[REPORTABLE] 
		IN THE HIGH COURT OF SOUTH AFRICA 
		(WESTERN CAPE HIGH COURT)
CASE NO: 13703/07
In the matter between:

and

NDITA, J:

[2] The applicant is a company duly registered and incorporated in accordance with the Laws of the Republic of South Africa and the developer of the land, which is the subject matter of the present dispute. The respondents are the owners of the land and married to each other. Mr J P Coetzee represented the applicant in court in these proceedings. Mr M Bridgman appeared for the respondents.

THE CONTRACT

[3] On 10 March 2006, the applicant concluded a written agreement in terms of which the respondents were to make available to it farm land defined in clause 1.2.8 of the contract as:

"Remaining extent of the farm Retreat and The Willows nr 168 Stellenbosch RD in extent 5,9045 hectares and Portion 9 of Farm nr 119 Stellenbosch RD in extent 9,9034 hectares, both held in terms of T.37142/2001 known as BERGPLAAS."
[4] The overall extent of the land in terms of the agreement was therefore 15,8079 hectares for which the applicant was to pay an amount of R2 000 000,00 as a non-refundable deposit. In terms of clause 1.2.3 of the agreement, the applicant was obliged to develop a minimum of 300 stands with an average of 350 square metres on the land. The applicant paid the requisite sum of R2 000 000,00 on 16 March 2006. However, during February 2007, the applicant avers that it came into possession of the title deed of the land and discovered that, according to condition E of the Title Deed, two portions of the land described in the agreement as portion 9 of the farm 119 Stellenbosch RD, have been expropriated by the Divisional Council of Stellenbosch on 17 December 1982. The portions expropriated are in the extent of approximately 1,469 hectares and 710 square metres, as a result of which the aggregate of the expropriated land was 1,54 hectares. The extent of the land for development was thus 14, 2679 hectares and not 15,8079 hectares as reflected in the agreement between the parties. The Deed of Transfer T837142-2001 that reflects the extent of the property as 9,9034 hectares and 5,9045 metres is attached to the agreement.
[5] Some terms of the agreement have to be noted. In terms of Clause 2.2.1 the deposit of the sum of R2 000 000,00 is non-refundable and would, upon payment, become the sole and absolute property of the respondents. A further clause which turns on the issue for adjudication is Clause 2 of part B providing that the owner makes the land available to the developer voetstoots. I shall revert to these two issues later in this judgment.

[7] The respondents filed a counter application in which they sought an order declaring that the agreement of 10 March 2006 was a valid agreement and further seek an order rectifying clause 1.2.8 referred to above describing the land by adding the following words:

"which title deed records that two portions of the property, measuring a total of plus minus 1,54 Ha have been expropriated by the Divisional Council of Stellenbosch, leaving a total of plus minus 14, 2679 Ha available for development."

The reference to the title deed in the agreement incorporates the terms and conditions appearing in the title deed by reference.

[8] The respondents further seek an order declaring that they had lawfully cancelled the agreement between the parties on 16 March 2007, and in consequence a further order declaring that they are entitled to retain the non-refundable deposit of R2 000 000,00 paid by the applicant on 16 March 2006.

[9] In the affidavit in support of the counter application deposed to by the first respondent, it is averred that the reference to the Deed of Transfer, which clearly reflects that a portion of the land had been expropriated and was therefore less than the extent referred in the agreement, shows that the parties intended to incorporate such deed in the contract. According to the respondents, it is clear from the contract that they intended to supply the land for development as referred to in the deed. Nothing more, nothing less. However, this attitude, in my view, does not take into account that the contract specifically provides the full size and the extent of the land for development. The respondents further aver that the deed is a public document accessible to interested parties and the applicant could have easily verified the correct size of the land before signing the contract if the extent was material to the intended development. As developers of the land, so avers the respondents, it was up to the applicant to survey the land or verify its true extent in order to complete the responsibility it assumed under the contract.

[10] The first respondent admits that at no stage prior to the conclusion of the contract, did the parties discuss the extent of the land. Notwithstanding this averment, he, in his affidavit in support of the counter-claim, insists that the applicant had, prior to signing the contract, knowledge that less than 15,0879 hectares were available for development. He sketches a brief history of how the present transaction arose. According to the first respondent, he was approached by Mr Andries Breedt from Rawson Properties who then informed him that there was a developer interested in the land. The representative of the respective parties met on 8 February 2006 at the offices of Musto Brindley Inc, the respondents' attorneys of record. Pursuant to the meeting, the respondents confirmed in a letter dated 10 February 2006 that they were in favour of the deal and suggested incorporation of milestones in order to regulate the project. In response to this proposal, the applicant did not raise the issue of the size of the land for development and the agreement was signed on 10 March 2006.

