THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Reportable

Case no: 925/19
In the matter between:

BROCSAND (PTY) LTD
APPELLANT

(Plaintiff in the Court a quo)
and

TIP TRANS RESOURCES (PTY) LTD
RESPONDENT

(Third Defendant/Excipient

in the Court a quo)
FULL SCORE TRADING 145 CC
(First Defendant in the Court a quo

cited as inactive historical party)

GLOBAL PACT TRADING 370
(Second Defendant in the Court a quo
(PTY) LTD
cited as inactive historical party)

Neutral Citation:
Brocsand (Pty) Ltd v Tip Trans Resources (Pty) Ltd and
Others (Case no 925/2019) [2020] ZASCA 144 (4
November 2020)
Coram:
MBHA, VAN DER MERWE and MOCUMIE JJA and MABINDLA-
BOQWANA and UNTERHALTER AJJA
Heard:
31 August 2020
Delivered:
This judgment was handed down electronically by circulation to
the parties’ legal representatives via email, publication on the Supreme Court
of Appeal website and release to SAFLII. The date and time for hand-down is
deemed to be 9h45 on 4 November 2020.
Summary:
Contract – right of first refusal – grantee cannot, by application
of the Oryx mechanism and the doctrine of notice, acquire more rights than
those afforded by the grantor – particulars of claim do not disclose cause of
action – exception upheld.

______________________________________________________________

ORDER
______________________________________________________________

On appeal from: Western Cape Division of the High Court, Cape Town
(Thulare AJ, sitting as court of first instance): judgment reported sub nom
Brocsand (Pty) Ltd v Full Score Trading 145 CC and Others [2019] ZAWCHC
32.
The appeal is dismissed with costs, including the costs of two counsel where
employed.
______________________________________________________________

JUDGMENT
______________________________________________________________

Mbha JA (Van der Merwe and Mocumie JJA and Mabindla-Boqwana and
Unterhalter AJJA concurring):

[1] This appeal is directed against an order of the Western Cape Division of
the High Court, Cape Town (Thulare AJ), which upheld the exception raised by
the respondent, Tip Trans Resources (Pty) Ltd (Tip Trans), against the
particulars of claim of the appellant, Brocsand (Pty) Ltd (Brocsand), on the
ground that they did not disclose a cause of action. It also dismissed Brocsand's
application for leave to amend its particulars of claim under Rule 28(4) of the
Uniform Rules of Court.1 The court a quo granted leave to Brocsand to appeal
to this court.

[2] The appeal concerns the nature and extent of the rights of the holder of
a right of first refusal and the remedies available upon the breach thereof. Of
particular relevance is the so-called Oryx mechanism, recognised by this court
in Associated South African Bakeries (Pty) Ltd v Oryx & Vereinigte Bäckereien

1 Rules regulating the conduct of the proceedings of the several provincial and local divisions
of the High Court of South Africa, originally published under GN R48 in GG 999 of 12-01-1965
(the Uniform Rules of Court).

(Pty) Ltd en Andere,2 as well as the doctrine of notice. The Oryx mechanism
was formulated in Mokone v Tassos Properties CC and Another3 as follows:
'In the event that a seller concludes a contract of sale with a third party in breach of a
right of pre-emption, the [holder of the right of pre-emption] may, through a unilateral
declaration of intent, step into the position of the third party. A contract of sale is then
deemed to have been [concluded] between the seller and the holder of the right of pre-
emption.'4

[3] Although originally formulated in the context of sale agreements, this
court has recognised that the application of the Oryx mechanism is not limited
to sale agreements.5 Thus, the Oryx mechanism has been applied in various
cases, including by this court,6 and by the Constitutional Court.7

[4] The facts leading up to the dispute are set out hereafter. On 12 October
2010 Brocsand, a mining contractor, and Full Score Trading CC (Full Score),
the first defendant in the court a quo, concluded an agreement in respect of the
minerals
on
the farm
described
as
the
remainder of
the farm
Bloemendaalzfontein 702 and 703 in the district of Malmesbury (Red Hill). Full
Score was entitled to exploit the minerals on Red Hill by virtue of a mining right
it had acquired under the provisions of the Mineral and Petroleum Resource
Development Act 28 of 2002 (the MPRDA).8 In terms of this agreement (the
Red Hill Agreement), Brocsand was appointed as the mining contractor 'to
render mining services in respect of the Minerals’ on Red Hill. In essence, the
Red Hill Agreement afforded Brocsand the right to mine for laterite and sand on

