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[2018] ZAWCHC 167
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Van der Stel Sports Club v Cape Perfect Health CC t/a Perfect Health (4467/2018) [2018] ZAWCHC 167 (3 December 2018)
IN
THE HIGH COURT OF SOUTH AFRICA
(WESTERN
CAPE DIVISION, CAPE TOWN)
Case
no: 4467/2018
In
the matter between:
VAN
DER STEL SPORTS
CLUB Applicant
and
CAPE
PERFECT HEALTH CC t/a PERFECT HEALTH
Respondent
JUDGMENT DELIVERED 3 DECEMBER
2018
SAVAGE
J
:
Introduction
[1]
The applicant, the Van der Stel Sports
Club, a voluntary association, seeks an order of eviction from
commercial premises, being
erf 235, Stellenbosch (‘the
premises’), against the respondent, Cape Perfect Health CC,
trading as Perfect Health,
with a punitive costs order.
[2]
For some weeks following the hearing the
matter on 20 September 2018 the parties engaged in unsuccessful
attempts to settle matter.
On being advised that efforts to resolve
the dispute between them had failed, the parties were requested to
make further written
submissions in relation to the matter. These
submissions were received from counsel on 23 November 2018, following
which this judgment
was prepared.
Relevant
factual background
[3]
The premises in issue, used by the
respondent to operate a gym, are owned by the Stellenbosch
Municipality. As from 8 March 2002
the premises have been leased to
the Stellenbosch Sport and Recreation Association (‘the SSRA’).
In terms of this lease
agreement “
(t)he
Municipality shall
maintain
the exterior of the Premises as well as the main exterior walls and
roofs thereof in good order and repair
”.
With effect from 1 May 2004 the SSRA sub-leased the premises to the
applicant for a period of 9 years and 11 months, following
which the
lease has been tacitly renewed on a month to month basis. In terms of
clause 10 of that lease, it was agreed that “(t)
he
SSRA
shall
maintain the exterior of the Premises
as well as the main exterior walls and roofs thereof in good order
and repair
”.
[4]
The respondent occupies the premises in
terms of a written “membership fee agreement” entered
into between the parties
on 31 March 2015 for a 10-year period from 1
April 2015 until 31 March 2025. The agreement records that fixed
monthly
ledegelde
will
be paid to the applicant by the respondent. It is not in dispute that
these fees are in effect monthly rental payments and
that a landlord
and tenant relationship exists between the parties. The applicant
agreed, in clause 4, to pay a third of the monthly
costs of financing
any approved improvements to the premises of a capital nature, up to
a limit of R26 000,00 per month, for
the period of the
applicable financing agreement secured for this purpose. Clause 4.4
requires the applicant to act reasonably
in considering any
improvement requests, recognising that the respondent intends on a
continuous basis to improve the premises;
and clause 8 requires the
applicant to report any structural or maintenance problems forthwith
to the municipality.
[5]
Any variation or amendment to the terms
of the membership fee agreement is to be recorded in writing and
signed by the parties,
with it expressly recorded that the applicant
is not responsible for any damage to person or property which occurs
at the premises.
Clause 19 records that the applicant’s rights
will not be limited or prejudiced by any leniency granted to the
respondent
in respect of non-adherence to the terms of the agreement.
Clause 16 provides that if membership fees are not paid on or before
the seventh of the month and the respondent fails to remedy any
breach of the agreement within five days of receipt of notice to
do
so, the applicant is entitled to cancel the agreement forthwith
without further notice.
[6]
It is not in dispute that the roof of
the premises has leaked over an extended period, causing damage to
the interior of the premises,
which in turn has caused the respondent
to have to undertake repairs and has led to it incurring losses in
relation to the operation
of its business. The state of the roof had
been an ongoing problem, with the matter reported to the Municipality
but with no steps
taken by the Municipality to repair the roof. This
led the applicant in March 2017 to indicate to the respondent that it
would
repair the roof in the future if the Municipality did not. The
respondent states that the damages incurred by it due to the roof
leak are “
well in excess of
R1 760 911,10
”,
which exceeds the sum of the monthly amounts due to the applicant
over the period from 31 March to October 2017, being
the period
during which the respondent claims the applicant agreed it could halt
payments to the applicant. A
fter
the applicant gave notice to the respondent that it had fallen into
arrears for this period in its payment due to the applicant
,
the respondent did not act
to cure its default as it did not consider itself to be in arrears.
The lease was thereafter cancelled
by the applicant.
[7]
The respondent contends that
an agreement was reached with the applicant that rental payments to
the respondent could cease from
March to October 2017 while steps
were taken to repair the roof . While this is disputed by the
applicant, the respondent accepts
that this agreement was not
recorded in writing, as required by the membership fee agreement.
