THE SUPREME COURT OF APPEAL
REPUBLIC OF SOUTH AFRICA

JUDGMENT

Reportable

CASE  NO: 268/07

In the matter between :

FAIROAKS INVESTMENT HOLDINGS (PTY) LIMITED
First Appellant
WILLOW FALS ESTATE
Second Appellant

and

SUZETTE OLIVER
First Respondent
HIGHLAND KNIGHT INVESTMENTS 140 (PTY) LIMITED
Second Respondent
T L JANSE VAN RENSBURG INCORPORATED
Third Respondent
THE REGISTRAR OF DEEDS, PRETORIA
Fourth Respondent

__________________________________________________________________________
Before:
STREICHER, MTHIYANE, PONNAN JJA, HURT & KGOMO
AJJA
Heard:
11 MARCH 2008
Delivered:
28 MARCH 2008
Summary:
Sale of land – agreement of sale lapsed because of non-fulfilment
of suspensive condition – agreement to revive agreement of sale
with amendments has to comply with provisions of Act 68 of 1981.
Neutral citation:
Fairoaks Investment v S Oliver (268/07) [2008] ZASCA 41 (28
March 2008)
__________________________________________________________________________

STREICHER  JA

STREICHER JA:
[1] In an action instituted by the appellants against the respondents in the
Transvaal Provincial Division, the appellants claimed an order interdicting the
first respondent from transferring a property described as the Remaining
Extent of Portion 171 Wilgespruit 190 IQ (‘the property’) into the name of
any person or entity other than the first or the second appellant and an order
directing the first respondent to transfer the property to the first appellant (‘the
second appellant’s nominee) alternatively the second appellant. The first
respondent took various exceptions to the appellants’ particulars of claim on
the ground that they do not disclose a cause of action. The court a quo upheld
the exceptions but granted leave to the appellants to appeal to this court.

[2] In their particulars of claim the appellants alleged:
2.1
The second appellant and the first respondent, on 9 April 2002,
concluded a written agreement of sale in terms of which the first
respondent sold the property to the second appellant for a purchase
price of R2 150 000.
2.2
In terms of the agreement of sale they agreed
(a)
that the purchase price would be secured by a bank guarantee
payable against registration of transfer;
(b)
that the agreement would be subject to the fulfilment of three
suspensive conditions contained in clause 13 of the agreement
and that should any suspensive condition not be timeously
fulfilled the entire agreement would automatically lapse and be
of no force or effect.
2.3
The suspensive condition recorded in clause 13.2 of the agreement of
sale required that the property be rezoned and that the approval by the
relevant town planning authority of a site development plan for a
residential development of at least fifteen housing units per hectare be

obtained within twelve months of the date of signature of the
agreement.
2.4
The suspensive condition contained in clause 13.2 was not fulfilled
within a period of twelve months from the date of signature of the
agreement in consequence whereof the agreement lapsed.
2.5
The second appellant, represented by its attorney, on or about 8 August
2003, in a letter to the first respondent’s attorney (annexure B1 to the
particulars of claim), offered to revive the lapsed agreement and, by
way of a letter from her attorneys (annexure C1 to the particulars of
claim), the first respondent, on or about 20 August 2003, accepted the
offer.

[3] Paragraphs 11 to 16 of the particulars of claim read as follows:
‘11
On or about 8 August 2003, the Second Plaintiff, represented by its attorneys Izak
Minnie Inc, who acted on the Second Plaintiff’s written authority, offered to revive
the lapsed agreement of sale by addressing a letter bearing the said date to the First
Defendant’s attorneys, Dykes van Heerden Inc.

11.1
A copy of the said letter together with the undertaking therein referred to is
annexed hereto marked “B1”

11.2
A copy of the aforesaid written authorization of the Second Plaintiff’s
attorneys is annexed hereto marked “B2”.
On or about 20 August 2003 the First Defendant represented by her said attorneys,
Dykes van Heerden Inc, who acted on her written authority, accepted the
aforementioned offer to revive the lapsed agreement of sale by way of a letter
bearing the aforesaid date.