2 Associated South African Bakeries (Pty) Ltd v Oryx & Vereinigte Bäckereien (Pty) Ltd en
Andere 1982 (3) SA 893 (A) at 907E-F.
3 Mokone v Tassos Properties CC and Another [2017] ZACC 25; 2017 (5) SA 456 (CC).
4 Ibid para 56. This is Madlanga J’s (own) translation of the Afrikaans dictum in Oryx &
Vereinigte Bäckereien (Pty) Ltd (above fn 1). The original Afrikaans text reads as follows:
‘Indien 'n verkoper in stryd met 'n voorkoopsreg 'n koopkontrak met 'n derde aangaan, kan die
koper deur 'n eensydige wilsverklaring in die plek van die derde tree. 'n Koopkontrak word dan
geag aangegaan te gewees het tussen die verkoper en die houer van die voorkoopsreg.’
I have merely inserted ‘[concluded]’ (‘aangegaan’) into the second sentence of Madlanga J’s
translation.
5 Soteriou v Retco Poyntons (Pty) Ltd 1985 (2) SA 922 (A) at 932E-F and 935B-C.
6 See eg Soteriou (ibid); Hirschowitz v Moolman and Others 1985 (3) SA 739 (A) at 760I-761C.
7 Mokone (above fn 3).
8 See ss 22 and 23 of the MPRDA.

Red Hill until 30 October 2015. Clause 3.2 of the agreement gave Brocsand a
right of first refusal in these terms:
'3.2
this agreement shall commence on 1 November 2010 and, unless terminated
in accordance with the provisions of clause 18 or the other provisions of this Agreement
shall endure until 30 October 2015 -: Provided that upon expiry of the Agreement the
Contractor shall have the right of first refusal to enter into a new agreement as the
holder for the appointment as the exclusive contractor to render mining services in
respect of the Minerals on the Property.'
'Holder' is defined in s 1 of this agreement as Full Score Trading CC. 'Minerals'
means
'laterite
and
sand',
while
the
'property'
means
the
farm
Bloemendaalzfontein 702 and 703, District of Malmesbury.

[5] On 30 January 2015, Tip Trans, Full Score and Global Pact Trading 370
(Pty) Ltd (Global Pact) (the defendants), concluded a written agreement (the
January 2015 Agreement) in terms of which:
(a)
Full Score appointed Tip Trans as its mining contractor on Red Hill to
extract laterite and sand, and to buy it from Full Score Trading (Red Hill aspect);
and
(b)
Global Pact appointed Tip Trans as its mining contractor on the farm
described as Doornkraal 831, in the district of Malmesbury (Doornkraal), to
extract sand and to buy it from Global Pact (the Doornkraal aspect).

[6] This caused Brocsand to issue summons against Tip Trans, Full Score
and Global Pact as the first, second and third defendants, respectively.
Brocsand averred in its particulars of claim that it first became aware of the
conclusion of the January 2015 agreement and consequently of the fact that its
right of first refusal had been breached, on or about 10 June 2015, when a copy
of this agreement was disclosed to it. As a result, on 21 August 2015, Brocsand
conveyed to the defendants that by unilateral declaration of intent, it had
stepped into the shoes of Tip Trans and therefore became party to an
independent contract, equivalent to the January 2015 Agreement, with Full
Score and Global Pact.

[7] Brocsand averred further that by virtue of the deemed contract it was
effectively entitled to replace Tip Trans as mining contractor in respect of Red
Hill as it had already de facto done. As regards Doornkraal, Brocsand claimed
that it was effectively entitled to replace Tip Trans as mining contractor until 21
May 2035. Brocsand claimed that the defendants had deliberately entered into
the January 2015 agreement despite having had prior knowledge of Brocsand’s
right of first refusal and of the fact that the conclusion of the January 2015
agreement would amount to a breach thereof. Brocsand also claimed that the
Red Hill aspect of the January 2015 agreement, directly involving Full Score
Trading and Tip Trans, and the Doornkraal aspect thereof, directly involving
Global Pact and Tip Trans, were deliberately mixed up and conflated by the
defendants in a legally impermissible attempt to frustrate or circumvent
Brocsand’s right of first refusal. Brocsand accordingly claimed, in essence, an
order permitting it to mine on Doornkraal and payment of damages consisting
of loss of profits in respect of the period that it had allegedly been prevented
from doing so.

