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[2021] ZAWCHC 255
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MV Andre Builder Joiner CC v Nordien (19002/20) [2021] ZAWCHC 255 (6 December 2021)

IN
THE HIGH COURT OF SOUTH AFRICA
WESTERN CAPE
DIVISION, CAPE TOWN
Case number: 19002/20
Coram:
Montzinger AJ
Hearing:
30 November 2021
Judgement:
6 December 2021
In the matter between:
M V ANDRE BUILDER JOINER CC
Applicant
and
TAVIA NORDIEN
Respondent
JUDGEMENT DELIVERED ELECTRONICALLY ON 6 DECEMBER 2021
MONTZINGER
AJ:
[1]
This matter involves a commercial eviction.
[2]
The applicant seeks an order
confirming the cancellation of
lease agreements and the ejectment of the respondent from the
commercial premises situated at 10 Marine
Circle, Milnerton (“the
premises”).
[3]
The respondent opposes the application on various grounds. The
dilatory grounds are: (1) opposition to the condonation for the late
filing of the applicant’s replying affidavit, (2) the wrong forum
(i.e. either magistrate’s court or arbitration); and (3) security
for costs.
[4]
On the merits the respondent contends that: (a) the lack of authority
of the deponent
and an empowering resolution to institute the
proceedings by the applicant, (b) the lease agreements were not
correctly cancelled,
(c) a supervening impossibility
[1]
,
and (d) that the respondent exercises a lien over the premises for
improvements.
[5]
This Court is satisfied that the applicant has made out a case for
the relief it seeks.
In exercising its discretion this Court
finds that it would be fair and reasonable in the circumstances of
this case that the respondent
be provided with an opportunity until
31 January 2022 to vacate the premises.  An order in the
aforementioned terms appears
at the end of this judgment.
CONTEXTUALIZING THE DISPUTE
[6]
On October 6, 2017 the applicant and the respondent entered into a
commercial lease
agreement in respect of portions 2, 3, and 3A of the
Milnerton premises. The parties concluded a further lease agreement
on five
April 2018 for potion 4A of the same premises.
[7]
The terms of these agreements are identical and contain the
traditional clauses regulating
the relationship between a lessor and
lessee in a commercial lease setting. In essence the respective
agreements would run, at the
agreed rental amount, from the date of
their respective conclusion until both terminated on 30 November
2020.
[8]
It is not in dispute that the respondent has failed to make the
monthly rental payments
since April 2020. At the time of the hearing
of this application is still in default with its monthly rental
obligations.  By
December 2020 the outstanding amount was R
708 418.02
[2]
.
The respondent still occupies the premises.
[9]
On 15 and 17 April 2020 the applicant demanded, in writing, that the
respondent cures
the breach as a result of its non-payment. These
notices did not have the desired effect.  On 12 June 2020 the
applicant, through
its attorney, cancelled the agreement.
[10]
During September 2020 the respondent, relying on a renewal option in
the lease agreements
[3]
proposed to renew the lease agreements for a further 3 years. This
was followed by a settlement offer on 17 November 2020.  All
of
these interactions culminated in another notice by the applicant, on
4 December 2020, requesting the respondent to vacate the
premises.
THE GROUNDS OF OPPOSITION
[11]
Various grounds were raised in opposition.
Condonation of the replying
affidavit
[12]     The
applicant delivered its replying affidavit out of time.  An
application was filed seeking to
condone the non-compliance.
Condonation was opposed on the basis that the late delivery denies
the respondent the opportunity
to lead further evidence in response
to the issues raised in the replying affidavit. Especially in
relation to the issue of authority.
Considering my finding below on
the issue of the deponent’s authority and the applicant’s
resolution to authorise the institution
of the proceedings, there is
no discernible prejudice for the respondent if I condone the late
delivery. I ordered condonation of
the late delivery.
The wrong forum or alternative
dispute resolution
[13]     Both
lease agreements provide in clauses 30 and 31 for a choice of process
and dispute resolution.
The respondent relies on these clauses
to oust this court’s jurisdiction.
[14]     The
clauses read as follows:
30.
CHOICE OF PROCESS
Should
the tenant breach this agreement then the landlord shall choose
whether the dispute is to be brought in the Magistrate’s
Court or
by way of arbitration as set out in clause 31 below.  If the
landlord chooses the Magistrate’s Court, then the parties
are taken
to have consented to the jurisdiction of the Magistrate’s Court for
any action in terms of or relating to this lease.
31.
