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REPUBLIC OF SOUTH AFRICA
IN THE HIGH COURT OF SOUTH AFRICA
GAUTENG DIVISION, JOHANNESBURG
CASE NO: 2023-066739
(1) REPORTABLE: NO
(2) OF INTEREST TO THE JUDGES: NO
(3) REVISED: NO
DATE: 18 November 2025
SIGNATURE:
In the matter between:
GREGORY JOHN VON HOLDT Applicant
and
HILL INC. First Respondent
THE TRUSTEES FOR THE TIME BEING OF THE
DOLPHIN TRUST (IT 2128/00) Second Respondent
PAM GOLDING PROPERTIES (PTY) LTD Third Respondent
JUDGMENT
This judgment is handed down electronically by circulation to the parties’ legal
representatives by email and by being uploaded to CaseLines. The date and time for
hand down is deemed to be 18 November 2025.
MAHON AJ:
INTRODUCTION
[1] This application concerns a dispute arising from a written agreement for the
sale of an immovable property situate d at Erf 2[...] Kyalami Agricultural
Holdings. The applicant, Mr Gregory John von Holdt, was the seller. The
second respondent, the trustees for the time being of the Dolphi n Trust, was
the purchaser. The purchase price was R17 250 000, of which a deposit of R1
725 000 was payable into the first respondent’s trust account shortly after the
parties concluded the agreement.
[2] The purchaser paid a total amount of R1 750 000 into the first respondent’s
trust account and the conveyancer expressly allocated that sum as
constituting compliance with the contractual deposit obligation. The
additional R25 000 was a voluntary overpayment that would, had the
transaction proceeded, have been applied to transfer -related charges. No
contractual entitlement to this excess amount was asserted by the applicant,
and it does not form part of the deposit that is the subject of the present
dispute as it has been repaid. The dispute, therefor e, only pertains to the
amount of R1 725 000.
[3] The agreement required the purchaser, when called upon to do so, to furnish
a bank guarantee securing the balance of the purchase price. It is common
cause that the guarantee was not furnished within the 14-day period stipulated
in the demand delivered on 2 November 2022, nor within the further five
business days afforded in the subsequent notice to remedy delivered on 28
November 2022. The applicant cancelled the agreement on 6 December
2022. Relying on clause 15.2 of the agreement, he now seeks an order
declaring that he is entitled to retain the deposit as a cancellation penalty,
together with the interest accrued thereon.
[4] The second respondent opposes the application and, itself seeks payment of
this amount f rom the first respondent by way of counter -application. It
advances two broad lines of defence. First, it contends that on a proper
interpretation of the agreement, the purchaser was obliged to remedy any
breach “timeously”, which it submits means within a reasonable time and not
strictly within the five -day period contemplated in clause 15.1. On this footing,
it argues that it was in a position to furnish the guarantee within a short
additional period, that it tendered to do so, and that the cancellation w as
premature. Secondly, and in the alternative, the second respondent invokes
section 3 of the Conventional Penalties Act 15 of 1962, submitting that even if
the applicant is entitled to rely on the penalty stipulation, the forfeiture of the
full deposit i s disproportionate to the prejudice suffered and ought to be
equitably reduced.
[5] After the cancellation, the parties engaged in further discussions concerning a
possible fresh transaction, and the property was later withdrawn from and
subsequently reintrodu ced to the market. In 2025 the property was sold for
R15.5 million. The parties differ materially on the extent to which this later
sale, together with the intervening period, bears upon the question of
prejudice.
[6] In the course of preparing for the hearing , the second respondent sought to
place before the court a supplementary answering affidavit containing facts
arising after the exchange of the principal affidavits. The applicant delivered a
supplementary affidavit in response. At the hearing the parties accepted that
these supplementary affidavits formed part of the record, and argument
proceeded on that basis.
[7] The matter therefore requires the court to determine three principal issues:
whether the applicant validly cancelled the agreement; if so, whether the
penalty clause has been triggered; and if it has, whether the penalty should be
reduced under section 3 of the Act in the light of the prejudice established on
the papers. The allied question of the fate of the deposit held in trust by the
first respondent turns on the resolution of these issues.
FACTUAL BACKGROUND
[8] The agreement of sale was concluded on 6 September 2022. The purchaser
paid the agreed deposit of R1 725 000 into the first respondent’s trust account
on 19 September 2022. In terms of the a greement, the balance of the
purchase price was to be secured by a bank guarantee when requested.
