About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Limpopo High Court, Polokwane
SAFLII
>>
Databases
>>
South Africa: Limpopo High Court, Polokwane
>>
2021
>>
[2021] ZALMPPHC 8
|
|
Polokwane Local Municipality v PLK Chisanyama Business Enterprise (7266/2019) [2021] ZALMPPHC 8 (2 March 2021)
IN
THE HIGH COURT OF SOUTH AFRICA
LIMPOPO
DIVISION, POLOKWANE
CASE
NO:7266/2019
In
the matter between:
POLOKWANE
LOCAL MUNICIPALITY
APPLICANT
AND
PLK
CHISANYAMA BUSINESS ENTERPRISE
RESPONDENT
JUDGMENT
KGANYAGO
J
[1]
The applicant is the owner of the property described as Portion of
Portion 10 Sterkloop
688 LSS known as Waterland (the premises). The
applicant has leased the premises to the respondent.
[2]
The respondent was in arrears with the payment of the municipality
services, rates,
rental and taxes in respect of the premises. On 8
th
April 2019 the applicant and respondent concluded a written agreement
in relation to how the respondent was to settle its arrears.
Part of
the terms of the agreement were that the respondent was supposed to
settle its arrears in full within a period of twelve
months.
[3]
On 2
nd
July 2019 the applicant gave the respondent a
written notice informing the respondent that it was in breach of the
lease agreement
that it had signed on the 25
th
November
2016 in relation to payment of monthly rental, rates and taxes. In
terms of the notice, the respondent was given fourteen
working days
within which to remedy the alleged breach. In reply to the notice,
the respondent through its attorneys per letter
dated 17
th
July 2019 conceded that its rental payments were not up to date, but
that as per the agreement of the 8
th
April 2019 it had
twelve months within which to settle its arrears. The respondent
further notified the applicant that it was paying
as per the
arrangement, and also that it was ahead with its payment of arrears.
[4]
On 25
th
July 2019 the applicant gave the respondent a
written notice notifying the respondent of the termination of the
lease agreement
with immediate effect. The respondent in that notice
was notified to vacate the premises with immediate effect upon
receipt of
the notice.
[5]
On 26
th
July 2019 the applicant disconnected electricity
supply on the premises. That resulted in the respondent launching an
urgent application
on 1
st
August 2019. The purpose of the
urgent application was to interdict, review and set aside the
applicant’s decision to discontinue
electricity supply on the
premises. On 6
th
August 2019 the respondent obtained an
order interdicting and restraining the respondent from implementing a
decision to cancel
and/or repudiate an agreement concluded between
the parties on 8
th
April 2019 in respect of the
outstanding municipality services on the premises pending the
finalization of the review application.
When the present application
was argued in this court, the respondent’s review application
had not yet been finalized.
[6]
On 28
th
October 2019 the applicant launched the present
application seeking an order for confirmation of the cancellation of
the lease
agreement, and that the respondent and all other persons
occupying the premises be ejected. The applicant avers that the
respondent
was given several indulgence to settle its arrears and the
final one been that of the 8
th
April 2019. As at 8
th
April 2019 the respondent’s outstanding balance was R 439
551-72 and was given an incentive of R 66 228-02 which left a balance
of R 373 323-91. In terms of their arrangements, the respondent was
supposed to pay that amount over a twelve months’ period
on
monthly instalments of R 31 110-30 with effect from 30
th
April 2019. That these monthly instalments had to be paid in addition
to the normal monthly account.
[7]
According to the applicant, the respondent had failed to honour the
agreement as in
April 2019 it paid R 15 000-00, did not pay in May,
and in June 219 it paid R 100 000-00. On 2
nd
July 2019 the
applicant gave the respondent notice to remedy the breach within 14
working days of receipt of the notice. On 17
th
July 2019
the respondent’s attorneys replied to their notice wherein the
respondent’s acknowledged that it was not
up to date with its
rental payments. The applicant submitted that on 25 July 2019 it
notified the respondent of the termination
of the lease agreement and
that by then the respondent’s arrears amounted to R 408 887-25.
That on the 25
th
July 2019 the respondent paid R 70 000-00
and on 26
th
July 2019 the applicant proceeded to block
further purchases of prepaid electricity by respondent. That on 31
st
July 2019 the respondent made a further payment of R 60 000-00.
[8]
It is the applicant’s contention that the agreement between the
parties that
was entered on 8
th
April 2019 was only an
indulgence to the respondent for it to pay the amounts in arrears in
respect of the premises. The applicant
submitted that even if the
agreement of 8
th
April 2019 is reviewed and set aside, it
will not have any effect on the cancellation of the lease agreement
that was cancelled
in terms of the notification letter dated 25
th
July 2019. According to the applicant, as at the date of launching of
the present application, the outstanding amount was R 235
518-69.
