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[2019] ZAGPJHC 327
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Balvest CC t/a Fourways Garden Shopping Centre v Rainbow Pepper Trading 76 (Pty) Ltd and Others (30502/2017) [2019] ZAGPJHC 327 (2 September 2019)
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
LOCAL DIVISION, JOHANNESBURG
CASE
NUMBER: 30502/2017
In
the matter of
BALVEST
CC t/a FOURWAYS
GARDEN APPLICANT
SHOPPING
CENTRE
(Reg
No: 2008/261705/23
And
RAINBOW
PEPPER TRADING 76 (PTY) LTD FIRST
RESPONDENT
FOURWAYS
GARDENS SUPERMARKET (PTY) LTD SECOND
RESPONDENT
ZACHARIADES,
ANGELO JAMES THIRD
RESPONDENT
JUDGMENT
DOSIO AJ:
INTRODUCTION
[1]
This is an application to make a settlement agreement (“the
acknowledgment of debt”), entered into between the applicant
and the three respondents, an order of court.
[2]
The matter is substantially similar to the application which was
enrolled under case number 38342/2017 which pertained to a
summary
judgment application brought by the applicant against the second and
third respondents.
[3]
The application is opposed.
[4] Condonation is granted to the
respondents for the late filing of the answering affidavit.
BACKGROUND
[5]
The applicant is the present owner of a shopping centre known as
Fourways Gardens Shopping Centre (“the shopping centre”).
The second respondent leased two stores in this shopping centre,
namely, SPAR and TOPS. Both stores are now being let to the
franchisor,
The SPAR Group Ltd, who has taken over the management
thereof in terms of an option agreement.
[6]
On or about the 28
th
of October 2009, Rainbow Pepper Trading 76 (Pty) (Ltd) (“Rainbow
Pepper”) , duly represented by Angelo Zachariades
(“third
respondent”), entered into an agreement of lease (“The
Highveld Spar lease”) with Highveld
Syndication 15 Limited
(“Highveld”). Rainbow Pepper in terms of this agreement
would lease shop FG09 (“the Spar
premises”) at the
Fourways Gardens Shopping Centre situated at the corner of Uranium
and Bushwillow Avenues, Fourways Gardens.
The lease agreement was
signed by the third respondent on the 28
th
of October 2009. The Highveld Spar lease was to expire on the
30
th
of September 2019.
[7]
On the 22
nd
of April 2010 Rainbow Pepper entered into a written agreement of
lease with Highveld (“The Highveld Tops lease”) in
terms
of which Rainbow Pepper leased the shop FG07 at Fourways Gardens
Shopping Centre. This lease was signed by the third respondent
on the
22
nd
of April 2010.
[8]
Rainbow Pepper (trading as Spar and Tops) became lessees of the
applicant, when the latter took transfer of the shopping centre
in
March 2011.
[9]
The second respondent took cession of the 2009 lease agreement
between Highveld and Rainbow Pepper and the Tops store concluded
a
new lease on the 15
th
of March 2016. The third respondent represented the respondents in
all these transactions.
[10]
A meeting was held on the 8
th
of November 2015, where the applicant advised that it intended to
purchase the land on which the contentious parkings are situated,
and
that as this process takes time, a ten year lease was concluded with
the City of Johannesburg to secure tenure.
[11]
On the 23
rd
of May 2016, Rainbow Pepper and the second respondent, duly
represented by the third respondent acting personally, entered into
an agreement headed “Acknowledgement of Debt” with the
applicant, duly represented by Nicolaos Baltsoucous. The present
application pertains to this acknowledgement of debt which is
applicable to both the Spar and Tops premises. The amount is for
R1
770 410 (one million seven hundred and seventy thousand four hundred
and ten rand) as at 1 April 2016.
[12] The acknowledgment of debt was
based on an admitted liability, for failure to pay rent for the
period 2012 to 2016.
