About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: North Gauteng High Court, Pretoria
SAFLII
>>
Databases
>>
South Africa: North Gauteng High Court, Pretoria
>>
2010
>>
[2010] ZAGPPHC 269
|
|
Johannesburg Land Company (Pty) Ltd v Bubesi Investments 209 (Pty) Ltd and Another (17748/2010) [2010] ZAGPPHC 269 (2 June 2010)
NOT
REPORTABLE
IN
THE HIGH COURT OF SOUTH AFRICA
(NORTH
GAUTENG HIGH COURT, PRETORIA)
CASE
NO: 17748/2010
DATE:02/06/2010
In
the matter between:
THE
JOHANNESBURG LAND COMPANY (PTY
)
LTD
................................................
Applicant
and
BUBESI
INVESTMENTS 209 (PTY)
LTD
.........................................................
First
Respondent
NINO
GROUP
CC
.........................................................................................
Second Respondent
JUDGMENT
MURPHY
J
1.
The applicant seeks as a matter of urgency an order evicting the
first respondent from certain leased premises in central
Johannesburg.
2.
On 18 September 2004 the applicant concluded a written lease with LMO
Consulting CC ("LMO") in terms of which it leased
the
premises which are the subject of this application for the purpose of
operating a cafe as a franchisee of the second respondent,
Nino's
Group CC ("Ninos").
3.
The lease contained the usual clauses regarding rental, occupation
and the like. As the dispute between the parties relates to
the
termination of the lease, only the clauses governing termination are
relevant. Clause 22.1 provides:
"Subject
to the Renewal Option contained in clause 25, the lease shall
terminate on the Termination Date. The Lessee shall
vacate the Leased
Premises on the Termination Date and shall return the Leased Premises
to the Lessor in the same good order and
condition as the Leased
Premises were received by the Lessee on the Commencement Date, fair
wear and tear excluded."
Clause
25 is not strictly speaking a renewal option, but in fact provides
that where the Lessor evicts the Lessee or terminates
the lease then
Nino's will become the new Lessee on the same terms and conditions
until the termination date. "Termination
date" is defined
in clause 1.1.31 to mean 31 October 2009. Clause 4 provides that
subject to clause 25, this lease shall commence
on the commencement
date (defined as 1 November 2004), and shall, unless terminated
earlier in terms of 17.1, 19.1.10, 19.2 and
22.2 endure until the
termination date. The last mentioned clauses are not relevant to the
dispute between the parties, referring
as they do respectively to
termination on the grounds of destruction or damages, breach of
contract and the Lessor's reserved rights
to terminate in order to
renovate, demolish or re-develop the building in which the premises
are located.
4.
The substantive clauses of the written lease between the applicant
and LMO (Annexure RK2) do not appear to include an express
term
and/or procedure for renewal upon termination on the Termination
Date. As mentioned, although clause 22.1 subjects termination
to a
renewal option, the reference to clause 25 is meaningless because
that clause relates only to Nino's status as franchisor
under the
lease and its continuing obligation under the lease in the event of
termination prior to the termination date. However,
clause 1.1.28
defines the "renewal period" to mean "a period of 5
years commencing on the first day following the
termination date".
That clause might perhaps have been relied upon to support a claim on
the part of LMO that the actual intention
of the parties was to allow
for renewal for a further period of 5 years beyond the termination
date.
5.
On 4 June 2007, the applicant and LMO entered into an addendum to the
written lease agreement in terms of which the lease was
amended to
substitute the first respondent as the lessee in stead of LMO. The
written addendum (Annexure RK4) dealt with various
issues but only
the substitution and the termination term are relevant. Clauses 4 and
11 of the Preamble to the Addendum read:
"And
whereas the parties now wish to:
4.
to substitute the Lessee, LMO Consulting CC, with Babesi Investments
209 (Proprietary) Limited (Registration No. 2003/016456/07):
and................
11.for
the avoidance of any doubt delete Clause 1.1.28."
Clause
8 of the Addendum then effectively substituted the first respondent
as lessee and clause 13 reads: "Clause 1.1.28 is
deleted".
