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[2021] ZAGPPHC 325
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Ozmik Property Investments v Staracom Proprietary Limited and Another (93172/2019) [2021] ZAGPPHC 325 (28 May 2021)
REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
DIVISION, PRETORIA
(1)
REPORTABLE: NO
(2)
OF INTEREST TO OTHER
JUDGES: NO
(3)
REVISED.
28/05/2021
Case
No.: 93172/2019
In the matter
between:
OZMIK
PROPERTY
INVESTMENTS
Plaintiff
and
STARACOM
PROPRIETARY
LIMITED
1
st
Defendant
SRINIVISAN
VENKANT
KUMAR
2
nd
Defendant
JUDGMENT
MNGQIBISA-THUSI
J
[1]
In its application for summary judgment against the defendants, the
plaintiff
seeks an order in the following terms:
1.1
payment of the sums of R4,705,757.33 and R 369,242.67;
1.2
interest on the above-mentioned amounts at the rate of 12% per annum
from the
date of issuing of the summons to date of payment;
1.3
costs on an attorney and client scale.
[2]
On 14 April 2005 the first defendant and a company known as Growth
Point
Properties Limited (“Growth Point”) entered into a
written lease agreement (“the agreement”) over a Hotel
situated at erf 1215 Arcadia, Pretoria. In terms of the
agreement, the lease was to expire on 31 January 2015.
[3]
The agreement contained,
inter alia
, a variation clause which
provided that:
“
36.1
This document incorporates the entire agreement between the lessor
and the lessee and no alteration, cancellation
or variation hereof
shall be of any force and effect unless it is in writing and signed
by both the lessor and the lessee who hereby
acknowledge that no
representations or warranties have been made by either the lessor or
the lessee, nor are there understandings
or terms of lease other than
those set out herein”.
[4]
The second defendant signed a deed of suretyship with Growth Point
binding
himself as surety and co-principal debtor for the debts of
the first defendant.
[5]
On 28 March 2013 the lease was renewed. On 8 May 2015 the
parties
concluded an addendum to the agreement which provided, inter
alia, that the agreement would endure for the period 1 February 2015
to 31 January 2025. Further, the addendum set out the
applicable basic rentals and related costs.
[6]
According to the plaintiff, on 25 June 2015 ownership of the Hotel
was
transferred to the plaintiff after it purchased it from Growth
Point. The defendants are disputing the sale of the Hotel and
the cession of the lease agreement by Growth Point to the plaintiff.
[7]
On 21 November 2019 the plaintiff’s attorneys delivered a
letter
of demand on the first defendant for payment of the sum of
R4,705,757.33. In this letter, the plaintiff stated, amongst
others,
the following:
“
Our
client has considered the alternatives you presented to them but the
suggestions are not viable and attractive enough to significantly
reduce the outstanding arrears.”
[8]
On the same day, the second defendant, representing the first
defendant,
sent an email to the plaintiff in which he informed the
plaintiff of his intention to close the Hotel by 31 December 2019.
This date was subsequently extended to 30 January 2020.
[9]
On 18 December 2019 the plaintiff effected service of summons on the
defendants
in which it sought payment of the amount of R5,075,757.33
plus interest and costs. After the defendants filed their
notice
to defend on 1 January 2020, on 28 February 2020 the plaintiff
issued an application for summary judgment against the defendants
as
envisaged in Uniform Rule 32(1)(b). According to the plaintiff,
on 1 December 2019 the amount of R369,242.67 also became
due and
payable.
[10]
On 11 February 2020 the defendants issued notices in terms of Uniform
Rule 35(12) and (14).
The defendants further filed their
special plea, plea and an affidavit resisting summary judgment.
[11]
In its application for summary judgment the plaintiff alleges that
the defendants’
special plea, plea and notices in terms of
Uniform Rule 35 were a strategy by the defendants to delay the
granting of an order
for summary judgment.
[12]
In their plea the defendants have raised the following point
in
limine,
namely, that the plaintiff does not have
locus standi
to institute summary judgment proceedings.
