Horatio Stephen Mathewson and Another v Martha Francina Van Niekerk and Others

On 26 March 2007, the respondents (sellers) sold an erf (measuring 10,500 square metres) in a township under development to the appellants (purchasers). Clause 17 of the deed of sale provided that the developer warranted that the erf would be provided with electrical connection, water connection and sewerage. On 6 May 2009, the appellants' attorney wrote to the respondents alleging breach of the warranty in clause 17, stating that no services had been provided to the erf, and gave 7 days' notice to remedy the defect or the contract would be cancelled. When this was not remedied, the applicants (respondents in the appeal) brought motion proceedings in the High Court seeking relief based on valid cancellation of the deed of sale. The respondents (appellants in the appeal) defended on the basis that there was a tacit term that the purchasers had to indicate where the services were to be installed on the large erf before the sellers were obliged to install them, and that despite repeated oral requests, the purchasers had not provided this indication. The deed of sale contained clause 11, an 'entire agreement' or 'sole contract' clause stating that the document constituted the only agreement between the parties.

• Whether a tacit term can exist in a written contract for the sale of land notwithstanding the presence of a 'sole contract' or 'entire agreement' clause
• Whether in motion proceedings where there is a dispute of fact, the court can reject a respondent's version as far-fetched or clearly untenable
• Whether the probabilities supported the existence of the tacit term that purchasers had to indicate where services were to be installed on a large erf before the sellers' obligation to install arose
• Whether the respondents' defence based on the tacit term was an afterthought that should be rejected

The appeal succeeded with costs. The order of the court a quo was set aside and substituted with an order dismissing the application with costs.

The binding legal principles established by this judgment are: (1) A tacit term in a written contract for the sale of land is not excluded by an 'entire agreement' or 'sole contract' clause because a tacit term, once found to exist, is read or blended into the contract as an integrated part thereof and is therefore 'contained' in the written deed; (2) In motion proceedings where there is a factual dispute, the court must accept the respondent's version unless the applicant can demonstrate that the respondent's allegations are so far-fetched or clearly untenable that the court is justified in rejecting them merely on the papers - this is a stringent test not easily satisfied; (3) The existence of a tacit term must be determined having regard to the probabilities and the practical commercial context of the transaction, including the physical characteristics of the subject matter (such as the size of the land being sold).

The court made obiter observations that: (1) The 'entire agreement' clause in this case (clause 11) was poorly drafted; (2) If the matter had proceeded to oral evidence or trial, the apparent contradiction regarding when services became available would have provided ammunition for cross-examination of the first respondent, but this was not sufficient to reject the defence on the papers in motion proceedings; (3) The wider context of the email correspondence showed that at the time of the relevant email (16 September 2008), the parties were negotiating on the basis that the respondents would repurchase the erf from the applicants, not that the applicants wanted the services installed because they intended to build on the erf.

This case is significant in South African contract law and civil procedure for several reasons: (1) It confirms and applies the principle from Wilkens NO v Voges that tacit terms (whether actual or imputed) can exist in written contracts notwithstanding 'entire agreement' or 'sole contract' clauses, as such tacit terms are integrated parts of the contract that are 'contained' in the deed; (2) It reaffirms the stringent test from Plascon-Evans Paints Ltd v Van Riebeeck Paints (Pty) Ltd for rejecting a version in motion proceedings as far-fetched or clearly untenable, emphasizing that this test is not easily satisfied; (3) It demonstrates the importance of considering the probabilities and practical commercial context when determining whether a tacit term exists in a contract for the sale of land; (4) It illustrates that apparent contradictions in a defendant's case may provide material for cross-examination but are not necessarily sufficient to reject a defence on the papers in motion proceedings, particularly when the contradiction relates to an irrelevant aspect of the case.