Kosmos X6 Homeowners Association v Leopont 64 Properties (Pty) Ltd and Another

Leopont 64 Properties (Pty) Ltd developed a proposed township, Kosmos Extension 6, and during March–May 2004 concluded agreements of sale for erven that had not yet been created or proclaimed. The local municipality granted consent for pre-proclamation sales under the Town Planning and Township Ordinance. The township was proclaimed in May 2005, the General Plan approved in December 2005, and the erven transferred in August 2006. The purchasers later ceded their rights to the Kosmos X6 Homeowners Association. Kosmos alleged that Leopont failed to perform various ancillary obligations under the sale agreements, including construction of infrastructure and facilities, and sought rectification and specific performance (or damages). Leopont raised a special plea that the claims had prescribed, contending that prescription commenced when the agreements were concluded in 2004. The High Court upheld the plea of prescription, and Kosmos appealed.

The appeal was upheld with costs. The High Court’s order was set aside and replaced with an order dismissing the special plea of prescription with costs. The matter was referred back to the trial court for adjudication of the remaining claims, including whether the respondent’s attorneys’ letter of 4 June 2007 constituted a binding undertaking.

The case clarifies South African law on when prescription commences in contracts where obligations are not immediately enforceable, particularly in the context of township development and pre-proclamation sales. It reinforces the distinction between a debt arising and a debt becoming due, and confirms that prescription cannot run before a creditor has a complete cause of action.