12.1
A copy of the said letter of acceptance is annexed hereto marked “C1”.

12.2
The aforesaid written authorization, properly construed, is comprised of
clause 2.2 of annexure A hereto, a letter by Dykes van Heerden Inc. dated
18 July 2003 as well as the First Defendant’s written response thereto dated
20 August 2003, true copies whereof are hereunto annexed marked “C2”
and “C3”.

In the premises, the second plaintiff and the First Defendant, represented as
aforesaid, agreed in writing, by way of annexures “B1” and “C1” hereto, on 20th
August 2003, to revive the said lapsed agreement of sale.
14.1
It was an express term of the revived agreement of sale as constituted by Annexures
“B1” and “C1” hereto that clause 13.2 was thereby amended to the effect that
compliance therewith was to occur upon or before transfer of the property into the
name of the Second Plaintiff or its nominee.
14.2
It was an implied term of the revived agreement of sale constituted by Annexures
“B1” and “C1” hereto, that such revived agreement further embodied all of the
terms contained in Annexure “A”, save for the aforesaid amendment of the
provisions of clause 13.2.
14.3
The provisions of the amended clause 13.2 operated for the benefit of the Second
Plaintiff (or its nominee), whose nominee advised the First Defendant on 27
October 2004 in writing that it waived the benefit of such condition.
14.4
A true copy of the aforesaid document containing the waiver is hereunto annexed
marked “C4”.
15.
Alternatively to paragraphs 11 to 14 above:
15.1
On or about 20 August 2003, the First Defendant represented by her attorneys,
Dykes van Heerden Inc, advised the Second Plaintiff orally and in writing that such
attorneys were sending transfer documents to the Second Plaintiff in order to enable
the First Defendant to transfer the property in accordance with the provisions of the
agreement of sale, annexure “A” hereto.
15.2
On or about 20 August 2003, the First Defendant prepared and produced copies of
her identity document an antenuptial contract for purposes of preparing
documentation for the transfer of the immovable property in terms of the agreement
of sale, annexure “A” hereto.
15.3
On or about 21 July 2004, the First Defendant, represented by her said attorneys,
addressed a letter to the second plaintiff’s attorneys, a copy whereof is annexed
hereto marked “D”, in terms whereof the First Defendant called upon the Second
Plaintiff to produce guarantees in relation to the payment of the purchase price in
terms of the agreement of sale, annexure “A” hereto.
15.4
In conducting herself as set out above, the First Defendant waived any right to rely
on the failure of the suspensive conditions recorded in clause 13 of the agreement
of sale, annexure “A” hereto.

16.
In the premises, the Second Plaintiff became entitled, by no later than 20 August
2004, to enforce the provisions of the agreement of sale, annexure A hereto,
alternatively, the revived agreement embodied in annexures “B1” and “C1” hereto,
against the First Defendant.’

[4] The first respondent took a number of exceptions to the particulars of
claim. The third of these exceptions is to the effect that in so far as the
appellants’ claim is based on paragraphs 11 to 14 and 16 of the particulars of
claim it fails to disclose a cause of action in that the new contract for the sale
of land does not comply with the provisions of s 2(1) of the Alienation of
Land Act 68 of 1981 (‘the Act’). The fifth of these exceptions is to the effect
that in so far as the appellants’ claim is based on paragraphs 15 and 16 of the
particulars of claim, no cause of action is disclosed in that the contract of sale
was void ab initio by operation of law and no rights existed between the first
respondent and the appellant which were capable of being waived.

[5] Section 2(1) of the Act provides:
‘No alienation of land after the commencement of this section shall, subject to the
provisions of section 28, be of any force or effect unless it is contained in a deed of
alienation signed by the parties thereto or by their agents acting on their written authority.’
It would appear from a reading of paragraphs 11 and 12 of the particulars of
claim that the drafter thereof was of the view that the alleged agreement by
way of B1 and C1 had to comply with the provisions of the section in that in
respect of both letters the allegation is made that the attorney who signed the
letter acted on the written authority of his client. However, in the court a quo
and before us the appellants conceded that C1 and B1 did not comply with
these provisions.

