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[2020] ZAGPJHC 446
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Uvongo Falls 26 (PTY) Ltd v Grayston Chambers (PTY) Ltd and Another (18211/2019) [2020] ZAGPJHC 446 (4 May 2020)
REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
LOCAL DIVISION, JOHANNESBURG
CASE
NUMBER:
18211/2019
REPORTABLE:
YES / NO
OF
INTEREST TO OTHER JUDGES: YES/NO
REVISED.
4/5/2020
In
the matter between:
UVONGO
FALLS 26 (PTY) LTD
APPLICANT
And
GRAYSTON
CHAMBERS
(PTY)
L
TD
FIRST
RESPONDENT
ALL
UNLAWFUL
OCCUPIERS
SECOND RESPONDENT
JUDGMENT
WINDELL,
J:
INTRODUCTION
1.
This
i
s
a commercial eviction appl
i
cation.
The applicant
seeks an o
r
der
confirming the
cancellation
of a lease
agreement
with
the
first
respondent,
as
well
as
the evict
i
on
of the first and second respondents
from
the
leased
premises.
2.
The applicant,
Uvongo
Falls
26
(
Pty)
Ltd, is
the
owner and
l
andlord
of
Capital
Hill Building,
situated at 6 Benmore Road
,
Sandton
("the
leased
premises
"
).
The
first
respondent,
Grayston
Chambers
(Pty)
Ltd, provides
chambers accommodation and
related
ancillary
services to
customers,
referred to as
"members".
The members
are admitted advocates and members
of
the Johannesburg Society
of
Advocates
("JSA"),
as
well
as of a
group
of
advocates
called
G
r
ayston
Chambers. Members of Grayston Chambers
constitute
all
the
unlawful
occupiers
occupying
the
3rd
Floor
of
the leased
premises.
3.
On or about 4
May
2017
the
applicant and
the first respondent entered
into
an oral lease
agreement
(hereinafter
intermittently
referred
to as
"the
Grayston lease
agreement" and
"
the
lease agreemen
t"
)
.
The
parties
have divergent
v
iews
about
the
terms and
conditions of the Grayston
lease
agreement.
The applicant
avers that
the
first
respondent
breached
the
lease agreement by failing
to
pay the
monthly rental, and after the non-payment of the rental amount for a
period of approximately 20 months, the applicant, through
its
attorney of record, demanded payment of the sum of R2 788 094.39 from
the
first
respondent. In
a
letter
dated
30 January 2019
(which
was
delivered
to
the
first
respondent
by email
on 5
February
2019)
the
applicant
afforded the
first
respondent 14
days
to
remedy
its breach.
The
first
respondent failed to
remedy
the
breach and the
first respondent cancelled the lease agreement on 18 February 2019.
4.
The first
respondent contends that it
was
not indebted
to the applicant in the sum alleged, and was therefore not in breach
of the lease agreement. It further contends that
the applicant did
not give proper notice of cancellation of the lease agreement and was
consequently not entitled to cancel the
lease agreement.
5.
The
application is not opposed by
the
second
respondent.
Their right to
occupy the leased premises is derived
by
way
of a
sub-lease with the first respondent.
If
it
is
therefore
proven that the
lease
agreement with
the first
respondent
was lawfully
cancelled, the second respondent's right
to
occupy
will
automatically
follow.
BACKGROUND
FACTS
6.
It is common cause
that during
the
period August
2015 to April 2017, and before the
Grayston
lease
agreement
was
entered
into,
the
leased
premises
was
occupied by
Benmore Advocates NPC in
terms
of
two
written
lease
agreements, The
first
agreement
was
concluded
in
2015,
and
the
second in 2016 ("the
Benmore
lease
agreement").
Benmore
Advocates
NPC,
and its
subtenants,
who were
members
oi'
the
Benmore
Advocates
Group,
were in
occupation
of the
leased
premises
until April
2017.
On
19
April
2017, the Benmore
lease
agreement was
terminated by
agreement between the applicant and Benmore
Advocates
NPC, with
immediate
effect.
Subsequent
to
that, and on
4
May 2017, the
applicant
,
represented by
Mr. Gary Harlow, and the first respondent represented by its
director
,
Mr.
John Kayser,
the
sole
shareholder
and director
of
the
first
respondent,
(a
newly
incorporated
company
)
,
had
a meeting.