[8] Tip Trans excepted to Brocsand’s particulars of claim on the basis that
they failed to disclose a cause of action against Tip Trans in respect of the
mining of the minerals on Doornkraal. The essence of Tip Trans’s objection was
that the Red Hill Agreement conferred rights on Brocsand in respect of mining
of Red Hill only, and not on Doornkraal. There was no reference to mining of
any minerals on Doornkraal in the Red Hill Agreement.

[9] Tip Trans's exception can be summarised as follows:
(a)
Neither Global Pact nor Tip Trans were party to the Red Hill Agreement
which made provision for Brocsand’s pre-emptive rights in relation to Red Hill.
(b)
If it were to be found that Brocsand’s pre-emptive rights in terms of the
Red Hill aspect of the January 2015 agreement have been infringed, Brocsand
cannot, by unilateral declaration of intent and by implementation of the Oryx
mechanism, acquire new found rights against Global Pact and Tip Trans.
(c)
The Oryx mechanism is aimed at preserving existing rights and not
creating new rights. Consequently, Brocsand cannot avail itself to either the

Oryx mechanism or the doctrine of notice to create new contractual rights
against Tip Trans in relation to Doornkraal.

[10] In upholding Tip Trans's exception, the court a quo found that prior to
the conclusion of the January 2015 agreement, Brocsand had not obtained
rights from Global Pact Trading in respect of the mining of any minerals on
Doornkraal. Consequently, so it reasoned, the Doornkraal aspect of the
January 2015 agreement did not breach Brocsand’s right of first refusal in
respect of the mining of minerals on Red Hill.

[11] The court a quo found that Brocsand could not, by means of the Oryx
mechanism, 'step into the shoes' of Tip Trans in relation to a contract concluded
between Tip Trans and Global Pact, with whom Brocsand had no contractual
relationship. The Oryx mechanism did not, the court a quo concluded, extend
to matters 'beyond the original agreement', ie the Red Hill agreement, and was
limited only to the subject matter of the original agreement, namely the mining
of laterite and sand on Red Hill.

[12] After receipt of Tip Trans's exception, as referred to above, Brocsand
filed a Notice of Intention to Amend its particulars of claim in terms of Rule
28(1). It sought to amend paras 25 and 27 of its particulars of claim to reflect
that Tip Trans had repudiated the deemed contract by refusing to accept that
as a consequence of the deemed contract it had been ousted from the January
2015 agreement and that Brocsand has accordingly stepped into its shoes. Tip
Trans filed its objection thereto on the basis that the amendment would not
remove the cause of complaint, and that the particulars of claim remained
excipiable as they did not disclose a cause of action. By agreement between
the parties the application for leave to amend was heard simultaneously with
the exception. The court a quo consequently dismissed the application to
amend.

[13] It is apposite to mention that after leave to appeal to this court was
granted on 31 July 2019, Brocsand withdrew on 26 September 2016 its action
against Full Score Trading and Global Pact Trading, on the basis that the matter

had been settled between them. Accordingly, only the excipient, Tip Trans
Resources, is before us. There is substance in the argument on behalf of Tip
Trans that Brocsand’s claim could not be determined in the absence of Global
Pact, but that was not a basis of the exception and is a matter for another day.

[14] Before I consider the parties' respective positions, I recall certain trite
relevant legal principles. First, since these are proceedings on exception, the
court must accept as true the factual allegations in the claim as proposed to be
amended, and merely decide whether they disclose a cause of action.9 The
alleged defect must appear ex facie the pleading. The excipient may not rely
on his or her own plea or affidavits supporting the exception.10

[15] Secondly, a court hearing an application for an amendment has a
discretion whether or not to grant it. Such a discretion must be exercised
judicially, in the light of all the facts and circumstances.11

[16] There can be no doubt that the Red Hill and Doornkraal aspects of the
January 2015 agreement were severable. In terms thereof, as I have said, Full
Score granted rights in respect of Red Hill and Global Pact granted rights in
respect of Doornkraal. The aspects involved the exploitation of different
minerals at different prices. Clause 14 of the January 2015 agreement, relied
upon by Brocsand in this regard, merely referred to the combined monthly
extraction of minerals and makes no difference to this conclusion.

