The case of Capitec Bank Holdings Ltd and Another v Coral
Lagoon Investments 194 (Pty) Ltd and Others is valuable as it
succinctly sets out the rules relating to the interpretation of
contracts.
In this case, the Supreme Court of Appeal
(“SCA”) quoted, with approval, an
earlier SCA judgment in Natal Joint Municipal Pension Fund v
Endumeni Municipality. It reiterated when interpreting a
contract, the language used, the context in which it is used and
the purpose of the provision should be taken into
consideration.
Judge Unterhalter added, however, that text, context and purpose
should not be used in a mechanical fashion. He said that “It
is the relationship between the words used, the concepts expressed
by those words and the place of the contested provision within the
scheme of the agreement (or instrument) as a whole that constitutes
the enterprise by recourse to which a coherent and salient
interpretation is determined. As Endumeni emphasised,
