 All SA 519 (SCA)
4 Buffalo City Metro Municipality v Asla Construction (Pty) Ltd 2019 (4) SA 331 (CC)
5 Merifon (Pty) Limited v Greater Letaba Municipality and Another (CCT 159/21) [2022] ZACC 25; 2022 (9) BCLR
1090 (CC) (4 July 2022)
6 Supra
7 Department of Transport and Others v Tasima (Pty) Ltd 2017 (2) SA 622 (CC)
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15. However, the above paragraph from the Merifon judgment cannot be interpreted
as meaning that it is no longer required that state functionaries put forward a full
explanation for any delay in bringing reactive challenges. Certainly, this
paragraph does not detract from the established line of Constitutional Court and
Supreme Court of Appeal authority which establishes that a full explanation for
delay is required and a court has a discretion as to whether or not any undue
delay should be condoned.
16. The Municipality contended that the delay in seeking the review was not of its
own doing due to essentially two reasons:
16.1. Correspondence between the parties which shows that the
Municipality has a clear intention to follow the law and to transfer
the property; and
16.2. The counter -application is brought as a result of the comments
received from the Gauteng Provincial Treasury (“GPT”) and the
view adopted by the Municipality on consideration of same.
17. However, the Municipality does not provide a full explanation for the entire period
of delay. Not only is t he lengthy delay of eight years before the deed of sale
agreement was challenged not properly explained, but absolutely no explanation
is given for the delay since June 2022 when the Municipality was first advised of
the concerns of GPT (which now forms the basis for the self -review). To make
matters worse, despite being aware of these concerns, t he Municipality pushed
ahead with the implementation of the deed of sale agreement including entering
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into a settlement agreement which sought to ensure to the expeditious transfer of
the property in question.
18. I accordingly find that the delay by the Municipality is unreasonable and that a
case has not been made out for condonation.
The merits of the counter-application
19. In any event, even on the merits, I find that the Municipality has not established
that the conclusion of the deed of sale was unlawful. In this regard it is noted
that the GPT had raised three issues which included the following:
19.1. No evidence was presented that the product or service offered in
terms of the bid is a demonstrably or proven unique innovation
concept as per MSCM Reg 37(2)(a)
19.2. No evidence was presented that comments were deliberated upon
during the meeting held on the 15th of February 2016 as per the
requirement of MSCM Reg 37(4), (5) and (7).
19.3. The (BAC) was not held or open to the public as provided in the
Regulation.
20. The founding affidavit in the counter -application does not properly address these
issues in that:
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20.1. The founding affidavit stops short of making the assertion that the
product or service offered in terms of the bid was not demonstrated
nor proven to be unique;
20.2. The evidence indicates that the Council did not refer comments to
National Treasury because none were received. Indeed, on a
proper reading of regulation 37(2)(a) the duty to refer to National
Treasury only arises in circumstances were comments are received
on the unsolicited bid. In the present matter, none were received at
the relevant time. Comments were only submitted long after the
BAC had made its recommendation and a decision accepting that
recommendation had been taken; and
20.3. No allegation is made in the founding affidavit that the BAC was not
open to the public.
21. I accordingly find that the Municipality has failed to establish a factual foundation
for its claim that the deed of sale was unlawful.
Remedy
22. In these circumstances, the counter -application stands to be dismissed with
costs. It also follows that the main application for specific performance must
succeed with costs.
23. I note that the applicant seeks costs on a punitive scale. However, in my view,
the facts in this matter do not warrant punitive costs . I accordingly award costs
on a part and party scale.
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Order
24. The following order is thus made:
24.1. The counter-application is dismissed;
24.2. The first and second respondents are directed to take all necessary
steps, give all necessary instructions to the first respondent's
conveyancers, and to sign all necessary documentation, to procure
and effect the transfer of, and registration of the transfer of, the
property, described as ERF 2 […] DAVEYTON EXTENSION 7
TOWNSHIP, DAVEYTON, measuring approximately 5,0981
hectares in extent to the applicant
24.3. The Sheriff of this Court is authorised to sign all documents relating
to the transfer of the property to the applicant in the event of the
First and Second Respondents refusing and/or neglecting to take all
necessary steps, give all necessary instructions to the first
respondent's conveyancers, and sign all necessary documents to
give effect to the aforesaid registration and/or transfer of the
property into the name of the applicant within 30 (thirty) days from
the date of issue of this order.
24.4. The first respondent is to pay the costs of:
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24.4.1. The main application, on scale B of rule 69 of the Uniform
Rules of Court, including the costs of two junior counsel;
24.4.2. The counter -application on scale B of rule 69 of the
Uniform Rules of Court, including the costs of two junior
counsel;
24.4.3. The costs of the unopposed application set down for
hearing on 4 June 2024 before Judge Mahalelo, in which
costs were reserved, with reference to Scale A of rule 69
of the Uniform Rules of Court.
______________
K PILLAY
ACTING JUDGE OF THE HIGH COURT
JOHANNESBURG
For the Applicant:
Adv D Smith and Adv M Madi instructed
by Nyapotse Incorporated
For the 1st Respondent:
Adv E Sithole instructed by DDV &
Chiba Attorneys
Date of hearing:
21 July 2025
Date of judgment:
15 September 2025
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