B B S Empangeni CC v Phoenix Industrial Park (Pty) Ltd and Another

In January 1990 the appellant purchased vacant industrial land from the respondents, paying a 10% deposit. The balance was payable on transfer, subject to two suspensive conditions: approval of a sub‑division diagram and a municipal compliance certificate. Soon after conclusion of the contract, the appellant raised concerns about security features allegedly promised in a pamphlet and sought to delay or avoid transfer. The respondents insisted on performance. Litigation was initiated in 1992 but removed from the roll. By 4 October 1994 both suspensive conditions were in fact fulfilled and the property became registrable, although transfer never occurred because the appellant continued to refuse to take transfer. In October 2000 the respondents sold the property to eThekwini Municipality, with transfer in December 2002. In 2006 the appellant purported to cancel the contract, claiming repayment of the deposit and damages. The respondents pleaded, inter alia, that the appellant’s claims had prescribed.

The appeal was dismissed with costs, including the costs of two counsel for the first respondent and one counsel for the second respondent.

The case clarifies the operation of extinctive prescription in reciprocal contractual obligations, confirming that prescription runs from the date suspensive conditions are fulfilled and the debt becomes due, and that once contractual rights are prescribed the contract cannot be repudiated. It also provides guidance on wilful concealment, reasonable care under s 12 of the Prescription Act, and what constitutes an acknowledgment of liability under s 14.