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[2017] ZASCA 176
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Mohamed's Leisure Holdings (Pty) Ltd v Southern Sun Hotel Interests (Pty) Ltd (183/17) [2017] ZASCA 176; 2018 (2) SA 314 (SCA) (1 December 2017)
THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Reportable
Case
No: 183/17
In
the matter between:
MOHAMED’S
LEISURE HOLDINGS (PTY)
LTD
APPELLANT
and
SOUTHERN
SUN HOTEL INTERESTS (PTY) LTD
RESPONDENT
Neutral
Citation:
Mohamed’s
Leisure Holdings (Pty) Ltd v Southern Sun Hotel Interests (Pty) Ltd
(183/17)
[2017] ZASCA 176
(1 December 2017)
Coram:
Shongwe AP, Willis and Mathopo JJA
and Meyer and Ploos van Amstel AJJA
Heard:
21 November 2017
Delivered:
1 December 2017
Summary:
Contract law –
cancellation clause not unfair or unreasonable – doctrine of
pacta sunt servanda
to be enforced and applied – impermissible to infuse principles
of ubuntu and good faith in the circumstances.
ORDER
On
appeal from
:
Gauteng Local Division, Johannesburg (Van Oosten J, sitting as court
of first instance):
1
The appeal is upheld with costs, such costs to include the costs of
two counsel.
2
The order of the high court is set aside and substituted with the
following:
‘
2.1
The respondent, together with all those persons who occupy the
property fully described as Remaining Extent of Erf 13164 Cape
Town
(hereinafter referred to as ‘the Property’) by virtue of
the respondent's occupation thereof are to vacate the
property, on or
before 31 March 2018.
2.2
Should the respondent or any persons occupying the property through
or under it fail to comply with the order granted in accordance
with
the order in par 2.1 above, that the sheriff of the above Honourable
Court or his lawful deputy is authorised forthwith to
evict the
respondent and all persons/entities occupying the property
through/under it.’
JUDGMENT
Mathopo
JA (Shongwe AP, Willis JA and Meyer and Ploos van Amstel AJJA
concurring):
[1]
This is an appeal against the judgment of the Gauteng Local Division
of the High Court, Johannesburg (Van Oosten J) (the high
court). It
arises from an application in which the appellant, Mohamed’s
Leisure Holdings (Pty) Ltd, the owner and lessor
in terms of a
written lease agreement (the agreement) of immovable property known
as Remaining Extent of Erf 13164, sought an order
for the eviction of
the respondent, Southern Sun Hotel Interests (Pty) Ltd. The eviction
was sought on the basis that the respondent
had breached clause 20 of
the agreement by failing to make payment of the rental on due date.
Although the high court accepted
that the respondent had breached the
agreement, it declined to grant an order for eviction. It reasoned
that the implementation
of the cancellation clause would be
manifestly unreasonable, unfair and offend public policy. In doing so
it concluded that the
common law principle,
pacta
servanda sunt
,
should be developed by importing or infusing the principles of ubuntu
and fairness in the law of contract. The appeal against
its order is
with the leave of the high court.
[2]
I pause to state that the high court in arriving at its decision was
aware of the decision of this court in
Venter
v Venter
1949 (1)
SA 768
(A), which dealt with the principle of
pacta
sunt servanda
. The
high court held that the judicial precedent set in
Venter
is no longer good law and cannot be applied in the new Constitutional
era. More about this aspect will follow later in the judgment.
[3]
At this stage it is necessary to set out in the paragraphs that
follow the relevant factual background underpinning the respondent’s
defence.
[4]
The original lease agreement between the parties was concluded in
1982 between the parties’ predecessors namely, Cape
Town
Holiday Inn (Pty) Ltd, as the lessor and Rennies Hotel and Liquor
Holdings Ltd, as the lessee. The agreement was varied by
the parties
over the years. There were about four subsequent written agreements
entered into, varying the identities of the parties,
duration of the
agreement and the amount of rental payable. On 18 July 1996 the
appellant purchased the property and it became
the registered owner
of the premises. On or about 1 November 2001, the appellant concluded
a written lease agreement with the respondent
as the lessee in
respect of the property. The new period of the agreement commenced on
1 January 2002 until 31 December 2011, with
an option to renew the
agreement for a further period of 10 years, 1 January 2012 to 31
December 2021, which option had been exercised.
