Meyer & others v Big Five Developments (Pty) Ltd

During 2010, Leola Meyer, a trustee of Klipriviersberg Trust and JGM Trust, approached Glenn David Crick, a director of Big Five Developments (Pty) Ltd, to develop land belonging to the Trusts. The parties had previously dealt with each other when developing another piece of land. Negotiations led to the conclusion of three joint venture agreements (JVA) between Big Five and various trusts (Klipriviersberg Trust, JGM Trust, and JG Meyer Boerdery Trust). The original plan was for a low to medium density residential estate, but this evolved to a high-density mixed-use residential scheme. The main purpose of the JVA was to increase the value of the land by obtaining appropriate rezoning, then sell it to a third party or realisation company. Big Five was to undertake the development and rezoning, paying all associated fees. Three trustees were involved (Leola, Heleen, and Tyers), with Leola primarily negotiating and signing the agreements. The Trusts later challenged the validity of the JVA, and Big Five instituted action seeking rectification of various clauses, a declaration that the agreement was valid, and an interdict preventing the trustees from negotiating the sale of the property to Home Talk Developments or any other third party.

• Whether the joint venture agreement constituted a sale of land requiring compliance with the Alienation of Land Act 68 of 1981
• Whether the agreement was void for vagueness due to uncertainty regarding the purchase price and value of the property
• Whether Leola Meyer had authority to bind the trusts by signing the agreement
• Whether proper trustees' resolutions were passed authorizing the November 2011 agreement
• Whether a proper case for rectification of the agreement was made
• Whether certain claims for relief were properly abandoned during the application for leave to appeal

The appeal was dismissed with costs, including costs occasioned by the employment of two counsel.

A joint venture agreement for the development and rezoning of land, where the purpose is to increase property value for future sale to third parties (a realisation company and development company), does not constitute a sale of land requiring compliance with the Alienation of Land Act 68 of 1981. The Act is only applicable where there is an actual agreement of sale between the parties, not where sales are merely contemplated in the future with other entities. In interpreting agreements, courts must ascertain the intention of the parties by examining all circumstances surrounding the conclusion of the agreement, including the factual matrix and relevant subsequent conduct. Where a trust deed provides for decisions by majority vote, not all trustees are required to sign an agreement for it to bind the trust, provided the required majority has authorized the transaction. Parties who fail to challenge evidence in cross-examination are deemed to have accepted that evidence as correct (applying the rule in Browne v Dunn), and failure to call material witnesses (such as the defendants themselves) to establish a defence is fatal to that defence.

The court made observations about the unbusinesslike nature of interpreting the agreement in the manner suggested by the appellants, which would have meant Big Five would develop property belonging to the Trusts without any quid pro quo. The court noted that enforcing the JVA as only a property development agreement would not interfere with the good faith the parties promised themselves. The court also observed that the fundamental flaw in the appellants' case was their failure to call as witnesses the very defendants on whose behalf the plea was filed, making it difficult to see how they could discharge their evidentiary burden. Regarding the abandonment issue, the court commented that holding the respondents bound by an erroneous submission that was corrected during argument before the high court would be "opportunistic and devoid of merit", suggesting a broader principle against taking unfair advantage of inadvertent counsel errors that are subsequently rectified.

This case provides important guidance on the interpretation of joint venture agreements in South African law, particularly the distinction between development agreements and sale of land agreements for purposes of the Alienation of Land Act. It clarifies that agreements aimed at increasing property value through rezoning and development, with contemplated future sales to third parties, do not constitute sales of land requiring compliance with the Act. The case also reinforces principles regarding trust administration, specifically that unanimity of trustees is not required where trust deeds provide for majority decision-making. It emphasizes the importance of the rule in Browne v Dunn regarding cross-examination and the consequences of failing to challenge evidence. The judgment also demonstrates a pragmatic approach to inadvertent errors by counsel during proceedings, refusing to allow opportunistic reliance on bona fide mistakes that are subsequently corrected.