THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT

Reportable
Case No: 32/2016

In the matter between:

NUANCE INVESTMENTS (PTY) LTD

APPELLANT

and

MAGHILDA INVESTMENTS (PTY) LTD

FIRST RESPONDENT

JONATHAN BRUCE SANDLER NO

SECOND RESPONDENT

GEOFFREY ALAN WEST NO

THIRD RESPONDENT

CHRISTOPHER HARDY BOULE NO

FOURTH RESPONDENT

REGISTRAR OF DEEDS

FIRTH RESPONDENT

CENTURUS (PTY) LTD

SIXTH RESPONDENT

INVESTEC BANK LIMITED

SEVENTH RESPONDENT

Neutral Citation: Nuance Investments v Maghilda Investments & others (189/2016)
[2016] ZASCA 190 (1 December 2016)

Coram: Tshiqi, Seriti, Willis, Van Der Merwe JJA and Nichols AJA

Heard:
2 November 2016

Delivered:
1 December 2016

Summary: Prescription : No evidence that the appellant knew or could by the
exercise of reasonable care, have acquired knowledge of the facts giving rise to the
invalidity of the sale agreement before the effluxion of the three year period of
prescription : Counterclaim : the individual registrations and transfers of ownership in
the three individual portions of land with their own cadastral descriptions were
effected by separate real agreements and were not prohibited by law.

___________________________________________________________________

ORDER

On appeal from: Gauteng Division of the High Court, Pretoria (Fourie J sitting as
court of first instance):
The appeal is upheld with costs including costs of two counsel.
The order of the court a quo is set aside and replaced with the following orders:
2.1 ‗It is declared that;
(a)
the purported sale agreement dated 21 November 2007 is null and void from
the outset with no legal force and effect;
(b)
the purported incidental development agreement dated 21 November 2007 is
null and void from the outset with no legal force and effect;
(c)
the purported lease agreement dated 15 January 2008 is null and void from the
outset with no legal force and effect;
The special plea of prescription raised by the First to Fourth Defendants is
dismissed:
Against the transfer of the Remaining Extent of Portion 6 of the Farm Elandsdrift
527 JQ to the First Defendant, free from any mortgage bond held by Investec
Bank Ltd, the First Defendant is ordered to pay an amount of R17, 343, 214 to

the Plaintiff; together with interest on the amount of R17, 343, 214 at the
prescribed rate of 9% per year calculated from the date of demand herein
(which is 23 June 2009) to the date of payment thereof;
Against the transfer of the Remaining Extent of Portion 4 of the Farm Elandsdrift
527 JQ and the Remaining Extent of Portion 39 of the Farm Elandsdrift 527 JQ
to the Second to Fourth Defendants jointly, free from any mortgage bond held
by Investec Bank Ltd, the Second to Fourth Defendants jointly are ordered to
pay an amount of R42, 656, 786 to the Plaintiff; together with interest on the
amount of R42, 656, 786 at the prescribed rate of 9% per year calculated from
23 June 2009 to the dated of payment thereof.
The counter-claim of the First to Fourth Defendants is dismissed:
6.1 The First Defendant and the Second to Fourth Defendants, jointly in their
capacities as trustees of the Sanjont Trust, are ordered to pay the costs hereof
jointly and severally, the First Defendant paying the Second to Fourth
Defendants to be absolved and the Second to Fourth Defendants jointly paying
the First Defendant to be absolved, with such costs to include the costs of two
counsel.‘
___________________________________________________________________
JUDGMENT

Tshiqi JA (Seriti, Van Der Merwe JJA and Nichols AJA concurring)

[1] I have read the dissenting judgment of Willis JA and regret that I cannot agree
with him that the appellant, Nuance Investments (Pty) Ltd (Nuance) could, by the
exercise of reasonable care, have acquired knowledge of the invalidity of the
agreement well before the effluxion of the three year period of prescription. I also do
not agree that Plan Practice, a firm of town planners which had initially acted on
behalf of Maghilda Investments (Pty) Ltd (Maghilda) and Sanjont Trust but which,

after the conclusion of the agreement subsequently acted for Nuance, must have
known that the necessary consent was not obtained. Unlike Willis JA, I hold the view
that the correspondence between the parties subsequent to the transfer shows that
they were unaware that the relevant ministerial consent for the sale in terms of s 3(e)
of the Subdivision of Agricultural Land Act 70 of 1970 (the Subdivision Act) had not
been obtained. To my mind the correspondence only shows that the parties
concerned themselves about the further subdivisions of the land, and not ministerial
consent for the sale. For the reasons that follow, I hold the view that all the parties to
the sale agreement thought that the agreement was valid and that nothing could
have alerted Nuance to the fact that the required written ministerial consent had not
been obtained before the agreement was concluded. I also find that the respondents
have failed to prove that the claim has prescribed.

[2] Nuance was the plaintiff, in the court a quo and the first respondent, Maghilda,
together with the second to fourth respondents (the trustees of the Sanjont Trust)
(Sanjont) were the defendants in an action by Nuance arising out of the following
three agreements, which were all part of one overall scheme, and concluded in
pursuit of a proposed development of agricultural land:
a)
A written sale agreement entered into on 21 November 2007 in terms of which
Nuance purchased five portions of the farm Elandsdrift 527 JQ from Maghilda
and Sanjont (the sale agreement);
b)
A developmental agreement also entered into on 21 November 2007 between
Maghilda, Sanjont, Nuance and the sixth respondent, Centurus (Pty) Ltd
(Centurus) in terms of which it was agreed that the proposed development
would be undertaken by Nuance and a certain development structure of the
land was agreed upon (the incidental development agreement); and
c)
A long-term lease agreement entered into around 15 January 2008 between
Nuance and Maghilda (the lease agreement).

[3] In compliance with the terms of the agreements Nuance paid an amount of
R60 million to Maghilda and Sanjont. On 13 May 2008, three of the portions were
transferred to and registered in the Deeds Registry in the name of Nuance.
Simultaneously with the transfers, mortgage bonds in favour of Investec Bank and
Maghilda and Sanjont were registered. It is common cause that there was no

compliance with the provisions of s 3 of the Subdivision Act, before the sale and
lease agreements were concluded in that the written ministerial consent prescribed in
subsecs 3(d) and (e) had not been obtained. Such ministerial consent was necessary
because two portions of the land were yet to be subdivided. The three portions that
were transferred, however, had historically been subdivided and were thus three
individual portions with their own cadastral descriptions and no ministerial consent
would have been required if the agreement concerned only those three portions. This
distinction is irrelevant for the purposes of prescription but is determinative of the
counterclaim.

[4] On 29 May 2009,  Maghilda and Sanjont‘s legal representatives addressed a
letter to Nuance alleging that Nuance had breached the agreements in several
respects and demanded that Nuance should remedy the respective breaches within
30 days after the date of the notice. In response, Nuance sent a letter dated 23 June
2009 recording inter alia, the amounts it had already paid in terms of the sale
agreement and in consideration for the transfer of the properties to Nuance. It noted
that only three of the five properties had already been transferred and that a second
bond had been registered over the transferred properties for the balance of the
purchase price, even though two properties still had to be transferred. It also stated:
‗3. It appears from the agreement of sale that these two properties (to be subdivided portions
of portion 46 and 5 of Elandsdrift 527 JQ respectively) were at the time of conclusion of the
agreement, and in fact still are, portions of agricultural land and subject to the provisions of
[the Subdivision Act]‘.
4. As you are aware any agreement of sale of a portion of agricultural land entered into prior
to having obtained the Minister of Agriculture‘s consent for such subdivision, is void.
5. It was at all times contemplated by the parties that the sale of the properties would be one
indivisible transaction . . .
6. Although it is attempted in clause 41 of the agreement to provide for all transactions to be
severable from the others, it should be clear that this was due to a common mistake of the
parties, as such provision would inter alia render impossible the method of payment of the
balance of the purchase price of the already transferred properties.

7. We are respectfully of the opinion that the agreement as a whole is therefore invalid ab
initio, and that restitution should take place. Our client hereby tenders re-transfer of the
transferred properties to your client upon repayment of the amount of R60 000 000.
8. With reference then to your letter of demand of 29 May 2009, it follows that should the sale
agreement be void ab intio, the ―further agreement‖ would also not be applicable, as it was
(in clause 3 thereof) suspensive upon the conclusion of the sale agreement . . . .‘
The letter further recorded that the lease agreement was also void on the basis that it
‗relate[d] to a subdivided portion of agricultural land‘ and that the ‗Minister of
Agriculture ha[d] not granted its consent to such lease‘.

