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[2014] ZAGPJHC 314
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Adventure Golf Bruma CC v Redefine Properties Ltd and Another (6836/2013) [2014] ZAGPJHC 314 (2 September 2014)
REPUBLIC
OF SOUTH AFRICA
SOUTH
GAUTENG LOCAL DIVISION,
JOHANNESBURG
CASE
NO.
6836/2013
DATE:
02 SEPTEMBER 2014
In
the matter between:
ADVENTURE
GOLF BRUMA CC
...........................................
Applicant
And
REDEFINE
PROPERTIES LTD
.....................................
First
Respondent
RURAL
MAINTENANCE (PTY) LTD
.......................
Second
Respondent
JUDGMENT
OPPERMAN
AJ
INTRODUCTION
[1]
In February 2013 the Applicant had launched
a two part application in terms of which it had sought, in Part A
thereof, certain interdictory
relief on an urgent basis and in Part
B, which was to be heard in the normal course, declaratory relief.
The parties had come to
an interim arrangement regarding the relief
sought in Part A thus rendering the urgent part of the application
unnecessary in the
circumstances.
[2]
In Part B, the applicant seeks a
declaratory order to the effect that a lease agreement concluded on
17 September 2010 between the
applicant (as lessee) and the first
respondent (as lessor), prohibits the first respondent from charging
the applicant for its
actual consumption of electricity, gas and
water based on the readings of sub-meters and that it instead
requires that the applicant
be charged for utilities on a notional,
pro-rata basis without reference to the actual consumption as
measured by the sub-meters.
COMMON
CAUSE FACTS
[3]
A written lease agreement was concluded
between the Applicant and the First Respondent (“
the
lease agreement
”). In terms
thereof, the Applicant took occupation of the leased property on 1
August 2010, being the commencement date.
From the commencement of
the lease agreement, up until about 1 June 2012, the Applicant
received monthly statements of account
in respect of services,
calculated on a 100 square metres area and no amount was invoiced
separately in respect of “
common
area costs property taxes”
. From
1 June 2012, the Applicant received a secondary bill for electricity
and ancillary charges from the Second Respondent, being
the entity
responsible for the invoicing and collection of monies on behalf of
the landlord, the First Respondent.
THE
DISPUTED CLAUSE
[4]
The Applicant’s obligations in terms
of the lease agreement relating to additional charges over and above
rental, are defined
in clause 23.01 and reads as follows:
“
23.
CHARGES PAYABLE BY THE LESSEE
.
01(a)
Upon the Lessee taking occupation of the leased premises for whatever
purpose it shall be liable for and shall on demand pay:
(i)
any charges arising out of the use
of gas and water in respect of the leased premises, as well as any
charges arising out of or
electricity consumed by it in or on the
leased premises which shall include electricity consumed by air
conditioning unit/s serving
the leased premises;
(ii)
the basic and service charges in
respect of the services referred to in (i) above; and
(iii)
the levy, rates or taxes
contemplated in 23.02 (if then in force) or a contribution to such
levy, rates or taxes, determined on
the basis contemplated in 23.02
below.
(b)
The Lessee’s
consumption of electricity, gas and water shall be determined
in accordance with separate sub-meters
.
If there are no sub-meters the Lessee’s consumption of
electricity, gas and water shall be calculated on a pro-rata
basis,
being the ratio which the rentable area of the leased premises bears
to the total rentable area of the building.
The
area being agreed upon is that of the Kiosk which totals 100 square
metres.
”
[5]
It is the Applicant’s case that on a
proper interpretation of the aforesaid clause the First Respondent is
not entitled to
calculate the consumption of electricity, gas and
water by the utilisation of installed sub-meters and is obliged to
calculate
the consumption of electricity, gas and water on a pro-rata
basis calculated on an agreed area of the kiosk of 100 square metres.
[6]
The Respondents contend that the failure to
initially invoice separately in accordance with the meter readings
was an administrative
oversight and that they are accordingly
entitled to invoice the Applicant based on the actual meter readings.