SUBMISSIONS MADE BY THE RESPONDENTS
[13]
The application is opposed as the respondents allege that at a
meeting held on the 8
th
of November 2015, the applicant who was represented by Mr
Baltsoucous, advised them that he was going to provide security of
tenure
for the tenants of the shopping centre by purchasing the
portion 184 of Zevenfontein, which fell over the parking bays
of
the Shopping Centre from the local council. Mr Baltsoucous
informed the respondents that this purchase, would take a lengthy
time
to finalise, possibly ten years. During this period, Mr
Baltsoucous assured the respondents he had obtained a ten year lease
from
the city council over the property to be bought and in this way
would safeguard the security of tenure of the car park whilst the
sale took place.
[14]
The third respondent contends that these representations were
material because on the strength of the assurances made by Mr
Baltsoucous, the third respondent was induced to sign the
acknowledgment of debt (which pertained to arrear rental for the
period
during 2012-2016), the new lease agreement and the cession
agreements in March and May 2016.
[15]
During the month of December 2016, the third respondent became aware
of a planned development by the city council with respect
to Uranium
Road. Despite being assured by the landlord that the parking lot of
the shopping centre was secure, the respondents
obtained the exact
site drawings pertaining to the development and it became clear that
the city council was planning a widening
of Uranium Road to such an
extent that it was to cut right into a large portion of the parking
area of the Shopping Centre.
[16]
The third respondent contends that had he known about this state of
affairs, he would never have signed any of these agreements
and
related sureties, nor would the loan by SPAR and subsequent cession
transactions have taken place.
[17]
Furthermore it was contended that the existing shopping centre was
thus built illegally
and
contravenes the Johannesburg Town Planning Legislation. As proof of
these
material
defects in the building site, reference was made to a report compiled
by Mr
Hanno
van Helsdingen dated the 26
th
of June 2012.
[18]
The respondents content that it also became evident that the council
held a full
servitude
over, alternatively owned the erf, where the parking lot of the
shopping centre
was
located i.e. Portion 184 of Zevenfontein.
[19]
The respondents contend further that during 2015 the landlord
represented to the
respondents
that all irregularities had been removed and that security of tenure,
in
regards
to the parking lot was ensured. This was however also found to be
another
misrepresentation.
[20]
The respondents therefore allege that it is clear that there will be
a
bona
fide
dispute
regarding
the misrepresentation and that the matter should be referred to trial
so that
the
issues can be properly ventilated. The respondents contend that the
misrepresentation made by the applicant’s representative
results in the
acknowledgement
of debt being voidable as it was not concluded with a meeting of the
minds between the
parties.
SUBMISSIONS MADE BY THE APPLICANT
IN RESPECT TO THE MISREPRESENTATION
[21]
The applicant contends that the purported factual disputes raised by
the respondents
are
illusionary, not factual, and not
bona
fide
.
[22]
Counsel contended that the alleged dispute would have to relate to
the events and
facts
preceding the conclusion of the acknowledgement of debt. A road
widening some
7
months later, by a disassociated third party (the City of
Johannesburg), which affects
the
contentious parkings, cannot affect the admitted liability recorded
in the acknowledgement of debt.
[23]
Counsel argued that a factual dispute can only exist if the
respondent’s version is
bona
fide
,
is relevant to the matter and it not far-fetched or seriously
unconvincing. Counsel alluded to the case of
Plascon
–Evans Paints Ltd v Van Riebeeck Paints (Pty)
Ltd
[1984] ZASCA 51
;
1984
(3) SA 623
(A) at 634-635 which states that;
“
It
is correct that, where proceedings on notice of motion disputes of
facts have arisen on the affidavits, a final order, whether
it be an
interdict or some other form of relief,
may
be granted if those facts averred in the applicant’s affidavit
which have been
admitted
by the respondent, together with the facts alleged by the respondent,
justify
such
an order…In certain instances the denial by respondent of a
fact alleged by the applicant
may
not be such as to raise a real, genuine or
bona
fide
dispute of fact (see in this regard
Room
Hire Co (Pty) Ltd v Jeppe Street Mansions (Pty) Ltd
1949 (3) SA 1155
(T) at 1163-5;
Da
Mata
v Otto NO
1972
(3) SA 858
(A) at 882 D-H)…for example, where the allegations
or
denials
of the respondent are so far-fetched or clearly untenable that the
Court is justified in
rejecting
them merely on the papers”.
