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THE SUPREME COURT OF APPEAL OF SOUTH AFRICA

JUDGMENT

Reportable

Case no: 406/21

In the matter between:

DEON NEL
APPELLANT

and

PETRUS JACOBUS DE BEER

FIRST RESPONDENT

PIETER HENDRIK JACOBUS BURGER NO
SECOND RESPONDENT

Neutral citation:
Deon Nel v Petrus Jacobus de Beer & Another (406/21) [2022]
ZASCA 145 (26 October 2022)

Coram
Zondi, Molemela, Plasket and Mabindla-Boqwana JJA and Musi
AJA

Heard:
14 September 2022

Delivered:
26 October 2022

Summary:
Sale of land – right of pre-emption – right of pre-emption in lease
agreement in respect of five separately registered farms – sale of two of those farms
constitutes breach of contract – third party purchasing two of the farms with knowledge
of right of pre-emption – remedy – specific performance, subject to court’s discretion,
suitable remedy.

___________________________________________________________________

ORDER
___________________________________________________________________

On appeal from: Gauteng Division of the High Court, Pretoria (Van der Westhuizen J
sitting as court of first instance):

The appeal is upheld with costs, including the costs of two counsel.

The order of the high court is set aside and replaced with the following:

‘(i) The plaintiff is directed to submit a duly signed deed of sale to the defendants
in respect of Portions 6 and 11 of the farm Swarts Rust, which deed of sale shall
contain all the terms and conditions of the Fanie Trust agreement, save for
clause 2(d), within 14 days from the date of this order;
(ii) The defendants are ordered to sign the deed of sale submitted to them by
the plaintiff within 14 days from date of receipt thereof;
(iii) Should the defendants fail and/or refuse to sign the deed of sale aforesaid,
the Sheriff of the Court (in which district the properties are situated) is
authorised and ordered to sign the deed of sale on behalf of the defendants;
(iv) The defendants are ordered to pay the costs of the action, including the
costs of two counsel.’

___________________________________________________________________

JUDGMENT
___________________________________________________________________

Musi AJA (Zondi, Molemela, Plasket and Mabindla-Boqwana JJA concurring):

Introduction
[1] This appeal, which is with the leave of this Court, is against the judgment of the
Gauteng Division of the High Court, Pretoria (the high court). The appeal concerns a
dispute about the validity and enforceability of a right of pre-emption contained in a
lease agreement. The high court found that there was no valid and enforceable pre-
emption clause in the lease agreement and consequently dismissed the claim. Mrs de
Beer (the erstwhile second respondent) passed on after the proceedings were
instituted. The current second respondent is the executor of her estate. Although the
lease agreement was entered into between the appellant (the plaintiff) and the
respondents (the de Beers), the plaintiff’s brother Mr Marius Nel played a pivotal role
in the dispute.

Facts
[2] On 20 November 2008, the plaintiff and the de Beers entered into a lease
agreement in terms of which the plaintiff leased five farms from the de Beers for a
period of three years (the capacity in which the plaintiff entered into the lease
agreement is in dispute, and will be dealt with below). The five farms consisted of two
portions of the farm Welgevonden (Portion 18 – a portion of Portion 1 – and Portion
20 – a portion of Portion 18), as well as three Portions of the farm Swarts Rust
(Portions 2, 6 and 11). All the portions were separately registered. The parties agreed
that the extent of the land was 600 hectares.

[3] The plaintiff initially desired to have an option to purchase the farms. However,
the parties agreed to include a right of pre-emption in favour of the plaintiff. The right
of pre-emption read as follows:

‘Die verhuurder verleen hiermee aan die huurder die eerste reg om die gemelde eiendomme
voor die verstryking van hierdie huurkontrak te koop.’1
On 30 July 2009, whilst the lease agreement was extant, and unbeknown to the
plaintiff, the de Beers concluded a sale agreement with the Fanie Trust (represented
by Mr Marius Nel) in terms of which Portions 6 and 11 of the farm Swarts Rust
(Portions 6 and 11) were sold for R3 137 103 (the Fanie Trust agreement). On the
same day the Moladora Trust (represented by Mr Marius Nel) sold two farms (Portion
15 – a portion of Portion 5 of the farm Rietkuil and Portion 16 a portion of Portion 12
of the farm Doornfontein) to the de Beers for R2 100 000 (the Moladora Trust
agreement).