[5] Subsequently, on 19 March 2012, Nuance issued summons against the first to
the seventh respondents in the North Gauteng High Court, Pretoria claiming
repayment of the amounts paid on the basis that the sale, lease and incidental
development agreements were null and void from the outset, being in breach of s 3
of the Subdivision Act, alternatively that the sale agreement was invalid as it was in
breach of the Alienation of Land Act 68 of 1981(the Alienation of Land Act). The
action was subsequently withdrawn against the fourth and fifth respondents. In their
plea, Maghilda and Sanjont averred that the sale agreement was both illegal and
invalid, and simultaneously raised a special plea of prescription in terms of s 11(d)
read with s 12(3) of the Prescription Act 68 of 1969 (the Prescription Act) alleging the
following:
‗Prescription in respect of any of the actions by Nuance … based on the illegality or voidness
of the sale agreement, incidental development agreement and … [the] lease agreement
commenced running on the dates of such illegality and voidness, ie 21 November 2007 (in
the case of the sale agreement and incidental development agreement) and 15 January
2008 (in the case of the lease agreement).‘

[6] They alleged that any action based on the voidness and the illegality of the
sale agreement and the incidental development agreement ought to have been
brought by no later than 20 November 2010, and that in respect of the lease
agreement, by no later than 14 January 2011. In the alternative, they alleged that in
the event that the court found that prescription arose when the payments were made,
ie on 13 May 2008, then the action ought to have been instituted by no later than 12
May 2011. In the further alternative it was pleaded that prescription commenced on a

date after 13 May 2008. Simultaneously they also filed a counterclaim alleging that by
virtue of the fact that no legal consequences flowed from the void sale agreement,
they remained owners of the portions of land already transferred and the Register of
Deeds fell to be rectified.

[7] The matter proceeded before Fourie J, who upheld the plea of prescription
and dismissed Nuance‘s claim for repayment. He also upheld the counterclaim and
ordered rectification of the Deeds of Transfer. The effect of his order was that
Maghilda and Sanjont would retain the amount of R60 million and that the land
should also be re-registered in its name.

[8] It was accepted by the parties during the trial that the defendants (Maghilda
and Sanjont) bore the onus to prove that the claim had prescribed. To this end the
evidence of the second respondent, Mr Jonathan Bruce Sandler was led. Mr Sandler
was one of Maghilda‘s directors at the time the agreement was concluded and took
part in the negotiations between the parties prior to, and after the agreement was
concluded. No other witnesses were called and Nuance closed its case without
calling any witnesses.

[9] Mr Sandler testified about the discussions that had taken place during the
several meetings held by the parties and provided insight into some of the
correspondence that was exchanged between the parties, as well as letters
exchanged with the Department of Agriculture. The gist of Sandler‘s evidence was
that during the negotiations, everyone who was involved in the project knew that they
were dealing with agricultural land. According to him they were all experienced in
property sales and development and therefore Nuance‘s representatives must have
known that ministerial consent for subdivision was necessary. This, he stated, was
because ‗they had an obligation to do whatever they needed to do, to get the
requisite permissions to do the development‘. He however conceded that there was
never any discussion concerning authorisation, consent, or approval or about the
provisions of the Subdivision Act. He also stated:
‗[Mr Oosthuizen]: So when you signed this agreement on 21 November 2007, you believed it
to be a valid and binding agreement.

[Mr Sandler]: We all did, M‘Lord. A large amount of money was transacted.‘

[10] During his evidence, Mr Sandler was also referred to the following
correspondence. The first is a letter dated 5 May 2009 written by Nuance‘s attorneys
to the Department of Agriculture. It stated:
‗REMAINING EXTENT 5 OF THE FARM ELANDSDRIFT NO. 527 JQ. GAUTENG
PROVINCE
We refer to the discussions between Lebo from our offices and … Mr Makhubela from your
offices and confirm that we need the Department‘s confirmation in writing that the
abovementioned property does not fall under [the Subdivision Act].‘
The department responded on 9 June 2009 and said:
‗According to my records the above-mentioned land, the farm Elandsdrift No. 527 J.Q is still
Agricultural Land in terms of the [Subdivision Act]. A formal application must be lodged for
the subdivision thereof.‘

[11] Mr Sandler was further referred to earlier correspondence between Plan
Practice, Nuances town planners and representatives, and the department. This
correspondence similarly raised questions concerning subdivision and did not deal at
all with ministerial consent required before an agreement concerning sale of
agricultural land may be concluded. He was also referred to the letter written by
Nuance‘s attorneys to the attorneys representing Maghilda and Sanjont on 23 June
2009. This letter made the allegation that the sale agreement was void for the first
time.

Prescription
[12] Section 12(3) of the Prescription Act 68 of 1969 provides:
‗A debt shall not be deemed to be due until the creditor has knowledge of the identity of the
debtor and of the facts from which the debt arises: Provided that a creditor shall be deemed
to have such knowledge if could have acquired it by exercising reasonable care.‘

[13] As mentioned, the onus of proving that Nuance‘s claim had prescribed by 19
March 2012 when it served summons, was on Maghilda and Sanjont (See Gericke v
Sack 1978 (1) SA 821 (A) at 828C. In order to meet the requirements of s 12(3) they
had to show the facts that Nuance was required to have knowledge before
prescription could commence running. This is so because the applicable period of
prescription is three years. They also had to prove that Nuance knew those facts
before the date on which prescription was alleged to have commenced running. (See
Links v Department of Health, Northern Province [2016] ZACC 10; 2016 (4) SA 414
(CC) para 24. The facts that must have been known are those that are material to the
debt.

[14] In terms of s 3 of the Subdivision Act there are seven different activities which
individually require ministerial consent in writing. (See section 3(1)(a) – (g)). The
knowledge at issue is confined to the entering of the lease agreement in respect of a
portion of agricultural land as envisaged in s 3(d) and the selling of a part of
agricultural land as envisaged in s 3(e) and does not relate to the other activities
contained in s 3. It is the duty of the owner of the land, wishing to lease or sell a
portion of agricultural land to obtain ministerial consent before concluding an
agreement. (See s 4 of the Subdivision Act). The facts that are material to the debt
and which Nuance must be held to have known or deemed to have known are that
Maghilda and Sanjont did not obtain the necessary ministerial consent in terms of
subsecs 3(d) and (e) before the agreements were concluded. It is not whether or not,
the parties knew that the land was classified as agricultural land or whether
ministerial consent is a requirement for subdivision of agricultural land.

[15] Mr Sandler‘s evidence did not shed any light on whether Nuance or its agents,
Plan Practice, had the subjective knowledge that Maghilda and Sanjont had not
obtained written consent from the Minister for the sale before the contract was
concluded. As stated above, his stance was that they ought to have known this
because they had vast experience in property sales and development and should
have known that they were dealing with agricultural land. This evidence however
does not suggest that they knew that ministerial consent for the sale had not been
obtained. Counsel for Nuance was prepared to accept that Nuance probably knew,
generally, that ministerial consent was required before the activities listed in s 3(a)–

(g) are undertaken and that it may be inferred from the correspondence exchanged
between the parties that the requisite consent for the subdivision of the land had not
yet been obtained. He however submitted that this was irrelevant as it did not relate
to knowledge that ministerial consent for the sale agreement had not been obtained. I
agree with this submission.

[16] There was no evidence at all that Nuance knew that Maghilda and Sanjoint
had failed to obtain the ministerial consent. Neither can such knowledge be inferred
from the fact that the parties had vast experience in property sales and development.
Such a conclusion would amount to sheer speculation. In Minister of Finance &
others v Gore NO 2007(1) SA 111 (SCA) it was stated:

‗[17] This Court has, in a series of decisions, emphasised that time begins to run against the
creditor when it has the minimum facts that are necessary to institute action.  The running of
prescription is not postponed until a creditor becomes aware of the full extent of its legal
rights, nor until the creditor has evidence that would enable it to prove a case ―comfortably‖.

[18] … Mere opinion or supposition is not enough: there must be justified, true belief. Belief,
on its own, is insufficient. Belief that happens to be true . . .  is also insufficient. For there to
be knowledge, the belief must be justified.

[19] It is well established in our law that:
(a) Knowledge is not confined to the mental state of awareness of facts that is produced by
personally witnessing or participating in events, or by being the direct recipient of first-hand
evidence about them.
(b) It extends to a conviction or belief that is engendered by or inferred from attendant
circumstances.
(c) On the other hand, mere suspicion not amounting to conviction or belief justifiably inferred
from attendant circumstances does not amount to knowledge.
It follows that belief that is without apparent warrant is not knowledge; nor is assertion and
unjustified suspicion, however passionately harboured; still less, is vehemently controverted
allegation or subjective conviction. ‗
(Footnotes omitted.)

