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[2021] ZAGPJHC 63
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Airport Inn and Suites (Pty) Limited v Strydom (2020/28545) [2021] ZAGPJHC 63 (7 May 2021)
SAFLII
Note:
Certain
personal/private details of parties or witnesses have been
redacted from this document in compliance with the law
and
SAFLII
Policy
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
LOCAL DIVISION, JOHANNESBURG
(1)
REPORTABLE: YES
(2)
OF INTEREST TO OTHER JUDGES: YES
7
MAY 2021
Case number:
2020/28545
In
the matter between:
AIRPORT
INN AND SUITES (PTY) LIMITED
Applicant
(Registration
number 2012/208882/07)
and
JACOBUS
JOHANNES STEPHANUS
STRYDOM
Respondent
(Identity
number [….])
JUDGMENT
[1]
This is an opposed application. The
Applicant seeks a monetary judgment, an eviction order and ancillary
relief against the Respondent.
[2]
The Applicant launched this application on
an urgent basis on 30 September 2020 and enrolled it for hearing on
13 October 2020.
Having heard argument, Francis J struck the matter
from the roll with costs for lack of urgency on 14 October 2020. The
application
came before me after the Applicant set it down for
hearing on the ordinary opposed roll.
The relief sought by the
Applicant
[3]
The relief relating to urgency not having
been granted, the remaining relief sought by the Applicant is set out
as follows in its
notice of motion:
“
2.
The Respondent to pay the sum of R17,196.60 (Seventeen Thousand One
Hundred and Ninety Six Rand Sixty Cents) to the Applicant;
3.
Interest on the aforesaid sum of R17,196.60 at the rate
of 7.75% per
annum,
a tempore morae
.
4.
The Respondent and all those claiming occupation under
or through him
are forthwith evicted from the premises situated at Restaurant and
Bar, Airport Inn and Suites … (‘the
Premises’);
5.
The Sheriff of the area within which the premises is situated,
is
authorised to evict the Respondent and all persons holding occupation
under him and further remove all equipment and furniture
of the
Respondent situate in the premises;
6.
The Sheriff is authorised to approach the South African
Police
Service for assistance and support in performing its duties in
relation to paragraphs 4 and 5 above;
7.
The Respondent to pay the costs of this application on
attorney-and
client scale, including the costs of the Sheriff and storage;”
The facts and the parties’
main contentions thereon
[4]
It is convenient to start by setting out
the relevant facts and the parties’ main contentions thereon.
[5]
The Applicant and the Respondent concluded
a written commercial lease agreement (the agreement) on 30 January
2020. In terms of
the agreement, the Respondent leased a restaurant
and bar (the restaurant and bar) from the Applicant. The Respondent
operates
the restaurant and bar under the trading name ‘Wings
Restaurant and Pub’. The premises where the restaurant and bar
are situated is a three storey apartment block with self-catering
facilities, operated by the Applicant under the trading name
‘Airport
Inn and Suites’. The agreement was for a fixed term of twelve
months that commenced on 24 September 2019 and
expired on 23
September 2020. The relevant clauses of the agreement read:
“
RENEWAL
OF LEASE
2.
It is agreed between the parties herein that [the Respondent]
will
have an option to renew this lease for a period of an additional 12
(‘twelve’) months, which renewal shall not
be
unreasonably withheld/refused by [the Applicant].
…
RENTAL
DURING THE RENTAL PERIOD
5.
The rental payable by [the Respondent] shall be in the
sum total of
R10,500.00 (Ten Thousand Five Hundred Rand) per month, including VAT,
made up as follows:
5.1
Restaurant:
R2,500.00 (Two Thousand Five Hundred Rand) per month, including VAT;
and
5.2
Bar:
R8,000.00 (Eight Thousand Rand) per month, including VAT
…
[THE
RESPONDENT’S] RIGHTS AND OBLIGATIONS
9.
[The Respondent] shall:
…
The
Restaurant and Bar
…
9.14
To work in concert with [the Applicant], as and when necessary, in
arranging,
inter alia
, special meals, events, functions, and
workshops, which permission shall not unreasonably be withheld.
…
APPLICABLE
LAW AND JURISDICTION
…
22.
Either of the parties to this agreement shall be entitled at its
option
to institute legal proceedings which may arise out of or in
connection with this agreement in any Magistrates’ Court having
jurisdiction, notwithstanding the fact that the claim or value of the
matter in dispute might exceed the jurisdiction of such Magistrates
Court in respect of the case or action.”
[6]
During about December 2019 there was an
incident (the December 2019 incident) at Airport Inn and Suites.