The rental payable
was in the amount of R566 988.38 (inc VAT), being the rental
payable during December 2011 and subsequently
escalated at the rate
of 7% per annum, compounded, with effect from 1 January 2012 and
thereafter on 1 January of each successive
year of the new option
period.
[5]
It was a material term of the agreement that should the respondent
fail to pay the rental on due date, then the appellant would
be
entitled to cancel the lease and retake possession of the property.
It is common cause that the respondent and its predecessors
have been
occupying the premises for purposes of operating commercially as a
hotel since 1982. This business has been functioning
for an
uninterrupted period of approximately 35 years. The respondent’s
hotel is operated and managed as part of eighteen
Garden Court
branded hotels in what is known as ‘the hospitality industry’
and it forms part of the greater Tsogo Sun
Hotel Group brand of
hotels. The nature of the business of the respondent is hotel
accommodation across all market segments, namely
corporate,
government, leisure, standard tour operators, aircrew, conferencing
and food and beverage services.
[6]
Clause 4.5 of the agreement which deals with the respondent’s
obligation to pay rent provides:
‘
4.5
The LESSEE shall make monthly provisional rent payments to the LESSOR
by not later than the seventh day of each month…’
The
appellant’s right to terminate the agreement and take
possession of the property is set out in clause 20 of the agreement
headed ‘Breach’ and it provides:
20.1
Should the LESSEE
20.1.1
fail to pay the rent on due date; or
20.1.2
contravene or permit the contravention of any one or more of the
conditions of this agreement and fail to remedy such
breach within 30
(THIRTY) days after receipt by it of notice in writing calling upon
it to remedy such breach; or
20.1.3
allow a judgment against it to remain unsatisfied or unopposed for a
period of seven days:
Then
the LESSOR shall be entitled to terminate this lease and to take
possession of the property.’
[7]
During the period of the lease the respondent maintained regular and
prompt payment of the rental in terms of the agreement.
However, in
June 2014 the respondent failed to make payment on the 7
th
,
as stipulated in the agreement. On 20 June 2014 when payment was not
forthcoming, the appellant wrote a letter to the respondent
and
afforded it a period of five days within which to remedy the breach.
In that letter the appellant pertinently warned the respondent
that
should it fail to pay rent on due date in the future, no notice to
remedy the breach would be given and the agreement will
be cancelled
forthwith and the respondent will be required to vacate the premises
with immediate effect. On 23 June 2014 the respondent’s
bankers, Nedbank, admitted that it was at fault in not transmitting
the payment to the appellant on due date. The letter stated
as
follows:
‘
We
wish to confirm that non-payment of the rental amount stated herein
was caused as a result of a change in Nedbank processes which
impacted the payment run for 01 June 2014 and by no omission of the
client.’
[8]
According to the respondent, as a result of this error, during the
next period of three months ie July to September 2014, it
monitored
its bank statements by ensuring that future payments were debited
from its account promptly by the 7
th
of each month. During the month of October, the rental was debited
from the respondent’s account on 6 October 2014. However,
on 7
October 2014, through no fault of the respondent, Nedbank again
omitted to transfer the rental amount due to the appellant.
The
explanation given by Nedbank was that the funds were credited into a
wrong account instead of the appellant’s account.
As a result
of this breach, the appellant's attorneys invoked the provisions of
clause 20 of the agreement and addressed a notice
of cancellation of
the lease agreement to the respondent on 20 October 2014 and afforded
it until 31 October 2014 to vacate the
premises. Once again, as in
the month of June, Nedbank accepted responsibility for the delay and
stated that due to a ‘processing
error’, it transferred
the money from the respondent's account, not to the appellant's
account but to an incorrect bank account.
The rent was eventually
paid on 21 October 2014. In an attempt to demonstrate its bona fides
the respondent transferred an
amount of R3 844.65 representing
interest to the appellant's account. In response to the cancellation
of the lease and the
threatened eviction, the respondent’s
attorney informed the appellant's attorneys that cancellation of the
lease was unreasonable
because the breach occurred as a result of its
banker’s error and contended that the purported cancellation
was contrary
to the concepts of ubuntu, good faith and reasonableness
as enshrined in the Constitution.