[4] The Fanie Trust agreement stated that the properties shall not be registered
before 1 November 2011, a day after the expiry of the lease agreement and
consequently the right of pre-emption (clause 2(c)). The parties agreed, in clause 2(d)
of both sale agreements, that the registration of the properties in the Fanie Trust
agreement must be done simultaneously with the registration of the properties in the
Moladora Trust agreement. They further acknowledged, in the Fanie Trust agreement,
the existence of the lease agreement entered into between the de Beers and the
plaintiff and recorded that the sale agreement was subject to that lease agreement.

[5] The de Beers did not offer the Swarts Rust farms to the plaintiff for him to
exercise his right of pre-emption. Instead, on 22 September 2011 after the Swarts Rust
farms were sold to the Fanie Trust the de Beers entered into another lease agreement
in respect of the same five farms with the plaintiff for another three years. The second
lease agreement also granted the plaintiff the right of pre-emption. The plaintiff
subsequently found out about the Fanie Trust agreement when Mr Marius Nel told him
about it. The plaintiff confronted Mr de Beer and told him that he wanted to exercise
his right of pre-emption.

[6] On 28 November 2011, the plaintiff gave notice of his intention to exercise his
right of pre-emption to the de Beers. He included a signed standard draft agreement

1 The lessors grant to the lessee the first right to purchase the said properties before this lease
agreement expires. (My loose translation.)

for the de Beers’ consideration. The de Beers did not sign the draft agreement. They
also did not indicate that they were dissatisfied with any term or condition in the draft
agreement or that they regarded the draft as a counter-offer. On 9 November 2012 the
plaintiff’s attorney transmitted letters to the de Beers’ and Marius Nel’s attorneys
respectively, informing them that the plaintiff intended to purchase the farms sold to
the Fanie Trust on the same terms and conditions set out in the Fanie Trust
agreement.

[7] On 4 July 2014, the plaintiff launched an application wherein he inter alia sought
an order declaring that he properly exercised his right of pre-emption over the farms
sold to the Fanie Trust. He also requested that the de Beers be ordered to enter into
a sale agreement with him on the same terms as the Fanie Trust agreement excluding
paragraphs 2(c), 2(d) and 2(e).2 Due to the factual disputes on the papers the matter
was referred to trial.

The Trial
[8] The plaintiff testified and called two witnesses, his wife, Mrs Mariette Nel, and
Mr Nieuwoudt, the attorney who drafted the first lease agreement. Mr Marius Nel and
Mrs Gagiano, the de Beers’ daughter, testified on behalf of the respondents. Mr de
Beer could not give coherent testimony, due to ill health.

[9]     The plaintiff testified that he was informed by his mother that Mr de Beer asked
her for his number. He called Mr de Beer and they arranged to meet at Mr de Beer’s
farm. They duly met and during that meeting they agreed that he could lease the farms.
They agreed on the rental amount and Mr de Beers contacted Mr Nieuwoudt who
drafted the lease agreement. Mr Marius Nel was not at the meeting and was not a
party to the lease agreement. It was already planting season (which is between middle
November and 15 December) and he was in a hurry to clear the land and commence
planting.

2 Clause 2(e) was a recordal that the parties are aware of the Moladora Trust agreement and accept
the contents of that agreement.

[10] He testified that the tractor that he used to rip the soil broke and the agents
informed him that it would take approximately six weeks to repair it. He contacted Mr
Marius Nel and asked him to rent him a tractor. He refused. In desperation he
requested Mr Marius Nel to clear and cultivate the land. Mr de Beer consented to the
arrangement and Mr Marius Nel paid for the lease of the land and cultivated it for the
entire lease period. He confirmed that during November 2011 when he was cultivating
the land, Mr Marius Nel informed him that he bought the farms. He consulted his
attorney and it was as a result of the attorney’s enquiries that they received the Fanie
Trust and Moladora Trust sale agreements from Mr Marius Nel’s attorney.