6.1
The Applicant contends that one of the Respondent’s employees,
Ms Nosihle Octavia
Mabaso (Mabaso), was found drunk at Airport Inn
and Suites. The Applicant further contends that Mabaso’s
conduct was disruptive
and generally detracted from the peace and
pleasantness of Airport Inn and Suites. In support of its
contentions, the Applicant
relies on an email that the Respondent
addressed to the Applicant’s building manager, Mr Kenny
Subramoney (Subramoney), on
10 December 2019. According to the
Applicant, the email confirmed ‘Mabaso’s drunken
incident’. It reads:
“
Good
morning Kenny
Subsequent
to our meeting last week Friday night, herewith my suggestions:
I
do believe that the time that has lapsed has allowed everyone to
reconsider the situation and behavior. In this regard I know
for a
fact that [Mabaso] has done so and now understand the consequences to
her actions.
I
visited the AA branch yesterday and made arrangements for [Mabaso]
(and me) to attend 2 meetings per week, 1 on Mondays and 1
on
Fridays. Unfortunately we are dealing with a disease and I (and
[Mabaso]) see this as crucial for any chance of recovery. In
addition
to this, I have met with our Pastor at Hope and Restoration Church
and was promised the church’s support in terms
of weekly
counselling sessions.
[Mabaso]
is not doing well at the moment and feels like the world has turned
it’s back on her and that she is being alienated
from a job,
her children and the basic human rights that everyone have.
I
will ensure that we attend sessions, that she is not allowed to use
alcohol on the premises and that we all live and work together
in
harmony and peace, as I promised to Bradleigh last week.
We
need to play our part in getting her reconciled with her children.
Even the children are uncertain and doesn’t understand
why they
are not allowed to be with their mother. As you know, this is the
time of the year for family and I am of the opinion
that now is the
time to act.”
6.2
The Respondent denies that Mabaso was drunk during the December 2019
incident. He asserts
that Subramoney incorrectly assumed Mabaso to
have been drunk. According to the Respondent, Mabaso was not drunk,
but angry. He
states that Mabaso ‘verbally defended herself
against unfair treatment by’ Subramoney. Mabaso filed a
confirmatory
affidavit.
[7]
On 2 May 2020, there was a further incident
(the May 2020 incident) at Airport Inn and Suites.
7.1
The Applicant contends that Mabaso was found inebriated and lying on
the ground at Airport
Inn and Suites on 2 May 2020. In this regard,
the Applicant relies on a photograph attached to the founding
affidavit. The Applicant
alleges that the photograph was taken by its
‘security company’.
7.2
The Respondent asserts that the photograph attached to the founding
affidavit is unclear
and shows ‘someone who might look like’
Mabaso. He contends that the Applicant ‘jumps to assumptions of
inebriation’.
[8]
On 7 August 2020, the Respondent launched
an urgent application (the magistrate’s court urgent
application) against the Applicant
in the Kempton Park magistrate’s
court.
8.1
The magistrate’s court urgent application was set down for
hearing on 13 August 2020.
It was, however, removed from the roll by
agreement between the parties. It has not been enrolled since then.
8.2
It appears from the notice of motion in the magistrate’s court
urgent application
that the Respondent seeks the following relief
against the Applicant:
“
3.
That this Honourable Court will grant an order to compel the
Respondent
to disclose the details in the form of documentary
evidence of a catering contract that was awarded and commenced on the
30
th
of July 2020, to an unknown catering company, in relation to a group
of 53 mine workers and in relation to a group of 12 security
staff
from Fidelity Guards in as far as:
3.1
What efforts were made to involve WINGS RESTAURANT AND PUB in the
catering
process?
3.2
Date and time of request for a quote from the current catering
entity?
3.3
Date and time of quote received from the current catering entity?
3.4
Who obtained the quote from the catering company?
3.5
The quote details?
3.6
Who accepted the quote and awarded the quote to the catering company?
3.7
What are the payment terms on both these contracts?
3.8
What procedures were put in place at AIRPORT INN AND SUITES as well
as
the catering company in terms of the Disaster Management Act?
4.
That this Honourable Court will grant an order to compel
the
Respondent to declare and disclose the COVID 19 status of a group of
53 mine workers that has been residing at AIRPORT INN
AND SUITES
since the 30
th
of July 2020.
5.
That this Honourable Court will grant an order that in
the instance
where AIRPORT INN AND SUITES have been certified as a quarantine
facility by the Department of Health (Gauteng), that
the required
certification be displayed in the reception area of AIRPORT INN AND
SUITES in clear view of the other guests, staff
and permanent
residents.
6.
Costs against the Respondent in this matter, only if opposed;”
8.3
The Applicant contends in respect of the magistrate’s court
urgent application that
it is not obliged in terms of clause 9.14 of
the agreement to obtain catering services from the Respondent. The
Applicant also
contends that it is authorised to accommodate
essential workers, such as mineworkers. In conclusion, it is
contended that the magistrate’s
court urgent application is
frivolous, vexatious and amounts to an abuse of court process.
