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[2015] ZAGPJHC 143
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Conara Properties (Pty) Limited v Benoni Rex Hotel CC and Others (12838/14) [2015] ZAGPJHC 143 (16 July 2015)

REPUBLIC
OF SOUTH AFRICA
GAUTENG
LOCAL DIVISION
JOHANNESBURG
CASE
NO: 12838/14
DATE:
16 JULY 2015
In
the matter between:
CONARA
PROPERTIES (PTY)
LIMITED
...........................................................................
Applicant
And
BENONI
REX HOTEL
CC
.........................................................................................
First
Respondent
DIONYSIOS
PANAYIOTOU
..................................................................................
Second
Respondent
BRANDON
VISAGIE
................................................................................................
Third
Respondent
JUDGMENT
CASSIM,
AJ
Introduction
1.
The
applicant seeks an order ejecting the first respondent and all
persons occupying under it from the premises leased by first

respondent in terms of a written agreement of lease (“the
lease”) entered into on 18 July 2011.
[1]
The leased premises constitute commercial immovable property and the
first respondent acquired the right to conduct a hotel, pub
and bar.
2.
The application was heard on 28 January
2015 and I gave judgment on 5 February 2015.  Paragraph 1 of
this judgment is a repetition
of paragraph 1 of my earlier judgment.
I made interim orders in my earlier judgment and I referred two
issues for determination
by way of oral evidence.  The hearing
of oral evidence took place on 13 July 2015.  I heard the
evidence of three witnesses
on behalf of the applicant, and Mr
Panayiotou (“Panayiotou”) testified on behalf of the
respondents.  I now deal
with the two issues referred for
determination by way of oral evidence.
The
determination as to whether the respondents committed fraud in
procuring the liquor licence into the name of the second respondent
3.
The controversy is this.  On 23
October 2012, Panayiotou applied for the liquor licence held by the
applicant over a portion
of the property leased by the applicant to
the first respondent and issued in terms of the Gauteng Liquor Act, 2
of 2003 (“the
Liquor Act&rdquo
;).  According to
Panayiotou, the sole director and sole shareholder of the applicant,
João Oliveira De Castro (“De
Castro”), consented
to the transfer of the licence into his name.  Part A of the
application is purportedly signed by
De Castro authorising the
transfer of the liquor licence to Panayiotou. De Castro denies that
he signed the relevant document before
a commissioner of oaths,
certain Constable Baloyi, on 23 October 2012 at the Alexandra Police
Station.
4.
The first witness for the applicant, Mrs
Lourika Buckley (“Buckley”), a qualified forensic
document examiner, illustrated
in her evidence by reference to her
report as to why, in her view, the signature relied upon by the
respondents is not that of
De Castro.  She concluded that in
view of the dissimilarities in individual writing characteristics,
that the disputed signature
was not produced by De Castro.  De
Castro testified that he did not sign the document relied upon by the
respondents. He testified
that he would not have consented to the
transfer of the liquor licence because it had a commercial value, and
without ownership
of the liquor licence, the property owned by
applicant and let to first respondent would be diminished in value.
He pointed
out that from his understanding, the object of clause 5.1
of the lease agreement enabled the lessee, namely the first
respondent
controlled by Panayiotou and Brandon Visagie (“Visagie”)
to appoint a manager to control the liquor licence for so long
as the
first respondent remained in lawful occupation.
5.
Panayiotou testified that De Castro did
sign the portion of the application for the transfer of the liquor
licence in his presence
and in the presence of a commissioner of
oaths.  Panayiotou, however, could not explain two material
features of the application.
First, he sought the transfer of
the licence in his name, whereas the lessee of the premises is Benoni
Rex Hotel CC.  This
is apparent from Part B of the application
where he cites himself as the prospective holder as well as paragraph
1 of his written
motivation in which he incorrectly states that he