[17] I must thus accept the contention by Nuance that until the lack of the
ministerial consent for the sale was mentioned for the first time in the letter dated 23
June 2009 from its attorneys, all the parties were under the impression that the
agreements were valid. I am fortified in this reasoning by the fact that in their letter
dated 29 May 2009, Maghilda and Sanjont placed Nuance on terms, alleging breach
of what they also perceived to be a valid contract. If Maghilda and Sanjoint thought
the agreement was valid, it is not clear to me on what basis I should find that Nuance
held a contrary view.

[18] There can be no reliance on the correspondence between Nuance, Plan
Practice and the Department of Agriculture as this correspondence only dealt with the
fact that the land was classified as agricultural land, and that consent was required
for its subdivision.

[19] The next question is whether Nuance could, by the exercise of reasonable
care, have known that the ministerial consent had not been obtained before the
agreements were signed. Reasonable care for the purposes of s 12(3) of the
Prescription Act is not measured by the objective standard of the hypothetical
reasonable or prudent person but by the more subjective standard of a reasonable
person with the creditor‘s characteristics. (See M M Loubser Extinctive Prescription
(1996) at 105-106.) Mr Sandler confirmed that all the parties believed that the
agreement was binding at the time it was signed. There was no evidence that
subsequent to this, there was anything or any incident that should have warned
Nuance that ministerial consent for the sale had not been obtained. It is to my mind
inconceivable that Nuance, and its team of experts, would proceed and focus on the
future implementation of a development for which they had expended R60 million
with knowledge or deemed knowledge that it may not have been above board. The
queries sent by Nuance and Plan Practice to the Department, concerning the
subdivision of the land suggest to me that they were careful and wished to ensure
that the project was above board.

[20] It must thus be concluded that there was also no deemed knowledge on their
part. Consequently the only probable conclusion is that the first time that the lack of

the ministerial consent came to their knowledge was around 23 June 2009, when
their attorney conveyed this to Maghilda and Sanjont‘s attorneys.

[21] Regarding the non-compliance with the Alienation of Land Act, the same
considerations apply. Sandler in his examination in chief suggested that the parties
intended the sketches, identifying certain areas of land as the objects of the sale
agreement, to be rough assessments or provisional sketches only. He however
continued and stated that the subdivisions were fairly identifiable and that these
sketches were last elements in terms of finalising the transaction. During cross
examination it became clear that the parties thought and believed that they had
sufficiently identified the areas of land in question and that they thought and believed
that they had a binding and valid sale agreement. In any event there is no evidence
to the effect that Nuance knew or could be deemed to have known that the scale,
configuration, description and detail on the sketches were such that it was not
possible to identify the property sold. The first occasion on which the parties would
probably detect the defect would have been after the approval of the development,
when it would have been necessary to re-transfer the relevant portions of land to
Maghilda and Sanjont.

The counterclaim
[22] The counterclaim was based on the proposition that ownership of the three
cadastral properties did not in law pass to Nuance, despite the registration of transfer
thereof to its name. As I will show herein below, ownership passes on registration if
there is a real agreement to do so, that is, an intention to transfer and receive
ownership. It is clear from the evidence that a real agreements existed in respect of
the three properties. What Maghilda and Sanjont had to show in order to succeed in
their counterclaim was that there was a defect in the real agreements.

[23] In Legator McKenna Inc & another v Shea & others [2008] ZASCA 144; 2010
(1) SA 35 (SCA), Mr Michael McKenna, an attorney in Legator McKenna Inc, an
incorporated firm of attorneys was appointed a curator bonis to the estate of Ms Clare
Shea, who, at the time was not able to conduct her affairs after she sustained injuries
as a result of a car accident. McKenna purported to sell her house in his capacity as

a curator bonis but concluded the sale agreement before he was issued with letters
of curatorship by the Master as required in terms of the Administration of Estates Act
66 of 1965 (the Administration of Estates Act). Ms Shea miraculously recovered from
the injuries and was again able to conduct her affairs. She sought an order to set
aside the sale and the return of her house on the basis that there was non-
compliance with the Administration of Estates Act. The purchasers, Mr and Mrs
Erskines claimed damages for the loss they would allegedly suffer through
McKenna‘s breach of an implied warranty that he was authorised to sell Ms Shea‘s
house. The trial court declared the contract of sale both illegal and void, and directed
the Registrar of Deeds to cancel the registration of transfer of the house to the
Erskines, against repayment of the purchase price by Ms Shea. This court held a
contrary view to that of the trial court concerning the legal status of the registration
and transfer process. It said:
‗[20] ….Should the transfer of the house to the Erskines be regarded as valid despite the
invalidity of the underlying sale which was the causa for the transfer? The [Erskines‘]
contention that it should, was rooted in the assumption that the abstract theory – as opposed
to the causal theory – of transfer has been adopted as part of our law. According to the
abstract theory the validity of the transfer of ownership is not dependent upon the validity of
the underlying transaction such as, in this case, the contract of sale. The causal theory, on
the other hand, requires a valid underlying legal transaction or iusta causa as a prerequisite
for the valid transfer of ownership. With regard to the transfer of movables our courts,
including this court, have long ago opted for the abstract theory in preference to the causal
theory.
[21] Some uncertainty remained, however, with regard to the transfer of immovable property.
In the High Courts that uncertainty has been eliminated in a number of recent decisions
where it was accepted that the abstract system applies to movables and immovables alike. ...
These decisions are supported by academic authors advancing well-reasoned arguments. …
In view of this body of authority I believe that the time has come for this court to add its
stamp of approval to the viewpoint that the abstract theory of transfer applies to immovable
property as well.
[22] In accordance with the abstract theory the requirements for the passing of ownership are
twofold, namely the delivery which in the case of immovable property, is effected by
registration of transfer in the deeds office - coupled with a so-called real agreement or
―saaklike ooreenkoms‖. The essential elements of the real agreement are an intention on the

part of the transferor to transfer ownership and the intention of the transferee to become the
owner of the property… Broadly stated, the principles applicable to agreements in general
also apply to real agreements. Although the abstract theory does not require a valid
underlying contract, eg sale, ownership will not pass - despite registration of transfer - if there
is a defect in the real agreement.
Regarding the facts of the matter the court said:
‗[23] The court a quo found that in this case ownership did not pass because of two defects
in the real agreement. The first defect, so the court held, was that McKenna‘s intention to
transfer ownership had been motivated by the mistaken belief that he had entered into a
valid agreement of sale… In this light, so the court held, it cannot be inferred that McKenna
intended to transfer the property even if the sale agreement turned out to be null and void. In
the same way as the court a quo, I also believe that McKenna – as well as the Erskines, for
that matter – probably thought that the sale agreement … was valid and enforceable. And,
albeit for different reasons, I also share the court a quo‘s view that the parties were mistaken
in that belief. But I do not agree that a mistake of that kind could in itself render the real
agreement void. If that were the position, we would effectively revert to the causal theory of
transfer which we have jettisoned in favour of the abstract theory. I say that because I
believe that very few parties (if any) to real agreements would deliberately give and receive
transfer pursuant to an underlying transaction which, to their knowledge, is void. If a
mistaken belief of this kind - whether unilateral or common were therefore to render the real
agreement invalid, there would not be much left of the abstract theory of transfer.‘

[24] For those reasons the court concluded that the house was validly transferred
to the Erskines and that the court a quo had erred in upholding Ms Shea‘s claim for
the restoration of her property.

[25] The three portions of land transferred were each a separate unit of land with
its own cadastral description. Sections 3(d) of the Act prohibits a lease in respect of a
portion of agricultural land without ministerial consent and s 3(e) prohibits sale of a
portion of agricultural land, whether surveyed or not, without the requisite consent.
The phrase ‗agricultural land‘ refers to a separate unit of land with its own cadastral
description as registered in the Deeds Registry. In Adlem & another  v Arlow [2012]
ZASCA 164; 2013 (3) SA 1 (SCA) paras 13-14, the phrase ‗portion‘ in ss 3(d) and (e)

of the Act was interpreted as meaning a part of property as opposed to the whole
property registered in the Deeds Registry. This court held that s 3(d) was not
applicable to the lease in question in that matter, because the whole of the property
owned by the respondent was the subject of the lease agreement. None of the three
portions of land transferred is a portion of agricultural land as envisaged in s 3. It
follows that the individual registrations and transfers of ownership in the three
individual portions of land with their own cadastral descriptions were effected by
separate real agreements and were not prohibited by law.
I make the following order:
The appeal is upheld with costs including costs of two counsel.
The order of the court a quo is set aside and replaced with the following orders:
2.1 ‗It is declared that;
(a)
the purported sale agreement dated 21 November 2007 is null and void from
the outset with no legal force and effect;
(b)
the purported incidental development agreement dated 21 November 2007 is
null and void from the outset with no legal force and effect;
(c)
the purported lease agreement dated 15 January 2008 is null and void from the
outset with no legal force and effect;
The special plea of prescription raised by the First to Fourth Defendants is
dismissed:
Against the transfer of the Remaining Extent of Portion 6 of the Farm Elandsdrift
527 JQ to the First Defendant, free from any mortgage bond held by Investec
Bank Ltd, the First Defendant is ordered to pay an amount of R17, 343, 214 to
the Plaintiff; together with interest on the amount of R17, 343, 214 at the
prescribed rate of 9% per year calculated from the date of demand herein
(which is 23 June 2009) to the date of payment thereof;