It
was
during
this meeting
that
the
parties
entered into
the
Grayston
lease
agreement.
7.
The applicant avers
that it agreed to continue to lease a smaller portion of the leased
premises, which formed the subject of
the
Benmore lease
agreement, to the first respondent
with
immediate
effect
on
a
monthly
lease
with
a
reduced
monthly rental
of R
150
000
per
month,
exclusive
of
utilities
and
other
ancillary
cl1arges.
This
smaller
portion
constituted
the
3
rd
floor
of
the Capital
Hill Building.
Mr.
Kayser
was
a
senior
member of
the
Benmore
Advocates
Group,
and
a
sub-tenant
of
Benmore
Advocates
NPC.
He
was
also a
director
of
Benmore
Advocates
NPC
,
until he
resigned
on
1
April
2016.
The
applicant
avers
that
Mr.
Kayser
was,
as a
result of
his
involvement
in
Benmore
Advocates
Group,
fully
aware of
the
terms
and
conditions
of the
Benmore
lease
agreement
and he
accepted
that
the
terms
,and
conditions
of
the Benmore
lease
agreement would apply
to
the
Grayston
lease
agreement.
8.
Mr.
Kayser,
on
behalf
of
the
first
respondent,
avers
that
the
dire
financial
situation
and
failure of
Benmore Advocates NPC
as
a group,
l
ed
to a situation
in
which
the
applicant
and the
first
respondent
both
stood
to
sustain
significant
losses:
in
the
event
that
Benmore
Advocates
NPC
vacated
the
leased
premises,
the
applicant
would
be
without
a
tenant
after
investing
approximately
R8
000
000.00
(eight
million
rand)
on
the
installation
on
the
leased
premises;
and,
the
first
respondent
would
have
to
overcome
negative
perceptions
by
other
stakeholders
in
the legal
profession
due
to the
precarious position in
which
it
found
itself, which
was
compounded
by the fact
that it
would
have only limited resources
available
to
create a
viable premises.
The applicant
and the first
respondent
proceeded to
salvage
the situation by finding a mutually
beneficial,
albeit risky,
solution
which
entailed
the
applicant
securing a tenant for what
would
otherwise
be
vacant premises.
9.
Mr.
Kayser
states
that
the
incorporation
of the first
respondent
therefore came about
in
light of
"the
catastrophe
that
was
unfolding
at Benmore
Advocates
NPC
("Benmore
Advocates")
a
non-profit
company
established
in
2015
for the
same
purpose
as
the first
respondent".
He
contends
that
it was
emphasised at
the
meeting
between the applicant and the
first
respondent on
4 May
2017
,
that the
first
respondent
was
not
a
successor
in
title or liability to
Benmore
Advocates
and
that
the
purpose
of
incorporating a new company
was
to
"
force
a
break
from
the
old
venture".
The
first respondent
avers
that the
parties
concluded an oral common
law
lease
agreement
in respect
of
the
leased
premises, and
that it
was
agreed
that
the
rental
would be
R
150
000
per
month
"all
inclusive",
and that the
first
respondent
could occupy
the
leased
premises on a
month-to-month
basis. According
to
the
first
respondent,
the terms
of
the
Benmore
lease
agreement
did
not
apply
to
the
Grayston
lease
agreement.
10.
The
first
respondent
further
denies
the
calculation
of
the
quantum
of
the
outstanding
rental
amount
claimed
by
the
applicant.
It
further
contends
that
an
essential
terms
of the
Grayston
lease
agreement was
"arrears
could develop
in the
near
term which
the
first
respondent
would
liquidate once
it
had
become
fully
established and economically
viable".
In
support
of
the its
contentions,
the first
respondent
attached
an
email
that
was
sent
to
Advocate
Pierre Rossouw
SC
of
the
JSA
on
31 May 2017. In the email Mr. Kayser confirmed the conclusion of the
Grayston lease
agreement
and recorded
the salient
terms
thereof. Point
7 of the email recorded that,
"
..
.Grayston
Chambers has obtained a substantial
reduction
in
rent
(including the utility and operating
costs)
until: 31
December 2017 in order to facilitate the establishment
of
the new
group whereafter a new 5 year lease
..
.
is
to
be
negotiated
..
."
.
11.