[9]
It is against this background that I now turn to construe the
relevant implications of clause 20 with a view to determine whether
the respondent's contention has merit or not. The high court
correctly found that the appellant was entitled in terms of clause
20
to cancel the agreement on the ground of non-payment of the October
rental on due date and that in itself triggered the right
to be
restored into possession of the leased property. The high court
further found that no hardship is caused by the impugned
clause and
that the respondent agreed to the specified time for the payment of
monthly rentals, which the respondent complied with
easily. The high
court characterised the issue to be whether in the circumstances of
this case, the implementation of the cancellation
clause contained in
the agreement will be manifestly unreasonable and offend against
public policy.
[10]
The parties were ad idem that this was a proper characterisation of
the issues. The appellant contended before the high court
that, on a
proper construction of clause 20, once it is established that the
lessee had committed a material breach entitling it
to cancel the
agreement, the high court was obliged to enforce the cancellation of
the agreement and grant an order for the eviction
of the respondent
from its premises.
[11]
In this court, the case advanced for the appellant is that the
respondent committed a material breach of the agreement when
it
defaulted in paying rental on due date and it was thus entitled to
cancel the agreement, as set out in clause 20. It was further
emphasised that the appellant did not, after the first breach in
June, cancel the agreement. Furthermore the appellant pertinently
cautioned the respondent that a further breach would result in the
cancellation of the agreement. Counsel for the appellant also
submitted that, although the appellant was entitled to cancel the
agreement forthwith when the respondent defaulted in its payment,
the
appellant did not cancel nor communicate its intention to cancel
immediately. Instead it waited for a period of 12 days to
lapse
before cancelling the agreement. It was submitted that if courts were
to embark on the course of action, claimed by the respondent,
it
would be imposing its own sense of fairness and make contracts for
the parties.
[12]
Counsel for the respondent contended that even though it accepts that
the payment was late, it disputed the appellant's entitlement
to
cancel the agreement on the ground of non-payment of the October
rental on due date and seek an eviction order. The impugned
clause,
it was submitted, should be interpreted to mean that parties to a
contract ought to act in good faith. This construction,
according to
the respondent, rendered the clause flexible to accommodate the
circumstances where a party is prevented by factors
beyond his
control from complying with the requirements of the clause. First, it
was argued that its implementation is so manifestly
unreasonable that
it offends public policy and secondly, the clause is unreasonable
because it insists on compliance with its provisions
regardless of
the circumstances which prevented compliance thereof. It was urged
upon us that public policy is informed by the
concept of good faith,
ubuntu, fairness and simple justice between individuals. The
respondent contended that we are obliged, in
construing the impugned
clause, to promote the spirit, purport and objects of the Bill of
Rights as contemplated in s 39(2)
of the Constitution. In other
words we must interpret it through the prism of the Bill of Rights.
In essence, the case advanced
for the respondent is that the
principle of
pacta
sunt servanda
is
not a sacred cow that should trump all other considerations.
[13]
T
he
main thrust of the respondent's argument is that having regard to the
duration of the lease, the circumstances leading to the
alleged
breach and the timeous efforts by the respondent to purge the
default, it cannot be said that it adopted a supine attitude.
It was
argued that because the respondent relied on Nedbank to transfer the
rental amount to the appellant on due date, it was
impossible for the
respondent to comply with the impugned clause given the fact that it
had no control over the Nedbank’s
internal system. It was
submitted that by reason of the fact that in the past three months
preceding the second breach, the respondent
regularly monitored and
checked its bank statements to ensure that payments were made on time
to avoid the breach that occurred
in June. Thus, it was contended,
the implementation of the impugned clause in the circumstances of
this case is not only objectively
unreasonable but it is also unfair
and contrary to public policy.
[14]
The respondent relied essentially on the judgment of the
Constitutional Court in
Barkhuizen
v Napier
[1]
where Ngcobo J writing for the majority, said the following:
‘
The
second question involves an inquiry into the circumstances that
prevented compliance with the clause. It was unreasonable to
insist
on compliance with the clause or impossible for the person to comply
with the time limitation clause. Naturally, the onus
is upon the
party seeking to avoid the enforcement of the time limitation clause.
What this means in practical terms is that once
it is accepted that
the clause does not violate public policy and non-compliance with it
is established, the claimant is required
to show that, in the
circumstances of the case there was a good reason why there was a
failure to comply.’
