Jointwo Holdings (Pty) Ltd v Old Mutual Life Assurance Company (South Africa) Ltd

The first and second appellants leased restaurant premises in the Riverside Mall, Nelspruit, from the respondent, Old Mutual Life Assurance Company (SA) Ltd. The third and fourth appellants bound themselves as sureties for the lessees’ obligations. Old Mutual sued for arrear rental and related amounts. The lessees admitted the claims but counterclaimed for damages, alleging breach of contract on the basis that Old Mutual had allowed a competing Spur restaurant to operate in the mall. They contended that, prior to conclusion of the written leases, Old Mutual’s letting agent had conveyed that no Spur restaurant would be allowed, and that the leases should be rectified to reflect this alleged common intention. The written leases, however, expressly excluded any exclusive trading rights. The High Court refused rectification, and the appellants appealed to the Supreme Court of Appeal.

The appeal was dismissed with costs, and the refusal of rectification by the High Court was confirmed.

The case reaffirms the strict requirements for rectification in South African contract law, particularly the need for a proven common intention intended to be embodied in the written contract. It also clarifies the limits of an agent’s authority and distinguishes between representations of policy and binding contractual agreements.