The first
respondent submits that as the Benmore
l
ease
agreement's
terms
and
conditions
were
not applicable
to the Grayston
lease
,
th
e
applicant was
not
entit
l
ed
to place
reliance upon the breach clauses
in
the Benmore
lease agreement
to justify
its
14
day notice to
til
e
first
respondent
to
pay
the
arrear
rental
payments
and
its letter of immediate cancellation of the lease agreement
CONCLUSION
12.
In
order
for
the applicant
to
succeed
with
the
application for an eviction order. the
appl
ic
ant
must a
ll
ege
and
prove
the
right
of
the
respondents
to
possess (in this instance the lease agreement),
a
valid
termination
of the right to possession
,
and
the
continued occupation by the respondent or
someon
e
holding
through them.
[1]
The
appellant must further prove that there was a breach of the lease
agreement, and an accrued right to cancel, because the breach
was
material, or in the event that the
agreement
contains
a
cancellation
clause,
that its
provisions
have
been
complied with
.
The
applicant
must also prove that a
clear
and
unequivocal
notice
of
cancellation
was
conveyed
to
the
other
party
,
unless
the
agreement
dispenses
with
such
notice.
13.
It
is
common cause
that
the
appellant and
the
first
respondent entered into the
Grayston
lease
agreement,
and
that
the
first
respondent
acquired
its
right
to
possess
as
a
result
of the lease
agreement.
The
applicant
a
llege
s
that
there
was a
breach
of
the
agreement,
in
that
from
May 20i7
until
january 2019,
the first
responden
t
fa
iled to
make
payment of the
rental and
anciliary
charges
due to
it
in
terms
of
the
lease
agreement.
It
is averred
that the
outstanding
amount, as on
30
January
2019,
was
R2
788 094.39. The applicant avers
that
the
rental
was
payable on
a
monthly basis
in
an amount
of R150
000,
exclusive
of other
charges. The
first
respondent
avers
that
the
rental
was
R150
000
inclusive
of other
charges, and that the quantum of
the
alleged arrears
is
incorrect and
the
first
respondent
is
therefore
not
in
breach in
the amount claimed.
14.
For
purposes
of
this
application
it
matters
not
whether
the
R150
000
was inclusive
or exclusive
,
because even
on the first respondent's version
there
was
a
breach
of
the
lease
agreement.
The
applicant
performed
a
reconciliation of
the
first
respondent's version
that
an
"all-inclusive"
rental
of
R150
000
was
payable
by
the
first
respondent.
This
reconciliation
demonstrates
that,
as a
January
2019,
the
first
respondent
owed the
applicant
R1
824
500.00.
The
applicant's
March 2019 tax
invoice
and
statement
indicates
that
one
further
payment of R100 000 was received in January
2019.
Despite
this
payment,
an
amount
of
more
an R1 million was still
due
and owing to
the applicant. It is
therefore
largely uncontested
that
the
first
respondent
failed
to
make
payment
of
R150 000
"
all
inclusive", and
that
it
was
i
n
breach of the
lease
agreement.
The
failure
to
pay
the
rental was
clearly a material breach
and
the
applicant
was entitled
to cancel
the
lease
agreement.
15.
But was the lease
agreement
lawfully
cancelled?
The
applicant avers
that
the terms
and
conditions
of
the
Benmore
lease
agreement
applied
to
the
Grayston
lease
agreement, and
that its
notice to
the
first
respondent
to rectify the
breach
and the
later
cancellation
of
the
lease
agreement
was done
in
compliance
with
the
breach
clause
in
the
Benmore
lease
agreement.
The
applicant therefore
instructed
its attorney
of
record
to
proceed
with
the
cancellation
of
the
lease
agreement
by
way
of
a
written
notice addressed to
the first respondent. On 5 February 2019
the
applicant
delivered the written notice to the first respondent calling
upon
it to pay the
amount outstanding within 14 days. The first respondent
failed
to pay the
outstanding amount and the applicant, through its attorney
,
issued a
letter on
18
February
2019,
addressed
to
the first
respondent,
in
which
the
lease
agreement
was
cancelled
with immediate
effect. In
this
letter
the
respondent
was
also
given
notice
to
vacate
the
leased
premises
immediately.
16.
