Brief Summary

Property Law — Transfer of immovable property — Fraudulent transfer — Applicant seeking to declare deed of sale and subsequent transfers null and void — Court finding that suspensive conditions were not fulfilled and that fraud vitiated the transactions — Deed of sale between applicant and YDT Trust declared null and void, and subsequent transfers to the Phokojes set aside, restoring ownership to the applicant.

Comprehensive Summary

Summary of Judgment

1. Introduction

These proceedings comprised two opposed applications heard together by agreement between the parties in the Free State Division of the High Court, Bloemfontein. The first application (case no 1750/2024) was brought by Veronica Goeieman as applicant, seeking declaratory and consequential relief to set aside the sale and subsequent transfers of her immovable property and to restore the property to her name. The second application (case no 3056/2024) was brought by Moalusi Ishmael Phokoje and Kehilwe Juned Phokoje (married in community of property) as applicants, seeking restoration of possession of the same property and monetary relief.

In application 1750/2024, the Phokojes were cited as first and second respondents. The trustee of the YDT Trust (IT970/2012), Mr Dlali, was cited as third respondent, with the Registrar of Deeds, Bloemfontein as fourth respondent and the bondholder (Changing Tides 17 (Pty) Ltd NO, in its capacity related to the South African Home Loans Guarantee Trust) as fifth respondent. The Registrar did not oppose, and the bondholder abided.

The dispute concerned the validity of two deeds of sale and two consequent transfers of an immovable property, following allegations of fraud and the non-fulfilment of suspensive conditions. The matter also raised questions about the consequences of defects in the “real agreement” required for transfer under South African law, and the effect of the nemo plus iuris principle where intermediate title is impugned.

2. Material Facts

Ms Goeieman became the registered owner of the immovable property described as Erf 6[...], Heidedal (Extension 13), district Bloemfontein, Free State, held under Deed of Transfer T12553/2011. It was common cause that she and her elderly mother occupied the property throughout and continued to do so at the time of the applications.

On 5 March 2020, Ms Goeieman concluded a written deed of sale with the YDT Trust, represented by its trustee, Mr Yabela Dlali, for a purchase price of R300 000. The sale contained a suspensive condition requiring approval of a loan by a financial institution for not less than R300 000 by 6 June 2020, secured by a first mortgage bond over the property. It was common cause that this suspensive condition was not fulfilled, and no evidence was produced showing that any loan was approved to the trust at any stage.

The deed of sale nominated Nozipho Dlali of ND Attorneys to attend to transfer despite her not being a qualified conveyancer. Ms Goeieman’s title deed was handed to ND Attorneys. A few days after signing, Ms Goeieman decided not to proceed and informed the trustee. Although the court held that an oral cancellation could not in itself validly cancel the contract, the evidence indicated that ND Attorneys later produced a statement for “wasted costs”, and the court accepted that the conduct of the trustee and attorney was consistent with having accepted the termination in practice while proceeding covertly.

In March 2022, Ms Goeieman discovered at the Deeds Registry that the property had been transferred to the YDT Trust, despite her understanding that she had not signed transfer documents for that purpose. It later emerged that, on 25 February 2022, the property was transferred from Ms Goeieman to the YDT Trust (Deed of Transfer T2404/2022) and then, on the same day, from the YDT Trust to the Phokojes (Deed of Transfer T2405/2022).

The Phokojes’ purported purchase from the YDT Trust was reflected as having been concluded on 16 March 2020 for R480 000, shortly after the trust’s transaction with Ms Goeieman. It was common cause, or not genuinely disputed, that the Phokojes never inspected the property before contracting or before transfer into their names, and no one approached Ms Goeieman for access to inspect the property.

The court recorded that material misrepresentations were made by the Phokojes in their affidavits, including incorrect allegations about the chronology of the contracts and the timing of their bond approval. Objective evidence showed that their home loan was approved on 17 June 2020, but transfer and bond registration occurred only on 25 February 2022, approximately two years after the purported sale date.

A Deeds Registry examiner’s note of 24 February 2022 reflected queries requiring amendments to the power of attorney to pass transfer, including corrections to the trust’s registration number and inconsistent signing dates, with the implication that the transferor’s initials were required. Ms Goeieman denied initialling those amendments, and the court accepted her version.

No affidavits were filed by Mr Dlali (as trustee) or by Ms Nozipho Dlali to explain the transfers, the alleged fulfilment or waiver of suspensive conditions, or the flow of the purchase price. It was undisputed that Ms Goeieman never received the purchase price for the transfer out of her name.

3. Legal Issues

The central questions were whether the deed of sale between Ms Goeieman and the YDT Trust was legally operative despite the admitted non-fulfilment of its suspensive condition, and whether the transfers registered in February 2022 were valid and capable of passing ownership.

Closely related issues included whether the YDT Trust, having acquired transfer on the deeds registry, could pass ownership to the Phokojes despite defects in its own acquisition, and whether the abstract theory of transfer nonetheless protected the downstream transfer.