[7]
The Respondents had initially contended
that a material dispute of fact existed in relation to whether the
sub-meters had been installed
subsequent to the conclusion of the
lease agreement or whether they had already been installed at the
time of the conclusion of
the lease agreement. The Applicant
contended that it is factually irrelevant whether the sub meters were
already installed at the
time of the conclusion of the first lease
agreement or thereafter. This was so, the argument ran, because the
lease agreement provided
for a fixed mode of calculating the service
charges which fixed mode was recorded in clause 23.01(b) ie that the
Applicant’s
consumption of electricity, gas and water be
calculated at the ratio of 100 square meters to the total rentable
area of the building.
[8]
The nub of the Respondents’ defence
is that on a proper interpretation of the lease agreement they are
entitled to calculate
the consumption of electricity, gas and water
by means of sub-meters and to charge the Applicant for such
consumption accordingly.
Respondents contend that where it is common
cause (as it is in this instance) that there are in fact sub-meters,
clause 23.01(b)
has no application.
[9]
After the matter was argued I requested
counsel to provide supplementary heads of argument on the following:
Having regard to,
inter alia
,
the following decisions
Bothma-Batho
Transport (Edms) Bpk v S Bothma & Seun Transport (Edms) Bpk
2014 (2) SA 494
(SCA) and
Bath
v Bath
(952/12)
[2014] ZASCA 14
(24
March 2014), what role, if any, the canons of interpretation as
developed in our common law, now play in interpreting agreements.
I
requested that they address, in particular, the principle
formulated in
Pritchard Properties (Pty)
Ltd v Koulis,
1986 (2) SA 1
(AD). I
requested argument on the approach a court is to adopt in reconciling
the 'new' approach formulated in
Natal
Joint Municipal Pension Fund v Endumeni Municipality
2012
(4) SA 593
(SCA) in para [18]
with the
'classic' rules of interpretation. I am very indebted to the
assistance received from counsel in this regard.
[10]
The aforegoing request came about primarily
by virtue of applicant’s counsel relying on deleted portions of
the lease agreement
for purposes of interpreting clause 23 and by
virtue of Respondents’ counsel wishing to have certain matter
struck out due
to such matter offending the parol evidence rule.
APPLICANT’S
ARGUMENT
[11]
The Applicant contends that it’s
construction of clause 23 of the lease agreement is correct, having
regard to, inter alia:
11.1.
the fact that clause 6, dealing with
operating costs, had been deleted in its totality;
11.2.
the fact that clause 23.01(a)(i) imposes an
obligation on the Applicant to pay charges arising out of the use of
electricity, gas
and water;
11.3.
the fact that the method of determining the
aforesaid liability is to be found in clause 23.01(b) as amended by
the deletion of
the first sentence. Applicant argued that had the
clause not been amended by the deletion of the first sentence, the
liability
would have been determined as per the Applicant’s
consumption of electricity, gas and water determined in accordance
with
separate sub-meters.
11.4.
this part of the clause was however
specifically deleted leaving the method of consumption to be
calculated on a pro-rata basis
being the ratio which the rentable
area of the leased premises bears to the total rentable area which
had been agreed upon to be
100 square meters.
[12]
Applicant places much reliance on the
deletion of the first sentence of clause 23.01(b). The question which
falls for determination
is whether a court can have any regard to
such deleted portion in interpreting the agreement.
[13]
In
Pritchard
Properties (Pty) Ltd v Koulis,
1986 (2)
SA 1
(AD) at Cillie AJA held as follows at 9I-J and 10A :
“
In
my view the clear and uncontradicted circumstance which emerges from
the writing itself is that the parties by their deletion
of the word
and their initialing of the deletion indicated unequivocally that the
word deleted was to form no part of this contract
and that the clause
should be so construed. To draw any further inference from the word
and its deletion would be erroneous. The
fact that the word could
still be deciphered cannot affect the clear and unmistakable
indication of the parties' agreement and
intention, namely that the
word had been expunged and forms no part of the contract."
[14]
The question which then falls for
consideration is whether the expunged portions of the agreement is
matter which should be included
in interpreting the agreement ie
matter which could well resort under the rubric “context”
and which a court would
be obliged to consider having regard to the
recent developments in our law.
CORRECT
APPROACH TO INTERPRETATION
[15]
In
Bothma
Batho (supra)
,
the Supreme Court of Appeal confirmed in para [12] (with reference to
the summary in paragraph [18] of
Endumeni
(supra)
),
that the approach to interpretation summarised in
Coopers
& Lybrand v Bryant,
[1995] ZASCA 64
;
1995
(3) SA 761
(A) “
is
no longer consistent with the approach to interpretation now adopted
by South African courts in relation to contracts …”
.
