THE SUPREME COURT OF APPEAL
REPUBLIC OF SOUTH AFRICA

JUDGMENT

Case No:  549/2007

YELLOW STAR PROPERTIES 1020 (PTY) LIMITED
Appellant

and

MEC: DEPARTMENT OF DEVELOPMENT PLANNING
AND LOCAL GOVERNMENT (GAUTENG)

Respondent

Neutral citation: Yellow Star Properties v Department of Development Planning and
Local Government (549/07) [2009] ZASCA 25 (27 March 2009)

Coram:
BRAND, MAYA, CACHALIA, MHLANTLA JJA and LEACH AJA

Heard:

11 March 2009
Delivered:

27  March 2009
Updated:

Summary:
Contract – damages for breach – contract found to have been invalid in
previous litigation between the parties – special plea of res judicata or issue
estoppel upheld – further special plea that alternative delictual claim had
prescribed also upheld.

____________________________________________________________________________________

ORDER

In an application for leave to appeal from the High Court, Johannesburg
(Gildenhuys J sitting as court of first instance).

The application is dismissed with costs, including the costs of two counsel.

JUDGMENT

_____________________________________________________________________

LEACH AJA (BRAND, MAYA, CACHALIA and MHLANTLA JJA concurring):

[1] This is an application for leave to appeal under s 21 of the Supreme Court Act 59 of
1959. The applicant, the plaintiff in the court below, brought an action for damages to
which the respondent, in pleading, raised two special pleas. When the matter came to trial
before Gildenhuys J in the Johannesburg High Court, it was agreed that the special pleas
be decided at the outset in the light of the facts contained in a so-called ‘stated case’ with
the remaining issues to stand over for later decision. Having heard argument, the learned
judge upheld both special pleas and dismissed the applicant's claim.  He also dismissed a
subsequent application for leave to appeal.  The applicant’s further application to this court
for leave to appeal was set down for argument before this court.

[2]   The merits of the appeal are obviously vital to the outcome of the application.  The
parties therefore agreed to argue the appeal on the understanding that if this court was of

the view that the appeal should succeed, the application would be granted and the appeal
upheld but, if the appeal was found to be without merit, the application would be
dismissed.  I turn now to consider which order is appropriate.

[3]   In order to consider the validity of the special pleas, it is necessary at the outset to set
out the somewhat lengthy history of the litigation between the parties. At the heart of the
dispute is a certain piece of immovable property more fully described as ‘the remaining
extent of Erf 137 Dunkeld West’ (‘the property’). The respondent, labouring under the
mistaken impression that the property vested in the Gauteng Provincial Government and
wishing to dispose of it, employed a valuer to ascertain what it was likely to fetch on the
open market. The valuer employed valued it at R300 000. As appears below, this valuation
was way off the mark. In June 2000 the respondent put the property up for sale on a public
auction at which it was purchased by the applicant for R452 900. The parties thereafter
signed a formal deed of sale which reflected the Gauteng Provincial Government as the
owner and seller of the property and which obliged the applicant to pay a deposit of R45
200, to provide a bank guarantee for the balance of the purchase price and to pay various
duties, levies and costs.

[4]    Despite the applicant having fully complied with all its obligations under the deed of
sale, transfer did not take place as it was discovered that the property, while state land,
vested not in the Provincial Government as had been thought but in the National
Government. Item 28(1) of Schedule 6 to the Constitution provides for a competent
authority to issue a certificate in respect of immovable property owned by the state
indicating in which particular branch of government such property is vested, whereupon a
registrar of deeds must make such entries or endorsements necessary to register such

property in the name of that sphere of government.   In order for the respondent to be
able to effect transfer to the appellant, it had to obtain an item 28(1) certificate recording
that the property vested in the Gauteng Provincial Government. And in order to obtain
such a certificate, it was necessary for the respondent to first persuade National
Government to transfer the property to the Gauteng Provincial Government.