had purchased the premises from De Castro and that the business was
transferred
into his name in February 2010.
6.
In cross-examination, he suggested that he
had made a mistake in stating that he had bought the property and
which was transferred
to his name in February 2010.  Secondly,
Panayiotou saw nothing untoward with the contents of paragraph 7 of
the application,
which he signed under oath before Constable Baloyi
and in which he affirmed that he, as the prospective holder, will
have the right
to occupy the premises in respect of which the liquor
licence would be used.  The fact of the matter is that the right
to
occupy the premises is that of Benoni Rex Hotel CC and not
Panayiotou.
7.
The application for a transfer of the
liquor licence into the name of Panayiotou was made on 23 October
2012.  The lease agreement
governing the basis upon which the
first respondent occupies the premises was entered into on 18 July
2011 and to endure for a
period of 60 months.  The lease would
thus terminate ordinarily on 30 June 2016.
8.
In evaluating the mutually destructive
versions of De Castro, on the one hand, and Panayiotou, on the other
hand, I must be satisfied
upon adequate grounds that the version of
the applicant upon whom the onus rest is true and the other false.
“The degree
of proof required by the civil standard is easier
to express in words than the criminal standard, because it involves a
comparative
rather than a quantitative test. In the words of Lord
Denning, “
it must carry a
reasonable degree of probability, but not so high as is required in a
criminal case. If the evidence is such that
the Tribunal can say “we
think it more probable than not” the burden is discharged, but
if the probabilities are equal
it is not.”
(see: SA Law of Evidence, Hoffmann & Zeffertt, 4
th
ed., page 526). Recently, the court mindful of the dicta of Wessels
JA in
National Employers’ Mutual &
General Insurance Association v Gany
1931
AD 187 at 199 as diluted in effect in
African
Eagle Life Assurance Co Ltd v Cainer
1980 (2) SA 234 (W) gave the following guidelines in evaluating the
evidence in
Stellenbosch Farmers’
Winery Group Ltd v Martell et Cie
2003
(1) SA 11 (SCA) para [5] at 14 as follows:
“
On
the central issue, as to what the parties actually decided, there are
two irreconcilable versions. So, too, on a number of peripheral
areas
of dispute which may have a bearing on the probabilities. The
technique generally employed by courts in resolving factual
disputes
of this nature may conveniently be summarised as follows. To come to
a conclusion on the disputed issues a court must
make findings on (a)
the credibility of the various factual witnesses; (b) their
reliability; and (c) the probabilities. As to
(a), the court's
finding on the credibility of a particular witness will depend on its
impression about the veracity of the witness.
That in turn will
depend on a variety of subsidiary factors, not necessarily in order
of importance, such as (i) the witness' candour
and demeanour in the
witness-box, (ii) his bias, latent and blatant, (iii) internal
contradictions in his evidence, (iv) external
contradictions with
what was pleaded or put on his behalf, or with established fact or
with his own extracurial statements or actions,
(v) the probability
or improbability of particular aspects of   his version,
(vi) the calibre and cogency of his performance
compared to that of
other witnesses testifying about the same incident or events. As to
(b), a witness' reliability will depend,
apart from the factors
mentioned under (a)(ii), (iv) and (v) above, on (i) the opportunities
he had to experience or observe the
event in question and (ii) the
quality, integrity and independence of his recall thereof. As to (c),
this necessitates an analysis
and evaluation of the probability or
improbability of each party's version on each of the disputed issues.
In the light of its
assessment of (a), (b) and (c), the court will
then, as a final step, determine whether the party burdened with the
onus of proof
has succeeded in discharging it. The hard case, which
will doubtless be the rare one, occurs when a court's credibility
findings
compel it in one direction and its evaluation of the general
probabilities in another. The more convincing the former, the less

