About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Western Cape High Court, Cape Town
SAFLII
>>
Databases
>>
South Africa: Western Cape High Court, Cape Town
>>
2016
>>
[2016] ZAWCHC 54
|
|
Hencetrade 15 (Pty) Ltd v Tudor Hotel Brasserie & Bar (Pty) Ltd (15275/2015) [2016] ZAWCHC 54 (16 May 2016)
IN THE
HIGH COURT OF SOUTH AFRICA
WESTRN
CAPE DIVISION, CAPE TOWN
Case number: 15275/2015
DATE: 16 MAY 2016
In the matter between:
HENCETRADE 15
(PTY)
LTD
...............................................................................................
Applicant
And
TUDOR HOTEL BRASSERIE & BAR (PTY)
LTD
..........................................................
Respondent
JUDGMENT
delivered
on 16 May 2016
(Application
for leave to appeal)
BINNS-WARD J:
[1]
The
respondent in the principal case has applied for leave to appeal to
the Supreme Court of Appeal (‘SCA’) against
the whole of
the judgment that was delivered in the principal case on 20 April
2016. The application was opposed.
[2]
The
application is based on two grounds. The first is that inasmuch
as this court decided the case applying the approach enunciated
in
Ethekwini Metropolitan Unicity
Municipality v Pilco Investments CC
[2007] SCA 62, at para 22, there is said to be a reasonable prospect,
having regard to certain
obiter dicta
in
Thompson v Scholtz
[1998] ZASCA 87
;
1999 (1) SA 232
(SCA) and the judgment of the Transkei full court in
Ntshiqa v Andreas Supermarket (Pty) Ltd
1997 (3) SA 60
(Tk), that the SCA ‘will reconsider its view’
in the
Pilco Investments
matter. The second is that there is a reasonable prospect that
another court might find on appeal that the lease was not
effectively
amended in terms of the agreement described at paragraph 5 of the
principal judgment to exclude the area comprised
of the third floor
of the Huys Heeren XVII building.
[3]
I
referred in the principal judgment to the doubts expressed in a
number of places, including the SCA’s judgment in
Thompson
v Scholtz
[1998] ZASCA 87
;
1999 (1) SA 232
(SCA), about
the soundness of the approach adopted in the line of judgments
following on
Arnold v Viljoen
1954 (3) SA 322
(C). Paragraph 22 of the judgment in
Pilco
Investments
does indeed, as submitted
by the respondent’s attorney, appear to reflect an application
of the approach in
Arnold
,
notwithstanding a reference therein to the remission of rental
principle discussed in
Thompson
.
The criticism directed at the line of authority based on
Arnold
certainly makes this an area of the law that would benefit from a
clarifying judgment from the SCA if and when the right case presents
such an opportunity.
[4]
No
point would be served, however, by granting leave to appeal if I am
not persuaded that there is a reasonable prospect
a
different result
would ensue if the SCA
were, on appeal, to apply the approach adumbrated in the pertinent
obiter dicta
in the judgment of Nienaber JA in
Thompson
;
alternatively, that there is a reasonable prospect that it might
uphold the respondent’s invocation of the the
exceptio
non adimpleti contractus
. I shall
consider the prospects in those respects presently. The proper
approach, in my view, is to do so mindful that
the purpose of
litigation is for the court to determine the litigants’
dispute. Therefore, if
the result
of the case is unlikely to be affected irrespective of the differing
approaches in legal principle that may be adopted, it would
not be
appropriate to send the matter on appeal merely to settle what would,
in effect, be an academic question in the factual
context of the
matter in hand; cf. e.g.
Grainco
(Pty) Ltd v Van der Merwe
[2016] ZASCA
42
(30 March 2016), at para 28-29. To express the position
more prosaically, it would be unjust to the applicant in the
principal case to grant the respondent leave to appeal and thereby
keep the applicant out of it its property pending the determination
of the appeal, unless I were persuaded that there was a reasonable
prospect that the ejectment order it has obtained against the
respondent might be set aside on appeal.
