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[2011] ZAGPJHC 243
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Hyprop Investment Limited v Sophias Restaurant CC and Another (23649/2011) [2011] ZAGPJHC 243 (2 September 2011)
iAfrica
Transcriptions (Pty) Ltd
REPUBLIC OF SOUTH
AFRICA
SOUTH GAUTENG
HIGH COURT, JOHANNESBURG
CASE
NO: 23649/2011
DATE:
2011-09-02
In the matter
between:
HYPROP INVESTMENT
LIMITED
.........................................................
Applicant
And
SOPHIA'S
RESTAURANT
CC
.....................................................
First
Respondent
NICKOLAS GEORGE
PROXEMOS
.......................................
Second
Respondent
J U
D G M E N T
Landlord and
tenant – reduced rent during renovations of premises –
common law principle that remission of rent available
to lessee if
profitable use of premises reduced – common law principle only
applicable in the absence of agreement to the
contrary
WEPENER J:
[1] The applicant is
the owner of commercial property leased to the first respondent. The
second respondent is a surety for the
obligations of the first
respondent and no argument regarding the validity of the suretyship
or its enforceability was submitted.
The applicant seeks summary
judgment for arrear rentals and the ejectment of the first respondent
from the property leased to
it pursuant to the applicant having
cancelled the lease agreement due to non-payment of rental. It is
common cause that the first
respondent is substantially in arrears
with rent payments.
[2] The defence
raised by the first respondent regarding the arrear rental is this:
It is not disputed that the full monthly rental
amount was not paid
for a considerable period of time, but it is alleged that the first
respondent is entitled to a remission of
rent by virtue of the fact
that it does not have full use and enjoyment - commodus usus - of the
premises due to renovations and
or alterations which the applicant
intends to embark upon. Hereinafter I refer to the renovations and
alterations as either renovations
or alterations, each reference
thereto having the same meaning.
[3] The affidavit of
the first respondent alleges that there was a duty on the
representative of the applicant to disclose facts
regarding the
intended renovations at the time when the lease was negotiated, that
he did not do so and fraudulently withheld the
information from the
first respondent. It continues to state that had the first
respondent known of the intended renovations it
would not have
entered into the lease on the terms and for the rent which were
agreed to in writing.
[4] The major
portion of the argument advanced by Mr Pincus, on behalf of the first
respondent, revolved around the first respondent's
right to pay
reduced rent in circumstances where renovations of the leased
premises occur. Assuming that a tenant would be entitled
to a
reduction of rent in such circumstances it is necessary to determine
whether the first respondent can rely on the alleged
failure to
disclose and the alleged fraudulent withholding of information
regarding the intended renovations, which would result
in reduced
trade and profitability for the first respondent.
[5] In my view the
first respondent has an insurmountable obstacle. Clause 25 of the
lease agreement provides as follows:
"25.1 The
landlord shall be entitled at any and all times during the currency
of this lease to effect any such repairs, alterations,
improvements
and/or additions to the premises or the buildings and/or erect such
further buildings on the property as the landlord
in its discretion
may decide to carry out or erect and for any such purpose erect or
cause to be erected scaffolding, hoardings
and/or building equipment
and also such devises as may be required by law or which the
architects may certified to be reasonably
necessary for the
protection of any person against injury arising out of the building
operations in such manner as may be reasonably
necessary for the
purpose of any of the works aforesaid, in, at, near or in front of
the premises.
25.2 The landlord
shall further be entitled by itself, its contractors and
sub-contractors, its architects, its quantity surveyors,
its
engineers and all artisans and all other workman engaged on the works
to such rights of access to the premises as maybe reasonably
necessary for the purposes aforesaid.
(3) The landlord
shall be further be entitled to lead pipes and other services through
the premises should it be necessary to link
such pipes or other
services with any other premises provided that in doing so that the
landlord does not unduly interfere with
the tenants beneficial
occupation of the premises. In exercising its above rights landlord
shall use its best endeavours to cause
as little interference with
the tenant's beneficial occupation of the premises.
(4) The tenant
shall have no claim against the landlord for compensation, damages or
otherwise, nor shall the tenant have any right
to remission or
withholding of any amounts payable in terms of this agreement, by
reason of any interference with its tenancy of
its beneficial
occupation of the premises occasioned by any such repairs or building
works as are herein before contemplated or
arising from any failure
or interruption in the supply of water and/or electricity and/or
heating and/or gas and/or any other amenities
to the premises for the
temporary sesation or interruption of the operation of any lifts,
elevators and hoists in the building."