[15]
Barkhuizen
shed light on the manner in which the question of substantive
fairness of a contract (or a contractual clause) is to be approached
in its application of the contractual doctrine of the public policy
test. The Constitutional Court introduced a second (subjective)
stage
to the public policy test in terms of which a contract (or
contractual clause) must not only be objectively reasonable in
order
for it to be valid but its effect must also be subjectively
reasonable in the particular circumstances in order for it to
be
enforceable. This approach facilitates a more purposive adjudication
and a substantively fair outcome for contracting parties.
[16]
Reverting to the circumstances leading to the breach of the agreement
as well as Nedbank’s admission that it was remiss,
the argument
for the respondent was that on the authority of the quoted passage in
Barkhuizen
,
once it is established that there were circumstances which prevented
compliance with the contractual provisions, insisting on
compliance
thereof would be unfair and unreasonable. The spirit of good faith,
ubuntu and fairness require that parties should
take a step back,
reconsider their position and not snatch at a bargain at the
slightest contravention.
[17]
In support of its argument it called to aid the decision of the
Constitutional Court in
Everfresh Market Virginia (Pty) Ltd v
Shoprite Checkers (Pty) Ltd
[2011] ZACC 30
;
2012 (1) SA 256
(CC),
where Yacoob J writing for the minority, said the following:
‘
Good
faith is a matter of considerable importance in our contract law and
the extent to which our courts enforce the good faith
requirement in
contract law is a matter of considerable public and constitutional
importance. The question whether the spirit,
purport and objects of
the Constitution require courts to encourage good faith in
contractual dealings and whether our Constitution
insists that good
faith requirements are enforceable should be determined sooner rather
than later. Many people enter into contracts
daily and every contract
has the potential not to be performed in good faith. The issue of
good faith in contract touches the lives
of many ordinary people in
our country.
The
values embraced by an appropriate appreciation of ubuntu are also
relevant in the process of determining the spirit, purport
and
objects of the Constitution. The development of our economy and
contract law has thus far predominantly been shaped by colonial
legal
tradition represented by English law, Roman law and Roman Dutch law.
The common law of contract regulates the environment
within which
trade and commerce take place. Its development should take cognisance
of the values of the vast majority of people
who are now able to take
part without hindrance in trade and commerce. And it may well be that
the approach of the majority of
people in our country place a higher
value on negotiating in good faith than would otherwise have been the
case. Contract law cannot
confine itself to colonial legal tradition
alone.’
[18]
In contrast to the minority, the majority judgment of Moseneke DCJ
declined to deal with the issue of good faith because
Everfresh
failed to raise this constitutional argument before the high court
and this court. The majority was rightly concerned that if the
Constitutional Court were to grant leave, it would be in the
undesirable position of sitting as a court of first and last
instance.
Moreover, it would not have had the benefit of the
arguments before the high court and in this court. Consequently it
dismissed
the application.
[19]
Finally, it was submitted that the prejudice that the respondent will
suffer by the cancellation is far greater than that of
the appellant.
The upshot of the respondent’s argument is that the conduct of
the appellant ignores the reality that the
respondent and its
predecessors have been occupying the premises since 1982 and the
respondent employs 91 permanent employees,
plus casual staff. It also
provides indirect employment to secondary staff and service providers
such as Bidvest and other companies.
In essence, it was contended
that evicting the respondent would not only affect its reputation in
the hospitality industry, but
it would also lead to job losses.
Consequently, it was submitted that the principle of
pacta
sunt servanda
should be relaxed and clause 20 should not be enforced.
[20]
It was furthermore submitted that if the appellant was bona fide, it
would have notified the respondent of the breach and required
the
respondent to rectify the non-payment within a short space of time
(which the respondent did in any event) instead of summarily
cancelling the agreement. The submission made is that the respondent
would have made payment and the implementation of clause 20
would
have been ameliorated without any hardship to the parties.
[21]
What must be decided in this case is whether the implementation of
clause 20 is manifestly unreasonable or unfair to the extent
that it
is contrary to public policy. To answer that question the enquiry
must be directed at the objective terms of the agreement,
in the
light of the relative situation of the parties. This, without doubt,
calls for a balancing and weighing-up of two considerations,
namely
the principle of
pacta
sunt servanda
and
the considerations of public policy, including of course
constitutional imperatives.