[5]   However, it then also came to light that the valuation of R300 000 obtained by the
Provincial Government before the auction was wholly unrealistic,  probably because the
valuer had by mistake only had regard to a portion of the property while the true value of
the whole property was several million rand.  The respondent does not appear to have
been overly concerned by this as it persisted in attempting to persuade national
government to allow the property to be transferred to the applicant. But it is hardly
surprising that the Ministry of Public Works, to whom administration of the property had
been assigned, on learning that the property had been sold for but a fraction of its true
value, refused to do so. Accordingly, as National Government refused to transfer the
property to the Gauteng Provincial Government, the respondent could not obtain an item
28(1) certificate relating to the property and was unable to effect transfer to the applicant.

[6]   When despite the passage of time transfer did not take place, the applicant raised the
matter with the respondent. In response, in a letter from the head of Gauteng’s
Department of Development Planning and Local Government dated 12 December 2000
the applicant was informed that the property in fact vested in the national Department of
Public Works and not in the provincial government, and it was suggested that the applicant
take the matter up with the legal section of the national department. It can be accepted
that until receipt of this letter the applicant did not know that the respondent was not the

owner of the property. Despite the applicant then consulting its attorney as well as a
number of other government officials, it was unable to obtain transfer.

[7]   Eventually, in June 2001 the applicant launched proceedings in the Pretoria High
Court in case 15278/01 in which it cited the present respondent, as well as the Minister of
Land Affairs and the registrar of deeds, as respondents.   In its founding affidavit the
applicant described the delays which had taken place and stated that it had established
that if the Minister of Land Affairs – as the competent authority contemplated by item 28(1)
– did not provide a certificate under that item, the property could not be registered in the
name of the Gauteng Provincial Government which was necessary for transfer to the
applicant to take place.  It therefore sought an order, inter alia:
‘3.
Compelling the (Minister of Land Affairs) to issue a certificate in terms of Item 28 of
Annexure 6 to the Constitution, Act 108 of 1996, on an urgent basis . . . and  to provide the
(registrar of deeds) with the said certificate;
4.
Compelling the (registrar of deeds) to effect the transfer over the property as a matter of
urgency, upon receiving the certificate from the (Minister of Land Affairs).’

[8] When the matter came before Van Der Walt J on 30 January 2002, both the
respondent and the Minister of Land Affairs argued that the applicant lacked locus standi,
contending that the individual who had concluded the sale, one Harding, had represented
not the applicant but a close corporation still to be formed. They also argued that the
parties had not been ad idem in regard to the property that was the subject of the sale.
Both these contentions were rejected by the learned judge, and it has not been suggested
that he erred in doing so.  During the course of the hearing a copy of a certificate issued in
respect of the property by the Minister of Land Affairs under item 28(1), was handed to

Van Der Walt J. In his view, this obviated the need to deal with the relief sought in the
application before him. He therefore merely granted an order which authorised the
registrar to effect transfer upon receipt of ‘the certificate’ from the Minister of Land Affairs.

[9]   At first blush, this is somewhat confusing. In making this order the learned judge
presumably had in mind that ‘the certificate’ would facilitate transfer to the applicant (viz.  It
would be a certificate reflecting the Provincial Government as the owner of the property
and thereby entitled to transfer it to the applicant). But the document handed in certified
that the property vested in the National Government and, in itself, rather than providing
the solution to the problem, constituted the very obstacle to the property being transferred
to the applicant. The solution to this conundrum is to be found in Van Der Walt J’s
subsequent judgment of 31 July 2002 dismissing an application for leave to appeal brought
by the Minister of Land Affairs in which  he expanded on his reasons for judgment. The
learned judge said that while the certificate handed in had been in the name of National
Government, it had been stated in the papers that the Provincial Government was in the
process of obtaining the property from the National Government  to enable it effect transfer
to the applicant,  and that the stage at which it could do so had  not been reached.  This
observation clearly indicates that the learned judge had not intended his order to authorise
transfer directly to the applicant at that stage.  It merely authorised the registrar of deeds to
do so when ‘the certificate’ reflecting the provincial government as owner came to hand.

[10]    Unfortunately for the applicant, no such certificate was ever issued as the national
government persisted in opposing transfer of the property to the applicant at a price which
bore no relationship to its true market value. As a result, the order of Van Der Walt J in no
way overcame the difficulty facing the applicant. The national government remained the

owner of the property and the respondent remained unable to transfer it to the applicant.
A position of stalemate had therefore been reached.

