Where a person is granted a right of pre-emption or right of first refusal and the grantor breaches the right (by selling or otherwise granting it to a third party), the so-called Oryx mechanism comes into place and the holder of the right steps into the shoes of the person to whom the right was purportedly transferred as against the grantor of the right. This effectively prevents the third party from exercising the right granted to it in breach of the right of first refusal, but the grantee of the right cannot obtain more rights than were explicitly granted by the pre-emptive right.

Where notice is given by the grantee to the third party whose contract interfered with the pre-emptive right, the grantee of the right gets to claim the property to which the right relates. The grantee does not become a party to the contract between the grantor and the third party. An independent contract comes into existence between grantor and grantee to fulfil the obligations to give the grantee a right of first refusal.

The claimant in Brocsand (Pty) Ltd v Tip Trans Resources (Pty) Ltd had a right on expiry of a contract to render mining services to a particular property. The grantor concluded written agreements with other parties relating to the property in question as well as a farm not mentioned in the grant. The contracts were allegedly collusive to defeat the claimant’s rights. However, the right of first refusal had specific content relating to a named property and the Oryx mechanism could not extend to the other property because the contract relating to that property did not breach the right of pre-emption. The claim was therefore dismissed. There was no delicitual claim, for instance based on unlawful interference with the pre-emption contract.

The case is Brocsand (Pty) Ltd v Tip Trans Resources (Pty) Ltd (SCA).