Against the transfer of the Remaining Extent of Portion 4 of the Farm Elandsdrift
527 JQ and the Remaining Extent of Portion 39 of the Farm Elandsdrift 527 JQ
to the Second to Fourth Defendants jointly, free from any mortgage bond held
by Investec Bank Ltd, the Second to Fourth Defendants jointly are ordered to
pay an amount of R42, 656, 786 to the Plaintiff; together with interest on the
amount of R42, 656, 786 at the prescribed rate of 9% per year calculated from
23 June 2009 to the dated of payment thereof.
The counter-claim of the First to Fourth Defendants is dismissed:
6.1 The First Defendant and the Second to Fourth Defendants, jointly in their
capacities as trustees of the Sanjont Trust, are ordered to pay the costs hereof
jointly and severally, the First Defendant paying the Second to Fourth
Defendants to be absolved and the Second to Fourth Defendants jointly paying
the First Defendant to be absolved, with such costs to include the costs of two
counsel.‘

___________________
ZLL Tshiqi
Judge of Appeal

Judge N P Willis

[26] This case concerns, primarily, the legal implications of a written agreement
that included the sale of both as yet undivided portions of agricultural land as well as
other transactions relating to portions of land that had, historically, been subdivided
as so-called ‗cadastral units‘. After this agreement had been entered into, the transfer
of certain cadastral units of agricultural land to the appellant had taken place. There
was no transfer of any of the undivided portions to which the agreement refers. At
issue is an intricate web of tangled questions of law, including those affecting the

question of prescription, where there has been a contravention of s 3(1)(e)(i) of the
Subdivision of Agricultural Land Act 70 of 1970 (SALA) inasmuch as the prior written
consent of the Minister of Agriculture (the Minister) had not been obtained. These
questions of law are not straightforward.

[27] The appellant, Nuance Investments (Pty) Ltd (Nuance), was the plaintiff in the
in the court a quo.  It claimed the repayment of moneys (‗the purchase consideration‘)
against a retransfer by it of the remaining part of the remaining extent of Portion 6 (a
part of Portion 1) and the remaining extent of Portion 4 (a part of Portion 1) of the
farm Elandsdrift 527 JQ. The aggregate of the amount claimed is in excess of R60
million. Relying on the nullity of the transaction, Nuance contended that it was entitled
to the relief claimed in terms of an enrichment action (whether this was the condictio
ob turpem vel iniustam causam or the condictio indebiti). In the alternative, on the
supposition that the transfer of land could not be reversed, Nuance relied on the rei
vindicatio to seek the eviction of Maghilda Investments (Pty) Ltd (Maghilda), the first
defendant in the court a quo and first respondent in the present appeal, from those
portions of the land that it occupied, being the remaining extent of Portion 39 and
Portion 51 of the farm Elandsdrift 527JQ

[28] The first to fourth defendants in the court a quo not only resisted the claim for
the repayment of the money in a special plea of prescription but also brought a
counterclaim that a declaratory order be made that they remained the owners of the
properties in question and that the Registrar of Deeds (the fifth respondent) cancel
the transfers conferring title of the properties on Nuance. Moreover, the first to fourth
defendants in the court a quo sought an order cancelling the mortgage bonds
registered over the properties, including those in favour of Investec Bank Limited (the
seventh defendant a quo).  In colloquial terms, the first to fourth defendants wanted
to ‗have their cake and eat it‘. They succeeded. The Gauteng Division of the High
Court, Pretoria (D S Fourie J) dismissed the plaintiff, Nuance‘s claim and upheld the
first to fourth respondent‘s counterclaim. The appeal is with the leave of the court a
quo. Investec, the seventh defendant a quo, initially entered an appearance to
defend the action but later filed a notice of withdrawal.

The relevant facts
[29] On 21 November 2007, Nuance, Maghilda and the trustees of the Sanjont
Trust (the second, third and fourth respondents) (the Sanjont Trust) entered into a
single, joint, comprehensive written agreement in terms of which:
(a)
Maghilda sold the remaining Extent of Portion 6 (a part of Portion1) of the
Farm Elandsdrift No. 527, Registration Division JQ, Gauteng Province,
measuring 42,1878 hectares (Portion 6) to Nuance for R23 909 536;
(b)
the Sanjont Trust sold to Nuance the remaining Extent of Portion 4 (a part of
Portion 1) of the Farm Elandsdrift No. 527, Registration Division JQ, Gauteng
Province, measuring 22,5734 hectares (Portion 4) for R30 702 018;
(c)
Maghilda sold to Nuance the remaining Extent of Portion 46 (a part of Portion
7) of the Farm Elandsdrift No. 527, Registration Division JQ, Gauteng
Province, measuring 17,3355 hectares (Portion 46) for R6 113 234; and
(d)
Maghilda sold to Nuance the remaining Extent of Portion 5 (a part of Portion 1)
of the Farm Elandsdrift No. 527, Registration Division JQ, Gauteng Province,
measuring 21,53 hectares (Portion 5) for R29 248 427.
All these properties are in the area commonly known as Lanseria, which in recent
decades has undergone a boom in development. The second respondent, Mr
Jonathan Sandler, is a director of Maghilda.

[30]  In addition, this same agreement of 21 November 2007 provided for the sale
by the Sanjont Trust of its ‗hospitality business‘ to Nuance for R42 656 786. The
‗hospitality business‘ comprised the remaining Extent of Portion 39 of the Farm
Elandsdrift No. 527 Registration Division JQ, Gauteng Province, measuring 42,1878
hectares (Portion 39), together with a five year lease agreement between the Sanjont
Trust as lessor and Maghilda as lessee for R30 702 018. On 15 January 2008,
Nuance and Maghilda entered into a separate agreement to develop Portion 39 and
to extend Maghilda‘s rights as lessee for a period of five years from the registration of
the transfer to Nuance of Portion 39, with yet a further option for Maghilda to extend
for a further five years thereafter. In the trial action, Nuance challenged the validity of
this lease agreement contending that inasmuch as the period of the lease was for ten
years or more and had not been approved by the Minister, it contravened the

provisions of s 3(d) of SALA. With this proposition Maghilda and the Sanjont Trust
agreed.

[31]  The sale in respect of Portion 39 was subject to ‗an excluded portion‘ thereof
being retransferred and that portion was reflected in a sketch plan and described
therein as ‗figure A‘.

[32] In the agreement, Nuance is defined as ‗the purchaser‘. In that agreement,
clause 34.1 specifically provides that the purchaser shall, at its own cost do ‗all such
things as are necessary to endeavour to procure the excluded part of Portion 39, the
excluded part of Portions 46, 5 and Portion 51 become registrable‘.

[33] Clause 28.2 of the agreement provides that:
‗Transfer of the excluded portion of 39 by the Purchaser back to the Trust shall be effected
by the Trust‘s attorneys on or as soon as possible after the land is registerable, and at the
cost of the Trust.‘

[34] Clause 41 of the agreement expressly provides as follows:
‗SEVERABILITY
41.1
Notwithstanding the form of this agreement as a single document, this agreement,
will be severable with respect to each transaction as contemplated in Part 2 to Part 7 (both
inclusive).
41.2
Any provision which is or may become illegal, invalid or unenforceable in any
jurisdiction affected by this agreement shall, as to such jurisdiction, be ineffective to the
extent of such prohibition or unenforceability and shall be treated pro non scripto and
severed from the balance of this agreement, without invalidating the remaining provisions of
this agreement or affecting the validity or enforceability of such provision in any other
jurisdiction.‘
Notwithstanding the existence of this severability clause, the contending parties all
agreed in the pleadings that the entire agreement (and not only a few transactions
contemplated therein) was invalid.  I am not sure that this is correct but, in the end, it
makes no difference to the outcome of the case.