The applicant avers that the reason for this deletion, as stated in
the preamble, was to avoid any doubt between
the parties as to the
remainder of the initial lease period. Therefore, according to the
applicant, the first respondent was entitled
to occupation of the
premises up to 31 October 2009, being the agreed termination date;
and the deletion of clause 1.1.28 removed
any doubt or ambiguity
about whether there was an option to renew the lease. The intention
of the deletion, the applicant contends,
was to make it plain that
the first respondent did not enjoy an option to renew.
6.
The Addendum was signed on behalf of the applicant and by directors
of the first and second respondents, as well as the managing
member
of LMO.
7.
On 6 August 2009, shortly before the agreed termination date, the
director of the second respondent (Ninos) addressed a letter
to the
applicant recording that the second respondent and the applicant were
in discussion about refurbishing the premises. The
letter commences
with the statement:
"Our
meeting to be held today refers and we wish to confirm that we intend
to refurbish the outlet for the new lease period
as follows...."
After
setting out the proposed refurbishment, the letter ends as follows:
"The
lease renewal needs to be finalized in order that the process can
proceed."
8.
During August 2009 a meeting took place between the representatives
of the applicant and the second respondent during which "the
situation regarding the tenancy of the first respondent in close
proximity to the termination date was discussed". The first
respondent denies that the second respondent represented it during
the meeting.
9.
On 27 August 2009, the director of the second respondent, Mr John
Philippou addressed an email to Mr Roger Koevort of the applicant
detailing the content of their discussions in the meeting. It reads:
"1.
My meeting with Roger on the 26th instant refers and I confirm.
2.
You are unhappy with the approach and operations of the current
lessee especially in view of:-
2.1
The erratic payment of rental and the need to continuously follow up
on this matter, although there has been an improvement
in meeting
these commitments over the past two (2) months, 2.1.1. In the past
there has been a record of unfulfilled commitments
and a
"take-it-or-ieave it" approach from the tenants.
2.1.2
The rentals and allied charges are up to date at this point.
2.2.
The tenant needs to be monitored with regards the usage of the
extraction system and you has had to appoint someone to monitor
that
this is in use.
2.3.The
health standards in the shop especially since members of your
management team and John have witnessed unsavoury handling
of food.
3.
Furthermore you are considering the addition to the facilities that
offers more than sit-down meals to the clientele in the area,
such as
a bakery element etc.
4.
Nonetheless whilst you are considering the following -
4.1The
type of concept that will meet with your requirements;
4.2
The proposals that Nino's will submit; You have agreed to -
4.3
Extend the lease period to 3: January 2009;
4.4
Will retain rentals at the current rate for this short term period,
5.
In this period you will furthermore -
5.1
Be monitoring any improvements to be made to the current operations;
5.2
Consider our proposals.
6.
You have also made it clear that in the event that you will continue
with a Nino's concept, the lease will be signed directly
between
yourselves and Nino's Head Office, who will then sublet the premises
to the franchisee and will be responsible for the
maintenance of the
terms and conditions of the lease agreement.
7.
We agreed to keep you informed of our progress and action plan for
this outlet."
10.
It is common cause that the date 31 January 2009 was a mistake. The
Applicant agreed to extend the lease period beyond the termination
date to the end of February 2010.
11.
The position of the applicant regarding the extension of the period
was further stated in an email to Mr Barry Nyabonda, the
director of
the first respondent, dated 9 December 2009, which reads:
"We
are interested in pursuing a different concept for the premises at 70
Fox Street and the principle (sic) shareholders are
in agreement that
it is the correct option for us to pursue. Consequently we will not
be in a position to extend your tenure at
70 Fox Street beyond the
agreed date of 28 February 2010.
Tomorrow
is my last official day in the office until 11 January 2010, I
suggest we meet after my return to make the necessary arrangements
pending the termination of the lease on 28 February 2010."
12.
The first respondent did not reply to this email. Nor did it claim
any different entitlement until two months later shortly
before the
termination of the extended period.
13.
