THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Reportable

Case No: 20470/2014

In the matter between:

FOUR ARROWS INVESTMENTS 68 (PTY) LTD
APPELLANT

and

ABIGAIL CONSTRUCTION CC
FIRST RESPONDENT

THE REGISTRAR OF DEEDS, PRETORIA
SECOND RESPONDENT

Neutral citation:
Four
Arrows
Investments
v
Abigail
Construction
(20470/2014) [2015] ZASCA 121 (17 September 2015)

Coram:
Lewis, Mhlantla, Willis, Saldulker and Swain JJA

Heard:
8 September 2015

Delivered:
17 September 2015

Summary:
Whether option had been granted: option for the purchase of a
portion of agricultural land without Ministerial consent – prohibited in terms of s
3(e)(i) of the Subdivision of Agricultural Land Act 70 of 1970.

ORDER

On appeal from: Gauteng Division of the High Court, Pretoria, (Bam J sitting as
court of first instance).

The appeal is dismissed with costs such costs to include the costs of two counsel.

JUDGMENT
_______________________________________________________________
Swain JA (Lewis, Mhlantla, Willis and Saldulker JJA concurring):
[1] The central issue in this appeal is whether a contract concluded between the
appellant, Four Arrows Investments 68 (Pty) Ltd (Four Arrows), and the first
respondent, Abigail Construction CC (Abigail), conferred upon Four Arrows an option
to purchase a demarcated portion of an undivided immovable property, or whether
the contract constituted a sale of the property, which was subject to a suspensive
condition.
[2] The importance of the distinction for Four Arrows lies in its submission that
an option for the sale of a portion of agricultural land, the nature of the immovable
property in question, does not fall within the prohibition contained in s 3(e)(i) of the
Subdivision of Agricultural Land Act 70 of 1970 (the Act). This section provides that
‘no portion of agricultural land . . . shall be sold or advertised for sale . . . unless the
Minister has consented in writing.’ The definition of ‘sale’ in s 1 of the Act includes a
sale subject to a suspensive condition.
[3] Four Arrows unsuccessfully relied upon this submission in seeking an order
before the Gauteng Division of the High Court, Pretoria, compelling Abigail to pass
transfer of the whole property to it. Transfer was sought in reliance upon additional

terms in the contract, which made provision for this eventuality in the event of the
sale agreement between Abigail and the liquidators of an insolvent company, from
whom the property was to be acquired, not proceeding, or the consent of the Minister
of Agriculture (the Minister) to the subdivision of the property not being obtained.
[4] The court a quo (Bam J) held that the contract constituted a sale subject to a
suspensive condition, being the approval of the Minister. In reliance upon the
decision of this court in Geue & another v Van der Lith & another [2003] ZASCA 118;
2004 (3) SA 333 (SCA), it declared the contract void, as claimed by Abigail in its
counter-application. The appeal against this decision is with the leave of this court.
[5] Apart from the clause in the contract purporting to confer an option upon
Four Arrows, the remaining clauses all clearly indicate that a sale of the property
subject to a suspensive condition was intended by the parties. The contract is
headed ‘Agreement of sale of immovable property. . . .’ Abigail and Four Arrows are
respectively defined as ‘the seller’ and ‘the purchaser’ and it is provided that ‘[t]he
seller hereby sells to the purchaser who hereby purchases the property, at the price
and upon and subject to the terms and conditions herein contained.’
[6] Although it is recorded that Four Arrows has agreed to assist Abigail in
financing the payment of Abigail’s purchase price for the property in the amount of
R4 047 000, it is then recorded that this amount ‘constitutes payment of the
purchase price due to the seller by the purchaser, payable in advance’. It is common
cause that this amount was paid: Abigail was ordered to repay Four Arrows by the
court a quo.
[7] In this context, clause 2.7.1 which purports to grant an option to Four Arrows
to purchase an undivided half share in the property is incomprehensible. The clause
provides as follows:
‘. . . [T]his Agreement shall be deemed to be an option to purchase the Property granted by
the Seller [Abigail] to the Purchaser [Four Arrows] at the price and upon and subject to the
terms and conditions hereof which option shall be exercisable by the Purchaser at any time

