The law reports – September 2014

September 1st, 2014

Heinrich Schulze BLC LLB (UP) LLD (Unisa) is a professor of law at Unisa.

July 2014 (4) The South African Law Reports (pp 1 – 317); [2014] 2 The All South African Law Reports June no 1 (pp 493 – 634); and no 2 (pp 635 – 726); 2014 (6) Butterworths Constitutional Law Reports June (pp 641 – 739); and 2014 (7) July (pp 741 – 867)


CC: Constitutional Court

GP: Gauteng Division, -Pretoria

KZD: KwaZulu-Natal Local Division, Durban

SCA: Supreme Court of Appeal

WCC: Western Cape Division, Cape Town

Administrative law

Electronic communications: The facts in City of Tshwane Metropolitan Municipality v Link Africa (Pty) Ltd and Others [2014] 2 All SA 559 (GP) were that the first respondent, Link Africa, was the holder of an electronic communications network services (ECNS) licence granted by the -Independent Communications Authority of South Africa (ICASA), in terms of the Electronic Communications Act 36 of 2005 (the Act). Link Africa alleged that the licence conferred various statutory powers on it under ss 22 and 24 of the Act, enabling it to construct and maintain an electronic communications network consisting of fibre optic cables. It sought to exercise those powers by deploying its patented technology in the applicant’s municipal area.

The applicant, the municipality, in turn, sought to prevent Link Africa from constructing and developing its network. It contended that ss 22 and 24 of the Act did not entitle Link Africa to construct its network without the municipality’s consent. It also contended that Link Africa’s decision to construct its network fell to be reviewed and set aside. In the alternative, the municipality contended that ss 22 and 24 of the Act are unconstitutional and invalid.

Avvakoumides AJ held that the municipality’s argument regarding the necessity for its consent was unfounded. The court rejected the municipality’s submission that a local authority must give its consent before s 24 powers are exercised by an ECNS licensee.

The court further accepted that a decision by an ECNS licensee to exercise the powers afforded to it in terms of s 22(1), amounts to administrative action under the Promotion of Administrative Justice Act 3 of 2000.

It was this decision by Link Africa to exercise its powers that the municipality wanted to review. However, Link Africa submitted that the municipality’s attempts to review its (Link Africa’s) decision in the present case were fatally flawed due to unreasonable delay. It further submitted that the municipality’s submissions blurred the distinction between appeal and review. The court agreed with the submissions made by Link Africa because the municipality took more than four months after it was first informed by Link Africa of its decision to seek a review of the latter’s decision. It further provided no reason for the delay, even after Link Africa raised the question of an unreasonable delay.

Finally, the court also dismissed the municipality’s alternative application that the court ought to declare ss 22 and 24 of the Act unconstitutional because these sections do not require the landowner’s (the municipality’s) consent and that it therefore permits arbitrary deprivation of property in contravention of s 25 of the Constitution.

The court held that not all deprivations of property are arbitrary and that the municipality had failed to explain why the deprivation of property occasioned by Link Africa’s decision is arbitrary.

The application was dismissed with costs.


Disciplinary inquiry: The case of Graham and Another v Law Society, Northern Provinces and Others (Road Accident Fund Intervening) 2014 (4) SA 229 (GP) concerned an application by complainants who was dissatisfied with the pace of the respondent law society’s disciplinary inquiry into the applicant’s complaint of overreaching by their attorneys, the second respondent, Ronald Bobroff & Partners Inc (RBP).

Mr Graham was injured in a motor-vehicle accident and the RBP deducted fees of R 860 000 from Graham’s Road Accident Fund (RAF) settlement of R 2 million. The Grahams’ application turned on an alleged laxness and bias in the Law Society of the Northern Provinces’ (LSNP) investigation of the complaint against RBP. The Grahams applied for an order for the court to either supervise or take over the inquiry itself. The Grahams also sought to compel RBP to make available outstanding documents relating to the complaint. The Grahams based their allegations against the LSNP on a number of grounds, only two of which will be referred to here. First, that there was a conflict of interest as a result of a position it took in an earlier matter; and secondly, that the LSNP allowed RBP to dissemble (play possum) by feigning ignorance of the issues raised in the complaint.

