Tiekiedraai Eiendomme (Pty) Limited v Shell South Africa Marketing (Pty) Limited

Hall (second respondent) was the lessor of land on which Shell (first respondent) operated Gateway Motors as lessee. The lease agreement contained a right of pre-emption in clause 21, which required Hall to offer the land to Shell on "identical terms and conditions in all respects" before selling to any third party, giving Shell 30 days to exercise the right. On 28 October 2014, Tiekiedraai (applicant) made an "offer to purchase" to Hall for R17 million, which stated further terms "to be agreed upon". Hall forwarded this incomplete offer to Shell on 30 October 2014. Shell contended this did not trigger the 30-day period. On 5 December 2014, Hall sent Shell a complete Sale of Fixed Property Agreement with Tiekiedraai. Shell exercised its right of pre-emption in writing on 9 December 2014. Shell then brought an application in the High Court for declaratory relief that it had validly exercised its pre-emptive right.

• Whether the incomplete offer of 30 October 2014 or the complete sale agreement of 5 December 2014 triggered the 30-day period for exercising the right of pre-emption
• Whether the High Court correctly granted a 'stepping-in' remedy allowing Shell to step into Tiekiedraai's shoes
• Whether this Court had jurisdiction under section 167(3)(b)(ii) to entertain novel arguments not raised in the courts below
• Whether leave to appeal should be granted where arguable points of law of general public importance are raised for the first time before the Constitutional Court
• The proper interpretation of a contractual right of pre-emption

The application for leave to appeal was dismissed with costs.

The binding legal principles established are: (1) Under section 167(3)(b)(ii) of the Constitution, even where an arguable point of law of general public importance is raised, the Constitutional Court will grant leave to appeal only if the interests of justice require it to consider the matter - the provision aims to ensure the Court does not entertain "any and every application" brought to it; (2) The Constitutional Court will only under exceptional circumstances agree to develop the common law as a court of first and last instance, particularly where doing so would deprive it of the benefit of well-reasoned judgments from lower courts on the point at issue; (3) Novel legal arguments not raised before lower courts will generally not provide a basis for Constitutional Court jurisdiction, as the Court's appellate powers exist to intervene in and correct determinations by lower courts, not to determine novel issues raised for the first time before it; (4) An arguable point of law of general public importance must transcend the particular interests of the litigating parties - the interpretation of specific contractual wording in a bespoke agreement between particular parties does not meet this threshold; (5) Arguable points of law relied upon to establish jurisdiction must appear in or emerge from the record of appeal, as the record determines the scope of the appeal - a court cannot grant jurisdiction based on fabricated points not arising from the proceedings below.

Cameron J made several obiter observations: (1) The Court noted that the position as between three parties where two are parties to a sale agreement that trenches upon a third party's pre-existing pre-emptive right "affords rich ground for this Court's attention" and that questions about what remedies should be available "are questions of real and wide substance"; (2) The Court acknowledged that the common law in the area of pre-emptive rights "has long been unsettled - and might even be unascertainable"; (3) The Court commented that cases may arise where it should consider points of law not raised before lower courts, "but there must be something extra" beyond the mere arguability and importance of the legal questions; (4) Cameron J observed that it is different where "a point of law is apparent on the papers and the parties simply misunderstood the law" - in such cases a court can raise the legal point of its own accord; (5) The Court noted that the parties appeared to have "enough legal resources to enable each of them to secure their best interests in the courts below"; (6) The Court did not decide whether the matter was academic for Tiekiedraai or whether the High Court order stripped it of its entitlement to claim damages against Hall, as these issues did not arise given the dismissal of the application. Jafta J in his concurring judgment observed that: (7) there may be overlap between the "ought to be considered" requirement and the interests of justice enquiry, but jurisdiction and interests of justice remain separate requirements; (8) a point of law is arguable if it carries some prospects of success, and must have reasonable prospects when considered in the context of the entire case - not every argument renders a point of law arguable.

This judgment clarifies the requirements for establishing Constitutional Court jurisdiction under section 167(3)(b)(ii) where an arguable point of law of general public importance is alleged. It emphasizes that: (1) even where such a point exists, the "interests of justice" test must still be satisfied before leave will be granted; (2) this Court will generally not entertain novel legal arguments raised for the first time before it, absent exceptional circumstances; (3) the Court is reluctant to decide common law issues as a court of first and last instance without the benefit of consideration by lower courts, particularly the Supreme Court of Appeal; (4) the interpretation of specific contractual clauses between particular parties will rarely constitute a matter of general public importance; and (5) arguable points of law must emerge from the record of appeal and the proceedings below - they cannot be manufactured for the first time on appeal to create jurisdiction. The case reinforces the Constitutional Court's gate-keeping function and its role as an apex court that corrects errors in lower court decisions rather than entertaining entirely new arguments not previously ventilated.