DATE:	11 DECEMBER 2008

In the matter between

FIRST PHARMACY CC					APPLICANT

versus

JUDGMENT

	
The following facts are either common cause or not disputed.
(a) On 8 December 2003, first respondent concluded a written lease with Jean A de Klerk CC ("De Klerk CC"), in terms of which it leased the premises known as Shops 8 to 11, Shoprite Centre (hereinafter referred to as the leased premises) for a period of three years commencing on 1 November 2003 and terminating on 31 December 2006.   De Klerk CC had the right to renew the lease for a further period of five years.     De Klerk CC established and conducted a pharmacy under the name and style of Bothasig Apteek/Pharmacy from the leased premises.

(b)    The lease contained a special condition, namely:-

Medicines Control Act 1965. Bothasig Apteek shall have the sole right to operate as a pharmacy."

(c) During the currency of the said lease, first respondent sold the shopping centre to second respondent and a reciprocal lease was concluded between them in respect of the premises from which first respondent conducted its supermarket business.    The said lease was for a period of 12 years with effect as from 1 November 2005.

(d) The supermarket premises were let for the purpose of the lessee carrying on the business of a supermarket, as well as allied and ancillary business thereto, including but not limited to the business of a dispensary in pharmaceutical and health products. The said lease contained an exclusion to the effect that:-

"All current tenants and their successors in title at the shopping centre who are in contravention of the lessee's rights to exclusivity shall be permitted to continue trading and doing business as they currently are."

(e) On 7 June 2006 and during the currency of the aforesaid lease agreement in respect of the leased premises, De Klerk CC sold the business of Bothasig Apteek/ Pharmacy to applicant as a going concern, together with goodwill, fixtures, fittings and movables, as at the effective date of 10 September 2006, in terms of a written agreement of sale.   The value of goodwill paid by applicant to   De  Klerk  CC  was  R200  000,00.  The agreement of sale contained a suspensive condition that the sale was subject firstly to a new lease agreement in respect of the premises being concluded between the
applicant and second respondent for a period of five years from the effective date of the sale on no more onerous terms as that in force in respect of De Klerk CC, and secondly to the simultaneous cancellation of the existing lease in respect of the leased premises.

(g) The same special condition relating to the exclusive right to operate a pharmacy in the shopping complex as was contained in the original lease of De Klerk CC was replicated in the new lease of applicant.     It was quite clear  from   both   the   new   lease   agreement  and   the cancellation of the existing lease agreement that the enforcement of the two agreements were inter-dependent on each other.

The applicant purchased the pharmacy business from its predecessor and paid a substantial goodwill amounting to R200 000,00. The sale was conditional on the applicant obtaining a lease with similar rights enjoyed by De Klerk CC. Applicant enjoyed such right when he took the business over from its predecessor. When applicant learnt that first respondent intended opening a pharmacy, it approached first respondent, but first respondent denied such intention. When first respondent had a change of heart, it failed to inform applicant of its  change of heart. First respondent had knowledge, in my view, that De Klerk CC and applicant had exclusive rights to conduct a pharmacy at the shopping centre. First respondent merely informed second respondent of its intention to open a pharmacy business in the supermarket and advised second respondent to inform applicant accordingly. Second respondent failed to inform applicant of such intention. A few days prior to first respondent opening the pharmacy in the supermarket, the present application was brought by the applicant.  I am satisfied that the applicant brought the application as soon as reasonably possible, after it became aware of the fact that first respondent intended opening a pharmacy in the supermarket.

First respondent is a national chain of supermarkets with considerable economic power and muscle. Applicant is a small business enterprise. I am of the view that should first respondent be allowed to continue operating the pharmacy within the supermarket, it will cause irreparable harm to the applicant. With its economic muscle and power it could squeeze applicant out of business. In my view applicant has well-grounded apprehension of irreparable harm if the interim relief is not granted.

second respondent as same  provided for the right of De Klerk CC and its successors to be protected. I conclude that balance of convenience favours the granting of the interim relief.