[11] The applicant then heard rumours of the property being subdivided. This news led
to it bringing urgent proceedings in the Pretoria High Court in case 4578/2002, seeking an
order restraining the respondent, as well as the Minister of Land Affairs and the registrar of
deeds, from effecting any subdivision of the property.   It also claimed an order directing
the registrar of deeds to transfer the property to it within 48 hours and obliging the
respondent to file all documents necessary to facilitate such passing of transfer.   As the
original item 28(1)  certificate produced at the earlier hearing had gone missing, the
applicant sought an order directing the registrar of deeds to be satisfied with a copy of it
‘for purposes of effecting transfer’.

[12]   It seems both from the relief sought and from the comment in the founding affidavit
that once the item 28(1) certificate had become available the relief claimed in case
15278/2001 ‘became superfluous… in order (to) pass transfer to the Applicant’, that the
applicant still mistakenly regarded the certificate that had been handed to Van Der Walt J
as being all that was required for the respondent to pass transfer. However, the registrar of
deeds drew the court’s attention to the fact that the existing item 28(1) certificate recorded
the property as vested in the national government, and also observed that before transfer
to the applicant could be effected, it would be necessary for the property to be transferred
from the national to the provincial government so that the latter could, in turn, transfer it to
the applicant.

[13]   The Minister of Public Works then applied to intervene as a party to oppose the relief

sought.   In doing so, she stated that she had been charged with the administration of the
property, ownership of which vested in national government as reflected the item 28
certificate, that such certificate did not result in the property vesting in the provincial
government, and that the applicant was not entitled to insist upon transfer. She also stated
that as the responsible minister of state, only she had the discretion to sell the property, a
discretion which she had not yet exercised. But in any event, she said she would probably
not agree to the property being transferred to the applicant as it was worth several million
rand more than the amount the applicant had undertaken to pay.

[14] By reason of certain allegations made in the papers and undertakings given after
the institution of the proceedings, the necessity to seek an interdict in regard to the
proposed subdivision of the property fell away.  But the applicant persisted in claiming
transfer of the property and the matter came to be argued before Smit J. Despite
opposition from the appellant, the learned judge correctly allowed the Minister of Public
Works to intervene as an interested party.  She was, after all, the minister of state charged
with the administration of the property and the only person who had the authority to sell it.

[15] In proceeding to deal with the relief sought by the applicant, Smit J concluded that
while the Premier of Gauteng is authorised under s 2 of the Gauteng Land Administration
Act 11 of 1996 to dispose of provincial land which vests in the Gauteng Provincial
Government, it is the State President who under s 2(1) of the State Land Disposal Act 38
of 1961 has the power to dispose of land vesting in national government.  He also
accepted the allegation made by Minister of Public Works that the State President had
assigned that power to her, and concluded that in the circumstances the provincial
government had not been authorised in law to sell the property; that the sale to the

applicant had therefore been ultra vires and void ab initio; that there was accordingly no
valid causa for the transfer of the property to the applicant; and that the applicant was
therefore not entitled to transfer of the property which remained vested in the national
government.  The application was accordingly dismissed.

[16] The applicant did not seek to appeal against this decision. Instead, in a letter
addressed by its attorney to the respondent on 30 August 2004, it accused the respondent
of having repudiated the sale by failing or refusing to transfer the property, and stated that
it had decided to accept such repudiation and that it thereby cancelled the agreement. The
attorney further demanded payment of more than R6,8 million as damages to be made
within 30 days, failing which action would be instituted.

[17] In the light of Smit J’s finding that the sale had been void at all times, it is hardly
surprising that the respondent refused to make the payment demanded and, in due
course, the applicant instituted action as it had threatened. In formulating its claim, it relied
on the same breach of contract it had in the letter of 30 August 2004 (viz. the failure or
refusal to transfer the property to the appellant). In the alternative, it relied on a delictual
claim, alleging that the respondent’s servants, in selling the property, had either been
aware that the respondent was not authorised in law or in fact to sell the property and had
acted in bad faith; alternatively, that they had acted negligently in that they ought to have
been aware that the respondent was not so authorised to conclude the sale. As a further
alternative, the applicant averred that the respondent had maliciously or negligently failed
to effect transfer in breach of Van Der Walt J’s order of 30 January 2002.

