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[2010] ZAGPPHC 50
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Proc Corp 160 (Pty) Ltd v Interactive Trading 626 (Pty) Ltd (26533/2008) [2010] ZAGPPHC 50 (25 June 2010)
IN
THE HIGH COURT OF SOUTH AFRICA
(NORTH
GAUTENG HIGH COURT, PRETORIA)
CASE
NO: 26533/2008
DATE:25/06/2010
IN
THE MATTER OF:
PROC
CORP 160 (PTY) LTD (CONVERTED FROM A CC) APPLICANT
AND
INTERACTIVE
TRADING 626 (PTY) LTD RESPONDENT
JUDGMENT
PRELLER.
J
The
applicant applies for an order evicting the respondent from their
restaurant conducting on premises belonging to the applicant.
During
2003 the applicant and respondent signed a lease agreement which
commenced on 1 May 2003 and expired on 30 April 2008. In
terms of the
agreement the respondent (tenant) is granted an option to extend the
lease for another period of five years provided
that at least six
months before the expiry of the lease the tenant informs the landlord
of its intention to exercise the option.
The
following background will to some extent explain the conduct of the
parties: the director of the respondent was in the process
of
completing a new development to which it was intended that the
respondent would move its operation after the expiry of the lease
agreement. This development was objected to and delayed by one
Koukoudis who also had an interest in the applicant. The respondent
obviously wished to extend its occupation of the applicant's property
until the respondent could be accommodated in the proposed
new
development. The respondent annexed
inter
alia
the
following documents to its opposing affidavit:
o
a copy of the application in terms of section 32 of the Magistrate's
Court Act brought by the applicant against the respondent;
o
a copy of an application in this court between the local authority
and a company in which the director of the respondent had an
interest
and which apparently concerns the proposed new development;
o
a copy of the papers in the pending dispute in the magistrate's court
between the present parties concerning rentals and other
amounts
payable;
o
copies of the papers that served before the planning committee of the
local authority relating to the said new development;
o
copy of a counter-application in this court in the dispute between
the local authority and the company attempting to effect the
new
development:
These
papers comprised more that 1100 pages.
Not
surprisingly the applicant brought an application at the commencement
of argument for the annexures to be struck out as well
as certain
portions of the answering affidavit in which the annexures were
explained.
If
I understand the legal position correctly such an application should
not be granted unless the party bringing the application
would be
prejudiced in the absence of the order sought.
Apart
from the obvious inconvenience caused to me to have to handle such a
bulky court file, the inconvenience to the applicant
is illustrated
by the history of the hearing of this application.
The
matter was originally set down as an urgent application for hearing
on 17 June 2008. Because the papers were in excess of 500
pages and
in terms of the practice directive the parties had to approach the
Deputy Judge President for the date of hearing. The
date so allocated
was 22 June 2008 when it was struck off the roll due to lack of
urgency. The applicant then enrolled the matter
for hearing on 24
November 2008 without following the necessary-procedure. On behalf of
the respondent it was submitted that due
to
inter
alia
the
proposed application for striking out the argument in the case would
take longer than a day to complete. For that reason, so
the argument
went, the matter had to be set down in the so-called third court
which is the court for hearing opposed applications
that will take
longer than the normal.
It
is apparent from the aforegoing going that the mere inclusion of the
annexures referred to above delayed the hearing of the matter
at
least from June until November. That in itself is in my view
sufficient prejudice to the applicant and I accordingly ordered
that
the annexures referred to be struck out with costs.
Clause
44 of the lease agreement between the parties is headed "holding
over". Clause 44.1 reads:
"If
the tenant should after expiration or earlier termination of this
lease agreement remain in occupation of the lease premises,
then: -"
Sub-paragraphs
1.1 and 1.2 then provide that the amount of the monthly rental and
the operating costs will immediately be increased
by 12% and 14%
respectively. That is following four sub-paragraphs:
"44.1.3
the other terms and conditions of this lease agreement shall
mutatis
mutandis
remain
applicable to the tenant save that the lease agreement
shall
be deemed to have been entered into for a month at a time
(sic)
only
(emphasis
added):
44.1.4
the tenant shall continue to pay the increased rental and all other
amounts due to the landlord in terms of this lease agreement
on due
date;
44.1.5
the landlord shall be entitled to recover and accept the payments
referred to in 44.1.1 and;
44.1.6
the recovery and acceptance by the landlord of payments referred to
in 44.1.3 (sic) shall be without prejudice and shall
not in any
manner effect the landlord's rights."
