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[2009] ZASCA 16
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Brink v Premier of the Free State Province and Another (256/08) [2009] ZASCA 16; 2009 (4) SA 420 (SCA) ; [2009] 3 All SA 304 (SCA) (19 March 2009)
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THE
SUPREME COURT OF APPEAL
REPUBLIC
OF SOUTH AFRICA
JUDGMENT
Case no: 256 / 08
LOÏS
BRINK Appellant
and
THE
PREMIER OF THE FREE STATE PROVINCE First Respondent
THE
MEC: DEPARTMENT OF PUBLIC WORKS, Second Respondent
ROADS
AND TRANSPORT OF THE FREE STATE
PROVINCE
___________________________________________________________________
Neutral citation:
Brink
v
Premier of
the Free State (256/08)
[2009] ZASCA 16
(19 March 2009)
CORAM:
STREICHER,
NAVSA, PONNAN and MLAMBO JJA and LEACH AJA
HEARD:
10 MARCH 2009
DELIVERED:
19 MARCH 2009
SUMMARY:
Contract â interpretation of â language to be
given its grammatical and ordinary meaning.
___________________________________________________________________
___________________________________________________________________
ORDER
___________________________________________________________________
On appeal from
:
The High Court, of South
Africa, Free State Provincial Division (Wright J sitting as court
of first instance).
The appeal is dismissed with costs.
___________________________________________________________________
JUDGMENT
___________________________________________________________________
PONNAN JA
(
STREICHER, NAVSA and MLAMBO
JJA
and LEACH AJA concurring):
[1] A contract of lease in respect of a resort between the Free State
Provincial Government,
1
as lessor, and the appellant Loïs Brink, as lessee, gave to the
latter - so she contends - two options to extend the period
of the
lease. When she sought on the second occasion to renew the lease, her
right to do so was challenged by the respondents.
[2] At the heart of the dispute between the parties is Clause 2 of
the lease headed 'PERIOD', which provides:
'The LEASE is for a period of five (5) years from 1
October 1997 to 30 September 2002, with the proviso that the LESSEE
shall have
an option to extend the lease period for a period of five
(5) years with a second option of 5 years on the same and/or new
conditions
as will be mutually agreed, excluding a further right to
renewal. The LESSEE shall give written notice to the LESSOR six (6)
months
in advance of his or her intention to renew the contract and
all negotiations with regard to the renewal of the contract shall be
concluded four (4) months before the initial contract lapses. If the
LESSEE does not give written notice six (6) months before
the
contract lapses or if all negotiations are not concluded four (4)
months before the contract lapses, this option to renew expires.'
[3] After the initial term of five years, the first five year option
to renew in terms of clause 2 was exercised by the appellant
and the
lease was duly extended until 30 September 2007.
[4] Things did not go as smoothly, however, when she purported to
exercise the second option to extend the lease period for a further
five years. She did so by despatching a letter per facsimile to
Advocate Msibi, the Head of the Department of Public Works, Roads
and
Transport, on 29 January 2007. The relevant portion of that letter
reads:
'I herewith notify you that I hereby exercise the option
to extend the lease for a further period of 5 years effective from
1
st
October 2007
until 30
th
September 2012 on the same terms as provided for in clause 2 of the
agreement.
It is my view that the options contained in the
agreement are such that the second option which I hereby exercise,
will be on the
same terms and conditions as contained to in the
existing agreement of lease, including the annual escalation of
rentals. There
is in my opinion thus no other conditions to be
negotiated.'
[5] The response from Advocate Msibi was:
âYour letter correctly states that the agreement was
signed on the 3
rd
of November 1997 for [an] initial period of five (5) years.
It should be mentioned that your initial agreement
expired at the end of October 2002, and you were given an option to
extend your
lease hence expiry in October 2007.
Please be advised that as we did the previous year
whereby we gave notice that the Department will not renew or extend
the lease.'
[6] Not content with that response, the appellant consulted with an
attorney who wrote to Advocate Msibi, on 13 February 2007,
as
follows:
'Clause 2 of the Lease Agreement specifies that an
initial period of 5 years running from the 1
st
of October 1997 to the 30
th
September 2002. During this period our client exercised her option to
renew for a further period of 5 years (the 1
st
option afforded to her) and the lease was subsequently renewed for a
further period of 5 years in terms of this first option.
