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[2016] ZASCA 140
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eThekwini Municipality v Breakers Share Block Limited (42/2016) [2016] ZASCA 140 (29 September 2016)
THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Not
Reportable
Case
No: 42/2016
In
the matter between:
eTHEKWINI
MUNICIPALITY
Appellant
and
BREAKERS
SHARE BLOCK LIMITED
Respondent
Neutral
citation:
EThekwini
Municipality v Breakers Share Block Limited
(42/2016)
[2016] ZASCA 140
(29 September 2016)
Coram:
Mpati
AP, Shongwe, Swain and Mocumie JJA and Potterill AJA
Heard:
30
August 2016
Delivered:
29
September 2016
Summary:
Contract
– Lease agreement - Interpretation of – Reference in
original lease agreement to ‘floor area’ being
determined, for calculating rental payable – amendment to
relevant clause providing ‘floor area’ to be calculated
in accordance with town planning scheme – whether amendment
indicates change in method of calculating ‘floor area’.
ORDER
On
appeal from:
KwaZulu-Natal
Local Division, Durban (Mbatha J, sitting as a court of first
instance):
1
The appeal succeeds, with costs, which shall include the costs of two
counsel.
2
The order of the court a quo is set aside and for it is substituted
the following:
‘
The
plaintiff’s action is dismissed, with costs, which shall
include the costs of senior and junior counsel where employed.
’
JUDGMENT
Mpati
AP (Shongwe, Swain and Mocumie JJA and Potterill AJA concurring):
[1]
This appeal involves the interpretation of certain clauses in two,
almost identical, written lease agreements. On 21 May 1985
the
respondent took cession of the two lease agreements that had been
concluded on 21 August 1975 and 27 January 1981 respectively,
between
the appellant’s predecessor, the Borough of Umhlanga (the
Borough), which was then owner of certain property described
as Lot
1066 Umhlanga Rocks Township (the property), and Sycol Properties
(Pty) Ltd (Sycol). In terms of the lease agreements Sycol
leased two
portions of the property at agreed rentals, subject to revision
periods of 10 years after the initial agreed periods
of four and a
half years. The lease agreements were referred to in the papers as
‘Lease 1’ and ‘Lease 4’
respectively. I
shall, for convenience, continue to refer to them individually as
such. Following the cession the respondent operated
a share block
scheme on the leased portions of the property.
[2]
In November 2008 the appellant, as the Borough’s
successor-in-title, and the respondent entered into discussions with
the view to the latter purchasing the property from the former.
Subsequently, a detailed measurement of the floor area of the
buildings on the property was undertaken at the respondent’s
instance. The discussions led to a disagreement between the parties
on the actual floor area in respect of which the rental had been
calculated in terms of the lease agreements. The respondent contended
that the rental ought to have been calculated upon a floor area that
was much less than that upon which the rental had hitherto
been
calculated. On 23 August 2013 it instituted action against the
appellant in the KwaZulu-Natal Local Division, Durban seeking,
amongst others, an order directing the appellant ‘to forthwith
recalculate the rental currently payable by [it] . . . upon
a floor
area of 12,079.10 m²’. It sought a further order
directing the appellant ‘to refund to [it] all
amounts paid by
[it]
sine
causa
subsequent to the 1
st
September 2013 in an amount determined by this Honourable Court upon
the hearing of this action’.
[3]
After close of pleadings the parties agreed that the issue pertaining
to the proper interpretation of the relevant clauses (clause
6(b)) of
the respective lease agreements be determined separately, in terms of
rule 33 of the Uniform Rules, prior to the adjudication
of all the
other issues in the action. For this purpose the following statement
of facts was agreed upon
[1]
:
‘
4.
At
all material times hereto the Borough of Umhlanga, and subsequently
the [appellant], owned the property described as “
lot,
1066 Umhlanga Rocks Township, situate in the Borough of Umhlanga in
the North Coast Regional Water Services Area, County of
Victoria,
Province of Natal, in extent four, five one nine two (4,5192)
hectares
”
(hereinafter referred to as “
the
property
”).
