IN THE HIGH COURT OF SOUTH AFRICA
KWAZULU-NATAL DIVISION, PIETERMARITZBURG
APPEAL CASE NO :
AR199/2024
CASE NO: 829/2022P
In the matter between:
BLUE GUM ESTATE (PTY) LTD APPELLANT
and
ZENITH ESTATES CC FIRST RESPONDENT
THE REGISTRAR OF DEEDS SECOND RESPONDENT
___________________________________________________________________
ORDER
___________________________________________________________________
On appeal from: KwaZulu-Natal Division of the High Court, Pietermaritzburg
(Annandale AJ, sitting as court of first instance):
The appeal against the judgment and order of the court a quo declaring that
the respondent validly exercised the option to purchase is dismissed with
costs on scale C
___________________________________________________________________
JUDGMENT
2
Mathenjwa J (Chetty J and Hadebe J concurring)
Factual background
[1] This is an appeal against the judgment and order of Annandale AJ in which
the learned Judge declared valid the first respondent’s (the respondent) exercise of
the optio n to purchase contained in the agreement of sale of Commercial Timber
Farming Enterprise concluded between the appellant and the respondent . The court
a quo directed the appellant to take all necessary steps to effect the transfer of the
immovable properties described as Erf 1450, Erf 1451, Erf 1452, and Erf 1453 to the
respondent, against payment of the purchase price of R900,000.
[2] The matter arose from an agreement of sale of commercial property
concluded by the respondent and appellant on 11 August 2006, in terms of which the
respondent sold to the appellant , the Commercial Timber Farming Enterprise,
comprising the land and timber farming business on the Zenith Estate (the
respondent). In terms of clause 6.1 of the sale agreement, the appellant granted the
respondent the s ole and exclusive right and option to purchase the House Sub -
division, which is a component of the Commercial Timber Farming Enterprise, as the
new owner, for the purchase price of R900,000 . The House Sub -division (‘the
property’) was defined as the subdivision portion 1 containing the existing
homestead as described on the layout plan Ref 6065/2006, scale 1:3000. The option
to purchase would terminate on 31 July 2015 or 90 days after the appellant furnished
the respondent wit h the approved subdivisional diagrams of the property whichever
was the earlier of the aforesaid two dates.
[3] On 2 September 2013 , the appellant and the respondent concluded a written
addendum to the agreement of sale in terms of which the date by which the
respondent was required to exercise the option as set out in clause 6.1.1 of the sale
agreement was extended to 31 July 2020 . O n 31 July 2015 , Mr Pillay, the
agreement was extended to 31 July 2020 . O n 31 July 2015 , Mr Pillay, the
respondent's attorney, addressed an email to the appellant advising them that the ir
client, the respondent, exercises their right and option to purchase the House Sub-
division from the appellant. In addition, the attorney further attached an agreement
signed by the respondent in respect of the purchase of th e House Sub-division. The
3
agreement provided that the respondents purchased four subdivisions, namely Erf
1450, 1451, 1452, and Erf 1453, in accordance with clause 6.1 of the offer contained
in the sale agreement. The reason being that the appellant had subdivided the
property referred to as the House Sub -division into four erven. However, the
appellant contended that the respondent ’s purported exercise of the option was
invalid because it related to a different property than the one that was offered for
purchase. Dissatisfied with the appellant’s action , the respondents launched a court
application for an order declaring that the option to purchase was validly exercised,
and the court a quo granted judgment in favour of the respondent.
Issues before this Court
[4] The grounds of appeal before this court are mainly based on the contention
that the court a quo erred in finding that the respondent had validly exercised th e
option to purchase the property in terms of the agreement between the parties. The
appellant also raised a point of law stating that in the event that this Court finds that
the option to purchase was properly exercised by the respondent , then the exercise
of the option did not comply with the provisions of s 2(1) of the Alienation of Land Act
68 of 1981 (‘the Act’), since, there was no evidence that the attorney was authori sed
in writing to exercise the option on behalf of the respondent.
