THE SUPREME COURT OF APPEAL
REPUBLIC OF SOUTH AFRICA

JUDGMENT

Case No: 498/08

ROCKBREAKERS AND PARTS (PTY) LTD

Appellant

and

ROLAG PROPERTY TRADING (PTY) LTD

Respondent

Neutral citation: Rockbreakers and Parts (Pty) Ltd v Rolag Property Trading

(Pty) Ltd. (498/08) [2009] ZASCA 102 (18 September 2009)

Coram:
HEHER, PONNAN JJA, HURT, TSHIQI et WALLIS AJJA
Heard:
25 AUGUST 2009

Delivered:
18 SEPTEMBER 2009

Summary:
Alienation of land – party accepting offer adding a
suspensive condition amounting to a counter offer – other party not
signing the amendment – contract unenforceable for non-compliance
with s 2(1) of Alienation of Land Act 68 of 1981.

______________________________________________________________

ORDER
______________________________________________________________

On appeal from: Johannesburg High Court (Van Oosten J sitting as court of
first instance).
1.
The appeal is upheld with costs, including the costs of two counsel.
2.
The order of the court below is set aside and substituted as follows:
2.1
The application is dismissed with costs.

______________________________________________________________

JUDGMENT
______________________________________________________________

TSHIQI AJA (HEHER and PONNAN JJA and HURT and WALLIS AJJA
concurring):

[1] This appeal concerns the validity of a purchase and sale agreement in
respect of immovable property, owned by the appellant, Rockbreakers and
Parts (Pty) Ltd, and known to both parties as 'Portion 54 of the Farm
Roodekop No 139 IR measuring 49408m²'. A written offer to purchase the
property was signed on behalf of the respondent, Rolag Property Trading
(Pty) Ltd, on 20 October 2005 and by a representative of the appellant on 25
October 2005. This case arises because in so doing he added the following
words in manuscript:
'This offer is accepted subject to the seller obtaining registration of the subdivision of
the property.'
The manuscript insertion was neither initialled nor countersigned by the
respondent. Apart from the manuscript insertion there is no reference to a
subdivision of the property in the agreement, although the evidence shows
that both parties were aware of the need for the property to be subdivided in
order to give effect to the sale.

[2] The requisite deposit was paid by the respondent and the necessary
guarantees were furnished for the payment of the balance of the purchase
price. A conveyancer was nominated to attend to the subdivision and transfer
of the property. The application for subdivision was approved by the local
authority and the property to be sub-divided was then described as 'Portion
124 (a portion of 29) of the Farm Roodekop No 139 IR' now measuring
37507m². The letter of approval was dated 16 May 2006 and imposed certain
conditions. The one that gave rise to controversy is contained in paragraph 3
and states:

'That a township be established on proposed Portion 54 and that no development of
any nature whatsoever takes place on the property before the township has been
promulgated.'
The appellant did not thereafter proceed with further steps to ensure finality to
the registration and transfer process. From the correspondence exchanged
between the parties it became clear that the appellant took the stance that the
quoted condition imposed burdensome obligations and 'the offer to purchase
which was signed on 20 October 2005, was not accepted unconditionally by
the sellers, Rockbreakers and Parts (Pty) Ltd on 25 October 2005 as the
acceptance was made subject to the seller obtaining registration of the
subdivision of the property'1. That clearly conveyed the appellant's intention
not to regard itself as bound by the agreement.

[3] When the attitude of the appellant became clear to the respondent, it
applied to the Johannesburg High Court for an order for specific performance
of the agreement. The appellant opposed the application raising four defences
which were all rejected by the court below. The appeal is brought with the
leave of that court. For the reasons that will become apparent it is only
necessary to deal with one of the defences.

