THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Not Reportable
Case no: 918/2024
In the matter between:
AGILE CAPITAL HOLDINGS (PTY) LTD APPELLANT
and
68 MELVILLE ROAD PROPERTIES (PTY) LTD RESPONDENT
Neutral citation: Agile Capital Holdings (Pty) Ltd v 68 Melville Road Properties
(Pty) Ltd (918/2024) [2026] ZASCA 56 (21 April 2026)
Coram: MAKGOKA, GOOSEN and KEIGHTLEY JJA, CHILI and
NUKU AJJA
Heard: 11 November 2025
Delivered: This judgment was handed down electronically by circulation to
the parties’ representatives by email, publication on the Supreme Court of Appeal
website, and release to SAFLII. The date and time for the handing down of the
judgment are deemed to be 21 April 2026 at 11h00.
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Summary: Claim for payment of adjusted purchase price of section in
sectional title scheme – contract providing for provision of final determination of
base development cost to permit adjustment – whether determination requiring
submission to expert – nature of dispute raised – whether document evidencing
determination admissible in absence of confirmation under oath.
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ORDER
On appeal from: Gauteng Division of the High Court, Johannesburg (Vally and
Strydom JJ and Ford AJ, sitting as a court of appeal):
The appeal is dismissed with costs, including the costs of two counsel.
JUDGMENT
Goosen JA (Makgoka, Keightley JJA, Chili and Nuku AJJA concurring):
[1] This is an appeal against an order of the full court of the Gauteng Division of
the High Court, Johannesburg (the full court), which dismissed an appeal against
orders entered by the high court per Adams J (the high court) against the appellant,
Agile Capital Holdings (Pty) Ltd (Agile Capital) and nine other entities. This Court
granted special leave to appeal. The parties had agreed that the appeal before the full
court would be pursued only by Agile Capital, one of the affected entities, since the
central issues for determination relate to all the parties . Accordi ngly, only Agile
Capital is before this Court.
[2] 68 Melville Road Properties (Pty) Ltd (Melville Road) is the respondent in
the appeal. Its main business is to develop a mixed-use sectional title scheme called
Illovo Point, and to sell sections of the scheme to its shareholders to cover the
construction costs. It purchased the property from Illovo Point Properties (Pty) Ltd
(Illovo Point Properties).
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[3] Agile Capital and Illovo Point Properties, along with several other entities, are
shareholders of Melville Road. A shareholders’ agreement governs, among other
things, the extent of shareholders ’ ownership, based on each shareholder ’s
participation quota in the sectional title scheme. The shareholders of Melville Road
were required to fund the property ’s development through capital advances on loan
accounts. Additionally, Melville Road would secure a development bond from a
financial institution to cover the development costs. Upon completion of the project,
the development bond would be paid off.
The facts
[4] On 3 March 2017, Agile Capital signed a purchase and sale agreement with
Melville Road to buy a section within the Illovo Point sectional scheme. The
agreement specified that the purchase price could be reduced by the amount of the
shareholder’s loan accou nt advance and would be subject to final adjustment upon
the completion of the project. This adjustment was to be calculated by determining
the total base development cost of the scheme’s construction and allocating this cost
to the shareholder purchasers according to their respective participation percentages.
If the actual purchase price paid exceeded the adjusted purchase consideration, the
difference would be credited to the purchasers’ loan accounts at Melville Road.
Conversely, if there was a shortfall, the purchasers would be responsible for the
adjustment amount. The latter claim is the focus of the current appeal.
[5] The scheme development was completed on 31 August 2020. The final
participation quotas had already been set on 29 August 2018. On 14 September 2020,
DHP Quantity Surveyors, then employed by Melville Road, issued a final total base
development cost for the project. Based on this, Melville Road sought payment from
Agile Capital and nine other purchasers. When the purchasers failed to make the
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payments, Melville Road launched ten separate applications in the high court against
the shareholder-purchasers, seeking payment of the respective amounts.
In the high court
[6] The ten applications brought by Melville Road involved adjudication of the
same issues. The differences related only to the dates of purchase of separate units,
the extent of each purchaser’s participation quota, and the quantum of the amount
claimed. For these reasons, the high court delivered a single judgment dealing with
the applications.