The “
new
”
approach, which has been followed in a number of subsequent cases,
[1]
may be summarised as follows.
15.1.
Interpretation
is an exercise in ascertaining the “
objective”
[2]
“
meaning
of the language of the provision itself
”
- it is not aimed at determining the intention of the parties,
whether common or otherwise, which is an “
unrelated”
concept,
[3]
that has “
no
bearing on the analysis
”
[4]
and is “
irrelevant
”.
[5]
15.2.
“
Interpretation
is a matter of law and not of fact and … is a matter for the
court and not for witnesses
”.
[6]
15.3.
The
meaning of a provision is determined with reference to its language
and in the light of its factual context, which includes
what has
previously been referred to as “background circumstances”
and “
surrounding
circumstances”
.
[7]
Since interpretation is “
one
unitary exercise”
,
[8]
the process requires the court “
from
the outset
”
to consider the language and context of the provision together,
[9]
“
whether
or not there is any possible ambiguity
”.
[10]
15.4.
The factual context is ascertained by
reading the provision having regard to:
15.4.1.
the document as a whole; and
15.4.2.
the
circumstances attendant upon its coming into existence.
[11]
15.5.
Consideration
must be given to the following four aspects:
[12]
15.5.1.
“
the language used in the light of
the ordinary rules of grammar and syntax
”,
although it must be recognised that words seldom have a single
meaning;
15.5.2.
“
the context in which the
provision appears
” (including the
provisions of the “
document as a
whole
”);
15.5.3.
“
the apparent purpose to which
[the provision] is directed”
; and
15.5.4.
“
the material known to those
responsible for its production”.
15.6.
The
“
inevitable
point of departure
”
[13]
is the language of the provision and where “
more
than one meaning is possible each possibility [i.e. each possible
meaning] must be weighed in the light of all these factors
”.
[14]
Where the court “
is
faced with two or more possible meanings that are to a greater or
lesser degree available on the language used … the apparent
purpose of the provision and the context in which it occurs will be
important guides to the correct interpretation
”.
[15]
15.7.
It
is, however, inappropriate to “
do
violence to the language … by placing upon it a meaning of
which it is not reasonably capable
”
[16]
and the language should not be “
unduly
strained
”.
[17]
Thus, while context may no longer be sacrificed at the altar of
language, a cautionary note should be sounded against overcorrecting
by giving context an exaggerated importance in order to distort and
strain the language used in a document. The document
should be given a meaning of which it is reasonably capable.
The language adopted must be respected and some measure of fidelity
must be shown towards it.
[18]
15.8.
Although
extrinsic evidence of a provision’s context, purpose and
material known to those responsible for its production is
admissible,
“
one
must use it as conservatively as possible
”.
[19]
The reason for this admonishment is clearly to avoid unnecessarily
taking up court time and parties’ costs in pursuit of
extrinsic
evidence in cases where a clear answer is provided by the intrinsic
evidence such as the document as a whole, the provision’s
immediate context or its apparent purpose.
15.9.
Finally,
a sensible meaning should be preferred to one “
that
leads to insensible or unbusinesslike results
”,
or one that undermines the apparent purpose.
[20]
THE
‘NEW’ APPROACH AND THE PAROL EVIDENCE RULE
[16]
In
Johston v
Leal
,
1980 (3) SA 927
(AD) Corbett JA
observed at 942 H – 943B as follows :
"
As
has been indicated, the parol evidence rule is not a single rule.
It in fact
branches into two independent rules, or sets of rules: (1) the
integration rule, described above, which defines the limits
of the
contract, and (2) the rule, or set of rules, which determines when
and to what extent extrinsic evidence may be adduced
to explain or
affect the meaning of the words contained in a written
contract:
see, for example, the exposition by SCHREINER JA in Delmas Milling Co
Ltd v Du Plessis
1955 (3) SA 447
(A) at 453 - 5. (For convenience I
shall call this latter rule "the interpretation rule".)
Neither rule, in my opinion,
affects the matter under consideration."