5.
On
the 21
st
of August 1975, the Town Council of the Borough
of Umhlanga (hereinafter referred to as “
the Council
”)
and Sycol Properties (Pty) Ltd (hereinafter referred to as “
Sycol
”)
executed a Notarial Deed of Lease (hereinafter referred to as “
Lease
1
”), which was registered in the offices of the Registrar
of Deeds, Pietermaritzburg, with reference number K1541/1975.
.
. .
8.
Clause
6 of Lease 1 read as follows:
“
REVISION
OF RENTAL:
(a)
The said rental shall, during the period of this lease or any renewal
thereof, be subjected
to revision at the expiry of the initial period
set out in paragraph 5 (a) above and thereafter at the commencement
of each ten
(10) year period;
(b)
The annual rental for each revision period of ten (10) years as
aforesaid shall be computed
as to seven per centum (7%) of the
valuation of an area of foreshore land equivalent to the floor area
of the buildings on the
lot, based on ruling market prices per square
metre of foreshore land, provided that the rent shall in no case be
less than TWENTY
THOUSAND RAND (R20,000.00) per annum. Floor area
shall be defined in the draft Town Planning Scheme as amended from
time to time.
.
. .
9.
Lease
1 contemplated (in clause 8) the erection of buildings within
approximately three and a half years. It also contemplated rental
in
a fixed amount for a period of four and a half years (clause 5) and
that rental would thereafter be revised in accordance with
the floor
area of buildings on the lot.
10.
On
the 27
th
of January 1981, the Council and Sycol executed a Notarial Deed of
Amendment of Lease (hereinafter referred to as “
the
amendment
”)
which was registered in the offices of the Registrar of Deeds,
Pietermaritzburg, with reference K790/1981.
12.
In
terms of the amendment, clause 6 of Lease 1 was amended to read as
follows:
“
REVISION
OF RENTAL
(a)
On
the 1
st
day of July 1978 and at the expiry of every 10 years thereafter the
aforesaid rental shall be subject to revision as hereinafter
provided.
(b)
When
the annual rental becomes due for revision same shall be computed at
7% of the valuation (which valuation shall be based on
the current
market price per square metre of Lot 1066 Umhlanga Rocks Township of
an area of foreshore land which area shall be
equivalent to the floor
area (calculated in accordance with the provisions of the Umhlanga
Town Planning Scheme No.1 as it was
at the date of signature hereof)
of the buildings on the Lot.”
.
. .
13.
On
the 27
th
of January 1981, the Council and Sycol executed a further Notarial
Deed of Lease (hereinafter referred to as “
Lease
4”
)
which was registered in the offices of the Registrar of Deeds,
Pietermaritzburg, with reference number K792/1981.
.
. .
16.
Save
for clause 6 (b) reading as follows:
“
When
the annual rental becomes due for revision same shall be computed at
seven
(7%)
per cent of valuation (which valuation shall be based on the current
market price per square metre of Lot 1066 Umhlanga Rocks
Township of
an area of Foreshore land) which area shall be equivalent to the
floor area (calculated in accordance with the provisions
of the
Umhlanga Town Planning Scheme No. 1 as it was at the date of
signature hereof) of the buildings on the Lot.”
the
remaining provisions of clause 6 of Lease 4 are identical to those
contained in the amendment of Lease 1, (para 12) above.
17.
Lease
4 contemplated the construction of additional buildings within
approximately three years (clause 8), and provided for rental
in a
fixed amount to continue provided the lessee submitted plans for
development of the land (clause 5).
18.
The
parties agree that the relevant wording of Umhlanga Town Planning
Scheme No. 1 is as it appears from annexure “D”
which is
filed evenly herewith.
19
On
the 21
st
of May 1985
,
Sycol
and the [respondent], then known as Breakers Properties Limited,
executed two Notarial Deeds of Cession of Lease (with reference
K752/85 and K753/85, respectively) in terms of which Sycol ceded,
assigned and transferred all its right, title and interest in
and to
both Lease 1 and Lease 4 to the [respondent].
20.
