IN THE HIGH COURT OF SOUTH AFRICA
NORTH WEST DIVISION, MAHIKENG
Not Reportable
Case no: M523/2023
In the matter between:
THE MAHIKENG LOCAL MUNICIPALITY Applicant
and
P ELLIS N.O.
First Respondent
ARBITRATION FOUNDATION OF SOUTH
AFRICA
Second Respondent
MIAGRA PROPERTY DEVELOPMENT (PTY)
LTD
Third Respondent
REGISTRAR OF DEEDS, VRYBURG Fourth Respondent
Coram: Wessels AJ
Heard: 20 March 2026
Delivered: This judgment was handed down electronically, circulated to
the parties’ representatives via email, uploaded to CaseLines, and released to
SAFLII. The date and time for the handing down of the judgment are deemed to
be 15h00 on 2 June 2026
Summary: Application for leave to appeal against an order striking a
review application from the roll for lack of territorial jurisdiction – applicant
seeking to raise new arguments on appeal based on s 109(2) of the Local
Government: Municipal Systems Act 32 of 2000 that were not pleaded in the
court below – whether the principle in CUSA v Tao Ying Metal Industries [2008]
ZACC 15 obliged this Court to raise the point mero motu – held that the point
was not apparent on the papers – applicant not left withou t a remedy –
application for leave to appeal dismissed with costs.
JUDGMENT
Wessels AJ
Introduction
[1] In this application for leave to appeal, the applicant seeks to appeal a
judgment I delivered on 28 November 2025, in which its review application was
struck from the roll on the ground that this Court lacks the territorial jurisdiction
to entertain it. The applicant seeks leave to appeal the order to the Supreme
Court of Appeal (‘SCA’), alternatively to the Full Court of this Division.
The order
[2] In the judgment of 28 November 2025, I stated the following:
‘The lack of this court’s jurisdiction is not dispositive of the application insofar as it served
before this Court, but not dispositive of the application in its entirety. I am therefore of the
considered opinion that the proper order to be made would be to strike the matter from the roll
due to a lack of this Court’s jurisdiction.’
[3] On this basis, I ordered that the application be struck from the roll, as this
Court lacked the necessary jurisdiction to hear its merits. I did not dismiss the
review application on its merits , I instead held that this Court is not the
appropriate forum since the seat of the arbitration , and thus the cause of action
for jurisdictional purposes, is located in Pretoria, which falls within the Gauteng
Division.
The statutory provision of the applicant’s argument
[4] In its application for leave to appeal, the applicant places strong reliance
on s 109(2) of the Local Government: Municipal Systems Act 1 (‘the Systems
Act’), which subsection provides:
‘(2) A municipality may compromise or compound any action, claim or proceedings, and
may submit to arbitration any matter other than a matter involving a decision on its
status, powers or duties or the validity of its actions or by-laws.’ (emphasis added)
[5] The applicant argues that the provision precludes a municipality from
referring any dispute concerning the validity of its actions or decisions to
arbitration. It contends that the arbitration between the applicant and the third
respondent concerned the validity of the Sale of Land Agreement , and that the
arbitration agreement was therefore void ab initio. From this, the applicant seeks
to draw two conclusions . First, that the arbitrator had no jurisdiction to make
any award. Second, that the choice of Pretoria as the seat of a (presumed) void
arbitration cannot confer territorial jurisdiction on any court. The applicant
1Local Government: Municipal Systems Act 32 of 2000.
accordingly submits that this Court retains jurisdiction to declare the arbitration
proceedings null and void and to set aside the Sale of Land Agreement.
[6] The applicant ’s arguments raise pertinent questions about the tension
between the Arbitration Act, the Systems Act , and the Constitution of the
Republic of South Africa (‘the Constitution’) , as created by the facts of the
matter. However, they were not properly argued before me when the
jurisdictional point was decided , and it is necessary to examine the arguments
advanced in the application for leave to appeal.
