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[2015] ZAGPJHC 322
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Mokone v Tassos Properties CC and Another (12229/2012) [2015] ZAGPJHC 322 (25 November 2015)
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IN THE HIGH COURT OF
SOUTH AFRICA
GAUTENG LOCAL
DIVISION, JOHANNESBURG
CASE NO.: 12229/2012
Reportable: Yes
Of interest to other
judges: Yes
Revised: Yes
25/11/2015
In the matter between:
NTSWAKI JOYCE
MOKONE
Plaintiff
and
TASSOS PROPERTIES
CC
First
Defendant
BLUE CANYON PROPERTIES
125 CC
Second
Defendant
JUDGEMENT
DE VOS J:
[1] The plaintiff in this
matter, Ntswaki Joyce Mokone, seeks an order declaring the sale of an
immovable property described as
"remaining extent of Erf […],
Boksburg Township, Registration Division l.R., The Province of
Gauteng, measuring 891
(eight hundred and ninety one) square metres"
and entered into between the first defendant, Tassos Properties CC,
and the
second defendant, Blue Canyon Properties 125 CC, to be
invalid. Both defendants oppose the said application.
[2] When the matter was
called, the parties agreed that the question of law relevant to this
judgement be separated from all the
other disputes related to this
case in terms of Rules
[3] The question of law
to be determined relates to whether the plaintiffs alleged tight of
pre-emption as per clause 6 of the lease
agreement between the
parties was – in law – capable of being extended/renewed
based on the facts recorded on the particulars
of claim.
[4] The facts of the
matter as recorded in the particulars of claim gave rise 10 the
question of law as mentioned above and can
be summarised as follows.
Three tease. agreements have been en info between the plaintiff,
there and then acting personally. and
the first defendant. then duly
represented by Anastasion Emmanuel Nichas, in respect of a premise
situated at 119 Commissioner
Street. The initial written lease
agreement was entered into on 01 March 2004 and terminated on 28
February 2005. The second agreement
stretched over the period 01
March 2005 until 02 May 2008 in terms of an oral agreement between
the plaintiff and the first defendant,
essentially “on the same
terms and conditions as contained in the original written lease
agreement. The final agreement stretched
from the period 03 May 2006
to 31 May 2014 at a monthly rental amount of R5500, based on an
endorsement made on the first page
of the original written lease
agreement which was “31/5/06 Extend till 31/5/14 Monthly rent
R5500.” The original written
lease agreement upon wh1ch the
endorsement was made is attached to the particulars of claim as
Annexure A.
[5] The pre-emptive
clause relating to the question of law to be decided is set out in
clause 6 of Annexure A which reads as follows:
"The Tenant shall
have the first right of refusal to purchase the leased
when
the Landlord which [sic] to sell the leased premises. The purchase
price will be negotiated when the Landlord which [sic] to
sell the
leased premises”.
It is not in dispute that
the first defendant sold the said property in 2009 to the second
defendant and that the said property
was transferred to the name of
the second defendant on 01 March 2010.
[6] It is the plaintiff’s
contention that, she had the right of first refusal in terms of
clause 6 of the lease agreement,
and that this right continued to
exist subsequent to the expiry of the initial lease period and
throughout the second and third
agreements of lease. It is contented
that the meeting of the minds between the plaintiff and the first
defendant is manifested
in their words and deeds The plaintiff
alleges that the parties agreed to extend the lease agreement on the
terms and conditions
as they appear in the initial lease agreement.
[7] Counsel for the
plaintiff, Mr Dzimba, held that the principle of the English raw
seems to be clear in the sense that when a
tease is renewed. all the
terms are renewed that are incident to the relation of landlord and
tenant Terms that are collateral
to and independent of such
relationship, are not renewed unless the parties make it clear that
this is part of their intention,
either through the use of language
or in circumstances, such as in this case, where the parties meant to
renew the lease document
in its totality and not just the lease of
the premises. Mr Dzimba argued that the the parties endorsed the
lease document in such
a manner as to include the heading reading
"agreement of lease” to the endorsement, thus reading
"Agreement of
Lease extended tull 31/5/2014 monthly rent
R5500'', and therefore agreeing to renew the entire agreement
including all its terms
and conditions. The endorsement specifically
made on the first page of the written lease agreement, thus indicates
the intention
of both parties to the lease to extend all the terms
and conditions contained in the lease agreement. In conclusion, the
plaintiff's
right of first refusal to purchase the leased premises is
included within the terms and conditions or the lease agreement.