[5] The respondent opposed introduction of the new point of law on appeal, but
alternatively contended that in the event this Court decided to entertain the new point
of law, the respondent would apply for leave to adduce further evidence to show that
the attorney was authorised by the respondent in writing to convey to the appellant
that the respondent had taken a resolution to exercise the option to purchase the
property. The appellant opposed the application to adduce further evidence based
on the grounds that the engagement letter , which purported to authorise the
on the grounds that the engagement letter , which purported to authorise the
attorneys to advise the appellant that the respondent had exercised the option does
not constitute the authority required by s 2(1) of the Act and therefore it is irrelevant
to the question of whether or not the respondent had ever exercised the option.
[6] Therefore, the issues for consideration in this appeal are:
a) Whether the court should entertain the new point of law raised by the
appellant on appeal;
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b) Whether this court should grant leave to the respondent to adduce further
evidence;
c) Whether the respondent had validly exercised the option to purchase the
property;
d) If so, whether the exercise of the option complies with the requirements of s
2(1) of the Act; and
e) In reaching the conclusion that the option was validly exercised, this court will
have to make a finding that the exercise of the option relates to the same
merx that was offered for sale and that the terms incorporated in the proposed
agreement by the respondent do not constitute a counter-offer.
Parties’ contentions
[7] Mr Pammenter SC for the appellant submitted that the letter addressed by
Pillay from the respondent’s attorneys to the app ellant advising that the respondent
had exercise d the option constituted an e xercise of the option by Pillay. It was
contended that s uch exercise of option by Pillay was not binding because it is not
contained in a deed of alienation signed by the parties or by the parties acting on
their written authority. Furthermore, it was argued on behalf of the appellant that the
exercise of the option does not coincide with the offer contained in the agreement in
that the appellant had offered to sell a House Sub-division to the respondent, and the
respondent had exercised the option to purchase four subdivisions.
[8] It was further submitted on behalf of the appellant that the creation of the four
subdivisions and the provision of services thereto resulted in considerably greater
costs to the appellant as the property developer and the parties could never have
contemplated that the respondent would be entitled to the benefit of purchasing the
four subdivisions at the same price as the single House Sub-division.
It was contended on behalf of the appellant that the proposed agreement imposed
additional obligations on the appellant which were not contained in the offer to
purchase. Firstly, the proposed agreement provided that the purchaser was entitled
purchase. Firstly, the proposed agreement provided that the purchaser was entitled
to occupation pending transfer of the sale of the property, whereas such obligation
was not included in the option. Secondly, the appellant was obligated to do all things
necessary to obtain approval of the relevant authorities for the development of the
entire scheme , whereas in terms of the original agreement , the appellant was
5
required to arrange for the subdivision of the whole property into divisions , one of
which was to be the House Sub-division. The third point is that the type of servitude
outlined in the option was significantly different from what was proposed in the
agreement. The parent property was intended to be encumbered by a servitude
benefiting a single property, the House Sub -division. In contrast, the proposed
agreement specified that the property would be encumbered by a servitude
benefiting four properties, the four subdivisions.
[9] Ms Mills, representing the respondent, argued that the option was not
exercised by the attorneys of the respondent and that it complies with section 2(1) of
the Act. She asserted that the option was exercised by the respondent itself through
a written resolution that was signed by it. 1 The respondent submitted that the draft
agreement clarified that the option property was divided into four erven in the
identical land that was the subject of the option. Each of the option terms , which is
the property, price, and payment thereof, remained unaltered.
[10] With regard to the proposed additional terms , it was argued on behalf of the
respondent that while the additional proposals were not a precondition to the
exercise of the option , some of the proposals were terms implied by law, and some
were proposed solely to the benefit of the appellant.