That on 3
rd
September 2019 the applicant’s attorneys
had notified the respondent that due to the cancellation of the lease
agreement,
it was in unlawful occupation of the premises and that it
must vacate the premises by not later than the 30
th
September 2019.
[9]
The respondent in its answering affidavit has raised the defence of
lis pendens.
The respondent avers that after the applicant had
discontinued and restricted electricity supply to the premises on
26
th
July 2016, the respondent launched an urgent
application for the review and setting aside of the applicant’s
decision to
discontinue and restrict the electricity supply on the
premises. The respondent succeeded in obtaining an urgent interim
relief
for the restoration of the electricity supply on the premises
pending the final determination of the review proceedings. As per
the
interim relief that the respondent had obtained, the applicant was
also interdicted and restrained from implementing a decision
to
cancel and/or repudiate the subsequent agreement in relation to the
payment of outstanding rates and taxes in respect of the
premises.
[10]
It is the respondent’s contention that the issue as to whether
the applicant is entitled
to act upon the respondent’s failure
to keep-up with the payment of the outstanding rates and taxes of the
premises has been
dealt with by the interim relief. It is
further the respondent contention that the issue whether they should
be evicted or
not is still subject of the review application wherein
they have obtained an interim relief. The respondent submit that the
present
proceedings should therefore be stayed pending the
finalization of their review application.
[11]
With regard to the merits the respondent submits that the lease
agreement provides for payments
of rental in the amount of R 31
000-00 per month, and rates, water, taxes and electricity would be
paid for in terms of a regime
applicable to those specific items. It
is the respondent’s contention that it was never in the
contemplation of the parties
that the rental fee shall be an amount
of rates, taxes, water and electricity and R 31 000-00. The
respondent submit that the water
and electricity were paid for on the
basis of pre-paid merchandising, whilst rates and taxes were paid on
the basis of a separate
invoice.
[12]
The respondent avers that with regard to the outstanding rates and
taxes on the premises, the
applicant’s officials have already
taken a decision to restructure the outstanding arrears, and that the
said decision was
valid and binding between the parties. The
respondent further submits that if the applicant is of the view that
there is
something untoward with the decision to restructure payment,
the applicant should bring a review application to set aside that
decision.
[13]
The respondent avers that the applicant had incorrectly allocated all
payments received from
the respondent into the rates and taxes
account of the premises. The respondent submits that its rental
payments in terms of lease
agreement have never been outstanding. It
is the respondent’s contention that the only outstanding
payment were in respect
of municipality rates and taxes. The
respondents submit that the payment arrangement it had with the
applicant stifle any complaint
of non-payment preceding the date on
which the payment arrangement was agreed upon between the parties.
[14]
In its replying affidavit the applicant stated that the respondent’s
review application
relates to payments of outstanding rates and
taxes, whilst their application relates to confirmation of the
cancellation of the
lease agreement between the parties. It is the
applicant’s contention that the order of the 6
th
August 2019 was interdicting a decision to cancel and/or repudiate an
agreement concluded with the respondent on 8
th
April 2019
in respect of the payment of the outstanding municipality services
account of the respondent’s premises and that
it should be
distinguished from the rental agreement in terms of which the
respondent occupies the premises. The applicant has
also attached to
its replying affidavit latest reconciliation of the respondent’s
account for the period April 2019 to March
2020.
[15]
It is not in dispute that the applicant and respondent on 25
th
December 2016 entered into a lease agreement in terms of which the
respondent leased the premises from the applicant at a monthly
rental
of R 31 000-00. In terms of the lease agreement the respondent was
also responsible for payments of electricity and water
charges,
assessment rates and taxes, service levies, licence fee, other
payable and municipality services rendered according to
tariffs
determined from time to time in connection with and in respect of the
business operation. It was also a material term of
the lease
agreement that the supply of electricity shall not form part of the
lease agreement save as may be provided for or agreed
upon in a
separate written agreement.
[16]
The respondent was not up to date with its payment to the applicant
which resulted in the parties
concluding three agreements on
different occasions. In terms of said three agreements, the
respondent was given indulgence by way
of rebates and schedule for
payment of the amount in arrears. The first indulgence was given to
the respondent per the written
agreement of 20
th
October
2017, and by then the outstanding amount after rebate was R 315
866-79. The respondent did not settle the amount as agreed
and that
led to the second written agreement of 26
th
January 2018
and the outstanding amount after the rebate was R369 814-53. Again
the respondent failed to pay the outstanding amount
as agreed and
that led to the third agreement that was concluded on 8
th
April 2019 and by then the outstanding amount after rebate was R 373
232-91. As per the 8
th
April 2019 agreement the respondent
was supposed to settle its arrears over a period of twelve months,
which would have been until
the 7
th
April 2020.
