THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT

Not Reportable

Case No:   512/2011

In the matter between:

HANUSCKE BELEGGINGS CC

Appellant

and

KUNGWINI LOCAL MUNICIPALITY

Respondent

Neutral citation:
Hanuscke
v
Kungwini
(512/2011)
[2012] ZASCA
(12 September 2012)
Coram:
Brand, Snyders, Malan, Shongwe and Theron JJA
Heard:
20 August 2012
Delivered:
12 September 2012

Summary:
Agreement for purchase of land – suspensive conditions – non-
fulfilment within a reasonable time – agreement lapsing

_________________________________________________________________________
ORDER

On appeal from: The North Gauteng High Court, Pretoria (RD Claassen  J sitting as court of
first instance):

The appeal is dismissed with costs.

_________________________________________________________________________

JUDGMENT

Malan JA (Brand, Snyders, Shongwe and Theron JJA concurring):

[1] This is an appeal against the judgment of RD Claassen J dismissing with
costs, the appellant’s claim against the respondent local authority (the ‘municipality’)
for the transfer of a certain immovable property. The appeal is with his leave.

[2] On 25 April 1996 the appellant corporation entered into an agreement of sale
with the municipality in terms of which the latter sold to the appellant a certain piece
of municipal land in Bronkhorstspruit for an amount of R300 000. The agreement
was subject to three suspensive conditions. The first was that there had to be
compliance with s 79(18) of the Local Government Ordinance 17 of 1939 (clause
13.1). The second was that the property be rezoned from ‘public open space’ to
‘business 1’ in terms of s 56(1) of the Town-Planning and Townships Ordinance 15
of 1986 (clause 13.2). The third condition entailed that the property, a park, be
closed permanently pursuant to s 66 of the Local Government Ordinance (clause
13.3). Sections 79(18) and 66 of the Local Government Ordinance respectively deal
with the procedures to be followed when municipal land is alienated and with the
closure of, inter alia, parks.  Section 56(1) of the Town-Planning and Townships
Ordinance is concerned with the procedures to be followed when property is
rezoned.

[3] Other terms of the agreement provided that the purchaser had to bear the
cost of the closure of the park and the rezoning of the property (clause 14.1). The
purchaser had to provide a site development plan for approval by the municipality
(clause 14.2). All the expenses in providing additional external bulk services were to
be for the account of the purchaser (clause 14.3). The purchaser also had to
commence with the construction of buildings to the value of R1 million within one
year of rezoning of the property and to complete them within a year of commencing
construction (clause 14.4). It was also provided that the property could be used for
business purposes only (clause 14.5).

[4] It was common cause between the parties that two of the suspensive
conditions, ie those in clauses 13.2 and 13.3, had not been fulfilled. The appellant
instituted action claiming that the municipality be ordered to take all steps necessary
to ensure that the property be rezoned in terms of the provisions of s 56(1) of the
Town-Planning and Townships Ordinance; that the property be closed permanently
pursuant to s 66 of the Local Government Ordinance; and that the municipality,
within 60 days of complying with the two previous orders, complete and submit the
required transfer documents to the appellant against delivery of an approved bank
guarantee for the purchase price. (It was common cause between the parties that
the first condition had been fulfilled and that the municipality had waived the
requirement that a site development programme be delivered.) In its particulars of
claim the appellant alleged that on 26 May 2004 it demanded that the municipality
comply with the two conditions concluding with the statement that it had elected to
keep the agreement in force and that it was entitled to an order for specific
performance because a reasonable time for the fulfilment of the suspensive
conditions had already lapsed.

[5] The municipality filed a special plea of prescription: summons was issued only
on 21 April 2006, some eleven years after conclusion of the agreement. In its plea,
the municipality pleaded further that it was a tacit term of the agreement that the
suspensive conditions had to be fulfilled within a reasonable time of entering into the
agreement and that the appellant knew or ought to have known during 1997 that,
due to legal disputes between the parties, the municipality had no intention of
proceeding with the agreement. The plea concluded with the statement that it was

not open to the appellant to make an election and that failure of the parties to ‘meet
the suspensive conditions’ resulted in the agreement lapsing. In its replication the
appellant pleaded that its claim for specific performance only arose on the
municipality’s refusal to take the required steps to obtain fulfilment of the suspensive
conditions: it refused to do so only after summons was issued.  The appellant also
replicated that the municipality’s conduct was mala fide, unconscionable, in breach
of the spirit of the Constitution and, alternatively, that in terms of s 12(2) and (3) of
the Prescription Act 68 of 1969 prescription could only have commenced running
after the municipality’s failure to inform the appellant that it had no intention of
proceeding with the sale.