[17] Brocsand’s right of first refusal had a specific content. It was the right ‘to
enter into a new agreement with the Holder for the appointment … to render
mining services in respect of the Minerals on the Property’, that is, a right
against Full Score in respect of laterite and sand on Red Hill. As a matter of
logic, the content of a right cannot change because of a breach thereof, not

9 Ocean Echo Properties 327 CC and Another v Old Mutual Life Assurance Company (South
Africa) Ltd [2018] ZASCA 9; 2018 (3) SA 405 (SCA) para 9.
10 YB v SB and Others NNO [2015] ZAWCHC 109; 2016 (1) SA 47 (WCC) para 12; Baliso v
First Rand Bank Ltd t/a Wesbank [2016] ZACC 23; 2017 (1) SA 292 (CC) para 33.
11 Caxton Ltd and Others v Reeva Forman (Pty) Ltd and Another 1990 (3) SA 547 (A) at 565F-G;
YB v SB (above fn 7) para 9.

even when the breach takes place by collusion. This, therefore, begs the
question: How, according to the particulars of claim, did Brocsand obtain rights
against Global Pact in respect of the minerals on Doornkraal?

[18] The main premise for Brocsand’s claim to rights on Doornkraal was that,
by invoking the Oryx mechanism, it had 'stepped into the shoes' of Tip Trans
not only in respect of the Red Hill aspect, but also in respect of the Doornkraal
aspect of the January 2015 agreement. In other words, Brocsand sought to
'step into the shoes' of Tip Trans in respect of both parts of the January 2015
agreement.

[19] In addition, it contended that the application of the doctrine of notice
‘bridges the gap which might otherwise have existed’. It emphasised that
Brocsand had alleged that Tip Trans not merely had knowledge of Brocsand’s
right of first refusal, but deliberately participated in the January 2015 agreement
with the intent to frustrate it.

[20] With regard to the first-mentioned contention vis-à-vis the applicability of
the doctrine of notice, Brocsand relied on the following relevant averments in
the particulars of claim:
'22.2
... the Third defendant, by virtue of the fact that it deliberately entered into
the 30 January 2015 agreement with the First Defendant and the Second
Defendant, despite having had prior knowledge of the Plaintiff's right of first
refusal and of the fact that the conclusion of the 30 January 2015
agreement would amount to a breach of such right of first refusal;
...
23.5
By virtue of their common prior knowledge of the Plaintiff's right of first
refusal and their consequently mala fide, alternatively and in any event
deliberate participation in the conclusion of the 30 January 2015
agreement ... and by virtue further, generally, of the doctrine of notice, all
three Defendants are fully subjected to the operation of the deemed
contract and its consequences ... despite the fact that

23.5.1
the First Defendant (being the grantor of the Plaintiff's right of first refusal)
is directly involved only in the Red Hill aspect of the 30 January 2015
agreement;
23.5.2
the Second Defendant is directly involved only in the Doornkraal aspect of
the 30 January 2015 agreement;
23.5.3
only the Third Defendant is directly involved in both the Red Hill and
Doornkraal aspects of the 30 January 2015 agreement.’

[21] As appears from Brocsand’s formulation of its claim in the particulars of
claim, the gravamen of Brocsand’s complaint is the mala fide, alternatively
improper conduct of the defendants in relation to the January 2015 contract,
with knowledge that their conduct would infringe upon Brocsand’s right of first
refusal. This is the essence of Brocsand’s case, namely, that an extended
application of the Oryx mechanism, was justifiable on the grounds of equity.

[22] In the case of Hirschowitz,12 this court stated:
[In Oryx13] ... Van Heerden AJA emphasised that, although the holder (grantee) of the
right of pre-emption is said to step into the shoes of the third party (“in die plek van die
derde tree”), he does not take the place of the third party in relation to that contract.
The true position is that upon the grantee exercising his rights after the conclusion of
a contract of sale with a third party, a new independent contract – and not a
substitutionary one – comes into existence between the grantor and the grantee and
this does not affect the validity of the contract between the grantor and the third party
(at 919 C-E).’

[23] Therefore, this court made it very clear that the metaphoric ‘stepping into
the shoes’ in terms of the Oryx mechanism does not make the grantee a party
to the contract between the grantor and the third party. An independent contract
between the grantor and grantee comes into existence. It follows that the Oryx
mechanism permits the grantee to obtain rights only as against the grantor and
only in respect of the subject matter of the preferent right, here the right of first
refusal. Thus, the Constitutional Court in Mokone14 aptly stated that:

12 Hirschowitz (above fn 10) at 761G-I.
13 Referring to the eponymous case of Oryx & Vereinigte Bäckereien (Pty) Ltd (above fn 2) and
not the Oryx mechanism.
14 Mokone (above fn 3) at para 59.

