Sandlundlu (Pty) Ltd v Shepstone and Wylie Inc

The appellant, Sandlundlu (Pty) Ltd, owned the Estuary Hotel in Port Edward and entered into a complex series of transactions with Biz-Afrika 987 (Pty) Ltd, controlled by Dr Kotter, to lease the hotel business and later sell the land. An oral agreement fixed the monthly rental at R50 000 with a 12% annual escalation. A written lease drafted by the lessee’s attorney erroneously reflected rental as R4 500 with 10% escalation. The appellant’s attorney, Breytenbach of Shepstone & Wylie Inc, noticed the error, undertook to correct it, but negligently failed to do so before the lease was signed by both parties. Biz-Afrika paid only R300 000 once and thereafter no rental. The appellant had to pursue rectification, eviction proceedings, and ultimately recovered no rental as Biz-Afrika became insolvent. The appellant sued its former attorneys for damages arising from breach of mandate.

The appeal by the appellant and the cross-appeal by the respondent were both dismissed with costs. The trial court’s award of limited rental damages, interest from date of summons, and attorney-and-client costs for the rectification arbitration was upheld.

The case is significant for clarifying the application of factual causation and remoteness in contractual damages claims against negligent professionals, particularly attorneys. It confirms that plaintiffs need only prove probable causation, not certainty, and that professional negligence may found liability even where third-party dishonesty and insolvency intervene. It also affirms that attorney-and-client costs may be recoverable as damages where they are a foreseeable consequence of breach.