Mokone v Tassos Properties CC and Another

Ms Ntswaki Joyce Mokone leased commercial premises from Tassos Properties CC in March 2004 under a written lease containing a right of pre-emption (right of first refusal) to purchase the property if the lessor wished to sell. After the initial term expired, the lease continued on the same terms orally and was later extended until 31 May 2014 by a manuscript endorsement signed only by the lessor. In 2009 Tassos sold the property to Blue Canyon Properties 125 CC without offering it to Ms Mokone. Ms Mokone alleged that the extension of the lease also extended her right of pre-emption and sought to set aside the sale and transfer, alternatively claiming damages. While this dispute was pending, Blue Canyon sought her eviction after the lease period ended. The High Court held that the right of pre-emption was not extended and later granted an eviction order on appeal.

Leave to appeal was granted in both matters. Both appeals were upheld. The High Court’s orders were set aside. It was declared that the 2006 extension of the lease extended Ms Mokone’s right of pre-emption. The action enforcing the right of pre-emption was remitted to the High Court for determination of outstanding issues. The eviction appeal was held in abeyance pending finalisation of that action.

The case is significant for reformulating South African law on the effect of lease renewals or extensions on collateral terms such as rights of pre-emption. The Constitutional Court moved away from a rigid, English-law-derived rule and confirmed that the matter is one of interpretation based on context and ordinary meaning, particularly from the perspective of lay contracting parties. The judgment strengthens contractual fairness and clarifies that rights of pre-emption are not subject to the Alienation of Land Act’s formalities.