About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Supreme Court of Appeal
SAFLII
>>
Databases
>>
South Africa: Supreme Court of Appeal
>>
2016
>>
[2016] ZASCA 82
|
|
Herr v Innomet (Pty) Ltd Limited (394/2015) [2016] ZASCA 82 (31 May 2016)
THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Not
reportable
Case
no: 394/2015
In
the matter between:
CAINE
JASON
HERR
APPELLANT
and
INNOMET
PROJECTS (PTY)
LIMITED
RESPONDENT
Neutral
citation:
Herr
v Innomet (Pty) Ltd
(394/2015)
[2016]
ZASCA 82
(30 May 2016)
Bench:
Ponnan, Majiedt, Saldulker, Swain and
Zondi JJA
Heard:
16
May 2016
Delivered:
30
May 2016
Summary:
Contract: Lease agreement –
landlord and tenant – reciprocity of obligations –
obligation on lessor to provide
peaceful and undisturbed occupation
in return for rental from lessee.
ORDER
On
appeal from
:
Gauteng Local Division, Johannesburg (Makhanya J
and Ndamase AJ sitting as court of appeal).
1.
The appeal is upheld
with costs.
2.
The order of the court
a quo is set aside and in its stead the following order is
substituted:
‘
The
appeal is dismissed with costs.’
JUDGMENT
Saldulker
JA (Ponnan, Majiedt, Swain and Zondi JJA concurring):
[1]
The appellant, Mr Caine Jason Herr (the lessee, Herr) instituted
proceedings in the Boksburg Magistrate’s Court against
the
respondent lessor, Innomet Projects (Pty) Ltd (Innomet) for
payment in the sum of R64 000, being a rental deposit
which he
had paid to Innomet pursuant to a lease agreement entered into
between them on 20 January 2010 (the lease). Innomet raised
a special
plea to the lessee’s claim, which is not relevant for present
purposes. It also instituted a counterclaim against
the lessee. To
the extent here relevant the counterclaim provides:
‘
19.
In breach of the Agreement read together with the Addendum, the
Plaintiff:
19.1
purported to give the Defendant written notice dated 5 December
2010 terminating the Agreement read together with the
Addendum, which
notice is annexe ‘D’ to the Particulars of Claim;
19.2
prematurely vacated the Premises on 28 February 2011.
20.
The Plaintiff’s conduct constitutes a repudiation of the
Agreement read together with the Addendum, which repudiation
the
Defendant has accepted alternatively accepts subject to its rights to
recover any damages it suffers as a result of the Plaintiff’s
unlawful conduct from the Plaintiff.
21.1
At the time that the Addendum was concluded it was contemplated by
the Plaintiff and Defendant that the Defendant would suffer
damages
in the event that the Plaintiff breached the Agreement read together
with the Addendum.
21.2
In order to mitigate its damages the Defendant entered into a written
lease agreement with a tenant for the premises for the
period 1 April
2011 to 31 March 2012 at a monthly rental of R 25 000.00. A copy
of that lease is annexed marked “P1”.
22.
The Defendant has suffered damages as a result of the Plaintiff’s
breach which caused the premature termination of the
Agreement read
together with the Addendum in the form of lost rental income in
the amount of R24 000.00 calculated as
follows:
22.1
rental income due in terms of the Agreement read together with the
Addendum for the period 1 March to 30 November 2011 at R32
000 per
month in the sum of R288 000;
22.2
less rental income received and to be received by the Defendant in
mitigation at R25 000 per month for the period 1 April to
30 November
2011 in the sum of R200 000;
22.3
less the Deposit of R64 000.’
[2]
The magistrate’s court found in favour of the lessee and the
following order was made:
‘
48.1
The special plea is dismissed with costs;
48.2
Defendant is to pay the amount of R 75 026,17 to plaintiff
together with interest of 4.5% per
annum from 26 June 2013 to date of
payment;
48.3 The
counterclaim is dismissed with costs;
48.4
Costs of suit including of costs of counsel.’
[3]
Aggrieved by this decision, Innomet appealed to the Gauteng Local
Division, Johannesburg. The appeal succeeded before Makhanya
J
(Ndamase AJ concurring), who set aside the magistrate’s court
order and replaced it with the following order:
‘
1.
The appeal succeeds.
2.
The order of the court a
quo
is set aside and replaced with
the following order:
2.1
the appellant’s special plea is
upheld;
2.2
the respondent’s claim in convention
is dismissed with costs;
2.3
the appellant’s counterclaim against
the respondent succeeds with costs;
2.4
The respondent is ordered to pay appellant the sum of R24 000-00
together with interest thereon at 15.5% per annum from
30 November
2011 to date of final payment;
2.5
Costs are to include the costs of counsel.’