8.4
The Respondent contends that he had no option but to launch the
magistrate’s court
urgent application to limit his financial
damages and to protect himself, and others, against the risk of being
infected by the
Coronavirus. The Respondent asserts that he only
launched the magistrate’s court urgent application after
numerous verbal
and written requests by him to the Applicant for
information had remained unanswered.
[9]
On 17 August 2020, the attorneys for the
Applicant, KWA Attorneys (KWA), sent a notice to the Respondent. The
Applicant refers to
it as a ‘notice to vacate’ (the
notice to vacate).
9.1
The notice to vacate reads as follows in relevant part:
“
2.
What is set out hereunder is not an exhaustive synopsis of all
relevant
events. Our failure to deal with any issues may not be
construed as a waiver thereof. Our client’s right to deal more
fully
therewith at a later stage and in the appropriate forum is
reserved.
3.
We refer you to the commercial lease between you and our
client
signed on 30 January 2020, in terms of which your lease for the
Restaurant and Bar (‘the Premises’) terminates
on 23
September 2020. Please note that, given the material break down in
relationship between the parties caused,
inter alia
, by:
3.1
An irreconcilable difference in interpretation and understanding of
the
terms of the lease agreement;
3.2
Your subsequent launching of a frivolous and unfounded Urgent
Application
against our client in the Kempton Park Magistrate’s
Court (Case Number: …); and
3.3
Your failure and/or refusal to settle your residential rental arrears
in respect of Unit … at Airport Inn and Suites, which arrears
currently stand at R39,900.00 (Thirty Nine Thousand Nine Hundred
Rand) since May 2020;
our
client has elected
not
to renew your commercial lease.
4.
In the circumstances, our client demands that you vacate
the Premises
on or before 23 September 2020, and accordingly hereby gives you
notice to vacate same.
5.
Should you fail to vacate the Restaurant and Bar on or
before 23
September 2020, our client reserves the right to take legal steps
against you, including, but not limited to, applying
for your
eviction. In pursuing such legal recourse, our client will seek an
appropriate costs order against you.”
9.2
The Respondent replied to the notice to vacate by email on 12
September 2020. His email
reads as follows in relevant part:
“
3.
In terms of the current commercial lease agreement (‘the lease
agreement’) between ourselves, I have the option to
extend/renew same for another 12 (twelve) months, and your client
shall
not be entitled to refuse such extension/renewal unreasonably.
4.
I hereby elect to exercise my option to extend/renew the
commercial
lease agreement between ourselves, and as a consequence shall not
vacate the premises as you demand in your letter under
reply, as I am
entitled to.
5.
In as much as your letter under reply constitutes a refusal
of the
election of me to renew the commercial lease agreement between
ourselves, such a refusal is indeed unreasonable and therefore
unlawful, contrary to the terms of the lease agreement, for the
reasons set out below.
6.
First, there is no rational contractual connotation and/or
notion in
contractual law in South Africa to the effect that if, between
parties to an agreement, which if they differ on the interpretation
of the agreement between them, the terms of such agreement can be
disregarded.
7
Pactum sum servanda est.
8.
…
9.
Second, there is no rational or legal connotation between
our current
litigation and the terms of the commercial lease agreement your
letter under reply refers to. There is no indication
or reference in
the written commercial lease agreement, to which the respective
parties are bound, which suggests same.
10.
Third, I again firmly deny that I am indebted to your client in the
amount
claimed or any amount for the residential lease mentioned in
your letter under reply. In addition I pause to mention that I have
been paying and is seemingly still held liable for the electricity
charges of equipment, office and bathrooms at AIRPORT INN AND
SUITES,
in direct contravention of the commercial lease agreement.
11.
Regardless, there is no rational or legal connection between the
residential
lease agreement and the commercial lease agreement with
your client.
…
13.
Therefore I shall not vacate the leased premises as is demanded in
your
letter under reply.
14.
Your demands in your letter under reply are irrational and unlawful.
I
therefore consider the commercial lease agreement to be renewed.
…
18.
The current lease agreement between me and your clients shall be
accordingly
enforced by me.”
9.3
On 14 September 2020, KWA addressed a further email to the
Respondent. Paragraph 3 thereof
reads:
“
Our
client will
not
be renewing the lease and you are accordingly expected to vacate the
Premises on or before the termination date, namely, Wednesday,
23
September 2020.”
9.4
The Respondent replied to KWA’s last email on 21 September
2020. He wrote,
inter alia
, as follows:
“
Your
clients’ refusal to renew the said lease agreement in
accordance with the terms thereof, as I have stated in my previous
correspondence, is unreasonable and constitutes a breach of the lease
agreement.
I
do not accept your clients’ breach of our agreement, and hereby
inform you that I choose to enforce same, as I am entitled
to do by
virtue of the agreement between your client and me.