[9] On 2 November 2022 the seller’s conveyancers delivered a written request
calling for the guarantee within 14 days, expiring on 16 November 2022. No
guarantee was furnished within that period. On 28 November 2022 a further
written notice was issued recording the purchaser’s failure to comply and
calling for the breach to be remedied within five business days. The guarantee
was again not delivered within the peri od stipulated in that notice. On 6
December 2022 the applicant notified the purchaser in writing that the
agreement was cancelled.
[10] Thereafter, and once the applicant returned from travel in early 2023, the
parties engaged in renewed discussions concerning the possibility of
concluding a fresh agreement. Those engagements included exchanges
between the purchaser, the estate agents and the applicant relating to the
purchaser’s request for a professional inspection of the property and access
for that purpose. Despite these exchanges, no further agreement eventuated.
[11] In June 2023 the property was withdrawn from the market. It was placed back
on the market in March 2024 at an asking price of R17 million, later reduced to
R16 495 000 in August 2024. The property w as ultimately sold in early 2025
for R15.5 million.
[12] During this intervening period the purchaser made various overtures aimed at
resolving the dispute over the deposit, including without -prejudice tenders. In
June 2025 it sought leave to place additional f acts before the court by way of
a supplementary answering affidavit, principally relating to developments in
the marketing and sale of the property. The applicant filed a supplementary
affidavit in reply.
[13] These events form the factual background against wh ich the present dispute
falls to be determined.
[14] For completeness, it is convenient to record that, although the second
respondent raised a range of additional defences and complaints on the
papers, these were not persisted in at the hearing. In its answeri ng affidavit
the second respondent advanced various in limine points (including objections
based on alleged procedural non -compliance and attacks on the adequacy of
the founding papers), as well as allegations concerning supposed impropriety
or irregularity in the manner in which the first respondent held and dealt with
the funds in its trust account. It also made allegations that the applicant had
suffered no prejudice at all, that he had sought to enrich himself at the
expense of the second respondent, th at he had acted mala fide , and that
enforcement of clause 15.2 would be contra bonos mores , coupled with a
prayer for punitive costs and a counter -application for repayment of the
deposit.
[15] In the second respondent’s heads of argument, however, it is expressly
recorded that “the second respondent’s in limine defences and the issues
concerning the alleged impropriety/irregularity in respect of the first
respondent’s trust account are no longer persisted with”, with specific
reference to the paragraphs of the answering affidavit in which those matters
were raised. The heads of argument further state that they are confined to two
remaining defences, namely (i) the contention that on a proper cons truction of
clauses 15.1 and 15.2 of the agreement the cancellation penalty did not
become due because the purchaser was not afforded a reasonable time to
provide the guarantee, and (ii) the alternative contention that, if the penalty
was otherwise enforce able, it falls to be reduced under section 3 of the
Conventional Penalties Act.
[16] That narrowing of the issues was maintained at the hearing. Counsel for the
second respondent indicated that he would not traverse the full range of
arguments contained in the answering affidavit and that his submissions
would be directed to the proper interpretation of clauses 15.1 and 15.2 and to
the proportionality enquiry under the Conventional Penalties Act, drawing on
the allegations of absence of prejudice and alleged mala fides only as part of
that section 3 enquiry rather than as freestanding defences. The dispute that
falls for determination in this judgment is accordingly confined to those two
issues.
ANALYSIS
The operation of clauses 15.1 and 15.2
[17] The central point of departure is the proper construction of the contractual
mechanism governing breach and its consequences. Clause 15.1 provides
that if any party breaches the agreement and fails to remedy that breach
within five business days of written demand, the innocen t party may elect
either to claim specific performance or to cancel the agreement and claim
damages. Clause 15.2 concerns the treatment of the deposit where the
purchaser is the defaulting party. It provides that, subject to applicable law and
the estate agent’s prior rights, the seller is entitled to retain the deposit “where
the purchaser is the defaulting party and fails to remedy the breach
timeously”.