[24]
Counsel referred to the case of
Wightman
t/a JW Construction v Headfour (Pty) Ltd
and
another
[2008] ZASCA 6
;
2008 (3) SA 371
(SCA) where it was stated at paragrap
h
[13] that;
“
[13]
A real, genuine and
bona
fide
dispute of fact can exist only where the court is satisfied
that
the party who purports to raise the dispute has in his affidavit
seriously and unambiguously
addressed
the fact said to be disputed.”
The misrepresentation
[25]
As regards the defence of a misrepresentation, the applicant’s
counsel contends that
the
respondents create the impression that the applicant on the 8
th
of November 2015
and
before the conclusion of the acknowledgment of debt, misrepresented
the following
to
the respondents;
1.
The
status of the shopping centre,
2.
The
number of parking bays available at the shopping centre, and
3.
That
there was security of tenure for the contentious parkings.
[26]
Counsel contended that the third respondent and his stores were in
occupation at the
shopping
centre from October 2009 already, and as illustrated hereunder, the
number
of
parking bays have remained unchanged.
[27]
Counsel contended that the high-water mark of the supposed
misrepresentation, is a
representation
made that there is security of tenure in respect of the parking lot,
and
that
the applicant misrepresented that a lease agreement was concluded
with the City
of
Johannesburg, in terms of which, the portion of the parking lot,
which encroached
upon
municipal land, would be leased from the City of Johannesburg for a
period of
ten
years.
[28]
Counsel contended that such a lease was concluded on the 26
th
of August 2014,
which
was long before the alleged misrepresentation in November 2015.
[29]
Counsel contended that in order to contextualise the supposed
irregularities of the
shopping
centre, the realisation of the parking bay encroachment, and the
steps taken
before
the applicant became the owner of the shopping centre, the following
dates are
relevant;
1.
In
1997 the site development plan listed 180 parking bays (i.e.21 years
ago). There was thus an approved site development plan.
2.
When
the TOPS lease agreement was concluded between Rainbow Pepper and the
previous owner of the shopping centre, on the 22
nd
of April 2010, there was annexed to that lease agreement a plan which
expressly referred to a 2.5 m set-back for future road widening.
According to the applicant’s council, the third respondent
initialled this plan on the left bottom corner. Counsel contends
that
the suggestion in the answering affidavit, that the respondents were
unaware of the possibility of a possible road widening,
until 2016,
is clearly contrived and stands to be rejected as far-fetched and
seriously unconvincing.
3.
On
the 10
th
of February 2011, the site layout and town planning schedule were
approved.
4.
In
2013 the applicant became aware of the contentious parkings being
situated/encroaching on municipal land and immediately acted
proactively during 2013 to secure the contentious parkings. The
correspondence between the applicant and the City of Johannesburg,
to
support this has been attached and marked as annexure “R14”,“R15”,
“R16”, “R17”,
“R18”, “R19”,
“R20”, “R21”.
On the 25
th
of September 2013, the City of Johannesburg explained the process to
apply for a lease or purchase of the municipal land containing
the
contentious parkings, (annexure “R14”).
On the 9
th
of October 2013 the City of Johannesburg established the market value
for rental for the contentious parkings as per annexure “R15”
as being R12 636 per month.
On the 17
th
of October 2013, the City of Johannesburg confirmed that the
applicant’s application to either acquire or lease the
contentious
parkings had been circulated, (Annexure “R16”).
On the 15
th
of November 2013, the City of Johannesburg confirmed that its
property-owning company was in the process of considering the
application
for lease or sale of the municipal land on which the
contentious parkings were situated, (Annexure “R17”).
On the 13
th
of December 2013, the City of Johannesburg confirmed that the
contentious parkings could be utilised by the applicant, pending
transferral thereof to the applicant, (Annexure “R18”).
On the 11
th
of March 2014, the City of Johannesburg confirmed that the applicant
could utilize the contentious parkings at a rental of R12 636
per month until such time as the long term lease for a period of 9
years and eleven months was concluded, (Annexure “R19”).
It was also stated in the letter dated the 11
th
of March 2014 that the tenant had the option to renew the lease
agreement for a further 9 years and 11 months provided that the
property would not be needed for future Municipal developments.
