Brief Summary

Eviction — Commercial lease — Application for eviction of respondent from premises — Dispute over legal right to occupy premises following termination of lease — Respondent claims new lease agreement concluded after original lease expired — Applicant contends no valid lease exists post-termination — Court applies Plascon-Evans principle, finding no material disputes of fact but rather legal conclusions — Respondent's interpretation of communications deemed untenable — Eviction granted as respondent failed to establish right of occupation.

Comprehensive Summary

Summary of Judgment

1. Introduction

The proceedings concerned an application for the eviction of a commercial tenant from retail premises, coupled with a counter-application by the tenant seeking a stay of the eviction proceedings and an interdict preventing eviction pending the outcome of related litigation.

The applicant was VLP Property CC (the landlord), and the respondent was Martjohn Trading CC (the tenant), which operated a Spar and Spar Tops from the premises.

As procedural background, the respondent had instituted an action under case number 55641/2020 seeking declaratory relief concerning its alleged continued rights of occupation. The eviction application (under case number 43745/2020) was instituted on or about 14 December 2020, was heard on 25 January 2022, and judgment was delivered on 26 April 2022.

The general subject-matter of the dispute was whether the respondent retained any legal right to occupy shops 20, 21 and 23 at the Elsburg Shopping Centre after the expiry of prior fixed-term leases, and specifically whether a new five-year lease was concluded in early 2020.

2. Material Facts

It was common cause that the respondent had occupied the premises since 1 July 2009, initially under fixed-term five-year leases that ran until 30 June 2019 (together described as the original lease agreements). It was also common cause that after 30 June 2019, the respondent remained in occupation while the parties engaged, to some degree, with the possibility of a replacement lease.

The court accepted that, in the period after 30 June 2019, the respondent remained in occupation on a month-to-month basis pending further developments. During the latter half of 2019, the applicant also attempted to sell the premises, but the sale fell through by November 2019.

On 17 December 2019, the applicant’s attorneys informed the respondent’s attorneys that the applicant was no longer willing to negotiate the renewal terms and required the signing of a circulated draft new lease by 20 December 2019, failing which the lease would continue month-to-month on the same terms as the original leases.

On 23 January 2020, the respondent’s attorneys responded and attached the draft new lease, signed by the respondent on 17 January 2020, but containing numerous amendments (the amended lease). The respondent requested the applicant to consider it and, if acceptable, to sign.

On 6 February 2020, the applicant’s attorneys responded that the applicant had identified a new tenant and stated that if the respondent wished to remain, it would have to match the terms agreed with the new tenant (the new tenant’s lease). Subsequent correspondence on 10 February 2020 included an email from the applicant’s letting agent stating, in context, that the applicant’s attorney had confirmed that “everything was in order,” which the respondent contended supported its case that the amended lease had been accepted.

The court treated the meaning of the 10 February 2020 email as a matter of interpretation arising from common cause facts. It held that the email related to the transmission and procedural handling of the new tenant’s lease and did not amount to acceptance of the amended lease.

On 11 February 2020, the respondent’s attorneys sent a “without prejudice” letter asserting, inconsistently, that the original lease agreements had been renewed in January 2019 and also that the amended lease constituted acceptance of the draft new lease, while simultaneously urging further negotiations for a further agreement of lease.

On 31 August 2020, the applicant denied both the alleged renewal and the alleged acceptance and purported to terminate the month-to-month lease on three calendar months’ notice.

On 22 October 2020, the respondent instituted the action (case 55641/2020) seeking declaratory relief that the original leases were extended by virtue of the alleged renewal; allegations about the amended lease as a basis for rights of occupation were introduced only later, following an amendment after the delivery of the applicant’s replying affidavit (jurat 8 March 2021).

3. Legal Issues

The central legal questions were whether the respondent could establish a right of occupation sufficient to defeat a landlord’s eviction application, and, specifically, whether a new lease agreement came into existence in January/February 2020.

The dispute required determination of a combination of law and the application of law to largely common-cause facts, including whether the matter raised genuine disputes of material fact (for purposes of motion proceedings for final relief), whether lis pendens operated to stay the eviction, and whether contractual communications and documents established consensus.

A further legal issue was whether the respondent’s signed and amended version of the draft lease constituted acceptance of an offer or amounted instead to a counter-offer that was not accepted.

4. Court’s Reasoning

The court approached the matter on the basis that an eviction application by a landlord cannot succeed if the respondent establishes a legal right to remain in occupation. Because the application sought final relief, the court identified the relevance of the Plascon-Evans approach to factual disputes on motion. However, it emphasised that Plascon-Evans does not govern disputes that are legal in character, such as disputes about legal conclusions or the inferences to be drawn from common cause facts, and that it applies to genuine disputes of material fact.

On the respondent’s contention that disputes of fact were incapable of resolution on the papers, the court held that no material facts were truly in dispute; rather, the dispute concerned legal interpretation and conclusions, including the meaning of the 10 February 2020 email. To the extent the respondent sought to characterise its interpretation of the email as a factual matter, the court found the respondent’s version clearly untenable, palpably implausible, and far-fetched on the papers, warranting a robust approach. The court construed the email within its context and concluded it concerned the circulation and receipt of the new tenant’s lease, not acceptance of the respondent’s amended lease. It also considered it significant that the email came from a letting agent, whereas substantive contractual acceptance would ordinarily emanate from the attorneys who had by then taken over communications.

