IN THE HIGH COURT OF SOUTH AFRICA
NORTH WEST DIVISION MAHIKENG
CASE NO: 2056/2020
In the matter between:
MAHIKENG LOCAL MUNICIPALITY PLAINTIFF
and
MIKE ISHMAEL BINAZIR DEFENDANT
Heard: 22 January 2026
Delivered: 07 April 2026
Summary: Opposed motion – contract law – purchase and sale agreement of
land (immoveable property) belonging to the municipality – purchaser’s non
fulfilment (breach) of a condition in sale agreement, also registered as
condition to title in title deed – plaintiff seeking to exercise its right per the
reversionary clause – nature thereof (option) and manner of exercise of
reversionary right – defendant’s special plea: plaintiff’s claim has prescribed in
terms of section 11(d) of the Prescription Act No, 6 8 of 1969 (the Act) –
applicability of sections 11(d) and 11(b) of the Act – discussion of Mounthaven
case – prescription defence upheld.
Reportable: NO
Circulate to Judges: NO
Circulate to Magistrates: NO
Circulate to Regional Magistrates: NO
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ORDER
Consequently, the following order is made:
(i) The Defendant’s special plea of extinctive prescription in terms of
section 11(d) of the Prescription Act, No 69 of 1969, to the plaintiff’s
claim, is upheld.
(ii) The plaintiff is ordered to pay the costs of this application on a party -
and-party basis on Scale B, in terms of Rule 67 A of the Uniform Rules
of Court, to be taxed.
JUDGMENT
HENDRICKS JP
Introduction
[1] This is an opposed interlocutory application in terms of Rule 6 (11) of the
Uniform Rules of Court. The defendant has raised a special plea of
extinctive prescription, seeking a determination of that issue prior to the
hearing of the main action.
[2] The plaintiff, Mahikeng Local Municipality (“the Municipality”), instituted
action against the defendant, Mr. Mike Ishmael Binazir, for the re-transfer
of immovable property sold to him pursuant to a written deed of sale
concluded on 26 August 2005.
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[3] It is common cause that transfer of the property was effected on 16 April
2007. The deed of sale, read together with the conditions of title, imposed
an obligation on the defendant to erect a structure on the property within
a period of two years from date of t ransfer. It further provided that, upon
breach of that obligation, the Municipality would be entitled to claim re -
transfer of the property against repayment of the purchase price.
[4] The defendant failed to comply with that obligation within the stipulated
period, which expired on 15 April 2009. More than a decade later, during
December 2020, the Municipality instituted action seeking to enforce its
right to re-transfer of the property.
[5] The defendant accordingly raises a special plea that the Municipality’s
claim has been extinguished by prescription in terms of section 11(d) of
the Prescription Act 68 of 1969, on the basis that the claim constitutes a
“debt” which became due upon breach and prescribed after three years.
[6] The Municipality resists that plea. It contends that the right it seeks to
enforce is not a “debt” within the meaning of the Prescription Act, but
rather a contractual election or option, exercisable at its discretion. On that
basis, it submits that the st atutory regime of extinctive prescription does
not apply, alternatively that a longer prescriptive period of fifteen (15)
years is applicable.
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[7] The crisp issue for determination is therefore whether the Municipality’s
claim for re-transfer of the property constitutes a “debt” as contemplated
in Chapter III of the Prescription Act, and, if so, when that debt became
due for purposes of prescription.
[8] Although framed as a narrow question of law, that issue lies at the
intersection of contract, property, and prescription. Its resolution requires
a proper characterization of the reversionary clause, and a careful
application of binding authority concerning the nature of obligations to
effect transfer of immovable property. The issues arising for determination
are narrow, but decisive.
[9] The primary question is whether the Municipality’s claim for the re-transfer
of the property, arising from the defendant’s breach of the building
condition contained in the deed of sale and title deed, constitutes a “debt”
as contemplated in Chapter III of the Prescription Act 68 of 1969.
[10] If the question is answered in the affirmative, two further questions arise:
(i) The first is when the alleged debt became “due” for purposes of
section 12(1) of the Prescription Act — that is, when the Municipality
acquired a complete cause of action to enforce re-transfer.
(ii) The second is whether the applicable prescriptive period is that
provided for in section 11(d) of the Act, namely three years in respect
of “any other debt”, or whether, as suggested in argument, section
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11(b), which provides for a fifteen- year period in respect of certain
debts owed to the State arising from the sale of land finds application.
[11] If the Municipality’s claim constitutes a debt which became due upon
breach on 15 April 2009, and if section 11(d) applies, then the claim would,
prima facie, have prescribed on 15 April 2012, well before the institution
of action in December 2020.
[12] Conversely, if the claim does not constitute a “debt” within the meaning of
the Act, but rather a contractual election or option falling outside the
prescription regime, then the special plea cannot succeed.
[13] The determination of these issues turns, in essence, on the proper
characterization of the right created by the reversionary clause, and the
application of binding authority concerning whether an obligation to effect
transfer of immovable property constitutes a “debt” for purposes of
prescription.
