Sim Road Investments CC v Morgan Air Cargo (Pty) Ltd (024/10) [2011] ZASCA 81 (27 May 2011)

Sim Road Investments CC v Morgan Air Cargo (Pty) Ltd (024/10) [2011] ZASCA 81 (27 May 2011)

The Supreme Court of Appeal found that Sim Road Investments CC, through its agents, made a material fraudulent misrepresentation in advertising the property as commercial and earmarked for light industry, when it was in fact agricultural. This misrepresentation directly induced Morgan Air Cargo (Pty) Ltd to purchase the property. The exclusion and voetstoots clauses in the contract could not shield Sim Road from liability for fraud. The evidence did not support that any corrective announcement was made at the auction, and the probabilities favoured Morgan Air's version that it was unaware of the true zoning. The contract was thus voidable at the instance of Morgan Air, which was entitled...

Citation
[2011] ZASCA 81
Parties
Appellant: Sim Road Investments CC; Respondent: Morgan Air Cargo (Pty) Limited
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
27 May 2011
Case Number
024/10
Procedural Posture
Civil Appeal / Appeal From North Gauteng High Court (pretoria), Murphy J
Outcome
Appeal dismissed with costs.
Judges
Harms, Lewis, Bosielo, Seriti, Petse
Legal Topics
Fraudulent Misrepresentation, Voetstoots Clause, Contract Rescission, Exemption Clause, Error in Corpore, Auction Sale
Land and Property Commercial and Corporate Fraudulent Misrepresentation Voetstoots Clause Contract Rescission Exemption Clause Error in Corpore Auction Sale

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Parties

Sim Road Investments CC

Appellant

Morgan Air Cargo (Pty) Limited

Respondent

Procedural Posture

Civil Appeal / Appeal From North Gauteng High Court (pretoria), Murphy J

Legal Issues

  1. 1 Whether the sale of land was induced by fraudulent misrepresentation.
  2. 2 Whether exclusion and voetstoots clauses protect the seller in cases of fraud.
  3. 3 Whether the contract is void or voidable due to misrepresentation or mistake.

Ratio Decidendi

The Supreme Court of Appeal found that Sim Road Investments CC, through its agents, made a material fraudulent misrepresentation in advertising the property as commercial and earmarked for light industry, when it was in fact agricultural. This misrepresentation directly induced Morgan Air Cargo (Pty) Ltd to purchase the property. The exclusion and voetstoots clauses in the contract could not shield Sim Road from liability for fraud. The evidence did not support that any corrective announcement was made at the auction, and the probabilities favoured Morgan Air's version that it was unaware of the true zoning. The contract was thus voidable at the instance of Morgan Air, which was entitled...

Court Disposition

Appeal dismissed with costs.

Orders

  • The appeal is dismissed with costs.