[17]
While
the “
new
”
approach to interpretation referred to herein has clearly abolished
one of the “
branches
”
of the parol evidence rule i.e. the “
interpretation
rule
”,
which stated that extrinsic evidence was not admissible in order to
determine the meaning of a written instrument,
[21]
it in no way affects the operation of the other “
branch
”
of the parol evidence rule, being the so-called “
integration
rule
”,
which determines the content or (in the words of Corbett JA in
Johnston
v Leal
),
the “
limits
”
[22]
of a written instrument.
[18]
It
is apparent from
KPMG
v Securefin
[23]
(which was specifically identified by Wallis JA in
Bothma-Batho
as
being representative of the “new” approach to
interpretation
[24]
that the
integration rule remains good law. See too
See
Brisley
v Drotsky
,
2002 (4) SA 1
(SCA).
[19]
Although the applicant’s initial
heads of argument stated that “
the
terms of the lease agreement are set out in the written document
”,
it does appear to be the applicant’s contention that the lease
agreement includes content that was not part of the
signed written
lease agreement:
19.1.
In paragraph 9 of the founding affidavit,
the applicant alleges that the “
terms
of the agreement of lease
”
include the crossed-out portions of clause 23.01(b);
19.2.
In paragraph 10.3 of the founding affidavit
the applicant alleges that the parties “
agreed
to revive
” the leased premises
(which it contended was “a common area to the centre”)
and “
improve the area to the
benefit of the ... shopping centre”
;
and
19.3.
In paragraph 10.5 of the founding
affidavit, the applicant alleges that “
it
was part of the pre-negotiations to the conclusion of the agreement
of lease that the applicant would not need to pay for the
entire
consumption of water and electricity at the leased premises as these
were already a cost to the first respondent for an
area not receiving
an income”.
[20]
Since it cannot be doubted (especially in
view of the “
whole agreement
”
term contained in clause 32.01 of the lease agreement) that the
parties intended the document to be conclusive as to the
terms of the
transaction, it is clear that these allegations regarding the content
of the lease agreement cannot be accepted and
would offend the
integration rule.
[21]
The
unanimous decision of the Appellate Division judges in
Pritchard
Properties (supra)
that the deleted portions of a contract cannot be regarded as part of
its content must remain good in view of the integration rule.
[25]
[22]
As noted by Watermeyer JA in
Union
Govt v Vianini
,
1941 AD 43
at 47, the
integration rule is regarded by the South African Courts as a rule of
evidence and allegations that contravene it are
inadmissible.
[23]
I would grant the application to strike out
allegations which seek to alter the content of the lease agreement
contrary to the integration
rule. I do not intend sifting through the
application to strike out, picking out such allegations, but will
disregard such evidence
in adjudicating this matter as such matter is
clearly inadmissible.
THE
FACTS: CONTEXT OF THE LEASE AGREEMENT
[24]
In
the absence of a referral to oral evidence, the relief sought by the
applicant is final in nature and the correct approach to
the evidence
is that the court must determine the matter on the basis of “
those
facts averred in the applicant's affidavits which have been admitted
by the respondent, together with the facts alleged by
the
respondent
”.
[26]
[25]
Such facts will include:
25.1.
The premises leased under the lease
agreement (“
the leased
premises
”)
are located in a shopping centre where they are identified as “
shop
51
”. The leased premises did not
form part of the “
common area
”
of the shopping centre as alleged by the applicant.
25.2.
In the period prior to the conclusion of
the lease agreement, the leased premises were unlet and unoccupied.
The first respondent,
as owner, was “
paying
and absorbing
” the costs
associated with the premises, including the water and electricity
costs, and would have had to do so for as long
as they remained
unlet.
25.3.
The applicant concedes that the court
should accept as a matter of fact that sub-meters were already
installed at the time of the
conclusion of the lease agreement, and
requests that the matter be decided on this basis.
25.4.
There were several meetings between
representatives of the applicant and the respondent prior to the
conclusion of the lease agreement.
25.5.
“
Part
”
of these negotiations related to whether applicant “
would
not need to pay for the entire consumption of water and electricity …
as these were already a cost to the first respondent
for an area not
receiving income
”, but I do not
find for the reasons advanced herein before, that an actual agreement
was reached in this regard.
25.6.
Prior to the conclusion of the lease
agreement and as “
part of the
negotiation process
”, Mr Lombard,
on behalf of the applicant, signed an “
offer
to lease
” the leased premises.