[6] The court a quo stated that the only issues to be determined in deciding
whether the particulars of claim disclosed a cause of action were whether
there had been a consensual revival of the agreement of sale with written

amendments or whether the first respondent waived any right to rely on the
failure of the conditions recorded in clause 13 of the agreement of sale. It held
that because of the non-fulfilment of the condition recorded in clause 13.2 the
sale lapsed by operation of law and was deemed to be void ab initio. The
agreement of sale could not be revived without amendments in that it would
automatically self destruct as a result of the non-fulfilment of the condition
which brought about its demise in the first place. An agreement to revive it
with the necessary amendments would constitute a new agreement of sale
which had to comply with the provisions of s 2(1) of the Act. The agreement
to revive relied upon by the appellants was, therefore, not a valid agreement
and in so far as the appellants’ claim is based on that agreement no cause of
action is disclosed.

[7] In so far as the appellants’ claim is based on an alleged waiver by the
first respondent to rely on the failure of the suspensive conditions in clause 13
of the agreement of sale, the court a quo held that, as the agreement of sale
had lapsed and was void ab initio, there were no rights and obligations
flowing from the agreement of sale which were capable of being waived by
the first respondent. The court a quo accordingly held that in so far as the
appellants’ claim is based on a waiver by the first respondent, no cause of
action is disclosed.

[8] According to the particulars of claim the agreement of sale lapsed upon
the non-fulfilment of the condition contained in clause 13.2 of the agreement
but was revived by agreement in writing, by way of annexures B1 and C1, in
its original form save for an amendment of clause 13.2 thereof. The
amendment is alleged to have been to the effect that fulfilment of the
condition had to occur upon or before transfer of the property into the name of
the second appellant or its nominee.

[9] Annexure B1 consists of a letter by the second appellant’s attorneys
and an undertaking by the attorneys to pay to the first respondent’s attorney,
for the credit of the first respondent, the amount of R2 150 000 against –
(a)
transfer of the property;
(b)
cancellation of all existing bonds; and
(c)
‘receipt of confirmation that all the suspensive conditions as is evident
from the Deed of Sale between the respective parties, and with specific
reference to rezoning of the property as residential and the approval of
the town planning authorities, have been complied with’.
The letter to which the undertaking was attached refers to the transfer of the
property and in paragraphs 2 to 4 thereof it is said:
‘2
We confirm our advice that, under cover herewith, the attorneys undertaking agreed
to is transmitted to you.
We further confirm your advice that same is in order and that we will, as per your
Ms Oliver’s instructions, convey to Willow Falls Estate’s Mr Hartzer that the
process must be proceeded with immediately.
We will also in consultation with him and Dykes van Heerden, work out a time
table for finalisation of the outstanding issues and transfer of the property.’
Of importance is the fact that in terms of the letter read with the undertaking
to pay –
(a)
the terms of the undertaking had been approved by the first
respondent’s attorneys;
(b)
the rezoning of the property had to precede transfer of the property; and
(c)
the process had to be put in motion immediately.

[10] Annexure C1 is a letter by the first respondent’s attorneys to the second
appellant’s attorneys. It refers to the transfer of the property and reads:
‘We refer to the above matter and to the telephone conversation between Gillian of our
offices and yourself on the 20th August 2003 and confirm the following:
You will furnish us with the necessary company documentation, to enable us to draw
the relevant transfer documents.

We are to proceed without the re-zoning.’

[11] Counsel for the appellants submitted that the allegation in paragraph
14.1 of the particulars of claim was clearly wrong in that it is apparent from a
reading of C1 that the rezoning condition had been waived in terms of the
agreement to revive the agreement of sale. He submitted, furthermore, that the
allegation in paragraph 14.3 that the benefit of the rezoning condition was
waived on 27 October 2004 should be understood as an allegation that the
waiver of the rezoning condition on 20 August 2003 was confirmed on 27
October 2004. Asked whether the matter did not have to be decided on the
basis alleged in the particulars of claim he contended that if a valid cause of
action, although at variance with the cause of action alleged in the particulars
of claim, could be constructed from documents annexed to the particulars of
claim, the exception had to be dismissed. If that cause of action differed from
what is alleged in the particulars of claim the excipient’s complaint may be
that the particulars of claim are vague and embarrassing but not that they fail
to disclose a cause of action, so he submitted. For these reasons the matter
should, according to counsel for the appellants, be decided on the basis that
the agreement of sale had been revived without the condition that it be subject
to the rezoning of the property sold.