[5]
It
will be recalled that the respondent sought to rely on the
exceptio
non adimpleti
contactus
in the principal case. The
leading authority on that defence is the judgment in
BK
Tooling (Edms) Bpk v Scope Precision Engineering (Edms) Bpk
1979 (1) SA 391
(A)
.
As
I shall seek to illustrate, although the respondent’s
invocation of
exceptio
arguably might find some support in the judgment in
Ntshiqa
,
it is wholly irreconcilable with the reasoning applied by Nienaber JA
in
Thompson
.
[6]
The
question in issue in
Thompson
was
how the plaintiff’s claim for occupational interest should be
dealt with in a situation where he had, in breach of the
agreement,
failed to give occupation of the whole property to the defendant.
The defendant had, however, been given the use
and enjoyment of the
greater part of the property in question. The setting was
described by Nienaber JA as closely analogous
to that in which a
lessor claims rental under a contract of lease when the lessee has
not been given the full use and enjoyment
of the let property. The
SCA considered the applicability of the
exceptio
,
but expressly discounted it. It did so after a close
examination of the judgment in
BK
Tooling
.
[7]
In
considering whether the
exceptio
defence was available to the plaintiff’s claim for occupational
interest, Nienaber JA pointed out (at 240J) that what he
termed ‘
two
major premises or propositions
’
are ‘
basic to the judgment
’
in
BK Tooling
.
He observed (at 241D) that ‘[i]
mplicit
in the first proposition is the notion that a plaintiff is precluded
from recovering any remuneration if his performance
[in
terms of a snynallagmatic contract]
falls
short of perfection, even when the defendant, notwithstanding its
shortcomings, accepts and utilises it’.
He
continued (at 241E) ‘[t]
he second
proposition in
BK
Tooling
takes
account of that eventuality. The second proposition is that the first
proposition cannot be applied without qualification;
the
qualification is that there is a corrective; and the corrective is
that where the shortcoming in the plaintiff's performance
is capable
of being restored (or 'cured') the Court has a discretion, if
fairness so dictates, of allowing the plaintiff his contractual
remuneration - but minus the cost of restoring his defective work to
the required contractual standard.
’
The learned judge of appeal went on to explain, for the reasons set
out in the judgment (at 243G-244I), that while
both propositions are
readily applicable in the context of short performance of a contract
of
locatio conductio operis
,
the second proposition in
BK Tooling
is not practically transposable to a reciprocal contract in which, as
in the current matter, there is a situation of continuing
breach.
He considered the solution in respect of the plaintiff’s claim
for payment of occupational interest was to
apply an approach
analogous to that afforded by the remedy of
remissio
mercedis
(remission of rental) in the
context of lease agreements.
[8]
Thus, when questioning the line of
authority based on
Arnold
,
Nienaber JA did not suggest that the propositions in
BK
Tooling
should be applied. On the
contrary, the learned judge indicated that it might be preferable to
follow the line of authority
(see the cases cited at 248A-F) in which
the remission of rental principle had been applied. In doing so
the leaned judge
observed (at 248F-H) that there are material points
of distinction between the principles in respect of remission of
rental by
a lessee and the two propositions on which the judgment in
BK Tooling
concerning the
exceptio
defence is premised. Nienaber JA noted in this regard
(at 248F-H) that ‘[i]
n
approaching remission of rent on the basis of what is fair some
common ground can be found with the second proposition in
BK
Tooling
which is also founded on
fairness (at 427A). Even so, it would be wrong to equate the two
instances or to regard them as anything
more than merely analogous.
Remission of rental involves
an
estimation, in the innocent party's hand
,
of the extent to which the remuneration he owes the guilty party
should be reduced in relation to his reduced enjoyment of the
latter's performance. As such it may include elements which are
peculiar to him. That exercise is primarily subjective. The second
proposition in
BK Tooling
involves
a calculation, in the
guilty party's hand
, of the
exact cost of upgrading or perfecting his own defective performance.