Analysis and applicable legal principles
[11] The new issue raise d by the appellant on appeal is that the exercise of the
option by the respondent to purchase the property does not comply with the law. It is
appropriate to state upfront that a party cannot raise an issue on appeal that was not
raised in the court a quo unless it is a pure question of law. 2 The rule regarding the
raising of a new point of law on appeal is not without limitations. A new point of law
may be raised if the pleadings covered the point, and the entertainment of the point
must not prejudice the other parties.3
must not prejudice the other parties.3
1 The directors of the first respondent signed the resolution to exercise the option to purchase the property.
2 DB v CB [2024] ZACC 9; 2024 (5) SA 335 (CC) para 45.
3 Maphango and Others v Aengus Lifestyle Properties (Pty) Ltd [2012] ZACC 2; 2012 (3) SA 531 (CC)
para 109.[ please check the spelling of the parties’ names ]
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[12] There is no doubt that the issue of whether the respondent’s exercise of the
option complies with the requirement of the law is an issue of law. The respondent
had stated in their pleadings that the attorneys conveyed the message by means of
a letter to the appellant , which communicated that the respondent had exercised the
option to purchase the pr operty. The refore, the involvement of the respondent’s
attorneys in transmitting the exercise of the option by the respondent to the appellant
is material and was traversed in the pleadings. Furthermore, the court’s
entertainment of the point of law would not prejudice the respondent because it had
been afforded the opportunity to respond, and it had applied for leave to adduce
evidence to deal adequately with the point of law.
[13] This then brings me to the reception of new evidence on appeal. The
requirements formulated by the Supreme Court of Appeal for the reception of new
evidence on appeal are as follows:4
‘…(a) There should be some reasonably sufficient explanation, based on allegations
which may be true, why the evidence which it is sought to lead was not led at
the
trial.
(b) There should be a prima facie likelihood of the truth of the evidence.
(c) The evidence should be materially relevant to the outcome of the trial’.
From the affidavit filed by the respondent in the application to adduce further
evidence, it is evident that the evidence is aimed at showing that the attorney who
advised the appellant about the respondent’s exercise of the option had the authority
to act on behalf of the respondent in this regard. The evidence sought to be led was
not led in the court a quo because the appellant did not raise the lack of authority
from the respondent’s attorney to represent them. The evidence is material and
relevant to the outcome of the case because it will either support the appellant's or
the respondent's version on the issue of whether the attorney had the authority to act
the respondent's version on the issue of whether the attorney had the authority to act
on behalf of the respondent or not. Accordingly, the respondent is allowed to adduce
the evidence to counteract the appellant’s submissions on an issue that was not
raised in the court a quo.
4 De Aguiar v Real People Housing (Pty) Ltd [2010] ZASCA 67 ; 2011 (1) SA 16 (SCA) para 12; S v
De Jager 1965 (2) SA 612 (A) at 613B-E.
7
[14] The enquiry on the validity of the exercise of the option must commence with
the question of whether the option was exercised by the attorney of the respondent
or not. If it was exercised by the attorney, then the question is whether the attorney
had the authority to do so. A piece-meal interpretation of the documents pertaining to
the exercise of the option would defeat the basic principle of interpreting a document
which was spelt out in Natal Joint Municipal Pension Fund v Endumeni Municipality,5
where it was held that ‘an interpretation is the process of attributing meaning to the
words used in a document , having regard to the context provided by reading the
particular provision or provisions in the light of the document as a whole and the
circumstances attendant upon its coming into existence’.6
[15] The respondent’s attorney clarifies in the letter that they were advising the
appellant about the respondent ’s exercise of the right of option to purchase the
House Sub-division. The attorney further attached the resolution adopted by the
respondent to exercise the option duly signed by its members, and an agreement in
respect of the purchase of the property duly signed by the respondent’s
shareholders. The wording of the attorney's letter stating that they were advising the
appellant of the decision taken by the respondent to exercise the option, coupled
with the resolution adopted by the respondent and the agreement of purchase
signed by the respondent’s shareholders , clearly shows that the option to purchase
was exercised by the respondent, not by their attorneys.
[16] Having found that the option was not exercised by the attorneys, the issue of
whether the attorney s had the authority to exercise the option has become moot.
