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[2021] ZAGPPHC 47
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Huurkok Commercial (Pty) Ltd v Subtinix (Pty) Ltd and Others (66183/2020) [2021] ZAGPPHC 47 (1 February 2021)
IN
THE HIGH COURT OF SOUTH AFRICA
(GAUTENG
DIVISION, PRETORIA)
(1)
REPORTABLE: NO
(2)
OF INTEREST TO OTHER
JUDGES: NO
DATE:
01-02- 2021
Case
Number
: 66183/2020
In
the matter between:
HUURKOK
COMMERCIAL (PTY) LTD
APPLICANT
and
SUBTINIX
(PTY)
LTD
FIRST
RESPONDENT
TSHWANE
UNIVERSITY OF TECHNOLOGY
SECOND
RESPONDENT
THE
OCCUPANTS: DUBAI
RESIDENCE
THIRD
RESPONDENT
THE
MINISTER OF HIGHER
EDUCATION,
FOURTH
RESPONDENT
SCIENCE
AND TECHNOLOGY
FUNDI
CAPITAL (PTY)
LTD
FIFTH
RESPONDENT
THE
STUDENT REPRESENTATIVE COUNCIL OF
SIXTH
RESPONDENT
TSHWANE
UNIVERSITY OF TECHNOLOGY
JUDGMENT
KUBUSHI
J,
This
judgement is handed down electronically by circulating to the
parties’ representatives by email and by uploading on
Caselines.
[1]
On 7 December 2018, the applicant Huurkor Commercial (Pty) Ltd
(“Huurkor”) and
the first respondent, Subtinix (Pty) Ltd
(“Subtinix”) entered into a written agreement of lease in
respect of the premises
known as Dubai Residence, the premises are
also known as Casa JJ as described in the agreement of lease (“the
premises”).
The occupants of the said premises are mainly
students enrolled with The Tshwane University of Technology ("TUT").
[2]
Subtinix is one of the entities accredited with TUT to provide
student accommodation. Subtinix
does not have its own premises and
have leased the premises from Huurkor to provide for the
accommodation needs of the students.
An entity by the name of TMM
Rental (Pty) Ltd (“TMM Rental”) is the registered owner
of the premises and Huurkor is
its authorised managing agent.
[3]
The students are beneficiaries of the National Student Financial Aid
Scheme of South Africa
(“NSFAS”) bursaries. The NSFAS
funds are administered by the fifth respondent, Fundi Capital (Pty)
Ltd (“Fundi”),
which issues payment cards to the
students. The students use the cards at accredited businesses and
also use the cards to pay for
their accommodation.
[4]
Fundi makes payments to Subtinix in respect of the accommodation of
the students who have
signed agreements of lease with it and Subtinix
in turn makes payment to Huurkor for the number of students it has
accommodated
in the premises.
[5]
Huurkor performed all its contractual obligations by giving Subtinix
occupation of the premises.
Subtinix took possession of the premises
on 1 January 2019. It has also concluded agreements of lease with the
occupants (Sub-lease)
who in turn commenced occupying the premises
and are in fact in occupation of the premises.
[6]
The agreement of lease between Huurkor and Subtinix provided for an
initial lease period
of twelve (12) months with an option to renew.
The lease period started on 1 January 2019 and terminated on 31
December 2019
but was renewed for another twelve (12) months
scheduled to expire on 31 December 2020. The lease period was not
extended for a
further period and at the time of the hearing of this
application the agreement of lease had expired by effluxion of time.
[7]
In terms of the agreement the monthly rental, excluding utilities
amounted to R648 000 and
later escalated to R777 600. In addition to
the said rental, Subtinix was in terms of clause 2.3 of the agreement
of lease, liable
for payment of the utilities, water sanitation,
electricity WI-FI data, Top ups and a card machine for collection of
rental, pertaining
to the premises.
[8]
It is alleged that Subtinix has continually defaulted, and remains in
default, in its contractual
obligations, including defaults in making
payment of the monthly rental, utilities and WI-FI data as
contractually agreed. Subtinix
was requested in a written letter of
demand to remedy its breach within fourteen (14) days in accordance
with clause 19.1.1 of
the agreement of lease but failed to comply
with such demand. Due to Subtinix’s failure to remedy the said
breach, Huurkor,
in a letter dated 16 November 2020, cancelled the
agreement of lease. As at date of cancellation of the agreement of
lease, Subtinix
was in arrears in the amount of R4 504 953, 56.
