Narainsamy and Others v Nel and Another (15281/2014) [2020] ZAKZPHC 5 (28 February 2020)

Key Facts

Deceased Name

Transaction Type

Tax Type

Issues

• The court considered whether Nel's request for specific performance (to enforce the 2018 order and transfer the property to her) was justified, weighing potential injustices to Soni who had already settled the property's debts and incurred financial obligations.
• Nel argued that the sale to Soni was tainted by fraud and contrary to public policy (contra bonos mores), as it undermined the 2018 court order. The court evaluated whether these claims could invalidate the transfer, considering constitutional principles and the need to uphold court orders.
• The court assessed whether Ketan Soni, who purchased the property from the applicants after the 2018 order, qualified as a bona fide transferee under the abstract theory of transfer. This involved examining the validity of the real agreement between Soni and the applicants despite the prior court order's conditions.
• The court was required to determine whether the 18 May 2018 court order granted Lauren Ann Nel (respondent) the legal right to transfer and occupy Section 302, Wembley Square, Cape Town, particularly in light of subsequent transfers to Ketan Jamnadas Soni (third applicant). The order's resolutive conditions, including SARS' agreement to issue a tax clearance certificate, were central to this issue.

Date of Death

Tax Years

• 2018
• 2013

Holdings

• The application is dismissed with costs.
• First respondent is directed to pay first to third applicants' costs.
• The court declared that the court order dated 18 May 2018 does not afford first respondent, Lauren Ann Nel, any right to take transfer of and/or occupy section 302, Wembley Square, Vredehoek, Cape Town.
• Scott is directed to return all funds held in trust to Nel.
• The counter application's Part B is dismissed, as Nel failed to make a case for the relief sought.
• The Registrar of Deeds, Cape Town, is joined as the third respondent.

Remedies

• The application is dismissed with costs, requiring the respondent to bear all associated expenses.
• The court declared that the 18 May 2018 order does not afford the first respondent, Lauren Ann Nel, any right to take transfer of and/or occupy section 302, Wembley Square, Vredehoek, Cape Town.
• The first respondent is directed to pay the costs of the first, second, and third applicants in respect of the counter application.

Contract Value

Tax Issue Category

Legal Principles

• The court considered whether a real agreement could be deemed contra bonos mores (against public policy) due to non-compliance with a prior court order. It concluded that non-compliance alone does not render the agreement void, aligning with constitutional principles and the Legator McKenna case.
• The court applied the abstract theory of transfer, which holds that the validity of property ownership transfer is independent of the underlying transaction's validity. This principle was reinforced by references to the Legator McKenna case and Brand JA's reasoning in the Supreme Court of Appeal.
• The judgment emphasized that fraud 'unravels all' only between the victim and perpetrator, not extending to third parties. This was supported by the Absa Bank Ltd v Moore decision, clarifying that third parties acting in good faith and without knowledge of fraud are protected.

Precedent Name

• Legator McKenna Inc. & another v Shea & others
• Menezes v McGaili
• Dream Supreme Properties II CC v Nedcor Bank Ltd & others
• Crundall Brothers (Pvt) Ltd v Lazarus NO & another
• Prinsloo NO & others v Goldex 15 (Pty) Ltd & another
• Kootbodien & another v Mitchell's Plain Electrical Plumbing & Building CC & others
• Barkhuizen v Napier
• Madan v Macedo Heirs & another
• Hyprop Investments Ltd & others v NSC Carriers and Forwarding CC & another
• Sasfin (Pty) Ltd v Beukes

Key Disputed Contract Clauses

• The 2018 Sale Agreement addendum between Narainsamy and Soni obligated Soni to cover outstanding bond payments, levies, rates, and legal fees. Nel's father alleged this arrangement was designed to defraud her by transferring financial burdens to Soni while circumventing the 2018 court order. The court assessed whether these obligations rendered the real agreement contra bonos mores.
• The 2012 Sale Agreement included a clause stipulating that occupation and possession of the property would be transferred to Nel upon registration. An addendum modified this to allow immediate occupation without rental liability. This became a point of contention when Scott later demanded R20,000/month in occupational rent due to delayed transfer, contradicting the addendum's terms.
• The 18 May 2018 court order contained resolutive conditions, including SARS' agreement to issue a tax clearance certificate. These conditions were unmet, prompting the applicants to cancel the sale agreement. Nel argued the order granted her enforceable rights, but the court found the resolutive conditions were not fulfilled, invalidating her claims.

Executor Name

Cited Statute

• Prevention of Illegal Evictions from and Unlawful Occupation of Land Act
• Constitution of South Africa

Executor Appointment

Judge Name

Passage Text

• The application is dismissed with costs.
• It is hereby declared that the court order dated 18 May 2018 does not afford first respondent, Lauren Ann Nel, any right to take transfer of and/or occupy section 302, Wembley Square, Vredehoek, Cape Town.
• The Registrar of Deeds, Cape Town, is joined as the third respondent.

Damages / Relief Type

• Application dismissed with costs.
• Court declared the 18 May 2018 order does not grant Nel rights to transfer or occupy the property.
• Nel directed to pay first to third applicants' costs.