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[2017] ZAGPPHC 127
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EME Investments (Pty) Ltd and Another v Biprops 46 (Pty) Ltd (A606/2016) [2017] ZAGPPHC 127 (24 March 2017)
IN
THE HIGH COURT OF SOUTH AFRICA
(GAUTENG
DIVISION, PRETORIA)
Date:
24/3/2017
Case
No:
A606/2016
In
the matter between:
EME
INVESTMENTS
(PTY) LTD
First
Appellant
EBEN
VAN
DER
BERG
Second Appellant
and
BIPROPS
46 (PTY)
LTD
Respondent
JUDGMENT
ELLIS,
AJ:
(1)
This is an appeal from the grant of summary judgment in a
magistrate's court. Appellants applied for and were granted
condonation
for the late filing of their appeal, which application
was not opposed by respondent.
(2)
The respondent (plaintiff in the action) sued the appellants
(defendants in the action) for arrear rental in the amount of R159
600.00, due to first appellant's repudiation of a five (5) year lease
agreement prior to the termination date thereof, i.e. 30
June 2019.
It is common cause that first appellant vacated the leased property
at the end of November 2015. Second appellant was
cited in the action
as surety and co-principal debtor with first appellant, on account of
a deed of surety executed in favour of
respondent.
(3)
In their opposing affidavit to the summary judgment application,
appellants raised two defences. The first defence attempts
to
indicate that the respondent's summons does not disclose a cause of
action, in that the written lease agreement does not afford
respondent the remedy to keep the agreement in force and to claim for
"specific performance". The second defence alleges
that the
respond1nt's claim against the second appellant is subject to the
provisions of section 14 of the Consumer Protection
Act 68 of 2008
("CPA"). Both defences in no way purport to advance any
defence on the merits of the respondent's claim,
i.e. the liability
of appellants to pay the arrear rental.
(4)
During the hearing in the court a
quo,
counsel for appellants,
after having heard respondent's argument, apparently conceded that
the first defence is not a
bona fide
defence on the merits,
but only technical in nature. In reply, counsel for respondent
graciously accepted this apparent concession.
The aforesaid is
depicted in the record of proceedings in the court a
quo.
(5)
However and before us, counsel for appellants conceded that the
second defence raised by appellants in the court a
quo
is
without any merit, but proceeded to argue the appeal on the grounds
of appeal, specifically relating to the first defence. Respondent
objected thereto on the basis of appellants' concession made in the
court a
quo.
(6)
In this
regard it
is necessary
to
refer to
the
matter
of
Kevin
and
Lasia
Property Investment
CC
and
Another
v Roos NO and Others,
[1]
where
counsel
for
appellant,
during
the
course
of
argument in
the
court
a
quo,
made a
formal
admission,
apparently
incorrectly,
which
prompted
the
court
a
quo
to make
an adverse finding. On appeal, the issue to be decided was whether
appellant was entitled to withdraw the admission. To
this end,
Mthiyane JA held as
follows:
"[12]
It
seems
to me
that
one
must
consider
the
context
in
which
the
admission
was
made.
Having
regard
to
that
context,
the
admission
did
not
require
a
formal
withdrawal. In
the
circumstances
in
which
it
was
made,
the
admission
amounted
to
no more than an election not to pursue a particular line of argument
on available facts.
There
is
no
suggestion
that,
because
of
the
admission,
the
liquidators
failed
to place
further facts before the Court - on the contrary, before the
admission was made,
they had
elected not
to deliver
a
replying
affidavit. No
question of
ma/a
fides
can
arise.
The
admission
could
therefore
be
withdrawn
on
appeal."
[2]
(7)
In support of the aforesaid, Heher J in
Saayman v
Road
Accident
Fund
[3]
observed
the
following:
"[28]
In the contexts of civil proceedings an admission is a statement
against interest which has the effect of binding the
party on whose
behalf it is made. If that effect is absent this statement cannot
amount to an admission and the well-established
rules relating to the
withdrawal of admissions cannot apply to it. In fact, a withdrawal is
strictly unnecessary, and prejudice
to the other party is not an
issue. An admission, in its formal sense, also requires at least an
intention, explicit or inferred,
and unequivocal, to remove a fact
that depends on proof from the field of contention.
