CTI Coldstore Pty Ltd v Chilleweni Cold Storage Pty Ltd (2025/028819) [2025] ZAGPJHC 328 (27 March 2025)

CTI Coldstore Pty Ltd v Chilleweni Cold Storage Pty Ltd (2025/028819) [2025] ZAGPJHC 328 (27 March 2025)

The court held that the right of first refusal in clause 2.6 of the sublease agreement is only triggered if the respondent intends to re-lease the premises. The respondent's evidence, which must prevail according to the Plascon-Evans rule, established that it intends to use the premises for its own business and does not intend to lease them to any third party. Therefore, the right of first refusal was not triggered, and the applicant cannot compel the respondent to enter into a new lease agreement. The agreement will terminate on 31 March 2025, and the applicant must vacate the premises by that date. The respondent is entitled to the declaratory and eviction relief sought in its...

Citation
[2025] ZAGPJHC 328
Parties
Applicant: CTI Coldstore (Pty) Ltd; Respondent: Chilleweni Cold Storage (Pty) Ltd
Court
South Gauteng High Court, Johannesburg
Jurisdiction
South Africa
Judgment Date
27 March 2025
Case Number
2025/028819
Procedural Posture
Urgent Application / Final Judgment on Opposed Urgent Application and Counterapplication
Outcome
Application dismissed with costs; counterapplication granted with declaratory and eviction orders.
Judges
JM Kilian
Legal Topics
Right of First Refusal, Lease Agreement, Contractual Interpretation, Eviction, Freedom of Contract
Commercial and Corporate Land and Property Right of First Refusal Lease Agreement Contractual Interpretation Eviction Freedom of Contract

Case Brief

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Parties

CTI Coldstore (Pty) Ltd

Applicant

Chilleweni Cold Storage (Pty) Ltd

Respondent

Procedural Posture

Urgent Application / Final Judgment on Opposed Urgent Application and Counterapplication

Legal Issues

  1. 1 Whether the right of first refusal in clause 2.6 of the sublease agreement was triggered by the respondent's conduct.
  2. 2 Whether the applicant is entitled to compel the respondent to enter into a new lease agreement.
  3. 3 Whether the respondent is entitled to a declaratory order that the agreement terminates on 31 March 2025 and eviction of the applicant if it fails to vacate.

Ratio Decidendi

The court held that the right of first refusal in clause 2.6 of the sublease agreement is only triggered if the respondent intends to re-lease the premises. The respondent's evidence, which must prevail according to the Plascon-Evans rule, established that it intends to use the premises for its own business and does not intend to lease them to any third party. Therefore, the right of first refusal was not triggered, and the applicant cannot compel the respondent to enter into a new lease agreement. The agreement will terminate on 31 March 2025, and the applicant must vacate the premises by that date. The respondent is entitled to the declaratory and eviction relief sought in its...

Court Disposition

Application dismissed with costs; counterapplication granted with declaratory and eviction orders.

Orders

  • The application is dismissed, with costs, including costs arising from the engagement of two counsel, at Scale C.
  • It is declared that the Storage Sublease Agreement entered into between the respondent and the applicant on 14 March 2024 will terminate at 24:00 on 31 March 2025.