[7] Melville Road invoked clause 4 of the purchase and sale agreement, which, in
relevant part, provides as follows:
‘4.1 It is recorded that the purchase price of the property shall, after registration of the transfer, be
adjusted to the amount equal to the final participation quota allocated to the section … multiplied
by the Total Base Development Cost after it has been finalized in terms of paragraph 4.3 hereof.
4.2 …
4.3 Once registration of transfer has occurred and once the Total Base Development Costs has
been finalized by the Quantity Surveyor … the purchase price shall be adjusted to the amount as
finally calculated in accordance with the aforesaid formula and where the purchase price is less
than the amount reflected in clause 1.5, the balance shall be refunded through the purchaser’s
shareholding in the seller entity.
4.4 If there is any dispute as to what the Total Base Development Costs of the property is, the
decision of the Quantity Surveyor (acting in his capacity as an expert and not an arbiter) shall be
final and binding on the parties.’
[8] Agile Capital opposed the claim for payment of the alleged shortfall due from
it. It advanced five grounds of opposition. The first was that the deponent of the
founding affidavit lacked authority to institute the proceedings because he had not
been authorised by the shareholders themselves. The second was that the total base
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development cost was determined by a quantity surveyor who was not the one
nominated in the sale agreement.
[9] The remaining grounds of defence were the following. It contended that the
determination of the total base development cost, evidenced by a schedule produced
by the quantity surveyor , was not confirmed under oath. It therefore constituted
hearsay evidence, which was inadmissible. In the absence of proper admission of the
evidence, there was no evidence upon which claims against the shareholders could
be proved. Regarding the determination of the total base development cost , it was
contended that it did not include recoveries arising from the discontinuation of
construction and use of certain storage facilities and related insurance. The final
defence arose from alleged disputes of fact said to be incapable of resolution on the
papers. In this regard, it was alleged that there had been considerable delays with the
project; that these were caused by a fellow shareholder, namely Illovo Point
Properties (Illovo); and that this had resulted in an accumulation of interest in finance
costs in relation to the development bond. It was alleged that this ‘rolled up’ interest
ought to be recovered from Illovo and not from the shareholders as a cost
proportionally attributable to the purchasers.
[10] The high court rejected these defences. It reasoned as follows: shareholder
consent was not required to institute uncontested debts. There was no dispute that
Agile Capital was indebted to Mellville Road. Shareholder consent was therefore
not required. In any event, a restrictive interpretation of the requirement for
shareholder consent would give rise to unbusinesslike results because it would
preclude Mellville Road from recovering debts due by shareholders, as contemplated
in the agreements, without the consent of the shareholders concerned.
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[11] As far as the identity of the quantity surveyor was concerned, the high court
held that the agreement allowed Mellville Road to nominate a quantity surveyor. It
considered it doubtful that the parties had applied their minds to whether the
contractual clause could be fulfilled only by the initially nominated quantity
surveyor. It therefore held, with reference to Van Diggelen v De Bruin and Another,1
that equivalent performance was sufficient.
[12] The high court further held that the determination of the base development
cost set out in the schedule was self-explanatory and did not require confirmation
under oath. In any event, the high court held that neither a challenge to the veracity
of the items or figures included in the calculation nor to the authenticity of the
document was raised. The challenge was focused on whether certain items ought to
have been included or excluded. This was an aspect governed by the terms of the
agreement concluded between the parties and could be determined with reference to
it.
[13] The high court found that the term ‘total base development cost ’ referred to
the total cost of constructing the development to completion. It include d the cost of
land acquisition, all construction costs, and finance and general costs. The high court
found that the costs associated with the provision of storage and insurance formed
part of the contemplated development costs of the property. On the ‘ rolled up’
interest, ie the finance and interest costs incurred because of the delays in the project,
the high court found that these were costs incurred in the development a nd were
recoverable as part of the total base development costs. The high court took the view
that, to the extent there were disputes regarding liability for incurring such additional
1 Van Diggelen v De Bruin and Another 1954 (1) SA 188 (SWA) at 193A-194E.
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costs, these were matters regulated by the shareholders ’ agreement and the
mechanisms it provided for inter -shareholder recoveries. The high court therefore
found in favour of Mellville Road and entered judgment against each of the ten
shareholders for the amounts claimed.