[29]
Concessions
are
made
by counsel
in the
course
of a trial
for
a variety
of reasons
without
a
contemplation
that
he
is
thereby
committing
his
client
and
without any
intention to limit the issues. The statement in question may, for
example, be used as an assumption on which to found
an argument, or
be made in a bona fide spirit of fairness, intending to convey to the
court counsel's candid view of the way
the court
should proceed. In
the absence
of formality the context must necessarily be decisive of whether an
admission has been made.
[4]
As
will be seen, I
am of the
view
that
it
provides
the
answer
in
this
case
to.
Although
there
was
some
suggestion
that
the
alleged
admissions
had
been
made
between
counsel
before
being
communicated to
the
court,
there
was
no
evidence in
that
regard,
and
the issue
can be
limited to statements contained in the heads of argument and repeated
in oral
argument
to
the
court
a
quo."
[5]
(8)
In view of the fact that neither the court
a
quo,
nor this Court formally noted the appellants' so-called
concessions as formal admissions, coupled with the fact that a
summary judgment
is a drastic remedy, it is appropriate under the
circumstances to deal with the merits of appellants grounds of
appeal.
(9)
The first 20 grounds of appeal relate to appellants' first defence,
whilst grounds 21 to 26 concern the second defence and ground
27 is
raised in respect of costs.
(10)
It
is
trite
that
a
bona
fide
defence
must
be
a
defence
in
law
[6]
and
the facts
set out in
the
appellants' affidavit must be sufficient to support such a defence.
As
already
referred
to
above,
the
appellants'
affidavit
discloses
two
defences
which
are
in
essence
legal
arguments
proffered
against
respondent's cause of action.
(11)
Accordingly
and
in
order
to
establish
repudiation,
the
true
question is
whether
the
acts
or
conduct of
the
party
evince
an
intention
no
longer
to
be bound
by
the
contract.
[7]
As
already
indicated
above,
the
first
appellant
vacated the premises at
the
end
of November
2015. It
is
therefore
clear
that
appellants
no
longer
wish
to
be
bound
to
the
written
lease
agreement.
(12)
In the case
of repudiation,
it is trite
that an innocent party is not compelled to rescind the contract, but
may reject the repudiation and claim specific
performance
(or
damages)
from
the
repudiator.
[8]
This
is
exactly
what
the
respondent
avers
in its
particulars
of
claim.
It decided
to
uphold
the contract
and
claim
for
arrear
rental
that
was
already
due
and
payable.
[9]
(13)
Although
the
respondent's
particulars
of
claim
does
not
specifically
pleads
the
computation
of
the
arrear
rental,
the
appellants
neither
dispute
the
contents
of
Annexure
"C"
to
the
particulars
of
claim
(the
calculation
of
respondent's
claim),
nor
the
fact
that
respondent
agreed
to
reduce
the monthly
rental to R35
000.00 Plus
VAT from 1
November
2015,
"until
such time
that
we
finalize
a
new
tenant."
[10]
(14)
The
appellants
specifically rely
on
the
provisions
of
clause
5
of
the written
l
ease
agreement
in
order
to
substantiate
their
first
defence. Clause
5 of the
lease
agreement
is a
cancellation
clause
and
does
not assist
the
appellants
in this
instance.
Moreover,
the
written
lease
agreement
in no
manner
whatsoever stipulates or indicates that respondent has waived its
common law
or
contractual remedies, not
specifically
recorded in
the lease
agreement. In this regard, the appellants first defence appears to
suggest
that
such
an alleged
waiver
should
by
implication
be read
into the
lease
agreement. Such
argument is
plainly
forced,
unsubstantiated
and
not
supported in law. A tacit term cannot be implied into an agreement if
it is in conflict with an express term.
[11]
Wherefore there
is no merit
in any of the
grounds of
appeal raised by appellants in respect of their first defence, and
this defence is consequently
not a
bona
fide
defence
to the respondent's summary
judgment
application.
