Bondev Midrand (Pty) Ltd v Madzhie and Others (63297/15) [2016] ZAGPPHC 1097; 2017 (4) SA 166 (GP) (19 December 2016)

Bondev Midrand (Pty) Ltd v Madzhie and Others (63297/15) [2016] ZAGPPHC 1097; 2017 (4) SA 166 (GP) (19 December 2016)

The court held that the retransfer clause, which required a purchaser of a residential stand to build a dwelling within eighteen months or face retransfer of the property at the original purchase price, is grossly unreasonable and contrary to public policy when enforced against an ordinary retail purchaser seeking...

Source-derived case information.

Citation
[2016] ZAGPPHC 1097
Parties
Applicant: Bondev Midrand (Pty) Ltd; Respondent: Mulatedzi Alton Madzhie; Respondent: The Registrar of Deeds, Pretoria; Respondent: The Standard Bank of South Africa Ltd
Court
North Gauteng High Court, Pretoria
Jurisdiction
South Africa
Judgment Date
19 December 2016
Case Number
63297/15
Procedural Posture
Civil Application / Withdrawal After Initial Indication of Dismissal; Reasons for Order Provided
Outcome
Application withdrawn with consent of the court; reasons provided for refusal to enforce the retransfer clause.
Judges
C R Jansen
Legal Topics
Retransfer Clause, Section 26 Right to Housing, Public Policy in Contract, Alienation of Land Act, Consumer Protection, Pacta Sunt Servanda Limitation
Land and Property Constitutional Law Civil Procedure Retransfer Clause Section 26 Right to Housing Public Policy in Contract Alienation of Land Act Consumer Protection +1 more

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Parties

Bondev Midrand (Pty) Ltd

Applicant

Mulatedzi Alton Madzhie

Respondent

The Registrar of Deeds, Pretoria

Respondent

The Standard Bank of South Africa Ltd

Respondent

Procedural Posture

Civil Application / Withdrawal After Initial Indication of Dismissal; Reasons for Order Provided

Legal Issues

  1. 1 Is the enforcement of a retransfer clause in a residential property sale agreement consistent with public policy and section 26(1) of the Constitution?
  2. 2 Does such a clause infringe the purchaser's constitutional right to access adequate housing?
  3. 3 Should courts mero motu refuse to enforce contractual clauses that offend constitutional values, even in unopposed matters?

Ratio Decidendi

The court held that the retransfer clause, which required a purchaser of a residential stand to build a dwelling within eighteen months or face retransfer of the property at the original purchase price, is grossly unreasonable and contrary to public policy when enforced against an ordinary retail purchaser seeking to build a home for personal use. Such a clause infringes the purchaser's constitutional right to access adequate housing under section 26(1) of the Constitution and cannot be justified by the developer's vague commercial interests. The court emphasized that contractual freedom is not absolute and must be balanced against constitutional values, especially in transactions...

Court Disposition

Application withdrawn with consent of the court; reasons provided for refusal to enforce the retransfer clause.

Orders

  • The applicant's notice of withdrawal is formally noted and filed of record.
  • The applicant is permitted to withdraw the application, with costs tendered as per the notice of withdrawal.