In the full court
[14] On appeal to the full court, Agile Capital confined its appeal to two issues.
The first issue concerned the high court ’s jurisdiction to determine the total base
development cost . This was, in effect, a reformulation of the challenge to the
inclusion of the ‘ rolled up’ interest and finance costs in determining the schedule.
The contention was that the inclusion ought to be the subject of an expert
determination by a quantity surveyor as provided by clause 4 of the purchase and
sale agreement. The second issue concerned the admissibility of evidence regarding
the quantity surveyor’s determination of the base development cost.
[15] The full court dismissed the appeal. It held that determination by the quantity
surveyor did not involve the expertise of a quantity surveyor. It involved calculating
the costs actually incurred. No issue had been referred to the quantity surveyor for
determination as an expert. In relation to the admissibility of the schedule, the full
court considered that the document fell within the ambit of s 3 of the Law of
Evidence Amendment Act 45 of 1988 (the Hearsay Act). The full court held that it
was neverthel ess admissible. Because these two issues were pursued before this
Court in identical formulation, I shall touch upon the full court’s reasoning where
necessary in considering the merits of the appeal.
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In this Court
[16] The two questions posed before this Court may be framed as follows:
(a) In view of the dispute regarding the determination of the total base
development cost, were the parties contractually bound to refer the dispute for
expert determination in terms of clause 4.4 of the purchase and sale agreement?
(the expert determination issue).
(b) If the answer to question one above is negative, does the schedule (Annexure
FA 6 to the particulars of claim) constitute hearsay evidence which ought not to
have been admitted in evidence? (the admissibility issue).
The expert determination issue
[17] Agile Capital relied upon clauses 4.3 and 4.4 of the purchase and sale
agreement to contend that the determination of the base development cost ought first
to be made by the quantity surveyor, as an expert. Upon this contention, the high
court lacked jurisdiction to entertain the claims as formulated.
[18] There are several difficulties with the contention as it is now advanced. The
most obvious lies in the way Agile Capital presented its defences to the claims. The
principal arrow to its bow was that the total base development cost had not been
determined by the quantity surveyor appointed in terms of the purchase agreement.
There was, thus, no determination warranting an adjustment to the purchase
consideration payable by each of the shareholders. Agile Capital’s challenge to the
content of the determination and the admission of the document in evidence were
ancillary to this primary challenge that no contractually stipulated determination had
been made.
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[19] Agile Capital’s answering affidavit clearly state d that the adjustment criteria,
specifically the calculation of how much the purchase price should be adjusted, were
‘not finalised’. To illustrate the consequences of a decision made by a quantity
surveyor other than the nominated one, Agile Capital explai ned the following in its
answering affidavit:
‘78. Thus , even if the agreed quantity surveyor makes a determination that the Total Base
Development Cost has been finalized, the respondent would have the right to dispute this.
79. If this happens, the matter should then only be referred to the agreed quantity surveyor to make
a decision on such dispute, and in so doing, a fair process must be followed where the respondent
would at least be allowed to make representations to the agreed quantity surveyor.’
[20] Agile Capital persisted with the challenge to the identity of the quantity
surveyor throughout proceedings in the high court. It abandoned this only after the
high court ruled against it. Its alternative stance before the high court was that the
‘dispute’ regarding the determination of the base development cost should be
ventilated at trial, ie, based on an alleged dispute of fact. It said the following in its
answering affidavit:
‘The respondent should therefore be given the opportunity to also ventilate this dispute at trial,
specifically in this context, to call for further documents pertaining to the Disputed Determination
and to cross-examine the applicant’s quantity surveyor on it.
[21] There was therefore never a referral of a dispute regarding the base
development cost, which required expert determination in terms of clause 4.4 of the
purchase agreement. Accordingly, clause 4.4 can be no bar to the adjudication of the
claims advanced by Mellville Road. This aspect of the expert determination issue is
therefore without any substance. The only other question is whether it could be said
therefore without any substance. The only other question is whether it could be said
that there was a genuine and material dispute of fact before the high court. To decide
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this question , it is necessary to identify the disputes Agile Capital raised. The
agreement defines base development costs to mean:
‘The total base development cost of the scheme, as determined by the Quantity Surveyor, which
shall include the cost headings referred to in Annexure E hereto.’