In terms of clause 2 of the written Lease Agreement our
client was afforded a second option for a final period of 5 years
which
second option she now exercises in terms of her letter dated
the 29
th
January
2007, a copy of which is annexed hereto.
Kindly advise as to the possibility of having a round
table discussion regarding the renewal of the lease for the final
period of
5 years, failing which our client will have to approach the
High Court with an Application for a Declaratory
Order
as to her right of a further extension in terms of the existing
agreement.'
[7] That letter failed to elicit a response. A subsequent letter, in
a similar vein, did. The response was this:
âThe Department wishes to reiterate it that it does
not intend extending the lease with your client, as according to the
Department,
there is no second option to be exercised by your client.
Alternatively the Department does not consider itself
bound by the second option if it does exist at all.
[Consequently] your client would be expected to vacate
the premises upon the expiry of the present lease i.e. on or before
30 September
2007.'
[8] Impasse having been reached, the threatened application for
declaratory relief adverted to earlier by the appellant's attorney,
was launched. The appellant accordingly sought an order in the High
Court (Bloemfontein) that she had lawfully and validly exercised
the
second option and that her renewal of the lease for the period 1
October 2007 to 30 September 2012 was valid. The High Court
(per
Wright J) held:
'Considering the clause as a whole it seems likely that
the parties intended that after ten years of the lease had expired,
the
parties should have the right to possibly negotiate new terms in
view of changing circumstances, and this is precisely what the
words
of the clause, construed as a whole, have achieved. The respondents
were, however, not entitled to refuse to negotiate.'
[9] The learned Judge accordingly issued the following order:
'1 Dit word verklaar dat die verhuurder (die Provinsiale
Regering van die Vrystaat Provinsie) nie geregtig was om summier en
sonder
dat
bona fide
onderhandelinge tussen die huurder (die applikante) en die verhuurder
omtrent 'n verdere verlenging van die huurkontrak, "LB1"
tot die funderende beëdigde verklaring soos vervang, gevoer was,
die huurder se versoek om 'n verdere verlenging van die huurkontrak
te weier nie.
2 Die verhuurder word gelas om onderhandelinge met die
huurder aan te knoop oor die moontlike verdere verlenging van die
huurkontrak
ingevolge die bepalinge van klousule 2 daarvan tot en met
30 September 2012, hetsy op dieselfde of ander voorwaardes of
ingevolge
'n kombinasie van die bestaande en ander voorwardes.
3 Ten einde die aanvang van die onderhandelingsproses te
reël, word dit gelas dat:
3.1 die verhuurder binne 21 dae na die verlening van
hierdie bevel 'n skriftelike uiteensetting van die voorwaardes waarop
die verhuurder
bereid sou wees om die huurkontrak te verleng, aan die
applikante se prokureur van rekord moet beteken;
3.2 die huurder binne 14 dae na die aflewering van die
uiteensetting in paragraaf 3.1 gemeld, haar skriftelike aanvaarding
van sodanige
voorstelle of enige skriftelike teenvoorstelle aan die
respondente se prokureur van rekord moet beteken; en
3.3 die verhuurder en die huurder nadat daar aan
paragrawe 3.1 en 3.2 voldoen is, indien ooreenkoms dan nog nie bereik
is nie, verplig
sal wees om oor 'n verdere tydperk van drie
kalendermaande bereken vanaf die eerste dag van die maand opvolgend
op die maand waartydens
aan paragraaf 3.2 voldoen is, redelikerwys,
sonder vooroordeel en
bona fide
onderhandelinge te voer ten einde te poog om ooreenkoms te bereik oor
die voorwaardes waarop 'n verdere verlenging van die huurkontrak
tot
en met 30 September 2012 kan geskied.
4 Gedurende die tydperk in paragraaf 3.3 gemeld, sal
dit die partye vrystaan om die Hof te nader vir 'n verlenging van
sodanige
tydperk, mits en indien dit sou blyk dat enige van die
partye in versuim is om redelikerwys, sonder vooroordeel en
bona
fide
onderhandelinge
omtrent die verdere verlenging van die huurkontrak tot en met 30
September 2012 en die voorwaardes daarvan, te
voer.
