Klokow v Sullivan

The plaintiff (Klokow) and defendant (Sullivan) concluded a written agreement in September 2000 for the sale of a liquor-licensed adult entertainment business for R500 000. Klokow paid R250 000 as half of the purchase price and took possession of the business. The agreement was concluded without obtaining the consent of the Chairperson of the Liquor Board as required by s 38(1) of the Liquor Act 27 of 1989 for the acquisition of a controlling interest. Six weeks later the business was returned to Sullivan, but Sullivan refused to refund the R250 000. Klokow sued for repayment, alleging the agreement was illegal and void.

The appeal was upheld with costs. The order of the full court was set aside and replaced with an order dismissing the appeal to the full court with costs, thereby restoring the trial court’s judgment in favour of the plaintiff for repayment of R250 000.

The case is important for clarifying that courts may relax the par delictum rule even where parties are equally blameworthy, and that plaintiffs are not invariably required to plead specific additional facts to invoke public policy or unjust enrichment. It confirms a flexible, equitable approach to illegality and cautions against overly technical pleading requirements in South African contract law.