'Court-coerced compliance by the grantor will be doing nothing more than to require
her or him to honour what she or he had bargained for. It will not be an imposition.
Ultimately, the holder of the right of pre-emption may be able to purchase on the exact
terms on which the third party purchased and thus 'step into the position of the third
party'.

[24] Thus the application of the Oryx mechanism cannot vest rights in
Brocsand that it may exercise against Global Pact and in respect of Doornkraal.
And, as I shall explain, Brocsand has also misconceived the meaning and
import of the doctrine of notice.

[25] It is trite that the effect of the doctrine of notice is to enable the grantee
to enforce his preferential personal right, not only as against the grantor, but
also as against third parties who have interfered with the right and have
knowledge of it. Its application will typically enable the grantee to reclaim
property that was delivered to a third party who has taken the property with
knowledge of the grantee’s rights. The content of the grantee’s right remains
the same. The doctrine of notice, in this context, simply permits the right to be
enforced against parties in addition to the grantor. Mala fides does not add to
the rights enjoyed by the grantee. The extent to which Tip Trans may have
acted improperly in relation to the conclusion of the January 2015 agreement
cannot enlarge the ambit of the Oryx mechanism, by recourse to the doctrine
of notice, so as to permit the grantee to enjoy rights that were never the subject
of the original grant.

[26] From the aforegoing it follows that the Oryx mechanism and the doctrine
of notice can be applied in the context of the present matter, but only in respect
of the Red Hill aspect of the January 2015 agreement, which is a distinct and
separate contract from the Doornkraal aspect. In my view it appears that
Brocsand in essence seeks compensation for Tip Trans's alleged wrongful
conduct in relation to the conclusion of the January 2015 agreement. Brocsand
has thereby ventured in the realm of the law of delict, under the guise of the
doctrine of notice. In fact, Brocsand acknowledged in its heads of argument that
'the doctrine is rooted in the unlawfulness of the offending party's conduct'. In

this regard, Brocsand referred to the unreported case of Saligee-Quickfall v
Daniels and Others,15 where the court stated that the ratio for the application of
the doctrine of notice, in the case of double sales, is the wrongfulness of the
third-party buyer’s conduct. The court also pointed out that this conclusion
accords with the principle that the intentional interference with another party's
contractual relationship amounts to a delict.

[27] The contract between Global Pact and Tip Trans in respect of the mining
of sand on Doornkraal did not, therefore, breach Brocsand’s right of pre-
emption. Thus, the gravamen of the particulars of claim was legally untenable.
It follows that the court a quo correctly upheld the exception and dismissed the
application to amend on the ground that it would not cure the legal gap in
Brocsand’s pleaded case. Although the court a quo did not spell it out, Brocsand
is in law entitled to further amend its particulars of claim, if so advised.

[28] Because the Red Hill and Doornkraal aspects of the January 2015
agreement were severable parts thereof, it is not necessary to deal with the law
in respect of so-called ‘package deal’ cases. At the hearing counsel for
Brocsand disavowed any attempt to persuade this court to develop the
applicable law.

[29] For all of these reasons, I make the following order:
'The appeal is dismissed with costs, including the costs of two counsel where
employed.'

_________________
B H Mbha
Judge of Appeal

15 Saligee-Quickfall v Daniels and Others [2015] ZAWCHC 115 para 34.

APPEARANCES

For Appellant:
Mr A le Grange SC (with him Mr C Cilliers)

Instructed by:
Werksmans Attorneys, Cape Town

Phatsoane Henney Attorneys, Bloemfontein

For Respondent:
Mr P de B. Vivier SC

Instructed by:
Lucas Deysel Crouse Incorporated, Durbanville

Honey Attorneys, Bloemfontein
THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
MEDIA SUMMARY
Brocsand (Pty) Ltd v Tip Trans Resources (Pty) Ltd and Others
(Case no 925/2019) [2020] ZASCA 144
From:
The Registrar, Supreme Court of Appeal
Date:
04 November 2020
Status:
Immediate
The following summary is for the benefit of the media in their reporting of the case and does not
form part of the judgment of the Supreme Court of Appeal

Today the Supreme Court of Appeal (SCA) handed down judgment in an appeal against a
decision of the Western Cape Division of the High Court, Cape Town (Thulare AJ) concerning
the nature and extent of a right of first refusal, as well as the remedies available to the holder
of such a right in the event that it is breached. The appeal was dismissed with costs.