[4] This defence is that the manuscript insertion was material to any
agreement and constituted a counter-offer which had to be in writing and
signed by or on behalf of the parties in compliance with s 2(1) of the
Alienation of Land Act 68 of 1981 ('the Act'), and that the failure by the
respondent to accept it or signal its acceptance in writing rendered the
contract unenforceable. The respondent disputes that the manuscript insertion
amounted to a counter-offer and contends that it was surplusage amounting
to no more than what was the common intention of the parties. The basis for
this contention is that both parties knew that the property had to be subdivided
in order to give effect to the agreement.

[5] Section 2(1) of the Act reads:

1 Letter dated 10 May 2007 from J C Smit Inc De Kock & Visser; Attorneys and Conveyancers
acting on the instructions of the appellant.

'No alienation of land after the commencement of this section shall, subject to the
provisions of  section 28, be of any force or effect unless it is contained in a deed of
alienation signed by the parties thereto or by their agents acting on their written
authority.'

[6] In Johnston v Leal2 Corbett JA summed up the legal effect of the
predecessor to s 2(1) which was materially the same terms as follows:
'It has been held ─ and in my opinion correctly so ─ that what s 1(1), or its
predecessors, require is that the whole contract of sale, or at any rate all the material
terms thereof, be reduced to writing (see Joubert v Steenkamp 1909 TS 169 at 171;
Coronel v Kaufman 1920 TPD 207 at 209, 210; Veenstra v Collins 1938 TPD 458 at
460; King v Potgieter 1950 (3) SA 7 (T) at 10 and 14 and the cases there cited;
Jammine v Lowrie 1958 (2) SA 430 (T) at 431; Meyer v Kirner 1974 (4) SA 90 (N) at
97G-98D). It is not necessary that the terms of the contract be all contained in one
document, but, if there are more than one document, these documents, read
together, must fully record the contract (see Coronel v Kaufman (supra at 209);
Meyer v Kirner (supra at 97E-F)). The material terms of the contract are not confined
to those prescribing the essentialia of a contract of sale, viz the parties to the
contract, the merx and the pretium, but include, in addition, all other material terms
(see King v Potgieter (supra at 14C); Meyer v Kirner (supra at 97-9)). It is not easy to
define what constitutes a material term. Nor is it necessary in the present case to do
so since clause 11, upon which the dispute turns and which has the effect (if
operative) of suspending the whole contract pending fulfilment of a condition as to
the procurement of a loan on the security of a first mortgage bond to be passed over
the property sold and also of causing the contract to be "automatically cancelled" in
the event of such a loan not being obtained, would clearly constitute a material term
of the contract. It is also not necessary in this case to consider at any length the
degree of precision with which the writing must set forth the terms of the contract,
particularly the essentialia, in order to comply with s 1 (1), since this is not an issue
which arises here. Generally speaking these terms ─ and especially the essentialia ─
must be set forth with sufficient accuracy and particularity to enable the identity of the
parties, the amount of the purchase price and the identity of the subject-matter of the
contract, as also the force and effect of other material terms of the contract, to be
ascertained without recourse to evidence of an oral consensus between the parties
(see Van Wyk v Rottcher's Saw Mills (Pty) Ltd 1948 (1) SA 983 (A) at 989-990, 995-

2 1980 (3) SA 927 (A) at 937G-H; 938B-C.

6; King v Potgieter (supra at 14D-E); Magwaza v Heenan 1979 (2) SA 1019 (A) at
1023C-G and the authorities there cited).'

[7] In Van Leeuwen Pipe and Tube (Pty) Ltd v Mulroy3 Nienaber J said:
'The sale is an alienation of land. To be valid its terms must be in writing and signed.
That means that every term that is conceived by the parties to form part of the sale
must comply with the prescribed statutory formalities. If any particular term does not
so comply, the term itself is void and so is the sale as a whole – at any rate if the
offending term is a material one that cannot be severed from the enforceable portion
of the contract. ... A term that relates to the performance and thus to the obligations
of any of the respective parties, such as a term incorporating a suspensive or
resolutive condition, would be a material term.'