However, for the sake of completeness of the discussion about the role of the
respondent’s attorneys in the exercise of the option a reference to the letter o f
respondent’s attorneys in the exercise of the option a reference to the letter o f
engagement signed by the respondent where it is recorded that the attorneys were
authorised to correspond with the appellant, prepare the exercise of the option
agreement and attend to the transfer of the property shows that the attorney had the
mandate from the respondent to deal with the matter including communicating with
the appellant on the exercise of the option by the respondent.
5 Natal Joint Municipal Pension Fund v Endumeni Municipality [2012] ZASCA 1; 2012 (4) SA 593
(SCA).
6 Ibid para 18.
8
[17] This then brings me to the appellant’s contention that the property in respect
of which the respondent exercised the option to purchase was not the same thing
offered by the appellant to the respondent. It is appropriate to point out that the point
in issue was raised and thoroughly ventilated in the court a quo. It is trite that when a
seller grants an option to a buyer to purchase a thing, the contract of sale comes into
existence upon the purchaser exercising the option when it is still open. 7 In this
matter, the respondent exercised the option to purchase while the offer was still
open. Apart from the description of the House Sub-division in the layout plan , the
sale agreement does not describe the content of the property , nor does it specify its
shape, whether it will be constituted by one or more than one erven. However, it is
discernible from clause 7.2 of the agreement that the House Sub-division includes a
residence and land forming part of it. The property that the respondent had exercised
the option to purchase is clearly identifiable on the layout plan attached to the
agreement. It is the same property in terms of the location and size that was offered
by the appellant to the respondent. Therefore, the court a quo was correct in finding
that the option was validly exercised to purchase the same merx that was offered to
the respondent for sale.
[18] The appellant’s contention that the property was different because the
respondent accepted an offer to purchase four erven, whereas the appellant had
offered to sell one property, the House Sub -division, does not hold water. The
reason being that the appellant subdivided the property into four subdivisions when it
had granted the respondent the sole and exclusive right to exercise the option to
purchase the property while such option was still open to the respondent. It is trite
that the essence of an option is that it is binding on the option grantor. It is an offer,
that the essence of an option is that it is binding on the option grantor. It is an offer,
in this case to sell property, which cannot be revoked. It is the option holder that has
the choice whether to exercise its right.8
[19] Clause 6.2 of the sale agreement requires the appellant to disclose to
interested parties in the event it alienates or advertises for the disposal of any part of
the property before the option terminates. Therefore, during the existence of the
7 Hersch v Nel 1948 (3) SA 686 (A) at 699.
8 Du Plessis NO and Another v Goldco Motor & Cycle Supplies Pty (Ltd) [2009] ZASCA 62; 2009 (6)
SA 617 (SCA) para 15.
9
option, the appellant would be prevented from dealing with the property in a manner
that would alter its character from that which was offered to the respondent without
prior disclosure of the intended action to the respondent, who is an interested party.
For that reason, the subdivision of the property into four erven would not frustrate the
respondent from accepting the offer to purchase the property in its current shape,
provided that the new shape did not change the merx, which is the subject of the
agreement of sale between the parties.
[20] I digress to the appellant’s contention that the y offered the land for a different
price, and the respondent had exercised the option to purchase at a different price .
That point was ventilated and correctly decided by the court a quo, which determined
that the inclusion of an offer to pay additional amounts alongside the option price in
the proposed agreement does not indicate that the respondent had failed to exercise
the option as outlined in the offer. The additional costs to the original purchase price ,
which the appellant complains about , are costs in favour of the appellant. The
additional costs include the costs incurred by the appellant for subdividing the
property into four erven. The additional costs do not constitute a counteroffer nor
invalidate the offer. The contract of sale would still be enforceable on its original
terms without the additional costs if the appellant did not accept payment of
additional costs by the respondent.
