Royal Anthem Investments 129 (Pty) Ltd v Yuen Fan Lau and Another

The parties concluded a written agreement of sale on 1 June 2009 for immovable property in Tshwane at a purchase price of R3.6 million. The sale was subject to a suspensive condition that the purchasers obtain a loan by 31 July 2009. The purchasers paid a deposit of R720 000 and transfer duty of R264 723 to the seller’s appointed conveyancing attorneys. Although a loan was initially refused, finance was later approved and transfer duty was paid to SARS. Before transfer occurred, disputes arose regarding interest and alleged breach, and the sale ultimately failed. The seller purported to cancel the agreement and the property was sold to a third party. The deposit and refunded transfer duty remained held by the conveyancing attorneys on the seller’s instructions. The purchasers sued for repayment of both amounts.

The appeal was dismissed except for amendments to the interest orders. The conveyancing attorney (first defendant) was ordered to repay the purchasers R720 000 plus accrued investment interest up to 9 December 2009 and legal interest thereafter, and to repay R264 723 plus legal interest from 29 June 2011. The appellant was ordered to pay costs on the attorney-and-client scale, including costs of two counsel.

The case clarifies that deposits and transfer duty paid to conveyancing attorneys pending transfer must be repaid to purchasers when a sale fails, unless a contract clearly provides otherwise. It affirms restitution following failure of a contract and restricts the scope of forfeiture clauses. The judgment is important for conveyancing practice and the treatment of trust monies in failed property transactions.