[8] On the other hand,
the defendants’ counsel, Mr Pretorius, submits that an option
to purchase in a lease is collateral
to the relation of landlord and
tenant It is the defendants' case that in principle there is no
difference between an option to
purchase and a right of pre-emption,
and therefore a right of pre-emption in a lease is not incident to
the relation of landlord
and tenant, i.e. it is collateral. When a
lease is renewed
simpliciter,
all the terms are renewed that
are incident to the relation of landlord and tenant. Terms that are
collateral to and independent
of such a relationship are not renewed
unless the parties make it specifically clear that this was their
intention upon renewing
the tease. It is further contended that the
exercise of a simple renewal of lease does not make a right or
pre-emption a term of
the new lease due to its being collateral.
Where there is in existence an agreement containing a lease and
matters that are not
incident to the relationship of landlord and
tenant and if agreement is reached simply
'to renew the
lease',
then any reasonable person would understand that only
the lease of the premises and nothing more was to be renewed, and if
he wished
to extend any of her portion of the agreement would feel it
Incumbent upon him to stipulate expressly that this should happen The
defendants hold that if the reletting is express, the question
relating to which of the terms of the expired lease form part of
the
new contract is a question of interpretation:
[9] According to the
defendants, the English rule, which is accepted as part of the South
African law, is stated in Halsbury
Laws
of
England
2
nd
ed., vol. 20, para. 69 as follows:
“
A lease may
confer on this lessee an option to purchase the interest of the
lessor in "the demised premises. This
usually takes
the form of a covenant by the lessor that if the lessee within a
specified period shall give the lessor notice in
writing of
a
strength of his desire to
purchase the fee
simple,
or ether interest of the lessor in the premises, the lessor will,
on
payment of a specified purchase price, and of arrears of
rent, convey the
demised premises to the lessee. Such an
option is collateral to, independent of and not incident to the
relation of landlord and
tenant. It is not therefore one of the terms
which will be incorporated in the terms of
a
yearly tenancy
crested by the tenant holding over after the expiration of the
original lease;·and when the parties agree
that the lease
shall
be
extended,
unless it be clearly shown that it
was their intention that the option to purchase should continue
throughout the extended period,
it will not be
deemed to be
one of the terms of the extended tenancy "
[10] While the starting
point remains the words of the document, the process of
interpretation does not stop at "a perceived
literal meaning of
those words, but considers them in the light of all relevant and
admissible context provided by reading the
particular provision/s in
right of the document as a whole, including the circumstances
attendant upon its coming into existence.
In the decision
Natal
Joint Municipal Pension Fund v Endumeni Municipality
2012
(4) SA 593
(SCA) at paragraph 18
,WALLIS JA dealt with the proper
evaluation of documents:
“
The present
state of the law can be expressed
as
follows: interpretation
is the process of attributing meaning to the words used in a
document, be it legislation, some
other statutory
instrument or contract having regard to
the context provided
by reading the particular provision or provisions in the light of the
document as a whole and the circumstances
attendant upon its
coming into existence. Whatever the nature of the document,
consideration must be given to 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. Where more than one meaning is
possible each
possibility must be weighed in the light of all these factors The
process is objective, not subjective.”
[11] In order to
interpret ·the words contained in the endorsement on the lease
agreement, the following reported cases are
relevant. In Sherwood v
Tucker
1924 (2) Ch. 440
the extension of a lease (which was, as in
the present matter, enforced by an endorsement on the original lease
agreement) was
found not to cover an option to purchase contained in
the original lease agreement. The endorsement on the lease agreement
as to
the extension of the lease was in the following terms.