[11] After the contract was signed and during April or May 2006, the first respondent met with the applicant's representatives, Mr Nortjie and Mr Nel, who informed him that the size of the property was not as big as earlier envisaged and that that would create potential problems for development. According to the first respondent, Mr Nortjie seemed associated with the applicant. Nothing much turned on the size of the property but for the fact that Mr Nel and Mr Nortjie discussed changing the style of the development and making it more up market. The respondents requested a layout plan for the development. During June 2006, the respondents met with one Susanna Nel (Mr Nel's sister) who requested him to sign a Notification of Intent to Develop in terms of Section 38 of the National Heritage Resources Act No.25 of 1999. In the notice the size of the land is reflected as 14, 3389 hectares contrary to the extent referred to in the contract.

[12] In a meeting held on 6 June 2006 at the respondents' attorney's offices in Tokai, at the instance of Mr Nel who was represented by Mr Wallace and Mr Nortjie, the issue of the size of the property was raised as a concern. At this meeting, according to the first respondent, the applicant confirmed that they had had the property surveyed. Again the extent of the land did not appear to have any impact on the agreement because Mr Nel undertook to present a layout plan of the proposed development. On 13 December 2006, the first respondent received a request to sign a special power of attorney from a company known as Under the Boardwalk 19 (Pty) Ltd, which claimed to be the applicant's development planner. The power of attorney was sent to the first respondent's attorneys, Musto Brindley Inc. Attached to the power of attorney was an email in which the new company confirmed that the process of Rezoning and Subdivision application was finalized on 12 December 2006 and all that remained was for the respondents to sign the power of attorney.

[13] The first respondent avers that he did not sign the document as he had not yet discussed the layout plan with the applicant's representatives. On 30 January 2007 a further meeting was held at the respondents' attorney's office. Mr Nel and Mr Wallace were again present. Mr Nel gave a progress report on the development. However, on 2 February 2007, the first respondent was notified by the Stellenbosch Municipality that the application for the subdivision and rezoning was lodged in December 2006, but the application process had not commenced as the lodgment fee had only been paid on 27 January 2007. The first respondent alleges that he brought that information to Mr Nel's attention through a texted cellphone short message system, ie, sms. Eventually, on 6 February 2007, the first respondent received the application for rezoning and subdivision. The rezoning layout reflected that, contrary to 300 houses agreed upon by the parties, only 248 residential erven and 2 apartments could be developed.
[14] All of this background information, coupled with the applicant's conduct of performing in terms of the contract despite realizing that the extent of land was less than the size reflected on the agreement, according to the first respondent, leads to one inescapable conclusion that the contract between the parties had been rectified.

[15] The first respondent denies that the agreement between the parties is void and contends that it is the applicant who is in breach of the terms of such agreement. In terms of clauses 2.9.1 and 2.9.2 the parties agreed that:

"2.9.1 The DEVELOPER shall obtain rezoning and subdivisional approval for the land development from the local authority by 31 October 2006;

2.9.2      The DEVELOPER shall obtain the record of Decision from the Department of Environmental Affairs approving development in terms of the Environmental Conservation Act 73 of 1989, as amended, by31 October2006."

It is not in dispute that the above terms of the contract were not complied with. It was only subsequent to the above meeting that the respondents discovered that the Application for Rezoning and Subdivision had only been lodged during January 2007, and the Application to the Department of Environmental Affairs had not yet been lodged.

[16] The respondent alleges that because of such breach, he cancelled the contract in a letter dated 12 February 2007 to the applicant, which reads as follows:

" Dear Sirs,

RE: BERGPLAAS

The above matter and in particular the meeting at our offices on 30 January refers.
After careful consideration, our clients have decided that they cannot overlook your failure to meet the deadlines set out in clauses 2.9.1 and 2.9.2 of the Agreement namely:

It was only subsequent to the above meeting that our clients discovered that the Application for rezoning and Sub-division had only been lodged during January 2007 and the Application to the Department of Environmental Affairs had not yet been lodged.

Effectively this puts to the time frame envisaged in the Agreement for the development of the property.

Accordingly, our clients hereby notify you of their decision to exercise their right to terminate this agreement in terms of clause 2.9.
You, of course are entitled to exercise your right in terms of clause 7.1 to purchase the land for R50 000 000,00 (Fifty Million Rand)."

[17] The applicant responded to this letter by stating that it had obtained a copy of the title deed which clearly reflected that 1,469 hectares and approximately 710 square metres have been previously expropriated by the Divisional Council of Stellenbosch. In the replying affidavit, the applicant emphatically denies that he was aware of the true extent of the land available at the time the contract was entered into. According to the applicant, he received a copy of the title deed only in February 2007. Furthermore, the respondents' claim to rectification cannot be sustained because Clauses 9.2 and 9.3 of the agreement provide as follows:

9.3 This Agreement constitutes the whole agreement between the Parties as to the subject matter hereof and no agreements, representations or warranties between the Parties regarding the subject matter hereof other than those set out herein are binding on the Parties."