(15)
As indicated above, the second defence concerns the applicability of
section 14 of the Consumer Protection Act 68 of 2008
("
CPA"
),
on the respondent's
claim against the second appellant and the second appellant has bound
himself as surety and co-principal debtor.
(16)
Accordingly
and by bounding himself as co-principal debtor, the
second
appellant thereby renounced the benefits of excussion and division
vis-a-vis
the
respondent and
became
liable
jointly and
severally
with
the
first
appellant.
[12]
(17)
However and in view of the fact that the debt of the second appellant
remains accessory to the principle debt, it follows
that the
provisions of the CPA can only find application in the event that the
lease agreement falls under this Act.
(18)
In its particulars of claim, the respondent specifically averred that
the provisions of section 14 of the CPA is not applicable
as both
Landlord and Tenant are juristic persons and that the matter is not
subject to the National Credit Act 34 of 2005 ("NGA").
(19)
Section 1 of the CPA contains no definition of a lease agreement or a
deed of surety, similar to the agreements in this instance.
The only
definition relating to 'rental', provides as follows:
"rental"
means an agreement for consideration in the ordinary course of
business, in terms of which temporary possession
of any premises or
other property is delivered, at the direction of, or to the consumer,
or the right to use any premises or other
property is granted, at the
direction of, or to the consumer, but does not include a lease within
the meaning of the
National Credit Act;"
(20
)
It is common cause that the lease agreement in this instance is a
long-term lease agreement, which does not provide for temporary
possession of any premises and that the provisions of the NCA are not
applicable.
(21)
The
appellants
in
their
grounds
of
appeal,
specifically
contend
that the
suretyship constitutes "a transaction"
[13]
alternatively
"an agreement",
[14]
further
alternatively
"a
consumer
agreement",
[15]
as
defined
in
section 1
of
the
CPA,
and
that
section
14
of
the
CPA
is
consequently
applicable
to
the
suretyship entered into between the respondent and
the second
appellant.
(22)
However, the aforesaid definitions may not be viewed in isolation and
regard must also be had to the definitions of "consumer"
and "supplier" in the CPA. These terms are defined in
section 1
of the CPA as follows:
"consumer",
in respect of any particular goods or services, means:
(a)
a person to whom those particular goods or services are marketed in
the ordinary course of the
supplier's business;
(b)
a person who has entered into a transaction with a supplier in the
ordinary course of the supplier's
business, unless the transaction is
exempt from the application of this Act by section 5(2) or in terms
of section 5(3);
(c)
if the contexts so requires or permits, a user of those particular
goods or a recipient or beneficiary
of those particular services,
irrespective of whether that user, recipient or beneficiary was a
party to a transaction concerning
the supply of those particular
goods or services; and
(d)
a franchisee in terms of a franchise agreement, to the extent
applicable in terms of section 5(6)(b)
to (e).
"supplier''
means a person who markets any goods or services.
(23)
In this regard, section 5(2)(b) of the CPA specifically provides that
the CPA does not apply to transactions in terms of which
the consumer
is a juristic person whose asset value or annual turnover, at the
time of the transaction, equals or exceeds the threshold
value
determined by the Minister in section 6.
(24)
Notwithstanding the aforesaid, section 14(1) of the CPA, which deals
specifically with the expiry and renewal of fixed-term
agreements,
provides that the section does not apply to transactions between
juristic persons, regardless of their annual turnover
or asset value.
(25)
In view of the aforegoing it must therefore be accepted that the
first appellant is a consumer as defined in the CPA for all
intent
and purposes, but that section 14 of the CPA does not apply to the
written lease agreement due to the fact that first appellant
is a
juristic person. It follows logically that the deed of surety, as an
accessory agreement to the written lease agreement, also
falls
outside the provisions of the CPA and that section 14 of the CPA does
not apply. The second defence raised by the appellants
is therefore
bad in law and does not constitute a
bona fide
defence to
respondent's summary judgment.
(26)
In view of the above, the court
a quo
cannot be faulted for
grating the summary judgment application with interest and costs, on
the basis that appellants failed to raise
a
bona fide
defence
on the merits of respondent's claim.