[22] These costs fall into three categories, namely land acquisition costs ,
construction costs, and finance and general costs. The purpose of the determination
of the base development cost was to permit an adjustment of the purchase price to
be undertaken by Mellville Road upon completion of the project. The agreement
provided for the adjustment to be undertaken on the basis of a proportional allocation
of the total purchase consideration between the shareholders in accordance with their
participation quotas. Mellville Road made the adjustment calculation . The payment
of the adjusted purchase price i s a matter between each shareholder purchaser and
Mellville Road. The quantity surveyor, under the unambiguous terms of the purchase
agreement, did not allocate cost liabilities among shareholders or determine the
adjusted purchase price payable by a shareholder.
[23] Agile Capital, however, argued that the dispute involved the inclusion of what
it called ‘rolled up’ interest in the base development cost. It claimed that the person
preparing the schedule should not have allocated such costs to be shared by all
shareholders based on their participation quotas when one shareholder was
responsible for the additional financing and interest costs incurred during the
development.
[24] The quantity surveyor , however, played no role in allocation between
shareholders. Their task was to determine the development costs, ie, the total costs
payable by Mellville Road to bring the project to completion . Significantly, Agile
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Capital did not contend that the total base development costs set out in the schedule
did not constitute development costs . There was no challenge to the determination
upon that basis. The only challenge, such as it was, concerned the inclusion of
additional interest and finance charges that had arisen because of certain delays in
the project. At no stage did Agile Capital suggest that Mellville Road was not liable
to pay those amounts to the financiers who had financed the project. Nor could such
a challenge be raised.
[25] Upon a careful reading of the ‘ dispute’ as it was framed, no material dispute
of fact arose. To the contrary, there was no dispute that the base development cost
was, in fact, incurred and that it was recoverable by way of an adjustment to the
purchase consideration payable by the shareholders. Agile Capital’s true complaint
was that one of the shareholders, Illovo, had delayed taking the transfer of the units
it had purchased, and that this delay caused an increase in costs for which it , rather
than all other shareholders, should be held liable.
[26] This dispute does not fall within the ambit of the purchase agreement , but of
the shareholders’ agreement , which, in clause 12.4 of the shareholders’ agreement
provides:
‘Any shareholder who unnecessarily delays the release of the development bond finance or the on-
sale conveyancing process shall bear the full cost of any such delay insofar as it affects all
compliant shareholders which cost shall include legal fees, interest costs, penalty fees that may be
charged by the financial institution granting the development bond provided the prescribed Breach
notice is issued to the non-compliant Shareholder in terms of Clause 23 hereof.’
[27] Clause 23 of the shareholders’ agreement makes provision, if a breach is not
remedied or is incapable of being remedied, inter alia, for the involuntary transfer
of the non -compliant shareholder’s shares and loan account to other shareholders,
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subject to the provisions of clauses 16 and 24 of the Agreement. The shareholders’
agreement, therefore, provides for the type of dispute that Agile Capital contends
underlies the disputed payment of its adjusted purchase price.
[28] It follows that the so -called expert determination question and the reliance
upon an alleged material dispute of fact are without substance. The full court
correctly rejected the arguments.
The admissibility issue
[29] Agile Capital argued that the full court was wrong to rely on s 3 of the Hearsay
Act2 to admit annexure FA 6 into evidence, especially when no application was made
and no case was established for its exceptional admission. Counsel for Mellville
Road asserted that it is not for Agile Capital to complain about the lack of a case
being made and that the full court was c orrect to rely on the Hearsay Act, as it was
Agile Capital that introduced the argument involving the Hearsay Act. It is also
argued that, in any case, the full court was correct.