…
I
shall remain in occupancy of the leased premises.
…
In
the meantime, I deny that I am liable for payment of the rental
claimed on Invoice no. 25267 in the amount of R17,196.60 which
was
transmitted to me electronically today, or at all.”
[10]
On 1 September 2020, the Applicant
concluded a written commercial lease agreement (the Raciti agreement)
with Mr Antonio Raciti
(Raciti). In terms of the Raciti agreement,
Raciti would have leased the restaurant and bar from the Applicant.
The Raciti agreement
would have been for a fixed term that would,
initially, have commenced on 28 September 2020 and expired on 30
April 2021. When
the Respondent failed to vacate the restaurant and
bar, the Applicant agreed with Raciti on 29 September 2020 that the
fixed term
of the Raciti agreement would only commence on 1 November
2020.
[11]
The Respondent is also a residential lessee
at Airport Inn and Suites. The Applicant alleges that the Respondent
was in arrears
in respect of his residential rent in the amount of
R49 875 as at 1 September 2020. The Respondent admits that he is in
arrears
in respect of his residential rent. He denies, however, that
the amount of his arrears is what the Applicant alleges it to be.
[12]
On 17 September 2020, KWA sent the
Applicant’s invoice 25267 (the invoice) to the Respondent for
commercial rent under the
agreement.
12.1 I
reproduce a portion of the invoice:
Qty
1
1
1
1
1
1
Description
Rent
June Restaurant pro-rata from 26 June 2020 to 30 June 2020 (5
days)
Rent
July Restaurant
Rent
August Bar for period 18 August 2020 – 31 August 2020 (14
days)
Rent
August Restaurant
Rent
September Bar 01 September 2020 – 23 September 2020 (23
days)
Rent
September Restaurant – 01 Sept 2020 – 23 Sept 2020 (23
days)
Unit
Price
R83.30
R2
500.00
R266.60
R2
500.00
R266.60
R83.30
TOTAL
R416.50
R2
500.00
R3
732.40
R2
500.00
R6
131.80
R1
915.90
R17
196.60
Vat
Incl.
SubTotal
TOTAL
R17
196.60
12.2 The
Applicant contends that the amount of R17 196,60 is due, owing and
payable to it by the Respondent.
In relation to the invoice, the
Applicant states that, in light of the national lockdown, it provided
the Respondent with rent
relief during the times when restaurants and
bars were not allowed to operate. The relevant part of the founding
affidavit reads:
“
The
Applicant only charged the Respondent pro-rata figures for the
periods when Restaurants and Bars were permitted to operate during
the lockdown. The effect of this is that, instead of incurring rental
expenses the sum of R63,000.00 (Sixty Three Thousand Rand)
for the
period of April 2020 to September 2020, the Respondent is only
indebted to the Applicant in the mere sum of R17,196.60
(Seventeen
Thousand One Hundred and Ninety Six Rand and Sixty Cents).”
12.3 The
Respondent denies that he is indebted to the Applicant for commercial
rent under the agreement.
He states that the Applicant ‘created’
the commercial rent arrears as part of a stratagem to evict him and
to bolster
this application. Along the same lines, the Respondent
contends that the Applicant ‘raised’ the invoice to find
a reason
not to consent to the renewal of the agreement. The
Respondent also states that he had been paying electricity charges
for twelve
months that should not have been for his account.
The Respondent’s points
in limine
[13]
In his answering affidavit, the Respondent
quotes various provisions of the Consumer Protection Act 68 of 2008
(the CPA) under headings
that, purportedly, relate to points
in
limine
. The Respondent makes
allegations below each quotation from the CPA. However, those
allegations do not relate to the quoted provisions
and do not
constitute points
in limine
.
The only contention of the Respondent that is clear from his
purported points
in limine
is that the CPA applies to the agreement.
The applicability of the
Consumer Protection Act 68 of 2008
[14]
In order to determine whether or not the
CPA finds application in this case, it is necessary to consider
whether the Applicant,
the Respondent and the agreement fall within
the scope of the CPA.
[15]
The CPA defines ‘person’ as
including a juristic person. ‘Supplier’ is defined as a
person who markets any
goods or services. The CPA further defines
‘service’ as including the provision of use of any
premises or other property
in terms of a rental. Having regard to
these definitions, I am satisfied that the Applicant, for purposes of
this application,
is a supplier as contemplated in the CPA.
