Schnetler’s Inc Attorneys

19/09/2025

A lease agreement containing a pre-emptive right to purchase the leased property was the subject of the judgment in Pegasus Treasury (Pty) Ltd v Murphy [2025] ZAWCHC 419. Pegasus leased a residential property in Hout Bay, Cape Town. The lease included a pre-emptive right of first refusal, should Murphy decide to sell. Murphy concluded a sale agreement with a third party, which was conditional on Pegasus not exercising the right of first refusal. Pegasus was notified and given 48 hours to match the offer.

The representative of Pegasus responded with an email expressing an intent to exercise the right of first refusal, but did not submit a written signed offer. Subsequent correspondence indicated that the proposal originally emailed was to be amended with various terms, conditions and clawback provisions.

The Court had to consider whether Pegasus had validly exercised its pre-emptive right. What was required was a signed written offer. No such offer had been submitted. An expression of intent in an email was insufficient, especially when followed by various other emails suggesting additional terms and conditions to be added.

The Court held that the pre-emptive right had not been exercised. The lesson – a pre-emptive right should be exercised by submitting a valid and signed offer, to ensure that the holder of the right is protected.

04/09/2025

The Joint Building Contracts Committee (JBCC) Principal Building Agreement is frequently utilised when construction work has to be done. It provides that a dispute must, in the first place, be referred to adjudication which results in a determination. After that, the parties are free to invoke the arbitration provisions.

In Pro-Khaya Construction CC v City of Cape Town [2025] ZAWCHC 353, the applicant had been engaged to construct an electrical depot for the City of Cape Town (“the City”). A dispute resulted in an adjudication that the City owed Pro-Khaya approximately R8 million. The City refused to comply with this determination.

In subsequent court proceedings, the Court held that adjudication serves as an expedited, binding interim mechanism to avoid construction delays. The Adjudicator’s role was that of an expert, not an arbitrator, meaning that his determination was final until overturned by litigation or mutual agreement, unless fraud, collusion or manifest injustice were established.

None of these were present in the matter under consideration. The City was mistaken in arguing that the Adjudicator’s determination was reviewable under common law or the Arbitration Act. The determination, the Court concluded, was valid and enforceable. The Court ordered the City to comply with the Adjudicator’s determination.

Great care should be taken by everyone in property development or construction utilising the JBCC contract, to properly observe the adjudicatory provisions thereof.

21/08/2025

Many building activities require an environmental impact assessment, and environmental authorisation. The duties on the Authority obliged to issue such authorisation are, it seems, becoming more and more onerous.

An example of this development is found in Green Connection NPC v Minister of Forestry [2025] ZAWCHC 349. The Court found that, in issuing environmental authorisation for exploratory drilling, the Minister of Forestry failed to adequately assess the socio-economic impact of potential oil spills, and unnecessarily focussed on exploration benefits, and had not conducted a proper public participation process. The applicants alleged that the environmental impact assessment (“EIA”) had not properly considered climate change considerations, and whether there were adequate contingency plans catering for oil spills.

The Court confirmed that the environmental authorisation could only be set aside if it was one which could not reasonably have been granted in the circumstances, but criticised the fact that that environmental impact assessment had not assessed the effect of oil spills on small scale fishers and local communities, and had focussed on exploration benefits while ignoring potentially toxic oil spills, and had failed to call for detailed oil spill contingency plans. That rendered the decision reviewable.

The judgment is, from an environmental point of view, to be welcomed although property developers working their way through the complexities of the environmental legislation might perhaps not share this view.

18/08/2025

In Mofiko v Mthophe (2025) ZAGPJHC 772, the Applicant, the executrix in the estate of Mfikwe, sought eviction of the Respondent from a residential property in Johannesburg. The case features two interesting aspects.

Firstly, Applicant had not, in her founding papers, disclosed that the estate and Respondent had concluded a deed of sale, in respect of the property, in 2014. Secondly, the full purchase price had been paid into the Trust account of the conveyancer. The conveyancer appropriated the funds and was struck off the role.

The Court held that the Applicant’s failure to disclose these material facts was fatal to its application under the PIE Act. The Applicant had not mentioned that a deed of sale existed and that the purchase price had been paid. Applicant had also put up no facts indicating that the deed of sale had been validly terminated. Given that these shortcomings, the application was dismissed with costs.