DISPUTE RESOLUTION
Should
the landlord choose arbitration as referred to in clause 30 above
then the dispute shall be determined and resolved by an expedited
arbitration process administered by the Arbitration Foundation of
Southern Africa (AFSA) in accordance with AFSA’S Expedited Rules
by
an arbitrator selected in accordance with such Rules.  This
arbitration clause survives termination of the lease agreement.
[15]
Neither of these clauses, either individually or collectively, embody
an
agreement to arbitrate
.  At best it provides the
applicant with an election between either arbitration or court
proceedings in the magistrate’s court.
In any event, the
election is afforded to the applicant only.  To fall within the
ambit of an arbitration agreement and for
the applicant to be bound
by such a dispute resolution mechanism the clause must clearly be
couched in terms that embodies an agreement.
The mere fact that
the clause appears in ‘an agreement’ does not elevate it to an
agreement to arbitrate and falls foul of the
definition of
‘arbitration agreement’ as contemplated in
s 1
of the
Arbitration
Act 42 of 1965
.
[16]
I’m fortified in my approach as the Supreme Court of Appeal found
in
De
Lange
that
an arbitration agreement is a contract
[4]
,
and in
North
East Finance
said
that the agreement to arbitrate is construed according to the
ordinary principles governing the interpretation of contracts
[5]
.
[17]
Reliance on the purported arbitration clause also fails because
s 6
of the
Arbitration Act requires
a litigant, invoking an agreement to
arbitrate to bring an application for a stay of the proceedings.
However,
s 6
contains a qualification.  The application may be
launched after an appearance to defend is delivered
but
before
any pleadings are delivered or any other steps are taken in the
proceedings.
Section 6
must be understood in the shadow of the
position in our law that an arbitration agreement does not deprive
the court of its jurisdiction
over the dispute
[6]
.
Therefore, since all the pleadings have been exchanged it does not
behove the respondent to only now rely on a purported arbitration
clause to compel the stay of the proceedings.
[18]
There is another reason the proposition is not sustainable.  As
mentioned, the clause rather embodies
an election.  The fact
that clause 30 limits the applicant to choose the magistrate’s
court does not bar this Court from having
jurisdiction over the
matter.  The Supreme Court of Appeal in
S
tandard
Bank of SA Ltd and Others v Thobejane and Others
[7]
has found that the concurrency of jurisdiction in circumstances in
which a claim justifiable in a magistrate’s court has been brought
in a High Court has been recognised in case law for over a century.
Therefore,  when a High Court has a matter before it that
could
have been instituted in a magistrates’ court, it has no power to
refuse to hear the matter.
Security for costs
[19]
On 25 November 2021 the respondent delivered a notice requesting the
applicant to provide security in
the amount of R 200 000.00 in
terms of uniform
rule 47(1).
The rule requires a demand for
security of cost to be made as soon as practicable
[8]
.
Although this is not an inflexible limitation of the right to request
security, I am of the view that the request is too late.
This
late request for security does not bar the application from its
continuation.  In any event, the request for security loses
its
purpose when one considers that the value of the Milnerton premises
and the amount of money the respondent is indebted to the
applicant
for, far exceeds the security requested.
No authority to depose to
founding affidavit or to institute proceedings
[20]     The
founding affidavit is deposed to by a Ms Grace Vorster.  She
alleges that she is a manager of
the applicant.  It appears from
the record that the respondent and Ms Vorster has had numerous
engagements.  It is thus
untenable to deny that Ms Vorster
represents the applicant.
[21]     The
applicant contends that the issue of Ms Vorster’s authority is
belatedly raised as uniform
rule 7(1)
requires a litigant to raise
the issue within 10 days from being aware of the impediment.
The failure to raise it properly
and in time means that the
respondent cannot now, at this stage of the proceedings complain
about the authority.
[22]     I
agree with the applicant’s contestation on the authority issue. The
court in
Ganes
v Telecom Namibia Ltd
[9]
confirms
the position that a deponent to an affidavit does not need specific
authorisation from the applicant to depose to the affidavit.
The correct approach to resolve the authority issue would have been
to employ the operation of uniform
rule 7(1).
This position has
been confirmed in various case law
[10]
.
[23]     The
respondent also disputed that the applicant passed a resolution
authorising the institution of the
current litigation proceedings.
Reliance is placed on various case law that affirms the principle
that a juristic person, in
this case a close corporation, can only
act through its members.  In this matter it is common cause that
the only member of
the applicant is a certain Ms Lu, currently
residing in Singapore.
[24]     The
complaint that no empowering resolution was passed is resolved since
I accept the deponent's statement
that the applicant is pursuing the
relief, as sufficient. See
Mall
(Cape) (Pty) Ltd v Merino Ko-operasie Bpk.