[6] There was some correspondence between the parties after conclusion of the
agreement. The appellant was informed on 20 June 1996 which attorneys were
instructed to proceed with the transfer. The municipality’s attorneys informed the
appellant on 13 August 1996 that the municipality was proceeding with the sale. On
11 February 1997 the municipality, in a letter to the appellant’s auditors, confirmed
the municipalty’s  intention to proceed with the sale and procuring fulfilment of the
suspensive conditions.  Eventually, advertisements of the proposed closure of the
property were placed in the Provincial Gazette of 4 June 1997. Objections to the
closure were made but on 26 February 1998 the municipality resolved in terms of s
66 of the Local Government Ordinance that the park be closed permanently and that
in terms of s 56(1) of the Town-Planning and Townships Ordinance the property be
rezoned from ‘public open space’ to ‘business 1’.  The municipality’s attorneys wrote
to the appellant on 9 February 1999 stating that the municipality had to resolve
whether to rezone the property and that they would make the necessary enquiries to
ascertain whether it had been done. On 29 September 1999 the Municipality’s
attorneys asked the appellant’s representative, Mr Hoffeldt, whether he had
discussed the matter with Mr Mattheus (the town secretary) and what his intentions
were. In his evidence Mr Hoffeldt recalled this letter and his conversations with the
town secretary and a Mr le Roux of the municipality and stated that he informed the
latter that he was awaiting fulfilment of the suspensive conditions so that he could
produce his guarantees for transfer.

[7] Nothing of any relevance transpired thereafter but on 26 May 2004 the
appellant’s attorneys demanded from the municipality confirmation that the closure of
the park and the rezoning of the property had been completed and tendered
payment of the purchase price. This was followed by a letter dated 12 October 2004
to the municipality’s attorneys requesting delivery of the transfer documents for
signature by the appellant. This led to the municipality’s response on 9 February
2005 confirming that there had not been fulfilment of the suspensive conditions and
suggesting that a meeting between the parties be held to resolve the impasse. On 15
February 2005 the reply on behalf of the appellant followed stating that he was
interested in specific performance only:
‘4.
Ons kliënt wens op rekord te plaas dat hy te alle tye sedert sluiting van die
Koopkontrak begerig was en steeds is om met die transaksie voort te gaan en tender ons
kliënt alle redelike en billike kostes waarvoor hy aanspreeklik is ingevolge die Koopkontrak.
5.
Aangesien daar geen tydperke bepaal is waarbinne die terme van Klousules 13.2 en
13.3 van die Koopkontrak aan voldoen moet word nie, is ons klient die respekvolle mening
toegedaan dat sodanige nakoming binne ‘n redelike tyd moet geskied en dat sodanige
redelike tyd nou verstryk het.
6.
Geliewe kennis te neem dat ons kliënt slegs wens dat volvoering van die bepalings
van die Koopkontrak moet geskied en dat ons kliënt nie begerig is om in enige
onderhandelinge en of gesprekke tot onderhandelinge betrokke te raak met die oog op
enige verdere ooreenkomste nie.’
No correspondence of any significance followed. Summons was issued on 21 April
2006.

[8] At the trial the respondent’s attorney of record, Dr A D de Swardt, and Mr R
Hoffeldt, the sole member of the appellant, testified. RD CLaassen J found for the
municipality holding both that the agreement had lapsed and that the appellant’s
claim had prescribed.

[9] Dr De Swart testified that the municipality resolved to rezone the property and
close the park but that these resolutions were never published as was required by
the ordinances. He explained the background of the transaction between the parties.
The town clerk, a Dr Senekal, left the municpality’s employment on the day the
agreement was signed. Litigation between him and the municipality followed.

Mr Hoffeldt supported Dr Senekal and, as Dr De Swart explained, there was a
perception in 1997/8 that Mr Hoffeldt opposed everything the council did.
Nevertheless, at its meeting of 26 February 1998 the council resolved to close the
park and rezone the property. No further steps were, however, taken to give effect to
these resolutions. Another issue at that time concerned a pamphlet published by the
Democratic Alliance on the day before the 5 December 2000 elections concerning a
certain city counsellor. This led to litigation with the counsellor succeeding in a claim
for defamation. Mr Hoffeldt was not cited but it emerged from the evidence that he
had sponsored the publication. A third issue concerned a dispute between the
municipality and a Mr Dewald Hattingh, a property developer. Mr Hoffeldt also
supported Mr Hattingh. Thus, between the years 2000 and 2002 there were a
number of disputes between the council of the Municipality and Mr Hoffeldt, and Dr
De Swardt’s perception was that there was ‘a very great animosity’ between them.
His firm of attorneys were initially asked to see to the transfer of the property but
after 1999 until 2004 no word passed between the parties concerning the property.