On the basis of these facts and circumstances the applicant contends
that prior to the termination date of the lease, the applicant
agreed
with the first respondent (who had no option to renew by virtue of
the deletion of clause 1.1.28) to extend the lease to
28 February
2010 or alternatively granted the first respondent an indulgence in
terms of which it could remain in occupation on
a monthly basis. In
this latter regard clause 24.11 of the lease is relevant. It
provides:
"Relaxation
No
latitude, extension of time or other indulgence which may be given or
allowed by any Party to any other Party in respect of the
performance
of any obligation hereunder or enforcement of any right arising from
this Lease and no single or partial exercise of
any right by any
Party shall, under any circumstances, be construed to be an implied
consent by such Party or operate as a waiver
or a novation of, or
otherwise effect any of that Party's rights in terms of or arising
from this Lease or estop such Party from
enforcing, at any time and
without notice, strict and punctual compliance with each and every
provision or term hereof."
14.
On 8 February 2010 the attorneys of the first respondent addressed
a
letter to the applicant raising its defence in the following
terms:
"RE:
TENURE AT 70 FOX STREET: OUR CLIENT - BUBESI INVESTMENTS 209 (PTY)
LIMITED
We
address this letter to you on the instructions of the above tenant.
According
to our instructions, you are of the view that our client is to vacate
the particular premises on 28 February 2010.
It
is our instructions that the agreement and its various addenda
incorrectly reflect the agreement between the parties in that
it was
at all times the agreement between the parties that the lease would
endure for five years from the date of signature of
the addendum
substituting our client for the previous tenant.
We
are accordingly instructed to advise you as we hereby do that our
client does not intend to vacate the premises after 28 February
2010
and that it will continue to make monthly payments to you in terms of
the true agreement between the parties."
15.
In its answering affidavit the first respondent elaborates on the
circumstances surrounding its substitution as lessee. The
first
respondent purchased the business of LMO and entered into a franchise
agreement with the second respondent around about the
same time. The
franchise agreement was concluded on 27 April 2007, while the
addendum was concluded more than a month later on
4 June 2007.
According to the respondent the purpose of the addendum was to
facilitate the first respondent's purchase of the business
and the
taking over of the leased premises as well as entering into the
franchise agreement. The first respondent draws attention
to clause 4
of the Franchise Agreement which states:
"It
is recorded that the Franchisee entered into a written agreement of
lease in respect of the Approved Premises with the
landlord, for a
period of at least 5 years."
The
Approved Premises are described in the agreement as those which are
the subject of dispute.
16.
Accordingly, the first respondent contends that the agreement reached
with the applicant was that the lease between them would
endure for 5
years and insofar as the addendum does not reflect this fact, it
incorrectly reflects the intention of the parties
at the time and
"this was either as a result of a bona fide mutual error of the
parties or intentionally by the Applicant".
It also maintains
that it should be clear from the franchise agreement that the
respondents believed that a 5 year lease agreement
had been entered
into. It therefore contended that the addendum did not correctly
reflect the intention of the parties and thus
falls to be rectified
"to include a termination date 5 years from the date of
signature thereof.
17.
The applicant's rebuttal of these contentions is predicated
principally upon the clear wording of the addendum in relation
to the
deletion of clause 1.1.28 of the lease. Clause 11 of the preamble to
the addendum is unequivocal in its pronouncement that
the purpose of
the deletion was "for the avoidance of any doubt". The only
doubt conceivably to be avoided was the ambiguity
in relation to the
existence of a renewal period of 5 years. Logically the deletion of
the clause could only be intended to result
in there being no renewal
period and hence no renewal option. This position is reinforced by
the fact that we do not find in the
list of various amendments
effected by the addendum any amendment to the termination date. The
absence of any such amendment, taken
with the deletion of clause
1.1.28, the applicant submitted, is a clear indication that the
parties agreed that the agreement would
terminate on 31 October 2009
and there would be no option to renew the agreement by the first
respondent.
18.
I agree with the applicant that ex facie the addendum and the
written lease the intention was for the lease to terminate on
31
October 2009. Moreover, because the franchise agreement (to which the
applicant was not a party) was signed more than a month
before the
addendum, the recordal in the franchise agreement that the first
respondent had entered into a lease agreement for a
period of 5 years
was premature and in any event did not bind the applicant. The best
evidence of the intention of the parties
is that which is recorded in
the addendum which includes a conscious and deliberate decision to
delete clause 1.1.28. The probabilities
are strong that had the
parties intended to lease the premises to the first respondent for 5
years, they would have included an
amendment to the termination date
along with all the other amendments meticulously included in the
addendum.
