Reclamation Property Holdings (Pty) Ltd v ArcelorMittal South Africa Ltd and Others

The appellant, part of the Reclamation Group, leased industrial land in Benoni from Iscor (later ArcelorMittal South Africa Ltd). In March 2003, while steps were already being taken to establish a proposed township known as Benoni Extension 74, the parties concluded a written agreement of sale in terms of which Iscor sold several properties to the appellant, including Portion 32 of the farm Kleinfontein 67. The agreement was subject to suspensive conditions relating to the establishment and approval of the township. Although the township was approved by the local authority, it was never declared an approved township under the Town-Planning and Townships Ordinance 15 of 1986. A dispute later arose as to whether the agreement had lapsed or was invalid. ArcelorMittal contended that the agreement was void because it contravened section 67 of the Ordinance, which prohibits the sale of an erf in a proposed township before it is declared an approved township.

The appeal was dismissed with costs, including the costs of two counsel. The first respondent was ordered to pay the costs of the opposed application to introduce the general plan as further evidence.

This case clarifies the interpretation of 'erf' under the Town-Planning and Townships Ordinance 15 of 1986 and confirms the strict application of the statutory prohibition on the sale of land in proposed townships before approval. It reinforces the protective purpose of section 67 and affirms that agreements concluded in contravention of the section are void, regardless of the parties’ commercial context or perceived absence of risk.