Plattekloof RMS Boerdery (Pty) Ltd v Dahlia Investment Holdings (Pty) Ltd

The respondent owned a farm comprising eight portions. Two of these portions were leased to the appellant under a five-year lease concluded on 13 April 2018. Clause 10 of the lease granted the appellant a right of first refusal (pre-emptive right) to purchase the leased premises on the same or no less favourable terms than those offered by a bona fide third party. In April 2020, the respondent sold the entire farm to a third party, Swellendam Plase (Pty) Ltd, for a global purchase price of R17 million, without allocating a price to individual portions. The appellant became aware of the sale and demanded compliance with its pre-emptive right, seeking an offer to purchase the two leased portions. The respondent failed to make such an offer, leading the appellant to approach the High Court for enforcement of the right of pre-emption. The High Court dismissed the application, and the appellant appealed to the Supreme Court of Appeal.

The appeal succeeded in part. The High Court’s dismissal of the application was set aside. The respondent was ordered to deliver a written offer to the appellant within 10 days, in terms of the right of first refusal, based on the deed of sale with the third party. The appellant was ordered to pay the costs of the appeal, including the costs of two counsel.

The case clarifies the operation and enforcement of rights of pre-emption in South African law where the subject property forms part of a larger package deal. It confirms that such rights cannot be circumvented by selling property in globulo and that courts may compel grantors to comply in good faith with their contractual obligations.