Law Reports

Gowar Investments

In Gowar Investments v Section 3 Dolphin Coast and Cameron [2006] SCA 162 (RSA), the court on appeal had to answer the following question:
"Is a deed of alienation which does not reflect the right to revoke or terminate void as decided in Sayers v Khan 2002 (5) SA 688 (C) or voidable at the instance of the purchaser as held (per Olsen AJ) in the present case (reported at 2006 (2) SA 15 (D))?"

Sub-section 2(2A) of the Alienation of Land Act 68 of 1981 ('the Act') provides:
"The deed of alienation shall contain the right of a purchaser or prospective purchaser to revoke the offer or terminate the deed of alienation in terms of section 29A."

In answering the question, and dismissing the appeal, which was based on the premise that it was not the intention of the Legislature to bring the attention of s 29A rights to the purchaser only, Combrinck AJA overruled Sayer v Khan 2002 (5) 688 (C).

He concluded as follows:
"[16] I consider that Sayers case was wrongly decided. A narrow semantic and linguistic approach was adopted in interpreting the section instead of as in this case, determining in the first place the overall intention of the Legislature and seeking to interpret the section in such a way as to give effect to such intention. It would appear from a reading of the Sayers judgment that voidability at the instance of the purchaser on non-compliance was not considered. Had it been it would, I think, have assuaged the judge's fears that the object of the Legislature would be frustrated or seriously inhibited if the deed were to be valid (see para 5 above). The reasons given in the court below for not accepting the Sayers judgment are persuasive. It was said (inter alia):

"The construction of ss 2(2A) approved in Sayers allows a seller the opportunity to withdraw from a contract against the will of the purchaser. Such an outcome does not accord with the restriction of the benefit of rights under s 29A to purchasers only. Sellers also have second thoughts, and may also fall victim to unfair practices where commissions are to be earned. Notwithstanding that, the Legislature left sellers out of the reckoning in s 29A, and a construction of ss 2(2A) in conformity with that is to be preferred.' (Para 22.)

[17] Apart from the argument referred to in para [14] above, the appellant did not seek to rely on any of the other ground found in the Sayers judgment to justify the interpretation that the agreement is void. Nor did he attack any other of the reasons given by the court below for reaching its conclusion.

[18] The court a quo gave cogent and compelling reasons for reaching its finding. The grounds relied upon are more fully articulated in the judgment. The brief summary in this judgment does not do the careful and logical reasoning justice. The full judgment should be read in conjunction with this judgment.

[19] The answer to the question posed at the beginning of this judgment is therefore that a deed of alienation which does not comply with ss 2(2A) is not ipso facto void but at the instance of the purchaser."

Full judgment


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