[13]
In its affidavit resisting summary judgment and in their plea the
defendants oppose the
granting of summary judgment on the ground that
the plaintiff is precluded from launching these proceedings on the
grounds that:
13.1 in May
2019 the parties concluded a
pactum de non petendo
which
precludes the plaintiff from instituting these proceedings pending
finalisation of negotiations; and
13.2 since the
plaintiff was served with notices in terms of uniform sub-rules
35(12) and (14) and has not responded
to such notices, the plaintiff
was precluded from pursuing its summary judgment application until it
has responded to the notices
seeking discovery and inspection of
certain documents.
Locus
standi
[14]
It is the defendants’ contention that there is no proof that
Growth Point has transferred
ownership of the Hotel or ceded the
lease agreement to the plaintiff. The defendants base their
objection to the plaintiff’s
locus standi
on the grounds
that:
14.1
the plaintiff has failed to attach proof of its purchase of the Hotel
and the cession of the
lease;
14.2
the original agreement between Growth Point and the defendants,
attached to the particulars of
claim, is not the original as it
contains manuscript writing and is illegible;
14.3
the addendum to the agreement is illegible and is the subject matter
of a Rule 35(12) notice;
and
14.4
the lease agreement was ever renewed.
[15]
On behalf of the plaintiff it was argued that the defendants’
objection to the plaintiff’s
locus standi
is a sham in
that over the period 22 July 2015 to 27 November 2019 the second
defendant, the sole director of the first defendant,
has been
communicating with the plaintiff’s representative in which the
first defendant:
15.1
acknowledged plaintiff as its new landlord. On 22 July 2015 the
second defendant sent the plaintiff
an email in which he stated,
inter alia,
the following;
“
it
was a pleasure meeting you last week when you visited the Hotel as
the new landlord”.
15.2 frequently
sought indulges from the plaintiff with regard to monthly rental
payments. In this regard
plaintiff has made reference to an
email dated 8 October 2015 wherein the first defendant sought an
indulgence from the plaintiff
to pay rent for the Hotel and
conference venues between the 7
th
and 14
th
of
every month and not necessarily at the beginning of each month as
provided for in the agreement.
[16]
The plaintiff has also attached to its affidavit in support of its
application for summary
judgment an email (annexure RA4) dated 22
July 2015 in which the second defendant, acting on behalf of the
first defendant acknowledges
the plaintiff as its new landlord and
emails (amongst others annexure RA5 and RA16) in which the first
defendant acknowledges liability
to the plaintiff.
[17]
In their affidavit resisting summary judgment, the defendants have
not dealt with the various
written communication referred to in
paragraph [16] above which show that the first defendant and the
plaintiff have communicated
with each other from the time the
plaintiff became owner of the Hotel.
[18]
I am of the view that the defendants’ objection to the
plaintiff’s
locus standi
is baseless as it is clear from
the correspondence between the parties in which the parties
discussed, among other issues, the
first defendant’s arrear
rent and the possibility of the first defendant finding a
replacement, that the defendants were
aware that the plaintiff had
become the new owner of the Hotel. As correctly pointed out by
counsel for the plaintiff in
terms of the principle of ‘
huur
gaat voor koop’
the plaintiff as the new owner of the
Hotel, with regard to the lease agreement, stepped into the shoes of
Growth Point as the
lessor. I am therefore of the view that the
defendants’ point on the plaintiff’s
locus standi
has no basis and it ought to be dismissed.
[19]
Uniform Rule 32(2) reads in part as follows:
32(2)(a)-
Within 15 days after the date of delivery of the plea, the Plaintiff
shall deliver a notice of application for summary
judgment, together
with an affidavit made by the Plaintiff or by any other person who
can swear positively to the facts.”
32(2)(b)
– “The Plaintiff shall in the affidavit referred to in
sub-rule (2)(a) verify the cause of action and the amount,
and
identify any point of law relied upon and the facts upon which the
Plaintiff’s claim is based, and explain briefly why
the defence
as pleaded does not raise any issue for trial.”