"We, the
undersigned, hereby agree
that this lease be extended for
three
years expiring December 21, 1923.”
In holding that the
endorsement related to the lease only and not also to the option to
purchase, POLLOCK. WARRINGTON & SARGANT
LJJ concurring the
following·
"What the words
which have been used in this case mean-"we agree that this lease
be extended”, are words apt to
cover the option
as
well
as the extension of the demise? I think they do not cover the option
.
There is a clear distinction between two things. The first is the
demise of the premises by the landlord to the tenant, and although
it
is to be found in an agreement, or in a
lease signed and
executed by the parties, still the option is a separate and
independent contract whereby a chance is given to
the tenant,
under the conditions to purchase the freehold of the premises which
are demised to him...”
SARGANT LJ laid stress on
the use of the word
"extended”.
He quoted the
endorsement and said;
“
What does that
mean
?
Does it mean that the term is to be extended or
that
the contract is to be extended with all its incidents? I think the
word
"extension” is not really strictly applicable,
properly used, with regard to the document. You
cannot extend
the document. You cannot
extend the actual lease. It is a word
properly applicable to the extension of the term of years granted by
the lease,
though I incline to think that a very slight
alteration of the terms here might have produced a different result.
If the parties
had agreed that
house should be taken for a
further term of
three years upon all the terms upon which it
was taken under this contract the result might very likely have been
different But
on the whole I cannot
find in this document
anything more than an extension, and an extension is prima facie
applicable to the term granted, and does
not necessarily involve the
further grant of an option of purchase
which is not itself one
of the
incidents of a tenancy strictly speaking.”
[12] In Batchelor v
Murphy
1926 A.C. 63
the court concluded that the new lease did
contain an option to purchase the property. This was an instance
where a new lease was
granted to a new lessee in regard to the
unexpired term of the lease granted to the previous lessee. The
previous lease contained
an option to purchase the property and the
operative part of a memorandum, which was the document requiring
interpretation, stated
that
“…
execute
a new lease for the unexpired term of eight years and six months from
the
sixth of October last on the same
terms and
conditions in all respects as the lease of 17
October, 1913"
The court found that the
wording of the memorandum meant that the entire document, and not
only the lease, was agreed to and that
the option to purchase,
although a collateral right, was included in the original lease and
was in substance transferred
[13] In
Webb v
Hipkin
1944 AD 95
the renewal in question dealt with
an option of renewal which was signed by the two parties and read as
follows:
RENEWAL OF LEASE
We
the undersigned
SOPHIE CATHERINE WEBB
and
GEOFFREY HIPKIN
do hereby agree to a
renewal of the aforementioned lease for a further period of Three (3)
years
from 1
st
September, 1941, under
the same terms and conditions as aforewritten.”
The lessor contended that
the option had expired on 1 September 1941 and that the renewal of
the lease did not extend the option
beyond that date The court was
called upon to interpret the clause. FEETHAM JA referred to what was
stated in
Halsbury, Laws
of England
supra under the heading
Landlord and Tenant
as well as to
Webb v Hipkin
and
Sherwood v Tucker
supra.
The court held that on the words used in the
agreement to renew -in
particular “
under the same terms and conditions
as
aforewritten”
- it was sufficiently
clear that the parties intended that this clause also should be
renewed.
[14] In the present
matter and as far as the interpretation of the extended agreement is
concerned, the plaintiff cannot rely on
a tacit term to the effect
that the extension was on “
the same terms and conditions as
contained in the written lease",
since reliance on such a
term has not been pleaded as part of the common cause facts; and a
tacit term cannot be inferred where
it is contrary to the express
language of an agreement. The express words to be interpreted in
light of the facts mentioned above
are “
Extended till
31/5/2014 monthly Rent R5 500”
and must be interpreted
objectively. It is significant that the words endorsed on 3 May 2006
on the initial agreement are similar
to the words used in
Sherwood
v Tucker
supra.