[16]
Section (
b
)
of the definition for ‘consumer’ in the CPA provides,
inter alia
,
that a consumer, in respect of any particular goods or services,
means a person who has entered into a transaction with a supplier
in
the ordinary course of the supplier’s business. In order to
determine whether a person to whom this definition relates
is a
consumer as contemplated in the CPA, it must be established (i)
whether or not a transaction had been entered into, (ii) whether
or
not the person with whom the transaction had been entered into was a
supplier, and (iii) whether or not the transaction had
been entered
into in the ordinary course of the supplier’s business. It has
already been established that the Applicant,
for purposes of this
application, is a supplier as contemplated in the CPA. It remains to
be established whether or not the agreement
constitutes a transaction
as contemplated in the CPA and, if it does, whether or not the
transaction was entered into in the ordinary
course of the
Applicant’s business as contemplated in the CPA.
[17]
‘
Transaction’ is defined in the
CPA as meaning,
inter alia
,
in respect of a person acting in the ordinary course of business, an
agreement between or among that person and one or more other
persons
for the supply or potential supply of any goods or services in
exchange for consideration. The phrase ‘in the ordinary
course
of business’ appears in the definitions of both ‘consumer’
and ‘transaction’ in the CPA. The
meaning of this phrase
is determinative of the meanings of ‘consumer’ and
‘transaction’. Thus, it is necessary
to establish the
meaning of the phrase ‘in the ordinary course of business’.
[18]
In
Amalgamated
Banks of South Africa Limited v De Goede and Another
[1997] ZASCA 30
;
[1997]
2 All SA 427
(A), the Appellate Division considered whether the two
respondents in that case had acted in the ordinary course of their
business
when binding themselves as sureties.
[1]
The
De
Goede
case
was decided in the context of the provisions of
sections 15(2)(
h
)
and (6) of the
Matrimonial Property Act 88 of 1984
. With reference to
AA
Mutual Insurance Association Ltd v Biddulph and Another
1976
(1) SA 725
(A) at 738D–739F, the Appellate Division held that a
single isolated activity may, in appropriate circumstances, be deemed
as ‘business’.
[2]
It was held in
Biddulph
’s
case that –
“‘
business’
should be given a wide rather than a narrow meaning. Precisely how
wide is difficult to say and unnecessary and
inadvisable to determine
here. Each case must be decided on its own particular facts. …
…
I
think that even a single, isolated activity, enterprise, or pursuit
of serious importance that occupies a person’s time,
energy, or
resources would also, in appropriate circumstances, be included
within the meaning of ‘business’ …”
[3]
[19]
In
establishing the meaning of the phrase ‘in the ordinary course
of business’ in
De
Goede
’s
case, the Appellate Division referred with approval to
Hendriks
NO v Swanepoel
1962
(4) SA 338
(A) at 345B,
Joosab
v Ensor NO
1966
(1) SA 319
(A) at 326D–E and
Ensor
NO v Rensco Motors (Pty) Ltd
1981
(1) SA 815
(A) at 824H–825A.
[4]
In
Joosab
’s
case and in the context of
section 34(1)
of the
Insolvency Act 24 of
1936
, the Appellate Division set out the test for determining whether
a transaction was ‘in the ordinary course of business’.
It was held that the test is an objective one, namely whether, having
regard to the terms of the transaction and the circumstances
under
which it was entered into, the transaction was one which would
normally have been entered into by solvent business people.
[5]
This objective test under the
Insolvency Act 24 of 1936
must be
adjusted for purposes of applying it to the CPA. Reference should not
be made to
solvent
business
people, but merely business people.
[6]
[20]
The test for determining whether a
transaction was ‘in the ordinary course of business’ in
order to establish whether
a person is a consumer as contemplated in
the CPA, is an objective one, namely whether, having regard to the
terms of the transaction
and the circumstances under which it was
entered into, the transaction was one which would normally have been
entered into by business
people. Similarly, the test for determining
whether an agreement for the supply of any goods or services in
exchange for consideration
constitutes a transaction as contemplated
in the CPA, is an objective one, namely whether, having regard to the
terms of the agreement
and the circumstances under which it was
concluded, the agreement was one which would normally have been
concluded by business
people.
[21]
Applying these tests to the facts of this
case, I am satisfied that the agreement constitutes a transaction as
contemplated in the
CPA for purposes of this application. I am also
satisfied that the agreement, being a transaction, was entered into
in the ordinary
course of the Applicant’s business as
contemplated in the CPA. The agreement was, in my judgment, a
transaction with the
usual terms that business people would normally
conclude in the circumstances of this case. That being so, all the
requirements
have been complied with for the Respondent, for purposes
of this application, to be a consumer as contemplated in the CPA.
[22]
Having regard to the above, it is clear
that the Applicant, the Respondent and the agreement fall within the
scope of the CPA. I
am fortified in this finding by the definitions
of ‘consumer agreement’ and ‘agreement’ in
the CPA. ‘Consumer
agreement’ is defined as an agreement
between a supplier and a consumer other than a franchise agreement.