First, Mothle J approved the RAF’s application to intervene because it (the RAF) had a legitimate interest that funds intended to compensate victims of traffic accidents were not wasted by overreaching attorneys.

Secondly, the Grahams fail-ed to establish that the LSNP’s conduct in the earlier litigation justified a finding of a conflict of interest in the present inquiry against RBP. Making such a finding before the conclusion of the inquiry would in any event be premature.

Thirdly, the court held that RBP was not required to disclose its defence either during the inquiry before the present court, and the Grahams’ allegation that the LSNP was allowing RBP to play possum, as well as the ancillary charge of undue delay in the prosecution of the complaint were premature and unfounded.

The circumstances surrounding the application simply did not call for an intervention or take-over of the investigation by the court.

The court accordingly ordered that the LSNP be allowed to complete its inquiry. Because the Grahams’ application succeeded in part (with regard to access to certain documents), the court ordered that each party pay its own costs.

Close corporation

Reinstatement after deregistration: The facts in Missouri Trading CC and Another v ABSA Bank Ltd and Others 2014 (4) SA 55 (KZD) were as follows. The applicant, Missouri Trading CC (Missouri) was deregistered in terms of s 82(3) of the Companies Act 71 of 2008 (the Act) as a close corporation due to its failure to submit annual returns. Thereafter, this deregistration unknown, the first respondent, Absa Bank Ltd (Absa) in 2011 successfully applied for the winding-up of Missouri. Liquidators were appointed and immovable property of the estate was sold to a third party. Missouri was then reinstated to the Registrar of Companies under s 82(4) of the Act. Missouri applied for a declaration that the winding-up orders were void. At stake was the question whether reinstatement was retrospective to the date of deregistration.

Koen J held that the reinstatement of a company under s 82(4) does not operate retrospectively. This is deduced from the absence of an express provision which provides for retrospectivity, as well as the fact that reg 40(6) requires the filing of outstanding returns and not also returns in respect of the period of deregistration. Accordingly the close corporation ‘would survive only from the date of reinstatement…’.

The court further held that a court order under s 83(4) declaring the dissolution of the close corporation to have been void can be used only if the act of deregistration was void. Such an order would operate retrospectively. In the present case deregistration was clearly lawful and justified, and such an order could therefore not be made.

The court declared the provisional and final winding-up orders valid and binding. It further confirmed the appointment of the liquidators and declared all actions by them valid, including the sale of the close corporation.

The application was accordingly dismissed with costs.

Constitutional law

State tenders: The facts in Allpay Consolidated Investment Holdings (Pty) Ltd and Others v Chief Executive Officer, South African Social Security Agency and Others 2014 (4) SA 179 (CC); AllPay Consolidated Investment Holdings (Pty) Ltd and Others v Chief Executive Officer of the South African Social Security Agency and Others (Corruption Watch and another as amici curiae) 2014 (6) BCLR 641 (CC) turned on the determination of a ‘just and equitable’ order in the context of a government procurement contract that had been declared constitutionally invalid. In an earlier decision between the same parties (reported under the citation of Allpay Consolidated Investment Holdings (Pty) Ltd and Others v Chief Executive Officer, South African Social Security Agency and Others 2014 (1) SA 604 (CC) (the merits decision); AllPay Consolidated Investment Holdings (Pty) Ltd and Others v Chief Executive Officer of the South African Social Security Agency and Others (Corruption Watch and another as amici curiae) 2014 (1) BCLR 1 (CC)), the CC declared a procurement tender award – for the distribution of social grants – constitutionally invalid, but suspended its declaration pending the determination of a just and equitable remedy. The present decision expounded the parameters of what would constitute a ‘just and equitable’ order.