[8] In order to determine whether the defence raised can be sustained it is
necessary to determine the effect of the manuscript insertion on the rights and
obligations of both parties. It follows from the authorities cited above that if the
manuscript insertion embodied a material alteration to the contractual terms
and thus constituted a counter-offer that was never accepted in writing, then
the contract would be unenforceable.

[9] The contract as initially signed by the respondent made no mention of
subdivision. In the absence of the subdivision, foreshadowed by the
manuscript insertion, the property described as 'Portion 54 of the Farm
Roodekop No 139 IR' would not be separated from the rest of the farm and
consequently could not be transferred to the respondent. This would affect the
material obligations of the appellant, which would still be obliged to make
good its part of the bargain. The insertion of the clause in manuscript
therefore served to protect the appellant from an action for damages in the
event that the subdivision did not materialise. There is therefore no doubt in
the circumstances of this case that the manuscript insertion is material and
amounted to a counter-offer.4

3 1985 (3) SA 396 (D) at 400F-I.
4 Admin Estate Agents (Pty) Limited t/a Larry Lambrou v Brennan 1997 (2) SA 922 (E) at
928G-H.

[10] We have been referred to the case of Stalwo (Pty) Ltd v Wary Holdings
(Pty) Ltd5 to support a submission that, because both parties knew that the
subdivision was a precondition to the transfer of the property, the manuscript
insertion is of no moment. However this case is distinguishable from the case
of Stalwo (supra) because 'the proposed subdivision' in that case was
expressly incorporated into the agreement and it was agreed that a
suspensive condition, although omitted from the written agreement, was
indeed a term of the agreement between the parties.

[11] It therefore follows that the manuscript insertion constituted a counter-
offer that required acceptance in writing by both parties. In light of the fact that
the counter-offer was not accepted by the respondent, it follows that no
binding agreement was concluded between the parties. This conclusion
disposes of the appeal and it is thus not necessary to deal with the other
issues considered by the court below.

[12] Reference was made in argument to correspondence from the
respondent, referring the appellant to BOE Bank regarding the issue of
guarantees, and a letter to BOE Bank requesting a guarantee. Even if the
letters could be read, and, to the extent of their relevance, incorporated into
the agreement, both deal with separate issues pertaining to the purchase and
sale agreement and are silent on the issue of the subdivision. They cannot be
of assistance to respondent, in so far as the acceptance of the counter-offer is
concerned. The status of the letters can best be described as in Jackson v
Weilbach's Executrix6 where Innes CJ said, in relation to an attempt to use
subsequent documentation to overcome an absence of writing:
'But do these declarations of purchaser and seller constitute such a contract? In form
they certainly do not; the declaration of the seller is not an offer, and the declaration
of the purchaser is not an acceptance. Nor is there anything to show that the parties,
when they signed these declarations, intended to enter into any contract. The
declarations were signed for revenue purposes, and they purport not to embody a

5 2008 (1) SA 654 (SCA) at paras 8-12.
6 1907 TS 212 at 216-217.

contract constituted in terms of the documents themselves, but to record that a prior
contract had been entered into at a date therein mentioned. . . It comes, then, to this
– that these declarations do not purport to contain a contract: they were not intended
by the parties to do so, and if they constituted a contract there would be two
contracts in this case instead of one. In my view the two parties did not enter into the
written contract which sec. 30 of Proclamation 8 of 1902 requires, and their verbal
agreement was null and void.'

[13] I would therefore make the following order:
1.
The appeal is upheld with costs, including the costs of two counsel.
2.
The order of the court below is set aside and substituted as follows:
2.1
The application is dismissed with costs.

_______________________
Z L L TSHIQI
ACTING JUDGE OF APPEAL

WALLIS AJA (HEHER JA concurring)

[14] I have had the advantage of reading the judgment of my colleague
Tshiqi AJA and I concur with her reasoning and her conclusion. I write
separately because in one respect my reasoning goes further than hers.