convincing will be the latter. But when all factors are equipoised
probabilities prevail.
””
9.
In my view, the applicant has discharged
the onus of proof to establish that Panayiotou did commit fraud.
On Panayiotou’s
own version, he misled the Liquor Board when he
applied to transfer the liquor licence into his name.  I am
unpersuaded by
his version that he made an error when he asserted
that he had purchased the premises from De Castro.  It is not
logical to
accept such a version in the context of him further making
the written statement that the bought the premises and that same
business
was transferred to his name in February 2010.  The
wording of his motivation for the liquor licence is carefully crafted
to
create the impression that the business premises were transferred
to him in February 2010 and hence, logically, the liquor licence
must
also go to him.  It is difficult to imagine that any person of
ordinary intelligence would make these statements unintentionally.

Panayiotou also stated under oath in his affidavit to the Liquor
Board that he occupies the premises, whereas in terms of the lease

agreement, the tenant is Benoni Rex Hotel CC.
10.
I am mindful of the criticisms made by
Advocate Cohen, on behalf of the respondents in his insightful
analysis of the evidence in
his written submissions in support of a
finding, that the applicant had not discharged the onus to prove that
the respondents had
breached clause 4.2 of schedule A to the lease
agreement, which provides that the lessee shall not contravene or
permit the contravention
of any statutory provision and/or conditions
of any licences relating to or affecting the occupation of the leased
premises.
I have already expressed the view that Panayiotou
committed fraud and, in so doing in his capacity as the controlling
mind of Benoni
Rex Hotel CC, he contravened the provisions of
section
128
of the
Liquor Act.  He
furnished false and incorrect
information to the Liquor Board in the application for the transfer
of the liquor licence held in
the name of the applicant into his own
name. The Liquor Board, itself, did not apply its mind to the
application nor did it critically
evaluate the substance of the
application.  Thus for instance, there is no record of a full
copy of the lease agreement being
part of the application.  Only
selected portions are to be found.  There is no compliance with
the rudimentary requirement
of proper notice to the applicant.
11.
My findings are not limited to the
conclusions of the expert witness, Mrs Buckley.  I could not do
so as Mrs Buckley identified
the limitations of her findings in her
report.  She pointed out that she only had copies of the
documents made available to
her and not the originals.  She
could hence not assess the line quality and the signatures.
Whatever other limitations
there may be in her report, as a qualified
expert, she supported the version of De Castro that it was not his
signature that appeared
on the form purporting to authorise the
transfer of the property to Panayiotou.
12.
On the probabilities, it is not
unreasonable to accept De Castro’s version that he would not,
on behalf of the applicant,
part with the liquor licence which is an
asset of the applicant.  His explanation that he furnished a
copy of his identity
document to the respondents is consistent with
clause 5.1 of the lease in terms whereof the lessor agreed to permit
the lessee
to appoint a manager on the liquor licence for so long as
the lessee remains in lawful occupation and agreeing to pay all fees
and charges attaching to the licence.  It is also consistent
with the common cause version that the parties attended at the

offices of an attorney in Pretoria with the purpose of enabling the
lessee to procure the appointment of a manager on the liquor

licence.  This De Castro explains why a copy of his certified ID
was furnished to the second respondent as a representative
of the
first respondent.
13.
De Castro appeared to me to be an
experienced businessman and it is unlikely that he would dispose of
the liquor licence as contended
for by the respondents.  He was
forthright in his evidence and struck me as an honest individual.
Upon discovery, what
he considered was a fraud, he reported the
matter to the police.  The affidavit in support of his report
made at the time
of him discovering the fact that the liquor licence
was transferred into the name of the second respondent is consistent
with his
evidence before me.  On the other hand, Panayiotou was
an unsatisfactory witness in material respects. He was evasive and
not forthcoming.  Whilst I have found that there was actual
fraud, it is also necessary to reflect on the accepted law that
the
courts will not readily infer fraud.  This foundational theme
steeped in bygone years where high standards of morality
was the norm
of the day has to be revisited in the modern day South Africa where
fraud has become the order of the day.  Orbiter,
I observe, that
in pursuing the true facts, our courts must be more vigilant to the
current norm which is that people take chances
based on dishonesty
because they get away with dishonest conduct.  That fraud is not
readily inferred is not in sync with
modern day morality.
14.
Having found fraudulent and dishonest
conduct on the part of the respondents, there is not only a breach of
clause 4.2 of schedule
A to the lease agreement, but a repudiation of
the relationship arising from the lease agreement.  The
applicant is entitled
to accept that the agreement has been
repudiated and hence is entitled to cancel the lease and an order for
eviction.
The
determination as to whether the applicant committed fraud in
diverting water or in any other manner causing the first respondent