32(3)(b)
– “The Defendant may-
(b)
satisfy the court by affidavit which shall be delivered five (5) days
before the day on which application is to be heard
or with the leave
of the court by oral evidence of such defendant or of any other
person who can swear positively to the fact that
the Defendant has a
bona fide defence to the action, such affidavit or evidence shall
disclose fully the nature and grounds of
the defence and the material
facts relied upon therefore.”
[20]
In an application for summary judgment
the court
enquires only into:
20.1 whether
the defendant has disclosed the nature and grounds of his defence and
the material facts upon which
it is founded, and
20.2
whether on the facts so disclosed the defendant appears to have a
defence which is both bona fide and good
in law to either the whole
or part of the claim
[1]
.
[21]
The defendants are
opposing the plaintiff’s application for summary judgment
firstly, on the ground that the plaintiff has
failed to respond to
their Uniform Rule 35(12)
[2]
and (14)
[3]
notices, to the prejudice of the defendants in their preparation for
trial.
[22]
On behalf of the plaintiff it was submitted
that even if it had not complied with the defendants’ request,
such failure cannot
postpone or defer the determination of the
application for summary judgment.
[23]
In
Business
Partners Ltd v Trustees, Botes Family Trust
[4]
,
a decision the plaintiff relied on, with regard to the influence the
non-compliance with Uniform Rules 35(12) and (14) on an application
for summary judgment, the court stated that:
“
[11]
…. However, if they had difficulty in dealing with the
pleadings because they require documents
in order to determine what
the plaintiff’s case was, this should have been stated in
affidavits opposing summary judgment
as justification for their
inability to deliver an affidavit disclosing the nature and grounds
of the defence and the material
facts upon which it was based. But
what the defendants cannot do is circumvent the provisions of rule
32(3)(b) by delivery of the
notice, in order to obtain documents
which might support a bona fide defence or to defer summary judgment
proceedings, as was submitted
by Mr Newton on their behalf”.
[24]
Further
in
ABSA
Bank Ltd v Expectra
423 (Pty) Ltd
[5]
the court held that:
“
[15]
In the event that I am incorrect in my interpretation of the relevant
part of the judgment in
Business
Partners
and the learned judge was indeed stating or implying that the
provisions of Rule 35(12) and (14) can somehow be utilised to defer
an application for summary judgment until such time as appropriate
response is received from a plaintiff, then I am in respectful
disagreement therewith. In my view, for all the reasons which
Schippers J sets out, invoking the provisions of Rule 35(12) and
(14)
is incompatible with the purpose and nature of summary judgment
proceedings. If it were the intention of the rule maker that
early
discovery could, in this sense, be obtained, it would go a long way
to stultify the procedure created by Rule 32 which has
effectively
been used by the courts over a long a period of time
[6]
.
Defendants’ intent upon delaying summary judgment could make
use of the provisions of Rule 35(12) and (14) to obtain extended
delays in summary judgment applications by tying up the plaintiff in
contested interlocutory applications”.
[25]
In the plea and affidavit opposing summary
judgment, the defendants do not allege that they are not aware of the
plaintiff’s
cause of action. As indicated earlier, the
defendants, through the second defendant, have acknowledged that the
plaintiff
is the new owner and landlord of the Hotel hence
negotiations took place between the parties as to how the first
defendant’s
arrear rentals could be managed. It cannot be
disputed that the defendants are well aware of the contents of the
documents
they seek to be discovered and inspected and could have
pleaded their bona fide defence to the plaintiff’s claim.
I
am therefore satisfied that the notices issued in terms of Uniform
Rule 35 are meant only to delay the determination of the summary
judgment application.
