Loncon Developments (Pty) Ltd v Ekurhuleni Metropolitan Municipality (2011/22837) [2015] ZAGPJHC 202 (11 September 2015)

Loncon Developments (Pty) Ltd v Ekurhuleni Metropolitan Municipality (2011/22837) [2015] ZAGPJHC 202 (11 September 2015)

The court held that the applicant's right of first refusal under clause 10.6 was perfected when the respondent formed the desire to sell the properties to the Department of Education and the applicant exercised its right in writing by submitting a signed draft agreement. The respondent's subsequent change of mind did not affect the applicant's right, as the contingency had already supervened and the right had been exercised. The court rejected the respondent's interpretation of clause 10.6, finding that the clause contained two distinct prohibitions: one against selling the property to any other party, and another against using the property for any purpose other than educational purposes....

Citation
[2015] ZAGPJHC 202
Parties
Applicant: Loncon Developments (Pty) Ltd; Respondent: Ekurhuleni Metropolitan Municipality
Court
South Gauteng High Court, Johannesburg
Jurisdiction
South Africa
Judgment Date
11 September 2015
Case Number
2011/22837
Procedural Posture
Civil Application / Final Judgment
Outcome
Application granted; the respondent is ordered to sign the sale agreement and transfer documents, failing which the sheriff is authorised to sign on its behalf. Costs awarded to the applicant.
Judges
Van der Linde
Legal Topics
Right of Pre Emption, Specific Performance, Interpretation of Contract, Sale of Land
Land and Property Civil Procedure Right of Pre Emption Specific Performance Interpretation of Contract Sale of Land

Case Brief

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Parties

Loncon Developments (Pty) Ltd

Applicant

Ekurhuleni Metropolitan Municipality

Respondent

Procedural Posture

Civil Application / Final Judgment

Legal Issues

  1. 1 Whether the applicant's right of first refusal under clause 10.6 was perfected when the respondent formed the desire to sell the property.
  2. 2 Whether the respondent's subsequent change of mind and cancellation of arrangements with the Department of Education affected the applicant's right of pre-emption.
  3. 3 Proper interpretation of clause 10.6 regarding the prohibition on sale and use of the property.

Ratio Decidendi

The court held that the applicant's right of first refusal under clause 10.6 was perfected when the respondent formed the desire to sell the properties to the Department of Education and the applicant exercised its right in writing by submitting a signed draft agreement. The respondent's subsequent change of mind did not affect the applicant's right, as the contingency had already supervened and the right had been exercised. The court rejected the respondent's interpretation of clause 10.6, finding that the clause contained two distinct prohibitions: one against selling the property to any other party, and another against using the property for any purpose other than educational purposes....

Court Disposition

Application granted; the respondent is ordered to sign the sale agreement and transfer documents, failing which the sheriff is authorised to sign on its behalf. Costs awarded to the applicant.

Orders

  • The respondent is directed to sign the draft Sale of Property Agreement annexed as 'X' to the notice of motion within seven days of service of the order.
  • The respondent is directed to sign or cause to be signed all documents necessary to give effect to the transfer of the properties referred to in annexure 'X' into the name of the applicant or its nominee, within seven days of being furnished with such documents and a guarantee as provided for at paragraph 2.2 of...