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[2018] ZAGPPHC 771
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IDL Transport CC t/a Old Fashioned Fish and Chips and Others v Soleprops 39 (Pty) Ltd (38854/2013) [2018] ZAGPPHC 771 (13 February 2018)
REPUBLIC OF SOUTH AFRICA
IN THE HIGH COURT OF SOUTH
AFRICA,
GAUTENG DIVISION, PRETORIA
(1)
NOT
REPORTABLE
(2)
NOT OF
INTEREST TO OTHER JUDGES
(3)
REVISED
CASE
NO: 38854/2013
13/2/2018
In
the matter between:-
IDL
TRANSPORT CC t/a OLD FASHIONED FISH AND
CHIPS
First Applicant
ROSE
THOKO
MAHLANGU
Second Applicant
ISAAC
NSEBENZI
MAHLANGU
Third Applicant
and
SOLEPROPS
39 (PTY)
LTD
Respondent
JUDGMENT
CRUTCHFIELD
AJ:
[1]
The applicants claimed the rescission
and setting aside of a judgment granted by default on 4 June 2015, in
the absence of the applicants.
[2]
The judgment was for payment of R182
099.30 together with interest and costs.
[3]
The applicants contended that they were
not in wilful default as they were under the impression that the
trial was set down on 5
June 2015, not 4 June 2015 when the matter
was called for hearing. The respondent opposed the application on the
basis that the
applicants were in wilful default, in that:
3.1
The
notice of set down in respect of 4 June 2015 was served on the
applicants on 13 May 2015; and
3.2
The
applicants had no defence on the merits.
[4]
The applicants entered into a written
lease agreement with the respondent on 27 January 2012, in respect of
premises situated at
34 Willowbrook Square, corner Samuel and Van der
Walt Streets in Delmas ('the premises'). The lease provided for
payment by the
applicants of rental in an amount of R19 152.00 per
month subject to an annual increase of 10% ('the lease').
[5]
The applicants' defence was to the
effect that the respondent was obliged to repair certain damage to
the premises. Failure by the
respondent to do so resulted in a breach
by the respondent of the lease and the deemed cancellation thereof.
[6]
Broadly stated, the ceiling of the
premises collapsed during September 2012 resulting in the first
applicant being unable to trade.
Thereafter, on 14 September 2012,
the local municipality declared the building unsafe for occupation
and use by members of the
public.
[7]
The first applicant called upon the
respondent to rectify the defects failing which it intended
cancelling the lease. In the interim,
the first applicant withheld
the rentals pending the respondent repairing the building. The
respondent declined to repair the defects.
[8]
The respondent was of the view that the
first applicant 's contractors were responsible for the collapse and
the respondent was
absolved of responsibility . The contractors had
allegedly installed an extractor and failed to seal it properly
resulting in the
collapse of the ceiling.
[9]
The applicants relied in their founding
affidavit (in the rescission application), and their plea, on the
collapsed ceiling as the
reason for their inability to trade and
enjoy beneficial occupation of the premises.
[10]
This was reflected in correspondence dated 11 October 2012, addressed
by the applicants ' attorneys
to the respondent, in which the
applicants relied upon clause 17(c)(iv) of the lease as the alleged
basis for the respondent's
liability to repair the damage ('the
attorney's correspondence').
[11]
Attached to the attorney's
correspondence was correspondence from the local municipality ('the
municipality's correspondence') ,
that stated that upon inspection of
the premises, the municipality found:
11.1
Structural
cracks on the external load bearing wall (east side of the building),
the internal walls dividing the floor space
between the office and
the cooking area had minor cracks, and the ceiling had lost its grip
to the walls and had fallen down. Thus
the building was not fit or
competent for occupation and use by the public.
[12]
The first applicant cancelled the lease
pursuant to the respondent's failure to rectify the defects.
[13]
The respondent averred that the first applicant was incorrect in
contending that it could, or
did, validly cancel the lease. The
respondent relied upon the fact that the collapse of the ceiling was
caused by the first applicant
's defective tenant installation, for
which the first applicant was itself responsible.