The judgment is obviously correct. Payment by a purchaser to the conveyancer appointed by the seller constitutes compliance by the purchaser of its payment obligations. In those circumstances the deed of sale cannot be terminated. In any event, on a procedural level, a party seeking eviction under the PIE legislation must make full disclosure of all relevant facts or face the risk that the application will be dismissed.

15/08/2025

Residential estates and complexes may no longer enforce rules that forbid domestic workers from having visitors or require them to wear name tags. These rules may lead to fines or imprisonment for trustees or managing agents.

The new Practice Directive issued by the Community Schemes Ombud Service (CSOS) introduces significant changes to the governance of community schemes. These include restrictions on forcing property owners to use specific agencies when selling or renting their properties.

The Directive also addresses concerns such as:
• Unequal application of pet bans,
• Excessive fines and penalties, and
• Administrative processes to be complied with

Importantly, this new Practice Directive consolidates and supersedes all previous CSOS directives and now serves as the primary resource for interpreting and applying rules across all community schemes.

07/08/2025

It is not uncommon for individuals and businesses to become embroiled in billing disputes with local authorities. When, however, those disputing parties sell properties and wish to transfer them, they require a clearance certificate from their municipality. This can be refused if the municipality claims that monies are owed to it.

That conundrum enjoyed the attention of the court in Majiedt NO v Mangaung Municipality [2025] ZAFSHC 129. A property had been sold by an insolvent estate. Transfer was stalled due to disputed municipal charges, in respect whereof the municipality did not meaningfully respond to valid queries. In desperation, the liquidators approached the High Court for relief.

The Court found that the municipality had provided inflated clearance figures, including arrears in excess of those permitted by the Municipal Systems Management Act. The municipality had failed to justify the calculations, despite repeated requests.

The Court found that the municipality’s demands were unlawful, and impermissible. The municipality was ordered to provide the applicant with itemised clearance figures within five court days, and to issue a clearance certificate on payment of those figures. The municipality was further directed to pay the applicant’s costs.

It is good to know that those unable to obtain proper itemised billing from their municipalities are not without legal redress.

31/07/2025

'Please Call Me' saga to be continued...

The Constitutional Court has not ended the protracted legal battle between Vodacom and Please Call Me idea-man, Kenneth Makate, instead sending it back for another round.

28/07/2025

🏠 Selling Your Property? Here’s What You Really Need to Know! 💡

Many sellers calculate their expected profit based on the sale price… but during the transfer process, they’re hit with unexpected costs that eat into those figures fast. 😬

✅ Electrical
✅ Plumbing
✅ Beetle/Pest
✅ Gas
✅ Repairs to pass inspections
✅ PLUS: Fixing defects that must legally be disclosed!
✅ Building plans

🔍 Sellers are required by law to disclose any known defects, and if they’re concealed or not declared, you could face serious legal consequences later. 😟

Think: leaks, damp, faulty wiring, roof issues… hiding them doesn’t protect you - it increases your liability. And buyers can come back after registration if they discover something you failed to mention.

These aren't just formalities - they’re legal requirements and can cost thousands if there are hidden issues. That “net profit” you planned for? It can shrink fast if you’re unprepared.

💡Pro tip: Get a pre-sale inspection and full disclosure report before listing. It protects your sale, your reputation, and your bottom line.

25/07/2025

One may acquire ownership of immovable property by remaining in possession of that property for 30 uninterrupted years. The running of prescription may be interrupted in certain circumstances. One of those circumstances was considered by the SCA in Hassody Katha v Primathie Pillay N.O. and Others [2025] ZASCA 106.

The matter concerned a dispute over ownership of immovable property in Benoni, registered in the name of Latchman Katha, the appellant Hassody Katha’s mother-in-law. Following Ms. Katha’s death in 2014, the appellant claimed ownership of the property through acquisitive prescription under s 1 of the Prescription Act 68 of 1969, asserting she had possessed it for the required 30-year period.

On appeal, the SCA had to determine whether the high court correctly interpreted s 3(1)(a) of the 1969 Act and whether Ms. Katha’s death constituted a superior force that delayed the 30-year prescription period. In its judgment, the court emphasized that property rights are protected under s 25(1) of the Constitution, ensuring an owner’s right to defend their property against claims, including those based on acquisitive prescription.