[22]
Before these arguments are considered, it is necessary to place the
issue in its proper perspective with regard to the legal
principles
governing contractual obligations. This court in
Sasfin (Pty) Ltd
v Beukes
1989 (1) SA 1
(AD) said:
‘
The
power to declare contracts contrary to public policy should, however,
be exercised sparingly and only in the clearest of cases,
lest
uncertainty as to the validity of contracts result from an arbitrary
and indiscriminate use of the power. One must be careful
not to
conclude that a contract is contrary to public policy merely because
its terms (or some of them) offend one’s individual
sense of
propriety and fairness.’
[23]
The privity and sanctity of contract entails that contractual
obligations must be honoured when the parties have entered into
the
contractual agreement freely and voluntarily. The notion of the
privity and sanctity of contracts goes hand in hand with the
freedom
to contract. Taking into considerations the requirements of a valid
contract, freedom to contract denotes that parties
are free to enter
into contracts and decide on the terms of the contract. This court in
Wells v South African Alumenite Company
1927 AD 69
at 73 held
as follows:
‘
If
there is one thing which, more than another, public policy requires,
it is that men of full age and competent understanding shall
have the
utmost liberty of contracting, and that their contracts, when entered
into freely and voluntarily, shall be held sacred
and enforced by the
courts of justice.’
[24]
Parties enter into contractual agreements in order for a certain
result to materialise. The fact that parties enter into an
agreement
gives effect to their constitutional right of freedom to contract,
however, the carrying out of the obligations in terms
of that
contractual agreement relates to the principle of
pacta sunt
servanda
. In
Brisley v Drotsky
[2002] ZASCA 35
,
2002 (4)
SA 1
(SCA) Cameron JA held that judges must exercise ‘perceptive
restraint’ lest contract law becomes unacceptably uncertain.
Cameron JA noted that the judicial enforcement of terms, as agreed
to, is underpinned by ‘weighty considerations of commercial
reliance and social certainty’. In the majority judgment in
Barkhuizen,
Ngcobo J endorsed Cameron JA’s broader
conception of the law of contract as reflected in
Brisley
and
affirmed that the Constitution requires parties to honour contractual
obligations that were freely and voluntarily undertaken.
The court
further went on to say:
‘
While
it is necessary to recognise the doctrine of
pacta
sunt servanda
,
courts should be able to decline the enforcement of … a clause
if it would result in unfairness or would be unreasonable.’
[25]
In
Bredenkamp & others v Standard Bank of South Africa Ltd
,
[2010] ZASCA 75
;
2010 (4) SA 468
(SCA) Harms DP interpreted Ngcobo
J’s reference to public policy importing notions of ‘fairness,
justice and reasonableness’
as not extending these notions
beyond instances in which public policy considerations found in the
Constitution or elsewhere would
be implicated:
‘
This
all means that, as I understand the judgment, if a contract is prima
facie contrary to constitutional values questions of enforcement
would not arise. However, enforcement of a prima facie innocent
contract may implicate an identified constitutional value. If the
value is unjustifiably affected, the term will not be enforced. An
example would be where a lease provides for the right to sublease
with the consent of the landlord. Such a term is prima facie
innocent. Should the landlord attempt to use it to prevent the
property
being sublet in circumstances amounting to discrimination
under the equality clause, the term will not be enforced.’
Harms
DP went on to say:
‘
With
all due respect, I do not believe that the judgment held or purported
to hold that the enforcement of a valid contractual term
must be fair
and reasonable even if no public policy consideration found in the
Constitution or elsewhere is implicated. Had it
been otherwise I do
not believe that Ngcobo J would have said this (para 57):
“
Self-autonomy,
or the ability to regulate one’s own affairs, even to one’s
own detriment, is the very essence of freedom
and a vital part of
dignity. The extent to which the contract was freely and voluntarily
concluded is clearly a vital factor as
it will determine the weight
that should be afforded to the values of freedom and dignity. The
other consideration is that all
persons have a right to seek judicial
redress.”’
[26]
Davis J made a similar point in
Mozart
Ice Cream Franchises (Pty) Ltd v Davidoff & another
[2008]
ZAWCHC 118
;
2009 (3) SA 78
(C) at 85A, when he held that
‘[m]anifestly, without this principle, the law of contract
would be subject to gross uncertainty,
judicial whim and an absence
of integrity between the contracting parties’. And in the same
vein Brand JA remarked in
Fourways
Haulage SA (Pty) Ltd v SA National Roads Agency Ltd
[2008] ZASCA 134
;
2009 (2) SA 150
(SCA) at 158E-F that ‘[a] legal system in which
the outcome of litigation cannot be predicted with some measure of
certainty
would fail in its purpose’.