ORDER:
1.
In the result I make the following order:
1.1
The appeal is dismissed with costs on the scale as between attorney
and
own client.
______________________
I.
ELLIS
ACTING
JUDGE OF THE HIGH COURT
I
AGREE AND IT IS SO ORDERED:
______________________
BASASSON
J
JUDGE
OF THE HIGH COURT
APPEARANCE
ON BEHALF OF APPELLANTS: Adv C.E. Thompson
APPEARANCE
ON BEHALF OF RESPONDENT: Adv J. de Beer
Date
of hearing: 14 March 2017
[1]
2004 (4) SA 103 (SCA).
[2]
Kevin
and Lasia Property Investment CC and Another v Roos NO and Others
2004
(4) SA 103
(SCA) at [12].
[3]
2011 (1) SA 106 (SCA).
[4]
In
Standard Bank of SA Ltd v Minister of Bantu Education
1966
(1) SA 229
(N) Caney J said (at 242H-243G):
'Whatever
may be the position concerning counsel's authority to bind his
client by admissions formally made and recorded
in a civil
case, it seems undesirable that counsel's opening of a case should
be accorded decisive effect in regard of proof
of facts necessary to
a party's case or defence. Opening remarks are, in common with
counsel's closing argument, usually not
recorded. If such matters
are to be used in coming to a conclusion in a judgment, they must be
set out therein and used, in the
ordinary course of events, with
considerable circumspection. No use was made of this factor by the
court a
quo
and it is quite uncertain what its conclusion in
that regard would have been.'
Heher
J concluded by recording that "I respectfully adopt the
entirety of this reasoning. See also
Kevin and Lasia Property
Investment
CC
and Another
v Roos NO and Others
2004 (4) SA 103
(SCA) at para 12."
[5]
Saayman
v Road Accident Fund
2011
(1) SA 106
(SCA) at [28-[29].
[6]
Vetpac
Animal
Health
CC
v
Tantus
Trading
274
CC
[2012]
JOL
28493
(KZD)
at
[10]-[11];
Visser
and
Another v Kotze
[2013
JOL 29985
(SCA) at [14]-[18].
[7]
Schlinkmann
v Van der Walt
1947
(2) SA 900
(E) at 919.
[8]
De Wet
v Kuhn
1910
CPD 263
at 266-267;
Ager
v Hitchcock
1950
(3) SA 372
(D) at 377. In
any event,
the decision
in
Tuckers
Land
&
Development
Corporation
(Edms)
Bpk
v
Van Zyl
1977 3
SA 1041
(T)
at 1045,
clearly
states that a
claim
for
specific performance in
the form
of "klinkende munt"
is
a
competent
claim
in
the
Magistrate's
Court.
[9]
De Wet
v Kuhn
1910
CPD 263
at 267.
[10]
Annexure
C1
to
appellants
Opposing
Affidavit
in
the
summary
judgment
application.
[11]
Transnet
Ltd v Rubenstein
2006
1
SA
591
(SCA) at [18].
[12]
Kilroe-Daley
v Barclays National Bank Ltd
[1984] ZASCA 90
;
1984
4 SA 609
(A) at 623.
[13]
Section 1
of
the CPA
defines
transaction
as
follows:
"transaction" means:
(a)
in respect of a person acting in the ordinary course of business:
(i)
an agreement between or among that person and one or more other
persons for the supply all potential
supply of any goods or services
in exchange for consideration; or
(ii)
the supply by that person of any goods to or at the direction of a
consumer for consideration; or
(iii)
the performance by, or at the direction of, that person of any
services for or at the direction of a consumer
for consideration; or
(b)
an interaction contemplated in section 5(6), irrespective of whether
it falls within paragraph
(a).
[14]
The
definition
of
"agreement"
in
the
CPA reads
as
follows:
"agreement"
means an agreement or understanding between or among two or more
parties that purports to establish a relationship
in law between or
among them.
[15]
Section 1 of the CPA defines "consumer agreement" in the
following terms:
"consumer
agreement" means an agreement between a supplier and a consumer
other than a franchise agreement.