The original notice of motion of 21 September 2023
[7] The applicant commenced these proceedings with a Notice of Motion
dated 21 September 2023. It prayed for an order reviewing and setting aside the
arbitral award, upholding the applicant’s counterclaim and declaring the Sale of
Land Agreement invalid and , alternatively, for a new arbitration. There was no
prayer seeking to declare the arbitration proceedings themselves null and void
and no reference to s 109(2) of the Systems Act. After the arbitrator had lodged
the record of the arbitration proceedings, the applicant, acting in terms of Rule
53(4) of the Uniform Rules of Court, delivered an Amended Notice of Motion
on 1 November 2024. That amended notice prayed for an order reviewing and
setting aside the arbitral award, declaring the Sale of Land Agreement invalid
and void ab initio, and costs. Ex lege, the Amended Notice of Motion became
the operative Notice of Motion when the matter was argued before me on 29
May 2025.
[8] It is of importance to note that , even in th e Amended Notice of Motion,
there was no prayer declaring the arbitration proceedings null and void. There
was no reliance on s 109(2) of the Systems Act. The entire case remained what it
had always been, a review under s 33 of the Arbitration Act2 seeking to set aside
the arbitrator’s award and to have the underlying Sale of Land Agreement
declared invalid. That relief depends on the existence of a valid arbitration, as
the applicant cannot review an award that is a nullity . It can only seek a
declarator of nullity, which the applicant did not.
The proposed further amended notice of motion of 20 June 2025
[9] After the hearing on 29 May 2025 but before I delivered judgment, the
applicant filed a Notice of Intention to Amend its Notice of Motion, dated 20
June 2025. The proposed amendment sought to introduce a new prayer declaring
the arbitration proceedings null and void. The third respondent opposed this
proposed amendment. The applicant never set the amendment application down
for hearing, and this Court made no order granting the amendment. The status of
the proposed amendment is of no moment as the Further Amended Notice of
Motion never formed part of the proceedings before me. It was not before me
when I delivered judgment and it follows axiomatically that it is not part of what
I have to decide in this application for leave to appeal. The suggestion by the
applicant, set out in paragraph 7 of its application for leave to appeal, that I
ought to have had regard to a notice of intention to further amend the Amended
Notice of Motion filed after judgment was reserved, is misconceived and cannot
be sustained.
[10] As counsel for the third respondent correctly submitted during the hearing
of this application, the applicant’s entire case before me was based on the legal
validity of the arbitration proceedings. The applicant sought to review the first
respondent’s award in terms of s 33 of the Arbitration Act. That relief
necessarily assumes the existence of a valid arbitration. The applicant cannot
2Arbitration Act 42 of 1965 s 33(1).
now, on appeal, seek to convert its case into one in which the arbitration
proceedings were a nullity from the outset, as such a case was never set out in its
founding affidavit and never adjudicated.
The applicant’s case on leave to appeal
[11] The applicant’s heads of argument on leave to appeal advance a radically
different case from that presented at the hearing. The applicant now contends
that s 109(2) of the Systems Act precludes it from submitting to arbitration any
matter involving the validity of its actions; that the arbitration agreement was
therefore void ab initio; that the arbitrator’s award is a nullity; that the choice of
Pretoria as the seat of a void arbitration cannot confer territorial jurisdiction on
any court; and that this Court accordingly had, and retains, jurisdiction to
declare the arbitration proceedings null and void and to set aside the Sale of
Land Agreement.
[12] In support of the case that the applicant now wants to establish on leave to
appeal, the applicant relies heavily on the SCA judgment in NAD Property
Income Fund (Pty) Ltd v Bushbuckridge Local Municipality and Another3 where
it was held that where a municipality raises a defence that a contract is invalid
for want of compliance with constitutional procurement requirements4, that issue
falls within the exclusive jurisdiction of the courts and cannot be decided by a
private arbitrator . The applicant also relied on the principle articulated by the
Constitutional Court in CUSA v Tao Ying Metal Industries5 that where a point of
law is apparent on the papers, but the common approach of the parties proceeds
on a wrong perception of what the law is, a court is not only entitled but obliged
3 NAD Property Income Fund (Pty) Ltd v Bushbuckridge Local Municipality and Another (422/2024) [2025]
ZASCA 184 (4 December 2025).
4 Section 217 of the Constitution.
5CUSA v Tao Ying Metal Industries [2008] ZACC 15 para 67-68.
to raise that point of law mero motu and require the parties to address it. The
applicant contends that s 109(2) of the Systems Act constitutes such a point of
law, namely, that the arbitration agreement was void ab initio because it
concerned the validity of municipal action . In CUSA, the Constitutional Court
stated:
‘[67]…A party that seeks to review an arbitral award is bound by the grounds contained in the
review application. A litigant may not on appeal raise a new ground of review…
[68] These principles are, however, subject to one qualification. Where a point of law is
apparent on the papers, but the common approach of the parties proceeds on a wrong
perception of what the law is, a court is not only entitled, but is in fact also obliged, mero
motu, to raise the point of law and require the parties to deal therewith. Otherwise, the result
would be a decision premised on an incorrect application of the law. That would infringe the
principle of legality.’