[35]  Moreover, on 21 November 2007, Nuance, Maghilda, the Sanjont Trust and
Centurus (Pty) Ltd (Centurus) (the sixth defendant in the court a quo and sixth

respondent in the present appeal) entered into a quadrate ‗incidental development
agreement‘ in terms of which the properties in question would be developed by
Nuance with Centurus guaranteeing that it would administer and control its
subsidiary, Nuance. Nuance claimed that, as the underlying substratum of its
agreement was invalid, so too was the development agreement itself. Centurus has
agreed to abide the decision of this court. Maghilda and Sanjont Trust do not take
issue with Nuance in this regard.

[36] The remaining Extent of Portion 6 (a part of Portion 1), the remaining Extent of
Portion 4 (a part of Portion 1) and the remaining Extent of Portion 39 were all
transferred to Nuance by the Registrar of Deeds, Pretoria on 13 May 2008. In each
case, the deed of transfer makes reference to the sale agreement of 21 November
2007. Simultaneously with the registration of transfer, the mortgage bonds to which
reference has been made were also registered. These transfers did not, however,
give effect to the anticipated further subdivisions to which reference was made in the
agreement. The transfers were all of subdivisions that had been approved
historically, prior to the agreement having come into existence.

[37]   No evidence was led on behalf of Nuance. Mr Sandler, the second
respondent testified. The thrust of his evidence was to the effect that, at all relevant
times, everyone was aware of the relevant provisions of SALA.

[38]   A letter from Mr Naidu, the financial director of Centurus to Mr Sandler makes
it clear that in October 2007, the two of them were well aware of the fact that the
written approval of a subdivision of the properties in question was required. This
aspect was confirmed by Mr Sandler in his evidence in the trial. Part of his evidence
was that he was an honest, experienced businessman who would have had no
reason, in his dealings with Nuance, to disguise the truth about the requirement of
ministerial consent and that, on the contrary this was openly discussed with them
during their negotiations. He may well have been unaware, at that time, that the
absence of ministerial consent to a subdivision would have invalidated any
agreement of sale of that subdivision. I shall deal with this aspect later.

[39] Indeed, the agreement itself defines ‗registrable‘ as meaning:

‗capable of registration in the Deeds Office once approval by all competent authorities has
been obtained whether in terms of a land development application in terms of the DFA
[Development Facilitation Act 67 of 1995] or a subdivision application in terms of any other
law.‘

[40] In a letter to the Department of Agriculture written on 13 May 2008 – the very
day upon which the properties had been transferred – Plan Practice, town planners
employed as such by Nuance, described itself as Nuance‘s ‗authorised agent‘. Plan
Practice were experts in the field of property development. They had originally acted
as consultants to Maghilda and the Sanjont Trust in regard to the development of the
properties in question and were ‗taken over‘ by Nuance. On 20 January 2009, Ms
Jeanne Fourie, writing to the  Department of Agriculture, on behalf of Plan Practice
wrote to enquire whether the farm Elandsdrift was ‗excluded from the provisions‘ of
SALA.

[41] Even if Nuance had been unaware, on the date of the agreement of 21
November 2007, that the sales in question would have required written ministerial
approval, Plan Practice must have been aware of this requirement by no later than 28
July 2008, when it received confirmation thereof in a letter from the Department of
Agriculture.  The summons was served on 19 March 2012 – more than three years
after Plan Practice became aware of this requirement of ministerial consent in terms
of ss 3(d) and 3(e)(i) of (SALA).

[42] A letter written on behalf of the Minister to Nuance‘s attorneys in June 2009,
read together with a letter sent by them to Maghilda and the Sanjont Trust‘s attorneys
in the same month, makes it clear that the invalidity of the sale of the undivided
portions without the prior approval of the Minister was known to Nuance at that time.
About this there is no dispute. Insofar as prescription is concerned, the critical issue
is, obviously, when did Nuance become aware of this fact – or at what point in time
may this knowledge be imputed to it?

The parameters of the issues in question
(a) The significance of the fact that the land is ‘agricultural’

[43] The definition of ‗agricultural land‘ in SALA is widely cast but for most practical
purposes means any land, except land situated in the area of jurisdiction of
municipalities. There is no dispute between the parties – and none seems possible –
that all the portions of land affected by the relevant agreement are ‗agricultural land‘
as defined in SALA.
[44]  The relevant part of s 3(e)(i) of SALA provides that:
‗[N]o portion of agricultural land, whether surveyed or not, and whether there is any building
thereon or not, shall be sold or advertised for sale . . .  unless the Minister [of Agriculture] has
consented in writing.‘
In similar vein, s 3(d) provides that:
‗[N]o lease in respect of a portion of agricultural land of which the period is 10 years or
longer, or is the natural life of the lessee or any other person mentioned in the lease, or
which is renewable from time to time at the will of the lessee, either by the continuation of the
original lease or by entering into a new lease, indefinitely or for periods which together with
the first period of the lease amount in all to not less than 10 years, shall be entered into…
unless the Minister [of Agriculture] has consented in writing.‘

(b) The special plea
[45] A special plea is one that raises a defence that does not dispute the
allegations of a plaintiff in either its declaration or particulars of claim but is
independent and separate therefrom.1 At first blush, it may therefore seem logical
first to consider the defendants‘ special plea of prescription. There is, however, no
requirement in our law that a special plea should be considered first or even
separately from any other defence.2

[46] In Schierhout v Minister of Justice 1926 AD 99, Innes CJ, delivering the
unanimous judgment of this court held that: ‗It is a fundamental principle of our law

1  In Brown v Vlok 1925  AD 56 at 58, Innes CJ said that a special plea ‗is one which, apart from the
merits, raises some special defence, not apparent ex facie the declaration – for in that case it would be
taken by way of exception – which either destroys or postpones the operation of a cause of action.‘ In
the past, a ‗special plea‘ was more commonly known either as a ‗plea in bar‘ or a ‗plea in abatement‘
respectively. See for example Glennie, Egan & Sikkel v Du Toit’s Kloof Development Co (Pty) Ltd
1953 (2) SA 85 (C) at 88; Jaffe & Co (Pty) Ltd v Bocchi & another 1961 (4) SA 358 (T) at 371A-B;
Viljoen v Federated Trust Ltd 1971 (1) SA 750 (O) at 759H-760D; Avex Air (Pty) Ltd v Borough of
Vryheid (2) SA 1972 (4) SA (N) at 678A-B as contrasted with Brown v Vlok (above). See also
Mineworkers Investment Co (Pty) Ltd v Modibane 2002 (6) SA 512 (W).
2  See for example David Beckett Construction (Pty) Ltd v Bristow 1987 (3) SA 275 (W) at 277J-282D.

that a thing done contrary to the direct prohibition of the law is void and of no effect.‘3
The principle is trite. Counsel for both sides argued before us that this principle
operated in their favour. Reliance was also placed on Cool Ideas 1186 CC v Hubbard
& another [2014] ZACC 16; 2014 (4) S 474 (CC), to argue that the nullity that arises
from an unlawful juristic act, transcends any claim of prescription. In that case, it was
said that: ‗It cannot be expected of a court of law in such circumstances to disregard
a clear statutory prohibition – that would be inimical to the principle of legality and the
rule of law.‘4 I shall therefore first deal with this argument, that Maghilda and the
Sanjont Trust‘s defence of prescription was trumped by the allegedly unlawful
transfers of the properties.

No prior written consent by the Minister – the question of unlawfulness
[47]  I turn now to turn to the question of ministerial consent. The transfer of an
immovable property is not necessarily final, in the sense of not being irreversible. For
example, this court has made it clear that, where an underlying sale agreement was
tainted by fraud, the registration of transfer did not divest the seller of ownership of
the immovable property in question.5

[48] Nuance is correct, however, in its alternative argument before us that SALA
was not aimed at prohibiting the sale and transfer of cadastral units of land or, put
differently, agricultural land, having its own cadastral description, and that had
previously been registered in the office of the Registrar of Deeds as such.6 What was
prohibited was the sale of undivided portions or ‗parts‘ of agricultural land, whether
conditional or not and unless and until the subdivision had actually been approved by
the Minister.7

3 At 109.
4 Paragraph 55.
5 See Preller & others v Jordaan 1956 (1) SA 483 (A) at 496; Meintjes NO v Coetzer & another [2010]
ZASCA 32; 2010 (5) SA 186 (SCA) para 9; Gainsford & others NNO v Tiffski Property Investments
(Pty) Ltd & others [2012] ZASCA ; 2012 (3) SA 35 (SCA) paras 10, 11 and 50; and Quartermark
Investments (Pty) Ltd v Mkhwanazi & another [2013] ZASCA 150; 2014 (3) SA 96 (SCA) para 27.
6  The meaning of ‗cadastral‘ was described in National Director of Public Prosecutions v Mohunram &
others [2006] ZASCA 12; 2006 (1) SACR 554 (SCA) para 4, as ‗the property as described in the deeds
office. See also Dlamini & another v Joosten & others [2005] ZASCA 138; 2006 (3) SA 342 (SCA)
paras 10 to 17, where the terms is used.
7 Geue & another v Van der Lith & another [2003] ZASCA 118; 2004 (3) SA 333 (SCA) para 15 at
344A-C. See also Adlem & another v Arlow [2012] ZASCA 164; 2013 (3) SA 1 (SCA) paras 12 and 13.