[14]
The relevant provisions of the lease
agreement were the following:
14.1
The
rentals and monthly operating expenditure contributions were payable
monthly in advance, on or before the first day of every
month, free
of exchange or deductions, retention, remission or set off on any
grounds;
14.2
The
respondent did not warrant or represent that the premises were fit
for the purpose of the business to be conducted in terms
of the lease
or any other purpose and the lease was not made conditional thereon-,
14.3
The
first applicant would not make any alterations or additions to the
premises without the written consent of the respondent first
having
been obtained and which consent would not be unreasonably withheld,
and, unless otherwise agreed upon in writing, any alterations
or
additions made would be the property of the respondent and the first
applicant would not be entitled to any compensation in
respect
thereof. In addition, the first applicant would be responsible for
compliance with all lawful aspects required by the local
authority
and all costs incidental thereto;
14.4
The
first applicant undertook, at its own cost, to care for and maintain
the interior of the premises and all installations, air
conditioning,
fittings and appurtenances therein generally, including but not
limited to keys, locks, glass windows (including
shop fronts),
sewerage and sanitary installations and electrical fittings during
the term of the lease, or any renewal thereof,
and at the termination
of the lease, whether by effluxion of time or otherwise, to return
and redeliver the premises to the respondent
in like good order and
condition. Throughout the lease or any renewal thereof, the first
applicant would immediately make good
and repair at its own expense,
all damages, all breakages to the premises and would be responsible
for all replacements to the
premises;
14.5
The
first applicant would not, except for normal fixturing purposes,
drive into the walls or ceiling of the premises any nails,
screws or
other instruments or articles, nor in any manner whatsoever do or
permit anything to be done that might damage the walls
or ceilings or
any other portion of the leased premises and/or the building;
14.6
The
first applicant was precluded from effecting any structural
alterations and/or additions to the premises, including the erection
or installation of any fixtures unless:
14.6.1
The
respondent's prior written consent, which would not be unreasonably
withheld, was obtained;
14.6.2
All
such alterations and/or additions and/or work accorded with plans and
specifications as approved by the respondent;
14.6.3
All
such costs incurred were for the account of the first applicant;
14.7
On
termination of the lease for any reason whatsoever, including
expiration by effluxion of time, if the respondent so elected,
the
relevant alterations and/or additions and/or work, including any
fixtures, would remain, and the first applicant would not
be entitled
to any compensation in respect thereof.
[15]
Clause 17(c) of the lease provided that
should any part of the premises, but not the whole of the premises,
be destroyed or damaged
by fire or any other cause , then:
15.1
The
lease would not be cancelled;
15.2
The
rental then payable by the first applicant would be reduced
pro
rata
having regard to the extent to
which, and the period for which the first applicant was deprived of
beneficial occupation of the
premises;
15.3
The
agreement period would be extended by the period during which the
first applicant was deprived of beneficial occupation of the
whole of
the leased premises;
15.4
The
respondent would repair the damaged or destroyed portion of the
premises as expeditiously as was reasonably possible in the
circumstances ;
15.5
The
first applicant would have no claim of any nature whatsoever against
the respondent as a result of the destruction or damage
from
whatsoever cause;
15.6
Any
dispute between the first applicant and the respondent in respect of
the amount of remission of rental and the date on which,
or the
period for which the premises were available or unavailable for
occupation by the first applicant would be decided by the
respondent's auditors who would consult the respondent's architect
thereon and whose decision would be final and binding.
[16]
Clause
17(c)(iv) of the lease provided that:
16.1
Should
the building be destroyed or substantially damaged by fire or any
other cause or should the premises be destroyed or damaged
(to an
extent) which prevented the lessee from having beneficial occupation
of the premises, then;
16.1.1
The
lessor would notify the lessee as to whether or not it cancelled the
agreement within one (1) month after the destruction or
damage to the
premises. In the event of no notification being given by the lessor,
the lease agreement would be deemed to have
been cancelled.
16.1.2
The
lessee would not be liable for any rental for as long as it was
deprived of beneficial occupation of the premises.
[17]
The applicants were obliged to show good
cause in order to succeed in the rescission application.
[18]
It is well established that good cause
requires, firstly, a reasonable explanation such that the court is
able to truly understand
how the default occurred. Secondly, the
application must be made
bona fide
and not merely with the intention of
delaying the plaintiff in its claim, and finally, the existence of a
bona fide
defence
to the claim in respect of which the applicants,
prima
facie,
have some prospect of
success. A probability of success is not required, a triable issue
will suffice.
[1]
[19]
Notwithstanding compliance with all
three requirements , a court retains a discretion to rescind the
judgment or not, but that discretion
must be exercised judicially in
the light of the facts and circumstances of the matter in their
entirety.