That exercise is primarily objective
’.
(Emphasis supplied.)
[9]
J.N Piek and D.G. Klein in their article ’
n
Huurder se Aanspraak op vermindering van
Huurgeld terwyl hy in besit van die Huursaak is
,
(1983) 46 THRHR 367
(which is cited with apparent approval in both
Thompson
and
Ntshiqa
),
summarise the import of the remission of rental principle in the
context of lease agreements as follows (at p. 382): ‘
Die
verhuurder sal in die lig van die vereiste van wederkerige prestasie
nie die volle huurgeld kan eis indien hy nie volledig presteer
het
nie. Waar die verhuurder slegs ’n gedeelte van die
ooreengekome genot en gebruik aan die huurder verskaf het, het
hy
volgens die gemene reg en Suid-Afrikaanse regspraak die reg om ’n
pro rata-deel van die huurgeld te ontvang.
Die
huurder kan nie in so ’n geval met ’n beroep op
byvoorbeeld die
exceptio
non adimpleti contractus
weier om ‘n
pro
rata
-deel van die
huurgeld te betaal nie.
Dit spreek vanself dat die huurder wat geen genot en gebruik van die
huursaak het nie in die lig van die vereiste van wederkerige
prestasie geen huurgeld hoef te betaal nie
’.
[1]
(Footnotes omitted, and emphasis supplied.) In note 120, the
authors state ‘
Die gemeenregtelike
gesag
[D 19 22 25 2; Grotius 3 19 12;
Van Leeuwen 4 22 17; Pothier
Contrat de
Louage
139-164]
en
regspraak
[see especially the judgments
cited at note 112, some of which were also cited by Nienaber JA in
the passage in
Thompson
at 248A-F referred to in paragraph [8], above]
wat
hierbo aangehaal is, maak nie melding van enige sodanige reg
[i.e.
to rely on the
exceptio
]
wat die huurder mag hê nie.
Daar kan uit die feit dat die
verhuurder toegelaat is om ’n
pro
rata
-deel van die
huurgeld te eis, afgelei word dat die huurder hom nie in so ’n
geval op bv die
exceptio
non adimpleti contractus
kon beroep nie.
’
[2]
(Emphasis supplied.)
[10]
To
the extent that the full court of this Division had applied the first
proposition in
BK Tooling
in determining the intermediate appeal adversely to the plaintiff in
Thompson
on the basis of the
exceptio
(see
Scholtz v Thompson
1996
(2) SA 409
(C)), its approach was disapproved by the SCA, which
instead applied the equivalent of the remission of rental principle.
Hence
my observation at the outset of this judgment that the
SCA judgment in
Thompson
is, if anything, adverse to the respondent’s defence in the
current matter.
[11]
The judgment in
Thompson
is also, by necessary implication, disapproving of the reasoning (but
not necessarily the result) in the judgment in
Ntshiqa
,
to the extent that that seems to have been expressed as having been
founded on an application of the second proposition in
BK
Tooling
. The judgment in
Ntshiqa
referred to both the remission of rental principle and the
exception
and gave no sign of astuteness to the points of distinction between
the two concepts highlighted in
Thompson
.
It also did not give a clear indication which of them it was applying
in determining the question whether the lessor in
that case had been
entitled to cancel the lease. On analysis it seems to me that
the court in
Ntshiqa
actually applied the remission of rental principle.
[3]
[12]
Counsel
for the applicant in the principal case highlighted the effect in
passages in
Thompson
to which I have referred and argued that even adopting the most
favourable approach to remission of rental conceivable in the
respondent’s favour – that is recognising, for argument’s
sake, that the respondent was entitled to a remission
of rental
calculated on a pro-rated reduction of rental calculated by using the
floor area of the entire third floor of the Huys
Heeren XVII building
as a proportion of the total rented floor space (see in this regard
para 14 and 17 of the principal
judgment) – the
respondent would have been in arrears on the posited reduced rental
in the amount of R885 511,88 when
the applicant cancelled the
lease. Counsel’s calculation was made on figures that are
not disputed by the respondent.