Two
further sub-paragraphs under the same heading read as follows:
"44.2
Payments made to the landlord in respect of clause 44.1 above shall
be regarded as amounts paid by the tenant on account
of loss and/or
damage sustained by the landlord as a result of the holding over by
the tenant of the premises.
44.3
Unless otherwise stated by the landlord or its agents, acceptance of
any rental or payments shall in no way whether (sic) prejudice
or
operate as a waiver, rescission or abandonment on any termination of
right of termination."
I
may mention in passing that revenue stamps to the value of Rl 1 665
have been fixed to the agreement. The costs of the document
must
therefore have been substantial. One would expect that in the
circumstances the draftsperson of the agreement would have paid
a
little more attention to what he was doing.
It
is apparent from the correspondence, the respondent's answering
affidavit and also the argument submitted to me at the hearing
that
the respondent's attitude is that upon the expiry of the lease
agreement a new "month to month tenancy" was entered
into
and which should then be terminated with notice in terms of the
contract. The respondent also relies on clause 39.2 of the
contract
in terms of which notices have to be addressed to the respondent's
chosen domicilium.
The
only provision in the agreement that deals with notice is clause 3.5
thereof. This provision deals with the eventuality that
the tenant
may have taken occupation of the premises after making an offer to
rent and which offer was not accepted by the landlord
and
subsequently rejected. The clause provides that in that event a
tenant shall nevertheless be bound by the terms of the lease
save
that its occupation shall be deemed to be a monthly tenancy
terminable on one months" written notice. That is clearly
a
situation different from the one that arose in the present case after
expiry of the lease.
Likewise
the requirement in clause 39.2 that all notices should be addressed
to the chosen
domicilium
is
not applicable simply because the situation that arose after the
expiry of the lease is a
sui
generis
one
and no notice to terminate the occupation is required.
The
applicant may also have misconceived its rights in terms of the said
clause since it also purported to terminate the respondent's
occupation.
The
simple fact of the matter is that clause 44 deals with the situation
where the respondent unlawfully continues to occupy the
premises
after expiry of the lease. The object of the clause is merely to
create a formula for the easy calculation of the landlord's
damage in
the event of the tenant unlawfully continuing in occupation after the
expiry of the lease. Despite the clumsy wording
of clause 44.1.3
quoted above the intention is clearly enough that the provisions of
the lease agreement shall remain applicable
as
if
the
lease agreement had been one entered into on a month by month basis,
and not that a new monthly tenancy had come into operation.
It is
further confirmed by the wording of the sub-clauses 1.5 and 1.6
quoted above and in addition clauses 44.2 and 44.3 make it
abundantly
clear that the lease agreement remains expired and that no new
agreement came into existence.
In
the circumstances it is clear that the respondent's occupation
remains unlawful and that the applicant is entitled to an order
for
its eviction.
As
far as the costs are concerned the applicant applied in prayer 4 for
a punitive cost order. In my view the respondent clearly
abused the
legal process and its interpretation that a new lease had come into
force is disingenuous. In my view a punitive cost
order will
accordingly be appropriate. It should also be noted at this stage
that in prayer 3 the word '"empower" is
incorrect and
should be "directed" and that in prayer 3.3 the word
"deemed" should be omitted. I make an order
in terms of
prayers 2 and 3 of the Notice of Motion and that the respondent be
ordered to pay the costs of the application on the
scale as between
attorney and client.
F
G PRELLER
JUDGE
OF THE HIGH COURT
Applicant's
counsel: J Van den Berg (Headsdrawn by CP Wesley)
Instructed
by: Welgemoed Attorneys
Respondent's
counsel: M Snyman Instructed by: Geldenhuys, Botha Inc