[11]
Supervening impossibility
[24]
Reliance on the defence of supervening impossibility also fails.
[25]
My decision is influenced by an August 2021 judgment
[12]
,
Freestone
v Remake
[13]
,
where it was found that the declaration of the state of disaster and
the continued effect of the Covid-19 pandemic may have resulted
in a
dramatic decline of customers through the shopping centre in which
the lease premises were situated but does not afford a defence
to the
lessee
[14]
.
I find the judgment persuasive and decide to follow and apply it in
this case.  The respondent in this matter is in a
similar
position as the respondents in
Freestone
v Remake.
[26]
Particular to the matter before me it seems as if
clause
3.4 of the lease agreements in any event operate against the
respondent to rely on a defence related to the Covid-19 pandemic.
Cancellation of lease
agreements
[27]
Whether the applicant properly cancelled the lease agreement, really
turns on two issues.  Firstly,
whether the respondent was
entitled and in fact exercised its option to renew the lease
agreements.  This option is contained
in clause 50.1 read with
50.2 – 50.8 of the lease agreements.   Secondly, whether
there was compliance with
s 14
of the CPA
[15]
.
[28]     The
respondent’s reliance on clauses 50.1 – 50.7 of the lease is not
sustainable.  Clause 50.7
expressly provide that the option to
renew is not available to the respondent if he has twice during the
lease period failed to make
payment of the monthly rental.  It
is apparent from the papers that by the time the respondent
purportedly exercised the option
that she was already in the position
as envisaged in clause 50.7 of the lease.
[29]     The
respondent also relies on
ss 14
(2)(b)(ii) of the CPA.  This
section requires a landlord to give at least 20 business days written
notice to the consumer of
a material failure to comply with the
agreement.  The proposition is that although the applicant has
delivered a breach notice
on 30 October 2020 no subsequent notice of
cancellation was delivered.  In the result the leases have not
been validly cancelled
and have they continued on a month to month
basis in terms of
ss 14(2)(d)
of the CPA.
[30]     This
proposition is not sustainable on the facts.  For its contention
the respondent relies on the
notice of 30 October 2020.  If that
notice is in fact the cancellation notice then the argument could
have had some value.
However, the notice of 30 October 2020 was
preceded by various other notices.  The record shows that the
applicant demanded
that the respondent cured her breach on 15 April
2020.  The respondent failed to do so.  Then on 12 June
2020, after 20
days
[16]
,
the applicant cancelled the lease in writing.
Section 14(2)(b)(ii)
of the CPA provides the supplier with the option
that it ‘
may cancel
the agreement 20 business days after given written notice to the
consumer of a material failure by the consumer’
.
The applicant has thus complied with this requirement.
[31]
Having cancelled the lease on 12 June 2020, after a breach notice,
the provisions of
ss 14(2)(c)
are not activated, as the section
surely is not intended to operate if the consumer agreement is
already cancelled.  It thus
no longer embodies the character of
a ‘fixed term’ consumer agreement as envisaged by
ss 14(2)
[17]
of the CPA.
[32]
During argument it was also contended that the breach and
cancellation notices of April and June 2020
were attached by the
respondent in the answering affidavit.  Consequently, I must
disregard these notices as the applicant has
failed to make out a
case in its founding affidavit.  However, the principle that a
party should make it out its case in the
founding affidavit is not an
inflexible rule
[18]
.
[33]     In
any event the cancellation notice of 20 June 2020 is attached to the
applicant’s founding affidavit.
Furthermore, the respondent
cannot attached annexures to its answering affidavit and then expect
the court from disregarding the
evidence, especially where the
evidence introduced is not disputed.
[34]     Even
if this Court accepts that the applicant did not comply with
s
14(2)(c)
of the CPA, the lease agreements would then have continued
on a month to month basis.  As soon as that is the position
ss
14(2)(b)(ii)
of the CPA no longer applies and the parties revert back
to the terms of the written lease agreements, which at clause 25.3
provides
that a cancellation notice is not required if the lessee has
been in default with two rental payments within 12 months.  It
is not in dispute that the respondent defaulted at least twice in a
12 month period.
[35]
However, to be absolutely certain about the cancellation the
applicant again demanded payment on 4 December
2020 and then
instituted court proceedings.    The institution of
the proceedings qualifies as confirmation of the
cancellation of the
lease agreement
[19]
.
The lease agreements were therefore, correctly cancelled.
The existence of a lien
[36]     The
existence of an improvement lien defence is overshadowed by clause
11.2 of the lease agreements.