[12] It is for an excipient who alleges that a summons does not disclose a
cause of action to establish that, upon any construction of the particulars of
claim, no cause of action is disclosed.1 However, in the present matter there
can be no uncertainty as to the pleader’s intention. The particulars of claim
are clear. Moreover, counsel for the appellants did not contend that the
particulars of claim could be construed in different ways, he contended that

1 See Theunissen and Others v Transvaalse Lewendehawe Koop Bpk 1988 (2) SA 486 (A) at 500E;
Amalgamated Footwear & Leather Industries v Jordan & Co Ltd 1948 (2) 891 (C) at 893; Callender-Easby
and Another v Grahamstown Municipality and Others 1981 (2) SA 810 (E) at 813A; Klerck NO v Van Zyl
and Maritz NNO and Another and Related Cases 1989 (4) SA 263 (SE) at 288D-G; and South African
National Parks v Ras 2002 (2) SA 537 (C) at 542B-E.

the particulars of claim were wrong and argued the matter on a factual basis
that had not been pleaded. In my view it cannot be required of an excipient to
establish that such a factual basis does not disclose a cause of action. In any
event there is no way that B1 and C1 can be interpreted, as the appellant’s
counsel urged us to do, to embody an agreement in terms of which the second
appellant no longer required the rezoning of the property as a precondition to
the payment of the purchase price. The undertaking to pay the purchase price
was specifically made subject to the condition that rezoning had to take place.

[13] Read with paragraph 3 of B1 and with the undertaking to pay the
purchase price against fulfilment of the condition requiring rezoning of the
property, the statement in C1 that the first respondent was to proceed without
the rezoning, can be interpreted to mean that the process of transferring the
property should be set in motion, not finalised, even though the property had
not been rezoned yet. This is the interpretation pleaded in the particulars of
claim. In para 14.1 it is alleged that it was an express term of the revived
agreement of sale as constituted by B1 and C1 that clause 13.2 was thereby
amended to the effect that compliance therewith was to occur upon or before
transfer of the property. In para 14.3 it is alleged that the provisions of the
amended clause 13.2 operated for the benefit of the second appellant (or its
nominee) whose nominee advised the first respondent on 27 October 2004,
more than a year after the alleged agreement in terms of B1 and C1, in
writing, that it waived the benefit of the condition.

[14] Counsel for the appellants submitted that it was held in Neethling v
Klopper and Others2 that a contract for the sale of land which had been
cancelled could be revived by waiver of the rights created by the cancellation
of the agreement and that an agreement to do so does not constitute a fresh
agreement of sale which has to comply with the formalities prescribed by

2 1967 (4) SA 459 (A).

s 2(1) of the Act. He submitted that the same principle is applicable in a case
where the contract of sale lapsed through the non-fulfilment of a condition.
The parties could likewise agree to waive the rights created by the lapsing of
the agreement and such agreement would not constitute a fresh agreement of
sale which had to comply with the formalities. In this regard he relied on the
judgment in D S Enterprises (Pty) Ltd v Northcliff Townships (Pty) Ltd3.

[15] In Neethling v Klopper, Neethling sold a farm to Klopper and others
(‘Klopper’). The purchase price was payable in instalments. Subsequent to the
sale Neethling claimed that he had validly cancelled the sale but Klopper
disputed his right to do so. In a letter dated 6 January 1966, Klopper claimed
transfer of the farm against payment of the full balance of the purchase price
and threatened to apply to court for an order that transfer be effected to him
should Neethling not take steps to transfer the farm to him. On 7 February
1966, Neethling accepted Klopper’s offer to pay the balance of the purchase
price against transfer of the farm but later refused to pass transfer and
contended that the contract for the sale of the farm had lapsed and that the
subsequent arrangement was invalid as it did not comply with the formalities
prescribed by s 1(1) of Act 68 of 1957, the precursor of s 2(1) of Act 68 of
1981. The arrangement did not comply with such formalities in that the letters
were signed by the attorneys without the written authority of their clients.
This court held that the agreement reached in terms of the two letters did not
have to comply with these formalities.

