Mokone v Tassos Properties CC and Another

Ms Ntswaki Joyce Mokone leased business premises from Tassos Properties CC in terms of a written lease concluded in March 2004. The lease included a clause granting her a right of pre-emption (right of first refusal) should the lessor wish to sell the property. After the initial lease period expired, the parties continued on the same terms through an oral lease and later, in May 2006, extended the lease until May 2014 by way of a manuscript endorsement on the original lease, signed only by Tassos. In 2009 Tassos sold the property to Blue Canyon Properties 125 CC without offering it to Ms Mokone. Ms Mokone contended that the extension of the lease also extended her right of pre-emption, and sought to enforce it. The High Court held that the right of pre-emption, being collateral to the lease, was not extended. While litigation was pending, the lease expired and Blue Canyon sought Ms Mokone’s eviction, which led to further proceedings.

Leave to appeal was granted and both appeals were upheld. The High Court’s orders were set aside. It was declared that the extension of the lease in May 2006 extended Ms Mokone’s right of pre-emption. The action to enforce the right of pre-emption was remitted to the High Court for determination of outstanding issues, and the eviction proceedings were stayed pending finalisation of that action.

The case is significant for clarifying South African law on the interpretation of lease renewals and extensions, rejecting a rigid common-law rule that favoured lessors. It emphasises a contextual and purposive approach to contractual interpretation, aligned with modern interpretative principles, and confirms that rights of pre-emption are not subject to the formalities of the Alienation of Land Act. The judgment has wide implications for commercial leasing practice.