This document:
25.6.1.
“
specifically recorded that the
lessee shall be responsible for the payment of electricity,
water/sewerage and refuse charges
”
during the “
period of beneficial
occupation
” prior to the
commencement of the lease; and
25.6.2.
stipulated that the lessee would be liable
for “the pro-rata or metered cost of electricity, water, gas,
sewerage and refuse
including the basic and service charges in
respect of these services and other services consumed by it in or on
the leased premises.
25.7.
It is apparent that a draft version of the
lease agreement was then prepared, certain portions of which were
crossed out prior to
the signature of the document
25.8.
Following the conclusion of the lease
agreement, the applicant was billed no amount at all in respect of
water prior to March 2012
and no amount at all in respect of
electricity prior to June 2012. After these dates, the respondents
sought to bill the applicant
on the basis of the sub meter readings.
25.9.
Before concluding this section on the
relevant factual context, it must be emphasised that although the
respondents were not able
to dispute the allegation (which was within
the applicant’s knowledge) that it was a “
key
and overriding factor
” in the
applicant’s decision to conclude the lease that the first
respondent was “
currently paying
and absorbing the costs of the utilities
”
for the premises, this allegation is irrelevant and inadmissible.
This is because contractual interpretation involves the
determination
of the objective meaning of the agreement that was actually
concluded, and not of one (or even both) of the parties’
subjective intentions, understanding and beliefs. As such, the
allegations are disregarded.
THE
MEANING OF THE PROVISION WHEN READ IN CONTEXT
[26]
According to Wallis JA in
Endumeni
(supra)
, “…
where
more than one meaning is possible each possibility must be weighed
”
in view of the “
language used in
the light of the ordinary rules of grammar and syntax; the context in
which the provision appears; the apparent
purpose to which it is
directed and the material known to those responsible for its
production”
The
language used, in the light of the ordinary rule of grammar and
syntax
[27]
The
“
inevitable
point of departure
”
[27]
is
the text of the clause sought to be relied upon and interpreted,
namely clause 23.01:
“
If
there are no sub meters the lessee’s consumption of
electricity, gas and water shall be calculated on a pro rata basis,
being the ratio which the rentable area of the leased premises bears
to the total rentable area of the building.
The
area being agreed upon is that of the Kiosk which totals 100m2.
”
[28]
On a plain grammatical reading, the phrase
“
If there are no sub meters
”
in clause 23.01(b) operates as a conditional qualifier. It is
only in circumstances where the condition is met (i.e.
that there are
no sub-meters) that the lessee’s consumption must be calculated
on the
pro rata
basis.
[29]
Those are however, not the facts of this
case. It is common cause that there are sub-meters, that they have
been installed for some
time and that they are operational. Indeed,
the applicant concedes that it is irrelevant whether the sub-meters
were already installed
at the time of the conclusion of the lease
agreement and accepts, for purposes of the application, that this was
indeed the case.
[30]
For as long as there are such sub-meters,
the requirement to calculate the charges on the pro-rata basis
contemplated in clause
23.01(b) simply does not arise, and the
residual provisions of the lease agreement are relevant.
[31]
Of overriding relevance in this regard is
clause 23.01(a) of annexure A, which requires that the applicant (as
lessee):
“…
shall
be liable for and shall on demand pay: -
(i)
any charges arising out of the use
of gas and water in respect of the leased premises, as well as any
charges arising out of all
electricity consumed by it in or on the
leased premises which shall include electricity consumed by any
airconditioning unit/s
serving the leased premises.
(ii)
the basic and service charges in
respect of the services referred to in (i) above …”
[32]
The applicant’s contention that the
amount payable for the services should be calculated on the pro-rata
basis (and without
reference to the applicant’s actual “
use
”
or “consumption”) even though the condition in clause
23.01(b) is not met, is at odds with the clear and unambiguous
ordinary grammatical meaning of the lease agreement as concluded.
[33]
It would not be absurd for a lease
agreement to require a tenant to pay for its actual consumption of
electricity, water or gas.
Where the agreement does not provide
for a method to establish such consumption, it is open to the
landlord to do so by reference
to sub-meters. In this particular
case, the specific reference in clause 23.01(b) to the possibility
that sub-meters might exist
places it beyond doubt that the parties
contemplated that the utility charges would be calculated with
reference to such sub-meters
if they existed (which they do).
