Brink v Premier of the Free State Province and Another

The appellant, Loïs Brink, leased a resort from the Free State Provincial Government under a written lease concluded in 1997. The lease was for an initial period of five years, with an option to renew for a further five years, and a second option of five years “on the same and/or new conditions as will be mutually agreed”. Brink validly exercised the first option, extending the lease to 30 September 2007. In January 2007 she purported to exercise what she claimed was a second option to renew the lease for a further five years on the same terms, without negotiations. The respondents rejected this, contending that no unconditional second option existed. Brink approached the High Court for declaratory relief. The High Court held that there was no automatic second renewal, but that the respondents were obliged to negotiate in good faith. Brink appealed to the Supreme Court of Appeal.

The appeal was dismissed with costs, leaving intact the High Court’s order that the respondents were obliged to negotiate but that no automatic second renewal existed.

The case is an important authority on contractual interpretation in South African law, reaffirming the primacy of the ordinary grammatical meaning of contractual language and clarifying the interpretation of renewal clauses containing the phrase “and/or” and future-tense qualifiers such as “as will be mutually agreed”.