On
the 11
th
of June 2002
,
the
[respondent] and the [appellant] agreed, pursuant to an exchange of
correspondence between them between the 23
rd
of
April 2001 and the 11
th
of June 2002, upon a revised rental in the sum of R900,553.50 per
annum or R75,046.13 per month.
.
. .
23.
On
the 22
nd
of October 2008
,
the
[respondent] and the [appellant] agreed, pursuant to an exchange of
correspondence between the parties between the 3
rd
of March 2008 and the 22
nd
of October 2008
,
a
further revised rental in the sum of R 4,093,514.00 per annum, or R
341,126.00 per month.
.
. .
25.
The
[respondent] has paid the aforesaid revised rental to the [appellant]
from the 1
st
of July 2008 to present date.
26.
In
or about November 2008 the [respondent] and the [appellant] entered
into discussions with the view of the [respondent] purchasing
the
property from the [appellant].
27.
During
or about 2009 professional land surveyors L.D. Baker & Associates
were instructed by the [respondent] to prepare plans
for the possible
conversion of the shareblock scheme on the property to sectional
title. In order to do so, a detailed measurements
of the actual floor
area of the buildings constructed upon the property was undertaken.
.
. .
29.
It
is agreed between the parties, based upon the measurements taken by
L.D. Baker Associates that:
(a)
if
the interpretation of clause 6 contended for by the [respondent] is
correct, the rental ought to be calculated upon a floor
area of
12,079.10 m
2
;
and
(b)
the floor area of all parts of the building under
roof at each floor level to the
external
wall is 15,594.34 m
2
and if the interpretation of clause 6 as contended for by the
[appellant] is correct, the rental ought to be calculated upon this
floor area.
. . .
36.
In
the event of this Court determining the said issue in favour of the
[appellant], it is agreed between the parties that it would
be proper
for this action to be dismissed, with costs, including the costs of
senior and junior counsel where employed.’
[4]
The contention of the respondent, as contained in the statement of
facts was that on a proper interpretation of clause 6 of
both lease
agreements, read with the provisions of the Umhlanga Rocks Township
Scheme No 1 (the Scheme) and taking into account
the actual use of
the buildings constructed on the leased portions of the property, the
floor area ought to be determined by excluding
the area of all public
access corridors, public stairways and public entrances or hallways.
The appellant disagreed with this interpretation
and contended, inter
alia, that the relevant provisions of the Scheme are those contained
in the definitions clause (clause 1.2),
where the ‘floor area’
of a building is defined as ‘the sum of the roofed areas of the
buildings at each floor
level measured over and including wall
thickness’.
[5]
The matter came before Mbatha J (the court) who, after hearing
argument on behalf of both parties, granted an order in accordance
with the respondent’s contentions, with costs, including the
costs of senior counsel. The court further declared that ‘the
floor area, for the purposes of calculating any revision of the
rental payable in respect of clause 6(b) of the . . . leases is
12,079.10 square meters’ and directed the appellant to
forthwith recalculate the rental payable accordingly. The court
subsequently
granted leave to the appellant to appeal to this court
against its order.
[6]
In considering the question of the correct method of calculating the
rental payable by the respondent to the appellant in terms
of the
provisions of clause 6(b) of the leases, the court placed much store
on what it referred to as ‘a change of wording’
when the
amendment to Lease 1 was effected on 27 January 1981.
[2]
Before the amendment clause 6(b) of Lease 1 stipulated that ‘[f]loor
area shall be as defined in the draft Town Planning
Scheme as amended
from time to time’. After the amendment the words ‘floor
area’ are qualified by the words in
brackets: ‘calculated
in accordance with the provisions of the Umhlanga Town Planning
Scheme No. 1 as it was at the date
of signature hereof’. The
court observed that in the amended version the word ‘calculated’
was introduced, while
the words ‘as defined’, which were
used before the amendment, had been abandoned. This led the court to
the conclusion
that the change in the wording indicated ‘a
change of intention between the parties’. In this regard
reliance was placed
on the decision of this court in
Port
Elizabeth Municipal Council v Port Elizabeth Electric Tramway Co. Ltd
1947 (2) SA 1269
(A) at 1279.