[34]
The meaning the applicant seeks to ascribe
to this clause is as follows:
“
If
there are sub meters the lessor shall not be entitled to calculate
the lessee’s consumption of electricity, gas and water
by
utilisation of such sub meters, but shall be bound and obliged to
calculate such consumption on a pro rata basis, being the
ratio which
the rentable area of the leased premises bears to the total rentable
area of the building.
The area being
agreed upon is that of the Kiosk which totals 100m2.
”
[35]
On a plain reading of the clause, the
requirement to calculate the applicant’s consumption on the
pro-rata basis only arises
in circumstances where “
there
are no sub-meters
”.
[36]
This is simply not the case in the current
matter. Not only is it common cause that there “
are
”
sub-meters (i.e. at the time that the respondents seek to charge the
applicant for its consumption), the applicant concedes
that the court
should accept as a matter of fact that they were already installed at
the time of the conclusion of the lease agreement,
and requests that
the matter should be decided on this basis.
[37]
The language of the clause relied upon by
the applicant contains no textual support for interpretation
contended for by it. Indeed,
the text of the clause specifically
states that it applies to factual circumstances that simply do not
arise in the current matter.
The
context in which the provision appears
[38]
While it is accepted that nothing in clause
23.01(b) or any other clause of the lease agreement prevents the
first respondent (if
it so chooses) from charging the applicant on
the pro-rata basis in circumstances where sub meters are installed,
that is not the
question which the court is required to answer.
Instead, the question is whether respondents are compelled by the
lease agreement
to do so and are prevented from charging on the basis
of actual consumption. This is not the case. In fact, the contrary is
true:
the respondent is under no compulsion as to the method of
charging when there are sub meters. It is only when there are not
such
sub meters that any such compulsion or prohibition arises.
[39]
The primary purpose of the lease agreement
is to regulate the terms upon which the applicant leases “shop
51” from the
first respondent on a commercial basis. There can
be no suggestion that this purpose supports either of the competing
interpretations
in this matter.
[40]
As may be expected, an important secondary
purpose of the lease is to regulate the parties’ respective
obligations in relation
to the payment for utilities, including water
and electricity.
[41]
This purpose is advanced by means of at
least two other clauses in the lease which expressly relate to the
applicant’s duty
to pay for utilities on the basis of its
consumption:
Clause
B.01
: “
Notwithstanding
[that the commencement date of the agreement is 1 August 2010], the
lessee shall be given beneficial occupation
of the premises from 1
st
April 2010 until commencement. All terms and conditions of the lease
shall apply save for the payment of basic rental, Clause C
and rates
and taxes, Clause G. It is specifically recorded that the lessee
shall be responsible for the payment of electricity
and water and
other charges as from the date of beneficial occupation”.
Clause
23.01(a)
“
Upon the lessee taking
occupation of the leased premises for whatever purpose it shall be
liable for and shall on demand pay:-
(i)
Any charges arising out of the use of gas
and water in respect of the leased premises, as well as any charges
arising out of all
electricity consumed by it in or on the leased
premises which shall include electricity consumed by any
air-conditioning unit/s
serving the leased premises.
(ii)
The basic and service charges in respect of
the services referred to in (i) above …”.
[42]
Nothing in these clauses prevents the first
respondent (if it wished) from charging the applicant on the basis of
its actual consumption
of utilities. It would be perfectly entitled
to do so. Not only is the word “
consumed
”
used repeatedly, a distinction is drawn between “
basic
”
and service “
charges
”.
In the context of the clause, this distinction can only refer to
those charges which remain constant every month on the
one hand and
those charges which vary as a result of the changes in actual
consumption on the other.
The
apparent purpose to which the provision is directed
[43]
The fact that clause 23.01(a) sets out a
“default” position that allows the first respondent to
choose the manner in
which it may calculate the applicant’s
consumption (and for which the applicant is liable to pay) gives an
insight into the
specific purpose of clause 23.01(b).
[44]
Clause 23.01(b) operates as an exception to
the default position: In certain defined circumstances (i.e. if there
are no sub meters),
the first respondent does not have an option –
it is required to calculate the consumption in a particular manner.