[11] Mrs Mariette Nel, confirmed that Mr Marius Nel was not at the meeting where
the lease of the farms was discussed by her husband and the de Beers. Mr Nieuwoudt
testified that Mr Marius Nel was not a party to the lease agreement.

[12]     Mr Marius Nel testified that on 15 November 2008, Mr du Preez, the de Beers’
son-in-law, informed him telephonically that Mr de Beer wanted to rent out his farms.
He went to the de Beers’ farm where he found the de Beers, Mr du Preez, the plaintiff
and the plaintiff’s wife. During the negotiations the plaintiff stated that he did not have
enough implements to cultivate the farms. They agreed on the lease amount and that
he would cultivate Portions 6 and 11 and the plaintiff would cultivate the rest. He paid
the rental amount plus VAT for the properties. On 17 November 2008 he started
cleaning and cultivating Portions 6 and 11. When he noticed that the plaintiff only
delivered implements on the other farms without cultivating them, he decided to
cultivate them. After the first season when he heard nothing from the plaintiff, he paid
the de Beers and cultivated all the farms.

[13] He testified that during June 2009 he bought the farm Rietkuil from his mother.
Mr du Preez informed him that Mr de Beer was interested in buying Rietkuil. Mr de
Beer offered to sell Portions 6 and 11 of the Swarts Rust farm to the Fanie Trust.
However, he only saw the first lease agreement in 2009 when the attorney who drafted
the sale agreements requested it from Mr De Beer, and was disappointed to see that
the plaintiff was the only lessee. As a result, the Fanie Trust and Moladora Trust
agreements were entered into.

[14] Mrs Gagiano testified that she was not present at the meeting in her parental
home. She confirmed that she filled in the other particulars on the cheque that Mr
Marius Nel presented to the de Beers.

High Court
[15] The high court found that the impugned clause did not contain a proper right of
pre-emption since it did not provide for the price of the properties. It opined that the
purported pre-emption clause was in effect an agreement to enter into an agreement
about the purchase price and other terms and conditions of the sale. It also found that
if the plaintiff wanted to step into the shoes of the Fanie Trust, no term of the
agreement between the de Beers and the Fanie Trust may be added or deleted. It
reasoned that the deletion of clause 2(d) from the Fanie Trust agreement would
constitute a counter-offer. Furthermore, it found that the pre-emption clause was not
triggered because the Fanie Trust agreement was in respect of certain specified farms
and not the entire 600 hectares mentioned in the lease agreement.

Issues
[16] The issues that fall to be determined are: (a) whether the Nel brothers were co-
lessees; (b) whether the pre-emption clause was triggered when only two farms were
sold; (c) whether the right was properly exercised; (d) whether the exclusion of clause
2(d) in the offer to step into the Fanie Trust’s shoes constituted a counter-offer; and
(e) the appropriate remedy.

[17] The principles regarding a right of pre-emption are well-established. In
Owsianick v African Consolidated Theatres3 it was stated as follows:
‘A right of pre-emption is well known in our law . . . and it is to be distinguished from an option
to purchase . . .The granter of the right of pre-emption cannot be compelled to sell the subject
of the right. Should he, however, decide to do so, he is obliged, before executing his decision
to sell, to offer the property to the grantee of the right of pre-emption upon the terms reflected
in the contract creating that right.’4

3 Owsianick v African Consolidated Theatres (Pty) Ltd 1967 (3) SA 310 (A).
4 Ibid 316C-D.

Was Mr Marius Nel a co-lessee?
[18] Only the testimonies of the Nel brothers are relevant to determine whether Mr
Marius Nel was a co-lessee. The high court did not deal with this issue. The de Beers
contended that the plaintiff could not exercise the right of pre-emption unilaterally
because Mr Marius Nel was a co-lessee and therefore had to exercise the right with
the plaintiff. They argued that the plaintiff’s name was inserted in the lease agreement
as the nominee for himself and Mr Marius Nel. Mr Marius Nel testified that the
agreement between him, the de Beers, and the plaintiff was that he would lease the
two Swarts Rust farms and that the plaintiff would lease the rest. He did not sign any
lease agreement.  He initially testified that he assumed that the plaintiff was going to
sign the contract on their behalf.