to pay for water charges with the knowledge that the first respondent
did not use such water
15.
Both De Castro and Panayiotou testified on
this issue.  In addition, the applicant relied on the evidence
of an experienced
and qualified plumber, Mr Venter, whose evidence
went unchallenged.  His evidence is to the effect that he
inspected the three
metres installed at the premises occupied by some
ten tenants and he verified that the three metres measuring the
consumption of
water by the first respondent is in working order and
there is no diversion of water affecting the first respondent to any
other
tenant or third party.
16.
The version of the respondents is that De
Castro caused charges to be levied against the first respondent in
respect of water supply
to a butcher on the premises, because the
butcher is a friend of De Castro.  The respondents led no
credible evidence to support
such allegation; on the contrary,
Panayiotou’s evidence was based on speculation and his
subjective belief that this had
been done.  His gripe was that
water charges had been significantly increased and the speculation
was that De Castro was up
to no good.  Thus for instance, there
was a period when the municipality did not levy any charges and yet
the landlord charged
the tenants – because subsequently the
municipality got its act together and did levy charges.  I find
the reasoning
of Panayiotou to be devoid of any logic and sadly so
reflective of a mentality permeating our society where people fail to
pay
for the use of resources.  If in fact the municipality did
not charge on a particular month because for one or other reason
it
did not get its act together, this does not absolve the person who
use the resources to be liable and to be prepared to pay
for such
use.
17.
De Castro explained that he had installed
separate meters for the tenants on the premises with reference to a
meter reading returns
of Motlala Utilities (Pty) Limited, a firm that
specialises in this field.  I was referred to the various
tenants described
on the returns and the particulars for each meter
reading period appears thereon and the charges arising from usage of
water.
De Castro had experienced that persons unknown to him
had tampered with meters and this caused him to move the meters to a
secluded
area in which access was prohibited, unless provided by the
landlord.  I would not be remiss to point out that it would be
a
fair inference (Wigmore deals with this fully in his treaties on the
law of evidence) that those who tamper with the meters are
likely to
be the very people who are liable and responsible for payment and who
do not wish to pay.
18.
Reverting to the breach in question, I fail
to understand the issue because first the landlord made no profit on
water supplied
to tenants.  To the extent that this is suggested
in the heads of argument prepared on behalf of the respondents, there
is
no evidence whatsoever to support such a finding.  On the
contrary, an analysis of the meter reading and the charges arising

therefrom correlates to the charges levied by the municipality.
There is nothing untoward about this.  The municipality
charges
the landlord and in turn the landlord charges the tenants for the use
of water.  The refusal of the first respondent
to pay the sum of
R10,428.78 for the period December 2013 to January 2014 is
regrettable.  This is the water consumed and
charged for the
hotel as appears on the meter reading return for the period 18
December 2013 to 29 January 2014 under description
“Rex Hotel –
Shop 89 and hotel rooms”.  The meter reading return
appears at page 254 of Bundle 3 and was
furnished to the first
respondent.  In fact, the meter readings for the period 29 July
2013 to 27 May 2014 form part of the
papers and the first respondent
could see that it was not charged for water that it did not use
according to the meter readings
which in turn is consistent with the
charges meted out by the Ekurhuleni Municipality.
19.
The refusal by the first respondent to make
payment, despite demand in terms of the provisions of the lease
agreement, entitled
the applicant to cancel the lease and to seek the
eviction of the first respondent.  To date in fact this amount
had not been
paid and the first respondent refuses to make payment.
In such circumstances, a court is left with little choice but to give

effect to the terms of the lease agreement.  I have already
found that the lease agreement was validly cancelled.
20.
In the premises, I make the following
orders:
20.1.
An order is granted ejecting the first
respondent, and all person occupying under it, from the premises
being:
20.1.1.
all floors of the building constructed on
the southern side of the property owned by the lessor (being the
applicant), across Erf
1300 and 1298, Benoni Township, excluding the
ground floor (the previous Rex Hotel premises); and
20.1.2.
an area of approximately 145 square metres
on the ground floor of the eastern side of the remaining building,
north of the building
referred to above, also built across Erf 1300
and 1298 Benoni Township (the previous Rex theatre); as per the
sketch attached to
the lease agreement to the application under this
case number (also known as 78 Tom Jones Street, Benoni).
20.2.
The respondents are to pay the costs of the
application and the hearing before me, jointly and severally, the one
paying the other
to be absolved.
NA
CASSIM
Acting
Judge of the High Court,
Gauteng
Local Division
Date
of oral hearing: 13 July 2015
Date
of judgment: 16 July 2015
APPEARANCES
For
the Applicant: Advocate G Meijers
Instructed
Paul Farinha Attorneys
For
the Respondents: Advocate S Cohen
Instructed
by David C Feldman Attorneys
[1]
The
leased premises are identified in clause 1 of the lease agreement
and further dealt with in schedule “A” to the
lease
agreement.