Arbeidsaamheid Boerdery CC v Proc Corp 202 CC and Others (115148/2025) [2025] ZALMPPHC 158 (22 August 2025)

Case Note

Arbeidsaamheid Boerdery CC v Proc Corp 202 CC and Others
Case No: 115148-2025
Date: 22 August 2025

Reportability

This case is reportable due to its implications on the interpretation of rights of first refusal in lease agreements. The judgment clarifies the conditions under which such rights can be exercised and the obligations of the lessor to inform the lessee of any offers made by third parties. The case is significant as it addresses the balance of convenience in urgent applications concerning property rights, particularly in the context of agricultural leases.

Cases Cited

• Robinson v Randfontein Estates Gold Mining Co Ltd 1921 AD 168
• Hartsrivier Boerdery (Edms) Bpk v Van Niekerk 1964 (3) SA 702 (T)
• Sher v Allan 1929 OPD 137
• Manchester Ship Canal Co v Manchester Race Course Co (1901) 2 Ch 37
• Ferreira v Levin NO and Others; Vryenhoek and Others v Powell NO and Others 1995 (2) SA 813 (W)
• Simon NO v Air Operations of Europe AB and Others 1999 (1) SA 217 (SCA)
• Makone v Tassos Properties CC and Another 2017 (5) SA 456 (CC)
• Natal Joint Municipal Pension Fund v Endumeni Municipality 2012 (4) SA 593 (SCA)
• Webster v Mitchell 1948 (1) SA 1186 (W)

Legislation Cited

• None specified in the judgment.

Rules of Court Cited

• Rule 6(12) of the Uniform Rules of Court.

HEADNOTE

Summary

The High Court of South Africa, Limpopo Division, addressed the urgent application by the lessee, Arbeidsaamheid Boerdery CC, seeking to prevent the transfer of a property to a third party, arguing that it held a right of first refusal under the lease agreement. The court examined the interpretation of the lease clause granting this right and the obligations of the lessor to notify the lessee of any offers.

Key Issues

The key legal issues included the interpretation of the right of first refusal, the obligations of the lessor to inform the lessee of third-party offers, and whether the lessee's right had lapsed due to non-exercise within the stipulated time frame.

Held

The court held that the lessee had established a prima facie right to the property and that the balance of convenience favored granting the interdict to prevent transfer until the lessee could exercise its right of first refusal.

THE FACTS

The applicant, Arbeidsaamheid Boerdery CC, is the lessee of a property under a lease agreement that includes a right of first refusal. The first respondent, Proc Corp 202 CC, is the lessor and owner of the property. The lessee became aware of a potential sale to a third party and sought an urgent interdict to prevent the transfer, claiming that the right of first refusal had not lapsed. The lessor contended that the right had lapsed due to the lessee's failure to exercise it within the required timeframe.

THE ISSUES

The court had to decide whether the lessee's right of first refusal had lapsed and whether the lessor had fulfilled its obligation to notify the lessee of any offers from third parties. Additionally, the court needed to determine if the lessee had established a prima facie case for the urgent interdict sought.

ANALYSIS

The court analyzed the lease agreement's clause regarding the right of first refusal, emphasizing that the lessee's right only arises once the lessor has made the property available for sale and has notified the lessee. The court found that the lessor had not adequately informed the lessee of any offers, which led to the conclusion that the lessee's right had not lapsed. The court also considered the balance of convenience, noting the potential financial harm to the lessee if the property were sold without allowing the lessee to exercise its right.

REMEDY

The court granted an interim interdict preventing the transfer of the property to the second respondent or any other party until the lessee could institute and finalize an application to declare that its right of first refusal had not lapsed. The court ordered that this application must be instituted within twenty days, failing which the order would lapse.

LEGAL PRINCIPLES

The judgment established that a right of first refusal must be exercised within a reasonable time after the property is made available for sale, and that the lessor has a duty to inform the lessee of any offers from third parties. The court underscored the importance of interpreting contractual terms in their ordinary sense and in a manner that aligns with commercial purposes. The balance of convenience in urgent applications must favor the party at risk of irreparable harm.