[18]   The respondent pleaded specially to these claims as follows: first it alleged that the

action had been instituted on 29 October 2004, more than three years after both the
contractual and delictual claims relied upon had arisen, and that they had consequently
prescribed under s 11 of the Prescription Act 68 of 1969; secondly, it pleaded that:
(a) Smit J had found that:
(i) the sale had been void ab initio;
(ii) there was accordingly no valid causa for the property to be transferred;
(iii) transfer by the provincial government was therefore not legally possible; and
(iv) in the circumstances the provincial government could not be ordered to transfer the
property to the appellant;
(b) These issues having been finally determined by Smit J, it was not open to the appellant
to raise them in its claim by reason of res judicata or ‘issue estoppel’.
(c) The appellant was therefore estopped from alleging or relying on a breach of the
contract or Van der Walt J’s order or from pursuing its main claim founded in contract
which was based on such alleged breaches.

[19]   As already mentioned, these special pleas were determined in the light of the facts
agreed in a stated case.  Gildenhuys J held in relation to the second special plea that the
appellant’s contractual claim could not succeed as it was based on a contract of sale that
had been found by Smit J to have been void ab initio, that the appellant was bound by that
finding on the basis of issue estoppel or res judicata, and that the repudiation of a contract
void ab initio could not support a claim for damages arising from its repudiation. In regard
to the first special plea, the learned judge found it unnecessary to make any ruling on
whether the claim in contract had prescribed as that claim was in any event incompetent
on the basis of issue estoppel or res judicata. However, he held that the appellant’s claim
in delict had prescribed as more than three years had elapsed after the debt sued upon

had become due before summons was issued.   It is against these findings that the
applicant now seeks leave to appeal to this court.

[20]   For convenience, I intend to deal at the outset with the second special plea and the
finding in the court a quo the appellant’s claim could not succeed as the appellant was
bound by the previous finding of Smit J that the sale was invalid ab initio. In regard to this
issue, the appellant contended that Van Der Walt J had held the contract of sale to have
been valid and enforceable, and that such issue had therefore been res judicata when it
came before Smit J whose findings were consequently not binding and were to be
regarded as no more than obiter.

[21]   In considering this argument, it is necessary to deal briefly with the principles of res
judicata and so-called ‘issue estoppel’ relied on by both sides.  The underlying ratio of the
exceptio rei judicatae vel litis finitae is that where a cause of action has been litigated to
finality between the same parties on a previous occasion, a subsequent attempt by one
party to proceed against the other on the same cause of action should not be permitted.  In
National Sorghum Breweries v International Liquor Distributors 2001 (2) SA 232 (SCA) at
239 para [2] Olivier JA stated the requirements for a successful reliance on the exceptio to
be as follows:
‘The requirements for a successful reliance on the exceptio were, and still are: idem actor, idem
reus, eadem res and eadem causa petendi. This means that the exceptio can be raised by a
defendant in a later suit against a plaintiff who is ‘demanding the same thing on the same ground’
(per Steyn CJ in African Farms and Townships Ltd v Cape Town Municipality 1963 (2) SA 555 (A)
at 562A); or which comes to the same thing, ‘on the same cause for the same relief’ (per Van
Winsen AJA in Custom Credit Corporation (Pty) Ltd v Shembe 1972 (3) SA 462 (A) at 472A-B; see
also the discussion in Kommissaris van Binnelandse Inkomste v ABSA Bank Bpk 1995 (1) SA 653
(A) at 664C-E); or which also comes to the same thing, whether the ‘same issue’ had been

adjudicated upon (see Horowitz v Brock and others 1988 (2) SA 160 (A) at 179A-H).’

[22]   It has been recognised though that the strict requirements of the exceptio, especially
those relating to eadem res or eadem petendi causa (the same relief and the same cause
of action), may be relaxed where appropriate. Where a defendant raises as a defence that
the same parties are bound by a previous judgment on the same issue (viz. idem actor and
eadem quaestio), it has become commonplace to refer to it as being a matter of so-called
‘issue estoppel’.  But that is merely a phrase of convenience adopted from English law, the
principles of which have not been subsumed into our law,1 and the defence remains one of
res judicata.  Importantly when dealing with issue estoppel, it is necessary to stress not
only that the parties must be the same but that the same issue of fact or law which was an
essential element of the judgment on which reliance is placed must have arisen and must
be regarded as having been determined in the earlier judgment.