This clause provides that “
any
improvements, alterations or additions….which the tenant may have
affected to the leased premises shall become the property
of the
landlord, and the landlord shall not be obliged to compensate the
tenant in respect thereof.”
[37]     The
respondent has not attacked the validity of the lease agreements or
any of the clauses.  Without
deciding the issue I am of the view
that in these proceedings, the existence of an improvement lien
defence is not sufficient to
prevent ejectment.
EJECTMENT OF THE RESPONDENT
[38]
Since no sustainable defence was raised the applicant is entitled to
its relief.
It
is not in dispute that the applicant is the owner of the leased
premises
[20]
.
The applicant is thus entitled to an order for the respondent’s
ejectment.
[39]
The
legal position is that our Courts has no equitable discretion to
refuse the granting of an ejectment order if the applicant has
established all the grounds.  See
AJP
Properties CC v Sello
2018
(1) SA 535
(GJ)
(“AJP
v Sello”)
[21]
.
[40]
What remain is to determine an equitable date on which the respondent
should be ordered to vacate the
premises.  During argument the
applicant contended for between 3 - 14  days.
[41]
According to
AJP
v Sello supra
although
a Court’s discretion is limited if all the grounds for an ejectment
order has been established, our law does recognise
that
courts can exercise a discretion, derived from a common law power to
stay or suspend the execution of an ejectment order.
This
discretion is in line with the discretion afforded to a Court in
terms of Uniform
Rule 45A
to suspend execution of its orders.
Eviction or Ejectment is a species of execution.
[42]
Similar to the Court’s approach in
AJP
v Sello
this Court
finds that the interests of justice will deny an applicant who fails
to afford the respondent a fair opportunity to relocate
or vacate the
premises.
[43]
In determining an equitable date for the respondent’s ejectment,
this Court’s discretion is infused
with the following objective
factors which appear from the papers:
(i)
Unless the respondent is able to find
suitable alternative premises it faces significant financial hardship
if not financial ruin.
Already compounded by the impact of the
Covid-19 pandemic. This also jeopardises the staff contingent and
their dependents; staff
are likely to be laid off temporarily until
suitable premises are found or be exposed to retrenchment if the
respondent is obliged
to downscale or totally closed its doors.
(ii)
The
respondent is required not only to reinstate the applicant’s
premises to its pre-occupation state
[22]
but must also find suitable premises to relocate its business,
negotiate a new lease, effect necessary alterations and install
fittings
in order to recommence business.
(iii)
The
respondent has been in the premises for over three years.
(iv)
There
are allegations that substantial renovations have been effected to
the value of approximately R 3,7 million.  The applicant
admits
the renovations but rely on a forfeiture clause in the lease
agreement to not compensate the respondent.  On this basis
even
though the respondent is in arrears in approximately R 1,4 million,
the applicant will receive the benefit of extensive renovations
to
its immovable property which should set off the short term discomfort
and frustration caused due to a lack of rental income.
(v)
The
applicant still has a claim for outstanding rental and holding over
against the respondent, even should the court allow the respondent
a
reasonable extended period to vacate.
(vi)
Considering
the time of the year it is highly unlikely that the respondent would
be able to procure an alternative premises at short
notice. The
record indicates that extensive alterations were done to the
premises.  Although there may be a dispute over whether
the
respondent is allowed to remove fittings and alterations, it is
certain that the business of the respondent consist of a significant
amount of machinery and fittings, as it operates a restaurant, a slot
machine casino, a night club and a pool bar.
(vii)
The respondent did attempt to negotiate
alternative solutions to its predicament caused by the pandemic.
These were all dismissed
by the applicant.  A more commercial
practical approach may have resulted in a situation where the
respondent could still have
traded itself out of its loss trading
state, and resume the normal rental as agreed.
(viii)
The respondent alleged in the answering
affidavit that most of the units are not currently being leased and
the applicant is not making
much, if any, effort to procure new
tenants.  This allegation was not disputed or explained by the
applicant.
(ix)
The
lease agreements envisaged a period of 4 months’ notice if the
parties do not intend to renew the lease.  This period is
a good
indication of what parties in a commercial lease setting regard as a
reasonable period to vacate and find alternative premises.
[44]
This Court is of the view that it would be harmful to the interests
of justice to compel the respondent
to vacate immediately instead of
affording her the opportunity of finding suitable alternative
premises that would serve not only
her interests but also those of
her clientele and employees.  I am satisfied that the grounds in
(i) – (ix) above constitute
sufficient grounds, to justify a delay
in enforcing the ejectment order.