[9]
The municipal account is registered in the name of the premises, TMM
Rental. Against a threat
to discontinue services to the premises, TMM
Rental was forced to enter into a payment arrangement with the City
of Tshwane Municipality
under agreement number 80000670202 on 3
November 2020. The financial exposure and risk is alleged to be very
real and is increasing
drastically and without receiving rental
payments and thus not paying the City of Tshwane per the arrangement,
TMM Rental will
be held accountable.
[10]
The breach clause contained in clause 19.1 of the agreement of lease
provides that –
"19.1.1
If
either party commits any and fails to remedy such breach
within 14
(fourteen) days after receipt of a notice requiring that it be
remedied, provided that no such notice shall be necessary
in the case
of a third or subsequent breach occurring within the leased premises
period; or
19.1.2
Either party commits any breach of the terms of this lease
which is
incapable of being remedied; or
19.1.3
The lessee so consistently breaches the terms of this
lease (whether
by non-payment of rent or any other amount due to the lessors on due
date or by non-compliance with its terms) as
to justify the lessor in
holding that the lessee's conduct is inconsistent with an intention
or an ability to carry out such terms;
. . .
then
the aggrieved party shall have the right, but shall not be obliged,
forthwith to cancel this lease and to resume possession
of the leased
premises but without prejudice to its claim for arrear rental and/or
damages which it may have suffered by reason
of or of the premature
cancellation, alternatively to unilaterally vary this lease and make
it thereafter terminable by 1 (one)
month's written notice by either
party."
[11]
Huurkor, has approached the court on urgency seeking an order that
Subtinix restores the possession
of the premises in question
including all indicia of such possession as detailed in the notice of
motion, namely
11.1.
Giving effective control of and access
to the premises to Huurkor;
11.2.
Handing over the keys to the premises to
Huurkor;
11.3.
Handing to Huurkor any and all of
Subtinix’s electronic access devices regulating access to the
premises.
[12]
In the event of Subtinix failing to comply with this order, that the
Sheriff of the High Court, alternatively
his deputy, be authorised
and directed to take all reasonable steps to ensure compliance with
this order.
[13]
The relief is sought against Subtinix under the circumstances where
Subtinix is said to no longer have
any lawful right to occupy the
premises given the cancellation of the lease agreement concluded
between itself and the Huurkor
and the fact that the agreement of
lease has terminated due to effluxion of time. Due to the
termination of the agreement,
either by the cancellation thereof of
by effluxion of time, it is contended that Subtinix cannot remain in
occupation after the
commencement of the new academic year as it will
have no right and cannot lawfully conclude any new agreements of
lease directly
with the students who will enrol for the new academic
year that commences in April 2021.
[14]
In essence the urgent application rests on two claims, namely the
termination of the agreement resulting
from its alleged cancellation
and the fact that it has run its course due to effluxion of time.
[15]
Subtinix is opposing the application. The other parties are not
taking part in the proceedings and
only the fourth respondent,
The Minister of Higher Education Science and Technology,
has sent a letter
confirming to abide the decision of the court.
[16]
Besides the defence on the merits of the application, Subtinix has
raised points
in limine
which ought to be dealt with at the
outset.
Non-joinder
of NSFAS
[17]
The first point
in limine
of non-joinder does not have any
merit. NSFAS has no interest in the agreement entered into between
the parties. The fact that
it provides funding for the accommodation
does not prescribe how the agreement between the parties should be
conducted.
Urgency
[18]
Subtinix misconstrues the relief sought by the applicant. The relief
sought is not for payment of the
arrear rental which understandably
can be sought at a later date - and such relief will be of use and
effect if granted at such
later date. However, the relief sought in
these proceedings is for the handing over of the property to Huurkor.
[19]
The resolution Subtinix is referring to in its argument, authorises
one Daniel Johannes Muller to "
take all reasonable steps to
collect the arrear rent and evict the tenant
". Huurkor has
opted in these proceedings to first evict the tenant, Subtinix,
before collecting the arrear rental. The application,
thus, concerns
the eviction of Subtinix from the premises and is not for the
collection of the rental. There is nothing wrong in
law to do so.
Huurkor is not obliged to do the two actions at the same time.
[20]
In terms of clause 19 of the agreement of lease Huurkor has the
right, in the event of breach by Subtinix
of the terms of the
agreement of lease, to cancel the agreement and to resume possession
of the leased premises but without prejudice
to its claim for arrear
rental and/or damages which it may have suffered by reason of or of
the premature cancellation.