[26]
Secondly, the defendants
are opposing the plaintiff’s application for summary judgment
on the ground that the parties have
concluded a
pactum
de non petendo
[7]
in an attempt to
settle disputes between them. In their plea the defendants
allege that:
“
10.4 Subject
to the content of this plea and should it be found that the Plaintiff
has the necessary
locus standi in iudicio
, the Defendants
plead as follows:
10.4.1
At all material times the Plaintiff professed that it had required
ownership of the property in question without any
lease agreement
concluded with the First Defendant or otherwise;
10.4.2
The Plaintiff, duly represented by Mr Aboo-Baker and the First
Defendant duly represented by the Second Defendant,
entered into a
pactum de non petendo in the bona fide attempt to settle any
purported disputes between the parties and to prevent
the need for
any reciprocal litigation between the parties;
10.4.3
The Plaintiff by demanding performance from the First and/or Second
Defendants and instituting the current proceedings
is acting in
breach of the terms of the pactum de non petendo as pleaded infra.
10.5
the relevant express, alternatively tacit, alternatively implied
terms of the pactum de non petendo
are the following:
10.5.1
The Plaintiff will acquire the sole shareholding in the First
Defendant against payment consideration equal to the
acquisition of
the Second Defendant’s loan account in the First Defendant;
10.5.2
The Plaintiff, in doing so, will acquire and/or write off any debt
potential liability vis-à-vis the Plaintiff
and the First
Defendant;
10.5.3
The Second Defendant will be released from any and all surety
obligations towards either the lessor (and subject to
the
aforementioned) the Plaintiff;
10.5.4
The first Defendant will not pursue any claim for damages based on
breach of contract and/or failure on the part of
the Plaintiff to
provide the First Defendant with a premises suitable for the purpose
for which it was initially leased, being
the operation of the
business of a hotel;
10.5.5
That the Plaintiff’s attorneys of record will attend to the
drafting of an agreement required for the transfer
of the shares on
the terms pleaded supra; and
10.5.6
That the Second Defendant will be retained as manager of the hotel
operated from the premises on a temporary basis
based on his
permanent replacement by an individual to be appointed by the
Plaintiff.
10.6
The agreement as pleaded supra superseded any contractual liability
which may have been incurred between
the Plaintiff and the First
and/or Second Defendants;
10.7
No time of performance of the reciprocal duties arising from the
agreement pleaded supra was agreed
between the parties.
10.8
Notwithstanding demand on behalf of the First Defendant for the
Plaintiff to comply with its obligations
in terms of the agreement
supra, the Plaintiff has failed and/or refused to comply with the
obligations.”
[27]
In the affidavit resisting summary judgment, the defendants allege
that from May 2019 the
parties have been engaged in negotiations
aimed at the plaintiff buying shareholding in the second defendant.
In support
of this allegation the defendants are relying on a letter
sent to the plaintiff in which the defendants had attached the second
defendant’s financials. According to the defendants the
said negotiations culminated in the parties on 16 August 2019
concluding an oral agreement in terms of which the plaintiff would
not, for the time being, institute proceedings against the defendants
seeking payment of the arrear rentals.
[28]
Counsel for the defendants
submitted that despite the existence of a non-variation clause, the
enforcement of a
pactum
de non petendo
did not
violate the principle laid down in
SA
Sentrale Ko-op Graanmaatskappy Bpk v Shifren en Andere
[8]
with regard to the inviolability of a non-variation clause. In
this regard the defendants are relying on the decision in
HNR
Properties CC and Another v Standard Bank of South Africa Ltd
[9]
where the court stated the following:
“
[19]
… No doubt in particular circumstances a waiver of rights
under a contract containing a non-variation
clause may not involve a
violation of the
Shifren
principle, for example, where it amounts to a
pactum
de non petendo
or an
indulgence in relation to previous imperfect performance.”
[29]
On behalf of the plaintiff it was denied that the parties had
concluded a pactum de non
petendo. Inasmuch as the plaintiff
acknowledges that there have been negotiations between the parties,
it is the plaintiff’s
contention that no agreement was reached
that the plaintiff would not pursue its claim against the defendants
for the arrear rentals.