The first
respondent
contends that the parties entered
into
a
common law
lease
agreement and that
the
appiicant's
reliance
on
the
breach
clause
in
the
Benmore
lease
agreement
was
misplaced
.
The
cancellation of the lease agreement was as a result premature. In
reply to the
cancellation
letter
issued on 18
February
2019,
Mr. Kayser
addressed two
letters
to the
applicant
'
s
attorney of record
dated
11
March
2019
and
18
March
2019
respectively,
in
which
he
denied
the
applicant
'
s
cancellation
of the
lease
agreement
in
terms of
which
tile first
respondent occupied
the
premises. This,
in
turn
,
lead
to
further correspondence
between
the applicant's
attorney
of record
and
the
first
respondent
in
which
it
was
reiterated
that
the
first
respondent
was
in
material breach of
an
essential
term
of the
lease
agreement and
it
was
stressed
that the
applicant
had
unequivocally
cancelled
the
lease
agreement.
17.
In support
of
its
version
that the terms of
thee
Benmore
lease
agreement
applied
to
the
Grayston
agreement,
the
applicant
attached a
copy of
redacted
minutes
of
the meeting
held
on
4 May 2017. It
is
common
cause
;
that
the minutes,
inter
alia
,
recorded
the
conclusion
and
terms
of the Grayston
lease
agreement.
In
paragraph
19
of the minutes
Mr.
Gary Harlow,
who
attended
the
meeting in
the capacity
of a
director
as
the
applicant,
noted
the following:
"He
indicate
that
if Grayston Chambers
would
pay
R150 000.00 per month out of the R300 000.00 per
month
that
was due
for
one
floor,
Uvongo
be
prepared to let Grayston continue
a
month
to
month
basis,
but could terminate with just
one
month's
notice".
18.
From
the
minutes
of
the
meeting
four
aspects
of
the
Grayston agreement
were
made
clear: (
1)
Rental
is
R150
000; (2) No
fixed
period
was
agreed
upon and the lease
would
be an a
"month
to
month
basis";
(
3)
The lease
agreement can
be
terminated
by
giving one month's
notice and; (4) No reference is made to
the
terms of
the
Benmore
lease
agreement being applicable
to
the Grayston
agreement.
19.
The first
respondent does
not
dispute receipt
of
the letter of
demand
from the
applicant
on
5
February
2019, and it also does not dispute receipt of
a
further letter
dated 18
February
2019
in which the
applicant
purported to
cancel
the
l
ease
agreement and
demanded
that the first
and
second respondent
vacate
the leased
premises
immediately.
The
first
respondent
contends that the
notice
period was
insufficient and therefore invalid for
the
want of
compliance
with the
common law
terms of the Grayston lease agreement.
20.
The
applicant
bears
the
onus
to
prove
that the
lease
agreement
has
been
terminated in accordance with the terms
of
the lease
agreement.
[2]
The
minutes of the
meeting
on
4
May
2016
clearly
recorded
that
the
lea
se
agreement
could
be
terminated
with
"one
month's
notice". The applicant was not entitled to
rely
on
the breach clause in the Benmore lease agreement
,
which
allowed
for only
14
days, to terminate
the
lease
agreement.
The
termination
was
not
valid.
21
So
,
alt
hough
the
first
respondent
committed
a
material
breach
of
the
l
ease
ag
re
ement
(
e
ven
on its own
version)
,
by repeatedly
failing
to
pay
its
rental due
to
th
e
applicant
,
the
applicant did
not
cancel
the
l
ease
agreement in
accordance with the oral lease
agreement
co
nclu
ded
on 4 May
2017.
22.
In the
result
the following
order is made:
22.1
The
application
is
dismissed with
costs
.
L.
WINDELL
JUD
GE
OF THE
HIGH
COURT
GAUTENG
LOCAL
DIVISION,
JOHANNESBURG
APPEARANCES
Counsel
for
the
applicant:
Advocate
B.
Manning
Instruc
ted
by:
Fullard
Mayer
Morrison Inc
Counsel
for
the
first
respondent:
Advocate D
.
Milne
Instructed
by:
Beder
-
Fr
i
ed
l
and
Inc.
Date
of hearing:
28 January
2020
Date
of judgmen
t
4
May
2020
[1]
Chetty
v Naidoo
"
1974
(3) SA 13
A at page 2.0
[2]
Chetty
v Naidoo supra at
21G-H.