[17]
As at July 2019 the applicant was not satisfied in the manner in
which the respondent was paying
its outstanding arrears. That led to
the applicant on 2
nd
July 2019 addressing a letter to the
respondent informing the respondent that it was in breach of clause 7
and 28 of the lease
agreement. The respondent was given 14 working
days within which to remedy the breach. On 25
th
July 2019
the applicant notified the respondent that the lease agreement has
been terminated and that it must vacate the premises
with immediate
effect. On 26
th
July 2019 the applicant terminated the
electricity supply on the premises which the respondent was leasing.
That led to the respondent
obtaining an interim interdict against the
applicant.
[18]
The interim interdict read as follows:
“
1. The respondent
is interdicted from implementing a decision to cancel and/or
repudiate an agreement concluded with the applicant,
on 8
th
April 2019, in respect of the payment of the outstanding municipality
services account of portion of portion 10 Sterkloop 688 LSS,
known as
Waterland, pending the finalization of the review application.
2. The respondent is
forth with directed to restore the electricity supply and
municipality services to the abovementioned premises,
pending the
finalization of the review application.
3. The costs shall be the
costs in the cause of the review application.”
[19]
On 3
rd
September 2019 the applicant through its attorneys
notified the respondent that the respondent review application has
got nothing
to do with the decision to cancel the lease agreement and
that the respondent must vacate the premises by 30
th
September 2019. The respondent failed to vacate the premises
and that led to the applicant launching the present application.
[20]
The question is whether the respondent’s plea of
lis pendens
will succeed in this matter. It is trite that the requisite for a
successful plea of
lis pendens
are that two actions must have
been between the same parties or their successors in title,
concerning the same subject matter and
founded upon the same cause of
complaint.
[21]
In
Caesarstone
Sdat-yam v World Market and Gravite 2000
[1]
Wallis JA said:
“
On
this basis the requirement of the same cause of action is satisfied
if the other proceedings involve the determination of a question
that
is necessary for the determination of the case in which the plea is
raised and substantially determinative of the outcome
of that latter
case.
Boshoff
was
followed in a number of cases in provincial courts, but was regarded
as controversial because it was thought to import into
South African
law the English principles of issue estoppel.
It is unnecessary to
explore that controversy because this Court laid it to rest in
Kommissaris
van Binnelandse Inkomste v ABSA Bank Beperk.
There, Botha JA held
that
Boshoff
was based
on the principles of our law. He said that its
ratio
is that the strict
requirements for a plea of
res
judicata
of
the same cause of action and that the same thing be claimed, must not
be understood in a literal sense and as immutable rules.
There is
room for their adaptation and extension based on the underlying
requirement that the same thing is in issue as well as
the reason for
the existence of the plea.”
[22]
It is the applicant’s contention that the interim order
obtained by the respondent on 6
th
August 2019 relates to
payment of outstanding rates and taxes, and further that the
respondent review application does not concern
the applicant’s
decision to cancel the lease agreement. According to the applicant,
in terms of the agreement of 8
th
April 2019, the
respondent was supposed to settle the balance of R 373 323-91 in
twelve monthly instalments of R 31 110-30, and
that those instalments
were to be paid in addition to the normal monthly account. The
applicant in its founding affidavit has stated
that all payments due
by the respondent it in respect of the premises, which were rental,
rates and taxes and municipal services
were consolidated into one
account of which on the applicant’s system they allocated the
respondent a new account number.
Therefore, the normal monthly
account which the respondent was supposed to pay in addition to the
monthly instalments as per the
agreement of the 8
th
April
2019 was for rental, rates and taxes and other municipal services.
[23]
The applicant has further stated that by the end of June 2019 the
respondent’s outstanding
arrears should have been R 279 993-01,
but that the respondent paid R 15 000-00 in April 2019 and R 100
000-00 in June, leaving
a total outstanding balance of R 508 887-25.
The applicant further stated that the outstanding balance of R 508
887-25 was inclusive
of the normal monthly account. As per
applicant’s founding affidavit, the respondent’s constant
failure to adhere to
the provisions of the lease agreement and
indulgences led it addressing a letter to the respondent on 2
nd
July 2019 giving the respondent fourteen working days within which to
remedy the alleged breach. Even in that letter of 2
nd
July
2019 the respondent is notified that it is in breach of payment of
rental, rates and taxes. In the alleged termination letter
the
respondent is being notified that the lease agreement has been
terminated on the basis of the respondent’s failure to
pay
monthly rental, rates and taxes by the 7
th
of every month
and also its failure to update its arrears as per the payment
arrangements.