The appellant, Allpay, was an unsuccessful tenderer for the countrywide payment of social grants to beneficiaries. The tender was awarded to Cash Paymaster. Allpay alleged that the award of the tender by the South African Social Security Agency (SASSA) was unconstitutional. The tender was one of the largest in South Africa’s history and was for the provision of social grants to some 15 million beneficiaries.

In the merits decision Allpay proved a number of technical and other irregularities in the tender and procurement process, including SASSA’s non-assessment of the functionality of the black economic empowerment (BEE) component of Cash Paymaster.

In determining a ‘just and equitable’ order, the present court confirmed that the contract between SASSA and Cash Paymaster for the payment of social grants was invalid.

Froneman J held that the tender process had to be re-run. However, in initiating and implementing a new tender process, there had to be no disruption to the payment of existing social grants to beneficiaries.

The declaration of invalidity was accordingly suspended pending the decision by SASSA to award a new tender after the new tender process had been completed. SASSA was ordered to initiate a new tender process for the payment of social grants within 30 days of the present court’s order and that the new payment process must be made for a period of five years.

The new process further had to ensure that when a tender is awarded and a re-registration process is required –

  • no lawful existing social grant is lost;
  • the payment of lawful existing grants is not interrupted; and
  • personal data obtained in the payment process remains private.

The court further ordered that a new and independent Bid Evaluation Committee and Bid Adjudication Committee must be appointed to evaluate and adjudicate the new tender process. Their evaluation had to be made public by filing a status report with the Constitutional Court Registrar on the first Monday of every quarter of the year until the payment process is completed.

The issue was whether the inquiry into the question of what is ‘just and equitable’ is a multi-dimensional one. The court held that a ‘just and equitable’ remedy did not always lie in a simple choice between ordering correction and maintaining the existing position. It may sometimes lie somewhere in between, with competing aspects assessed differently.

The order in the present case was such a multi-dimensional order. The court provided detailed instructions of how the new tender process should take place. Only some of these instructions are dealt with here.

The court held that when the new tender is awarded, it must be for the same period as the original tender. If the new tender is not awarded, the declaration of invalidity of the current tender will be further suspended until the five-year period for which the contract was initially awarded, has been completed.

The court also ordered SASSA and Cash Paymaster to carry out a number of further duties, the most important of which is that Cash Paymaster must, within 60 days of the completion of the five-year period for which the contract was initially awarded, file with the Constitutional Court an audited statement of the expenses incurred, the income received and the net profit earned under the completed contract.

Finally, the court held that Cash Paymaster’s report must be verified by SASSA by an independent audited statement.

Contract law

Floor-plan agreements: The decision in Roshcon (Pty) Ltd v Anchor Auto Body Builders CC and Others [2014] 2 All SA 654 (SCA) brought to head a protracted and heated debate in South Africa on the question whether floor-plan agreements are valid. The debate reached a crescendo after the decision in Nedcor Bank Ltd v ABSA Bank Ltd 1998 (2) SA 830 (W) in which the court held that the floor-plan agreement in that case, which reserved ownership for purposes of security, was simulated, and thus invalid.

The facts in Roshcon were that the appellant, Roshcon (Pty) Ltd (Roshcon), placed an order for five Nissan trucks with a Nissan dealer, Toit’s Commercial (Pty) Ltd (Toit’s). Toit’s purchased the trucks from Nissan Diesel (SA) (Pty) Ltd (Nissan SA). The purchase price was financed by the second respondent, FirstRand Bank, trading as WesBank (WesBank), by way of a floor-plan agreement with Toit’s.

In terms of the floor-plan agreement WesBank bought the vehicles from Toit’s and thus became the owner of the trucks. Roshcon required that the trucks be fitted with specialised cranes. Toit’s instructed the respondent, Anchor Auto Body Builders CC (Anchor), to fit the trucks with the cranes and Nissan SA delivered the trucks directly to Anchor for this purpose. Toit’s failed to meet its obligations to WesBank in terms of the floor-plan agreement and was placed under provisional winding-up. WesBank, in its capacity as owner of the trucks, claimed them from Anchor and sold them to third parties. WesBank relied on the supplier agreement, which it had concluded with Nissan SA, and on the floor-plan agreement with Toit’s to assert its ownership and the right to sell the trucks.