[15] It is correctly accepted by the parties that the additional clause added
to the draft offer, by Mr Esprey, is a suspensive condition. The effect of that is
to create ‘a very real and definite contractual relationship’ between the
parties.7 Pending fulfilment of the suspensive condition the exigible content of
the contract is suspended.8 On fulfilment of the condition the contract

7 Corondimas v Badat 1946 AD 548 at 551, 558-559; Palm Fifteen (Pty) Ltd v Cotton Tail
Homes (Pty) Ltd 1978 (2) SA 872 (A) at 887.
8 Odendaalsrust Municipality v New Nigel Estate Gold Mining Co Ltd 1948 (2) SA 656 (O) at
665-667.

becomes of full force and effect and enforceable by the parties in accordance
with its terms. None of this is contentious.

[16] In a contract not subject to the condition inserted by Mr Esprey, as my
colleague points out, Rockbreakers would have been obliged to procure the
subdivision of the property and its transfer to Rolag. This is in accordance
with the rule enunciated by Pothier in the following terms:
‘The seller is bound to deliver the thing to the buyer if it is not already in his
possession; and as a necessary consequence of this obligation, to do, at his own
expense, whatever may be necessary to enable him to perform it.’9

[17] The contrast between the contract being subject to the suspensive
condition, inserted by Mr Esprey, and a situation where it was not subject to
any such condition is apparent from these brief descriptions of the differing
legal consequences flowing from the two different situations. In order to
circumvent the problem this poses to the enforcement of the contract Rolag
contended, and this was upheld by the court below, that in the absence of the
additional clause the offer, and hence any contract concluded as a result of its
unequivocal acceptance, would in any event have been subject to a
suspensive condition, precisely the same as that inserted in manuscript by Mr
Esprey, when he purported to accept the offer. In forming that conclusion the
court below relied on the decision of this Court in Stalwo.10

[18] The issue in Stalwo was whether an agreement failed to comply with
the requirements of the Alienation of Land Act, because the parties had
omitted to incorporate expressly in the written document a suspensive
condition making the sale subject to sub-division of the land sold from a larger
property. There was no dispute between the parties that their agreement was
subject to such a suspensive condition, but it was contended that the failure to
incorporate it expressly in the written document meant that there had been
non-compliance with the requirement of writing in the statute, resulting in the

9 Contract of Sale 2.1.42 (Cushing’s translation 26); Sauerlander v Townsend 1930 CPD 55
at 63; Abdullah v Long 1931 CPD 305 at 308.
10 Stalwo (Pty) Ltd v Wary Holdings (Pty) Ltd 2008 (1) SA 654 (SCA) at paras 8-12.

contract being void and unenforceable. This Court rejected that contention on
the basis that in consequence of the parties’ agreement on the suspensive
condition, taken in conjunction with the express reference to a sub-division in
the description of the property sold, the contract was subject to a tacit term
embodying such suspensive condition and as ‘a tacit term, once found to
exist, is simply read or blended into the contract: as such it is "contained" in
the written deed. Not being an adjunct to but an integrated part of the
contract, a tacit term does not … fall foul of … the [Alienation of Land] Act.’11

[19] In reaching that conclusion the court applied the well-established
principles governing the circumstances in which a tacit term is implied into a
contract as laid down in a number of decisions of this Court.12 Those
principles are equally applicable to the contention in this case that the offer as
submitted would, if accepted without qualification, have resulted in a contract
subject to a suspensive condition by virtue of a tacit term to that effect, with
the result that the additional clause was mere surplusage. In considering that
question the only background fact external to the agreement relied on by
Rolag is that both parties were aware at all times that it would be necessary to
effect a sub-division in order for Rockbreakers to give transfer of the property
that was the subject of the sale.