[13]
For
these reasons, I am not persuaded that there is a reasonable
prospect, even were the SCA to reconsider the approach adopted
in
Pilco Investments
and adopt instead the approach preferred in
Thompson
,
thereby applying the line of authority in the cases cited at 248A-F
of the latter judgment and note 112 of the article by Piek
and Klein,
that the court would, in consequence, uphold the appeal and set aside
the order for the respondent’s eviction.
I am also of the
view, having regard to the rejection by the SCA in
Thompson
of the application of the
exceptio non
adimpelti contractus
in the judgment of
the full court in
Scholtz
supra,
and the content of the common law rehearsed in the passages from Piek
and Klein’s article discussed earlier, that there
is not a
realistic prospect that the respondent’s invocation of the
first proposition in
BK Tooling
might be upheld. On that account too, I am not persuaded that
there is a reasonable prospect that the ejectment order would
be set
aside.
[14]
The
second ground of appeal that the respondent would seek to advance if
leave were granted is directed at obtaining a finding that
the third
floor of the Huys Heeren XVII building was not excluded from the
hired premises with effect from the end of April 2014.
The aim
is to thereby avoid the effect of this court’s finding that on
any approach the applicant had not been in breach
of the lease by
withholding occupation of that area during what was referred to in
the principal judgment as the ‘second
period’ of the
lease (see para 16-18 of the principal judgment). The
respondent would seek on that basis to avoid the
effect of this
court’s finding that on any approach it was not open to it to
rely on the first proposition of the
BK
Tooling
judgment in respect the
non-payment of rental during the second period of the lease. It
will be apparent in the context of
what I have already said about the
unlikelihood of the SCA being persuaded that the respondent could in
principle rely on the
exceptio non
adimpleti contractus
, rather than being
limited, if it wished to retain the lease, to asserting an
entitlement to a remission of rental, that the second
ground upon
which the application for leave to appeal has been brought does not
advance the respondent’s case.
[15]
It
is not necessary in the circumstances to go into the question that I
raised with counsel during argument (apropos the contention
described
in paragraph 8 of the principal judgment) concerning the effect of
the legal principles governing the allocation and
appropriation of
the payments that the respondent made in respect of rental during the
currency of the lease.
[16]
The
following order is made:
The application for leave to appeal
is dismissed with costs.
A.G.
BINNS-WARD
Judge
of the High Court
[1]
In the light of the requirement of reciprocity of
performance, the lessor is not entitled to claim the full rental if
he has not
himself performed fully. Where the lessor has
provided the lessee with only part of the agreed use and enjoyment,
he has,
according to the common law and South African jurisprudence,
an entitlement to receive a pro rata portion of the rental.
The lessee may not in such a situation
refuse payment of a pro rata portion of the rental by invoking, for
example, the
exceptio non
adimpleti contractus
.
It is axiomatic in the light of
principle of reciprocity of performance that a lessee that has had
no use and enjoyment whatsoever
of the subject matter of the lease
is not required to pay any rent. (My translation.)
[2]
The common law authority and jurisprudence cited
above does not make mention of any such right by the lessee [i.e. to
rely on
the
exceptio
].
It may be inferred from the fact that
the lessor is permitted to claim a pro-rata portion of the rental
that the lessee may not
invoke, for example, the
exceptio
non adimpleti contractus
in
such a situation.
(My
translation.)
[3]
That is also the sense in which
Ntshiqa
appears to have been construed by Satchwell J in
Mpange
and Others v Sithole
2007 (6) SA 578
(W); see the latter judgment at para 68-70.