[19]    During cross-examination, Mr Marius Nel testified that he assumed that he would
sign a separate contract for the two Swarts Rust farms and that the plaintiff would do
so with regard to the rest of the farms. He stated that he paid the full lease amount for
all five farms because he assumed that the plaintiff would later repay him his (the
plaintiff’s) pro rata amount. However, he did not discuss any of this with the plaintiff.
When he was not given a lease agreement in respect of the two farms, he did not
enquire from the de Beers or the plaintiff about it. He testified that he did not confront
the plaintiff or Mr de Beer when he found out that the plaintiff was the only lessee in
terms of the contract. He also did not take any steps to try and rectify the anomaly.
During the discussions preceding the signing of the sale agreement he, Mr de Beer
and Mr du Preez discussed the lease agreement whereupon Mr de Beer informed him
that the lease agreement is null and void because the plaintiff sub-let the property to
him. He accepted this proposition without demur.

[20] In their plea, the de Beers stated that Mr Marius Nel and the plaintiff were co-
lessees of all the farms, in terms of the first and second lease agreements. They later
abandoned their stance with regard to the second lease agreement. The high court
found that the de Beers were scoundrels because they entered into the second lease
agreement with the plaintiff knowing that they concluded a sale agreement with the
Fanie Trust, in respect of Portions 6 and 11. This finding was not challenged before
us. Mr Marius Nel insisted that he was a co-lessee, however, he could not coherently
explain why the Fanie Trust agreement was made subject to the lease agreement

entered into between the de Beers and the plaintiff. The high court did not make any
credibility findings in respect of the Nel brother’s testimonies.

[21] On the probabilities, I agree with the plaintiff that Mr Marius Nel’s conduct was
consistent with that of a sub-lessee. He did not ask for a separate lease contract; he
paid the full lease amount whereas he stated that he leased only two farms and, when
he was told by Mr de Beer that he was a sub-lessee, he did not object. Also, Mr Marius
Nel signed the Fanie Trust agreement wherein he and the de Beers recognised the
plaintiff’s right of pre-emption in the lease agreement. This conduct is contrary to that
of a person who claims to have been a co-lessee. Furthermore, Mr Marius Nel did not
give the plaintiff an instruction to enter into the lease agreement as his nominee.5 As
such, the doctrine of the undisclosed principal is also not applicable firstly, because
Mr Marius Nel did not testify that he was the plaintiff’s principal and secondly, he did
not give the plaintiff, as the purported intermediary, a mandate. There must be a
relationship between the principal and the intermediary:
‘It would appear though, that the required relationship exists only where the undisclosed
principal has instructed the intermediary to conclude the contract either in the name of the
principal or in his or her own name or in either as he or she chooses. If no such relationship
exists, the situation is not an undisclosed-principal relationship and the alleged undisclosed
principal can acquire no right and incur no obligations from the contract’6
I find that Mr Marius Nel was not a co-lessee. There was therefore no need for him to
exercise the right of pre-emption jointly with the plaintiff.