5 Indien die verhuurder en die huurder daarin sou slaag
om 'n ooreenkoms te bereik omtrent die verlenging van die huurkontrak
tot
en met 30 September 2012, sal sodanige ooreenkoms in skrif vervat
word en deur die verhuurder en die huurder, of hul gemagtigde
verteenwoordigers, onderteken word, alvorens dit bindind sal word.
6 Hangende die duur van die onderhandelinge voormeld
hetsy gedurende die aanvanklike termyn of enige verlenging daarvan,
of gedurende
die beregting van enige aansoek om 'n verlenging van die
termyn waartydens onderhandelinge gevoer moet word, en tot tyd en wyl
'n skriftelike huurkontrak soos in paragraaf 5 beoog gesluit is, of
tot tyd en wyl die onderhandelinge ingevolge die bepalinge van
hierdie bevel tot 'n einde sou kom, sal die bepalinge en voorwaardes
van die huurkontrak
mutatis mutandis
van toepassing bly, en sal sodanige huurkontrak alleen ten einde loop
indien die partye nie 'n skriftelike oorenkoms bereik nie.
In
sodanige omstandighede sal die huurkontrak beëindig word op die
laaste dag van die maand onmiddellik opvolgende op die
maand
waartydens die onderhandelingstydperk, of enige verlenging daarvan,
verstryk het.
7 Die respondente word gesamentlik en afsonderlik, die
een te betaal die ander vrygestel te word, gelas om die applikante se
koste
te betaal.'
[10] This appeal against the judgment and order of Wright J is before
us with the learned Judgeâs leave.
[11] The matter is essentially one of interpretation. According to
the 'golden rule' of interpretation the language in a document
is to
be given its grammatical and ordinary meaning, unless this would
result in some absurdity, or some repugnancy or inconsistency
with
the rest of the instrument.
2
[12] The first difficulty in the interpretation of the relevant words
in clause 2 is created by the use of the expression 'and/or'.
Those
words must in the context of the clause be read disjunctively as well
as conjunctively.
3
If that is done, then it is clear that what the clause envisages is a
second option to renew on either:
(a) the same conditions; or
(b) new conditions; or
(c) a combination of (a) and (b).
It is not in dispute that the qualifier, 'as will be mutually
agreed', which is couched in the future tense, is applicable to a
renewal in terms of either (b) or (c). The sole issue for
determination therefore is whether it applies as well to a renewal
under
(a). Upon a natural construction of the words of clause 2 they
do not signify, I think, that the qualifier is rendered inapplicable
to (a). There appears to be no reason for the limitation of the
ordinary grammatical meaning of the phrase. It has not been shown
why
such a limitation of the ordinary meaning of the phrase is either
necessary or desirable or what absurdity or repugnancy would
arise
should the phrase be given its ordinary grammatical meaning.
[13] The qualifier 'as will be mutually agreed' follows syntactically
on the reference to the conditions upon which the lease agreement
may
be extended for the second time, which may be the same or new, or a
combination of both the same and new conditions. In other
words, the
phrase plainly qualifies both 'the same and/or new conditions'. I
thus remain unpersuaded that the clause can be made,
on any
permissible technique of interpretation - as was urged upon us on
behalf of the appellant - to yield the following intelligible
meaning: 'on the same conditions or new conditions as will be
mutually agreed'.
[14] It follows that the appeal must fail. There being no
counter-appeal, it is unnecessary to consider whether the order of
the
court below is a competent one.
[15] In the result the appeal is dismissed with costs.
_________________
V M PONNAN
JUDGE OF APPEAL
APPEARANCES:
For
Appellant: D J van der Walt
Instructed
by:
Molenaar
& Griffiths
Sasolburg
Symington
& De Kok
Bloemfontein
For
Respondent: I V Maleka SC
Instructed
by:
The
State Attorney
Bloemfontein
1
Represented by the Premier of the Free State Province as the first
respondent and the Department of Public Works, Roads and Transport
as the second respondent.
2
Coopers & Lybrand and Others v Bryant
[1995] ZASCA 64
;
1995 (3) SA 761
(A)
at 767.
3
Berman v Teiman
1975
(1) SA 756
(W) at 757D-G;
Du Toit en ân
Ander v Barclays Nasionale Bank Bpk
1985
(1) SA 563
(A) at 570G-I.