Soteriou v Retco Poyntons (Pty) Ltd. (1) (381/83) [1985] ZASCA 15; [1985] 2 All SA 208 (A) (29 March 1985)

Soteriou v Retco Poyntons (Pty) Ltd. (1) (381/83) [1985] ZASCA 15; [1985] 2 All SA 208 (A) (29 March 1985)

Clause 2(b) of the lease conferred a valid and enforceable right of first refusal upon the appellant. The clause was intended to have business efficacy and was not void for uncertainty, as the lessor was obliged to offer the premises to the appellant on the same terms and rental as would be offered to any third party. The qualification that terms and rental be 'mutually agreed upon' did not render the clause unenforceable, as the lessor was required to act in good faith and make a fair and reasonable offer. The respondent breached this right by refusing to make an offer and re-letting the premises to a third party. The appellant was therefore entitled to remain in occupation, and the...

Citation
[1985] ZASCA 15
Parties
Appellant: Evangelos Antoniou Soteriou; Respondent: Retco Poyntons (Pty) Limited
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
29 March 1985
Case Number
381/83
Procedural Posture
Civil Appeal / Appeal From Order of Ejectment Granted by the Transvaal Provincial Division
Outcome
Appeal upheld; order of ejectment set aside; application dismissed with costs (excluding costs related to abandoned factual defences).
Judges
Kotzé, Botha, Nicholas, Galgut, Vivier
Legal Topics
Right of First Refusal, Commercial Leases, Contractual Uncertainty, Business Efficacy, Pre Emption Rights
Land and Property Commercial and Corporate Right of First Refusal Commercial Leases Contractual Uncertainty Business Efficacy Pre Emption Rights

Case Brief

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Parties

Evangelos Antoniou Soteriou

Appellant

Retco Poyntons (Pty) Limited

Respondent

Procedural Posture

Civil Appeal / Appeal From Order of Ejectment Granted by the Transvaal Provincial Division

Legal Issues

  1. 1 Does clause 2(b) of the lease confer a valid and enforceable right of first refusal or an unenforceable option to renew?
  2. 2 Is the clause void for uncertainty due to lack of agreement on rental and terms for the extended lease?
  3. 3 Was the respondent entitled to eject the appellant from the premises?

Ratio Decidendi

Clause 2(b) of the lease conferred a valid and enforceable right of first refusal upon the appellant. The clause was intended to have business efficacy and was not void for uncertainty, as the lessor was obliged to offer the premises to the appellant on the same terms and rental as would be offered to any third party. The qualification that terms and rental be 'mutually agreed upon' did not render the clause unenforceable, as the lessor was required to act in good faith and make a fair and reasonable offer. The respondent breached this right by refusing to make an offer and re-letting the premises to a third party. The appellant was therefore entitled to remain in occupation, and the...

Court Disposition

Appeal upheld; order of ejectment set aside; application dismissed with costs (excluding costs related to abandoned factual defences).

Orders

  • The appeal succeeds with costs, including the costs of two counsel, but excluding all costs in connection with pages 55 to 123 of the appeal record.
  • The order of the court a quo is set aside and substituted with: 'The application is dismissed with costs, including the costs of two counsel, but excluding the costs in connection with the respondent's answering affidavit, the applicant's replying affidavit, and the respondent's supplementary affidavit.'