About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: South Gauteng High Court, Johannesburg
SAFLII
>>
Databases
>>
South Africa: South Gauteng High Court, Johannesburg
>>
2012
>>
[2012] ZAGPJHC 266
|
|
Denver Auto Body Repairers CC v Stand 637 Isando CC and Others (35238/12) [2012] ZAGPJHC 266 (18 October 2012)
IN THE HIGH COURT
OF SOUTH AFRICA (
SOUTH GAUTENG
)
JOHANNESBURG
CASE NO
:
35238/12
DATE
:
2012-10-18
In the matter between
DENVER AUTO BODY
REPAIRERS
CC
.......................................................
Applicant
and
STAND 637 ISANDO CC
…..........................................................................
First
Respondent
TERACO PROPERTIES
(PTY) LTD
…..........................................................
Second
Respondent
THE REGISTRAR OF
DEEDS, JOHANNESBURG
….................................
Third
Respondent
J U D G M E N T
WILLIS, J
:
[1] This is an
application in terms of which the applicant seeks to enforce a right
of first refusal (otherwise known as a pre-emptive
right) which, it
is common cause, it had in respect of a property known as Earth 637
Isando, Extension 1 Township, Registration
Division, IR, Province of
Gauteng, which measures 5 173 square meters.
[2] It is common
cause that the first and second respondents entered into an agreement
in terms of which the first respondent sold
the second respondent the
property in question, subject to a significant suspensive condition.
This suspensive condition was that
the applicant did not exercise the
right of first refusal, which the applicant had in its favour.
[3] Despite
voluminous papers and despite some tension in the arguments, it is
clear that the issue turns on a simple point: did
the applicant
exercise its right of first refusal in terms of the agreement or did
it not? Critical to the issue is a letter is
sent by Mervyn Smith,
written on behalf of the applicant, on 6 July 2012 to the first
respondent. In that letter, the following
appears:
“
We confirm that we act on
behalf of Denver Auto Body Repairers CC, and that all correspondence
is to be addressed to our offices
directly.”
The letter continues with a protest:
“
Although the
agreement of sale is not an offer as contemplated by clause 16 of the
agreement of lease, this omission of a concluded
agreement of sale as
opposed to an offer flies in the face of clause 16 aforesaid. Our
client regards your conduct as a repudiation
of the lease, which
repudiation our client does not accept. You are advised that
our
client intends to purchase the property at a commercially realistic
or market-related price
. You are called
upon to submit to our client an offer of sale for our client to
consider.”
[4] By no stretch
of the imagination, can this be regarded as an acceptance or an
exercise of the right of a first refusal. Not
only is it a statement
of an intention rather than an actual acceptance of the terms and
conditions of the sale, but it contains
a protest and an attempt to
negotiate to reach a “commercially realistic or market-related
price”.
[5] Later, on 3
August 2012, Mervyn Smith, attorneys again acting for the applicant,
address a letter to Möller and Pienaar,
the attorneys acting for
the first respondent, in which they offer to purchase the property in
the name of another legal entity.
That legal entity is Rajaca
Investments CC, not the applicant.
[6] We cannot ‘lift
the corporate veil’ in a matter such as this. It is trite that
separate legal personality is a strongly
entrenched principle in our
law. It cannot operate as compliance with the agreement conferring a
right of first refusal if the
party having that right decides,
unilaterally, that somebody else can exercise its rights of
pre-emption on its behalf. Mr
Cohen
,
who acts for the applicant, then referred me to a letter dated, 10
August 2012. He drew my attention to the fact that the letter
for the
attorneys, acting on behalf of the first respondent, records:
“
Our client notes your
indication that it exercises its right to purchase the property as it
was offered to Teraco Properties (Pty)
Ltd.”
That is an
interesting clause, but the letter goes on to say:
“
An offer by
Rajaca Investments CC does not constitute an acceptance by Denver
Auto Body Repairers CC, as envisaged in the lease
agreement. The
offer to purchase should be fr
om Denver
Auto Body Repairers ... Your client’s difficulty to raise
funding in Denver Auto Body Repairers CC is not our client’s
concern. As you correctly pointed out, it is different legal
entities and Denver Auto Body Repairers CC has the right to demand
transfer of the property on the same terms and conditions as Teraco
Properties (Pty) Ltd, not Rajaca Investments CC.”
[7] Against this
background, the applicant has failed to make out a case. There is
only one appropriate order that can be made.
It is the following:
The application is dismissed with
costs.