On the 4
th
of April 2014 the City of Johannesburg sent a letter explaining
that there had been delays in finalizing the lease agreement,
(Annexure “R20”).
On the 8
th
of April 2014, the City of Johannesburg provided approval for the
occupation of the shopping centre and all necessary compliance
certificates were issued, (Annexure “R21”).
On the 20
th
of May 2014, the City of Johannesburg provided a further rental
advising certificate, which ultimately led to the conclusion of
the
lease agreement referred to below.
On the 26
th
of August 2014 the applicant and the City of Johannesburg concluded a
lease agreement for the contentious parking for a period
of 9 years
and 11 months.
[30]
The applicant’s counsel contended that the contentious
parkings, and alleged
irregularities
of the shopping centre are irrelevant to the application under
consideration
as
the acknowledgment of debt pertains to arrears for the rental period
2012 to 2016
which
arose before the alleged misrepresentation supposedly induced the
conclusion
of
the acknowledgment of debt
[31]
Counsel contended that nowhere is it suggested in the third
respondent’s answering
affidavit
that the widening of the road, by the City of Johannesburg in January
2017,
was
known to the applicant, or its representative, at the time that the
acknowledgement
of
debt was concluded. Accordingly, the development by the City of
Johannesburg in
December
2016 therefore has no effect on the acknowledgment of the debt
concluded
on
the 23
rd
of May 2016
[32]
Counsel contended that the acknowledgment of debt contains the whole
agreement
and
the
Shifren
clauses.
Clause
11 of the acknowledgment of debt states;
“
This
AGREEMENT constitutes the entire AGREEMENT between the parties and
that no conditions, stipulations, warranties or representations
whatsoever have been made
by
either
party or their agents, other than those such as are included herein.”
Counsel
contended that this of itself disentitles the respondents to rely on
any representations allegedly made, and in light of
the
parol
evidence
rule, the respondent’s cannot place reliance on terms not
recorded in the acknowledgment of debt.
[33]
Counsel contended that nowhere in the Tops lease agreement concluded
on the 15
th
of
March
2016 was the parking lot issue, recorded or dealt with, evincing the
conjured
nature
of the alleged misrepresentation on the parking lot issue.
Furthermore, if the
sale
issue, security of tenure of the contentious parking bays was
crucial, it should
have
been recorded in the lease agreement.
EVALUATION
[34]
At the time that the lease was signed for the Spar premises on the
28
th
of October 2009, a plan which outlined the boundary lines and number
of parking bays in the shopping centre was attached to the
Highveld
Spar Lease.
[35]
According to the applicant, (which is not disputed on the papers by
the respondent), the initial of the third respondent, in
his personal
capacity and on behalf of the first respondent is affixed to this
plan. The occupation date was with effect from the
22
nd
of October 2009. Accordingly, Spar was in the premises since 2009 and
the respondents must have been aware that the existing roadway,
(that
is Uranium road) had a 2.5m setback for future widening.
[36]
Annexure “A25”, dated the 26
th
of June 2012, is a letter addressed to George Skoutellas from Hanno
Van Helsdingen who was employed by Urban Context. The contents
of
this letter states that the parking is indeed situated in the road
reserve of Uranium road and that it did not form part of
the initial
site development plan. The letter states further that even though a
company named Redwall Developments applied to the
Joburg Metropolitan
municipality to approve a new updated site development plan, the
municipality denied it. The contents of the
letter explains that the
parking requirement for the site was 276 bays and the current site
development plan provided for 176 bays.
[37]
The letter further stated that the Joburg Roads Agency could not
confirm whether the road would be widened in the near future,
but
should this be required a huge amount of parking areas would become
nullified and it would have a negative impact on the centre.
[38]
From the contents of this letter the third respondent must have been
aware of the situation. The number of parking bays had
not changed
since the Spar lease agreement was signed in 2009. These
parking issues were realised as far back as 2012. The
acknowledgement
of debt was signed on the 15
th
of March 2016 which was four years after the issue of the parking
bays came to the knowledge of the respondents.
I
fail to see, how this can now constitute a misrepresentation in 2016.
The respondents cannot say they have been induced into concluding
an
acknowledgment of debt agreement when they were fully aware of the
state of the property when they leased the Spar and Tops
premises.