[2]
[20]
The applicants became aware of the
default judgment on 5 June 2015, when their legal representatives
appeared at the trial roll
call of that day, being the date upon
which both parties originally understood the matter to have been set
down.
[21]
I would have accepted the applicants appearance on 5 June 2015 as
sufficient indication of the
applicants' bona fides, that there was
no wilfulness on their part and that a
bona fide
error had
occurred, but for the applicants' failure to disclose that the
respondent had served the notice of set down in respect
of 4 June
2015, on 13 May 2015 on all three applicants personally, during the
period of their attorney's withdrawal.
[22]
Nor did the applicants proffer an explanation of their failure to
disclose the service of the
corrected set down in reply, the
applicants having declined to deliver a replying affidavit.
[23]
The applicants failed to prosecute the rescission application
subsequent to the respondent having
served its answering papers on
the on 23 October 2015. The respondent furnished its heads of
argument and set the application down
for hearing, delivering the
notice of set down on 21 July 2017. The applicants' heads of argument
were made available at the hearing.
[24]
At the hearing, the applicants argued that the premises was
uninhabitable not only because of
the collapsed ceiling but also due
to the structural cracks and the walls having caved in as stated in
the municipality's correspondence.
[25]
In terms of clause 17(c)(iv) of the lease, the first applicant argued
that it notified the respondent
of the damage to the premises, and
that the respondent was obliged to elect within thirty days whether
to rectify the damage, failing
which the contract was deemed to be
cancelled. Given that the respondent refused to make good the damage,
the lease was deemed
to be cancelled and the first applicant was
entitled to withhold the rental.
[26]
The respondent argued that the ceiling
collapsed due to the failure of the first applicant's contractor to
properly effect certain
work and that the respondent was not the
cause of the first applicant's inability to enjoy beneficial
occupation of the premises.
Accordingly, the respondent was not
liable to compensate the first applicant for the damage. The first
applicant remained liable
to pay the monthly rental and to comply
with the terms of the lease in all other respects.
[27]
The
respondent argued with reference to the provisions of the lease,
that:
27.1
The
lease prohibited the first applicant from withholding the rental
under any circumstances;
27.2
The
lease was not conditional upon the premises being fit for purpose;
27.3
The
first applicant was responsible for compliance with all requirements
of the local authority as regards any alterations or additions
made
to the premises by the first applicant (the first applicant was not
entitled to make alterations or additions without the
written consent
of the respondent first being obtained);
27.4
The
first applicant was obliged to maintain the interior of the premises
including all installations, air-conditioning, fittings
and the like
and was obliged upon termination of the lease, to redeliver the
premises to the respondent in the same good order
and condition that
the premises were initially received by the first applicant;
27.5
The
first applicant was obliged to repair all damage, breakages to the
premises and replacement at its own cost;
27.6
The
first applicant was not entitled to take any step that might damage
the walls or ceiling or any other portion of the leased
premises or
the building;
27.7
In
the event of the first applicant wishing to perform any installation,
the respondent's prior written consent had to be obtained,
the work
was to be in accordance with the plans and specifications approved by
the respondent, and the costs were for the account
of the first
applicant; and
27.8
In
the event of destruction or damage to the premises, the lease would
not be cancelled but the rental would be reduced
pro
rata
regard being had to the extent
to which, and the period for which the first applicant was deprived
of beneficial occupation of the
premises, any dispute as to the
remission of rental would be decided by the respondent’s
auditors.
[28]
Thus, the respondent argued that the first applicant ought to have
requested a remission of the
rental but incorrectly elected to cancel
/ terminate the lease, which the first applicant was not entitled to
do.
[29]
The applicants failure to file a
replying affidavit resulted in the respondent's averments being
unchallenged.
[30]
The respondent denied that the
applicants were
bona fide , and
referred to the history of the
matter as well as the applicants ' alleged dilatory conduct above
mentioned . In the light thereof,
the applicants' alleged purpose was
not to prosecute the trial but to delay the respondent in executing
upon its judgment.
[31]
The ground of
lis
pendens
relied upon by the
applicants was not relevant as the magistrates' court proceedings
referred to deal with a different time period
under the lease.
[32]
In argument before me, the applicants attempted to place reliance
upon the defects referred to
in the municipality's correspondence,
rather than upon the collapse of the ceiling as the reason for the
first applicant's inability
to trade.