Similarly, no written agreement was
entered into between the parties relating to the set off of the cost
of the damages sustained
by the respondent against the payment of
membership fees due to the applicant and the applicant disputes that
any agreement of
set off was entered into between the parties.
[8]
The respondent opposes the application
on a number of other grounds. These include that neither Ms Kemp, nor
the applicant’s
attorneys, were properly authorised by the
applicant to launch these proceedings.
Evaluation
[9]
It is trite that the
eviction of commercial occupants and juristic persons does not fall
within the ambit of the Prevention of Illegal
Eviction
from
and Unlawful Occupation of Land Act 19 of 1998
and
that the Court is empowered in such proceedings before it to make an
order that is just and equitable.
[1]
What is required in order to succeed with an application for
commercial eviction is that there was a valid termination of the
respondent’s right to occupy the premises and that there has
been continued occupation of the property by the respondent,
or
someone holding on behalf of or through the respondent. An applicant
need not allege and prove any title to the property from
which it
seeks a respondent to be evicted since a lessee is bound by the
provisions of a lease even if the lessor has no title
to the property
and when sued for ejectment at the termination of the lease, it does
not avail the lessee to show that the lessor
has no right to occupy
the property.
[2]
This is so, since it is not open to a sub-tenant, such as the
respondent, to raise the alleged lack of title of a sub-lessor, such
as the applicant, as a defence to a claim for eviction.
[3]
[10]
In its opposing
affidavit issue is taken by the respondent with the authority of the
deponent to the founding affidavit, Ms Freda
Kemp, to institute these
proceedings on the basis that the applicant’s constitution
provides that it is the executive committee
of the applicant which
has the requisite authority and there is no indication that the
institution of the current applicant has
been ratified by the
executive committee. The resolution put up by Ms Kemp, signed by Ms
Suzaan Jones, in her capacity as club
manager, records that ‘the
Committee’ of the applicant resolved on 13 December 2017 that
the applicant’s attorneys
institute eviction proceedings
against the respondent, that Ms Kemp is authorised to sign all
documents in doing so and that any
steps taken by the attorneys are
ratified. I am satisfied that this document, read with the
applicant’s constitution, indicates
that that Ms Kemp had the
requisite authority to institute this application. As to the
authority of the applicant’s attorneys,
although rule 7(1)
provides an available remedy to a party who wishes such a
challenge,
[4]
there is nothing before me to persuade me that the applicant’s
attorneys were not duly authorised to institute these proceedings
on
behalf of the applicant, nor that the ratification by the applicant
of any steps taken by such attorneys was in any sense irregular.
[11]
The respondent contended that the
applicant had lost its right to possession of the premises given that
lease agreements between
the SSRA and the Stellenbosch Municipality
and between the SSRA and the applicant had expired and had not been
tacitly renewed;
and that the Municipality has tacitly consented to
the respondent’s continued occupation of the premises. I am not
persuaded
that on the material before me that any of this has been
shown to be so. There is no reason not to accept that the applicant
remains
a lawful tenant who sub-leases the property to the
respondent, even if the applicant’s occupation is on a tacitly
agreed
month-to-month basis; and there has been nothing put up by the
respondent that persuades me that the respondent has been authorised
by the Municipality to remain in continued occupation of the
premises.
[12]
The respondent relies on the existence of an
alleged agreement that rent would not be paid given the problems
which had arisen with
the leaking roof. Such an agreement was denied
by Ms Kemp on behalf of the respondent and rejected as “far-fetched”.
She stated that since she lacked the authority to agree to an
alteration to the terms of the lease agreement with the respondent,
she would not have agreed that the respondent could stop paying rent.
However, even had an indulgence been granted to the respondent
in
relation to the payment of rent given the clear difficulties it had
experienced due to the state of the roof, clause 19 of the
lease
agreement recorded that no such indulgence was to limit or prejudice
any of the applicant’s rights in respect of such
agreement.
Furthermore, clause 9 required any variations to the agreement to be
reduced to writing and signed by the parties
. This did not
occur.
[13]
In
Baynes
Fashions (Pty) Ltd t/a Gerani v Hyprop Investments (Pty) Ltd
[5]
,
the lease provided that
rental was payable
‘
in advance
’,
‘
without any deduction or set-off
’
and the tenant would not have any claim against the landlord ‘
by
reason of any interference with his tenancy or his beneficial
occupation of the premises’,
caused by
repairs or building works. The result was that the Court found that
the principle of reciprocity was excluded by the terms
of the lease,
with the ‘
payment of rent by the lessee
…not contingent upon prior performance by the lessor
’.