Accordingly a reliance on a purported misrepresentation cannot be of
assistance to the respondents many years later
[39] None of the
lease agreements in respect to the Spar premises or the Tops premises
allude to any concerns that the respondents
may have had in respect
to the parking area. In fact the Spar lease agreement at clause 17. 1
states;
“
The
LANDLORD undertakes to provide on the property suitable parking in
accordance with the SHOPPING CENTRE PLAN for approximately
187 motor
cars…”.
[40]
The
same clause is prevalent in the Tops lease agreement . There are no
amendments to either lease agreements stipulating any special
conditions pertaining to parking bays or parking areas, with specific
reference to the applicant’s undertaking to provide
security of
tenure for the tenants of the shopping centre, by purchasing the
portion of Portion 184 of Zevenfontein.
[41]
If there were any amendments they should have been in writing.
Therefore, any prior negotiations have no force or effect unless
reduced to writing. The respondents entered the Spar and Tops lease
agreements with full knowledge of the number of parking bays
at the
property.
[42] There is
also a letter sent by Mr Johan Jansen van Vuuren dated the 13
th
of December 2013, which states that;
“
The
City of Joburg Property Company (SOC) Ltd (JPC) confirms that Balvest
can utilize portion adjacent to Erf 1162 Fourways Extension
10
situated on Uranium Street as additional parking for the shopping
centre until such time that the process will be finalized
and will be
transferred to Balvest cc in terms of the Imminent sale agreement”.
[43]
It is clear from this letter that there could not have been a
misrepresentation on the part of the applicant stating that it
would
buy the property, as the correspondence unequivocally shows that the
applicant intended to purchase this property.
[44]
It is clear from all the correspondence from the City of
Johannesburg, marked as annexures “R14” to “R21”,
that the applicant was going to buy the property and that the
intended sale would have provided security of tenure. The failure
of
the sale from materialising can have no bearing on the outstanding
rental that was due for the period 2012 to 2016. The respondents
do
not dispute that the amount as per the acknowledgement of debt is due
and owing. In fact the respondents have not dealt with
this at all,
they merely allege the agreement is void and should be set aside.
[45] Clause 1 of
the acknowledgement of debt agreement states;
“
ANGELO
ZACHARIADES (identity number [...]) IN HIS PERSONAL CAPACITY AND
BEHALF OF RAINBOW PEPPER TRADING 76 (PTY) LTD IN HIS CAPACITY
AS
DIRECTOR OR RAINBOW PEPPER TRADING 76 (PTY) LTD AND FOURWAYS GARDENS
SUPERMARKET of SHOP FG09 AND FG07, FOURWAYS GARDENS hereby
acknowledges that he is, and RAINBOW PEPPER TRADING 76 (PTY) LTD is,
and FOURWAYS GARDENS SUPERMARKET is (“the debtors”),
truly and lawfully indebted to BALVEST CC (“the creditor”)
its successors-in-title, administrators or assigns as surety
and
co-principle debtors
in
solidum
for arrear rental and other charges for the businesses RAINBOW PEPPER
TRADING 76 (PTY) LTD (REGISTRATION NUMBER 2009/003725/07)
trading as
TOPS SPAR and SPAR FOURWAYS GARDENS (“the business”) in
the agreed amount of:-
1.1
R1 770 410
(One million Seven hundred and seventy thousand Four hundred and ten
rand) as at 1 April 2016.”
[46] From the
above it is clear the listed parties are liable as surety and
co-principal debtors
in solidum.
The respondents cannot now
dispute the contents of the acknowledgement of debt as they signed it
and acknowledged it. In addition,
clause 8 of the acknowledgement of
debt states that;
“
The
debtors agree that this AGREEMENT shall be made an order of court by
the Creditor at the Creditor’s sole discretion.”
[47]
Clause 11 of the acknowledgment of debt states that the agreement
constitutes the entire agreement between the parties and
that no
conditions, stipulations, warranties or representations whatsoever
made by either party or their agents will be of effect
unless they
are included herein.