‘Agreement’
is defined as an arrangement or understanding
between or among two or more parties that purports to establish a
relationship in
law between or among them. These definitions provide
an accurate description of the relationship established between the
Applicant
and the Respondent through the agreement. As a result, the
CPA finds application in this case.
Applying the provisions of the
CPA to the facts of this case
[23]
Sections 14(2)(
c
)
and (
d
) of
the CPA provide as follows:
“
If
a consumer agreement is for a fixed term –
…
(
c
)
… not more than 80, nor less than 40, business days before the
expiry date of the fixed term of the consumer agreement, the supplier
must notify the consumer in writing or any other recordable
form, of
the impending expiry date, including a notice of –
(i)
any material changes that would apply if the agreement is to
be
renewed or may otherwise continue beyond the expiry date; and
(ii)
the options available to the consumer in terms of paragraph (
d
);
and
(
d
)
on the expiry of the fixed term of the consumer agreement, it will
be
automatically continued on a month-to-month basis, subject to any
material changes of which the supplier has given notice, as
contemplated in paragraph (
c
), unless the consumer expressly –
(i)
directs the supplier to terminate the agreement on the expiry
date;
or
(ii)
agrees to a renewal of the agreement for a further fixed term.”
[24]
The Applicant did not provide the
Respondent with the notice contemplated in
section 14(2)(
c
)
of the CPA. Even if it was argued that the notice to vacate complied
with the content requirements of
section 14(2)(
c
)
of the CPA, it was sent less than 40 business days before the expiry
of the agreement.
[25]
This leads to the question: Does a lessor’s
failure to comply with
section 14(2)(
c
)
of the CPA mean that the relevant fixed term lease agreement will be
automatically continued on a month-to-month basis upon its
expiry as
provided for in
section 14(2)(
d
)
of the CPA? In my judgment, it does not. If this was the case,
unscrupulous lessors would be able to negate whatever renewal options
their lessees might enjoy in terms of the fixed term commercial lease
agreements concluded between them. This would undermine and
be
contrary to the purposes of the CPA. The preamble to the CPA records
that it is necessary to develop and employ innovative means
to
protect the interests of all consumers. It is also clear from its
preamble that the CPA was enacted to promote and protect the
economic
interests of consumers.
Section 2(1)
of the CPA provides that the CPA
must be interpreted in a manner that gives effect to the purposes set
out in
section 3
thereof.
Section 3
of the CPA provides,
inter
alia
, as follows:
“
The
purposes of this Act are to promote and advance the social and
economic welfare of consumers in South Africa by –
(
a
)
establishing a legal framework for the achievement and maintenance
of
a consumer market that is fair, … sustainable and responsible
for the benefit of consumers generally;
…
(
c
)
promoting fair business practices;
(
d
)
protecting consumers from –
(i)
unconscionable, unfair, unreasonable, unjust or otherwise improper
trade practices; and
(ii)
deceptive, misleading, unfair or fraudulent conduct;”
[26]
In these circumstances and by virtue of the
provisions of clause 2 of the agreement, the Applicant’s
failure to comply with
section 14(2)(
c
)
of the CPA did not have the effect of the agreement automatically
continuing on a month-to-month basis upon its expiry as provided
for
in section 14(2)(
d
)
of the CPA. The rights of the parties must be determined by having
regard to clause 2 of the agreement.
Applying the provisions of
clause 2 of the agreement to the facts of this case
[27]
In terms of clause 2 of the agreement, the
Respondent had an option to renew the agreement for a further period
of twelve months,
which renewal would not be unreasonably refused by
the Applicant.
[28]
The Respondent exercised his option to
renew the agreement. The Applicant refused to consent to the renewal.
The question is whether
or not the Applicant was reasonable in its
refusal.
Was the Applicant reasonable
in refusing to consent to the renewal of the agreement?
[29]
The determination of whether or not the
Applicant was reasonable in refusing to consent to the renewal of the
lease requires an
evaluation of the reasons provided by the Applicant
for its refusal.
29.1 The
Applicant advanced three reasons in the notice to vacate. The first
and second reasons both relate
to the magistrate’s court urgent
application. The Applicant asserted that there was an irreconcilable
difference in the interpretation
and understanding of the terms of
the agreement. This, it is to be recalled, led to the Respondent’s
launching of the magistrate’s
court urgent application, which
the Applicant described in the notice to vacate as ‘frivolous
and unfounded’. The third
reason advanced by the Applicant in
the notice to vacate was the Respondent’s residential rent
arrears.
29.2 The
Applicant advanced four reasons in this application. First, Mabaso’s
alleged drunken conduct.
Second, the Respondent’s launching of
the magistrate’s court urgent application. Third, the
Respondent’s alleged
commercial rent arrears. Fourth, the
Respondent’s residential rent arrears.