On lis pendens, the court held that the plea did not arise on the facts as presented. It reasoned that the relevant dispute in the action concerning the amended lease only arose after an amendment in March 2021, which was subsequent to the institution of the eviction application in December 2020. Conversely, the action’s original cause of action based on an alleged renewal of the original leases was not relied on in the eviction proceedings as framed. The court therefore found that the matter relied on to resist eviction had not been commenced earlier in the required sense for lis pendens to apply against the eviction application. The court further emphasised that lis pendens is not automatic and involves a discretion, which it exercised against a stay because the action would cause unwarranted delay, the eviction dispute called for relatively expeditious determination, and there were no material disputes requiring trial resolution.

Turning to the merits of the alleged new lease, the court considered whether the draft new lease constituted an offer capable of acceptance. It expressed doubt because the draft lease remained unsigned by the applicant and contained a clause (clause 51.3) indicating that it would only become binding on the applicant when the applicant executed (including signed) it. No case was advanced based on fictional fulfilment of any signature condition.

In any event, even assuming the draft lease was an offer, the court held that it was not accepted by the respondent because acceptance must be clear and unequivocal and must correspond with the offer. The respondent had made more than a dozen changes to the draft lease, which the court treated as objectively material. The court rejected the respondent’s characterisation of these changes as minor and reasoned that the deletion or alteration of provisions supplied by a contracting counterparty generally requires assent, because consensus is fundamental to contract formation.

The court listed amendments including changes to deposits, escalation, electricity obligations, service charges, contractor approval, insurance provisions, landlord’s rights to alter premises, replacement costs, air-conditioning maintenance, jurisdiction-related provisions, suretyship provisions, provisions governing how the lease would come into force, and the landlord’s cancellation and removal rights on breach. On this basis, the court concluded that the amended lease was, at best, a counter-offer.

The court then held that the counter-offer had been rejected in the applicant’s attorneys’ letter of 6 February 2020 and was never accepted thereafter. The respondent’s reliance on the 10 February 2020 email did not alter this conclusion because the email did not constitute acceptance. As a result, the court found the respondent had no defence to eviction and that the counter-application for interim interdictory relief could not succeed.

In crafting relief, the court noted the respondent did not challenge the reasonableness of a three-month vacation period but held that the period had already elapsed. It nevertheless afforded the respondent one calendar month to vacate, making the eviction effective on 31 May 2022, while noting that this date did not affect any potential claims the applicant might pursue for holding over or related relief.

5. Outcome and Relief

The court granted an eviction order against the respondent, holding that the respondent had failed to establish any continuing right of occupation after the expiry of the prior lease arrangements and had not proved the conclusion of a new binding lease in January/February 2020.

The counter-application was dismissed, including the request to stay the eviction proceedings and to interdict the applicant from evicting pending the action.

The respondent and all persons occupying through or under it were ordered to vacate the premises by 31 May 2022, failing which the sheriff was authorised to eject them. Costs followed the result: the respondent was ordered to pay costs in both the main application and the counter-application, and a punitive costs order sought by the applicant was refused.

Cases Cited

Plascon-Evans Paints (TVL) Ltd v Van Riebeeck Paints (Pty) Ltd [1984] ZASCA 51; 1984 (3) SA 623 (A).

National Director of Public Prosecutions v Zuma [2009] ZASCA 1; 2009 (2) SA 277 (SCA).

National Scrap Metal v Murray & Roberts 2012 (5) SA 300 (SCA).

KPMG Chartered Accountants (SA) v Securefin Limited 2009 (4) SA 399 (SCA).

Soffiantini v Mould 1956 (4) SA 150 (E).

Caesarstone Sdot-Yam Ltd v The World of Marble and Granite 2013 (6) SA 499 (SCA).

Du Plessis NO v Goldco Motor and Cycle Supplies (Pty) Ltd 2009 (6) SA 617 (SCA).

Boerne v Harris 1949 (1) SA 793 (A).

Legislation Cited

Prevention of Illegal Eviction from and Unlawful Occupation of Land Act 19 of 1998.

Extension of Security of Tenure Act 62 of 1997.

Rules of Court Cited

No rules of court were expressly cited in the judgment.

Held

The court held that the respondent did not have a legally enforceable right to remain in occupation of the commercial premises because the alleged new lease was not concluded. The respondent’s signed version of the draft lease, containing numerous material amendments, amounted to a counter-offer rather than acceptance, and it was not accepted by the applicant and had in any event been rejected. The court further held that the respondent’s reliance on the 10 February 2020 email was based on an untenable interpretation and could not establish acceptance or consensus.

The court held that the requirements for lis pendens were not met as against the eviction application in the circumstances described, and that even if they were, the court would not have exercised its discretion to stay the eviction given the absence of material factual disputes and the need for expeditious resolution of eviction disputes.

LEGAL PRINCIPLES

The judgment applied the principle that a landlord is not entitled to eviction relief where the occupant establishes a right of occupation. In motion proceedings for final relief, factual disputes are assessed in accordance with the Plascon-Evans approach, but that approach does not govern disputes that are essentially legal, including disputes about the interpretation of documents and the legal inferences to be drawn from common cause facts.

The judgment applied principles of contract formation requiring clear and unequivocal acceptance corresponding with the offer. Material alterations to the terms of a proposed agreement typically prevent consensus and render the purported acceptance a counter-offer. Where a draft contract stipulates that it becomes binding only upon execution by a party (including signature), a court may doubt whether it constitutes an offer capable of acceptance merely by the other party’s signature, absent a pleaded basis to treat such a requirement as fulfilled.

The judgment reiterated that lis pendens is not an automatic bar. It depends on the relevant dispute having been instituted between the same parties, concerning the same matter and same cause, and even where those elements are satisfied, a court retains a discretion whether to stay proceedings, taking into account considerations such as delay and the appropriateness of expeditious determination in eviction matters.

VLP Property CC v Martjohn Trading CC (43745/2020) [2022] ZAGPJHC 242 (26 April 2022)