The court a quo dismissed Roshcon’s application for an order that it was the lawful owner of the trucks. It rejected Roshcon’s argument that both the supplier and the floor-plan agreement were simulated transactions and, as a result, that the reservation of ownership clause in favour of WesBank was void. It also rejected Roshcon’s argument that WesBank be estopped from asserting ownership in the trucks.

On appeal to the SCA, Shongwe JA held that, for a court to declare a transaction a simulation, it has to look at the facts of each particular case. The fundamental issue in deciding whether a transaction is simulated, and therefore void, is whether the parties intended the agreement they had entered into should have effect in accordance with the agreement’s terms.

The court confirmed that parties are allowed to arrange their affairs and draft their contracts in such a way as to avoid statutory provisions, provided the agreement does not result in a simulated transaction.

The reservation of ownership in favour of WesBank contained in the floor-plan agreement between Toit’s and WesBank represented the parties’ real intention and was valid and enforceable against third parties.

Importantly, the court held that the decision in the Nedcor case (supra) in which the court held that the floor-plan agreement was simulated, was clearly wrong.

Roshcon also raised an alternative argument that WesBank be estopped from asserting ownership in respect of the two trucks in possession of Roshcon as well as the three trucks already in possession of Wesbank. The court pointed out that the requirements for proving estoppel are:

  • A representation by the owner, by conduct or otherwise, that the person who disposed of his property was the owner or was entitled to dispose of it.
  • The representation by the owner must have been made negligently in the circumstances.

In the present case the trucks were delivered directly by Nissan SA to Anchor on Roshcon’s request. WesBank could not have made any representation to Roshcon, and the court rejected Roshcon’s reliance on estoppel.

The appeal was thus dismissed with costs.

Criminal law

Organised crime: In National Director of Public Prosecutions v Salie and Another [2014] 2 All SA 688 (WCC) the applicant, the National Director of Public Prosecutions (NDPP), sought a forfeiture order in terms of ss 48(1), 50(1)(a) and (b) and 53(1)(a) of the Prevention of Organised Crime Act 121 of 1998 (POCA) of certain property owned by the respondents, Salie. The property included three immovable properties and a motor vehicle.

The NDPP contended that, on the probabilities, all of the property had been acquired from the proceeds of contraventions of s 2 (keeping a brothel) and s 20(1)(a) (knowingly living wholly or in part on the earnings of prostitution) of the Sexual Offences Act 23 of 1957. The gist of Salie’s defence was that she was running legitimate massage parlours at three premises. She further contended that she did not know whether any of the masseuses had sexual intercourse with their clients for money, and if they did, that that was their private business and had nothing to do with her.

Section 48(1) of POCA provides that if a preservation of property order is in force, the NDPP may apply to the High Court for an order forfeiting to the state all or any of the property that is subject to the preservation of property order. Sections 50(1)(a) and (b) provide that the court shall, subject to s 52, make an order applied for under s 48(1) if the court finds on a balance of probabilities that the property concerned is an instrumentality of an offence referred to in sch 1 of POCA or is the proceeds of unlawful activities.

Breitenbach AJ accepted the NDPP’s contention that there was no evidence that, from 2006 onwards, Salie had any income from legitimate sources with which to service the loans she had taken to acquire the three immovable properties and the motor vehicle, and consequently the money she used to make the necessary repayments emanated from the three brothel businesses. All the property was found to be the proceeds of unlawful activities because they were assets which Salie was able to retain using the money which she made in connection with or as a result of the operation of the three brothels and her consequent contraventions of ss 2 and 20(1)(a) of the Sexual Offences Act.

Because Salie argued that forfeiture of any of the property would be disproportionate and consequently infringe the right not be arbitrarily deprived of property in s 25(1) of the Constitution, the court had to consider whether proportionality applies to the forfeiture to the state of the proceeds of unlawful activity under POCA.

