Counter Point Furnishers CC v S M Fraser t/a Salica

The respondent (Fraser) sold an immovable property to the applicant (Counter Point Furnishers CC) in terms of a written agreement of sale. Clause 17.1 of the agreement provided that if any party caused delay in the registration of transfer, that party would pay interest calculated on the purchase price at the rate charged by a financial institution on first home loan mortgages. The respondent issued a provisional sentence summons against the applicant claiming interest of R215,087, calculated at 11% per annum for the period 8 May 2009 to 3 September 2009. The respondent alleged that the applicant caused a delay by failing to furnish the guarantee required under clause 4.1 of the agreement. Mokgoatlheng J in the South Gauteng High Court granted provisional sentence and refused leave to appeal. The applicant then sought leave to appeal from the Supreme Court of Appeal.

• Whether a provisional sentence judgment is appealable
• Whether the written agreement of sale (specifically clause 17.1) was sufficiently liquid to ground a provisional sentence claim
• Whether the case constituted exceptional circumstances justifying an appeal from a provisional sentence judgment

The application for leave to appeal was dismissed with costs.

A provisional sentence judgment is not appealable unless exceptional circumstances exist. Mere challenges to the liquidity of the underlying document, including disputes about interest rates, identity of financial institutions, dates of default and notification, and conditional liability, do not constitute exceptional circumstances sufficient to make a provisional sentence judgment appealable. The theoretical possibility acknowledged in Smit v Scania South Africa (Pty) Ltd that exceptional circumstances might justify an appeal from a provisional sentence judgment requires the applicant to demonstrate why the particular case is so different from ordinary cases that it should be treated exceptionally. The established principles in Avtjoglou v First National Bank of Southern Africa Ltd regarding the non-appealability of provisional sentence judgments remain binding.

The judgment acknowledged that Smit v Scania South Africa (Pty) Ltd recognized a theoretical possibility that in an exceptional case, a provisional sentence judgment might be appealable. However, the Court observed that this does nothing more than acknowledge an unforeseen set of facts may arise in future that satisfies the requirements established in Zweni. This suggests that while the door remains theoretically open for exceptional circumstances, the threshold is very high and such circumstances are not easily established. The judgment was expressly noted as having 'No Precedential Significance' at the outset.

This case reinforces the established principle in South African law that provisional sentence judgments are generally not appealable except in exceptional circumstances. The judgment confirms that the principle established in Avtjoglou v First National Bank of Southern Africa Ltd regarding provisional sentence proceedings remains binding, and that the theoretical possibility recognized in Smit v Scania South Africa (Pty) Ltd of exceptional circumstances justifying an appeal requires more than mere challenges to the liquidity of the underlying document. The case provides guidance on what does not constitute 'exceptional circumstances' sufficient to render a provisional sentence judgment appealable, thereby maintaining the efficiency and purpose of the provisional sentence procedure.