Steyn Lyell Maeyane Attorneys v Oelofse

The respondent, Dr Johan Oelofse, had advanced finance to Abrina 2537 (Pty) Ltd in return for a 10% profit share in a property development known as Drakensberg Gardens. Anticipating payment of approximately R1 million from this profit share, Oelofse relied on it to finance a separate purchase of Wiesenhof Business Park through a company, Plenty Properties (Pty) Ltd. Because Abrina failed to complete the development timeously, Oelofse insisted on a written undertaking. On Abrina’s instructions, the appellant firm of attorneys issued a letter described as a ‘guarantee’ confirming Oelofse’s 10% profit share and stating that payment of R1 million would be made on or before 11 April 2008. The development was delayed, the funds were not available, and the appellant did not pay. As a result, the Wiesenhof sale was cancelled and a R200 000 deposit was forfeited. Oelofse sued the attorneys for payment under the undertaking and for damages. The trial court dismissed the claims, but the full court upheld them, prompting an appeal to the Supreme Court of Appeal.

The appeal succeeded with costs. The order of the full court was set aside and replaced with an order dismissing the respondent’s appeal with costs, effectively restoring the trial court’s dismissal of both claims.

The case clarifies South African law on the interpretation of attorneys’ undertakings and the meaning of ‘guarantee’ in commercial documents. It reinforces the Endumeni approach to contractual interpretation, confirms that subjective intention evidence is inadmissible, and cautions against construing attorneys’ letters as personal guarantees absent clear language.