SouthernEra Resources Limited v Farndell NO

The executor of the Estate of the late Marjorie Diana Dent sold certain mineral rights to SouthernEra Resources Limited in terms of a written agreement concluded in September 1995. The purchase price was payable against registration of a notarial deed of cession, and the purchaser was required to furnish a bank guarantee as security once the Master of the High Court consented to the sale. Due to delays in identifying heirs, the Master’s consent was only obtained and communicated to the purchaser on 22 April 2004. Before the purchaser furnished the required guarantee, section 3(1)(m) of the Deeds Registries Act was repealed on 1 May 2004, making registration of mineral rights cessions legally impossible. The purchaser argued that the sale lapsed due to supervening impossibility of performance, while the executor contended that the sale had already become perfecta, transferring risk to the purchaser.

The appeal was dismissed with costs, including the costs of two counsel, and the order of the High Court compelling payment of the purchase price was upheld.

The case is an important authority in South African contract and sale law on the distinction between suspensive conditions and contractual terms, particularly in agreements of sale. It confirms that once a sale becomes perfecta, the risk of supervening impossibility passes to the purchaser, even where delivery later becomes legally impossible due to a change in the law.