[18] The purchaser submitted that the use of the word “timeously” in clause 15.2
reflects a remedial period distinct from the five -day period stipulated in clause
15.1. It argued that “timeously” should be understood to mean within a
reasonable time, and that, on the facts, it could have furnished the guarantee
within a short additional period had it been permi tted to do so. The applicant
submitted that the two clauses must be read together; that “timeously” cannot
be divorced from the explicit remedial period provided in clause 15.1; and that
the structure of the agreement contemplates a single remedial mechani sm,
with the consequences of default differing depending on the identity of the
defaulting party, but not on the time allowed for remedy.
[19] The wording and structure of the agreement support the applicant’s
interpretation. Clause 15.1 is the operative remedi al provision and expressly
fixes the period within which a breach must be cured. Clause 15.2 does not
purport to introduce a separate or extended period; it simply describes the
circumstances in which the seller’s entitlement to the deposit as a cancellati on
penalty arises. The term “timeously” must therefore be construed contextually
as referring back to the period provided for in clause 15.1. To interpret it as
introducing a distinct and undefined period would undermine the commercial
certainty that the c ontract plainly sought to achieve, particularly in a
transaction in which the purchaser’s ability to secure financing is fundamental.
This approach accords with the now well -established principles of
interpretation which require the language, context and p urpose of a provision
to be considered together rather than in isolation, as explained in Natal Joint
Municipal Pension Fund v Endumeni Municipality 2012 (4) SA 593 (SCA) and
affirmed in Bothma-Batho Transport (Edms) Bpk v S Bothma & Seun
Transport (Edms) Bpk 2014 (2) SA 494 (SCA).
[20] On this construction, the purchaser was required to furnish the guarantee
within the period stipulated in the demand made on 28 November 2022. It did
not do so. Its explanation for the delay, and its contention that it could have
furnished the guarantee shortly thereafter, do not alter the fact that the
contractual time for remedy expired without compliance. The applicant’s
cancellation was therefore contractually competent.
The effect of the purchaser’s alternative contentions
[21] The purchaser advanced further contentions suggesting that the applicant’s
conduct contributed to the delay, that the breach was not material, and that
the applicant’s cancellation amounted to a repudiation. These contentions are
not borne out on the papers. The obligation to furnish the guarantee arose
directly from the purchaser’s acceptance of the offer and the terms of the
written agreement. The purchaser does not dispute that the guarantee was
required, nor that it was capable of requesting the necessary documentation
and initiating the process to procure it. The cause of the delay therefore lies
squarely with the purchaser, and nothing in the papers convincely suggests
conduct on the part of the seller or conveyancers that could have impeded
compliance within the contractual timeframes.
[22] As for materiality, clause 15.1 does not condition the seller’s election on a
material breach; it applies to “any” breach not timeously remedied. The
question of materiality would only arise in the absence of such a lex
commissoria. Where parties have, in clear terms, stipulated the consequence
of non -compliance, a court ordinarily gives effect to that allocation of risk
without importing a free-standing requirement of materi ality, unless the clause
is itself open to a different interpretation . The purchaser’s reliance on general
principles of materiality is inconsistent with the express terms of the
agreement.
[23] The repudiation argument is equally unsustainable. The cancellatio n was a
direct invocation of the contractually stipulated remedy following non -
compliance with a valid notice to remedy. There is no conduct in the
correspondence of 6 December 2022 that could reasonably be construed as
evincing an intention not to be boun d by the agreement; rather, it reflects the
exercise of a contractual right. The test for repudiation is whether the innocent
party would reasonably conclude that the other party does not intend to be
bound by the contract, judged objectively: Datacolor International (Pty) Ltd v
Intamarket (Pty) Ltd 2001 (2) SA 284 (SCA). On the facts of this matter, that
threshold is not remotely met.
[24] On any rational reading of the agreement, therefore, the right to cancel had
accrued, and the applicant was entitled to exercise it.
The Conventional Penalties Act
Whether the second respondent was entitled to rely on the Conventional
Penalties Act in the absence of a concession of breach
[25] The applicant submitted that the second respondent was not entitled to invoke
section 3 of the Conventional Penalties Act because it had not admitted that it
was in breach of the agreement. The submission relied on the line of authority,
including Sun Packaging (Pty) Ltd v Vreulink 1996 (4) SA 176 (A), which
describes as a “quaint state of affairs” the fact that a debtor who wishes to rely
on the Act must assert the very breach that triggers the penalty. The
applicant’s counsel contended that the purchaser’s simultaneous denial of
breach and reliance on the Act rendered its position impermissib ly
contradictory, particularly in motion proceedings.