Interpretation of Clause 19
[22] This Court has set out the proper approach to interpreting a document in the
oft-quoted decision in Natal Joint Municipal Pension Fund v Endumeni Municipality:7
‘Interpretation is the process of attributing meaning to the words used in a document, be it
legislation, some other statutory instrument, or contract, having regard to the context provided
by reading the particular provision or provisions in the light of the document as a whole and
the circumstances attendant upon its coming into existence. Whatever the nature of the

5 In Dadabhay v Dadabhay and Another 1981 (3) SA 1039 (A) at 1047 Holmes AJA said ‘The nominee
shareholder takes his instructions from the beneficial shareholder.’ See also Smyth and Others v
Investec Bank Ltd and Another [2017] ZASCA 147; 2018 (1) SA 494 (SCA) paras 21-23.
6 The Law of South Africa, Volume 1, Third Edition para 174.
7 Natal Joint Municipal Pension Fund v Endumeni Municipality [2012] ZASCA 13; 2012 (4) SA 593
(SCA).

document, consideration must be given to the language used in the light of the ordinary rules
of grammar and syntax; the context in which the provision appears; the apparent purpose to
which it is directed and the material known to those responsible for its production. Where more
than one meaning is possible each possibility must be weighed in the light of all these factors.
The process is objective, not subjective. A sensible meaning is to be preferred to one that
leads to insensible or unbusinesslike results or undermines the apparent purpose of the
document . . .  [t]he “inevitable point of departure is the language of the provision itself”, read
in context and having regard to the purpose of the provision and the background to the
preparation and production of the document.’8

[23] The approach to interpretation is a unitary exercise: the text, context and
purpose must be considered simultaneously.9 In determining the intention of the
parties to an agreement the court must have regard to all the facts. Although the words
used by the parties are important, it must, however, be remembered that ‘words
without context mean nothing’.10

[24] The de Beers argued that the right of pre-emption was not triggered because
in terms of clause 19 the farms were leased as a unit and the right could only be
triggered if they were sold as a unit. The sale of the two farms, so the argument went,
did not activate the right of pre-emption. The plaintiff argued that the wording of clause
19 is clear in that it refers to properties and not property, as the high court erroneously
stated.

[25] It is correct that the high court referred to property instead of properties when it
interpreted clause 19. The submission by the plaintiff that the high court should have
found that the use of the word properties in clause 19 was indicative of an intention to
disaggregate the farms is without merit. This is so because the parties clearly used
the words ‘properties’ and ‘property’ interchangeably. In clause 1 it is stated that the
‘properties leased are described as follows’ later in the same clause it is stated that
‘both parties agreed on the size of the property’.

8  Natal Joint Municipal Pension Fund v Endumeni Municipality para 18.
9 University of Johannesburg v Auckland Park Theological Seminary and Another [2021] ZACC 13;
2021 (6) SA 1 (CC) para 65.
10 Novartis SA (Pty) Ltd v Maphil Trading (Pty) Ltd [2015] ZASCA 111; 2016 (1) SA 518 (SCA) para 28.

[26] There is no evidence that the parties agreed that the farms had to be sold as a
unit. It was common cause that the de Beers’ other son-in-law, Mr Gagiano, occupied
Portions 6 and 11. The relationship between the de Beer family and Mr Gagiano was
strained and Mr de Beer wanted him to vacate those farms. Mrs Gagiano pertinently
testified that one of the ways the de Beers considered to get rid of Mr Gagiano was to
sell Portions 6 and 11. The de Beers therefore contemplated selling the Swarts Rust
farms separately in order to get rid of Mr Gagiano. The plaintiff testified that Portions
6 and 11 could be sold separately as a viable unit because the land was arable with
good soil. The de Beers eventually sold only Portions 6 and 11 to the Fanie Trust.
When the plaintiff informed the de Beers that he wanted to exercise his right of pre-
emption in respect of Portions 6 and 11, they did not inform him that he could not do
so because their agreement was that he could only do so if all the properties were
sold.

[27] I agree with the plaintiff that the contention that all the farms had to be sold
simultaneously as a unit does not make business sense. The de Beers’ contention
would give them licence to undermine the plaintiff’s right of pre-emption by selling the
farms separately and on a piece-meal basis. The only sensible interpretation is that
the right of pre-emption could be triggered by the sale of any or all the farms. There
is, however, another reason why the de Beers’ contention is untenable.