[7]
As
to the definition of ‘floor area’ in clause 1.2 of the
Scheme the court reasoned that it ‘is too wide for any
sustainable interpretation’; that it ‘is vague and not
clear’ and that it is clear from the use of the word
‘calculated’ (in clause 6(b)) that no reference is made
to that definition. With reference to clause 5 of the Scheme
the
court said
:
‘
Section
5.1(ii)(b) (iii) a) and b) of Part 5 of the Scheme starts as follows:
“
For
the purpose of calculating the total permissible floor area in terms
of Table D”.
The
words “calculate” and “floor area” as used in
part 6(b) of the Lease are used here. They complement
the wording in
clause 6(b) of the Leases. It is clear to me that the references with
regard to the calculation of the floor area
were made in the light of
the provisions of Section 5.1 of the Scheme
.’
[3]
Accordingly,
and moving from the premise that it did not accept that the
definition of ‘floor area’ in the Scheme ‘should
be
accepted as the applicable method of calculating rental in this
matter’, the court concluded thus:
‘
I
am persuaded by the submissions made on behalf of the [Respondent]
that the place is a residential [building] and that the rent
had to
be calculated in terms of clause 5 of the Scheme
.’
[4]
[8]
The relevant parts of clause 5.1 of Part 5 of the Scheme read:
‘
5.1
Bulk, Coverage And Height
(i)
No
site may be covered by buildings to a greater extent than the maxima
listed in Table D hereto and all buildings when erected
shall be
within the said maxima.
(ii)
(a) .
. .
(b)
. . .
(iii)
For the purpose of calculating the total permissible floor area
in terms of Table D:
a)
In a residential building, the area of all public access corridors,
public stairways and public
entrances or hallways whether open or
closed shall be excluded, provided that in the case of a block of
flats the area of any portion
of a public thoroughfare or public
waiting space shall be included, and provided that in the case of a
hotel the total area of
public entrances and hallways shall be
included.
b)
In a residential building, the area of any roofed verandah, balcony
or terrace which is intended for the private use of
one flat in a
block of flats or of one room or one suite of rooms in a hotel, shall
be included in the calculation of the total
floor area
.’
The
term ‘residential building’ is defined under Table A of
the Scheme and under the sub-heading ‘Types of Buildings
And
Land Use’ as:
‘
a
building or portion of a building other than a dwelling house, duplex
flat, semi-detached house, terrace house or maisonette used
for human
habitation together with such outbuildings as are ordinarily used
therewith and includes an hotel, a block of flats,
a boarding house,
a residential club or hostel, which building, in the case of an
hotel, may include a restaurant or restaurants
for the sale and
consumption of food and drink
.’
[9]
The interpretation of clause 6(b) of the lease agreements requires
that consideration be given to the language used in the document
in
light of the ordinary rules of grammar and syntax; the context in
which the clause appears; the apparent purpose to which it
is
directed and the material known to those responsible for its
production. And where more than one meaning is possible each
possibility
must be weighed in light of all the factors. Where that
is the case, that is, where more than one meaning is possible, a
sensible
meaning is to be preferred to one that leads to insensible
or unbusinesslike results or undermines the apparent purpose of the
document.
[5]
[10]
I agree with the submission advanced on behalf of the appellant that
the real dispute between the parties is whether ‘floor
area’
(calculated in accordance with the provisions of the Scheme) is to be
interpreted in accordance with (a) the definition
of ‘floor
area’ in the Scheme, or (b) the provisions of clause 5.1
(b)(iii) a),
[6]
in terms of
which certain areas in the building must be excluded. The starting
point, it seems to me, is the purpose to which the
documents (Leases
1 and 4) are directed, which is to regulate the conditions upon which
the leased portions of the property were
to be hired. The
respondent’s intention was to erect buildings on the land. The
purpose of clause 6(b) is directed at the
manner in which the rental
payable in respect of the hired piece of land is to be determined or
calculated at the time the rental
would be due for revision. The
rental for the initial period of four and a half years was fixed (in
clause 5) at R10 100 per
annum, payable in 12 equal monthly
instalments.