[23]   Fundamental to the respondent’s opposition in case 4578/2002 was the allegation
that the sale was invalid as the necessary statutory authority to sell the property had
vested solely in the Minister of Public Works, a contention which Smit J upheld. The
appellant accepted that if the decision of Smit J holding the sale to be  invalid was not
obiter but was binding between the parties, the issue would have been finally determined
between the parties and the special plea that this issue was res judicata would have been
correctly upheld. The applicant’s case on this issue is one of issue estoppel and stands or
falls on whether, by reason of the earlier judgment in case15278/2001, the validity of the

1 Smith v Porritt and Others 2008 (6) SA 303 (SCA) para 10 and Kommissaris van Binnelandse Inkomste v
ABSA Bank Bpk 1995 (1) SA 653 (A) at 669H-I and 670C-E.

sale had been finally determined between the parties by Van Der Walt J and was res
judicata when it came before Smit J.

[24]   Counsel for the appellant argued that while the decision of Smit J was probably
correct, it was no bar to the appellant successfully raising res judicata or issue estoppel.  In
this regard, while the law indeed allows a party to rely upon such a defence even if the
original judgment was incorrect,2 I have grave reservations about whether it is permissible
to do so if the effect will be to enforce a contract which is legally invalid.3 This would of
course be the case if Smit J was correct in concluding that, in law, only the Minister of
Public Works was authorised to sell the property. But in the light of the view I have of the
matter, it is unnecessary to consider this any further.

[25]   The applicant’s argument that the validity of the sale was res judicata in case
4578/2002 faces insurmountable difficulties.  As appears from what I have already said, in
order for the applicant to succeed on this issue the case had to involve the same parties
who had been in case 15278/2001 and had to turn on the same issue that had been finally
determined in the judgment of Van Der Walt J.  For the reasons that follow, neither of
those two requirements were fulfilled.

[26]   The obvious problem facing the applicant is that although it and the respondent were
parties to both proceedings, the Minister of Public Works, to whom the State President had
assigned the power to administer the property, was not a party in case 15278/2001 but,
pursuant to its successful application for leave to intervene, became a party in case

2 African Farms and Townships Ltd v Cape Town Municipality 1963 (2) SA 555 (A)
3 City of Tshwane Metropolitan Municipality v RPM Bricks (Pty) Ltd 2008 (3) SA 1 (SCA) at [16] and [23].

4578/2002. On the other hand, the Minister of Land Affairs, who was a party in case
15278/2001 was not a party in case 4578/2002. Counsel for the applicant sought to
overcome this difficulty by arguing that each minister had represented the national
government in whom ownership of the property vested and which had therefore effectively
been the relevant party before court at both hearings

[27] This argument cannot be upheld. Section 91(2) of the Constitution provides for the
President to assign powers and functions to ministers, and s 92(1) provides for ministers
‘to be responsible for the powers and functions . . . assigned to them’. A minister’s powers
and functions are always subject to constitutional control and the doctrine of legality and
‘can be validly exercised only if . . . clearly sourced in law.’4 In addition s 2(1) of the State
Liability Act 20 of 1957 provides that any claim against the State may be brought against
the minister of ‘the department concerned’. This can only mean that a claim may be
brought against the minister whose department is responsible for the debt sought to be
recovered (and not against any other minister) and that the affairs and functions of
different departments of state and their ministers are to be regarded as separate and
distinct.

[28] While the two different ministers whom the applicant sued in cases 15278/2001 and
4578/2002 are members of the same sphere of government, the President has assigned to
them separate and distinct powers and functions. Each can only exercise those powers
and functions that were individually bestowed on her. They cannot act on behalf of each
other in performing a public function, nor can one be validly sued in circumstances in

4 AAA Investments (Pty) Ltd v Micro Finance Regulatory Council  2007(1) SA 343 (CC) at [29] [39] and
[68].

which the law authorises the institution of proceedings against the other. Therefore the
Minister of Public Works, who was not a party to the proceedings in case 15278/2001,
cannot be bound by a decision on an issue arising in that case and the applicant has failed
to establish the necessary requirement of idem actor.

