Donald & Richard Currie (Pty) Ltd v Growthpoint Properties Ltd

Mr Richard Currie and Donald and Richard Currie (Pty) Ltd held linked units in Paramount Property Fund Ltd. On 18 December 2006, Growthpoint Properties Ltd made a mass offer to all Paramount equity holders to exchange their holdings for either linked units in Growthpoint or cash. The transaction was governed by the Securities Regulation Code on Takeovers and Mergers under s 440K of the Companies Act 61 of 1973. Currie completed acceptance forms for himself and the company, initially believing they held debentures rather than linked units. When he received corrected certificates on 12 January 2007 showing they held linked units, he made deletions and alterations to the forms. However, in completing the forms, Currie placed the number of units in the block electing cash consideration rather than the block for linked units. When Growthpoint (through its agent Computershare) processed the acceptances and sent cheques for the cash consideration, Currie immediately sought to reverse the transactions, claiming he had intended to elect linked units (which were financially more valuable). He refused to bank the cheques and instituted action seeking declarations that the acceptances were pro non scripto and delivery of the linked units and dividends.

• Whether Currie's errors in completing the acceptance forms rendered the elections void on the basis of reasonable mistake
• Whether Computershare, as agent for Growthpoint, should have realized Currie was confused and made enquiries before processing the acceptances
• Whether the acceptance of a mass offer could be avoided based on the offeree's own errors in completing the stipulated form of acceptance
• Whether the election of consideration was severable from the acceptance of the offer
• Whether the reliance theory of contract applied to determine whether an offer made in a stipulated mode had been properly accepted

The appeal was dismissed with costs.

Where a mass offer stipulates a particular mode of acceptance, and an offeree completes the required acceptance form in an unequivocal manner, the offeree cannot rely on his own unreasonable errors in completing the form to avoid the contract on the ground of mistake. The reliance theory of contract does not assist an offeree who seeks to resile from a contract based on his own mistake where he has led the offeror, as a reasonable person, to believe that his declared intention (as evidenced by the properly completed form) represented his actual intention. An election of consideration offered as part of acceptance is not severable from the acceptance itself - it constitutes acceptance in one of the stipulated modes. The agent of an offeror processing acceptances has no duty to enquire into the offeree's unexpressed intentions or the commercial wisdom of the offeree's choice where the acceptance form is unequivocal on its face.

The court observed that there are many reasons why a shareholder may wish to realize shares rather than exchange them for other securities, and it is not for the offeror's agents to second-guess such choices, even where the cash consideration is financially less advantageous than the alternative. Lewis JA noted that the mistakes alleged by Currie, if they were mistakes at all, were "far from reasonable" and in Currie's own words, it was "incredible" that he could have made such mistakes. The court also commented that the financial consequences of different elections, while relevant to commercial decision-making, do not create any obligation on the part of the offeror or its agents to verify that offerees have made the financially optimal choice.

This case establishes important principles regarding the acceptance of mass offers and the doctrine of mistake in South African contract law. It clarifies that where an offeror stipulates a particular mode of acceptance (such as completion of a form), and the offeree complies with that mode, the contract is concluded regardless of the offeree's unexpressed intentions or errors. The case limits the application of the reliance theory of contract (as established in Sonap Petroleum v Pappadogianis) in circumstances involving stipulated modes of acceptance. It confirms that an offeree cannot avoid a contract based on his own unreasonable mistakes in completing acceptance documentation, particularly where the completed form is unequivocal on its face. The judgment reinforces the principle of certainty in commercial transactions, particularly in the context of corporate takeovers and securities regulation. It also clarifies the limited role of agents (such as transfer secretaries) in processing acceptances - their function is to verify compliance with stipulated requirements, not to second-guess the commercial wisdom of offerees' choices or investigate unexpressed intentions.