[26] The argument cannot be sustained. The principle on which the applicant relied
is directed at factual versions that are mutually destructive. It is trite that a
party cannot, on affidavit, advance compet ing factual narratives of such a
nature that the truth of one necessarily entails the falsity of the other. The rule,
however, does not prevent a litigant from advancing a coherent legal
contention that is explicitly conditional upon a court’s rejection of its primary
factual or interpretative case. A litigant is entitled to say: “I did not breach the
agreement; but if it is found that I did, then a particular legal consequence
follows”. That is a familiar and unobjectionable form of alternative argument.
[27] There is nothing in Sun Packaging or in any of the authorities governing
motion proceedings that compels a debtor formally to concede breach as a
precondition to relying on the Act. What the Act requires, as explained in Sun
Packaging, is that the liability to pay under the impugned clause must derive
from “an act or omission in conflict with a contractual obligation”, that is, from
breach. The existence of a breach may be established as a matter of legal
conclusion rather than factual concession. The debtor may therefore dispute
that it was in breach but, in the same breath, take the position that if the court
concludes that a breach occurred, and if the penalty is enforceable, then the
court must go on to consider whether the penalty is disproportionate.
[28] That is precisely how the second respondent framed its case. Its primary
argument was that, properly construed, the agreement afforded it a longer
period within which to furnish the guarantee, and that no breach occurred. Its
alternative argument, premised o n the court rejecting that construction, was
that the penalty should nevertheless be reduced. These positions are not
mutually destructive: one is grounded in the parties’ differing interpretations of
their written contract, and the other is a distinct sta tutory defence that arises
only if the applicant’s interpretation prevails.
[29] The applicant’s contention that such an approach is impermissible in motion
proceedings therefore rests on a misapplication of the principle. The principle
does not prevent a party from raising a legal defence in the alternative to its
primary case; it merely prohibits a party from attempting to establish two
mutually incompatible factual versions. The respondent advanced a single
factual narrative. Its alternative reliance on the A ct is a legal contention whose
premise comes into existence only upon a judicial finding that differs from its
own. It was therefore properly advanced and falls to be considered on its
merits.
[30] I therefore turn, now, to this question.
The Application of the Conventional Penalties Act
[31] Once it is accepted that the cancellation was valid and that the contractual
entitlement to retain the deposit was triggered, the remaining question is
whether the forfeiture of the full deposit should be modera ted under section 3
of the Conventional Penalties Act 15 of 1962. That section empowers a court
to reduce a penalty to the extent that it is out of proportion to the prejudice
suffered by the creditor, and requires the court to evaluate not only the
creditor’s proprietary interests but “every other rightful interest” affected by the
breach. The enquiry is an equitable one, directed at the circumstances as they
stand at the date of the hearing. This two -stage enquiry – whether the penalty
is out of proportio n to the prejudice, and, if so, to what extent it should be
reduced – is well established: see Sun Packaging (Pty) Ltd v Vreulink and the
discussion there of section 3, as well as the analysis in later decisions
considering the scope of “prejudice” and “rightful interests”.
[32] In its heads of argument the second respondent articulated two alternative
contentions: (i) that the penalty was “commensurate with the prejudice
suffered” by the applicant, or (ii) that it was out of proportion and th erefore
liable to reduction. Embedded within these submissions were several
propositions requiring consideration.
[33] A principal theme of the second respondent’s argument was that the applicant
suffered little or no cognisable prejudice. Emphasis was placed o n the fact
that the property was eventually sold for R15.5 million, and the suggestion
was made that, when the forfeited deposit is added to that amount, the
applicant’s financial position approximates what it would have been under the
original agreement. This overlooks the fact that section 3 is not confined to
arithmetic loss. The applicant placed substantial, largely undisputed evidence
before the court concerning the consequences of the failed transaction: the
collapse of his planned onward purchase, the loss of a firm offer of R17 million
that pre -dated the respondent’s offer, extended maintenance and municipal
costs on a substantial rural property, the need to obtain bridging finance, and
the progressive deterioration in the property’s marketability in the period after
the breach. These consequences form part of the “rightful interests” that
section 3 requires the court to consider, consistently with the broad conception
of prejudice and legitimate interest recognised in the authorities and in the
standard texts, such as Christie’s Law of Contract in South Africa (which was
also referred to in Sun Packaging ). The second respondent’s analysis also
ignores the question of interest.