[29]   The applicant also faces difficulties in regard to the requirement of eadem quaestio.
For purposes of res judicata or issue estoppel, the relevant issue must be one which the
court is called upon to determine in its judgment.5 Where, as is here the case, the court is
dealing with motion proceedings, the issues which arise for determination are those
contained in the parties’ affidavits and a court can only decide an issue not raised in the
papers if such issue has been fully canvassed by the parties in the expectation that it will
be determined as an issue before court. 6  There is no suggestion of that having here been
the case.

[30]  Bearing that in mind, the issues arising and the relief sought in case 15278/01 were
clearly not the same as that in case 4578/2002. In the former, while both the respondent
and the Minister of Land Affairs in their papers disputed the applicant’s locus standi to sue
on the basis that the person who had concluded the sale had not represented the
respondent, and suggested that the property had not been properly described in the deed
of sale (a point abandoned in argument), they  raised neither the issue of the sale being
invalid by reason of the provisions of the State Land Disposal Act nor the fact that the
property was not the respondent’s to sell. Consequently, but most importantly, the question
of invalidity was not dealt with in judgment of Van Der Walt J who, after dismissing the

5 Horowitz v Brook and Others 1988 (2) SA 160 (A) at 179 B - G.
6 Horowitz at 179H-181A

point raised in respect of locus standi, clearly assumed the sale to be valid.

[31]    The validity of the sale was thus not an issue decided by Van Der Walt J upon which
he ruled that the applicant was entitled to relief. Nor was it an issue mentioned by the
learned judge in his judgment in the application for leave to appeal as being one of the
issues he had been obliged to decide in the main application. But it was an issue
pertinently raised in the papers in case 4578/2002 and was found by Smit J to be
determinative of those proceedings. The two proceedings were determined by regard
being had to different issues and the applicant clearly failed to establish the essential
requirement of eadem quaestio.

[32]   It is readily apparent from what I have set out above that the applicant cannot rely on
res judicata or issue estoppel as it has failed to establish the fundamental requirements of
that defence. As its case on the enforceability of the sale stands or falls on this issue, and
as the validity or otherwise of the sale had not been finally determined between the parties
in case 15278/2002, the findings of  Smit J, which were not appealed against,  cannot be
merely regarded as obiter as the applicant contends but must be taken as having been res
judicata when the applicant instituted its action for damages.  As a result, the applicant is
precluded both from enforcing any claim for damages under the invalid contract or, for that
matter, from enforcing its delictual claim for damages based on its allegation that the
respondent maliciously or negligently failed to transfer the property despite the order in
case 15278/2002.

[33]   This conclusion renders it necessary to consider the special plea in regard to
prescription only insofar as it relates to the claim that the respondent’s servants acted

negligently in selling the property.   In this regard the respondent pleaded that the
purported sale of the property had been concluded in mid 2000 whereas the action had
only been instituted more than three years later, on 29 October 2004, and that the claim
had therefore prescribed under s 11 of the Prescription Act 68 of 1969.

[34]   In seeking to avoid this, the applicant argued that it had not relied on a claim which
had arisen on the date of the sale as the negligence relied upon – in particular in
paragraph 14.2.2 of the particulars of claim where it is alleged that the respondent’s
servants had ‘failed to take steps to be authorized to sell the property by the relevant
department of state which was authorised to sell the property’ – had occurred well after the
sale.

[35]   This was not an issue raised by the applicant in the stated case in which it relied
solely on its contention that prescription had been interrupted  by the institution of
proceedings in cases 15278/2001 and 4578/2002, alternatively only commenced to run
after judgment in those two cases. The applicant is bound by that agreement and cannot
now seek to move the goalposts. In any event, the claim as pleaded is not capable of the
import the applicant seeks to ascribe to it. Paragraph 14.2.2 of the claim particularises only
one of the aspects in which it is alleged (in para 14.2) that the respondent’s servants has
acted negligently ‘in selling the property’.  It is quite clear from a reading of the pleading
that the applicant relies solely upon negligence at the time of the sale.