[45]
The respondent has not indicated how much time it will require to
relocate.  Notwithstanding, the
absence of any indication from
the respondent I believe that in all the circumstances real and
substantial justice requires that
the respondent be afforded a period
of six (6) months to find alternative premises to relocate.
Bearing in mind, as the Court
stated in
AJP v Sello
that
relocation is often the principle consideration for delaying the
execution of an eviction order in respect of commercial premises.
CONCLUSION
AND ORDER
[56]     The
applicant has made out a case for the relief as per the notice of
motion. In the circumstances I
make the following order:
(1)
The cancellation of the lease agreements is confirmed.
(2)
The respondent and all other persons or entities occupying under the
respondent at portions
2, 3, 3A and 4A of the premises situated at 10
Marine Circle, Milnerton is ordered to vacate on or before 3 June
2022.
(3)
The Sheriff of this Honourable Court (or his/her deputy) is
authorised and directed to take
all steps on 4 June 2022, or any time
thereafter, to give effect to prayer (2) above if the respondent does
not vacate the premises
on 3 June 2022.
(4)
The respondent shall pay the applicant’s costs of this application
on a party and party
scale.
A MONTZINGER
Acting Judge
of the High Court
Appearances:
Applicant’s
counsel:
Adv T Ferreira
Applicant’s
attorney:
G Van Zyl Attorneys
Respondent
counsel:
Adv P Gabriel
Respondent’s
attorney:
CK Attorneys
[1]
By
claiming
that as a
result of the Covid 19 pandemic and the resultant lockdown
regulations that came into effect on March 2020 the business
of the
respondent was unable to generate sufficient income to pay the
monthly rental and service charges.
[2]
This
amount had increased since then at a rate of approximately R
60 000.00 p/month.
[3]
Clause
50.1 – 50.8 allow for the option to be exercised 120 days before
the commencement of the renewal period.
[4]
De
Lange v Presiding Bishop for the time being of the Methodist Church
of Southern Africa
2015
1 All SA 121
(SCA); 2015 1 SA 106(SCA)
paras 46, 51, 56
[5]
North
East Finance
(
Pty
)
Ltd
v Standard Bank of SA Ltd
2013
3 All SA 291
(SCA); 2013 5 SA 1 (SCA)
[6]
Illustrated
by at least s 2, 3, 6 and various other provisions in the
Arbitration Act.
[7
]
S
tandard
Bank of SA Ltd and Others v Thobejane and Other Standard Bank of SA
Ltd v Gqirana N O and Another
(38/2019; 47/2019; 999/2019)
[2021] ZASCA 92
;
[2021] 3 All SA 812
(SCA);
2021 (6) SA 403
(SCA) (25 June 202
[8]
SA
Iron and Steel Corp v Abdulnabi
1989 (2) SA 224 (T) 236
[9]
2004
(3) SA 615 (SCA)
[10]
See
Unlawful
Occupier
School
Site v City of Johannesburg ANC
2005 (4) SA 199
(SCA)
as
well as
Umvoti
Council Causus
&
Others
v Umvoti Municipality
2010
(3) SA 31 (KZP)
[11]
1957 (2) SA 347 (C) at 352C-F, confirmed in
NahrungsmittelGMbH
v Otto
1991
(4) SA 414
(C) that was in turn unanimously confirmed by the SCA
NahrungsmittelGMbH
v Otto [1993] 1 All SA 456 (A)
[12]
The
facts correlate to a degree with the matter before this Court
[13]
Freestone
Property Investments (Pty) Ltd v Remake Consultants CC and Another
[2021]
ZAGPJHC
(25 August 2021)
[14]
At par
29
[15]
Consumer
Protection Act, 68 of 2008
[16]
Provided
for
in
s
14(2)(b)(ii)
of the CPA
[17]
The
introductory part of the section
[18]
Shephard v Tuckers
Land and Development Corporation (Pty) Ltd
(1)
[1978] 1 All SA 50
(w)
[19]
Thelma Court Flats
(pty) Ltd v McSwigin
1954(3) SA 457 (C) 462 C-D
[20]
MC
Denneboom Service Station CC and another v Phayane
2014
(12) BCLR 1421
(CC)
confirming
Chetty
v Naidoo
[1974] 3 All SA 304
(1974 (3) SA 13)
(A) that it is generally sufficient for an applicant to succeed with
an ejectment order to
demonstrate that it is the registered owner of
the property.
[21]
Para
17 referring to various judgment.  In this judgment the court
dealt with a commercial eviction.
[22]
Clause
36.2.1