[45]
The inclusion of this exception in clause
23.01(b) is not surprising. In the absence of meters, the calculation
of the applicant’s
consumption (for which, it is common cause,
it is liable and must be charged under clause 23.01(a)) would be open
to speculation
and would most probably give rise to endless disputes
between the parties as to the actual consumption.
[46]
The clear purpose of clause 23.01(b) is
therefore to avoid disputes between the parties regarding the
applicant’s consumption
of water and electricity in
circumstances where there is not an objective means of measuring such
consumption.
[47]
That purpose is irrelevant in circumstances
where there is an objective means to measure the applicant’s
consumption.
The material
known to those responsible for the provision’s production
[48]
In considering “
the
material known
” at the time of
the conclusion of the lease, it is significant that there appears to
have been some uncertainty about whether
sub meters were or were not
installed in relation to the leased premises. This confusion is
evident from -
48.1.
The respondents’ evidence that
although it turned out that electricity sub meters had been installed
prior to the conclusion
of the contract, the applicant’s
consumption was “
erroneously
”
not calculated in accordance with their readings; and
48.2.
The fact that, even in its replying papers,
the applicant makes the factual concession but does not pertinently
admit the respondents’
contentions.
[49]
The removal of the first sentence of clause
23.01(b) is entirely understandable in the light of this uncertainty:
if it had not
been crossed out, the first respondent would have
imposed upon itself an obligation (and not merely be entitled) to
install separate
sub meters to measure consumption.
[50]
It is true that both parties were aware
prior to the conclusion of the lease that the first respondent was
“
currently
”
(i.e. immediately prior to the conclusion of the agreement)
“
absorbing
”
the cost of utilities on the leased premises. This, however, gives no
contextual support to the interpretation that the
applicant contends
for in the light of the fact that the only reason why this was so was
the fact that the premises were unlet
and unoccupied.
[51]
The remaining evidence on the papers
regarding the knowledge of the parties at the time of the conclusion
of the lease agreement
relates to the negotiations that took place.
The evidence in this regard favours the respondent’s
interpretation of the contract:
51.1.
Firstly, given that the question of whether
the applicant “
would not need to
pay for the entire consumption of water and electricity”
was specifically discussed, it would be expected that the parties
would take care to carefully record such an agreement if it was
ultimately reached.
51.2.
Secondly, the fact that Mr. Lombard had
actually signed a lease for the premises (albeit one incorrectly
identifying the parties)
which provided that the lessee would be
liable for “
the pro-rata or
metered cost of electricity, water, gas, sewerage and refuse …”
demonstrates that he accepted that the
landlord would be entitled to charge on the basis of sub meters in
circumstances where they
were installed.
The
conduct of the parties following the conclusion of the contract
[52]
The applicant was at no stage during the
currency of the lease agreement charged for water and electricity on
the basis that it
contends is required by the agreement and that it
was latterly charged on the basis of its actual consumption as per
the sub-meters.
This contextual evidence regarding the parties’
behaviour following the conclusion of the contract favours the
respondents’
interpretation of the contract. At the very best
for the applicant it is a neutral fact.
CONCLUSION
[53]
I conclude, that the applicant has failed
to show that clause 23.01(b) of Annexure A to the lease agreement
prohibits the first
respondent from charging the applicant for its
actual consumption of electricity, gas and water on the readings of
sub meters.
ORDER
The
application is accordingly dismissed with costs.
I
OPPERMAN
Acting
Judge of the High Court
Heard:
20 March 2014
Additional
heads requested: 15 April 2014
Additional
heads received: 23 May 2014
Judgment
delivered: 02 September 2014
Appearances:
For
Applicant: Adv BE Gradidge
Attorneys:
Dadic Attorneys
For
Respondent: Adv R Moultrie
Attorneys:
Trevor Swartz Attorneys
[1]
See for example
Communicare
and Others v Khan and Another
2013 (4) SA 482
(SCA) at para 31;
Kwazulu-Natal
Joint Liaison Committee v MEC for Education, Kwazulu-Natal and
Others
2013 (4) SA 262
(CC) per Nkabinde J;
Strydom
v Engen Petroleum Ltd
2013 (2) SA 187
(SCA);
National
Credit Regulator v Opperman & Others
2013 (2) SA 1
(CC) per Cameron JA (dissenting);
Hubbard
v Cool Ideas
1186
CC
2013 (5) SA 112
(SCA) at para 14; CA Focus CC v
Village
Freezer t/a Ashmel Spar
2013 (6) SA 549
(SCA);
Cape
Town Municipality v SA Pension Fund
2014
(2) SA 365
(SCA);
Mansingh
v General Council of the Bar and Others
2014 (2) SA 26 (CC).
