Pick ‘n Pay Retailers (Pty) Ltd v Eayrs & Others NNO

Pick ‘n Pay Retailers (the franchisor) concluded a franchise agreement in 2004 with Carter Trading (the franchisee company) and its shareholders, which included a right of pre-emption in favour of Pick ‘n Pay over any sale of the franchise business or shares. In April 2010, the Holdstock Family Trust (seller) concluded a sale of shares agreement with the Daku Trust (purchaser) for 50% of the shares in the franchisee company, with the intention of converting the business from a Pick ‘n Pay franchise to a Superspar. The franchise agreement was terminated on notice, and the seller later offered the shares to Pick ‘n Pay in terms of its pre-emptive right. Pick ‘n Pay did not exercise the right within the original 30-day period but instead concluded an addendum with the seller extending the period. The purchaser, having waived all conditions precedent, sought specific performance of the sale agreement. The High Court ordered transfer of the shares to the purchaser, and Pick ‘n Pay and others appealed.

The appeal was dismissed with costs, and the order compelling transfer of 50% of the shares to the purchaser against payment of the purchase price stood.

The case clarifies the interaction between rights of pre-emption and subsequent sale agreements in South African contract law, confirming that an extension of a pre-emptive right by later agreement constitutes a new right that cannot defeat an earlier-acquired contractual entitlement. It reinforces the application of the maxim qui prior est tempore potior est iure to competing personal rights.