Charalambos Commercial Properties CC v Transkei Furnishers (Pty) Ltd and Others

The applicant and the first respondent concluded a 30-year notarial lease in August 2015 over immovable property in Mount Frere, with an option allowing the applicant to purchase the property upon the death of Mrs Nozibele Vakalisa, the sole director and representative of the sole shareholder’s estate. After Mrs Vakalisa’s death in January 2022, the applicant exercised the option and tendered the calculated purchase price. The first respondent, now controlled by new directors, disputed the validity of the lease and option, primarily alleging lack of authority, non-compliance with the Companies Act, and public policy concerns.

The court declared that the applicant validly exercised the option to purchase; ordered the first respondent to sign the agreement of sale within ten days; authorised the sheriff to sign if the first respondent failed to do so; and ordered the first respondent to pay costs including two counsel on scale C.

The case affirms the retrospective validation effect of company re-registration, the continued applicability of the unanimous consent principle under the Companies Act 2008, and the protection afforded to bona fide third parties under section 20(7). It also reinforces pacta sunt servanda in the context of long-term leases with options to purchase.