[2]
Endumeni
(above) para 18.
[3]
Endumeni
(above) paras 20 – 24.
[4]
CA
Focus
(above) para 18.
[5]
Bath
v Bath
(above) para 15.
[6]
KPMG
Chartered Accountants (SA) v Securefin Ltd and Another
2009 (4) SA 399
(SCA) para 39.
[7]
KPMG
(above)
para 39;
Bothma-Batho
(above) para 12.
[8]
Bothma-Batho (above) para 12.
[9]
Endumeni
(above) para 24;
KPMG
(
above)
para 16.
[10]
Bath
v Bath
(above) para 7.
[11]
Endumeni
(above) para 18.
[12]
Endumeni
(above) para 18.
[13]
Kwazulu-Natal
Joint Liaison Committee
(above) para 128.
[14]
Endumeni
(above) para 18. See also
National
Credit Regulator
(above) paras 93, 100 & 104: “elementary meaning demands
that we stop short of the extreme expedient of interpreting
a
provision against its own language”.
[15]
Endumeni
(above) para 26.
[16]
Hubbard
(above) para 14.
[17]
Mansingh
(above) para 9.
[18]
See Article by Michael Bishop and Jason Brickhill, “‘In
the beginning was the word’: the role of text in the
interpretation of statutes” SALJ (2012) 129 at pages 681 –
716. The authors endorse a contextual, purposive approach
to
statutory interpretation but all forms of interpretation in their
view owe some degree of fealty to the words of the law with
an
interpretation required to be ‘reasonably capable’. The
Courts, in their opinion, often exceed their interpretive
mandate by
allowing interpretations at odds and incompatible with the text
itself. The authors propose to modify Schreiner
JA’s two
approaches expressed in
Jaga
v Donges NO
,
1950 (4) SA 653
(A) at 662-664 and their suggestion is something of
a combination of the two options. They suggest a two-stage
process.
First, judges should set out the possible meanings of
a provision with full regard for both text and context. The
second
stage requires the judge to rely on the contextual factors.
It would appear that the use of the word “possible”
twice
by Wallis JA in
Endumeni
(paras 18 and 26) is indicative that the “new” approach
to interpretation is consistent with this in substance, if
not in
form.
[19]
KPMG
(above)
para 39.
[20]
Endumeni
(above)
para 18.
[21]
Johnston
v Leal
1980 (3) SA 927
(A) at 943A.
[22]
Johnston
v Leal
(above) at 943A.
[23]
KPMG
(above)
at
para 39. It appears that Harms JA’s use of the word “meaning”
in this paragraph was erroneous: it is clear
from the relevant
passage in
Johnston
v Leal
(which is the basis of the dictum) that the sentence should more
correctly read “[i]f a document was intended to provide
a
complete memorial of a jural act, extrinsic evidence may not
contradict, add to or modify its
terms
”.
See also
ABSA
Technology Finance Solutions (Pty) Ltd v Michael’s Bid A House
CC and Another
2013 (3) SA 426
(SCA) at paras 18 – 23;
Kingswood
Golf Estate (Pty) Ltd v Witts-Hewinson
2013 JDR 2722 (SCA) paras 20 – 22.
[24]
Bothma-Batho
(above) at para 11.
[25]
Pritchard
Properties (Pty) Ltd v Koulis
1986 (2) SA 1
(A). The source of disagreement amongst the judges in
this case was whether the pre-conclusion alterations to the draft
agreement
may be taken into account (as context) for the purposes of
considering the meaning of the content of the agreement. In casu,
Cillié AJA, Trengove and Kotzé JJA all took the view
that they could not be taken into account, Jansen JA took the
view
that they could and Boshoff JA declined to consider the question.
[26]
Plascon-Evans
Paints Ltd v Van Riebeeck Paints
(Pty) Ltd
[1984] ZASCA 51
;
1984 (3) SA 623
(A) at 634I – 635C
[27]
Endumeni
(above) at para 18.