[14] It is therefore necessary to consider, at first, the nature of the right relied
upon by the Municipality, and secondly, whether that right is susceptible
to extinctive prescription under the Act. The material facts are largely
common cause.
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[15] On 26 August 2005, the plaintiff, Mahikeng Local Municipality (“the
Municipality”), concluded a written deed of sale with the defendant, Mr.
Mike Ishmael Binazir, in terms of which it sold to him a specified erf for the
purchase price of R12 144.00. Transfer of the property was duly effected
and registered in the Deeds Office on 16 April 2007, whereupon
ownership passed to the defendant.
[16] The deed of sale imposed a material condition upon the defendant,
namely that he would erect, or cause to be erected, a structure on the
property in accordance with the applicable land use requirements within a
period of two years from the date of registration of transfer, or within such
extended period as the Municipality might allow. This obligation was not
merely contractual, it was also incorporated as a restrictive condition of
title and endorsed against the title deed of the property.
[17] The agreement further provided that, in the event of a failure by the
defendant to comply with this obligation, the Municipality would be entitled
to invoke the reversionary clause. In terms of that clause, the Municipality
could claim re-transfer of the property against repayment of the purchase
price.
[18] It is common cause that the defendant failed to erect any structure on the
property within the stipulated two -year period. That period expired on 15
April 2009. No extension of time was granted by the Municipality, and no
variation of the agreement was concluded between the parties.
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[19] The defendant’s failure to comply with the building condition constituted a
breach of the deed of sale and the corresponding condition of title.
Notwithstanding that breach, the Municipality did not immediately seek to
enforce its rights. Instead, it insti tuted action proceedings only during
December 2020, more than eleven years after the expiry of the two -year
period.
[20] In these proceedings, the Municipality seeks to enforce the reversionary
clause by compelling the defendant to re-transfer the property to it, upon
repayment of the purchase price.
[21] The defendant, in response, has raised a special plea of extinctive
prescription, contending that the Municipality’s claim became due upon
breach on 15 April 2009 and was extinguished by the lapse of three years
thereafter. It is against this factual matrix that the issue of prescription falls
to be determined. The law relating to extinctive prescription is governed
by the Prescription Act 68 of 1969.
[22] Section 10(1) of the Act provides that a debt shall be extinguished by
prescription after the lapse of the period prescribed by law. Section 11(d)
stipulates that, save where an Act of Parliament provides otherwise, the
period of prescription in respect of “any other debt” is three years.
[23] The Act does not define the term “debt”. It is, however, well established
that the term bears a wide and general meaning. It includes an obligation
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to do something ; to refrain from doing something ; or to render
performance. In Desai NO v Desai ,1 the court held that an obligation to
procure the registration of transfer of immovable property constitutes a
“debt” for purposes of the Act.
[24] The central enquiry in matters of this kind is therefore whether the right
sought to be enforced gives rise to an obligation on the part of the debtor
to perform, in this instance, to effect transfer of immovable property, and,
if so, when that obligation became due.
[25] The nature of reversionary clauses in agreements for the sale of land has
been authoritatively considered by the Supreme Court of Appeal in
eThekwini Municipality v Mounthaven (Pty) Ltd .
2 In th e Mounthaven
matter, the court held that a claim by a municipality to compel the re -
transfer of immovable property pursuant to a reversionary clause
constitutes a “debt” as contemplated in Chapter III of the Prescription Act.
The court further held that such a right is , in substance, a personal right,
notwithstanding its recordal in the title deed , and that the obligation to
effect transfer is susceptible to extinctive prescription.
[26] That reasoning was not disturbed by the Constitutional Court of South
Africa when it refused leave to appeal in the same matter.
3 On the
contrary, the Court endorsed the proposition that a claim to procure
1 Desai NO v Desai NNO and Others 1996 (1) SA 141 (SCA).
2 eThekwini Municipality v Moutnhaven (Pty) Ltd 2018 (1) SA 384 (SCA).
3 eThekwini Municipality v Mounthaven (Pty) Limited 2019 (4) SA 394 (CC).
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transfer of immovable property constitutes a claim to deliver goods, and
therefore falls within the ordinary meaning of a “debt”.
[27] The position was reaffirmed by the Supreme Court of Appeal in Bondev
Midrand (Pty) Ltd v Puling,
4 where the court considered a reversionary
clause framed in discretionary terms ; namely, that the seller would be
“entitled, but not obliged” to claim re -transfer upon breach. The court
nevertheless held that the claim for re-transfer constituted a “debt” which
became due upon the purchaser’s failure to comply with the building
condition, and that such claim prescribed after the lapse of three years in
terms of section 11(d).
[28] Importantly, the court rejected the notion that the discretionary nature of
the right, or its characterization as an “option”, removes it from the ambit
of prescription. Once the jurisdictional fact of breach occurs, the creditor
acquires a complete cause of action, and the corresponding obligation to
re-transfer becomes enforceable. It follows that the juridical
characterization of a reversionary clause as an “option” in contract law
does not determine whether the resulting claim constitutes a “debt” for
purposes of the Prescription Act. The enquiry is one of substance.