after the Purchaser and the Seller succeeds in obtaining the required consent to the
subdivision of the Property from Portion 175.’
[8] As its name implies, an option confers upon the option holder a choice
whether to enter into the main contract or not. It is clear, however, that no provision
is made in the contract for the repayment by Abigail of the purchase price paid in
advance, in the event of Four Arrows choosing not to exercise the ‘option’. This
eventuality was not catered for because the parties clearly envisaged the sale
proceeding without any election to purchase the property by Four Arrows, once the
consent of the Minister was obtained. The absence of this essential element
precludes the creation of an option by the parties. The fact that the parties recorded
that the agreement ‘shall be deemed to be an option to purchase the property’
matters not. Substance rather than form has to be considered to ascertain the true
nature of the transaction.1 Its true nature is that of a sale subject to a suspensive
condition, which is prohibited in terms of the Act.
[9] Even if a valid option to purchase had been conferred upon Four Arrows, the
outcome would be the same. In Geue (para 15) it was stated that:
‘The purpose of the Act is not only to prevent alienation of undivided portions of land. The
target zone of the Act is much wider. This is clear, for example, from s 3(e)(i), which also
prohibits advertisements for sale. Since advertisements obviously precede the actual sale or
alienation of an undivided portion, it is by no means absurd to infer that the Legislature
intended to prohibit any sale of an undivided portion of farmland, whether conditional or not,
unless and until the subdivision has actually been approved by the Minister. Courts are not
entitled, under the guise of absurdity, to avoid the Legislature’s clear intention because they
regard particular consequences to be harsh or even unwise. Moreover, once the intention of
the Legislature is clearly established, it can be dangerous to speculate as to why the
Legislature would have intended a particular result. . . .’

1 Roshcon (Pty) Ltd v Anchor Auto Body Builders CC & others [2014] ZASCA 40; 2014 (4) SA 319
(SCA) para 23 et seq.

[10] That the Legislature has prohibited the advertisement of a portion of
agricultural land for sale in the absence of Ministerial consent, clearly indicates that
the 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. In this context the grant of an option would clearly be a precursor
to the conclusion of a prohibited agreement of sale, at the election of the option
holder.
[11] That an option falls within the ambit of the prohibition contained in the Act
becomes clear when its true nature is considered:

‘The essence of an option is that it is binding on the option grantor. It is an offer, in this case
to sell property, which cannot be revoked. It is the option holder that has the choice whether
to exercise its right.’2
In the present context the option grantor purports to be bound to sell a portion of
agricultural land without Ministerial consent, on the election of the option holder,
contrary to the provisions of the Act. The fact that the option may provide, as in the
present case, that the option holder may only exercise the option after the consent of
the Minister has been obtained, matters not. In the interim, the option grantor
purports to be bound to sell a portion of agricultural land without Ministerial consent,
which remains contrary to the provisions of the Act.
[12] Counsel for Four Arrows submitted, however, that if clause 2.7.1 was found
to be null and void and unenforceable, the whole contract should not suffer the same
fate on the basis that the provisions of this clause were severable from the
remainder of the contract. On this basis the entitlement of Four Arrows to receive
transfer of the whole property, would be based upon the additional terms referred to

2 Du Plessis NO & another v Goldco Motor & Cycle Supplies (Pty) Ltd [2009] ZASCA 62; 2009 (6) SA
617 (SCA) para 15.

above, conferring this right on Four Arrows, in the event of the sale agreement
between Abigail and the original owner not proceeding.
[13] The probable intention of the parties as it appears from the contract as a
whole, was that the principal purpose of the contract was to enable Four Arrows to
purchase one half of the property. The provisions of the contract which provided for
the acquisition of the whole property were clearly subsidiary to this principal
purpose.3 The offending clause consequently results in the entire contract being null
and void.
[14] In any event, on the evidence, the agreement of sale between Abigail and its
seller did proceed to fruition. Four Arrows accordingly did not prove that it was
entitled to obtain transfer of the whole property.
[15] The following order is made:
The appeal is dismissed with costs such costs to include the costs of two counsel.

K G B Swain

Judge of Appeal

3 Sasfin (Pty) Ltd v Beukes [1988] ZASCA 94; 1989 (1) SA 1 (A) at 16B and 17D-E.

Appearances:
For the Appellant:
M C Erasmus SC (with him D Prinsloo)

Instructed by:
De Bruin Oberholzer Attorneys, Centurion

Symington & De Kok, Bloemfontein

For the Respondent:
C A Da Silva SC (with him J C Klopper)

Instructed by:

Corrie Nel & Co, Pretoria

Honey & Associates, Bloemfontein
THE SUPREME COURT OF APPEAL OF SOUTH AFRICA

MEDIA SUMMARY OF JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL

FROM

The Registrar, Supreme Court of Appeal

DATE

17 September 2015

STATUS

Immediate

Please note that the media summary is for the benefit of the media and does not form
part of the judgment.

Four Arrows Investments 68 v Abigail Construction  (20470/2014) [2015]
ZASCA 121 (17 September 2015)

Media Statement

The fact that the parties to an agreement described it as an option, was held by the
SCA to be irrelevant when in substance it was a sale subject to a suspensive
condition and consequently prohibited in terms of Section 3(e)(i) of the Subdivision of
Agricultural Land Act 70 of 1970, in the absence of the requisite Ministerial consent.
The SCA also held that even if it was an option, the result would be the same. The
appeal was accordingly dismissed.

--- Ends ---