[36]   As I have said, it was the applicant’s suggestion, albeit offered somewhat tentatively
in argument, that prescription had been interrupted by the institution of proceedings in
cases 15278/2001 and 4578/2002. Again, this cannot be accepted. Under s 15(1) of the

Prescription Act the running of prescription is interrupted by the service of any process
on the debtor whereby the creditor claims payment of the debt. The debt claimed in the
present case is an amount of damages allegedly suffered due to negligence on the part of
the respondent’s servants. In neither case 15278/2001 nor 4578/2002 was payment of
such a debt claimed and the relief sought in both of those proceedings was wholly
inconsistent with such a claim. The institution of proceedings in the two applications
therefore did not interrupt prescription in respect of the applicant’s claim for damages.

[37]   It was then argued by the applicant that by reason of the provisions of s 12(3) of the
Prescription Act, prescription only began to run once Smit J had delivered his judgment as
until then the applicant could not have known that the sale was invalid. Again, this
argument cannot be accepted.  The section provides that a creditor shall be deemed to
have knowledge of the identity of the debtor and of the facts from which the debt arises if
he could have acquired it by exercising reasonable care. In the present case, the applicant
was told by the Department of Development Planning and Local Government in its letter of
12 December 2000 that the property ‘belongs to the National Department of Public Works
and not the Gauteng Department of Education who instructed the disposal of the property.’
From then on, the applicant was aware that the property did vest in the respondent.  This
was also clearly set out in the respondent’s opposing affidavit in case 15278/2001 which
was filed in August 2001, more than three years before the institution of the applicant’s
action for damages.  It may be that the applicant had not appreciated the legal
consequences which flowed from the facts, but its failure to do so does not delay the date
prescription commenced to run.

[38]   In the light of these considerations it is clear that the applicant’s delictual claim for

damages arose in mid 2000, that prescription commenced to run by no later than
December that year, that the claim had therefore prescribed well before the institution of
action in October 2004, and that the learned judge in the court a quo correctly upheld the
special plea in that regard.

[39]   To summarise, both special pleas were correctly upheld in the court below.   There is
no merit in the appeal and the application for leave to appeal must therefore be dismissed.
Both parties employed two counsel and it was not suggested by the applicant that the
costs of two counsel were not warranted.

[40]   One further matter must be mentioned.  In his further particulars, the respondent had
both admitted the applicant was entitled to be repaid the deposit of R45 200 it had paid
after the conclusion of the deed of sale and tendered to repay such sum. Counsel for the
applicant submitted that irrespective of the outcome of the special pleas, this court should
therefore order the respondent to repay that deposit.

[41]   The facts relevant to this issue have not been ventilated in the evidence before us.
We do not know if the deposit has been repaid and, if not, why the respondent has not
done so. Not only can we not speculate on the facts but the question of the respondent’s
liability to repay in terms of his tender was not raised as an issue either in the stated case
or in the notice of appeal. It is not properly before this court and, in the circumstances, the
invitation to deal therewith must be declined.

[42]   The application for leave to appeal is dismissed with costs, such costs to include the
costs of two counsel.

________________________

LE  LEACH

ACTING JUDGE OF APPEAL

APPEARANCES:

FOR APPLICANT: AD WILSON and PJ BLOMKAMP
INSTRUCTED BY: EARLE FRIEDMAN & ASSOCIATES, JOHANNESBURG

LOVIUS BLOCK ATTORNEYS, BLOEMFONTEIN

FOR RESPONDENT: P M KENNEDY SC and M SELLO
INSTRUCTED BY: STATE ATTORNEY, JOHANNESBURG and BLOEMFONTEIN

Supreme Court of Appeal of South Africa
MEDIA STATEMENT
From:
The Registrar, Supreme Court of Appeal
Date:
Friday 27 March 2009
Status:
Immediate

The Supreme Court of Appeal today dismissed with costs the appellant’s appeal
against a finding by the Johannesburg High Court dismissing the appellant’s claim for
damages.

The appellant had claimed for damages allegedly suffered by reason of the breach of a
contract of sale of immovable property, alternatively, by reason of negligence on the
part of the respondent.

The Supreme Court of Appeal held that the High Court had correctly found that the
claim based on negligence had prescribed. The decision of the High Court that the
appellant could not claim damages in contract as another court had earlier held the sale
to have been invalid, rendering that issue to be res judicata, was also upheld.
--ends--