Shoprite Checkers (Pty) Ltd v Bumpers Schwarmas CC

The appellant (Shoprite Checkers) sold a business undertaking as a going concern to the first respondent (Bumpers Schwarmas CC), represented by the second respondent (Klopper). The sale was concluded in terms of a written agreement. The business was conducted on leased premises owned by a third party. Before signing the sale agreement, the second respondent and Van Tonder (representing the appellant) met with Hirschfield, a representative of the property owner, to discuss a potential lease for the first respondent. The Palmer lease (the previous tenant's lease) was discussed at this meeting. According to Hirschfield, he made it clear that any new lease would differ from the Palmer lease in two respects: increased rental and the inclusion of a 'development clause' that would require the tenant to vacate on 12 months' notice if the landlord decided to redevelop the property. The respondents sought rectification of the sale agreement to insert an obligation on the appellant to negotiate a lease with the same terms as the Palmer lease (save for period and rental), which did not contain such a development clause.

• Whether the court below was correct in granting rectification of the written sale agreement
• Whether the respondents proved that there was a common continuing intention between the parties that the lease to be obtained would have the same terms as the Palmer lease (except for rental and period)
• Whether the respondents discharged the onus of proof required for rectification
• What are the requirements for rectification of a written contract

1. The appeal was upheld with costs. 2. The respondents were ordered to pay the appellant's costs jointly and severally. 3. The respondents' application for amendments to the counterclaim was dismissed with costs payable jointly and severally. 4. The order of the court below was set aside and replaced with an order dismissing the defendants' prayer for rectification and ordering the defendants to pay the plaintiff's costs jointly and severally. 5. The application for condonation for late filing of the notice of appeal was granted with costs in the appeal.

For rectification of a written contract to be granted, the party seeking rectification must prove on a balance of probabilities that there was a common continuing intention between the parties that differed from the terms of the written agreement. Where credible evidence establishes that the parties were aware, prior to concluding the written agreement, that the actual terms would differ materially from the alleged common intention, the party seeking rectification cannot discharge the onus of proof. The party's subjective intention or expectations are insufficient; there must be proof of an actual agreement or common intention between the parties. Where the evidence of the party seeking rectification is no more probable than the opposing party's version, the onus is not discharged and rectification must be refused.

Marais JA made important obiter observations on two matters: (1) Courtroom decorum: The use of coarse, lavatorial and obscene language in court proceedings is inappropriate and should not be tolerated. While living in an egalitarian age, there are limits to acceptable speech in courts of law. Freedom of speech does not extend to the use of obscene language in judicial proceedings. Trial judges should calmly remind witnesses and counsel that they are in a court of law and that the solemnity of judicial proceedings is inconsistent with such language. This is important for maintaining public respect for courts as vital institutions in a free and democratic constitutional state. (2) Inappropriate grants of leave to appeal: Trial judges have a duty to consider which appellate court is most appropriate in the circumstances, regardless of the parties' preferences. Where a case involves purely factual issues with no controversial legal principles and modest sums of money, leave to appeal should be granted to a Full Bench rather than the Supreme Court of Appeal. Inappropriate grants of leave to the SCA increase costs and cause cases of greater difficulty to compete for space on the court's roll.

This case is significant in South African contract law for several reasons: (1) It reinforces the strict requirements for rectification of written contracts, particularly the need to prove a common continuing intention between the parties that differs from the written agreement. (2) It demonstrates that rectification will not be granted where evidence shows that the parties were aware of and accepted material differences between their agreement and the alleged common intention. (3) It illustrates the importance of properly evaluating all evidence, particularly uncontroverted evidence from third parties, in rectification cases. (4) The judgment emphasizes that the onus of proof in rectification cases rests firmly on the party seeking rectification and that where versions are equally probable, that onus is not discharged. (5) Marais JA's concurring judgment is significant for its strong remarks on proper courtroom decorum and the use of inappropriate language in judicial proceedings, as well as guidance on when leave to appeal should be granted to the SCA versus a Full Bench.