[20] In Wilkins v Voges13 Nienaber JA said that:
‘A tacit term, one so self-evident as to go without saying, can be actual or imputed. It
is actual if both parties thought about a matter which is pertinent but did not bother to
declare their assent. It is imputed if they would have assented about such a matter if
only they had thought about it - which they did not do because they overlooked a
present fact or failed to anticipate a future one.’
Any tacit term in the present case must fall within the second category
because, apart from the fact that the parties both knew that sub-division was
necessary, there is no evidence that they in fact addressed their minds to the

11 Wilkins NO v Voges 1994 (3) SA 130 (A) at 144C-D.
12 Alfred McAlpine & Son (Pty) Ltd vTransvaal Provincial Administration 1974 (3) SA 506 (A)
at 532G-533C; Delfs v Kuehne & Nagel (Pty) Ltd 1990 (1) SA 822 (A) at 827B-828B; Wilkins
NO v Voges 1994 (3) SA 130 (A) at 136H-137D.
13 At 136H-I.

matter before the offer was submitted or gave any consideration to what was
to happen if sub-division could not be effected. That serves to distinguish the
case from Stalwo where the parties had agreed that their contract would be
subject to a suspensive condition and had therefore addressed their minds to
the issue but not declared their assent.

[21] Logically it is difficult to speak of imputing a term into a contract until
one has reached the conclusion that a binding contract exists. In considering
the contention on behalf of Rolag one must necessarily approach the matter
on the basis of a consideration of the agreement that would have resulted if,
instead of inserting the suspensive condition, Mr Esprey had simply accepted
the offer as it stood, thereby bringing into existence a contract that, in its
written manifestation, did not contain the suspensive condition. One must then
ask whether, on a consideration of the express terms of that contract in the
light of admissible evidence of surrounding circumstances, a tacit term should
be imputed to the parties that their agreement would be ‘subject to the seller
obtaining registration of the subdivision of the property.'

[22] Whilst it would not be uncommon in ordinary commercial practice for a
matter such as the sub-division in this case to be the subject of a suspensive
condition, the mere fact that it might, or even would, be reasonable to include
such a provision in the contract is not a basis for imputing a tacit suspensive
condition to the parties. The property had been marketed for a number of
years as a separate sub-division and reference to the plan shows that it is
bounded on three sides by public roads and is separated from the balance of
the property by a railway line.  A sub-divisional diagram had been drawn up in
1967 and submitted to the local authority but, for reasons not explained in the
papers, that had not been taken further. There is no indication that the parties
foresaw any possible problems in obtaining sub-divisional approval or, until Mr
Esprey inserted the additional clause, that they contemplated the possibility
that such approval might not be forthcoming.  In those circumstances it is not
possible to draw the inference that if the matter had been raised at the outset
they would have agreed that in the event of sub-division not being procured
the contract would simply have fallen away. Whilst Rolag was clearly eager,

as its conduct shows, to pursue the contract once sub-divisional approval had
been obtained, that cannot be taken as indicating retrospectively that it would
have been agreeable from the outset to walk away from the transaction if
approval was not forthcoming. It might have insisted on the contract being
unconditional and Rockbreakers might have been willing to accept this,
because it did not foresee any difficulty in obtaining sub-divisional approval.
Alternatively, Rolag could have suggested a suspensive condition in different
terms or demanded some compensation for out-of-pocket expenses in
planning the development of the property. Other possibilities are conceivable.
Nothing suggests that the necessary response of both parties to the question
posed by the hypothetical bystander would have been to say: ‘Of course our
agreement is subject to sub-division being obtained. That is too obvious for us
to need to say it.’ Indeed, had they said that, it is by no means clear that they
would have meant by this statement that the contract was subject to a
suspensive condition. It is capable of meaning simply that they knew that a
failure to obtain sub-division would render performance impossible, without
necessarily exempting Rockbreakers from a liability to pay damages for non-
performance of their obligation to transfer the property to Rolag.

[23] A further relevant factor is that the offer was embodied in a written
document in a form conventionally used for transactions of this type, which
specifically caters in clause 18 thereof for the eventuality that the parties
might wish to make their agreement subject to a suspensive condition. As the
cases demonstrate a tacit term is not lightly to be imputed to parties who have
chosen to embody their agreement in writing. The reason is that one infers,
from the fact that they have chosen to adopt that course, that they have
thought about its terms and the document reflects those terms.