[15] Having regard to the
rules of interpretation, the question to be answered it this: Can be
said that when the endorsement “
Extended WI 31/5/2014
monthly Rent R5500”
was made, the parties intended for the
right of pre-emption to be transferred as well? Objectively such a
finding cannot be made
for the following reasons:
15.1. From a reading of
the final written lease itself, at best for the plaintiff, the
intention of the parties could only have
been that the right of
pre-emption was to endure for a maximum period of two years only. The
two year period had already expired
when the endorsement took place
on 03 May 2006. The parties could not have contemplated that 1he
right of pre-emption would endure:
for a further eight years (from
2006 until 2014).after the initial one year lease period and possibly
another year in terms of
the option to renew, had expired. To echo
the words of TREDGOLD CJ in
Levy v Banket Holdings (Private)
Ltd
1956 (3) &A 558 (FC) at 564F
:
“…
a
reasonable person would understand that the lease and nothing more
was to be renewed, and would feel it incumbent upon him, if he
wished to extend any other portion of the agreement to stipulate
expressly that this should happen”;
15.2. Specific wording,
such as
"on the same terms and conditions as the initial
written lease”
were not expressly endorsed on the document
and cannot be inferred for the reason set out above;
15.3.
Sherwood v
Tucker
supra is almost directly on point with the matter in
question. Batchelor v Murphy and Webb v Hipkin supra are clearly
distinguishable
on the basis that the wording of the clauses under
scrutiny there specifically included the express words
"the
same terms
and conditions” or
something similar
thereto. In this matter there are no such words and as referred to
above, such-words cannot be inferred;
15.4. Following the
reasoning of WARRINGTON W in
Sherwood v Tucker
supra a
tenant who sets up a contention that the endorsed document extending
the lease has continued the right of pre-emption,
has to show that
there is by necessary implication an agreement to continue the right
of pre-emption in the terms of the endorsement
Prima
facie, those documents which extend the lease ought to be held to
extend
the relation of landlord and tenant, and the arson
who seeks to
give to them any further meaning than that must
find in the document extending the lease either something expressed
…
or something which by
necessary implication has that
effect.”
No such finding can be
made on the present facts before the court,
15.5. If the right of
pre-emption was to continuance for a further period (after the
initial one year period as per the original
printed terms of the
lease and possibly a further one year renewal in terms of the oral
agreement), one would have expected clear
words to have been used for
that purpose. Such a clear intention is glaringly absent from the
words used;
15.6. In my view, the
word “
extended”
is appropriate to the continuance
of the period of the lease
and
not the continuance of the
right of pre-emption especially if one has regard to the fact that
the fight of pre-emption is collateral
to the relation of landlord
and tenant and terms that are collateral to and independent of such
relationship are not renewed when
a lease is renewed
simpliciter,
unless the parties it clear that they intended this;
15.7. In the absence of a
clear intention that the right or pre-emption should continue
throughout the extended period, it will
not be deemed to be one of
the terms of the extended tenancy.
[16] In conclusion it is
held that only the period of the lease was extended (and was capable
of being extended/renewed) and not
also the right of pre-emption
which is not in itself one of the incidents of a lease, even though
the night of pre-emption appears
in the document upon which the
endorsement was made. Therefore, the purported extension of the
initial written lease did not result
in the right of pre-emption
becoming a term of the extended new lease. The plaintiff’s
action can therefore not succeed on
the question of law and must
therefore be dismissed with costs.
I therefore make the
following order:
1. The alleged right of
pre-emption in terms of clause 6 of the lease agreement was not
extended/renewed when the original
lease agreement was endorsed
with the words "Extend till 31/5/2015 monthly rent·R5500
and the application is dismissed
2. The rest of the
prayers are postponed sine die.
3. Plaintiff is ordered
to pay the costs of the application.
__________________
DE VOS J
JUDGE OF THE GAUTENG
DIVISION OF THE HIGH
COURT
Date of
hearing:
20 November 2015
Date of
judgement:
24 November 2015
For the
plaintiff:
Adv. QM Dzimba
Instructed
by:
Ndzondo Kunene Mosea Inc
For the
defendants:
Adv.WG Pretorius
Instructed
by:
Brooks & Braatvedt Inc.