The
further appeal is with the special leave of this court.
[4]
Before us, counsel for Innomet conceded that there was no basis for
it to have withheld the deposit, which Innomet had been
obliged to
repay to Herr together with interest in terms of the lease agreement.
In the light of that concession, it follows that
the magistrates’
court had correctly entered judgment against Innomet for payment of
the amount of R 75 026.17 together
with interest and there was
accordingly no warrant for the high court to have overturned that
order on appeal. That leaves Innomet’s
counterclaim.
Background
[5]
On 20 January 2010, Herr, entered into a written lease agreement with
Innomet, duly represented by Mr Martin van Wijngaarden,
for the
rental of an apartment situated at Heron Waters, in Clifton, Cape
Town (the premises). The parties agreed that the lease
agreement
would commence on 1 February 2010 and terminate on 30 November 2010.
It was further agreed that the monthly rental for
the premises would
be R32 000, and a deposit of R64 000, to be paid by the lessee
in terms of the agreement, would be repayable
by the appellant to the
respondent, subject to the lease agreement, within 14 days after
termination of the lease.
[6]
On 24 August 2010 an addendum to the lease agreement was signed by
the parties, for the renewal of the agreement on the same
terms and
conditions for a further period of twelve months from 1 December 2010
until 30 November 2011. In terms of the addendum,
should the lessee
require early termination of the agreement, he would give Innomet
four calendar months’ written notice
which could only be given
after 31 January 2011.
[7]
However, during December 2010 Herr learnt that the owner of another
unit in the same sectional title complex, Mr Gerald Goott,
intended
embarking on a major structural renovation of his unit in the
complex, which was directly below Herr’s unit and
which
construction would commence in April 2011. Herr notified Innomet by
e-mail on 5 December 2010 of Goott’s planned construction
and
informed Innomet that it would be impossible to live on the premises
with a newborn baby during the construction. Herr gave
notice that he
and his wife would be moving out of the apartment not later than
March 2011. There was no response to this e-mail.
[8]
On 28 January 2011 Herr, represented by his wife, Meagan, informed
Innomet by e-mail that he had secured alternative accommodation
in
the light of the planned construction project, and notified Innomet
that he would vacate the premises on 28 February 2011, which
he did.
[9]
Pursuant to such notification, Innomet instructed its duly authorised
agent to conduct an inspection of the premises and to
collect the
keys to the premises. On 1 March 2011 a final inspection was carried
out on behalf of Innomet, which recorded that
the apartment had been
left in an excellent condition by the Herrs.
[10]
Subsequent to the Herrs vacating the apartment, Innomet entered into
a lease agreement with a new tenant, a Mr David Cook,
at a rental of
R25 000 per month for the period of 1 April 2011 to 31 March
2012.
Legal
Principles
[11]
In argument before us it was accepted that the lease agreement
imposed reciprocal obligations on the parties. In R H Christie
&
GB Bradfield
Christie’s The Law of Contract in South Africa
6 ed (2011) at 437, the authors state the following:
‘
In
BK
Tooling (Edms) Bpk v Scope Precision Engineering (Edms) Bpk
1979 1 SA 391
(A) the Appellate Division reviewed in some detail the
history and scope of what have come to be known as the principle of
reciprocity
and the
exceptio
non adimpleti contractus
.
The principle of reciprocity recognises the fact that in many
contracts the common intention of the parties, expressed or
unexpressed,
is that there should be an exchange of performances, and
the
exceptio
gives effect to the recognition of this fact by serving as a defence
for the defendant who is sued on the contract by a plaintiff
who has
not yet performed or tendered to perform.
’
[12]
This court explained the duties of a landlord in
Sishen
Hotel (Edms) Bpk v Suid- Afrikaanse Yster en Staal Industriële
Korporasie Bpk
[1987] ZASCA 20
;
1987
(2) SA 932
(A) where the facts were briefly as follows: the lessor
let a hotel to the lessee for twenty years. When entering into the
lease
the lessee acquired the previous lessee’s interest in the
building and the hotel business for a substantial sum (R350 000).