[30]
In
South
African National Parks v MTO Forestry (Pty) Ltd and Another
(446/2017)
[2018] ZASCA 59
(17 May
2018), Rogers AJA held as follows:
“
Commercial
leases often contain terms that the tenant may only do certain things
with the consent of the landlord and that the landlord’s
consent may not be unreasonably withheld. English, South African and
other Commonwealth courts follow a broadly similar approach
to such
clauses.”
[7]
[31]
In
1455202
Ontario
Inc. v. Welbow Holdings Ltd. et al.
[2003]
O.T.C. 396 (SC), the sole issue that the Superior Court of Justice of
Ontario had to decide was whether the landlord had
unreasonably
withheld its consent to an assignment by the tenant of its lease.
[8]
The lease provided that the tenant would not, during the term of the
lease or any renewals thereof, assign the lease in whole or
in part
to or in favour of any person without the prior written consent of
the landlord, such consent not to be unreasonably withheld.
[9]
The court held that –
“
[i]n
determining the reasonableness of a refusal to consent, it is the
information available to – and the reasons given by
– the
Landlord at the time of the refusal – and not any additional,
or different, facts or reasons provided subsequently
to the court –
that is material: …”
[10]
[32]
I am in respectful agreement with this
dictum
.
The reasonableness of a lessor’s refusal to consent should be
determined with reference to the reasons advanced by the lessor
at
the time of refusal. Additional or different facts or reasons
provided by a lessor to a court subsequently should not be taken
into
account when determining the reasonableness of the lessor’s
refusal to consent. There are, in my judgment, good grounds
for a
court to only concern itself with the reasons advanced by a lessor at
the time of refusal. The reasons advanced by the lessor
at the time
of refusal can reasonably be expected to be the true reasons. The
lessor’s refusal to consent may impact negatively
on the
relationship between the parties. A deterioration of the relationship
between the parties might cause a situation where
the lessor conjures
up additional reasons for refusing to consent. An unscrupulous lessor
might even find ways to create additional
reasons to refuse consent.
A court’s determination of the reasonableness of a lessor’s
refusal to consent solely on
the basis of the reasons advanced by the
lessor at the time of refusal, is also a matter of fairness to the
lessee involved. It
is not hard to imagine a situation where a
lessee, having been refused consent for reasons advanced by the
lessor at the time of
refusal, cures the issues underlying those
reasons only to be confronted with additional or different reasons
advanced by the lessor
in subsequent litigation.
[33]
For these reasons, I shall determine the
reasonableness of the Applicant’s refusal to consent to the
renewal of the agreement
with reference only to the three reasons
advanced in the notice to vacate.
[34]
As stated, the first and second reasons
advanced by the Applicant in the notice to vacate both relate to the
magistrate’s
court urgent application. The Applicant asserted
that there was an irreconcilable difference in the interpretation and
understanding
of the terms of the agreement. This irreconcilable
difference was part of the reason why the Respondent launched the
magistrate’s
court urgent application. The Applicant described
that application as ‘frivolous and unfounded’ in the
notice to vacate.
34.1
Section 34 of the Constitution provides that everyone has the right
to have any dispute that can be
resolved by the application of law
decided in a fair public hearing before a court or, where
appropriate, another independent and
impartial tribunal or forum. On
the Applicant’s own version, there is a dispute between the
parties regarding the interpretation
and understanding of the terms
of the agreement. There is also a dispute between the parties about
whether or not Airport Inn and
Suites is certified as a quarantine
facility. In terms of section 34 of the Constitution, the Respondent
has the right to have
these disputes decided in a fair public hearing
before a court.
34.2
Clause 22 of the agreement provides that either of the parties shall
be entitled to institute legal
proceedings which may arise out of or
in connection with the agreement in any magistrate’s court
having jurisdiction. The
dispute between the parties regarding the
interpretation and understanding of the terms of the agreement
clearly arose out of or
in connection with the agreement. The
Respondent acted within his contractual rights by launching the
magistrate’s court
urgent application.
34.3 It
is not for this court to decide whether or not the magistrate’s
court urgent application is
frivolous, unfounded, vexatious or an
abuse of court process. That application is not before this court.
The magistrate hearing
the magistrate’s court urgent
application should decide the Applicant’s contentions that that
application is frivolous,
unfounded, vexatious or an abuse of court
process.
34.4 In
the circumstances, I find that the Applicant’s refusal to
consent to the renewal of the agreement
on the basis of the
Respondent’s launching of the magistrate’s court urgent
application was unreasonable.
[35]
It has already been stated that the third
reason advanced by the Applicant in the notice to vacate was the
Respondent’s residential
rent arrears.
35.1 With
reference to a number of English, South African, Australian and
Canadian cases, Rogers AJA held,
inter alia
, as follows in the
case of
MTO Forestry
:
“
[73]
… Stated as general propositions, the landlord may not refuse
consent ‘on
grounds which have nothing whatever to do with the
relationship of landlord and tenant in regard to the subject matter
of the lease’
… .