In this regard the court held that both s 18(1) and s 50(1)(b) of POCA are directed at preventing people from benefiting from the fruits of crime. Once the jurisdictional requirements for a confiscation order or a forfeiture order relating to the proceeds of unlawful activities are met, both of these two subsections confer on the court a discretion as to whether or not to make any such order at all and, if so, the extent of the benefit to be confiscated or the property to be forfeited to the state. Therefore, the considerations relevant to the exercise by a court of its discretionary powers to determine whether to make a confiscation order in terms of s 18(1) are also relevant to the exercise by a court of its discretionary powers to determine whether to make an order for the forfeiture of the proceeds of unlawful activities and, if so, to fix the extent of the proceeds to be forfeited. The said considerations are elements of a proportionality inquiry.

The court concluded that proportionality is indeed a requirement for the forfeiture to the state of the proceeds of unlawful activity under POCA and the forfeiture order was granted.

Credit law

In duplum rule: In Paulsen and Another v Slip Knot Investments 777 (Pty) Ltd 2014 (4) SA 253 (SCA); [2014] 2 All SA 527 (SCA) the court was asked to consider the parameters of the in duplum rule (the rule).

The facts were as follows. A company, Winskor, concluded a loan for short-term bridging finance with Slip Knot for the shortfall in funding a property-development project. The appellants, the Paulsens, bound themselves as sureties and co-principal debtors for the repayment of the loan by Winskor to Slip Knot. Winskor defaulted and Slip Knot sued the Paulsens for the principal debt plus interest. The interest payable in terms of the agreement exceeded the capital amount. The High Court allowed the full claim, but on appeal to the full Bench, the claim was limited to payment of the capital and R 12 million in interest. On appeal, the court held that the amount of interest allowed was restricted by the operation of the in duplum rule.

The Paulsens appealed to the SCA and argued that the credit agreement between Winskor and Slip Knot was void because Slip Knot had not been registered as credit provider in terms of the National Credit Act, 2005 (the NCA). Slip Knot raised a cross-appeal contending that it was entitled to additional interest, which accrued after summons was issued.

Wallis JA considered the relevant provisions in the context of the NCA as a whole and decided that the loan agreement was not subject to the NCA and that s 89(2)(d), therefore, did not apply to the loan agreement. The agreement was excluded from the ambit of the NCA because if qualified in terms of s 4 as a large credit agreement made to juristic person. There was thus no duty on Slip Knot to register as a credit provider.

The agreement was not a profit-sharing agreement but a normal loan. Consequently the in duplum rule, which restricts the amount of interest payable to the amount of the capital outstanding, applied.

The loan was a so-called mezzanine finance arrangement in terms of which bridging capital is loaned to a party for a short period. Due to the high risk involved, interest rates are usually fairly high.

The amount of interest recoverable was limited to the capital amount of R 12 million, even though it was payable in a lump sum.

The fact that the interest had reached the duplum before the sureties (the Paulsens) were sued, was no reason for not permitting it to commence running again, once litigation had commenced in accordance with the ordinary application of the rule.

The appeal was accordingly dismissed while the cross-appeal succeeded.

Indigenous law

Proof of marriage: The facts in Murabi v Murabi and Others [2014] 2 All SA 644 (SCA) turned on a dispute between two women, the appellant, the first wife, and the first respondent, the second wife, respectively. Both claimed to have been validly married to a Mr Murabi (the deceased).

At the time of his death, the deceased was married to both the first wife and the second wife; one by customary rite and another by civil rite. The civil marriage was contracted with the second wife on 2 August 1995.

The first wife sought an order declaring that –

  • the civil marriage between the second wife and the deceased was invalid; and
  • the customary marriage concluded with her (the appellant) in 1979, and for which she obtained a marriage certificate in 1991, was valid.

When the deceased died in 2011, the first wife attended at the offices of the Master of the High Court, to report the death as contemplated in s 7(1)(a) of the Administration of Estates Act 66 of 1965. There she discovered that the death had already been reported by the second wife and that she (ie, the second wife) had been appointed as the executrix of the deceased’s estate.