19.
Counsel for the first respondent submitted in argument that there is
a dispute of fact on the papers and that the evidential
substratum to
determine the issue requires the defence of rectification to be
referred to oral evidence. Rectification is only
available as a
remedy where a contract has been affected by a common mistake
resulting in the misrecording of the contract due
to the common
mistake of both parties. The first respondent adduces no facts in
support of a common mistake. On the contrary the
events of August and
December 2007, reflected in the emails of those dates, and the
failure to raise the defence of rectification
until mid February
2010, point inescapably to the fact that the writing (in both the
lease and the addendum) was indeed a true
memorial of the intended
agreement. As I have said, had the true intention been a 5 year
lease, that key term would have been provided
for together with the
other amendments meticulously recorded in the addendum. The addendum
deals inter alia with adjustments to
the square meterage, rental and
uses of part of the premises. It is inconceivable that had the
intention been a 5 year lease that
such would not have been recorded.
Indeed the deletion of any possible renewal was plainly and
unequivocally dealt with. The contemporaneous
actions of the parties
recorded in the addendum, as captured in their signing of a document
twice recording an intention to delete
the reference to a renewal
period, with the express purpose of avoiding any doubt, supports an
inference, as the most legitimate
inference, that the common
intention was that the lease to the first respondent would terminate
on the termination date.
20.
To the extent that it has been suggested that I am obliged to resolve
the dispute of fact on the papers in accordance with the
well known
principle enunciated in Plascon Evans Paints Ltd v Van Riebeeck
Paints (Pty) Ltd
[1984] ZASCA 51
;
1984 (3) SA 623
(A) by accepting the version of the
respondent, I need hardly say that I am not required to do so where I
consider the denials
of the respondent to be untenable or
uncreditworthy, which I do in this case for the reasons already
advanced.
21.
Accepting then that the applicant is the owner of the premises, and
that the first respondent is in unlawful occupation since
the
termination of the grace period, the applicant is entitled to the
relief it seeks.
22.
The first respondent also challenged the application for want of
urgency. The applicant says it has secured a better, new tenant.
There is a contradiction on the papers about whether the new tenant
has signed a lease or not. I do not consider it to be material.
That
prospective tenant has expended money in anticipation of taking over
the premises. The applicant sets out the prospective
tenant's plans
in some detail. I do not consider it necessary to canvass all the
facts alleged. There are significant commercial
interests at stake
here and in appropriate cases the court should act quickly and
decisively to afford relief to deserving applicants;
if only because
it is in the interests of the administration of justice not to allow
the advancement of legitimate commercial interests
to be thwarted by
the unlawful occupation of premises needed for that end. The first
respondent is unlawfully infringing the applicant's
property rights
and I prefer to exercise my discretion to vindicate those rights
urgently rather that to permit a situation of
unlawful occupation to
endure longer on a foundation which rightly may be considered to be
specious.
23.
Clause 24.12.3 of the lease provides for legal costs to be payable as
between attorney and own client. No reason has been advanced
why the
costs of this application should not be awarded in accordance with
that clause.
24.
In the premises I make the following orders:
i)
The applicant's non-compliance with the rules relating to forms and
service is condoned and the application is considered to
be urgent.
ii)
The first respondent, or anyone claiming occupation through the first
respondent, is hereby evicted from the premises it occupies
at SA
Eagle House, Fox Street, Johannesburg, more fully described in
paragraph 2 of the applicant's notice of motion.
iii)
The first respondent is ordered to pay the costs of this application
on a scale as between attorney and own client.
JR
MURPHY
JUDGE
OF THE HIGH COURT
Date
Heard: 28 May 2010
For
the Applicant: Adv J Roux, Pretoria
Instructed
By: Reaan Swanepoel Attorneys, Pretoria
For
the Respondent: Adv EL Theron, Johannesburg
Instructed
By: Kobus Rossouw, Johannesburg