SouthernEra Resources Ltd v Farndell NO (664/08) [2009] ZASCA 150; [2010] 2 All SA 350 (SCA) ; 2010 (4) SA 200 (SCA) (27 November 2009)

SouthernEra Resources Ltd v Farndell NO (664/08) [2009] ZASCA 150; [2010] 2 All SA 350 (SCA) ; 2010 (4) SA 200 (SCA) (27 November 2009)

The Supreme Court of Appeal held that the sale of mineral rights became unconditional and perfecta upon fulfilment of the suspensive conditions: the Master's consent and written notification thereof. The requirement to furnish a bank guarantee was a contractual term, not a suspensive condition. Once the conditions were fulfilled, the appellant was obliged to furnish the guarantee within the stipulated time. The discretion to approve the guarantee must be exercised reasonably and does not suspend the agreement. Upon the sale becoming perfecta, the risk and benefit passed to the purchaser. Therefore, when registration of cession became impossible due to the repeal of s 3(1)(m) of the Deeds...

Citation
[2009] ZASCA 150
Parties
Appellant: SouthernEra Resources Limited; Respondent: Allan George Farndell NO (Executor of the Estate of the late Marjorie Diana Dent)
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
27 November 2009
Case Number
664/08
Procedural Posture
Civil Appeal / Appeal From North Gauteng High Court, Pretoria
Outcome
Appeal dismissed with costs, including costs of two counsel.
Judges
Mpati, Mthiyane, Lewis, Mhlantla, Hurt
Legal Topics
Sale of Mineral Rights, Suspensive Condition, Supervening Impossibility, Risk and Benefit Transfer
Commercial and Corporate Land and Property Sale of Mineral Rights Suspensive Condition Supervening Impossibility Risk and Benefit Transfer

Case Brief

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Parties

SouthernEra Resources Limited

Appellant

Allan George Farndell NO (Executor of the Estate of the late Marjorie Diana Dent)

Respondent

Procedural Posture

Civil Appeal / Appeal From North Gauteng High Court, Pretoria

Legal Issues

  1. 1 Whether the sale of mineral rights had become perfecta before the repeal of s 3(1)(m) of the Deeds Registries Act made registration impossible.
  2. 2 Whether the stipulation regarding the furnishing of a bank guarantee was a term or a suspensive condition of the contract.
  3. 3 Where the risk of loss or impossibility of delivery lay at the time registration became impossible.

Ratio Decidendi

The Supreme Court of Appeal held that the sale of mineral rights became unconditional and perfecta upon fulfilment of the suspensive conditions: the Master's consent and written notification thereof. The requirement to furnish a bank guarantee was a contractual term, not a suspensive condition. Once the conditions were fulfilled, the appellant was obliged to furnish the guarantee within the stipulated time. The discretion to approve the guarantee must be exercised reasonably and does not suspend the agreement. Upon the sale becoming perfecta, the risk and benefit passed to the purchaser. Therefore, when registration of cession became impossible due to the repeal of s 3(1)(m) of the Deeds...

Court Disposition

Appeal dismissed with costs, including costs of two counsel.

Orders

  • The appeal is dismissed with costs, which shall include the costs consequent upon the employment of two counsel.