Akasia Road Surfacing (Pty) Ltd and Another v Shoredits Holdings Ltd and Others

The parties concluded a written sale agreement and an addendum on 8 December 1995 in terms of which the respondents sold certain businesses, together with their assets and goodwill, to the first appellant as going concerns. One of the listed assets was described as a “new asphalt plant” with a stated value of R2 990 850. The second appellant bound himself as surety. After conclusion of the agreements, the respondents sued the appellants for payment of the amount due in respect of goodwill. In their plea, the appellants alleged that the asphalt plant was incomplete at the time of sale and that, on a proper interpretation of the contract, the respondents were obliged to deliver a completed plant, alternatively that the contract should be rectified to reflect such an obligation. They further alleged that they completed the plant at their own cost and were entitled to set off those costs against the purchase price. The respondents excepted to the plea on the basis that it disclosed no defence. The trial court upheld the exception in respect of the interpretation and rectification defences and struck out paragraphs 4 and 5 of the plea. The appellants appealed to the Supreme Court of Appeal.

The appeal was upheld in part. The order of the trial court was amended so that only paragraph 4 of the appellants’ plea was struck out. The striking out of paragraph 5 (the rectification defence) was set aside. No order as to costs was made, as the parties enjoyed equal success.

The judgment is significant for South African contract law and civil procedure as it clarifies that vagueness or potential unenforceability of the alleged true agreement does not bar a defendant from seeking rectification. It draws an important distinction between the clarity required to plead a rectification claim and the separate question of whether the rectified agreement would ultimately be valid or enforceable. The case also reaffirms principles of contextual contract interpretation and the limited scope of exceptions aimed at striking out defences.