[13] The applicant argues that this principle obliged this Court to raise the
s 109(2) point of my own accord, even though it was not part of the applicant’s
case. I cannot accept this argument for a pertinently obvious reason. This point
of law was not apparent from the papers before me. The principle in CUSA
applies only where the facts necessary to sustain the point of law are already
before the court, and the only missing element is the legal argument. In CUSA
itself, the facts giving rise to the legal question before that court were all set out
in the record. The only missing element was the legal characterisation. That is
not the position in the present matter.
[14] The factual allegation that the arbitration agreement was prohibited by
s 109(2) of the Systems Act was never pleaded. The founding affidavit does not
mention s 109(2) and neither does it allege that the dispute concerned the
validity of the applicant’s actions in a way that triggered the statutory
prohibition. The record contains no facts from which I could have concluded,
inter alia, that the arbitration agreement was void ab initio. The fulcrum of the
applicant’s case before me was conducted on the premise that the arbitration was
valid and that the award was susceptible to review in terms of s 33 of the
Arbitration Act.
[15] In these circumstances, I had no basis on which to raise the s 109(2) point
of my own accord as the point was not apparent on the papers. The applicant
cannot now invoke CUSA to remedy its own failure to properly present its case
before this Court in the first place. The applicant’s case was a review application
under s 33(1) of the Arbitration Act, with jurisdiction asserted solely on the
basis of the property’s location . This Court was bound to apply the settled
principles of territorial jurisdiction in arbitration matters. In Zhongji
Development Construction Engineering Company Ltd v Kamoto Copper
Company Sarl 6, the SCA held that the court of the seat of the arbitration
exercises supervisory jurisdiction over the arbitration proceedings.
[16] The seat of the arbitration in this matter was Pretoria. The arbitrator
resides and practises in Pretoria. The award was made in Pretoria. The cause for
a review under the Arbitration Act, the arbitration proceedings themselves, arose
in Pretoria. The location of the immovable property that formed the subject
matter of the underlying dispute is irrelevant to the question of territorial
jurisdiction over a review of an arbitral award.
The test for leave to appeal
6Zhongji Development Construction Engineering Company Ltd v Kamoto Copper Company Sarl 2015 (1) SA
345 (SCA) para 51.
[17] Section 17(1)( a)(i) of the Superior Courts Act 7 provides that leave to
appeal may only be given where the judge concerned is of the opinion that the
appeal would have a reasonable prospect of success , which constitutes a high
threshold. There must be a sound, rational basis for the conclusion that there are
prospects of success on appeal8. A mere possibility, or what may be described as
an arguable case, is insufficient. On the record that was before me, the
applicant’s appeal has no reasonable prospect of success.
[18] The new case that the applicant seeks to advance on appeal was never
pleaded before me and cannot be introduced for the first time in the SCA or the
Full Court. The applicant cannot , for the first time on appeal, now change the
nature of its case. The SCA has long held that it is not bound to entertain a new
point of law raised for the first time on appeal unless certain conditions are met.
In the often-referenced judgment of Cole v Government of the Union of South
Africa9, it was stated:
‘If the point is covered by the pleadings, and if its consideration on appeal involves no
unfairness to the party against whom it is directed, the Court is bound to deal with it. And no
such unfairness can exist if the facts upon which the legal point depends are common cause,
or if they are clear beyond doubt upon the record, and there is no ground for thinking that
further or other evidence would have been produced had the point been raised at the outset. In
presence of these conditions a refusal by a Court of Appeal to give effect to a point of law
fatal to one or other of the contentions of the parties would amount to the confirmation by it
of a decision clearly wrong.’
[19] The principles enunciated in Cole have been consistently applied in our
law. They require that the existing pleadings cover the new point of law and that
the relevant facts be common cause or clearly established on the record. Neither
7Superior Courts Act 10 of 2013.
7Superior Courts Act 10 of 2013.