In October 2010 the appellant, Brocsand (Pty) Ltd (Brocsand), a mining contractor, entered
into an agreement with Full Score Trading CC (Full Score), which held a mining right entitling
it to exploit the minerals on a farm in the Malmesbury, Western Cape (Red Hill). The 2010
agreement essentially afforded Brocsand the right to extract laterite and sand on Red Hill from
1 November 2010 until 30 October 2015. The agreement also conferred on Brocsand the right
of first refusal to enter into a new agreement with Full Score, upon termination of the 2010
agreement by effluxion of time, and again be appointed as the exclusive contractor for the
purposes of extracting laterite and sand on Red Hill.

In January 2015, ie nine months before the 2010 agreement was to expire, Full Score entered
into an agreement with the respondent, Tip Trans Resources (Pty) Ltd (Tip Trans), and Global
Pact Trading 370 (Pty) Ltd (Global Pact). In terms of the 2015 agreement Full Score appointed

Tip Trans as its mining contractor, to extract laterite and sand on Red Hill and to buy it from
Full Score; and Global Pact appointed Tip Trans as its mining contractor, on a different farm
in Malmesbury, Western Cape (Doornkraal), to extract sand and to buy it from Global Pact.

When Brocsand became aware of this later in the year, it informed the three parties to the 2015
agreement that, by unilateral declaration of intent, it (Brocsand) had ‘stepped into the shoes’ of
Tip Trans and accordingly become party to an independent contract (equivalent to the 2015
agreement) with Full Score and Global Pact. Brocsand averred that this deemed contract
entitled it to replace Tip Trans as mining contractor both in respect of Red Hill as well as
Doornkraal.

Tip Trans excepted on the basis that Brocsand’s claim did not disclose a case of action against
it in terms of the Doornkraal aspect of the 2015 agreement. Tip Trans argued that neither it nor
Global Pact were parties to the 2010 agreement, in respect of the extraction of laterite and sand
on Red Hill. Accordingly, so the argument went, even on a successful application of the Oryx
mechanism, Brocsand could not acquire rights as against Tip Trans or Global Pact, at least not
in respect of the Doornkraal aspect of the 2015 agreement.

The high court essentially agreed with Tip Trans’s objections, noting that the Doornkraal aspect
of the 2015 agreement did not breach Brocsand’s right of first refusal in relation to the
extraction of laterite and sand on Red Hill. Brocsand had no contractual relations with Global
Pact and was thus not entitled to step into the shoes of Tip Trans in respect of a contract
concluded between Tip Trans and Global Pact. It was held that the Oryx mechanism did not
extend to matters beyond the original agreement; it was limited to the subject matter of the
original agreement, in this case the extraction of laterite and sand on Red Hill.

The SCA found that the Red Hill and Doornkraal aspects of the 2015 agreement were
undoubtedly severable. Full Score granted rights in respect of the former, while Global Pact
granted rights in respect of the latter. The two aspects involved the exploitation of different
minerals at different prices. Brocsand’s right of first refusal was a right against Full Score, in
respect of laterite and sand, on Red Hill. Yet Brocsand sought to step into the shoes of Tip
Trans not only in respect of the Red Hill aspect, but also in respect of the Doornkraal aspect of
the 2015 agreement. It argued that this extension of the Oryx mechanism was justified on
grounds of equity, since the parties to the 2015 agreement acted mala fide, alternatively

improperly, with knowledge that their conduct would infringe upon Brocsand’s right of first
refusal.

The SCA rejected this line of reasoning and held that the Oryx mechanism permits the grantee
to obtain rights only as against the grantor and only in respect of the subject matter of the
preferent right. Application of the Oryx mechanism could thus not vest rights in Brocsand that
it would then be able to exercise against Global Pact and in respect of Doornkraal.

The SCA further held that Brocsand’s reliance on the doctrine of notice, in order to strengthen
its argument for an extended application of the Oryx mechanism, was misplaced. While the
doctrine may allow a grantee to enforce its preferential right against persons other than the
grantor of that right, it did not in any way extend the content of the right. It was held that the
ambit of the Oryx mechanism could not be enlarged, with recourse to the doctrine of notice, so
that a grantee is permitted to enjoy rights that were never the subject of the original grant. The
Oryx mechanism and the doctrine of notice could only apply in respect of the Red Hill aspect
of the January 2015 agreement, which was a separate and distinct contract from the Doornkraal
aspect.

In the result the appeal was dismissed with costs, including the costs of two counsel. The SCA
noted that Brocsand would be entitled to further amend its particulars of claim, if so advised.

________________________________________