[6] If, as Mr Pincus
argued, there was a duty to disclose, the landlord, in my view, did
disclose by inserting the term in the agreement
contracting for the
right to do renovations without a remission of rent. It told the
first respondent in no uncertain terms that
it could embark upon a
project to repair, alter and improve the building. The first
respondent accepted that this could happen
and, that if the applicant
did embark on effecting renovations, the first respondent would have
no right to remission of rent.
[7] The allegation
of fraud is refuted by the terms of the contract itself. The first
respondent unequivocally contracted on the
basis that renovations or
alterations could take place without an entitlement to a remission of
rent. The reliance by Mr Pincus
on the cases which decided that a
tenant may be entitled to a remission of rent in certain
circumstances, are all distinguishable
as in none of those cases did
the agreements contain a similar clause to the one that govern the
contractual relationship between
the parties in this matter.
[8] The first
respondent relied on Sishen Hotel v SA Yster en Staal Industriële
Korporasie 1987(2) SA 932(A). In that matter
there was no clause in
the contract comparable with clause 25 contained in the agreement
between the applicant and the first respondent.
The Sishen matter
found the landlord to be in breach of the contract (at page 959 B to
C). In the matter before
me there is no such
breach, it is a contractual right to do the renovations.
[9] The first
respondent relied further on Fourie NO v Potgietersrusse Stadsraad
1987 (2) SA 921
(A). Also in that matter there was no clause such as
clause 25 contained in the present agreement. Indeed at page 931 D,
Joubert
JA said:
"Die
huurkontrak het nie hierdie gemeenregtelike verpligting van die
stadsraad as verhuurder beperk of uitgesluit nie."
It implies that the
obligation to allow commodus usus can be excluded.
[10] The manner in
which liability by a lessor to a lessee for reduced beneficial use of
premises can be excluded in the event of
the premises having to be
renovated is by way of agreement. In the case before me the common
law obligation to give the first
respondent commodus usus of the
premises is indeed limited and excluded by agreement between the
parties. Malan J, as he then
was, in Sweets From Heaven Pty Ltd v
Ster Kinekor Films Pty Ltd
1999 (1) SA 796
(w) said at paragraph 9:
“The rules
relating to the impairment of the commodus usus of a lessee and the
consequent reduction of rent and the remedies
of the lessee are based
on ordinary contractual principles (Sishen at 955 I - J, De Wet and
Yeats Die Suid Afrikaanse Kontrakte
en Handelsreg (1978) fouth ed at
323). It follows that where the lessee expressly or tacitly accepts
the risk or where the lease
is concluded on the supposition that the
lessee may be deprived of the beneficial use of the property, he
cannot rely on any breach
by the lessor in that regard. Cooper
Landlord and Tenant (1994) 2nd ed at 126 says:
‘It is self -
evident that the lessee of a business premises may claim damages from
a lessor who causes the profitability
of the premises to be reduced.
This accords with a lessor's obligation to afford the lessee commodus
usus. At the same time the
lessor's obligations to abstain from
conduct which affects the lessee's profitable use of business is not
absolute. A myriad of
examples may be cited to illustrate this. For
a lessee of business premises to succeed in a claim against the
lessor for reduced
profitability caused by the lessor's conduct the
lessee must prove that the parties either explicitly or tacitly
agreed that they
would abstain from such conduct.’”
[11] It follows that
the first respondent can only succeed if it can show that the right
to commodus usus was not limited by agreement.
[12] The applicant
contracted for the right to effect alterations to the building
without the first respondent being entitled to
any remission of
rental should it do so and the first respondent accepted that
contract. Its reliance on the common law principle
can therefor not
be sustained.
[13] A further
argument advanced by Mr Pincus is that the applicant waited for three
months after its notice of demand to cancel
the lease. It was argued
that by continuing the lease, after the demand, the applicant elected
to keep the lease in esse and that
it cannot now elect to cancel the
agreement.
[14] There are no
facts to show that the period of three months between the date of
demand and the date of cancellation is unreasonable
and I was not
able to find any facts on the papers before me. Save for the
perceived delay to effect cancellation of the lease,
no other defence
regarding the cancellation has been raised. In my view the
cancellation was properly effected and it is valid
and enforceable.
[15] Having reached
this conclusion, the applicant is entitled to summary judgment. I
consequently grant an order in terms of prayers
1, 2, 3 and 4 of the
notice of application for summary judgment dated 20 July 2011. The
date from which interest is to run in
paragraph 2 is the date of
service of summons being 24 June 2011.
W L Wepener
Judge of the High
Court
Counsel for
applicant: G Dobie
Attorney for
applicant: Rooseboom Attorneys
Counsel for
respondents: S P Pincus
Attorney for
respondents: Biccari Bollo Mariano Inc
Date of
hearing: 01/9/2011
Date of
judgment: 02/9/2011