A legal battle for ownership of rights to land leased to a major petrol station has ended up in the Constitutional Court. A Cape Times report notes Shell SA had in 1991 built a petrol station in Nelspruit (now Mbombela) in Mpumalanga, on land it leased from HL Hall & Sons and – according to court papers – Hall had undertaken that if ever it wished to sell the land it would first offer it to Shell.

The energy giant would then have 30 days to exercise its right.

But 23 years later – in October 2014, Tiekiedraai Properties had sent an e-mail to Hall in which it had indicated that it wanted to purchase the land for R17m. Hall forwarded a copy of Tiekiedraai’s e-mail to Shell, and attached a cover letter referring to Shell’s right of pre-emption, or right to purchase.

Shell responded saying it would revert to Hall and in December 2014, Shell confirmed it had been close to getting its board’s approval for its own offer. By then, 30 days had passed since Hall’s e-mail to Shell and Hall and Tiekiedraai then concluded an agreement of sale.

Shell then lodged an application in the Gauteng High Court (Pretoria) against the sale, arguing even if it had accepted the offer, no contract of sale would have eventuated as the parties would still have had to reach an agreement on the further terms and conditions.

The High Court ordered Hall to ensure the property was transferred to Shell. Tiekiedraai then took the matter to the SCA and lost.

Yesterday, the Constitutional Court heard its application for leave to appeal against the SCA judgment. According to the Cape Times report, Tiekiedraai had three points to argue before the top court: the limits of the court’s remedial powers; the parties’ intention to contract; and the rules which courts needed to interpret contractual terms that created a right of pre-emption.

‘The first point of law engages an important question: What remedy, if any, may a court grant against a third-party purchaser where the grantor of a right of pre-emption alienates the merx in question in defiance of that right?

‘This question has long been unsettled,’ Tiekiedraai argued.

Full Cape Times report (subscription needed)