At
the same time the parties orally agreed that the lessee would
construct additional accommodation and upgrade other facilities,
upon
which the lessee spent R360 000. The lessor conducted mining
operations in the surrounding district and, to ensure that
hotel
accommodation of a high standard was available for visiting
officials, the lease embodied provisions which obliged the lessee
to
conduct its business according to certain high standards. The lease
prohibited the removal or transfer of the hotel liquor license
without the lessor’s written consent. The hotel was situated
next to the national road between Kuruman and Upington and,
because
of its situation, attracted considerable custom. Eight years after
the parties had entered into the lease the lessor, with
the approval
of the provincial administration, diverted the national road so that
it could extend its mining operations. The diversion
had an immediate
impact on the profitability of the lessee’s hotel business. The
hotel attracted considerably less custom
than before, and its profits
dropped - a thriving business changed into an unprofitable one and
the lessee was eventually forced
to close the hotel. The lessee sued
the lessor for damages. The trial court non-suited the plaintiff.
[13]
The plaintiff appealed to the Appellate Division. The essence of the
plaintiff’s cause of action was that by causing
the diversion
of the road, the lessor was in breach of a tacit term that it would
not take any steps which would interfere with
access to the hotel
site and prevent the flow of custom to the hotel and therefore
interfere with the plaintiff’s use of
the premises. This court
found that the lessor’s breach of contract was of such a
serious and material nature that the lessee
was entitled to cancel
the lease. This court held further that the lessor had committed a
breach of its common law obligation to
afford the lessee the
commodus
usus
of the leased premises. (See also
Ashcor Secunda (Pty) Ltd v Sasol
Synthetic Fuels (Pty) Ltd
[2011] ZASCA
158
; 2011 JDR 1208 (SCA)).
[14]
In
Thompson v Scholtz
[1998] ZASCA 87
;
1999 (1) SA 232
(SCA)
at 247A-D, this court said the following:
‘
Where
a lessee is deprived of or disturbed in the use or enjoyment of
leased property to which he is entitled in terms of the
lease,
either in whole or in part, he can in appropriate circumstances be
relieved of the obligation to pay rental, either in whole
or in part;
the Court may abate the rental due by him
pro
rata
to his own reduced enjoyment of the
merx
.
This is true not only where the interference with the lessee's
enjoyment of the leased property is the result of
vis
major
or
casus
fortuitus
but also where it is due to the lessor's breach of contract, e.g.
because the leased property is not fit for the purpose for which
it
was leased or, as in this case, because the performance rendered by
the lessor is incomplete or partial. . . The lessee would
be entirely
absolved from the obligation to pay rental if he were deprived of or
did not receive any usage whatsoever.
’
Conclusions
[15]
Applying the legal principles to the facts it is clear that Innomet
cannot succeed in its claim for contractual damages. As
landlord,
Innomet was obliged in terms of the lease to provide the Herrs with
peaceful and undisturbed occupation. Innomet failed
to respond to the
e-mails sent by the lessee on 5 December 2010 and 28 January 2011.
The e-mails gave a graphic account of the
effect of the planned
construction which would have deprived the Herrs of the use and
enjoyment of the premises. Photographs handed
in as exhibits during
the hearing depict the magnitude of the construction which, inter
alia required the use of a large crane,
and a large construction crew
would have required direct access to the building on a daily basis.
Furthermore building ramps down
to the pool area for concrete and
equipment had to be installed for easy movement up and down on the
construction site. All of
this would have taken place directly below
Herr’s apartment. The resultant noise and inconvenience would
undisputedly render
the premises uninhabitable. This was conceded
under cross examination by Mr van Wijngaarden, who stated that had he
been in a similar
situation as Herr he would probably have found
alternative accommodation and that the Herr’s concerns that the
apartment
would be ‘unliveable from April onwards’ were
not baseless.
[16]
Innomet had an obligation towards Herr to object to the planned
construction by Goott, by raising it with the trustees of the
sectional title complex. The conduct rules of the body corporate of
Heron Waters state that ‘an owner shall not make alterations
to
his section, which are likely to impair the stability of the building
or the amenity of other sections or the common property’.
Herr
as lessee could not himself invoke these conduct rules. It was for
Innomet to do so. That it failed to do even after the planned
construction had been brought to its attention by the Herrs. It
follows that Innomet’s counterclaim had to fail.
[17]
The following order is made:
1.
The appeal is upheld with costs.
2.
The order of the court a quo is set aside and in its stead the
following order is substituted:
‘
The
appeal is dismissed with costs’
________________
HK
Saldulker
Judge of Appeal
APPEARANCES:
For
Appellant
C
J Bresler
Instructed
by:
Smit Jones &
Pratt Attorneys, Johannesburg
Symington & De
Kok. Bloemfontein
For
Respondent:
R H Wilson (Heads of argument prepared by E Fasser)
Instructed by:
Webber Wentzel
Attorneys, Johannesburg
Honey Attorneys,
Bloemfontein