The court was also required to determine whether the evidence supported a finding that the transactions were tainted by fraud and whether fraud (and/or defects in the real agreement) meant that ownership did not pass notwithstanding registration. The dispute thus involved a combination of legal questions (the consequences of suspensive conditions, nemo plus iuris, abstract theory requirements, and fraud’s effect on transfer), factual evaluation (whether there was fraud and whether the transferor intended to transfer), and application of legal principles to the established facts.

A further issue was whether the Phokojes, if not valid owners, had locus standi to seek restoration of possession and to claim damages in motion proceedings.

4. Court’s Reasoning

The court applied the settled principle that where a contract of sale is subject to a suspensive condition that is not fulfilled within the stipulated time, the agreement lapses automatically. On the uncontested evidence, the loan approval condition in the 5 March 2020 deed of sale (YDT Trust as purchaser) was not fulfilled by 6 June 2020, and no proof existed of any loan approval at any stage. The court held that the sale thus terminated automatically, and any later attempt to revive or implement it would have had to comply with the statutory formalities governing alienation of land.

The court also assessed the purported deed of sale between the YDT Trust and the Phokojes. It noted that the document before it was incomplete and, importantly, was not signed by anyone on behalf of the seller to indicate acceptance of the offer, although there was a signature in relation to the estate agent’s commission. The court further found that this purported sale also included a suspensive condition requiring a loan within 60 days, which was not fulfilled within that period, and there was no demonstrated written amendment, written waiver, or timely forfeiture of rights before lapse. On that basis the purported sale to the Phokojes was likewise treated as having automatically terminated.

Against that background, the court turned to the principles governing transfer of ownership in South African law. It reiterated the nemo plus iuris ad alium transferre potest quam ipse haberet principle, namely that a person cannot transfer more rights than they have. If the YDT Trust did not become owner, it could not pass ownership onwards to the Phokojes.

The court engaged with the abstract theory of transfer, noting that ownership of immovable property passes upon registration plus a valid real agreement, which depends on reciprocal intention: the transferor’s intention to pass ownership and the transferee’s intention to acquire it. While abstract theory does not require a valid underlying contract in all circumstances, the court emphasised that ownership does not pass if there is a defect in the real agreement, such as absence of intention by the transferor.

On the evidence, the court found a material defect in the real agreement. It considered significant that Ms Goeieman’s intention to transfer could not be inferred where the sale had lapsed, she had indicated she wished not to proceed, she had never received the purchase price, and crucially, the power of attorney to pass transfer required amendments and initials that she denied providing. The court accepted her denial, and reasoned that, had she been asked to initial the amendments while aware that transfer was imminent, she would not have done so. The court also relied on the absence of any direct interaction between the conveyancer who signed and executed documentation and Ms Goeieman, together with the conveyancer’s account that he relied on ND Attorneys for the underlying documentation and financial arrangements.

Fraud featured prominently in the court’s evaluation. The court drew an inference, from the undisputed non-payment to Ms Goeieman, the back-to-back transfers on the same day nearly two years after the initial documents, and the absence of explanatory evidence from the trustee and attorney, that Mr and/or Ms Dlali had acted in concert to defraud Ms Goeieman and also to prejudice the Phokojes. The court treated the misrepresentations in the Phokojes’ documents and the YDT Trust’s confirmations about occupation as further indicators of irregularity, particularly given the conceded failure to inspect the property and the objective fact of Ms Goeieman’s ongoing occupation.

In applying the maxim fraus omnia vitiat, the court treated the fraud as operating within the compass of the victim’s claim for restoration, and accepted that Ms Goeieman, as victim, could invoke it to unwind the chain of transactions. It reconciled this approach with Constitutional Court caution that the maxim is not universally destructive in the hands of third parties, by emphasising that the relief was sought by the fraud’s victim against the consequences of fraudulent transfers affecting her ownership.

As a consequence, once the first sale and first transfer (to the trust) were set aside, the court held that the subsequent purported sale and transfer to the Phokojes could not stand. The nemo plus iuris principle prevented the trust from transferring title it never validly acquired, and the fraud and defects in the real agreement meant ownership did not pass despite registration.

Turning to the Phokojes’ separate application for restoration of possession and monetary relief, the court held that their case presupposed valid ownership, which had not been established and was undermined by the findings above. Without valid ownership they lacked locus standi to seek possession from Ms Goeieman. The court further held that damages could not be pursued in the manner sought in application procedure on the papers before it, and indicated that the Phokojes were not without remedy, but would have to pursue claims against the Dlalis.

On costs, the court acknowledged sympathy for the Phokojes’ predicament but concluded that they should not have opposed Ms Goeieman’s application and compounded matters by launching a separate application. The court relied on their misstatements under oath, failure to explain the substantial delay between loan approval and transfer, and their failure to inspect the property or verify occupation and entitlement to sell, as justifying adverse costs orders against them, including counsel’s fees on scale B.

