Nkengana v Schnetler and Another

The appellants purchased immovable property from the first respondent in terms of a written deed of sale concluded on 22 December 2000 for R260 000, payable in instalments. They were unable to meet the instalment payments, and the parties orally agreed that the appellants would instead pay the respondent’s monthly mortgage bond instalments to Standard Bank. The appellants made various payments over several years and eventually claimed that they had effectively paid most of the purchase price. They demanded transfer of the property against payment of the alleged balance and later tendered payment of the outstanding bond amount, transfer costs and duty. The respondent disputed the sufficiency of the tender, contending that the bond payments were occupational rent and that the purchase price had not been paid. The High Court and full court dismissed the appellants’ claim for specific performance, leading to an appeal to the Supreme Court of Appeal.

The appeal succeeded. The orders of the full court and the court a quo were set aside. The first respondent was ordered to take all necessary steps to transfer the property to the appellants against guarantees covering specified amounts, including the outstanding bond, cash payments, and transfer costs, with a mechanism ensuring payment of at least R260 000. The bank was ordered to facilitate cancellation of the bond. Costs were awarded on a divided basis depending on the stage of the proceedings, and unnecessary record costs were excluded.

The case clarifies South African contract law relating to tenders of performance and specific performance, confirming that a purchaser may still claim transfer if the contract has not been cancelled and a full tender is ultimately made. It also affirms a flexible approach to tenders made in replying affidavits and emphasises that unresolved collateral disputes do not necessarily bar specific performance.