[29] In addition, it is trite that prescription begins to run when the debt is “due”,
that is, when the creditor has a complete cause of action and is entitled to
enforce the obligation. In the context of building clauses of this nature, that
4 Bondev Midrand (Pty) Limited v Puling and Another, Bondev Midrand (Pty) Limited v Ramokgopa 2017 (6)
SA 373 (SCA).
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moment arises upon the expiry of the stipulated period for performance
without compliance.
[30] As to section 11(b) of the Act, which provides for a fifteen-year prescriptive
period in respect of certain debts owed to the State arising from the sale
of land, its application is limited. The Supreme Court of Appeal has held
in Holeni v Land and Agricultural Development Bank of South Africa
5 that
the phrase “the State” must be interpreted restrictively and does not
necessarily encompass every organ of state.
[31] In any event, section 11(b) presupposes the existence of a “debt”. It does
not assist a party who contends, as the Municipality does in this case, that
the right in question is not a debt at all. These principles make plain that
a claim to compel the re -transfer of immovable property pursuant to a
reversionary clause is, in law, a debt which is subject to extinctive
prescription, and that such prescription ordinarily runs from the date upon
which the underlying breach occurs.
[32] Applying the above principles to the facts of this matter, the starting point
is the proper characterization of the Municipality’s claim. The Municipality
seeks to compel the defendant, Mr. Mike Ishmael Binazir, to re -transfer
immovable property to it pursuant to a reversionary clause triggered by
his failure to comply with a building condition.
5 Holeni v Land and Agricultural Bank of South Africa 2009 (4) SA 437 (SCA).
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[33] That claim gives rise to an obligation on the part of the defendant to effect
the transfer of immovable property. In accordance with the authorities
discussed above, such an obligation constitutes a “debt” for purposes of
the Prescription Act.
[34] What needs to be determined is when that debt became due. It is common
cause that the transfer of the property was registered on 16 April 2007,
and that the defendant was obliged to erect a structure within two years
of that date.
[35] That period expired on 1 5 April 2009. Upon the defendant’s failure to
comply with the building condition by that date, the Municipality became
entitled to enforce the reversionary clause.
[36] At that point, the Municipality had a complete cause of action. The debt,
namely the obligation to re- transfer the property, was therefore due for
purposes of section 12(1) of the Prescription Act. Prescription accordingly
commenced to run on 15 April 2009.
[37] In terms of section 11(d) of the Act, the applicable prescriptive period is
three years. Absent interruption or delay, the Municipality’s claim would
have prescribed on 15 April 2012.
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[38] The Municipality instituted action only during December 2020, more than
eleven years after the debt became due. There is no suggestion in the
papers that the prescription was interrupted in terms of section 14 or
delayed in terms of section 12(2) to (4) of the Act. Nor has any factual
basis been advanced to bring the claim within the extended period
contemplated in section 11(b).
[39] The Municipality instead contends that its right could be exercised at any
time within a “reasonable period”, and that a delay of approximately
thirteen years is not unreasonable, having regard to administrative
processes within a local authority. I do not agree.
[40] Once it is accepted that the claim constitutes a debt, the time limits for its
enforcement are governed by the Prescription Act. The Act provides a
comprehensive and exhaustive regime for the extinction of debts. It does
not allow for a parallel enquiry based on general notions of
reasonableness. The Prescription Act is specific in catering for different
prescription period.
[41] Permitting a creditor to avoid the consequences of prescription on the
basis that its delay was “reasonable” would undermine the certainty and
finality which the Act is designed to achieve. Moreover, the Municipality’s
approach would render prescription contingent upon a creditor's internal
administrative efficiency, a consideration that finds no support in the Act
or in the authorities.
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[42] In the circumstances, the Municipality’s claim became due on 15 April
2009 and was extinguished by prescription on 15 April 2012. It follows
that, by the time the summons was issued in December 2020, the claim
had already prescribed. Mr. Binazir special plea must, therefore, succeed.
[43] I n conclusion, it need to be mentioned that this matter is on all -fours with
an identical same matter involving the very same parties, that were
pronounced upon by this Court and eventually even the Constitutional
Court, albeit on a different point b ut the result is the same. Based on the
principle of s tare decisiis, this Court is bound to follow the precedent
matter.
Order
[44] Consequently, the following order is made:
(i) The Defendant’s special plea of extinctive prescription in terms of
section 11(d) of the Prescription Act, No 69 of 1969, to the plaintiff’s
claim, is upheld.
(ii) The plaintiff is ordered to pay the costs of this application on a party-
and-party basis on Scale B, in terms of Rule 67 A of the Uniform
Rules of Court, to be taxed.
R D HENDRICKS
JUDGE PRESIDENT OF THE HIGH COURT,
NORTH WEST DIVISION, MAHIKENG
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Appearances
Counsel for the Plaintiff: Advocate N Laubscher
Instructed by: M E Tlou Attorneys and Associates
Email: info@tlouattorneys.co.za
Counsel for the Defendant: No appearance
Head of Argument and Practice Note Prepared by: Adv NJ Ferris
Defendant’s Attorneys on record: Rangwako Attorneys