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[2017] ZALMPPHC 49
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Thornhill Shopping Centre (Pty) Ltd v Africa Automotive Solutions (Pty) Ltd t/a Midas (5331/2017) [2017] ZALMPPHC 49 (30 August 2017)
REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
LIMPOPO
DIVISION, POLOKWANE
CASE
NUMBER: 5331/2017
30.8.2017
In the
matter between:
THORNHILL
SHOPPING CENTRE (PTY)
LTD
APPLICANT
And
AFRICA
AUTOMOTIVE SOLUTIONS
(PTY)
LTD t/a
MIDAS
RESPONDENT
JUDGEMENT
SEMENYA
J:
1.
The applicant is the landlord of Thornhill
Shopping Centre (the premises) situated at Centre Management Office,
Cnr Veldspaat &
Munnik Avenue, Polokwane, Limpopo (the Centre).
2.
On or about the 12 October 2015, the applicant
and the respondent entered into a three year written agreement in
terms of which
the respondent leased from the applicant certain
premises situated at shop 67 at the Centre. The contract was to
commence on the
1 September 2015 and end on the 31 August 2018.
3.
It was a term of the lease that the premises were
to be used solely for the retail of motor spares and accessory shop
and for no
other purpose whatsoever. The respondent was further
required to trade from 9:00 to 19:00 from Mondays to Saturdays, 9:00
to 17:00
on Saturdays and Sundays and 9:00 to 13:00 on public
holidays.
4.
A penalty of R2000.00 per day (excluding VAT) or
10% of the basic rental, whichever is bigger, was payable by the
respondent for
failure to remain open for the full period of the
trading hours as agreed upon by the parties.
5.
The applicant launched this application on an
urgent basis, in which it claims specific performance, interdict and
other ancillary
relief. It alleges that the respondent has repudiated
the contract. The applicant alleges further that the repudiation was
in the
form of the respondent's failure to open the shop for trade on
the morning of the 18 July 2017. It is alleged further that the
respondent had partially covered the windows of the premises with
paper and removed more of its assets from the premises. Trading
never
resumed since then. The applicant elected not to accept the
repudiation.
6.
The applicant contended that the respondent's
conduct will make it (the respondent) unable to meet its financial
obligations such
as payment of rent. It was further argued that this
conduct is detrimental to other tenants in that it will render the
Centre unattractive
to customers. It was submitted on its behalf that
an action for damages will not avail a proper remedy for the
applicant in that
firstly, it will be difficult to quantify its
damages and secondly, there is no guarantee that the respondent will
be able to satisfy
the judgement.
7.
The respondent is not disputing most of the facts
as set out above. It however denies that it is obliged, in terms of
the contract,
to maintain a fully operational business at the
premises. It alleges that its obligations are to pay the rent,
maintain the property
and return it in an acceptable condition at the
end of the lease.
8.
The respondent further states that an order of
specific performance, as claimed by the applicant, would be
inappropriate in that
it has already vacated the premises,
transferred staff to other branches or retrenched them in view of the
fact that it has been
running the business at a loss. It further
alleges that there was never an agreement between the parties that
the respondent would
be required to operate at a loss.
9.
that the applicant can still claim damages as a remedy.
10.
The respondent argued that it has not repudiated
the contract as there was no clause in it that required it to remain
fully operational
even when business was not good. In support of its
argument that the respondent has repudiated the contract, counsel for
the applicant
referred the court to the decision in
Aucamp
v Morton
1949
(3) SA
611
(A)
at 613
in
which Watermeyer CJ stated as follows:
"We are dealing in this case with a contract
involving reciprocal obligations of which several, of varying
importance, rest
upon the appellant, and it is usually laid down with
regard to such cases that a breach by one party of one of the
obligations
resting on him will only give the other a right to treat
the contract as discharged if the breach is one which evinces an
intention
on the part of the defaulter no longer to be bound by the
terms of the contract for the future, or if the defaulter has broken
a promise , the fulfillment of which is essential to the continuation
of the contract."
11.
I agree with counsel for the applicant that the only interpretation
one can arrive at from the respondent's failure to open
the premises
for trade and to remain open for the hours as agreed upon by the
parties, the covering of the windows with papers
and the removal of
stock and shelves from the shop, is that it no longer wished to be
bound by the terms of the contract. I am
satisfied that its conduct
amounts to repudiation.
12.
Furthermore, the respondent's argument that the
applicant cannot force it to remain open even though it was running a
business at
a loss cannot stand, so is the contention that the
contract does not state that the respondent is obliged to trade until
the end
of the term. The contract entered into by the parties is for
a period of three years, during which the respondent is to operate
a
business of selling motor spares. The applicant's argument that the
Centre it operates from requires a diversity of business
entities,
and that the respondent's failure to operate will negatively impact
on other businesses, is found to be valid. These
are the relevant and
admissible circumstances that should be considered when one has to
find a meaning to the words used in the
contract -
Bothma-Batho
Transport v Bothma & Seun Transport (Edms) Bpk
2014 (2) SA 494
SCA at 499 [12].
I therefor find that the
contract required the respondent to remain open for the duration of
the contract period.
13.
The respondent contended that an order of
specific performance sought by the applicant will subject it to
hardships. In response
to this submission, counsel for the applicant
contended that it is not the respondent's evidence that it is
impossible for it to
meet its obligations. In other words, the
respondent is not relying on impossibility of performance. It did not
state clearly in
its affidavit as to what makes it unable to run its
business profitably. All it state is that the premises fail to
attract customers.
I arn inclined to accept the applicant's
submission the respondent's submission should be rejected.
14.
With regard to the respondent's argument that the
applicant should resort to the remedies available to it in terms of
the contract,
counsel for the applicant referred the court to
Haynes
v King Williamstown Municipality
1951 (2) SA 371
(A) at 378D - E, as
referred to in Edrei Investments v Dis-Chem
2012
(2) SA 553
at 556 G-J.
It
was stated in that case that the plaintiff has a right of election
whether to hold a defendant to his contract and claim performance
or
to claim damages for breach. The defendant has no right to elect and
cannot claim to be allowed to pay damages instead of having
an order
of specific performance granted against him.
15.
The applicant in the instant matter has elected
to go for specific performance and not to claim damages. I have no
reason, in the
exercise of my discretion, to deny it this right. The
respondent will therefore have to find ways and means of attracting
customers
to its business and in order to make profit out of it. In
any event, its papers are silent about the steps it took, if any, to
improve its trade.
16.
In the result I make the following order:
16.1.
The matter
is disposed of as one of urgency in terms of Rule 6 (12) of the Rules
of Court;
16.2.
The
respondent is ordered to continue trading from shop 67, Thornhill
Shopping Centre, Cnr Veldspaat & Munnik Avenue, Polokwane,
as
Midas, in compliance with the shopping centre's trading hours, fully
stocked and adequately staffed;
16.3.
The
respondent is interdicted an restrained from closing the store and to
cease trading therefrom until 31 August 2018;
16.4.
The
respondent is ordered to pay the costs of this application.
________________________
SEMENYA
M.V
JUDGE
OF LIMPOPO DIVISION;
POLOKWANE
APPEARANCES:
COUNSEL
FOR THE PLAINTIFF: ADV. DANNIE WIJNBEEK
INSTRUCTED
BY: BEN GROOT ATT.
COUNSEL
FOR RESONDANT:ADV. ROSALIND J. STEVENSON
INSTRUCTED
BY: DE VRIES INC.
DATE
OF HEARING: 21 AUGUST 2017
DATE
OF JUDGEMENT:30 AUGUST 2017