[28] In McGregor v Jordaan11 the plaintiff (lessee) had a right of pre-emption over a
farm. The defendant sold a portion of the farm to a third party who had knowledge of
the plaintiff’s prior right of pre-emption. Kotze J held that the object of the law is, inter
alia, to discourage and prevent fraud and that the conduct of the second defendant
(purchaser) amounted to fraud.12 The court declared the sale agreement null and void
and interdicted the seller from giving and the purchaser from accepting transfer of the
half share of the farm.

11 McGregor v Jordaan and Another 1921 CPD 301.
12 Ibid at 309.

[29] T Naude13 states, with reference to McGregor v Jordaan and Transvaal Silver
Mines v Jacobs Le Grange and Fox14 that:
‘It is, however, clear that the sale of a portion of the pre-emption property is regarded as a
breach of the right of pre-emption, and that the holder is entitled to an interdict prohibiting such
a sale or an order cancelling the transfer of the pre-emption property to a third party with prior
knowledge of the right of pre-emption’15
She summarises the legal position in other jurisdictions as follows:
‘A majority of courts in the USA have decided that the grantor’s willingness to sell a partial
interest in the pre-emption property gives the holder the right to buy that partial interest by
matching the third party’s offer. A Canadian court has also held that the sale of a portion of
the pre-emption property (one of three parcels of land), triggers the right of pre-emption to buy
that portion. . . The German BGB provisions on Vorkaufsrechte are silent on the effect of the
sale of a partial interest in the pre-emption property. However, there is authority that the sale
of a portion of the pre-emption property triggers the right of pre-emption to buy that portion.’16

[30]    In Pushka v Magnowski Estate,17 the Canadian case referred to by Naude, the
right of pre-emption in a lease agreement referred to an offer for the ‘demised
premises’ which consisted of three parcels of land. The defendant sold one parcel of
land and contended that the right of pre-emption could only be triggered if all three
parcels, and not merely a part thereof, were sold. The court said the following about
the contention:
‘…it would follow that, although “the demised premises” retains the same meaning – all three
parcels – the lessor, by offering and selling only one parcel to a third party would not only not
trigger the lessee’s right to match the offer, but would terminate his right to match any later
offer on either or both of the remaining parcels. Such a devious and tortured reading is not
warranted when in their ordinary meaning the words are apt to include the parts in the whole.’18

[31] The absurdity illustrated in Pushka v Magnowski Estate would present itself in
this matter if the de Beers’ contention were to be accepted. The plaintiff’s right of pre-

13 T Naudé, ‘Which transactions trigger a right of first refusal or preferential right to contract?’ (2006)
123 SALJ 461.
14 Transvaal Silver Mines v Jaobs Le Grange and Fox 1891 4 SAR 116.
15 Footnote 11 at 493.
16 Ibid 494.
17 Pushka v Magnowski Estate (1983), 23 Man. R. (2d) 189 (QB).
18 Ibid at 194.

emption would be nugatory. In my view, where a right of pre-emption was granted in
respect of land or separate parcels of land and the grantor sells a portion of the land
or one of the parcels, the right of pre-emption would be triggered, unless a contrary
intention is indicated in the agreement between the parties.

Did the plaintiff exercise his right of pre-emption?
[32] On 28 November 2011, the plaintiff’s attorney wrote to the de Beers to inform
them that the plaintiff insists on exercising his right of pre-emption and attached a deed
of sale for the de Beers to append their signatures to. The de Beers, however, did not
respond. On 9 January 2012 the plaintiff’s attorney again wrote to the de Beers’
attorney and informed him that the plaintiff insisted on specific performance of his right
of pre-emption relating to Portions 6 and 11 and was prepared to buy them on the
same conditions as those contained in the Fanie Trust agreement. Mr Marius Nel, on
behalf of the Fanie Trust, entered into an agreement of sale with the de Beers in
respect of Portions 6 and 11 whilst fully aware of the plaintiff’s right of pre-emption.
Accordingly, the plaintiff exercised his right of pre-emption properly.