1. The respondents did not disclose their confusion as to the extent of the land when the contract was concluded; and
2. Impossibility of performance of developmental obligations in that a minimum of 300 stands (as envisaged in the contract) cannot be developed on the available land; and
3. Misrepresentation; and
4. Repudiation in that the respondents refuse to provide 15, 8079 hectares for development; and

[20] In the present matter, there is no genuine or material dispute of facts. Both parties admit all the terms of the contract. The weighty consideration is whether the applicant was, at the time of the inception of the contract aware of the actual size of available land. I am not persuaded that the respondents, who raised the dispute, have in the affidavits filed, seriously and unambiguously addressed the issue of how the applicant obtained prior knowledge of the extent of the land available for development at the time the contract was entered into in the light of the fact that there were no discussions between the parties pertaining to the expropriated land. The only reference to the applicant's prior knowledge appears in the affidavit of Mr Breedt (the estate agent) in which he states that he informed Mr Nel, who represented the applicant, that there might be a discrepancy of 1,5 hectares in the size of the property before the recordal of the contract. I am in this regard persuaded to accept the applicant's version for the following reasons:

"1.    Mr Breedt states that:
14. "While we were standing on land, I told Mr Nel about the expropriation for the road and there might be a 1,5 hectare discrepancy. I told him to work on the available +-14,3 hectares. I said that if the Deeds Office was correct and there needed to be no deduction then they would have an extra 1,5 hectares to work with.
15. When I told Mr Nel to work on 14,3 hectares, he told me not to tell him how to do his job. He said he knew his job. We returned to Stellenbosch and we discussed further details."
[21] If Mr Breedt knew of the discrepancy before the contract was signed there is no tangible reason why the true extent of available land was not recorded in the contract. It is noteworthy that Mr Breedt is the estate agent who solicited developers on behalf of the respondents and was in fact the respondents' agent. Furthermore, the contract was carefully drafted by the respondents' attorney who presumably must have had sight of the title deed. It is difficult to comprehend why he did not bring that information to the attention of the respondents ,seeing that he was the one sourcing a buyer for the land. The agreement specifically provides that the developer was obliged to pay the estate agent, Mr Breedt, R6 000,00 in respect of each erf sold after completion of the development and he had sole mandate to market the stands to prospective purchasers. Surely if he had information that the extent of the land was less than originally agreed, that would have been a very important factor impacting on his earnings, a fact that should have been disclosed to the contracting parties.

[22] Mr Breedt is not a party to the agreement but merely an estate agent. It was incumbent upon the owners of the land to correctly define the land in the light of the knowledge their estate agent possessed.

[23] The developer, by necessary implication, had the right to determine the shape and size of the land. It appears that the applicants also did not verify the extent of the land and simply relied on what was reflected in the contract. Mr Nel, as the director of the applicant, would obviously wish to negotiate a deal favourable to the applicant. The question is then why he would deliberately enter into this agreement if he was told by Mr Breedt that the land could be insufficient for the intended development. Clearly that would be to the disadvantage of the applicant as a developer.

[24] The first respondent concedes throughout his affidavit that the actual extent of the land was never an issue when the contract was signed. It is easy to understand why the actual extent was not an issue if the extent of the land was more than the hectares the respondents had undertaken to make available for development.
However, it becomes material should it be lesser than envisaged. He states that:

"In about April May 2006 I met with Mr Jan Nel and Mr Ferdi Nortjie at the property. Mr Nel asked me if I was aware that the property was not as big as they had originally envisaged. I replied that I was not aware of the size of the property and I said that I had never discussed the size with them. I said to them that they were property developers and that it was up to them to survey the land or check the size of the land."

[25] It is clear from the aforegoing that both parties signed the contract believing that the actual size reflected in the agreement was available. There is therefore a disagreement over an important quality or attribute of the agreed subject matter of the contract. I am of the view that this was a mutual mistake.

MUTUAL MISTAKE AND IMPOSSIBILITY OF PERFORMANCE

[28] The applicant's intentions when he entered into the agreement are explicitly set out in paragraph B of the preamble as follows:

"The Developer envisages subdividing the land into 316 and 330 residential stands."

[30] In the counter application the respondents claim that the contract had been rectified. Furthermore, so allege the respondents, the title deed referring to the expropriated land should be incorporated to the contract by reference. I now proceed to deal with such rectification and incorporation of the title deed by reference.

RECTIFICATION AND INCORPORATION BY REFERENCE

that:

". it is competent to order rectification of a written contract in those cases where, in which it is proved that both parties had a common intention which they intended to express in the written contract but through a mistake failed to express."

that:

[33] In the present matter, in line with the respondents' version, the parties did not discuss the extent of the land before the conclusion of the contract. The respondents seek to rectify the description of the land to 14,2679 hectares in stead of the agreed 15,8079 hectares.

have".

[37] Accordingly, the respondents' reliance on the voetstoots clause is misplaced because the clause cannot exempt the respondents from the obligation to deliver to the applicant the land as specifically agreed in the contract. Thus the voetstoots clause cannot in the circumstances of this case be read as referring to the extent of the land as the contract specifically provides for same, but rather to the condition of the land.

CONCLUSION

[39]  In the result, I make the following order:

2.	The Respondents are ordered to pay the applicant an amount of R 2 000 000,00;
3.	The respondents are ordered to pay interest to the applicant at the rate of 15,5% per annum with effect from 16 March 2006;
4.	The  Respondents are further ordered to pay the Applicant's costs of suit;
5.	The respondents' counter-application is dismissed with costs.
NDITA, J