[49] Commonly in South Africa, with the demands of urbanisation, farms have had
to, over time, be subdivided into portions. These historical subdivisions into portions
are so-called cadastral units. SALA does not prohibit the sale of agricultural land that
had, prior to that agreement, been subdivided into so-called ‗cadastral units‘.
Otherwise, the Minister would have to approve the sale of every farm in the country.
Mr Oosthuizen, who appeared for Nuance conceded that such an absurd result could
not have been intended. After all,  Tuckers Land and Development  Corporation (Pty)
Ltd v Wasserman 1984 (2) SA 157 (T) at 160E-F and 162B-H, makes it clear that the
purpose of  SALA is not so much to restrict either freedom of contract or testation or
even to make of the Minister a purchaser‘s nanny. SALA is designed to ensure that
agricultural land is not, through uncontrolled subdivision, rendered economically
unviable for the purpose of farming. Ironically, the reason for which agreements of
the kind in question are entered into, namely the conversion of agricultural land to
uses other than farming, as a result of rapid urbanisation, was not the ‗mischief‘
against which SALA was directed.8 That cadastral units fall outside of the scope of ss
3(d) and 3(e)(i) and (ii) of SALA was made clear by this court in Adlem & another v
Arlow [2012] ZASCA 164; 2013 (3) SA 1 (SCA), when it was stated that (paras 12
and 13):
‗The Act does not confer on the Minister the power to control the use of agricultural land
absent a contemplated subdivision, whether in the literal sense as envisaged in s 3(a) and
(e)(i), or the extended sense as envisaged in s 3(d) (a lease for 10 years or longer) and
3(e)(ii) (a right for 10 years or longer).
The correct interpretation in my view is that advanced on behalf of the appellants,
namely that the word ―portion‖ in s 3(d) and in s 3(e)(i) and (ii) means a piece of land that
forms part of a property registered in the Deeds Registry; and, on the authorities I have
quoted, the prohibition is aimed at preventing physical fragmentation of the property, and the
use of part of the property under a long lease — as well as, I would add, the granting of a
right for an extended period in respect of the property. In other words, the word ―portion‖ in,
inter alia, s 3(d) must be interpreted as meaning a part of a property (as opposed to the
whole property) registered in the Deeds Registry, and not as having the meaning used in the
deeds registry to describe the whole property.‘

8 Tuckers Land and Development Corporation (Pty) Ltd v Wasserman 1984 (2) SA 157 (T) at 160D-
162H.

[50] Even
the
most
well-intentioned
legislation
may
have
unintended
consequences. Nevertheless, a sensible result in this case is facilitated by bearing in
mind the ‗mischief‘ that the Legislature had in mind, rather than adopting an
‗armchair‘ approach. Sight should also not be lost of the fact that the helter-skelter
transfiguration of agricultural land into urban settlements may also be a ‗mischief‘
requiring Ministerial control.

[51] Often, a proposal to convert agricultural land into an urban aggregation will
require considerable preparatory investment in, for example, surveying, research on
the provision of utilities such as water and electricity, town and regional planning, etc.
In the nature of things, it will more often be the proposed developer rather than the
farmer who has resources of this magnitude available. Understandably, a prospective
developer will be reluctant to commit funds for these purposes without the assurance
that, if the venture is approved at the level of government, it will have the right to
embark on the venture, rather than anyone else. This was an aspect that was
discussed with counsel during the course of argument. It is perhaps a matter that
needs carefully considered legislative review.

[52]  Whatever lacunae may exist in SALA, it is clear that it does not require the
Minister to approve the sale of portions of agricultural land for which approval had
previously been granted – namely, cadastral units such as those which were
transferred in the present case. The sale and transfers of the remaining Extent of
Portion 6 (a part of Portion 1) and the remaining Extent of Portion 4 (a part of Portion
1) were not unlawful. I am fortified in this view by the severability clause in the
agreement that each transaction was severable from the others and that the invalidity
of one transaction would not affect the validity of the others. As I have observed, the
fact that, on the pleadings it was common cause that the agreement was invalid is
perhaps surprising but as I hope will soon become clear, this is not dispositive of the
issue of the reversibility of the transfer of the properties in question.

[53] Any agreement for the sale of agricultural land concluded in contravention of s
3(e)(i) of SALA is null and void.9 The parties agree that this is so. The parties also
agreed that the lease agreement and the development agreement would, by parity of
reasoning, also be null and void. The parties even agreed that the sale agreement
did not comply with the formalities required by s 2(1) of the Alienation of Land Act 68
of 1981 inasmuch as the descriptions of Portions 39 and 46 were so defective that
they could not properly be identified. However, for reasons that follow, these aspects
are irrelevant to the determination of the issues.

[54] Insofar as the transfer of the remaining Extent of Portion 39 is concerned,
even if the agreement to retransfer some of it, to develop it and the sale of the
hospitality business were invalid – as the decisions of this court in Geue & another v
Van der Lith & another [2003] ZASCA 118; 2004 (3) SA 333 (SCA) and Four Arrows
Investments 68 (Pty) Ltd v Abigail Construction CC & another [2015] ZASCA 121;
2016 (1) SA 257 (SCA) paras 9 to 11 make clear – this does not necessarily affect
the validity of the ‗saaklike ooreenkoms‘ to transfer Portion 39 according to its
historical cadastral description.10  In Quartermark Investments (Pty) Ltd v Mkhwanazi
& another [2013] ZASCA 150; 2014 (3) SA 96 (SCA), this court, following the abstract
theory of transfer approved in Legator McKenna Inc & another v Shea & others
[2008] ZASCA 144; 2010 (1) SA 35 (SCA) paras 20 to 22,  emphasised that ‗a valid
underlying agreement to pass ownership, such as in this instance a contract of sale,
is not required [in order to pass  ownership].‘11 The transfers constitute separate real
agreements.12 This is underlined by the fact that clause 28.2, which specifically
envisages first a transfer of the excluded part of Portion 39 to Nuance and then a
subsequent ‗transfer back‘ to the Sanjont Trust.

[55] If, as counsel for Maghilda and the Sanjont Trust accept, the abstract theory
applies in regard to the transfer of immovable property, then surely the correct

9 See Geue & another v Van der Lith & another [2003] ZASCA 118; 2004 (3) SA 333 (SCA) para 15;
and Four Arrows Investments 68 (Pty) Ltd v Abigail Construction CC & another [2015] ZASCA 121;
2016 (1) SA 257 (SCA) paras 9 to 11.
10 See for example Legator McKenna Inc & another v Shea & others [2008] ZASCA 144; 2010 (1) SA
35 (SCA) paras 20 to 22; Quartermark Investments (Pty) Ltd v Mkhwanazi & another [2013] ZASCA
150; 2014 (3) SA 96 (SCA) paras 24 and 25.
11 Paragraph 26.
12 Legator McKenna Inc v Shea (above) paras 20 to 22.

question to ask is whether the transfer itself gives effect to that which is prohibited?
The answer to this question must surely be: No! None of the anticipated further
subdivisions agreed upon by the parties in the agreement were transferred. The
subdivisions that were transferred had been past, historical subdivisions, approved
prior to the parties entering into the agreement in question. The transfers in question
did not dissemble any illegality. What may matter is whether any of the transfers gave
effect to any unlawful agreement of sale.13

[56]  In summary, by reason of the fact that –
(a) SALA does not prohibit the sale and transfer of agricultural land according to its
existing or ‗historically approved‘ subdivision, ie of cadastral units; and
(b) the transfers were, in fact, of cadastral units;
the orders granted by the High Court in terms of the counterclaim were wrong and
the counterclaim ought to have been dismissed with costs.
This leads to the question of prescription.

Defence of prescription
Background and first principles relating to the invalidity of the agreement
[57]  If I understood Mr Oosthuizen, who appeared for Nuance, correctly, he
submitted that s 3(e)(i) of SALA meant that the Minister could approve a sale of a
portion of agricultural land, once he had approved the subdivision thereof. This is not
correct. The Minister cannot, ex post facto, validate or approve an invalid act. A plain
reading of the subsection is that the Minister must have approved the subdivision
before any sale of any portion resulting therefrom may be concluded. Geue v Van der
Lith (above) at 344A-C and Four Arrows Investments 68 (Pty) Ltd v Abigail
Construction CC (above) paras 9 to 11, both of which were decided in this court,
make this clear. In Four Arrows Investments, Swain JA observed that (para 10):
‗[T]he object of the legislation was not only to prohibit concluded sale agreements, but also
preliminary steps which may be a precursor to the conclusion of a prohibited agreement of
sale.‘
To my mind, it could hardly be plainer that the agreement, at least with regard to the
non-cadastral portions of agricultural land, was stillborn. It could not be revived,

13 See for example Gainsford & others NNO v Tiffski Property Investments (Pty) Ltd & others [2012]
ZASCA ; 2012 (3) SA 35 (SCA) para 38.

resuscitated or resurrected by the Minister bestowing his consent at some time after
the parties had conceived it.