According to the plaintiff since no
agreement could be reached on the terms of the proposed take-over of
the first defendant by
the plaintiff, on 27 November 2019 the
plaintiff wrote to the defendants indicating in clear terms that it
was not amenable to
the terms propose by the defendants and demanded
immediate payment of the arrear rentals.
[30]
Further, it was submitted on behalf of the plaintiff that in the
event of a finding that
a pactum de non petendo was concluded, since
such an agreement was not in writing, it was of no force and effect
because of the
non-variation clause contained in the lease agreement.
[31]
The issue to be determined is whether a pactum de non petendo was
concluded, and if it
was, whether the oral agreement was valid in the
light of the non-variation clause.
[32]
With regard to the existence of the pactum de non petendo as alleged
by the defendants,
all what the defendants have shown is that there
were negotiations between the parties and during that period of
negotiating, no
claim was made by the plaintiff for payment of the
arrears. However, in light of the letter dated 27 November
2019, it is
clear that the plaintiff had terminated the negotiations
in that the parties could not reach agreement on the terms of the
proposed
take-over of the first defendant. I am of the view
that from that date it was open to the plaintiff to pursue its claim
for
payment of the arrear rentals.
[33]
The defendants have not disputed that the first defendant is in
arrears with regard to
the rent for the Hotel nor have they disputed
the amounts due as pleaded by the plaintiff.
[34]
Further, it is apparent that the defendants have not shown that they
have a bona fide defence
to the plaintiff’s claim and I am of
the view that their opposition is merely to delay the plaintiff’s
claim.
[35]
In the result the following order is made:
‘
Summary
judgment is granted against the defendants jointly and severally the
one paying the other to be absolved, for:
15.1 Payment of
the sum of R4,705,757.33.
15.2 Interest
on the sum of R R4,705,757.33. at the rate of 12% per annum from date
of issuing summons to date
of payment.
15.3
Costs on an attorney and client scale.
N.
P. MNGQIBISA-THUSI
JUDGE
OF THE HIGH COURT
Date
of hearing: 04 August 2020
Date
of judgment: 28 May 2021
Appearances
For
Plaintiff: Adv M T A Costa (instructed by DJ Steyn Attorneys
Inc)
For
Defendants: Adv G T Avvakoumides (instructed by Mark Efstratiou
Inc)
[1]
Business Partners n 4
para 8
[2]
Uniform
Rule 35(12) reads as follows: “(12) Any party to any
proceeding may at any time before the hearing thereof deliver
a
notice as near as may be in accordance with Form 15 in the First
Schedule to any other party in whose pleadings or affidavits
reference is made to any document or tape recording to produce such
document or tape recording for his inspection and permit
him to make
a copy or a transcription thereof. Any party failing to comply
with such notice shall not, save with the leave
of the Court, use
such document or tape recording in such proceeding provided that any
other party may use such documents or
tape recording.”
[3]
Uniform
Rule 35(14) reads as follows: “(14) After appearance to defend
has been entered, any party to any action may, for
purposes of
pleading, require any other party to make available for inspection
within five days a clearly specified document
or tape recording in
his possession which is relevant to a reasonably anticipated issue
in the action and to allow a copy or
transcription to be made
thereof.”
[4]
2013
(5) SA 514
(WCC).
[5]
2017
(1) SA 81
(WCC).
[6]
Joob Joob Investments
(Pty) Ltd v Stocks Mavundla Joint Venture
2009 (5) SA 1
(SCA) Para [32]
[7]
Van
der Merwe and others
Contract
General Principles
second edition 373-374 described the
pactum
de non petendo
as follows: “…
a
pactum de non petendo
suspends the capacity to enforce [a contract], usually for a
specified period or until the occurrence of some contingency.”
[8]
1964 (4) SA 760
(A). In the
Shifren
matter the court held that a term in a written contract providing
that all amendments and variations to the contract have to
comply
with specified formalities is binding. See also in this regard
Brisley v Drotsky
2002 (4) SA 1
(SCA).
[9]
2004 (a) SA 1 (SCA). See also
Miller
and Another NNO v Dannecker
2001 (1) SA 917
(C).