Brief Summary

Contract — Rectification — Onus — Plaintiff seeking rectification of written agreement to include term regarding five-meter high embankment wall — Plaintiff failing to establish prior agreement on balance of probabilities — Action dismissed — Counterclaim for defective workmanship upheld. The plaintiff, Gerhard Goosen, sought payment under a contract for the construction of a dam, claiming the written agreement was deficient as it omitted a term regarding the height of the embankment wall. The defendant, Bernardus Pieter van Blerk N.O, counterclaimed for damages due to defective workmanship, asserting the dam's capacity was below the agreed specifications. The court held that the plaintiff did not meet the onus of proving that the written agreement required rectification, leading to the dismissal of the plaintiff's action and the upholding of the defendant's counterclaim.

Comprehensive Summary

Summary of Judgment

Introduction

The proceedings were an action for contractual payment coupled, at a later stage, with a claim for rectification of a written agreement, opposed by the defendant, who also pursued a counterclaim for damages arising from allegedly defective construction work.

The plaintiff was Gerhard Goosen, trading as Triple “G” Grondwerke, who had undertaken earthworks including the construction of a dam. The defendant was Bernardus Pieter van Blerk N.O., sued in his capacity as executor of the estate of J S Ferreira (deceased), the plaintiff’s original contracting counterparty.

The matter commenced in November 1999 when the plaintiff instituted action against Ferreira (then alive) for payment ex contractu and ancillary relief, relying on a written agreement signed on 4 February 1999. After Ferreira’s death on 8 February 2000, the litigation proceeded against his estate. A plea with special pleas was delivered only in January 2004, together with a counterclaim. After extended inactivity, the plaintiff revived the matter in March 2011 by giving notice to amend and later amending the particulars of claim to introduce a rectification case. The matter ultimately came before Chetty J for hearing on 16 May 2013, with judgment delivered on 11 June 2013.

The general subject-matter concerned the construction of a dam (and related works) for an agreed contract price, with a dispute about whether the written contract correctly recorded the parties’ true agreement (particularly the dam’s specifications), and whether the dam was constructed to the required standard and capacity.

Material Facts

A written agreement concluded on 4 February 1999 recorded that the plaintiff would perform listed earthworks for R280 000.00 (excluding VAT, including fuel), with payments to be made monthly and a final payment due no later than 30 days after completion. Of central importance, the agreement described a dam of approximately 160 000 m³ constructed according to SABS standards, with specified side slopes (1:3 water side and 1:2 dry side). These written terms were not in dispute.

It was common cause that, after completion, the dam’s capacity was substantially less than the 160 000 m³ reflected in the written agreement. The defendant’s case (as pleaded) was that the dam was initially about 87 000 m³ and, after further work, increased to about 124 500 m³, still materially below the contracted volume. The judgment treated it as not in issue that, after the additional work to increase capacity was done, the deceased paid the plaintiff R191 456.41.

Pre-litigation correspondence was materially relied upon by the court. On 23 July 1999, the plaintiff’s attorney demanded payment of an alleged outstanding balance, describing the works (including a dam of approximately 160 000 capacity) in terms consistent with the written agreement. The deceased’s attorneys responded by asserting breach: the dam’s capacity was said to be 124 500 m³ (with 1 meter freeboard), the pump pit capacity significantly less than specified, and the dam not meeting SABS standards. The plaintiff proceeded to issue summons six months later for the contract balance, and in October 2001 the plaintiff’s attorneys proposed that the plaintiff would compact and repair the dam wall “as originally agreed”, subject to payment/security arrangements.

The disputed fact central to the rectification claim was the plaintiff’s later assertion (introduced by amendment about 11 years after the 1999 correspondence) that the parties had, during negotiations, jointly paced out the site and agreed that the dam would have a five-metre-high embankment wall, and that they mistakenly believed this would yield a capacity of 160 000 m³. On this version, the written agreement was said to be mistaken or incomplete because it recorded the 160 000 m³ specification but omitted the alleged true term of a five-metre wall height.

The court treated the absence of any reference to such an oral agreement—both in the earlier correspondence and in the original particulars of claim—as significant. The plaintiff was also treated as presenting insufficient evidence, even in his own testimony, to establish that the alleged five-metre term formed part of a prior common intention.

On the counterclaim, the defendant relied on allegations of unprofessional and slovenly work, including reduced capacity, inadequate compaction causing erosion, embankment slopes that were too steep, and a crest width far below what was required (pleaded as 0.5 metres instead of 3 metres). A consulting engineers’ report by Ninham Shand dated 20 November 2000 was relied on to set out deficiencies and repair costs, and the plaintiff ultimately accepted the report’s findings, conclusions, and recommendations during cross-examination. The parties were treated as being in agreement that the repair costs amounted to R250 000.00.

Legal Issues

The principal legal question was whether the plaintiff had discharged the onus of proving, on a balance of probabilities, that the written agreement did not correctly reflect the parties’ true common intention because of a common mistake, and thus whether the plaintiff was entitled to rectification by inserting a term that the embankment wall height would be five metres.

This dispute primarily concerned the application of legal requirements for rectification to the facts, including a factual inquiry into whether a prior consensus existed on the alleged omitted term and whether the written document inaccurately recorded that consensus due to mistake.

A further issue (consequent on the rectification claim failing or succeeding) was whether the plaintiff could sustain a contractual claim for payment in circumstances where the dam did not meet the written specifications. However, the judgment’s resolution of the rectification issue effectively disposed of the plaintiff’s claim.