2 Section 3(1) provides:
(1) Subject to the provisions of any other law, hearsay evidence shall not be admitted as evidence at criminal or
civil proceedings, unless—
(a) each party against whom the evidence is to be adduced agrees to the admission thereof as evidence at such
proceedings;
(b) the person upon whose credibility the probative value of such evidence depends, himself testifies at such
proceedings; or
(c) the court, having regard to—
(i) the nature of the proceedings;
(ii) the nature of the evidence;
(iii) the purpose for which the evidence is tendered;
(iv) the probative value of the evidence;
(v) the reason why the evidence is not given by the person upon whose credibility the probative value of such
evidence depends;
(vi) any prejudice to a party which the admission of such evidence might entail; and
(vii) any other factor which should in the opinion of the court be taken into account,
(vii) any other factor which should in the opinion of the court be taken into account,
is of the opinion that such evidence should be admitted in the interests of justice.
terms of paragraph (a) of subsection (1) or is admitted by the court in terms of paragraph (e) of that subsection.
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[30] I have grave doubts about the full court’s approach to the issue. However, for
reasons that follow, there is no need to engage with the full court’s understanding of
the operation of s 3 of the Hearsay Act. That is so because , for the reasons that
follow, the contention that FA 6 constitutes hearsay evidence lacks substance.
[31] It is important to note again that Mellville Road ’s cause of action was based
on the terms of the purchase agreement, which stipulated that, upon completion of
the development project, Mellville Road would be entitled to recover from each
purchaser the difference between the purchase price already paid a nd a calculated
adjusted purchase price. This adjustment would be based on the calculated base
development cost determined by a quantity surveyor and the function of each
shareholder’s participation quota.
[32] Thus, to sustain its claim, Mellville Road was required to prove that the total
base development cost had been determined, what the total was, and what each
shareholder's operative participation quota was. From this total amount, the amount
already paid by each shareholder would be deducted. The difference was the amount
claimed from each shareholder.
[33] Mellville Road alleged that the quantity surveyor had made a determination ,
and it annexed Annexure FA6 to establish this fact. It is important to emphasise that
it did not present FA6 to prove the veracity or accuracy of the document’s contents,
but as proof that the determination had been made, as a matter of fact, and as required
by the purchase agreement. That fact was established by the assertion under oath that
the determination document had been received from the quantity surveyor.
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[34] To sustain the claim, Mellville Road did not have to prove that the
determination was correct or that the calculation presented by the quantity surveyor
was correct. It would be required only if its veracity were disputed. The calculation
was never disputed. Agile Capital did not suggest that the cost headings forming the
basis of the calculation of the base development cost were incorrect. Nor did it
suggest that the particular items or the values included did not fall within what was
contemplated as the base development cost. Had it raised any such challenge,
Mellville Road would have been required to adduce evidence to prove the veracity
or accuracy of FA6. It could not then have relied upon the mere production of the
document. In those circumstances , FA6 would have fallen within the ambit of
inadmissible hearsay evidence and would have required proof or, if necessary,
admission as an exception provided by the Hearsay Act.
[35] This was, however, not the case. Mellville Road relied on FA6 to establish the
fact of a determination made by the quantity surveyor. That fact was challenged
solely based on the identity of the quantity surveyor who made the determination.
When that proposition was rejected, its challenge to the fact of the determination fell
away. Agile Capital’s only challenge to the ‘content’ of FA6 was that the additional
‘rolled-up interest’ should not have been included as a charge recoverable from all
shareholders in proportion to their participation quotas because of the delinquency
of a particular shareholder. But this challenge, as demonstrated above, was entirely
misplaced. To the e xtent that Agile Capital has a grievance about its obligation to
pay its share of the admitted development costs incurred in developing the property,
that is a matter to be pursued among the shareholders of Mellville Road.
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[36] It follows that FA6 was not hearsay evidence for the case advanced by
Mellville Road. Neither s 34 of the Civil Proceedings Evidence Act 25 of 1965, nor
s 3 of the Hearsay Act , finds application in this matter. While the full court was
incorrect in applying the latter section to admit the evidence in the interests of justice,
its order on the appeal before it was correct.
[37] As a result, the following order is made:
The appeal is dismissed with costs, including the costs of two counsel.
___________________
G GOOSEN
JUDGE OF APPEAL
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Appearances:
For the appellant: W B Pye SC
Instructed by: Claasen Inc., Gauteng
Bezuidenhouts Inc., Bloemfontein
For the respondent: D Mahon SC and E Nhutsve
Instructed by: Boshoff Inc., Pretoria
Honey Attorneys, Bloemfontein.