8Smith v S (475/10) [2011] ZASCA 15; 2012 (1) SACR 567 (SCA) (15 March 2011) para 7, against the modified
statutory framework under s 17 of the Superior Courts Act 10 of 2013.
9 Cole v Government of the Union of South Africa 1910 AD 263 at 272.
of these conditions is satisfied in this case. The point of law now sought to be
advanced, that the arbitration agreement was void because it offended s 109(2)
of the Systems Act, is not covered by the application as it served before me.
[20] The SCA further clarified this principle in Workmen’s Compensation
Commissioner v Crawford and Another10, where the court stated:
‘So the appellant had chosen his own battle‑ground, as it were, and he has no cause for
complaint if on appeal the Court declines to move on to a different terrain. This is not a case
in which this Court is constrained to decide a point of law and to deal with the appeal
accordingly, whatever the position taken up by the parties may have been, on the basis that it
is clear that all the relevant facts had been fully canvassed (cf Paddock Motors (Pty) Ltd v
Igesund 1976 (3) SA 16 (A) at 23B‑G). It is, on the contrary, in my opinion, a case where, if
this Court were to accept the belated submission of counsel for the appellant on the point of
law raised in argument, it would be wrong to decide the appeal on the basis thereof, for it
would run counter to what was common cause in the Court a quo, and if the point had been
taken there timeously, whether in the pleadings or otherwise, the possibility cannot be
excluded that the respondents’ conduct of their case would have been different.’
[21] The observations of the SCA 11 are apposite. The applicant chose its
battleground. It elected to pursue a review under s 33 of the Arbitration Act,
asserting jurisdiction solely on the basis of the property ’s location . It did not
plead the invalidity of the arbitration agreement. It did not seek a declarator of
nullity. It cannot now, on appeal, mov e to a different judicial basis. That would
be unfair to the third respondent , which might have conducted its case
differently had this new point been raised timeously.
[22] I have also considered whether there is a compelling reason within the
[22] I have also considered whether there is a compelling reason within the
meaning of s 17(1)(a)(ii) of the Superior Courts Act to grant leave despite the
10 Workmen’s Compensation Commissioner v Crawford and Another 1987 (1) SA 296 (A) at 307 F-H.
11 Ibid.
absence of reasonable prospects of success . The applicant argues that the
interpretation of s 109(2) of the Systems Act and its interaction with the
Arbitration Act raise important questions of public law that warrant the SCA’s
attention. However, these points are not properly before this Court, and they
cannot be properly raised before the SCA simply by granting leave to appeal,
based on papers that do not support them.
[23] In United Democratic Movement and Another v Lebashe Investment
Group (Pty) Ltd and Others 12, the Constitutional Court held that whether a court
should grant leave depends on what the interests of justice demand. Deciding
whether it is in the interests of justice to hear and resolve the matter requires a
careful weighing of all relevant factors . However, the court remarked that the
phrase ‘interests of justice ’ lacks a clear, concise definition of its meaning , and
ultimately, what serves the interests of justice will vary, based on a thorough
assessment of all relevant factors in each specific case.
Conclusion
[24] To grant leave to appeal on the present papers would be to countenance an
irregularity, in that I would be allowing a party to now advance a case that was
never made in this Court initially. I conclude that granting leave to appeal
would not serve the interests of justice and the application for leave to appeal
must be refused.
Costs
12 United Democratic Movement and Another v Lebashe Investment Group (Pty) Ltd and Others [2022] ZACC
34 paras 34 – 35.
[25] There is no reason to depart from the general rule that costs follow the
result. The applicant has been unsuccessful in its application for leave to appeal
and t he third respondent is entitled to its costs, including the costs of two
counsel on Scale C, given the complexity of the matter.
Order
[26] Accordingly, I make the following order:
1 The application for leave to appeal is dismissed.
2 The applicant shall pay the costs of this application , such costs to include
the costs of two counsel on Scale C.
_____________________________
M WESSELS
ACTING JUDGE OF THE HIGH COURT
NORTH WEST DIVISION, MAHIKENG
Appearances:
For the applicant: PG Seleka SC and L Bedhesi
Instructed by: M E Tlou Attorneys Inc, Mahikeng
For the third respondent: MC Maritz SC, RF de Villiers and SM van
Vuuren
Instructed by: De Ridder Attorneys, Hartbeespoort
c/o Smit Neethling Inc, Mahikeng