[21] Furthermore, the appellant's contention that the acceptance of the offer
creates an additional burden to the respondent because it makes provision for the
respondent to take occupation of the property before the property was transferred to
it; pay for the development of the property , and create four right of way servitudes in
respect of the four erven is not sustainable . These matters are provided for in the
respect of the four erven is not sustainable . These matters are provided for in the
sale agreement between the parties. Firstly , clause 7.1 of the agreement of sale
provides that until the date of registration of the House Sub-division, the appellant
would lease the property to the respondent. Therefore, the respondent’s occupation
until registration of the property in their name is an implied term of the agreement.
Secondly, the payment of costs by the appellant for developing the property is
provided for in clause 6.4 of the agreement of sale , where it is recorded that the
appellant was liable for all the costs for the creation of the House Sub -division,
10
including survey and compliance with all conditions of approval required in law to
give effect to the registration of the House Sub-division.
[22] Clause 6.5 of the agreement requires the appellant to register, over the whole
of the property sold, a right -of-way servitude in favour of the respondent, granting
them full access to the House Sub -division from the public road as well as access to
electricity and water. The creation of the right -of-way by means of four servitudes in
respect of each of the four erven was necessitated by the appellant’s own conduct in
creating four erven within the House Sub-division. The servitude sought to provide
each of the four with equal access to the public road and other services. Finally,
even if the disputed terms were not contained or implied in the parties' contract, the
fact that the respondent incorporated terms that are proposed in their acceptance of
the offer does not make the acceptance a counteroffer. If the proposed terms are
unacceptable to the appellant, that does not mean that the offer is not binding , since
the contract must still be enforced on the essential terms embodied in the offer.9
[23] What remains is the issue of whether the exercise of the option to purchase
the property complies with s 2(1) of the Act, which provides that:
‘No 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.’
The Act requires that the offer and acceptance of alienation of land to constitute a
valid contract should be in writing. 10 It is trite that the test applied in determining
whether the sale of land complies with s 2(1) of the Act, is ‘whether the land
alienated can be identified on the ground by reference to the provisions of the
contract without recourse to evidence from the parties as to their negotiations and
consensus.’11
consensus.’11
[24] It is not in dispute that the respondent took a resolution in writing to exercise
the option to purchase the property as it was identified in the layout plan in the sale
9 Du Plessis NO and Another v Goldco Motor & Cycle Supplies Pty (Ltd) fn 7 above para 18.
10 Brandt v Spies 1960 (4) SA 14 (E) at 17A-B.
11 JR 209 Investments (Pty) Ltd and Another v Pine Villa Country Estate (Pty) Ltd;
Pine Villa Country Estate (Pty) Ltd v JR 209 Investments (Pty) Ltd [2009] ZASCA 3; 2009 (4) SA 302
(SCA) para 19.
11
agreement containing the offer to sell the property . The resolution was signed by the
shareholders of the respondent. Further more, the shareholders of the respondent
authorised to sign the agreement relating to the purchase of the property by the
respondent, had signed such agreement , which was then conveyed by the
respondent's attorney to the appellant. Thus, the resolution, the agreement of sale
of the property duly signed by the authorised shareholders, together with the letter by
the respondent’s attor neys conveying the exercise of the option to the appellant ,
squarely complied with the requirements of the Act. The mere fact that the proposed
agreement of sale was not signed by the appellant would not render the acceptance
of the offer invalid, given that the offer was signed by the appellant and the
acceptance thereof was signed by the respondent.
[25] For this reason, the appeal should fail. There is no reason to depart from the
principle that costs follow the result [s]. Given the complexity of the matter , the
appellant should pay the respondent’s costs on scale C.
Order
[26] In the premises, the following order is made:
The appeal against the judgment and order of the court a quo declaring that the
respondent validly exercised the option to purchase is dismissed with costs on scale
C
_______________
Mathenjwa J
I agree.
_______________
Chetty J
I agree.
12
_____________
Hadebe J
Date of hearing: 13 June 2025
Date of judgment: 21 November 2025
Appearances:
Applicant’s counsel:
Instructed by: Cox Yeats Attorneys
Umhlanga Ridge
First Respondent’s counsel: Ms L M Mills
Instructed by: Simon Chetwynd-Palmer Attorneys
Kloof