NEWS

Pick N Pay Loses Exclusivity Case Against Game

The Constitutional Court said Pick n Pay's exclusivity might be impacted, but is not usurped.

25/11/2016 13:18 SAST | Updated 25/11/2016 13:18 SAST
Bloomberg via Getty Images
The dispute centred on whether Pick n Pay can use an exclusive right to trade at the Cape Gate shopping centre to prevent Game from selling fresh foods at the complex.

Walmart-owned Masstores has succeeded in its appeal at the Constitutional Court to have the right to operate as a supermarket that sells fresh foods at a Western Cape shopping centre.

The dispute centred on whether Pick n Pay can use an exclusive right to trade at the Cape Gate shopping centre to prevent Game from selling fresh foods at the complex.

Pick n Pay said that Game's selling of fresh foods interfered with its contractual agreement to have the exclusive right to trade as a supermarket in the shopping centre, which is owned by Hyprop.

The court on Friday, though, ruled that Masstores did not violate any agreements by trading as a supermarket.

Justice Johan Froneman, who read out the judgment, explained that instead of making the case against the lessors Hyprop, Pick n Pay made the case against the tenant Masstores.

However, there was no "contractual relationship" between the two retailers.

Pick n Pay contended Masstores' breach with its own lease agreement, as far back as 2006, which prohibited it from operating as a general food supermarket in the shopping complex. Pick n Pay argued that it was an "intentional interference" with its contractual relations with Hyprop.

Pick n Pay had obtained an interdict from the High Court to prevent Masstores from operating as a supermarket at the shopping centre. The Supreme Court of Appeal upheld the finding that Masstores breached its own lease agreement.

However, in the majority judgment by nine judges, with the exception of one, the leave to appeal was granted.

"Masstores's trading as a general supermarket does not deprive Pick n Pay of its entitlement to continue trading as a general supermarket in the shopping centre," stated Froneman.

He added that Pick n Pay's "exclusivity" may have been impacted, but this exclusivity was not "usurped" by Masstores.

The appeal was further succeeded with costs, to be paid by the respondents, Pick n Pay.