The court a quo held that the first wife had failed to establish the existence of the customary union asserted by her and dismissed her application with costs. The court also declared the second wife the only surviving spouse of the deceased.

On appeal to the SCA, the first wife’s argument was that the existence of her customary marriage was borne out by the certificate of its registration issued to her in 1991, which constituted conclusive proof of such marriage. Accordingly, so she argued, such conclusive proof could be rendered invalid only if there was countervailing evidence to show that it was obtained by fraud, whether by the holder or any other person.

Petse JA held that one of the critical dates in determining the validity of customary and civil marriages of indigenous people, is 2 December 1988, when s 22 of the Black Administration Act 38 of 1927 was amended by the Marriage and Matrimonial Property Law Amendment Act 3 of 1998.

Prior to 2 December 1988 an African man was competent to enter into a civil marriage despite the fact that he had another wife or wives by customary marriage. After 2 December 1988 a man is not competent to enter into a civil marriage if he has taken wives by customary marriage. Any ensuing civil marriage is null and void.

The certificate of registration of the first wife’s customary marriage that was obtained in 1991 constitutes prima facie proof of a valid customary marriage in the absence of evidence disputing its authenticity. The first wife was, therefore, legally married to the deceased.

The deceased was not competent to conclude a civil marriage, during the subsistence of the customary marriage with the first wife. The civil marriage with the second wife was, therefore, null and void and the appeal was allowed with costs.

Insolvency law

Effect on right to cancel contract: The facts in Ellerine Brothers (Pty) Ltd v McCarthy Limited 2014 (4) SA 22 (SCA) were as follows. The appellant, Ellerine, the lessor, leased business premises to a company, the lessee, which in turn sub-leased part of the premises to the respondent, McCarthy; the sub-lessee. The lessee failed to pay the rent to the lessor and the latter notified the lessee that the lease would be cancelled unless the breach was remedied within seven days.

Five days later, and before the seven-day period had expired, a third party lodged an application for the winding-up of the lessee. While the application was pending, the lessor delivered a letter cancelling the lease with immediate effect. However, the lessor and the liquidators assumed that the cancellation of the contract had not been effective and that the lease was, therefore, still in effect. Their assumption was based on the backdating of commencement of winding-up to the time the application was lodged. They argued that case law supported the view that, once liquidation ensues, the right of the other party to cancel the contract is lost. The liquidators ceded the lessee’s rights to collect rental under the sub-lease to the lessor.

When the lessor sued the sub-lessee for amounts due under the sub-lease, the sub-lessee argued that there could not have been a valid cession because the sub-lease automatically terminated when the lease was cancelled. The court had to determine whether the cancellation of the lease was valid. If it was, there were no rights that the liquidators could have ceded to the lessor.

The High Court held that the lease had been validly cancelled and that the lessor thus had no claim against the sub-lessee.

On appeal to the SCA, Van Zyl AJA held that liquidation or sequestration does not in general affect the continued existence of uncompleted contracts as the liquidator simply ‘steps into the shoes of the insolvent’. Insolvency affects only uncompleted contracts if the liquidator decides not to abide by the contract – the other contracting party cannot insist on specific performance by the insolvent.

Insolvency proceedings do not prevent the other contracting party from cancelling the contract, either in terms of a contractual stipulation (lex commissoria) or under a common-law right of cancellation following the insolvent’s breach of contract.

The distinction drawn in other cases between a completed or ‘accrued right to cancel’ and a right to cancel which only matures after the commencement of liquidation is unhelpful. The question is simply whether there was an effective and enforceable right at the time of cancellation.

Section 37 of the Insolvency Act 24 of 1936 provides the liquidator with a right to decide whether to continue with or cancel a lease in which the insolvent is the lessee. Section 37, therefore, does not materially change the common-law position and none of its provisions prevent the lessor from exercising a right to cancel.

The cancellation of the lease was thus valid and had the effect of also terminating the sub-lease. The liquidators had no right under the sub-lease that could be ceded to the lessor.

The appeal was dismissed with costs.