[34] The respondent also submitted that its breach was easily remediable, and th at
its failure to provide the guarantee timeously did not materially prejudice the
applicant. Even if one accepts that the guarantee could have been furnished
shortly after the expiry of the contractual period, that does not alter the fact of
breach nor it s consequences, which unfolded over a protracted period. The
Act does not empower a court to rewrite the parties’ agreed timeframes in
order to reflect what a party now says it could have done. The prejudice
assessment begins with the breach as established ; it does not permit the
debtor to recast the contractual matrix ex post facto.
[35] A further contention was that the applicant had contributed to or exacerbated
his own prejudice, particularly by withdrawing the property from the market for
a period in 2023. The respondent offered no evidence demonstrating that the
temporary withdrawal affected the ultimate sale price or the level of buyer
interest. The applicant’s explanation for the withdrawal appears congruent
with the broader factual context, including flu ctuating demand and limited
interest from prospective buyers. In any event, the Act requires the court to
assess the prejudice caused by the breach; it does not render the creditor’s
position vulnerable to every tactical or commercial decision taken
subsequently unless those decisions break the chain of causation, which the
respondent has not shown.
[36] The submission that the applicant’s eventual sale price, when combined
notionally with the deposit, places him in a roughly equivalent position also
fails to wi thstand scrutiny. The shortfall between the original contract price of
R17.25 million and the eventual sale price, even before considering the
extended holding costs, is significant. Moreover, the applicant’s legitimate
interests include timely realisation , the avoidance of substantial holding costs,
and the preservation of opportunities lost when the original transaction failed.
On the evidence, the overall prejudice exceeds the amount of the penalty. The
penalty cannot therefore be said to bear no reasona ble relationship to the
prejudice suffered.
[37] These considerations collectively demonstrate that the prejudice suffered by
the applicant was substantial, multi -faceted, and directly connected to the
respondent’s breach. The respondent failed to establish any basis upon which
the penalty could be characterised as excessive or inequitable. This is not a
case where the operation of the penalty clause results in an outcome that is
harsh or unconscionable in the sense contemplated by section 3. The
statutory jurisdiction to reduce the penalty is therefore not engaged.
CONCLUSION
[38] The dispute between the parties turns on the proper application of a clear
contractual regime and a statutory discretion that is engaged only in limited
circumstances. The contractual notic es issued on 2 and 28 November 2022
complied with the terms of the agreement. The purchaser did not furnish the
guarantee within the stipulated period. On a proper interpretation of clauses
15.1 and 15.2, the seller’s right to cancel accordingly accrued. T he applicant’s
cancellation on 6 December 2022 was a lawful exercise of that right.
[39] Once cancellation is held to be valid, the contractual entitlement to retain the
deposit likewise follows. The second respondent advanced no remaining
defence that undermin es this conclusion. Its alternative reliance on section 3
of the Conventional Penalties Act, although competently raised, does not
justify any reduction of the penalty. The evidence demonstrates that the
applicant suffered real, significant and wide -ranging prejudice as a result of
the purchaser’s breach, and that the amount of the forfeited deposit bears a
reasonable relationship to that prejudice. The statutory jurisdiction to interfere
is therefore not triggered.
[40] The applicant has thus established his entitlement to the relief sought, and the
application must succeed. The inevitable consequence for the counter -
application, is that is must be dismissed. In my view, the complexity of the
matter warrants an order for costs on scale C.
[41] In the circumstances, the following order is made:
1. The first respondent is ordered to pay to the applicant the deposit
amount retained in its trust account totaling R1 725 000.00, together with
all the interest that has accrued on this amount.
2. The counter-application is dismissed.
3. The second respondent shall pay the applicant’s costs of the application
and the counter-application, on scale C.
_________________________
D MAHON
Acting Judge of the High Court
Johannesburg
Date of hearing: 14 August 2025
Date of judgment: 18 November 2025
APPEARANCES:
For the Applicant: Adv P Cirone
Instructed by: Carvalho Inc
For the 1st Respondent: No appearance
For the 2nd Respondent: Adv H J Fischer
Instructed by: Berndt & La Vita Inc
For the 3rd Respondent: No appearance