[11]
At the first revision period - at which stage it was clearly
envisaged that a building or buildings would already have been
erected - and thereafter, the floor area of the building/s had to be
determined for purposes of calculating the rental payable,
which was
to be computed at 7% of the valuation of an area of foreshore land
equivalent to such floor area (clause 6(b) before
the amendment). For
what was meant by ‘floor area’ one had to have regard to
the definition thereof in the draft Town
Planning Scheme at the time.
It is not clear from the papers when the Scheme was approved, but it
was in operation when the original
clause 6(b) was amended to its
current form. This is clear from the wording of the amended clause,
which no longer speaks of a
‘draft’ Town Planning Scheme.
[12]
In terms of clause 6(b) (in its amended form) rental payable at the
revision thereof must still be computed at 7% of the valuation,
at
current market price per square meter, of an area of foreshore land
which shall be equivalent to the floor area of the buildings
that
have been erected on the leased portions of the property (leased
land). And floor area, for purposes of fixing rental payable,
must be
calculated in accordance with the provisions of the Scheme. Before us
counsel accepted that the definition of ‘floor
area’ in
the Scheme forms part of the provisions of the Scheme and can
therefore not be ignored. At the risk of repetition
I reproduce it.
It reads:
‘
Floor
Area
of
a building shall be taken as the sum of the roofed areas of the
building at each level measured over and including wall thickness
.’
What
is significant about this definition is that it makes no distinction
in relation to the type of building at issue or to what
use a
building is put. Its language is clear and permits of no ambiguity.
Counsel did not argue otherwise. It clearly directs one
as to how the
floor area of a building is measured for purposes of the Scheme. I
disagree, therefore, with the finding of the court
a quo that the
definition is vague and unclear.
[13]
The question to be considered now is whether there is any other
provision in the Scheme in terms of which the floor area of
a
building must be calculated for purposes of determining rental
payable, in this case, for the leased land. The court a quo held
that
clause 5 is such a provision. In their heads of argument counsel for
the respondent supported this finding and submitted that
the only
means by which floor area is ‘calculated’ in terms of the
Scheme is in terms of the provisions of clause 5.1
thereof. It is not
necessary to say much on the use of the word ‘calculating’
in clause 5.1. This is because senior
counsel who appeared for the
respondent in this court and who did not take part in the drafting of
the heads of argument moved
away from his predecessor’s
contentions in this regard and followed a different line which I
shall consider presently. Suffice
it to say that clause 5.1 deals
with the extent to which a building to be erected on a particular
site may cover that site.
[14]
The ratio between the size or extent of a site and the building which
may be erected on it is referred to in the clause as
‘the
F.A.R’, abbreviated for ‘Floor Area Ratio’, which,
in turn, is defined in the Scheme as follows:
‘
Floor
Area Ratio
means
the ratio of the total floor area of the building or buildings on a
lot, to the area of the lot, and is expressed as a decimal:
e.g. a
floor area ratio of 0.5 means that the permissible floor area of any
building or buildings on the lot may not exceed half
the lot area
.’
The
maximum extent to which a building may cover a site (permissible
floor area) is listed in Table D of the Scheme (clause 5.1(i)),
which
also regulates the height of the building to be erected. For example,
Table D, which is headed ‘Density Zones’,
provides that
in respect of a building categorised as ‘special residential’
the maximum permitted F.A.R is 0.35, with
a coverage of 33½%
and a height of three storeys or 7.6 meters above the highest natural
ground level, on a minimum
lot area of 1000 square meters. Thus, when
clause 5.1 (ii)(b)(iii) a) speaks of ‘calculating the total
permissible floor
area in terms of Table D’ it means nothing
more than a calculation of the floor area of a building to be erected
so as to
determine ‘the ratio of the total floor area of the
building or buildings on a lot, to the area of the lot’. It has
no relation, in my view, with the determination of the floor area of
a building on a leased lot, such as in the present matter,
for
purposes of calculating rental payable in respect of the lot.