[21]
The application in my view is urgent. In accordance with
uniform
rule 6 (12), an applicant must in her or his founding papers set
forth explicitly the circumstances under which she or he
avers the
matter is urgent. More importantly the applicant must state the
reasons why she or he claims that she or he cannot
be afforded
substantial redress at a hearing in due course.
[22]
The matter is said to be urgent, correctly so, as it cannot await
adjudication in the normal course
of the process. Given the impact of
the Covid-19 pandemic on tertiary education which includes TUT, the
academic year has been
extended to the end of March 2021. The current
occupants will remain in occupation until the end of this academic
year and will
have to conclude new agreements of lease if they intend
to continue with their respective occupancy in the premises. Students
enrolling
for the new academic year will in any event have to
conclude new agreements of lease for such period with whoever has the
lawful
right to do so in respect of the premises.
[23]
Huurkor needs to be placed in a position to prepare the premises to
be handed over to a new tenant
in order to ensure that it will be
able to meet its contractual obligations at the inception of the new
academic year. The premises
give accommodation to four hundred and
thirty-two (432) students and given the sheer size of the premises,
this in itself will
be a mammoth task. It is contended that if
possession is given now Huurkor will be in a position to prepare the
premises in time
for the next academic year. The applicant is not
seeking the eviction of the occupants of the property and as such the
relief sought
will not negatively impact on any of their existing
rights.
[24]
The argument that if the proper process of the filing of papers is
allowed and/or followed, by the
time the matter is heard the academic
year would have already commenced, is thus correct. Should Subtinix
remain in occupation
of the premises, the occupants' right to
occupancy of the premises will be tainted by Subtinix's unlawful
holding over of the premises.
New students enrolling for the new
academic year should enter into lease agreements that are not so
tainted.
The
Merits
[25]
It might or might not be so that the Ministerial Directives on
Revision of Payments to Off-Campus Accommodation
due to the Covid-19
outbreak which were supposedly brought to the attention of the
applicant as suggested by Subtinix, have affected
the performance of
Subtinix and perhaps amended the terms of the lease agreement by
operation of the law.
[26]
I do not intend to determine this issue which in my view ought to be
decided when the issue of whether
or not Subtinix is liable to pay
the outstanding rental is decided.
Such a
defence, in my view, may be brought against Huurkor’s claim for
arrear rental.
Of importance before me is that the agreement
of lease between Huurkor and Subtinix has been cancelled and in any
event has lapsed
due to effluxion on time and cannot be revived by
the court. Without an agreement in place, Subtinix cannot continue to
be in possession
of the premises which ought to revert to its owner,
in this instance Huurkor.
Subtinix is, thus, in
unlawful possession of the premises.
[27]
I am satisfied that Huurkor has complied with the requirements of an
interdict in that it has established
a clear right, a well-grounded
apprehension of irreparable harm if the relief sought is not granted
and the balance of convenience
favours the granting of the relief
sought.
[28]
In the circumstances I make the following order –
1.
It is directed that the matter be dealt with as
one of urgency in terms of Uniform Rule 6 (12) and that the normal
Rules relating
to applications be dispensed with and that insofar as
the applicant has not complied with the Rules of this Court, that its
failure
to do so be condoned.
2.
The agreement of
lease concluded between the applicant and the first respondent on 07
December 2018, is declared terminated by effluxion
of time.
3.
The first respondent
is ordered to forthwith restore the applicant's possession of the
property known as Casa JJ, situated at Servaas
Street, Pretoria-West,
Pretoria, Gauteng and also known as the DUBAI RESIDENCE including,
but not limited to, the following measures
- as against the first
respondent:
3.1
Giving effective
control of and access to the premises to the applicant;
3.2
Handing over the keys
to the premises to the applicant; and
3.3
Handing to the
applicant any and all of the first respondent's electronic
access devices regulating access to the premises.
4.
In the event of the
first respondent failing and/or refusing to comply with this order,
the Sheriff of the High Court, alternatively
his deputy, is
authorised and directed to take all reasonable steps to ensure
compliance with this order.
5.
The first respondent
is ordered to pay the costs of the application.
E.M KUBUSHI
JUDGE
OF THE HIGH COURT
GAUTENG
DIVISION, PRETORIA
Appearance:
Applicant’s
Counsel
: Adv. L W De Beer
Applicant’s
Attorneys
:
Pretorius Le Roux Inc.
First
Respondent’s Counsel
: Adv.
M.E. Manala
Adv. H.
Legoabe
First
Respondent’s Attorneys
:
Kholisile Lumka Inc.
Date
of hearing
: 26 January 2021
Date
of judgment
: 01 February 2021