[74]
… And in
Houlder
Brothers
[11]
Pollack MR said that the covenant could not be so interpreted as to
entitle the landlord to rely on a reason ‘which is independent
of the relation between the lessor and lessee’ … .”
[12]
35.2 In
the case of
Welbow Holdings
, the court held that –
“
a
refusal will … be unreasonable if it was … wholly
unconnected with the bargain between the Landlord and the Tenant
reflected in the terms of the lease: …”
[13]
35.3 The
Respondent’s obligation to make payment of his residential rent
is not reflected in the terms
of the agreement. His residential rent
arears is wholly unconnected with the commercial relationship between
the parties under
the agreement. This means that the Applicant
refused consent on a ground which had nothing whatever to do with the
relationship
between it and the Respondent in regard to the subject
matter of the agreement.
35.4 In
the circumstances, I find that the Applicant’s refusal to
consent to the renewal of the agreement
on the basis of the
Respondent’s residential rent arrears was unreasonable.
The Applicant’s claim
for arrear commercial rent under the agreement
[36]
The Applicant claims arrear commercial rent
under the agreement in the sum of R17
196,60. The sum is made up of the amounts set out in the invoice.
[37]
The Applicant significantly asserts that it
only charged the Respondent pro-rata rent for the periods when
restaurants and bars
were permitted to operate during the lockdown.
That is why, for example, the rent in respect of the restaurant for
June 2020 was
only R416,50 instead of R2 500 as agreed in clause 2 of
the agreement.
[38]
I stated that the Applicant’s
assertion regarding pro-rata rent is significant. Its significance
becomes apparent when one
considers the following statement on 12
August 2020 in the Applicant’s answering affidavit in the
magistrate’s court
urgent application:
“
As
can be seen from what is set out above the Respondent has tried to
assist the Applicant where it could, for example, by not charging
any
rental to the Respondent
(sic)
over
the last three months.”
[39]
The Applicant presents this court with two
mutually destructive versions relating to the Respondent’s
alleged arrear commercial
rent. On the one hand, the Applicant
asserts that it did not charge the Respondent any rent during June
2020, July 2020 and August
2020. On the other hand, the Applicant
asserts that it only charged the Respondent pro-rata rent for the
periods when restaurants
and bars were permitted to operate during
the lockdown. Having regard to the contents of the invoice, the
periods during which
the Applicant would allegedly only have charged
the Respondent pro-rata rent included June 2020, July 2020 and August
2020.
[40]
In the circumstances, the Applicant has
failed to make out a case for its claim relating to the Respondent’s
alleged arrear
commercial rent under the agreement.
Conclusion
[41]
The Applicant’s refusal to consent to
the renewal of the agreement was unreasonable. The effect of this
finding is that the
agreement was renewed for a period of twelve
months that commenced on 24 September 2020 and shall expire on 23
September 2021.
[42]
The Applicant was unable to prove its claim
for arrear commercial rent under the agreement.
[43]
In the result the following order is made:
1.
The application is dismissed.
2.
The Applicant is to pay the Respondent’s
costs.
This judgment is handed down
electronically by uploading it on CaseLines.
L.J. du Bruyn
Acting Judge of the High Court of
South Africa
Gauteng Local Division,
Johannesburg
Date heard:
8 February 2021
Judgment delivered:
7 May 2021
For the Applicant / Plaintiff:
S. Kabelo (Attorney)
of KWA
Attorneys
For the Respondent / Defendant:
The Respondent appeared in person
[1]
Amalgamated
Banks of South Africa Limited v De Goede and Another
[1997] ZASCA 30
;
[1997]
2 All SA 427
(A) at 433
b
.
[2]
De
Goede supra
at
434
h
.
[3]
AA
Mutual Insurance Association Ltd v Biddulph and Another
1976
(1) SA 725
(A) at 738H–739C.
[4]
De
Goede supra
at
434
i
–435
c
.
[5]
Joosab
v Ensor NO
1966
(1) SA 319
(A) at 326D–F.
[6]
Compare
De
Goede supra
at
435
b
–
c
.
[7]
South
African National Parks v MTO Forestry (Pty) Ltd and Another
(446/2017)
[2018] ZASCA 59
(17 May 2018) at paragraph [73].
[8]
Ontario
Inc. v. Welbow Holdings Ltd. et al.
[2003]
O.T.C. 396 (SC) at paragraph [1].
[9]
Welbow
Holdings supra
at
paragraph [6].
[10]
Welbow
Holdings supra
at
paragraph [9].
[11]
Reference
to authorities omitted.
[12]
MTO
Forestry supra
at
paragraphs [73] and [74].
[13]
Welbow
Holdings supra
at
paragraph [9].