[24]
It is clear that the rates and taxes cannot be separated from the
rental since as per the applicant’s
own version, they have been
consolidated into one account. The alleged termination letter of the
25
th
July 2019 also does not separate the rates and taxes
from the rental, but has been cited jointly as the reasons for
termination
of the lease agreement. The disconnection of the
electricity supply on the premises was as results of the alleged
cancelation of
the lease on the 25
th
July 2019. The
alleged cancelation letter does not specify how much rental was due,
and how much was due for rates and taxes, but
gives a globular amount
of R 408 887-25 since it relates to one consolidated account.
[25]
When the respondent obtained the interim order, it was in relation to
one consolidated amount
which the respondent had twelve months within
which to settle the arrears whilst at the same time paying the normal
account. In
my view, there is no merits in the applicant submission
that the respondent’s review application relates to payment of
outstanding
rates and taxes only. The court order of the 6
th
August 2019 relates to one consolidated account of the respondent
which comprise of rentals, rates and taxes and other municipal
services.
[26]
The purpose of the interim order was to interdict and restrain the
applicant from implementing
a decision to and /or repudiate an
agreement of the 8
th
April 2019 pending the finalization
of the review application. The agreement of the 8
th
April
2019 was valid for twelve months. The applicant had launched the
application at hand during October 2019. By then the review
application was not yet finalized, and even at the date when this
application was argued, it had not yet been finalized. Since
the
respondent’s account has been consolidated, and the applicant
relies on the letter dated 25
th
July 2019 as the
termination letter, and that letter contains a consolidated
outstanding amount, in my view, the determination
of the review
application which is still pending involve the question that is
necessary for the determination of the present application
as most of
the annexures in the review application are the same as with the
present application. The respondent was also making
one payment for
one consolidated account. In my view, the respondent has satisfied
the requirements of
lis pendens
.
[27]
The agreement of 8
th
April 2019 was valid for twelve
months. When this application was argued, that agreement had long
expired. Ordinarily when a plea
of
lis pendens
is upheld, the
proceeding will be stayed until the finalization of the pending
proceedings. The interim order of the 6
th
August 2019 was
valid until the expiry of the agreement of the 8
th
April
2019. It will therefore serve no purpose to stay the proceedings as
the agreement that led to the obtaining of the interim
order had
lapsed.
[28]
Despite notifying the respondent of its intention to terminate the
lease agreement and even after
allegedly cancelling the lease
agreement, the applicant allowed the respondent to continue making
further payments. As per respondent’s
payment history, it
reflects that the respondent made the following further payments on
2
nd
July 2019 paid R 100 000-00, 25
th
July 2019
paid R 70 000-00, 31
st
July 2019 paid R 60 000-00, October
2019 paid R 98 000-00, November 2019 paid R 55 000-00, December 2019
paid R 84 870-00, January
2020 paid R 86 000-00 and February 2020
paid R 130 000-00. Adding the respondent’s further payments
shows that as at October
2019 when the applicant launched its
application for confirmation of cancellation of the lease agreement,
the respondent has paid
R 443 000-00 and was still left with six
months before the expiry of the 8
th
April 2019 agreement.
The alleged termination letter of the 25
th
July 2019 shows
an outstanding amount of R408 887-25. Therefore, as at October 2019
the respondent was having manageable arrears
whilst still having six
months within which to settle its arrears.
[29]
Under the circumstance, even though the 8
th
April 2019
agreement had lapsed which renders interim order of the 6
th
August 2019 ineffective, the applicant is still not entitled to the
relief it is seeking as it had compromised its claim by accepting
further payments from the respondent, which further payments have
substantially reduced the arrears with six months still to go
before
the lapse of the agreement. The further payments by the respondent
had substantially remedied the breach which led to the
letters of the
2
nd
July 2019 and 25
th
July 2019 addressed to
it.
[30]
In the results I make the following order:
30.1 The applicant’s
application is dismissed with costs.
KGANYAGO
J
JUDGE
OF THE HIGH COURT
LIMPOPO
DIVISION, POLOKWANE
APPEARENCES
COUNSEL
FOR APPLICANT
ADV
JAL PRETORIUS
BRIEFED
BY
MOHALE
INCOPORATED
COUNSEL
FOR RESPONDENT
ADV
MANALA ME
BRIEFED
BY
LEGODI
ATTORNEYS
DATE
HEARD
03
FEBRUARY 2021
DATE
DELIVERED
2
ND
MARCH 2021
[1]
2013
(6) SA 499
(SCA) at para 21