The SCA held that the death of Ms Katha constituted superior force, which interrupted the running of prescription and that the acquisitive prescription period had not been completed. Consequently, the appellant had not acquired ownership through acquisitive prescription.

This decision underscores that while long-term possession may eventually ripen into ownership, the process is far from automatic. Legal interruptions, such as death, incapacitation, or superior force events, can reset the clock, preserving the rights of registered owners and heirs. It’s a potent reminder that prescription law balances both certainty and fairness in property relations.

21/07/2025

Family trusts are widely used to take care of family members. The judgment in CHR v HWR [2025] ZA LMPPHC 134 considers an interesting aspect of trust law.

The applicant had donated assets to a family trust for the benefit of his children. This constituted a donation. At common law, a donation could be revoked due to gross ingratitude.

The relationship between the applicant and one child had deteriorated irretrievably. The child had committed assaults against the applicant, resulting in criminal prosecution, and the respondent had been convicted of several criminal offences.

The court held that the respondent had displayed the sort of gross ingratitude justifying revocation of the donation, and granted an order removing the respondent as a beneficiary, and substituting one of applicant’s grandchildren in his place.

A warning, perhaps, to persons appointed as beneficiaries in trust deeds to display appropriate gratitude for that which is bequeathed to them.

18/07/2025

In WD Motors v Shell SA Refining [2025] 5341/24 (FB) the High Court heard an eviction application by WD Motors (Pty) Ltd against Shell South Africa Refining (Pty) Ltd, Shell Downstream South Africa (Pty) Ltd, and other occupiers of a commercial property owned by the applicant. The property was leased to Shell. The lease agreement permitted subletting only if the sublessee operated a business ancillary to a filling station.

The applicant alleged that Shell had breached the lease by subletting to a sublessee operating an electronics business. The applicant has not consented to this sublease. Shell had also failed to maintain the premises and pay municipal charges. Shell was notified of these breaches but failed to remedy them, leading to the lease cancellation. Shell opposed, arguing that the cancellation was unlawful, motivated by a desire to let one of the properties out for a higher rental.

The court found that the electronics store was not ancillary to a filling station and noted ongoing maintenance issues, including the fact that a wall was in a state of disrepair and urgently required painting, and the roof required substantial repairs.

The court concluded Shell had breached a number of clauses in the lease, and that the materiality of the breaches was irrelevant because the breach contained a forfeiture clause entitling cancellation in respect of any breach by the tenant. Shell’s defenses were neither genuine nor bona fide. The applicant’s case for eviction was upheld, with Shell and other occupiers ordered to vacate within 60 days. Costs were awarded against the first and second respondents, jointly and severally.

27/05/2025

The recent judgment in R.E.M v A.S.C.M and Others [2025] ZAKZDHC 30 examines the critical question of whether a surviving spouse, as sole heir, could take urgent legal action to protect estate assets prior to the formal appointment of an executor.

The applicant, a widow who sought urgent relief against her late husband's family members who were actively involved in running the family's motor vehicle dealership business. Following her husband's death, family members concluded certain questionable financial transactions, in particular a substantial withdrawal of R142,000 form the business. As no executor had been appointed, the widow approached the court seeking an interdict to preserve the estate's assets and maintain the status quo of the business operations.

The court's analysis confirmed the legal doctrine that permits beneficiaries to protect estate assets where no executor has been appointed or the executor, if appointed, is unable or unwilling to act. The court affirmed that in circumstances where there is a genuine risk to estate assets, beneficiaries may seek appropriate relief from the court to prevent potential harm to the estate.
However, the court emphasized that such intervention should be carefully circumscribed. In this instance, while the widow was granted partial relief regarding the suspicious withdrawal of funds by the first respondent, other aspects of her application were dismissed. The judgment made clear that any interim measures would only remain in effect until the executor's appointment, at which point the responsibility for estate administration would properly transfer to the appointed executor.

The judgment provides important guidance on their rights and limitations when seeking to protect estate assets in exceptional circumstances. While the court recognized the necessity of interim protection in this case, it also reinforced the principle that the executor's role remains paramount in proper estate administration.