[10] With reference to the correspondence received in 1999, Mr Hoffeldt, a local
businessman, testified that he had seen the purchase of the property as a long term
investment because he knew that he would require additional space for his garages
and workshops in future.
‘[I]n 1999 het ek toe ek die brief ontvang toe weet ek dat die stadsraad is nog besig met
hierdie proses en vir my het dit nie saak gemaak omdat hulle baklei by die stadsraad of
hofsake het of wat ook al nie, ek was tevrede om te wag, want my belegging, ek het
minstens ‘n kontrak wat ek geteken het en my kontrak onder andere sê dit ook dat die
stadsraad sal my in kennis stel as daar enigiets is wat ek moet doen en my op terme plaas
wat hulle in elk geval nooit gedoen het nie, maar so vir my het die proses net aangegaan en
ek het gewag, geduldig sit en wag om te sê ek wag tot julle nou al hierdie opskortende
voorwaardes nakom sodat ek dan maar kan oordrag neem en dan volgens die kontrak dan
net kan ten volle uitvoer dan.’
The longer it took to fulfil the conditions the better off he was. He did not have to pay
tax on the property pending their fulfilment and the price remained fixed. He was
never informed by any official of the municipality that they were not proceeding with
the sale. In 2004 he thought that the time had come to expand his business

premises and he requested his attorney to demand performance of the agreement of
sale.

[11] An agreement of purchase and sale subject to a suspensive condition is not a
sale pending fulfilment of the condition 'but there is nevertheless created "a very real
and definite contractual relationship" which, on fulfilment of the condition, develops
into the relationship of seller and purchaser . . .'.1 Non-fulfilment of the suspensive
condition renders the agreement void from inception, unless the  parties have agreed
otherwise.  As it was put–2
‘In my view, when a suspensive condition, of a kind which has not been inserted in the
contract for the benefit of one of the parties only, remains unfulfilled after the lapse of a
reasonable time for fulfilment, the contract is discharged automatically, by virtue of an
implied term to that effect, unless there is something in the contract negativing the
implication of such a term, and subject to the possibility of fictional fulfilment of the condition
by reason of the conduct or inaction of either of the parties. Ordinarily, no action on the part
of either of the parties equivalent to a placing in mora of the other in relation to the fulfilment
of the condition as such is required before the contract comes to an end.’

[12] It seems to me that the suspensive conditions relied upon were inserted in the
agreement for the benefit of both parties.3 There is no express duty on either of the
parties to procure fulfilment of the suspensive conditions. Fulfilment of the two
outstanding conditions is subject to a process in which the public interest and that of
others must also be considered. For this reason there is no room for the application
of the doctrine of fictional fulfilment of a condition in this case,4 and counsel for the
appellant did not rely on it. Nor was it pleaded. Although no express duty was placed
on the municipality to procure fulfilment of the condition, the fact that the municipality
was the owner of the property, leads to the importation of a tacit term in the

1 Corondimas & another v Badat 1946 AD 548 at 558-9 cited with approval in Paradyskloof Golf
Estate (Pty) Ltd v Stellenbosch Municipality 2011 (2) SA 525 (SCA) para 17. See also Cardoso v
Tuckers Land and Development Corporation (Pty) Ltd 1981 (3) SA 54 (W) at 63E-G; Design and
Planning Service v Kruger 1974 (1) SA 689 (T) at 697G-H.
2 Design and Planning Service v Kruger 1974 (1) SA 689 (T) at 697G-H.
3 Meyer v Barnardo & another  1984 (2) SA 580 (N) at 583C ff.
4 See George Municipality v Freysen NO 1976 (2) SA 945 (A) at 958H-959E.

agreement that it would take all reasonable steps to attempt to procure their
fulfilment.5 This was accepted by both parties.

[13] It was argued on behalf of the municipality that this duty incumbent on the
municipality constituted a ‘debt’ in terms of the Prescription Act 68 of 19696 that
prescribed three years after it became due (sections 11(d) and 12(1)). Where no
time for performance is stated a debt is generally due on  conclusion of the contract,7
or, as it has been said, ‘[a] right to claim performance under a contract ordinarily
becomes due according to its terms or, if nothing is said, within a reasonable time,
which, in appropriate circumstances, can be immediately…’.8 It is not necessary to
place the debtor in mora to ensure that a debt becomes ‘due’.9   It was contended
that the debt, ie the duty of the municipality to take steps to procure fulfilment of the
conditions, arose immediately on contracting, alternatively, within a reasonable time
of conclusion of the agreement so that the debt had been discharged by prescription
by the time summons was issued.