On the counterclaim, the legal question was whether the plaintiff had breached contractual and/or workmanship obligations in constructing the dam and, if so, whether the defendant had proved damages in the agreed amount, including entitlement to interest and costs.

Although special pleas were raised (including prescription and undue delay relating to the amendment), the court held that it was unnecessary to determine them once rectification was refused.

Court’s Reasoning

The court approached the matter from the starting point that the plaintiff bore the burden to prove the case for rectification. Rectification was treated as requiring proof that the written agreement did not correctly reflect a prior common intention of the parties due to mistake, and that the document should be corrected to conform to what was actually agreed.

In assessing whether a prior agreement existed on a five-metre embankment wall term, the court placed weight on the chronology and the documentary record. The pre-litigation letters written in 1999, and later correspondence in 2001, were regarded as canvassing the contract’s terms extensively, yet containing no suggestion of a five-metre wall height term as an agreed specification. The court considered the later emergence of this alleged oral term—raised for the first time roughly eleven years later through amendment—to be improbable, particularly given that it went to the root of the plaintiff’s cause of action. The omission of such a material term from the early correspondence and original pleadings was treated as undermining the reliability of the plaintiff’s rectification narrative.

The court also evaluated the plaintiff’s oral evidence, noting that he relied largely on his own testimony and had portrayed himself as an expert dam builder with decades of experience. When testifying about the parties’ alleged agreement, he described measurements and a formula used to estimate capacity, and he stated that the dam wall had to be “within the law” and “that is five metres”. The court found that this did not constitute adequate evidential support for a specific prior consensus that the five-metre wall height was a contractual term agreed between them, particularly as his response did not clearly set out an agreement in the manner asserted in the amended pleadings.

The plaintiff sought to link the five-metre height to legislative requirements. The court examined the relevant statutory provisions and held that the reliance on legislation did not support the plaintiff’s case. Both the National Water Act 36 of 1998 and the earlier Water Act 54 of 1956 (referred to as now repealed) were noted as defining a “dam with a safety risk” in a way that applies where the wall height is more than five metres, and the control measures apply where the wall exceeds five metres. On the plaintiff’s own version, the wall did not exceed five metres. The court therefore considered there to be no reason for the parties to have negotiated or included wall height as a contractual term on the basis asserted, and it did not treat the statutory material as corroboration of a specific agreement to build a five-metre wall.

Synthesising these considerations, the court held that the evidence was wholly insufficient to establish that the written agreement incorrectly recorded the parties’ intended agreement due to common mistake. Rectification was therefore refused. Because the plaintiff could not alter the written specification of 160 000 m³, and because the dam as constructed did not meet that specification, the court concluded that the plaintiff had failed to fulfil his contractual obligations and could not sustain his claim, with the result that the action was dismissed. In that posture, the court stated that the special pleas did not need to be determined.

On the counterclaim, the court accepted that the dam was constructed in an unprofessional manner and that deficiencies were established. The Ninham Shand report was treated as detailing the deficiencies and repair costs, and the plaintiff, under cross-examination, was constrained to accept the report’s findings, conclusions, and recommendations. On that basis, the court held that the plaintiff was liable for the repair costs, which the parties were treated as having agreed amounted to R250 000.00.

Outcome and Relief

The plaintiff’s claim for rectification was refused and the action was dismissed.

The counterclaim succeeded, and the plaintiff was ordered to pay the defendant R250 000.00, together with interest at 15.5% per annum a tempore morae.

The plaintiff was ordered to pay the defendant’s costs of suit, together with interest thereon at 15.5% per annum from the date of taxation to date of payment. The costs were ordered to include the reserved costs, the costs of the defendant’s expert witness (Mr J Kritzinger), and the costs of the pre-trial inspection in loco.

Cases Cited

No cases were cited in the judgment.

Legislation Cited

National Water Act 36 of 1998.

Water Act 54 of 1956.

Rules of Court Cited

Uniform Rules of Court, Rule 28.

Uniform Rules of Court, Rule 36(9)(a) and Rule 36(9)(b).

Held

The court held that the plaintiff failed to prove, on a balance of probabilities, that there was a prior common intention that the dam wall would be five metres high as a contractual term omitted from the written agreement through common mistake, and therefore failed to establish an entitlement to rectification. As a result, the plaintiff’s claim was dismissed.

The court further held that the defendant established the defective workmanship underpinning the counterclaim, with the plaintiff being liable for the agreed repair costs of R250 000.00, together with interest, and liable for the defendant’s costs on the scale ordered, including specified additional costs.

LEGAL PRINCIPLES

Rectification is not granted merely because a party asserts that the written contract does not reflect what was intended; the party seeking rectification bears the onus to prove, on a balance of probabilities, that the written document incorrectly records the parties’ prior common intention due to a common mistake, and must place sufficient evidence before the court to justify correction of the instrument.

Where contemporaneous correspondence and earlier pleadings extensively describe the contractual terms but omit the alleged prior oral term later relied on for rectification, that omission may weigh heavily against the probability that such a term was ever agreed and may contribute to a finding that the onus has not been discharged.

A party’s reliance on statutory provisions as contextual support for an alleged contractual term will not advance a rectification case where the statutory scheme does not, on the facts relied on, create a plausible basis for the asserted agreement or demonstrate that the alleged term formed part of the parties’ common intention.

Where defective workmanship and contractual non-compliance are established, and repair costs are proved (or treated as agreed), the contractor may be held liable for the reasonable costs of repair, together with interest and adverse costs orders as determined by the court.

Goosen v van Blerk NO (3123/1999) [2013] ZAECPEHC 28 (11 June 2013)