Prescription in relation to the claim for the reversal of the transactions
[58] When it comes to the claim to reverse the transactions, the period of
prescription may be different from that which applies in Nuance alternative claim for
eviction. Logically, it seems sensible to deal with the claim in respect of the reversal
of the transactions prior to the alternative claim for eviction. In terms of s 11(d) read
with s 12(1) of the Prescription Act 68 of 1969 ordinary civil debts (described as ‗any
other debt‘) become prescribed three years from when they became ‗due‘ – in other
words, prescription commences ‗to run as soon as the debt is due‘. In terms of s
12(3) of the Prescription Act a debt shall not be deemed to be due until the creditor
has knowledge of (a) the identity of the debtor and (b) the facts from which the debt
arises.  Nuance, at all relevant times, had knowledge of the identity of both Maghilda
and the Sanjont Trust.

Prescription and ignorantia juris
[59] Section 12(3) of the Prescription Act also provides that ‗a creditor shall be
deemed to have such knowledge [of the facts] if he could have acquired it by
exercising reasonable care‘. I shall assume, in favour of Nuance, that the invalidity of
the agreement from the moment it was entered into, by reason of the Minister not
having consented in writing to the subdivisions referred to in the agreement, was the
relevant fact in this case, rather that its being a discrete question of law.  The
question that then arises is this: could Nuance, by the exercise of reasonable care,
have become aware of this fact before the debt as it were prescribed?

[60] I am mindful of the fact that I may have been excessively generous towards
Nuance in making the assumption that I have.  A series of decisions of both this court
and the Constitutional Court have made it clear that, when it comes to prescription, a
clear distinction exists between the necessary factual ingredients that found a cause
of action upon which a litigant relies and must prove and the legal conclusions that

are to be drawn from those facts.14  In Van Staden v Fourie 1989 (3) SA 200 (A), this
court said (at 216D-E):
‗Artikel 12(3) van die Verjaringswet stel egter nie die aanvang van verjaring uit totdat die
skuldeiser die volle omvang van sy regte uitgevind het nie. Die toegewing wat die
Verjaringswet in hierdie verband maak, is beperk tot kennis van ―die feite waaruit die skuld
ontstaan‘‘.‘
This may be translated as follows:
‗Section 12(3) of the Prescription Act does not postpone the commencement of prescription
until the creditor has knowledge of the full extent of his rights. The concession which the
Prescription makes in this regard is limited to knowledge of ―the facts from which the debt
arises.‖‘ (My own translation.)
This passage was referred to with approval in Truter & another v Deysel [2006]
ZASCA 16; 2006 (4) SA 168 (SCA) para 18.

[61] In summary, I can do no better than to quote the following by Lewis JA in
Claasen v Bester [2011] ZASCA 197; 2012 (2) SA 404 (para 15):
‗These cases clearly do not leave open the question posed and not answered in Van Staden.
They make it abundantly clear that knowledge of legal conclusions is not required before
prescription begins to run. There is no reason to distinguish delictual claims from others. The
principles laid down have been applied in several cases in this court, including most
recently Yellow Star Properties v MEC, Department of Planning and Local Government,
Gauteng 2009 (3) SA 577 (SCA) para 37 where Leach AJA said that if the applicant ―had not
appreciated the legal consequences which flowed from the facts‖ its failure to do so did not
delay the running of prescription. See also ATB Chartered Accountants (SA) v Bonfiglio
[2011] 2 All SA 132 (SCA) paras 14 and 18.‘

[62] There is accordingly more than much to commend the submission of Mr Fine,
who appeared in this court for Maghilda and the Sanjont Trust, that the only relevant
fact, regarding prescription in this case, was that the parties had entered into an
agreement that provided for the subdivision of agricultural land, without the written
consent of the Minister, the rest being pure questions of law. Nevertheless, for

14 See for example  Evins v Shield Insurance Co Ltd 1980 (2) SA 814 (A) at 838D-H; Deloitte Haskins
& Sells Consultants (Pty) Ltd v Bowthorpe Hellerman Deutsch (Pty) Ltd 1991 (1) SA 525 (A) at 532H-I;
Truter & another v Deysel [2006] ZASCA 16; 2006 (4) SA 168 (SCA) paras 17 to 19; Minister of
Finance & others v Gore NO [2006] ZASCA 98; 2007 (1) SA 111 (SCA) paras 17 to 19; Links v
Department of Health, Northern Province [2016] ZACC 10; 2016 (4) SA 414 (CC) paras 31 to 35;
Makate v Vodacom Ltd [2016] ZACC 13; 2016 (4) SA 121 para 188.

reasons that follow, Maghilda and the Sanjont Trust will not be prejudiced by any
generosity of assumption on my part, in favour of Nuance.

[63] If I understood the argument of Mr Oosthuizen correctly, while he accepted
that Nuance may have known from a time before prescription would have run to its
completion that the consent of the Minister was required in order for the subdivision
to occur, it would not have known before 18 March 2009 that the agreements in
question had not been validly entered into.

[64] In Willis Faber Enthoven (Pty) Ltd v Receiver of Revenue & another 1992 (4)
SA 202 (A), this court made it clear that the ignorantia juris non excusat rule in terms
of which ‗everyone is presumed to know the law‘ or ‗ignorance of the law is no
excuse‘ has, for a considerable period of time, not been of general application in
South African civil law.15 The court held that ‗the age-old distinction between errors of
law and fact for the repayment of money duly paid in error‘ should no longer be
maintained.16  In Willis Faber, the court followed the principle set out in S v De Blom
1977 (3) SA 513 (A).17 Nevertheless, De Blom asserted the principle that where a
person engages in activity that he or she could be expected to know is regulated, that
person can be expected to take the necessary steps to be informed as to how the
law in that field of activity may affect him or her, more especially in regard to specific
juristic acts.18 How much more so must this apply in the field of property
developments involving millions of rand? Nuance did engage the services of experts
in property development. Significant legal consequences derive therefrom.  As was
noted in De Blom, in a modern State, our lives are highly regulated in almost every
field of activity.19 Property development is no exception.

[65]  In De Blom the example of an angler was given.20 If a fly-fisherman is
expected  to familiarise himself with the regulatory environment pertaining to his

15 At 223D-E. As Lord Atkin made clear in Evans v Bartlam [1937] AC 473 at 479, the position has
never, in English law, been as crude as to create a presumption that ‗everyone knows the law‘. This
position, in South African law, was affirmed in S v De Blom 1977 (3) SA 513 (A) at 529H.
16 Ibid.
17 Willis Faber Enthoven (Pty) Ltd v Receiver of Revenue & another 1992 (4) SA 202 (A) at 223E.
18 At 528H-533B.
19 At 532A-B.
20 At 532A.

sport, how much more so can a developer of land in one of the booming peri-urban
areas of Gauteng be expected, mutatis mutandis, to do likewise? In a civil case
involving prescription this must be an apposite analogy when considering whether
Nuance could have required knowledge of what was required for the validity of the
agreement by exercising reasonable care. In my opinion, Nuance could, by
exercising reasonable care, have acquired knowledge of the invalidity of the
agreement well before the effluxion of three-year period of prescription.

The imputation of the knowledge of Plan Practice to Nuance
[66] There are yet further reasons why the defence of prescription must succeed in
regard to the claim for the reversal of the transactions in question. On its own
version, by no later than 28 July 2008, Nuance‘s  duly appointed town planners, Plan
Practice,  became aware that certain of the sales in question would have required
prior written ministerial approval, from the date upon which they received
confirmation thereof in a letter from the Department of Agriculture. Anyone in the
position of Plan Practice is expected, in the ordinary course of business, to impart
knowledge of such importance and materiality to its principal.21 The approval of the
Minister, antecedent to the agreement of sale, is not merely important; it is, in a quite
literal sense, vital. In the language of lawyers, it is the sine qua non, which means
that it is an indispensable and essential condition. Indeed, as mentioned earlier, in a
letter to the Department of Agriculture written on 13 May 2008 – the very day upon
which the properties had been transferred – Plan Practice describes itself as
Nuance‘s ‗authorised agent‘. In all probability, Nuance became aware of the
requirement of ministerial approval in terms of ss 3(d) and 3(e)(i) of SALA soon after
28 July 2008 – if they were not, in fact, aware of it very much earlier. This too was the
evidence of Mr Sandler, the second respondent.