[33]
The municipality's correspondence, however, referred to the cracks on
the internal walls as 'minor',
noted the structural cracks on the
external wall, whilst the ceiling was described as having 'lost its
grip on the walls and fallen
down'.
[34]
The applicants' response to the respondent 's averment that the
collapse of the ceiling was caused
by the applicants ' own
contractors, was to argue that the issue ought to be tested by way of
trial. However, no alternate reason
for the collapsed ceiling was
advanced by the applicants.
[35]
The applicants correctly pointed out that the respondent did not deny
the existence of structural
cracks and nor did the respondent allege
that the cracks had been repaired. That, however, did not assist the
first applicant whose
defence of the action was based squarely upon
the collapse of the ceiling, maintenance of which was for the first
applicant.
[36]
Hence, the probabilities pointed to the collapsed ceiling as the
reason for the first applicant
's inability to trade and enjoy
beneficial occupation of the premises.
[37]
Furthermore, clause 17(c)(iv) of the
lease did not assist the applicants as it referred to the structure
of the premises. The balance
of subparagraph (c) referred to damage
to 'any part' of the premises, in which event the lease would not be
cancelled but a reduction
of the rental would apply, Even if a part,
but not the whole of the premises was destroyed or damaged, a
remission of rental was
the prescribed remedy.
[38]
The applicants are bound by the terms of
the lease, which obliged them inter alia, to maintain the interior
and any installations
effected by the tenant. Thus, responsibility
for the collapse of the ceiling rested with the first applicant and
not with the respondent.
[39]
Pacta sunt servanda
remains
a cornerstone of our law of contract. Public policy requires that
parties should in general comply with contractual obligations
that
were freely and voluntarily undertaken.
[3]
The fact that a provision in a contract, willingly undertaken, may
operate 'harshly ' does not mean that it is unenforceable.
[4]
[40]
The collapse of the ceiling was the only
possible cause placed before me, for the first applicant's inability
to trade. The only
reason alleged for the collapse was the failure of
the first applicant's contractors to seal the extractor properly.
Hence, in
terms of the lease, responsibility for the collapsed
ceiling rested with the first applicant who was obliged to effect the
necessary
repairs at its own cost.
[41]
Additionally, in the light of the
applicability of clause 17(c) of the lease in respect of damage or
destruction to a portion of
the premises, the appropriate remedy was
a remission of the rent and not termination of the lease as claimed
by the applicants.
[42]
In the circumstances, I cannot find that the applicants have
demonstrated good cause. They have
not established a
bona fide
defence, which, if established at trial, would entitle them to
the relief sought.
[43]
As regards the costs of the application, the parties agreed that the
costs should follow the
merits of the application. As to the scale of
costs, whilst the lease provided for costs on the attorney and client
scale, the
court retains a discretion in respect of the scale upon
which costs are ordered.
[44]
An award for costs on the scale as between attorney and client is not
lightly granted, and, is
ordered only in instances of special
circumstances. Whilst the applicants ought to have disclosed the
service of the corrected
set down referred to afore, that failure
alone, in my view, does not serve to justify a punitive costs order.
An award of costs
on a party and party scale is appropriate .
[45]
Accordingly , the following order is granted:
45.1
The application for rescission is dismissed with costs on a party and
party scale.
A A CRUTCHFIELD
ACTING JUDGE OF THE HIGH COURT
OF SOUTH AFRICA
GAUTENG DIVISION, PRETORIA
COUNSEL FOR
APPLICANTS
Letwaba Attorneys.
INSTRUCTED
BY
Letwaba Attorneys.
COUNSEL
FOR RESPONDENT
Mr W F Wannenburg.
INSTRUCTED
BY
Brits Muller Attorneys.
DATE
OF HEARING
11 October 2017.
DATE
OF JUDGMENT
13/2/2018
[1]
Hassim Hardware v Fab Tanks
(1129/2016)
[2017] ZASCA 145
(13
October 2017) at [12]
('Hassim Hardware').
[2]
Hassim Hardware
above n 1 at [13].
[3]
Botha
&
Another v Rich NO
&
Others
2014
(4) SA 121
(CC ) ('Botha') at para 23.
[4]
Bock
&
Others v Duburoro Investments (Pty) Ltd
2004
(2) SA 242
(SCA).