[48]
Notwithstanding
that there were negotiations between the applicant and the
respondents leading up to the signing of the acknowledgment
of debt,
the respondents cannot rely on these negotiations to stop paying
rental due for the period 2012 to 2016. As stated by
the learned
Boruchowitz AJA in the case of
Affirmative
Portfolios CC v Transnet Ltd t/a Metrorail
[2008] ZASCA 127
;
2009 (1) SA 196
at paragraph
[13]
;
“
The
appellant is precluded from relying on the alleged oral agreement by
virtue of the so-called ‘parol’ evidence or
‘integration’
rule…It is a well-established principle that where the parties
decide to embody their final agreement
in written form the execution
of the document deprives al previous statements of their legal
effect.”
[49]
There is nothing in the papers to suggest that the applicant intended
to mislead or defraud the respondents. I do not find
that the parties
were precluded from reaching consensus as regards the terms of the
acknowledgment of debt and accordingly I find
there are no grounds to
suggest that the acknowledgment of debt concluded on the 15
th
of March 2016 is void
ab
initio
.
[50]
Even if the respondents’ beneficial occupation of the premises
leased was affected, this is not a defence in light of
the matter of
Tudor
Hotel Brasserie & Bar (Pty) Ltd v Hencetrade 15 (Pty) Ltd
(793/2016)
[2017] ZASCA 111
(20 September 2017).
[51]
In the case of
Greenberg
v Meds Veterinary Laboratories (Pty) Ltd
1977 (2) (T) at 283
–
285
reference was made to the case of
Arnold
v Viljoen
1954 (3) SA 322
(C) where it was stated that;
“
I
think the test for the tenant’s liability for rent is whether
he was in occupation or
possession
of the leased premises and not whether such occupation or possession
was
beneficial or not. The latter element will of course be a
consideration when the
tenant’s
counter-claim for damages comes to be considered…with or
without
cancellation,
the respondent could only succeed in its claim to be relieved of the
payment
of rent if it had given up occupation or possession...”
[52] The principle set out in the
matter of
Arnold v Viljoen
(
supra
) was again reaffirmed
in the decision of
Basinghall Investments (Pty) Ltd v Figure
Beauty Clinics (S.A) (Pty) Ltd
1976 (3) SA 112
(W) where it was
held that;
“
A
tenant who is in occupation of premises is liable for payment of the
rent
notwithstanding
that he claims that by reason of defects in the premises he had not
had
full
beneficial occupation of them. In such circumstances the landlord is
not required to
claim
some sort of quantum meruit based upon the actual value of occupation
to the
tenant.
He is entitled to claim the full amount of the rent. It is then open
to the tenant to
establish
a claim for set-off or a counter-claim for damages”
[53]
From the authorities mentioned at paragraphs [51] and [52]
supra
,
it is clear they all say the same thing, and that is, that if you are
in occupation of the premises and use them, whether it has
defects or
not, then you must pay rental.
[54] The defence of a
misrepresentation raised by the respondents is rejected on the papers
as
farfetched and untenable.
I do
not believe the defence raised is good in law or that a factual
dispute arises on the papers that warrants referral to trial.
Accordingly the defence of an alleged misrepresentation is dismissed.
COSTS
[55]
The applicant’s counsel argued that it is entitled to punitive
costs for the abortive and frivolous opposition to the
application,
which costs are in any event catered for in the acknowledgment of
debt.
[56]
A cost order is within the discretion of the court.
[57]
In general a court does not grant punitive costs unless there are
special grounds.
There
is no indication that the respondent’s conduct during
litigation was reckless or
malicious.
Accordingly such a request for punitive costs is denied.
ORDER
[58]
In the premises the following order is made;
1.
That
the Acknowledgment of Debt Agreement attached to the founding
affidavit marked Annexure “X” is made an order of
court.
2.
The
first, second and third respondents shall pay the cost of this
application.
_______________________
D DOSIO
ACTING JUDGE OF THE HIGH COURT
Appearances
:
On behalf of the Applicant
Adv
C Van Der Merwe
Instructed
by KG Tserkezis Attorneys
On behalf of the
Respondents
Adv Du Toit
Instructed by Grosskopf Attorneys
Heard on the 29
th
May
2019
Judgment handed down on the 2
nd
of September 2019