Transnet National Ports Authority v Reit Investments (Pty) Limited and Another

The dispute arose from five long-term notarial leases concluded in 1960 between Transnet’s predecessor and Reit’s predecessor over land in Maydon Wharf, Durban. Rentals were calculated as a fixed percentage of the market value of the land, excluding improvements, and reviewed every five years. Following the commencement of the National Ports Act 12 of 2005, Transnet sought to address what it regarded as unreasonably low rentals and entered into ‘Declarations of Rental’ with Reit in 2009, substantially increasing rentals for the period 2009–2014. When the next review period arose (2014–2019), Transnet proposed a rental based on market-related rentals rather than market value of the land. Reit objected. Each party appointed valuers, whose valuations differed significantly. In terms of the lease, an umpire, Mr Seota, was appointed after deadlock. He determined a market-related rental. Reit applied to the High Court to review and set aside the umpire’s determination, contending that he exceeded his mandate by determining market-related rental instead of the market value of the land. The High Court upheld Reit’s challenge. Transnet appealed to the Supreme Court of Appeal.

The appeal was upheld with costs, including the costs of two counsel. The High Court’s order was set aside and substituted with an order dismissing Reit’s application for review with costs, including the costs of two counsel.

The case is significant for confirming the limited scope of judicial review over expert determinations and valuations made pursuant to contractual mechanisms in South African law. It reinforces contractual certainty in long-term leases, clarifies the effect of section 67 of the National Ports Act on existing leases, and underscores that mere dissatisfaction with or alleged incorrectness of a valuation does not justify court interference.