[14]
In this matter the agreement was clear
that any agreed variation to the agreement was to be in writing. The
respondent remained
in occupation of the premises, albeit in
imperfect condition, and it was obliged to pay rent. Since the lease
provided expressly
that the applicant will not be liable for any
damage to any person or property and the respondent indemnified the
applicant against
any such claims, the damages sustained by the
respondent could not be set off from rental due to the applicant. Had
there been
an agreement to the contrary, such agreement would have to
have been reduced to writing. It was not.
[15]
In
Tudor
Hotel Brasserie and Bar (Pty) Ltd v Hencetrade 15 (Pty) Ltd
[6]
the Supreme Court of Appeal
found
that the application of the principle of reciprocity to contracts is
a matter of interpretation; and that it has to be determined
whether
the obligations are contractually so
closely
linked that the principle applies whether reciprocity has been
contractually excluded or not.
[7]
Where a lease
agreement provides that rent is payable monthly in advance, such
lease agreement alters the reciprocal nature of the
obligations of
the lessor and lessee, with
the obligation of the lessee to make payment of the rent no longer
reciprocal to the obligation of the lessor to grant beneficial
occupation of the premises to the lessee.
[16]
In
Ethekwini
Metropolitan Unicity Municipality v Pilco Investments CC
[8]
the
Court
found that
where a tenant was deprived of the use of a portion of the property,
it would be entitled to a remission of rent, proportional
to its
reduced use and enjoyment of the property:
‘…
If the amount to be
remitted was capable of prompt ascertainment, the plaintiff could
have set this amount
off against the defendant's claim for
rent; if not, the plaintiff was obliged to pay the full rent agreed
upon in the lease and
could thereafter reclaim from the defendant the
amount remitted.’
[17]
The Court in
Tudor
reiterated that by remaining in occupation the lessee is obliged to
pay rent, unless the reduced value thereof is capable of ‘
prompt
ascertainment’
. Since
the respondent had indemnified the applicant for any damages
suffered, in terms 12 of the agreement, any claim against
the
applicant, whether promptly ascertainable or not, was excluded in
express terms and set off of damages sustained could not
occur.
[18]
The respondent’s failure to pay
rent constitutes a clear breach of the agreement entered into with
the applicant justifying
the cancellation of the agreement. Monies
were not owing between the parties which could be set off against the
rental amount due
and the applicant was not liable for and had
indemnified the applicant for any damages suffered by it. Other
remedies lay open
to the respondent in respect of the damages
suffered by it. These did not include the withholding of rental in
breach of the terms
of the lease agreement with the applicant.
[19]
Having called on the respondent to remedy its
breach, which the respondent failed to do, the
applicant has
consequently shown that it validly exercised its right to cancel the
agreement. In these circumstances the application
to evict the
respondent from the premises must succeed and the eviction order
granted. Given the nature of the respondent’s
business, I
consider it appropriate that an extended period be given to the
respondent within which to vacate the premises.
[20]
There is no reason why costs on the scale
between attorney and client, the scale expressly agreed between the
parties in the lease
agreement, should not follow the result.
Order
[21] In
the result, the following order is made:
1. The respondent and all those
who hold occupation under it are directed to vacate the premises
situated at erf 235, Stellenbosch
on or before 1 March 2019.
2. In the event of the respondent
and all those holding under it failing to comply with the terms of
paragraph 1 of this order,
the Sheriff is hereby authorised, upon
being provided with a writ of ejectment to be procured by the
applicant from the Registrar
of this Court, to compel compliance by
evicting the respondent and all those holding under it from the
premises.
3. The respondent is to pay the
applicant’s costs of suit on the scale as between attorney and
client.
_________________________
K
M SAVAGE
Judge
of the High Court
Appearances
:
For
the applicant:
Mr L Wilken
Instructed
by Hannes Pretorius, Bock & Bryant
For
respondent: Mr A Walters
Instructed
by Eben Klue Attorneys
[1]
MC
Denneboom Service Station CC and Another v Phayane
2015
(1) SA 54
(CC) at paras 12 and 18.
[2]
Broompret
Investments (Pty) Ltd and Another v Paardekraal Concession Store
(Pty) Ltd
1990
(1) SA 347
(A) at 351 H-J.
[3]
Mighty
Solutions t/a Orlando Service Station v Engen Petroleum
2016
(1) SA 621 (CC).
[4]
Unlawful
Occupiers, School Site v City of Johannesburg
2005
(4) SA 199
(SCA) at para 16.
[5]
[2005]
JDR 1382 (SCA).
[6]
[2017]
ZASCA 111
(20 September 2017) at para 11.
[7]
At
para 12.
[8]
[2007] ZASCA 62.