5. Outcome and Relief

The court granted substantial relief in application 1750/2024. It declared the 5 March 2020 deed of sale between Ms Goeieman and the YDT Trust null and void, set aside the transfer to the YDT Trust under Deed of Transfer T2404/2022, declared the purported 16 March 2020 deed of sale between the YDT Trust and the Phokojes null and void, and set aside the transfer to the Phokojes under Deed of Transfer T2405/2022. It ordered that the property be re-registered in Ms Goeieman’s name. The first and second respondents (the Phokojes) were ordered to pay the costs of that application, including counsel’s fees on scale B.

In application 3056/2024, the Phokojes’ application was dismissed with costs, including counsel’s fees on scale B.

Cases Cited

Fairoaks Investment Holdings (Pty) Ltd and Another v Oliver and Others [2008] ZASCA 41; [2008] 3 All SA 365 (SCA); 2008 (4) SA 302 (SCA).

Oriental Products (Pty) Ltd v Pegma 178 Investments Trading CC and Others [2010] ZASCA 166; 2011 (2) SA 508 (SCA); [2011] 3 All SA 173 (SCA).

Legator McKenna Inc and Another v Shea and Others [2008] ZASCA 144; 2010 (1) SA 35 (SCA); [2009] 2 All SA 45 (SCA).

Quartermark Investments (Pty) Ltd v Mkhwanazi and Another [2013] ZASCA 150; [2014] 1 All SA 22 (SCA); 2014 (3) SA 96 (SCA).

Moseia and Others v Master of the High Court: Pretoria and Others [2021] ZAGPPHC 37.

Botha NO v Leboko-Radebe and Others [2022] ZAGPJHC 724.

Knox v Mofokeng and Others [2012] ZAGPJHC 23; 2013 (4) SA 46 (GSJ).

Nedbank Ltd v Mendelow NO and Another [2013] ZASCA 98; 2013 (6) SA 130 (SCA).

Absa Bank Limited v Moore and Another [2016] ZACC 34; 2017 (1) SA 255 (CC); 2017 (2) BCLR 131 (CC).

Esorfranki Pipelines (Pty) Ltd and Another v Mopani District Municipality and Others [2014] ZASCA 21; [2014] 2 All SA 493 (SCA).

Lazarus Estates Ltd v Beasley [1956] 1 QB 702 (CA).

Namasthethu Electrical (Pty) Ltd v City of Cape Town and Another [2020] ZASCA 74.

Land and Agricultural Development Bank of SA v Parker and Others [2004] ZASCA 56; [2004] 4 All SA 261 (SCA); 2005 (2) SA 77 (SCA).

The South African Legal Practice Council v NC Dlali (6349/2024), unreported judgment, order granted 6 March 2025 and reasons provided 10 March 2025.

Legislation Cited

Deeds Registries Act 47 of 1937.

Alienation of Land Act 68 of 1981.

Prevention of Illegal Eviction from and Unlawful Occupation of Land Act 19 of 1998.

Rules of Court Cited

No rules of court were cited in the judgment.

Held

The deed of sale between Ms Goeieman and the YDT Trust was held to have lapsed due to non-fulfilment of its suspensive condition, and the later registration of transfer into the trust’s name was invalid. The court held further that the subsequent purported sale and transfer to the Phokojes could not stand because the trust could not pass title it did not validly acquire, and because fraud and defects in the real agreement prevented ownership from passing notwithstanding registration.

The transfers recorded under Deeds of Transfer T2404/2022 and T2405/2022 were set aside, and the property was ordered to be re-registered in Ms Goeieman’s name. The Phokojes’ attempt to secure possession and monetary relief failed because the validity of their ownership was not established and their relief was procedurally inappropriate in motion proceedings.

LEGAL PRINCIPLES

A contract subject to a suspensive condition that is not fulfilled within the agreed period terminates automatically, and any subsequent attempt to revive or implement it must comply with the statutory formalities applicable to land sales.

The nemo plus iuris ad alium transferre potest quam ipse haberet principle remains applicable: a person or entity cannot transfer more rights than it has, and an invalid transfer at an earlier stage prevents valid downstream transfer of ownership.

Under the abstract theory of transfer, registration in the deeds registry must be accompanied by a valid real agreement. The real agreement requires intention by the transferor to transfer ownership and by the transferee to receive it. Where there is a defect in the real agreement, ownership does not pass notwithstanding registration.

South Africa’s system of deeds registration is negative, and registration does not guarantee title. Where registration is procured through fraud or forged documentation, the “right” apparently created is no right at all, and ownership does not pass.

The maxim fraus omnia vitiat operates to unravel transactions directly affected by fraud at the instance of the victim; fraud may justify setting aside registrations and consequential transfers where the victim seeks restoration of the property and the underlying transfer was tainted by fraudulent conduct.

Goeieman v Phokoje and Others; Phokoje and Another v YDT Trust and Others (1750/52024; 3056/2024) [2026] ZAFSHC 15 (19 January 2026)