Sale of land: In Botha and Another v Rich NO and Others 2014 (4) SA 124 (CC); Botha and Another v Rich NO and Others 2014 (7) BCLR 741 (CC), the court was asked to pronounce on the question whether a purchaser of immovable property has a right to specific performance and thus claim the transfer of the property if more than half of the purchase price has been paid under an instalment sale.

The salient facts were as follows. Botha had concluded an instalment sale agreement to buy immovable property from a trust. A cancellation clause stated that breach by Botha would entitle the trust to cancel the agreement and retain all payments made. After Botha had paid three-quarters of the purchase price, she began to default on the instalments. The trust sued for cancellation of the contract and eviction of Botha from the property. Botha demanded transfer of the property in terms of s 27(1) of the Alienation of Land Act 68 of 1981.

The High Court allowed the trust’s claim and ordered cancellation of the contract and eviction of Botha.

After a number of unsuccessful appeals, Botha appealed to the Constitutional Court. The issues placed before the court were –

  • whether the trust was obliged to register the property in Botha’s name against registration of a mortgage bond in the trust’s favour; alternatively,
  • whether enforcement of the forfeiture clause by the trust was unconstitutional, given that 50% of the purchase price had been paid, and, if so, whether Botha was entitled to restitution of the money paid.

Nkabinde J held that earlier case law in which it was decided that s 27(1) did not afford a purchaser a right of specific performance were incorrect. Although s 27(3) mentions only cancellation as a remedy for a seller’s failure to transfer the property to the buyer after it had paid at least 50% of the purchase price, the buyer retained her common-law remedy of specific performance. Even though the exceptio non adimpleti contractus was in theory available to the trust, the principle of reciprocity had to be relaxed where its application would be unfair. The court emphasised that it was in the interest of fairness that the transfer of the property to Botha be made conditional on payment of the arrears and the outstanding municipal rates, taxes and service fees.

The court further held that to grant cancellation to the trust and forfeiture of the instalments paid by Botha where more than three quarters of the purchase price has been paid is a disproportionate penalty for the breach committed by Botha.

Botha was accordingly entitled to transfer against registration of a bond in favour of the trust, provided all arrears were brought up to date at or before transfer.

The appeal was upheld with costs.


Fideicommissum: The case of Erasmus NO v Estate Late Booysen 2014 (4) SA 1 (SCA) (also reported under the citation of ‘NE’ NO v Estate Late ‘BCB’ [2014] 2 All SA 635 (SCA)) concerned the interpretation of two separate wills of two different persons. These two persons were the great-grandfather and great-great-grandmother of a minor child, Jonique. The great-grandfather was the father of Jonique’s paternal grandfather. The great-great-grandmother was the mother of that great-grandfather. Jonique’s father, Josua Booysen (Josua) had predeceased his father, the late Barend Christiaan Booysen (the deceased).

The deceased was a fiduciary of fideicommissa established by the respective wills of his father (ie, Jonique’s previously mentioned great-grandfather) and grandmother (ie, Jonique’s previously mentioned great-great grandmother).

The appellant was Nicolette Erasmus, the mother and surviving natural guardian of Jonique, who was 14 years old at the time when the appeal was heard by the SCA.

The issue for determination in both the High Court and on appeal to the SCA, was whether Jonique could inherit a farm, as a fideicommissary, when her father had predeceased the deceased. The High Court held that Jonique could not.

Willis JA held that where a testator creates a fideicommissum consisting of a fiduciary, a first fideicommissary and a subsequent fideicommissary, and where the first fideicommissary dies before the fiduciary, the property concerned will pass to the second fideicommissary.

The appeal was accordingly allowed and the costs of the present appeal were to be paid by the estate of the deceased.


Apart from the cases and topics that were discussed or referred to above, the material under review also contained cases dealing with administrative law, banking, civil procedure, education, insolvency, legislation, local authorities, motor-vehicle accidents, pensions funds, practice, road fines, sectional titles and transport.

This article was first published in De Rebus in 2014 (Sept) DR 37.