[15]
As was correctly submitted on behalf of the appellant, the persons
responsible for the production of the lease agreements were
well
aware of the distinction between the terms or concepts ‘floor
area’, and ‘floor area ratio’. Clause
10(b) of the
lease provides that ‘[t]he Floor Area Ratio applicable to the
lease [land] hereby leased shall be calculated
on the total extent of
the lease [land] including the area set aside on the Eastern portion
to a depth of Seventy-Six comma Two
Nought (76,20) meters for public
open space or beach amenity reserve . . .’. Accordingly, were
the intention of the drafters
of the lease agreements that the
calculation of the floor area of the buildings here at issue, for
purposes of determining the
rental payable in respect of the leased
land, should be in accordance with the calculation of the permissible
floor area in terms
of Table D, that is the floor area ratio, they
could easily have said so. They did not. It follows that the court
erred in finding
that ‘the rent had to be calculated in terms
of clause 5 of the Scheme’.
[16]
But, as has been mentioned above, senior counsel who argued the
matter in this court followed a different line of argument.
He
submitted that although the parties understood the provisions of
clause 6(b) for more than 20 years and no doubt considered
the floor
area of the buildings on the leased land to be 15 594 square
meters in total, it becomes evident from the correspondence
that
passed between them that they believed ‘floor area’ to be
bulk area, which is not defined in the Scheme. It was
contended that
with the amendment, which cannot be ignored, the parties had in mind
bulk area or floor area ratio (F.A.R.). The
change or amendment to
clause 6(b) indicates that the parties would now fix the rental based
on the potential income capacity of
buildings, for example a hotel,
which would be a potential for higher rental, so the argument
continued. There was therefore a
genuine common mistake on the part
of both parties to the lease agreements in their understanding of the
provision. The change
brought about by the amendment, so it was
argued, would allow for more flexibility in the determination of
future rental revisions
depending on whether the buildings
constructed on the property were to be utilised as a block of flats
or a hotel at the time of
calculation.
[17]
The correspondence in question, mainly in the form of letters, were
referred to in the statement of facts and copies thereof
annexed
thereto. The letters contain evidence of the parties’
subsequent conduct and are therefore admissible even though
the
language of clause 6(b) is, in my view, unambiguous.
[7]
It is true that, at least when the letters annexed to the statement
of facts are considered, use of the term ‘bulk’
started
to creep in through a letter dated 3 March 2008 from the appellant
addressed to Mr I S Hume of the respondent. In the second
paragraph
of that letter the following is recorded:
‘
In
terms of clause 6(c) of the leases, “the Council shall at least
three (3) months prior to the revision, notify the Lessee
of the
proposed value per square metre of the said Lot that it considers
shall apply for purposes of the revision.” In this
regard, the
value per square metre I intend applying is R4 324.00/m²
bulk
and in terms of clause 6(b) of the leases, the floor area of the
buildings to which this rate is intended to be applied is
15 594,34m².
Accordingly, the annual rental computed at 7%
of the valuation for the revision period is R4 720 100
.’
(My emphasis.)
It
is clear though that despite the fact that the value of land per
square meter is described in terms of bulk, the extent of the
building for purposes of calculating rent is correctly referred to as
the floor area.
[18]
In an earlier undated letter from the respondent addressed to the
appellant, which letter was received by the latter on 16
July 2001,
the following appears in the second paragraph thereof:
‘
It
is confirmed that for purposes of the lease, the building area is
15 594m² (nett of parking), which can be compared
with the
municipal valuer’s area of 15 559m².’
Clearly
the reference to ‘building area’ is meant to be ‘floor
area’. The reference to the term ‘bulk’
was again
used in a letter from the respondent addressed to the appellant,
dated 22 April 2008, which appears to have been in response
to
notification of a proposed rental revision. The second sentence of
the second paragraph reads:
‘
The
land value divided by actual bulk of 15 594 gives a rate of
R4 324 per square meter of bulk
.’
