Waterberg Boulevard (Pty) Ltd v Smulhoekie Tuisnywerheid (Pty) Ltd and Another (283/2024) [2025] ZASCA 167 (4 November 2025)

Case Note

Case Name: Waterberg Boulevard (Pty) Ltd v Smulhoekie Tuisnywerheid (Pty) Ltd and Another
Citation: 283/2024 [2025] ZASCA 167
Date: 4 November 2025

Reportability

This case is reportable due to its significant implications regarding the jurisdiction of magistrates' courts in South Africa in relation to claims for specific performance and arrear rental payments. The Supreme Court of Appeal had to clarify the boundaries of jurisdiction under the Magistrates' Courts Act, as disputes often arise when claims exceed preset monetary thresholds. The case further elucidates the nature of claims for rental arrears as they pertain to claims for specific performance, addressing whether such claims should be acknowledged as falling under the ambit of monetary claims or specific obligations. This ruling has far-reaching consequences for landlords and tenants and the legal interpretations of jurisdiction and contractual obligations, making it a pivotal case in South African civil law.

Cases Cited

1. Westinghouse Brake & Equipment (Pty) Ltd v Bilger Engineering (Pty) Ltd 1986 (2) SA 555 (A)
2. Cook v Morrison and Another [2019] ZASCA 8
3. Daljosaphat Restorations (Pty) Ltd v KasteelHof CC [2006] ZAWCHC 26
4. Farmers' Co-operative Society v Berry 1912 AD 343
5. Maisel v Camberleigh Court (Pty) Ltd 1953 (4) SA 371 (C)
6. Olivier v Stoop 1978 (1) SA 196 (T)
7. Zinman v Miller 1956 (3) SA 8 (T)
8. Carpet Contracts (Pty) Ltd v Grobler 1975 (2) SA 436 (T)
9. Tuckers Land and Development Corporation (Edms) Bpk v van Zyl 1977 (3) SA 1041 (T)

Legislation Cited

1. Magistrates’ Courts Act 32 of 1944
2. Superior Courts Act 10 of 2013

Rules of Court Cited

1. Rule 22A of the Magistrates’ Court Rules

HEADNOTE

Summary

This judgment concerns the appeal of Waterberg Boulevard (Pty) Ltd regarding an order dismissing their claim for arrear rental against Smulhoekie Tuisnywerheid (Pty) Ltd and its representative, Louis Petrus Boshoff. The core legal issues debated included whether the claim for arrear rental constitutes a claim for specific performance within the meaning of section 46 of the Magistrates' Courts Act, and whether the magistrates' court had jurisdiction to entertain the claim given its value exceeded the monetary limit set by statute.

Key Issues

The judgment addresses several pivotal issues, including: - The characterization of a claim for arrear rental as a claim for specific performance or as a monetary claim. - The jurisdictional limits imposed by the Magistrates’ Courts Act on the magistrates’ court pertaining to claims exceeding specified amounts. - The implications of pre-trial agreements on jurisdiction and the binding nature of these agreements. - The duty of a landlord to mitigate damages in the context of unperformed lease obligations.

Held

The Supreme Court of Appeal held that the claims for arrear rental presented by Waterberg constitute monetary claims and not claims for specific performance under section 46 of the Magistrates’ Courts Act. As such, the magistrates' court had jurisdiction to hear the matter. The court concluded that the High Court’s findings regarding mitigation of damages were incorrect and that pre-trial agreements made were not binding on the court in respect of jurisdictional questions.

THE FACTS

Waterberg Boulevard (Pty) Ltd entered into a lease agreement with Smulhoekie Tuisnywerheid (Pty) Ltd, represented by Louis Petrus Boshoff, wherein Smulhoekie was to rent business premises for three years at a monthly rental fee that escalated over the term. However, after struggling financially, Smulhoekie ceased operations in October 2016, leading to the accumulation of rental arrears.

Attempts to find a suitable replacement tenant for Smulhoekie were made, but none materialized in a manner that satisfied Waterberg or mitigated their losses. Despite this, Waterberg initiated action in the magistrates' court to recover the rental arrears, which eventually invoked appeals through multiple legal venues, raising questions of jurisdiction and the nature of the rental claims.

THE ISSUES

The legal questions examined by the Supreme Court of Appeal included whether the claim for arrear rental is classified as a claim for specific performance per the definitions found in the Magistrates’ Courts Act. The court also had to evaluate the implications of the statutory jurisdiction limits on the magistrates' court while debating the binding nature of pre-trial agreements and any duty by Waterberg to mitigate damages.

ANALYSIS

In its analysis, the Supreme Court delved into the relationship between claims for monetary payments and claims for specific performance as articulated under section 46 of the Magistrates’ Courts Act. The court clarified that claims for arrear rental, which are requests for monetary payment rather than for the performance of specific obligations, do not meet the criteria for specific performance as previously framed by other judicial interpretations.

The court also directly addressed the duty to mitigate damages, reinforcing that since the lease was still in active effect, Waterberg was not legally compelled to seek additional tenants or mitigate losses proactively. This analysis clarified the scope of a landlord's obligations under ongoing lease agreements and refuted the necessity of an alternate claim for damages when pursuing rental arrears.

REMEDY

The Supreme Court of Appeal ruled in favor of Waterberg Boulevard, granting it special leave to appeal, and ultimately set aside the previous High Court order. The appeal was upheld, obligating the respondents to pay the claimed rental arrears, interest, and costs associated with the appeal. The court emphasized that the magistrates' court retained jurisdiction over the claims presented and affirmed the legitimacy of Waterberg's claims based on the agreements in place.

LEGAL PRINCIPLES

This case elucidated key legal principles regarding the jurisdiction of magistrates' courts over claims and the distinction between claims for specific performance and claims for monetary sums. Specifically, it reinforced that claims for payment of rental arrears should be regarded as monetary claims that do not require an alternative claim for damages to fall under the jurisdiction of magistrates' courts. Additionally, the case highlighted the non-binding nature of incorrect legal concessions made at pre-trial conferences in regard to jurisdictional issues.

Ultimately, this ruling serves to clarify and solidify the legal framework around contractual obligations, rental agreements, and the jurisdictional authority of magistrates' courts within South African law.