[24] Those considerations suffice to support the conclusion that by adding
the suspensive condition Mr Esprey, on behalf of Rockbreakers, was
proposing to contract on materially different terms from those offered by Rolag
and hence that he made a counter-offer. That conclusion finds support in

cases, not only in this country but also in England,14 from which our courts
have obtained much guidance in the field of tacit conditions. It also renders it
unnecessary to consider whether or in what circumstances it is ever possible
by way of a tacit condition to render a written contract, unconditional on its
face, conditional or whether the imputation of such a condition would be
inconsistent with the written terms and hence amount to an impermissible
amendment therof.  Other than Stalwo, which depends upon the unusual
situation where the parties had in fact agreed on a suspensive condition and
then not incorporated it in the written contract, I have found no South African
case where that has been done. My researches in the English cases have
only unearthed a single case where that was the result and that in an ex
tempore judgment where the basic principles were not canvassed.15
Fortunately, it is unnecessary to express a final view on that question as it
raises important issues of principle on which we have not had the benefit of
full argument.

[25] For those additional reasons and those contained in her judgment I
concur in the order proposed by Tshiqi AJA.

________________________
M J D WALLIS
ACTING JUDGE OF APPEAL

14 Charles H Windschuegl Ltd v Alexander Pickering & Co Ltd [1950] 84 Lloyd's L Rep 89
(KB) at 93; Brauer & Co (Great Britain) Ltd v James Clark (Brush Materials) Ltd [1952] 2 All
ER 497 (CA),
15 Bentworth Finance Ltd v Lubert [1967] 2 All ER 810 (CA). Such a contention was argued
but the point of principle was not decided in K C Sethia (1944) Ltd v Partabmull Rameshwar
[1950] 1 All ER 51 (CA).

Appearances:
Counsel for Appellant:
A Horwitz SC

J L Kaplan

Instructed by

M H Cirota Attorney, Johannesburg

Lovius-Block, Bloemfontein

Counsel for Respondent: M W Verster
Instructed by
BMV Attorneys, Johannesburg
Peyper Attorneys Inc, Bloemfontein
THE SUPREME COURT OF APPEAL
REPUBLIC OF SOUTH AFRICA

MEDIA SUMMARY – JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL

From: The Registrar, Supreme Court of Appeal
Date: 18 September 2009

Status: Immediate
Please note that the media summary is intended for the benefit of the media and does not
form part of the judgment of the Supreme Court of Appeal

ROCKBREAKERS AND PARTS (PTY) LTD v ROLAG PROPERTY TRADING (PTY)
LTD

The Supreme Court of Appeal has upheld an appeal against the judgment of the
Johannesburg High Court. The High Court granted an order for specific performance of a
purchase and sell agreement between Rockbreakers (the appellant) and Rolag (the
respondent).

A written offer to purchase land (still to be subdivided) was signed on behalf of Rolag. The
dispute arose because when a representative of Rockbreakers signed, he inserted the
following words in manuscript:
'This offer is accepted subject to the seller obtaining registration of the subdivision of the property.'
The manuscript insertion was neither initialled nor countersigned by the respondent. Apart
from the manuscript insertion there is no reference to a subdivision of the property in the
agreement, although the evidence shows that both parties were aware of the need for the
property to be subdivided in order to give effect to the sale.

Rockbreakers did not proceed with the registration and transfer process and took the stance
that the offer to purchase was not accepted unconditionally by Rockbreakers. Rolag applied
to the Johannesburg High Court and the application was successful.

The SCA held that the manuscript insertion was material as it would affect the material
obligations of Rockbreakers which would still be obliged to make good its part of the
bargain. Consequently it was held that the manuscript insertion amounted to a counter-offer,
which, because it was not accepted, meant that no binding agreement was concluded between
parties.
--ends--