I
do not intend to deal with all the letters referred to in the agreed
statement of facts, but the confusion was perpetuated in
a report
compiled by a valuer, Mr T B Richardson, who had been appointed by
the appellant ‘to assess the current market value
applicable to
Breakers resort property as at the due date for revision of rent,
being 1 July 2008’. The instruction was contained
in a letter
dated 15 August 2008
[19]
In his report dated 1 October 2008 Mr Richardson referred to the
‘current developed FAR’ being ‘stated by
the
Municipality at 15 594m²’, and ‘bulk rate per
m² of R3,173’. But nowhere in the letter of
instruction
did the appellant make mention of F.A.R. at 15 594m². It
was only conveyed to Mr Richardson that ‘[t]he
floor area to
which the rate is to be applied is 15 594m² and there is no
dispute in this regard’. In the letters
it addressed to the
respondent the appellant was consistent regarding the floor area
being 15 594m². It never referred
to the floor area as
F.A.R. or bulk. After all, F.A.R. is a completely different concept
expressed in decimals and not in square
meters. Whatever mistake may
have been there on the part of the appellant was only in relation to
the value of the leased land
per square meter. It was never mistaken
about what constituted the floor area of the buildings. Counsel’s
contention that
there was a mistake common to the parties to Leases 1
and 4 regarding the calculation of floor area cannot be sustained.
[20]
To sum up, whatever the intention may have been for the change in the
wording of clause 6(b), it could never have been to change
the
meaning of ‘floor area’ to ‘permissible floor
area’, a concept catered for in Part 5 of the Scheme.
I
therefore conclude that on a proper interpretation of clause 6(b) of
Leases 1 and 4 the floor area of the buildings constructed
upon Lot
1066 Umhlanga Rocks Township must be calculated by determining the
total floor area in accordance with the definition
of ‘floor
area’ in clause 1.2 of the Scheme. This, in my view, is a
sensible and businesslike interpretation of the
clause considering
that we have here to do with the determination of rental payable to a
lessor, which, in instances of commercial
purposes, is usually
calculated in terms of square meters. It follows that the appeal must
succeed.
[21]
The parties agreed in their statement of facts that in the event of
the court determining the issue in favour of the defendant
(appellant) it would be proper for the action to be dismissed, with
costs, including the costs of senior and junior counsel where
employed. That is the order that I intend to issue.
[22]
In the result, I make the following order:
1
The appeal succeeds, with costs, which shall include the costs of two
counsel.
2
The order of the court a quo is set aside and for it is substituted
the following:
‘
The
plaintiff’s action is dismissed, with costs, which shall
include the costs of senior and junior counsel where employed.
’
________________________
L Mpati
Acting
President
APPEARANCES
For
the Appellant:
V I Gajoo SC (with him G
D Goddard SC)
Instructed by:
Gcolotela &
Peter Inc, Durban
Lovius Block,
Bloemfontein
For
the Respondent
C J Pammenter SC (with him M Pitman) (Heads of argument
prepared by I
Topping SC)
Instructed by:
Tomlinson Mnguni
James, Durban
Claude Reid Inc,
Bloemfontein
[1]
Paragraphs not
relevant to the issue have been omitted.
[2]
Save for minor
discrepancies such as the numeral ‘7’ being in brackets;
the word ‘Foreshore’ being spelt
with a capital ‘F’
and the closing of the bracket after the words ‘Foreshore
land’ in Lease 4, the contents
of clause 6(b) in both leases
are identical.
[3]
Para 12 of the
judgment.
[4]
Para 16 of the
judgment.
[5]
Natal Joint
Municipal Pension Fund v Endumeni Municipality
[2012] ZASCA 13
;
2012 (4) SA 593
(SCA) para 18
;
Bothma-Batho Transport (Edms) Bpk v S Bothma & Seun Transport
(Edms) Bpk
[2013] ZASCA 176
2014 (2) SA 494
(SCA) paras 10–12.
[6]
Quoted in para 8
above.
[7]
Telcordia
Technologies Inc v Telkom SA Ltd
[2006]
ZASCA 112
;
2007 (3) SA 266
(SCA) para 91.