Did plaintiff make a counter-offer?
[33] The high court found that any attempt to delete any term contained in the
proposed agreement would constitute a counter-offer. Additionally, it found that the
plaintiff rejected the Fanie Trust offer and provided a counter-offer, ie the offer without
clause 2(d) of the Fanie Trust agreement. No offer was ever made to the plaintiff. He
could therefore not have made a counter-offer. On the contrary, the plaintiff offered to
purchase Portions 6 and 11 on the same conditions contained in the Fanie Trust
agreement.

[34] The finding with regard to the omission of clause 2(d) of the Fanie Trust
agreement in the initial agreement that the plaintiff presented to the de Beers is a red
herring. The de Beers pleaded that the Moladora Trust and Fanie Trust agreements
were cancelled. The clause 2(d) issue was therefore moot. Clause 2(d) was in any
event not a material clause; it was inserted for practical reasons to facilitate payment.
The de Beers conceded that the Moladora Trust and Fanie Trust agreements did not
constitute an exchange. The de Beers could therefore still continue with the Moladora
Trust agreement without the Fanie Trust agreement.

Was the price of Portions 6 and 11 determinable?
[35] The high court found that the price in the Fanie Trust agreement was for
Portions 6 and 11 and not the entire 600 hectares. It opined that additional terms and
conditions would have to be added to provide for the remaining farms. This reasoning
was based on its unfortunate finding that the farms had to be sold as a unit for the right
of pre-emption to be triggered. The finding of the high court is unsustainable. It is not
in dispute that the price of Portions 6 and 11 was determinable based on the Fanie
Trust agreement. A right of pre-emption is enforceable if the price and method of
payment are determinable.19

Remedy
[36]    The de Beers argued that the only remedies at the plaintiff’s disposal are a
declaratory order or an interdict. This argument is misplaced. In Associated South
African Bakeries v Oryx20 this Court held that where a seller enters into a contract of
sale with a third party, who had knowledge of the right of pre-emption, in breach of
that right, the purchaser can by way of a unilateral declaration of intent step into the
shoes of the third party.21 The moment a right of pre-emption is exercised after a
contract was concluded with a third party, an independent contract, and not a
substitutionary one, comes into existence between the grantor and grantee and this
does not affect the validity of the contract between the grantor and the third party.22

[37] In Hirschowitz v Moolman23 this Court stated that:
‘In principle the holder of a right of pre-emption is entitled (in addition to claiming an interdict
or damages in appropriate circumstances) to seek the positive enforcement of his right.’24

19 Van Aardt & Another v Weehuizen & Others 2006 (4) SA 401 (N) para 16.
20 Associated South African Bakeries (Pty) Ltd v Oryx & Verenigte Bӓckereien (Pty) Ltd en Andere 1982
(3) SA 893 (A) (Oryx).
21 Ibid at 907E. In Mokone v Tassos Properties CC 2017 (5) SA 456 (CC) para 57 The Constitutional
Court said: ‘The idea of a “unilateral declaration of intent” is understandable in the circumstances. It is
consonant with the notion that, subject to whatever the law may be held to be in ordering or not ordering
specific performance, the grantor of the right is liable to coercion.’
22 Oryx at 919C-E.
23 Hirschowitz v Moolman and Others [1985] ZASCA 38; 1985 (3) SA 739 (A).
24 Ibid at 776D.

It is now well-settled in our law that a right to specific performance exists subject to the
Court’s discretion to grant or refuse it.25 There is no reason not to grant it in this matter.
The appeal must succeed and the order of the high court should be set aside.

[38]     The following order is made:

The appeal is upheld with costs, including the costs of two counsel.

The order of the high court is set aside and replaced with the following:

‘(i) The plaintiff is directed to submit a duly signed deed of sale to the
defendants in respect of Portions 6 and 11 of the farm Swarts Rust, which
deed of sale shall contain all the terms and conditions of the Fanie Trust
agreement, save for clause 2(d), within 14 days from the date of this order;
(ii) The defendants are ordered to sign the deed of sale submitted to them by
the plaintiff within 14 days from date of receipt thereof;
(iii) Should the defendants fail and/or refuse to sign the deed of sale aforesaid,
the Sheriff of the Court (in which district the properties are situated) is
authorised and ordered to sign the deed of sale on behalf of the defendants
(iv) The defendants are ordered to pay the costs of the action, including the
costs of two counsel.’

