Ockert Cornelis Vermeulen v Goose Valley Investments (Pty) Ltd

On 24 December 1994, Vermeulen (seller) entered into a written agreement to sell Portion 48 of Ganse Valley No 444, Division of Knysna to Goose Valley Investments (purchaser) for R800,000. The purchaser intended to develop a golf course and residential scheme. The agreement excluded a "Homestead Portion" depicted in an annexed layout plan marked "X" and required the purchaser to subdivide and service 10 erven (approximately 1500m² each) to be transferred back to the seller. An addendum was entered into on 24 October 1995 reducing the purchase price to R750,000 and modifying the subdivision requirements to 18 stands total, with reference to a diagram marked "A". The purchaser allegedly failed to obtain all required rezoning and subdivision approvals. The seller sued for specific performance or alternatively cancellation and damages. The purchaser (first defendant/respondent) excepted to the particulars of claim on grounds that the property description was insufficient to comply with s 2(1) of the Alienation of Land Act 68 of 1981, and was void for vagueness at common law. Van Deventer J upheld the first exception in the Eastern Circuit Local Division. The seller appealed with leave.

• Whether the description of the property sold in the written agreement was sufficiently certain to enable identification on the ground without recourse to evidence of the parties' negotiations, as required by s 2(1) of the Alienation of Land Act 68 of 1981
• Whether an exception was the appropriate procedural mechanism to determine the adequacy of the property description
• Whether the agreement was void for vagueness at common law
• What evidence dehors the written agreement is admissible to assist in identifying the res vendita on the ground

The appeal was upheld with costs, including costs of two counsel. The order of the court a quo upholding the first exception was set aside. The exception to the particulars of claim insofar as it related to the claim against first defendant and was grounded upon alleged invalidity of the agreements was dismissed. Various costs orders were made as between plaintiff, first defendant and second defendant in respect of the exception proceedings, application for leave to appeal in the court a quo, and application for leave to appeal to the Supreme Court of Appeal.

The binding legal principles established are: (1) For compliance with s 2(1) of the Alienation of Land Act 68 of 1981, the test is whether the land sold can be identified on the ground by reference to the provisions of the contract, without recourse to evidence from the parties as to their negotiations and consensus. (2) An exception that a cause of action is not disclosed cannot succeed unless it is shown that ex facie the allegations and documents relied upon, the claim is (not may be) bad in law, and there is no reason to suppose that any admissible evidence could conceivably exist which would enable the claim to succeed. (3) Evidence facilitating the task of relating the description of the res vendita in the written agreement to an area on the ground is admissible, provided it does not relate to negotiations between parties or their consensus, and does not breach the parol evidence rule. Objectively existing facts dehors the agreement may be considered. (4) Where parties have entered into a composite agreement comprising an initial agreement and subsequent addendum, and claims are based on the composite whole, any deficiencies in the initial agreement are irrelevant if the composite documents viewed together provide adequate description. (5) A written contract is merely an abstraction until related by evidence to concrete things in the material world - the statutory requirement of writing cannot mean that only evidence contained in the writing can identify the property, as that would be impossible.

The court observed that by the time the addendum was entered into, ten months had elapsed and steps had been taken to implement the initial agreement, including payment of purchase price and obtaining subdivision approvals. The court noted prima facie impressions about what the diagram appeared to reflect (11 approved erven numbered 1-10 plus the Homestead Portion, with erven 11-18 being the "further 8 stands") but stressed these were not firm findings and would need to be tested by evidence. The court emphasized that whether the various data available (named neighboring erven, measurements in deeds registry, scale of diagram, angles and lengths of boundary lines) would in fact enable identification could only be known once the appellant had opportunity to adduce evidence. The court also noted that the appellant had formally abandoned claims in prayer 1(d) during the appeal, and considered what impact this should have on costs, ultimately finding no good reason to deprive appellant of costs save for respondent's costs of noting the exception to that specific prayer.

This case is significant in South African property and contract law for clarifying: (1) The proper test for compliance with s 2(1) of the Alienation of Land Act 68 of 1981 regarding adequacy of property description - whether land can be identified on the ground by reference to the contract provisions without recourse to evidence of parties' negotiations and consensus. (2) The scope of admissible evidence to assist in identifying the res vendita - objective existing facts dehors the written agreement are admissible provided they do not relate to negotiations or consensus and do not breach the parol evidence rule. (3) The inappropriateness of exception proceedings to determine issues requiring evaluation of potentially available evidence - an exception cannot succeed unless it is shown ex facie the documents that the claim is bad in law and that no admissible evidence could conceivably exist to remedy any deficiency. (4) The need to consider composite agreements as a whole when evaluating compliance with statutory requirements, rather than focusing on superseded or subsumed initial agreements.