Letaba Sawmills (Edms) Bpk. v Majovi (Edms) Bpk. (225/1991) [1992] ZASCA 195; 1993 (1) SA 768 (AD); [1993] 1 All SA 359 (A) (19 November 1992)

Letaba Sawmills (Edms) Bpk. v Majovi (Edms) Bpk. (225/1991) [1992] ZASCA 195; 1993 (1) SA 768 (AD); [1993] 1 All SA 359 (A) (19 November 1992)

The court held that the option to renew in clause 3 was valid and enforceable. The mechanism for determining rental, including negotiation and arbitration, provided sufficient certainty. The terms 'market related prices' and 'rental payable' were commercially intelligible and did not render the option void for vagueness. Since the option was valid, the lease agreement fell within the prohibition of section 3(d) of the Subdivision of Agricultural Land Act, as it created a lease renewable at the lessee's discretion for a period exceeding ten years without ministerial consent. Consequently, the entire lease agreement was invalid.

Citation
[1992] ZASCA 195
Parties
Appellant: Letaba Sawmills (Edms) Beperk; Respondent: Majovi (Edms) Beperk
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
19 November 1992
Case Number
225/1991
Procedural Posture
Civil Appeal / Appeal From the Transvaal Provincial Division
Outcome
Appeal dismissed with costs.
Judges
Botha, Vivier, Eksteen, Van den Heever, Van Coller
Legal Topics
Long Term Lease, Option to Renew, Ministerial Consent, Contractual Uncertainty, Arbitration Clause
Land and Property Commercial and Corporate Long Term Lease Option to Renew Ministerial Consent Contractual Uncertainty Arbitration Clause

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 3 Authorities cited 7 Party arguments 2 Amounts and remedies 2
Sign in to unlock

Parties

Letaba Sawmills (Edms) Beperk

Appellant

Majovi (Edms) Beperk

Respondent

Procedural Posture

Civil Appeal / Appeal From the Transvaal Provincial Division

Legal Issues

  1. 1 Whether the lease agreement between the parties is valid or invalid under the Subdivision of Agricultural Land Act.
  2. 2 Whether the option to renew in clause 3 creates a valid and enforceable right.
  3. 3 Whether the rental determination mechanism is sufficiently certain to be enforceable.

Ratio Decidendi

The court held that the option to renew in clause 3 was valid and enforceable. The mechanism for determining rental, including negotiation and arbitration, provided sufficient certainty. The terms 'market related prices' and 'rental payable' were commercially intelligible and did not render the option void for vagueness. Since the option was valid, the lease agreement fell within the prohibition of section 3(d) of the Subdivision of Agricultural Land Act, as it created a lease renewable at the lessee's discretion for a period exceeding ten years without ministerial consent. Consequently, the entire lease agreement was invalid.

Court Disposition

Appeal dismissed with costs.

Orders

  • The appeal is dismissed with costs.