______________________
MUSI AJA

ACTING JUDGE OF APPEAL

25 Benson v SA Mutual Life Assurance Society 1986 (1) SA 776 (A).

APPEARANCES

For Appellant:

SG Maritz with him JF van der Merwe
Instructed by:

JP Kruyshaar Attorneys, Pretoria
Honeys Attorneys, Bloemfontein

For First and Second
Respondents:

R Grundlingh with him ASL van Wyk
Instructed by:

Hengst Attorneys, Pretoria

Lovius Block Attorneys, Bloemfontein

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
MEDIA SUMMARY OF JUDGMENT DELIVERED IN THE SUPREME COURT OF
APPEAL
From:
The Registrar, Supreme Court of Appeal
Date:
26 October 2022
Status:
Immediate
The following summary is for the benefit of the media in the reporting of this case and does
not form part of the judgments of the Supreme Court of Appeal
Deon Nel v Petrus Jacobus de Beer & Another (406/21) [2022] ZASCA 145 (26 October
2022)
Today the Supreme Court of Appeal (SCA) upheld an appeal from the Gauteng Division of the
High Court, Pretoria (high court). The SCA set aside the order of the high court and replaced
it with one that ordered the plaintiff to submit a duly signed agreement to the defendants in
respect of Portions 6 and 11 of the farm Swart Rust (the farm), failing which, the Sherriff was
authorised and ordered to sign the agreement on behalf of the defendants.
This appeal revolved around a dispute about the validity and enforceability of a right of pre-
emption contained in a lease agreement. In terms of the agreement, five farms were to be
leased from the respondents for a period of three years. The plaintiff sought to buy the
property, but the parties decided to include a right of pre-emption in the agreement in favour
of the plaintiff instead. However, while the agreement was extant, the respondents concluded
a sale agreement with the Fanie Trust (the Fanie Trust agreement) in terms of portions 6 and
11 of the farm. The respondents did not offer the plaintiff the opportunity to exercise his right
of pre-emption. Rather, after the farms were sold to the Fanie Trust, the respondents entered
into another lease agreement with the plaintiff in respect of the same five farms for another
three years, also with the right of pre-emption. The plaintiff was unaware that the farms had
been sold, and when he became aware of this, informed the respondents that he intends to
exercise his right of pre-emption and provided them with a signed standard draft agreement.
The respondent did not sign the agreement. They also did not indicate that they were
unsatisfied with any particular term in the agreement, or that the draft agreement was

considered to be a counter offer. This prompted the plaintiff to launch an application seeking
an order declaring that his right of pre-emption was properly exercised over the properties sold
to the Fanie Trust.
The SCA had to determine whether the pre-emptive clause was triggered as only two of the
five farms were sold and whether the right was properly exercised. No evidence was tendered
indicating that the parties required the farms to be sold as a unit. This Court found that had
this been the case, the respondents would have been at liberty to undermine the plaintiff’s
right of pre-emption by selling the farms piece-by-piece, rendering the plaintiff’s rights
nugatory. This Court confirmed that where a right of pre-emption was granted in respect of a
property or separate properties and the grantor of the right sells a portion of the property or
one of the properties, the right of pre-emption would have been triggered, unless a contrary
intention emanated from the agreement between the parties. The moment when the right of
pre-emption was exercised after the contract was concluded with the third party, an
independent contract and not a substitutionary one came into existence between the grantor
and grantee. This, subsequently, did not affect the validity of the contract between the grantor
and the third party.
In the result, the SCA upheld the appeal and aside the order of the high court and replaced it
with one ordering the plaintiff to submit a duly signed agreement to the defendants in respect
of Portions 6 and 11 of the farm Swart Rust (the farm), failing which, the Sherriff was
authorised and ordered to sign the agreement on behalf of the defendants.
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