[14] I do not find it necessary to decide the matter on the basis of prescription.
The evidence of Dr De Swart was that suspensive conditions of the kind in question
would normally be fulfilled within a period of two or at most three years from the time
of contracting.  This evidence was hardly challenged except for some remarks by Mr
Hoffeldt that the new employees of the municipality were not particularly experienced
in matters of this kind. It was also common cause that a reasonable time for
fulfilment of the suspensive conditions had already lapsed by the time summons was
issued. In fact, as I have said, the appellant’s particulars of claim contain the
averment that a reasonable time for fulfilment had already lapsed. It is clear that,
given the fluctuating value of the property, the parties to the agreement of sale could

5 Design and Planning Service v Kruger 1974 (1) SA 689 (T) at 695C-F and 699G-H; Meyer v
Barnardo & another  1984 (2) SA 580 (N) at 584C-F; Thanolda Estates (Pty) Ltd v Bouleigh 145 (Pty)
Ltd  2001 (3) SA 196 (W) paras 17 ff.
6 Desai NO v Desai & others  1996 (1) SA 141 (A) at 146I-147A; Evins v Shield Insurance Co Ltd
1979 (3) SA 1136 (W) at 1141F-G; Kotzé v Ongeskiktheidsfonds van die Universiteit van
Stellenbosch 1996 (3) SA 252 (C) at 258H.
7 Cassim v Kadir 1962 (2) SA  473 (N) at 475D-E; J C de Wet and A H van Wyk Die Suid-Afrikaanse
Kontraktereg en Handelsreg 5 ed (1992) at 160.
8 Munnikhuis v Melamed NO  1998 (3) SA 873 (W) at 887E; Phasha v Southern Metropolitan Local
Council of the Greater Johannesburg Metropolitan Council 2000 (2) SA 455 (W) at 477A-B; Cardoso v
Tuckers Land and Development Corporation (Pty) Ltd 1981 (3) SA 54 (W) at 61G-H.
9 Standard Finance Corporation of South Africa Ltd (In Liquidation) v Langeberg Ko-operasie Bpk
1967 (4) SA 686 (A) at 691B-C;

not have intended the agreement ‘to hang in the air for an indefinite period’.10 To
ascertain whether a reasonable time has lapsed the peculiar circumstances of each
case must be considered. It was said that important factors to be considered are the
contemplation of each of the parties at the time of entering into the contract; and
their commercial interests. But the approach is not entirely subjective because,
although one of the parties may not have contemplated any particular difficulty, if it
was reasonably foreseeable it must be accounted for.11

[15] Mr Hoffeldt’s evidence was that he regarded the purchase of the property as a
long-term investment and that he was in no hurry to obtain transfer. He was
prepared to wait. Not surpringly, there is no evidence to suggest that the municipality
also contemplated a period of indefinite suspension of the contract until such time as
the appellant required the property. That the appellant would be prepared to wait for
such an inordinate period of time before requiring the property was simply not
reasonably foreseeable and, although within the contemplation of Mr Hoffeldt, not
within that of the municipality. The evidence is clear that from 1999 until 2004 when
the appellant’s demand was made nothing transpired between the parties with
regard to the property or fulfilment of the suspensive conditions. It is correct that the
municipality did not take further steps to procure fulfilment of the conditions but
waited to see whether the appellant would proceed with the sale. However, the
appellant could and, given the relationship between Mr Hoffeldt and the council,
should have enquired whether progress was made and could have demanded
performance. It did nothing of the kind and, in any event, after its demand of 26 May
2004, waited until 2006 to have summons issued. On any basis a reasonable time
for fulfilment of the conditions had by that time already passed. It follows that the
agreement had lapsed due to non-fulfilment of the suspensive conditions it was
subject to.

[16] In the result the appeal is dismissed with costs.
__________
F R Malan
Judge of Appeal

10 Lanificio Varam SA v Masurel Fils (Pty) Ltd  1952 (4) SA 655 (A) at 660H.
11 Cardoso v Tuckers Land and Development Corporation (Pty) Ltd 1981 (3) SA 54 (W) at 67B-C; Nel
v Cloete 1972 (2) SA 150 (A) at 165G-H.

APPEARANCES:

For  Appellant:

H S Havenga SC

J Roux

Instructed by:

Serfontein, Viljoen & Swart

Brooklyn, Pretoria

McIntyre & Van der Post

Bloemfontein

For  Respondent:

J A Motepe

Instructed by:

De Swardt Vögel Myambo

Brooklyn, Pretoria

Symington & De Kok

Bloemfontein