[16] Dealing with an argument that the contract for the sale of the farm had
been amended in that it was agreed that payment of the purchase price had to
be effected earlier than in terms of the contract, Steyn CJ reasoned that
amendments of material provisions of an agreement of sale of land had to

3 1972 (4) SA 22 (W).

comply with the formalities,4 but, that the letter of 6 January should not be
seen as a proposal that the agreement be amended, as an amendment of the
contract was not required in order to claim transfer against payment of the
purchase price.5

[17] Assuming that the contract had been validly cancelled the question was
whether the contract was revived by the letters of 6 and 7 January 1966.6
Dealing with this question Steyn CJ said that at common law, a party who
validly cancelled a contract, may with the consent of the other party undo his
cancellation with the result that the contract is no longer affected by such
cancellation.7 The question then arose whether the common law position was
affected by the provisions of s 1(1) of Act 68 of 1957 ie whether the
agreement embodied in the letters of 6 and 7 January should have complied
with the provisions of the section. In order to answer this question Steyn CJ
considered it necessary to determine what the nature of the transaction was
and proceeded to do so.8 He stated that, notwithstanding the assumed validity
of Neethling’s cancellation of the contract it should be borne in mind that
Klopper consistently disputed that the contract had been cancelled.9 In the
light of this attitude the letters could not be regarded as a fresh offer to
purchase and an acceptance of such an offer. It could not have been the
intention of Klopper to conclude a new contract to purchase and Neethling
could not have understood that to have been Klopper’s intention. Klopper’s
letter of 6 January rather amounted to a tacit request that Neethling waives his
claim to have validly cancelled the contract and accepts Klopper’s request
that transfer be effected to him.10 It followed that Neethling undid the
consequences of his cancellation, assuming that it was a valid cancellation,

4 At 464G.
5 At 46D-G.
6 At 466B.
7 At 466C-467C.
8 At 467D.
9 At 467D-G.
10 At 467G-H.

with the consent of Klopper thereby reviving the cancelled contract. No new
contract of sale had however been concluded. This agreement between
Neethling and Klopper was not to be equated with a contract of sale of land as
intended by the section and to not so equate it would not frustrate the purpose
of the section.11

[18] Steyn CJ concluded that for these reasons the revival of a cancelled
contract in respect of land by waiver of the rights arising from the
cancellation of the contract need not comply with the formalities prescribed in
respect of agreements for the sale of land.12 Referring to this passage in the
judgment counsel for the appellant submitted that this court decided that
whenever parties agree to the revival of a contract of sale of land by way of a
withdrawal of a cancellation of the contract, compliance with the formalities
is not required.

[19] I do not think that Steyn CJ’s concluding words were intended to be
read in isolation. It is in my view clear from his reasoning that in order to
determine whether an agreement should comply with the prescribed
formalities one has to determine what the intention of the parties was. In that
case there was a valid cancellation (so he assumed). But, the validity of the
cancellation was disputed by Klopper. There was, therefore, a dispute as to
whether the contract had been validly cancelled and that dispute was settled
on the basis that Neethling would waive his claim to have validly cancelled
the contract. In those circumstances he found that there was no intention to
enter into a new contract of purchase and sale. It does not follow that an
agreed waiver of a cancellation of an agreement of sale would not constitute a
new agreement of sale where the parties were agreed that the contract had
been validly cancelled. In each case the true nature of the transaction will

11 At 467H-468B.
12 At 468C.

have to be investigated in order to determine whether it constitutes an
agreement of purchase and sale. If the intention was to buy and sell ie to enter
into a new contract on the same terms as the cancelled contract, the agreement
will have to comply with the prescribed formalities even though the
mechanism employed to give effect to that intention was the withdrawal of
the cancellation.

[20] In the present case we are of course dealing with a contract which
lapsed because of the non-fulfilment of a suspensive condition and not with
an alleged revival of a cancelled contract. In D S Enterprises a sale of land
was subject to the condition that the purchaser would be able to obtain
permission to subdivide the property within a period of six months. The
agreement provided that the ‘seller shall accordingly advise the purchaser in
writing, within a period of six months of date of signature hereof, whether this
condition has been fulfilled; in the event that the seller does not do so, then,
unless the purchaser shall in writing waive such notice and/or fulfilment
within 14 days of expiration of such period, this sale shall fall away and be of
no force or effect whatsoever, and any payments made by the purchaser to the
seller shall be refunded without deduction and together with interest thereon
at 7 per cent per annum’. The condition was not fulfilled and the purchaser
did not within 14 days waive the non-fulfilment thereof. The parties
nevertheless continued to act as if nothing had happened. Accounts were
rendered to the purchaser in respect of instalments payable in terms of the
agreement and the purchaser paid these accounts, but the seller eventually
adopted the attitude that the agreement had lapsed because of the non-
fulfilment of the condition. Nicholas J held that the provision regarding
waiver of notice by the purchaser was part of the machinery designed to
procure certainty, within a period of six months and 14 days, on the question
whether the agreement would remain in force. That provision, he found was
inserted in the interests of both parties, who could waive it by agreement