A summary in regard to the prescription of Nuance’s claims for a reversal of the
transactions
[67] In my opinion, the fatal flaw in Nuance‘s argument that its claim has not
prescribed is exposed by asking a single question: why does it persist in seeking to

21 See for example Van Staden No & another v Firstrand Ltd & another 2008 (3) SA 530 (T) para 34.
See also Town Council of Barberton v Ocean Accidents and Guarantee Corporation Ltd 1945 TPD
306 at 311; Blackburn, Low Co v Vigors (1887) 12 AC 531 (HL). In Blackburn Lord Halsbury LC said,
at 537: ‗When a person is the agent to know, his knowledge does bind the principal.‘

reverse the transfers that have taken place? Any concern that it may have had about
the invalidity thereof is laid to rest by the application of the abstract theory of transfer
of property. Where is the legally recognised enrichment at its expense? I regret to
conclude that no other reason presents itself other than a buyer‘s remorse. The
opportunism inherent in this stance casts a shadow over its reliance upon the fact
that there is no direct evidence that, until its attorneys received a letter written on
behalf of the Minister in June 2009, it was aware that the agreement was void.
Having elected not to give any evidence itself to that effect, Nuance took a risk. Part
of that risk was that the conclusion that it did know the position very much earlier may
be drawn by inference. More especially, and of particular importance in deciding the
issue of prescription is not only that it could, by exercising reasonable care, have
known so earlier but also that the knowledge of Plan Practice in this regard may be
imputed to it.

[68]  If one has regard to the principles and criteria set out in Stellenbosch Farmers’
Winery Group Ltd & another v Martell et Cie & others [2002] ZASCA 98; 2003 (1) SA
11 (SCA) para 5,22 the probabilities are that, well before the effluxion of the period of
prescription, Nuance became aware not only that ministerial consent was required
but also that any agreement that was conditional upon his approval was invalid. In
Ocean Accident and Guarantee Corporation Ltd v Koch 1963 (4) SA 147 (A), Holmes
JA said (at 159B-C):
‗As to the balancing of probabilities, I agree with the remarks of Selke J, in Govan v
Skidmore 1952 (1) SA 732 (N) at 734, namely
―… in finding facts or making inferences in a civil case, it seems to me, that one may,
as Wigmore conveys in his work on Evidence, 3rd ed., para 32, by balancing
probabilities select a conclusion which seems to be the more natural or plausible,
conclusion from amongst several conceivable ones, even though that conclusion is
not the only reasonable one.‖‘

22 See also National Employers Mutual General Insurance Association v Gany 1931 AD 187 at 199;
AA Onderlinge Assuransie Assosiasie v De Beer 1982 (2) SA 603 (A) at 614H; Koster Koöperatiewe
Landboumaatskappy Bpk v Suid-Afrikaanse Spoorweë en Hawens 1974 (4) SA 420 (W) at 425;
African Eagle Life Assurance Co Ltd v Cainer 1980 (2) SA 234 (W) at 237; National Employers’
General Insurance v Jagers 1984 (4) SA 432 (ECD) t 440E-441A; Baring Eiendomme Bpk v Roux
[2001] 1 All SA 399 (A) para 7 in which the passage by Ecksteen AJP in National Employers’ General
Insurance v Jagers (above) at 440E-441A was unanimously approved by this court and Koster
Koöperatiewe Landboumaatskappy Bpk v Suid-Afrikaanse Spoorweë en Hawens 1974 (4) SA 420 (W)
at 425.

This dictum has been referred to with approval in numerous cases.23

[69]  As has been said in the oft-quoted passage from AA Onderlinge Assuransie-
Assosiasie Bpk v De Beer 1982 (2) SA 603 (A), decided in this court (at 614H):
‗Dit is, na my oordeel, nie nodig dat ‘n eiser wat hom op omstandigheidsgetuienis in ‗n siviele
saak beroep, moet bewys dat die afleiding wat hy die Hof vra om te maak die enigste
redelike afleiding moet wees nie. Hy sal die bewyslas wat op hom rus kwyt indien hy die Hof
kan oortuig dat die afleiding wat hy voorstaan die mees voor-die-hand liggende en
aanvaarbare afleiding is van ‘n aantal moontlike afleidings.‘
This may be translated as follows:
‗It is, in my opinion, not necessary for a plaintiff that relies on circumstantial evidence in a
civil case must prove that the inference which he asks the court to draw must be the only
reasonable inference. He will discharge the onus that rests upon him if he can persuade the
court that the inference that he advances is the most plausible and cogent of a number of
possible conclusions.‘ (My own translation.)
This passage has also been referred to with approval in numerous cases.24 The
parties agreed that Maghilda and the Sanjont Trust bear the onus of proving
prescription. Mutatis mutandis, the same principle applies.

[70] As mentioned previously, the summons in this case was served on 19 March
2012. This was more than three years after Nuance became aware of the facts upon
which it relies in seeking the relief. Even if this conclusion is incorrect, the knowledge
of its duly appointed town planners concerning the validity of dealings in agricultural
land must be imputed to Nuance. Even if that conclusion is incorrect, Nuance could,
by the exercise of reasonable care, have acquired the requisite knowledge well
before the prescriptive period had run.  Accordingly, any action it may have had to
recover by way of an enrichment action what it paid for the sale and transfer of the
properties to it had prescribed.

23 See, for example: South British Insurance Co Ltd v Unicorn Shipping Lines (Pty) Ltd 1976 (1) SA
708 (A) at 713 E-G; Smit v Arthur 1976 (3) SA 378 (A) at 386B-D;  Cooper and Another NNO v
Merchant Trade Finance Ltd 2000 (3) SA 1009 (SCA) at 1028B-C; Hülse-Reutter and Others v Gödde
2001 (4) SA 1336 (SCA) at para 14; Jordaan v Bloemfontein Transitional Local Authority 2004 (3) SA
371 (SCA) at para 379; De Maayer v Serebro; Serebro v Road Accident Fund 2005 (5) SA 588 (SCA)
at para 18.
24  See, for example, the judgment of Zulman JA in Cooper & another NNO v Merchant Trade Finance
Ltd 2000 (3) SA 1009 (SCA) para 7;  Minister of Safety and Security v Jordaan t/a Andre Jordaan
Transport  2000 (4) SA 21 (SCA) para 9.

The question of eviction
[71] Sight must not be lost of the fact that, in the alternative, Nuance claimed the
eviction of Maghilda from the remaining Extent of Portion 39 and Portion 51 of the
farm Elandsdrift, relying on the rei vindicatio. In ABSA Bank Ltd v Keet, this court
held that a vindicatory claim, because it is based on ownership of a thing, cannot be
described as a debt as envisaged by the Prescription Act and has 30 years to run
before it prescribes.25  In Staegemann, which was approved in Absa v Keet, Blignault
J said: ‗The rei vindicatio is clearly a claim to ownership in a thing. It cannot on any
reasonable interpretation be described as a claim for payment of a debt.‘26
Accordingly, Nuance must succeed in its alternative claim for the eviction of
Maghilda. This would obviously have a bearing on costs.

Summary of conclusions
[72] For reasons that are different from those of the high court, I agree that the
Nuance‘s claims for the repayment of monies against a retransfer by it of the
remaining extent of Portion 6 and the remaining extent of Portion 4 of the farm
Elandsdrift were correctly dismissed with costs. These claims have prescribed. The
alternative prayer by Nuance for the eviction of Maghilda should, however, have
succeeded.  The counterclaim is defeated by the applicability of the abstract theory in
regard to the transfer of property. The appeal against the counterclaim should be
upheld and replaced with an order dismissing the counterclaim with costs. Insofar as
costs are concerned, some kind of proportionality in regard to the respective success
of the parties should, naturally, be reflected in the award of costs, were this judgment
to have prevailed.

______________________
N P Willis
Judge of Appeal

25 ABSA Bank Ltd v Keet [2015] ZASCA 81; 2015 (4) SA 474 (SCA); [2015] 4 All SA 1 (SCA) paras
10-25.
26 Paragraph 21.

APPEARANCES
For Appellant:

M M Oosthuizen SC (with C A C Korf)
Instructed by:

VFV Attorneys, Pretoria
Symington & De Kok, Bloemfontein

For First to Fourth Respondents:
D M Fine SC (with T Dalrymple)
Instructed by:

Knowles Husain Lindsay Inc, Pretoria
McIntyre & Van der Post, Bloemfontein