between them. He found that they did so and said that their conduct amounted
to an affirmance of the contract and a dispensation of the termination of it.13
In dealing with the argument that the parties had concluded a new agreement
which had to comply with the formalities prescribed by s 1(1) of Act 68 of
1957 he referred to Neethling v Klopper and concluded that the factual
differences between the two cases were not such as to render the principle in
Neethling v Klopper inapplicable. He added:
‘In both cases the parties agreed that the dissolutive fact should be nullified, and this had
the result that the contract was revived. In Neethling’s case the parties did not conclude a
new contract of sale; and in the present case their conduct makes it clear that all that the
parties intended to do was to continue with their written contract of sale.’14

[21] It is not necessary to consider whether D S Enterprises was correctly
decided. The facts in the present matter are quite different. Not only is it
alleged that the parties by way of the letters B1 and C1 ‘agreed in writing . . .
to revive the lapsed agreement of sale’ it is alleged that it was an express term
of the revived agreement that clause 13.2 thereof be amended to the effect that
compliance therewith was to occur upon or before transfer of the property.
The amendment is material as the time allowed in clause 13.2 for the
fulfilment of the condition was inserted in order to create certainty as to the
fate of the contract and affected both parties. The contract which had lapsed
because of the non-fulfilment of the condition had become, as a result of the
amendment, subject to a new material condition, the time for fulfilment of
which had not been stipulated. It follows that the parties by agreeing to revive
the lapsed agreement with amendments, entered into an agreement to buy and
sell on terms different from the terms previously agreed to. Such an
agreement has to comply with the provisions of s 2(1) of the Act. Even if the
amendment had been agreed to prior to the lapsing of the agreement of sale it
would, in order to be valid, have had to comply with the provisions of s 2(1)

13 At 26F-H.
14 At 28E.

of the Act.15 It follows that in so far as the appellants’ claim is based on the
allegations contained in para 14 of the particulars of claim no cause of action
is disclosed.

[22] The fifth exception is on the basis that the lapsing of the agreement of
sale did not give rise to a right capable of being waived by the first
respondent. The condition contained in clause 13.2 was clearly a condition
inserted for the benefit of the purchaser. When it was not fulfilled the
agreement lapsed. The lapsing of the agreement could not possibly have given
rise to a right on the part of the seller which could unilaterally be waived by
the seller, thereby resurrecting the agreement, without the condition which
had been inserted for the benefit of the purchaser. It follows that in so far as
the appellants’ claim is based on the allegations contained in para 15 of the
particulars of claim, no cause of action is disclosed either.

[23] For these reasons the appeal is dismissed with costs including the costs
of two counsel.

__________________
P E STREICHER
JUDGE OF APPEAL

CONCUR:
MTHIYANE JA)
PONNAN JA)
HURT AJA)
KGOMO AJA)

15 See Neethling v Klopper at 464G.
THE SUPREME COURT OF APPEAL
REPUBLIC OF SOUTH AFRICA

MEDIA SUMMARY – JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL

From:
The Registrar, Supreme Court of Appeal
Date:
28 March 2008
Status:
Immediate

FAIROAKS INVESTMENT HOLDINGS (PTY) LTD & ANOTHER v S
OLIVER & OTHERS

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

* * *

The Supreme Court of Appeal today dismissed an appeal against a judgment in
the Transvaal Provincial Division. The case concerned the revival of an
agreement of sale of land which had lapsed because of the non-fulfilment of a
suspensive condition. The SCA held that an agreement to revive such an
agreement with an amendment of the suspensive condition which caused the
agreement of sale to lapse, had to comply with the formalities prescribed for
agreements of sale of land.