[27]
In
Barkhuizen
, Ngcobo J said:
‘
If
it is found that the objective terms [of the contract] are not
inconsistent with public policy on their face, the further question
will then arise which is whether the terms are contrary to public
policy in the light of the relative situation of the contracting
parties
.’
[2]
He
goes on to say that where the enforcement of a time-limitation clause
on the basis that non-compliance with it was caused by
factors beyond
his or her control, it is inconceivable that a court would hold the
claimant to such a clause.
[3]
Ngcobo J considered the principle of
lex
non cogit ad impossibilia
to be relevant in this regard.
[4]
[28]
The following facts are critically relevant in the present case in
applying the judgment of the Constitutional Court in
Barkhuizen
:
(a) the terms of the contract are not, on their face, inconsistent
with public policy; (b) the relative position of the parties
was one
of bargaining equality; the parties could have negotiated a clause in
terms of which the respondent was given notice to
remedy a breach
before the contract was cancelled; and (c) the performance on time
was not impossible because the respondent could
have diarised well
ahead of time to monitor this important monthly payment and it could
have effected other means of payment such
as an electronic funds
transfer. Against this background, it cannot be against public policy
to apply the principle of
pacta
sunt servanda
in
this case.
[29]
In this case there is no complaint that the impugned clause is
objectively unconscionable. No allegation is made that the lease
agreement was not concluded freely. There is also no evidence or
contention advanced by either of the parties that there was an
unequal bargaining power between them. On the contrary, there is
ample evidence that the parties contracted with each other on
the
same equal footing. In other words it cannot and neither was the
respondent's case that there was an injustice which may have
been
caused by the inequality of bargaining power. Evidently the
respondent was at all material times aware or must have been aware
of
the implications of the cancellation clause. When the respondent
committed the first breach in June 2014, its attention was
drawn to
the fact that in the event of a further breach in the future, the
appellant will invoke the provisions of clause 20 and
cancel the
agreement and evict them from the premises. It is disingenuous on the
part of the respondent to now contend that by
cancelling the
agreement and not affording them an opportunity to remedy the breach,
the appellant wanted to snatch at a bargain.
The facts demonstrate
that the appellant did not cancel the agreement or communicate its
intention to do so immediately upon non-payment
of the October
rental. It waited for a period of 12 days to lapse before it
cancelled the agreement.
[30]
The fact that a term in a contract is unfair or may operate harshly
does not by itself lead to the conclusion that it offends
the values
of the Constitution or is against public policy. In some instances
the constitutional values of equality and dignity
may prove to be
decisive where the issue of the party’s relative power is an
issue. There is no evidence that the respondent’s
constitutional rights to dignity and equality were infringed. It was
impermissible for the high court to develop the common law
of
contract by infusing the spirit of ubuntu and good faith so as to
invalidate the term or clause in question.
[31]
Nedbank acted as the respondent's agent to implement the mandate
conferred upon it by transferring the money on due date to
the
appellant. Before the appellant could cancel the lease, there was no
obligation on its part to either issue a demand/ultimatum
requiring
the respondent to make payment. It was also not the appellant's duty
to inform the respondent of its default. I do not
think that such a
duty can be imposed on the appellant. The terms of the agreement made
it clear that the appellant was entitled
to enforce clause 20 in the
event that the respondent fails to pay the rent on due date. A person
who promised to pay rental on
a certain date and upon failure to do
so, faces the possibility of an eviction, cannot be heard to say he
was not warned; he should
remember his obligation. In this case the
respondent was forewarned in June that any default in payment would
result in the cancellation
of the lease and possible eviction. This
notwithstanding it failed to comply with its obligation.
[32]
The result may well be unpalatable to the respondent. It must
therefore bear the consequences of its agent’s (bank) failure
in paying the October rental on due date. Its defence was clearly to
restrict the lawful reach of the contract and to limit what
can be
regulated by way of a contractual agreement between parties, in
circumstances where the terms of the contract were clear
and
unambiguous. In this case the parties freely and with the requisite
animus contrahendi
agreed to negotiate in good faith and to conclude further substantive
agreements which were renewed over a period of time. It would
be
untenable to relax the maxim
pacta
sunt servanda
in
this case because that would be tantamount to the court then making
the agreement for the parties.
[33]
In all the circumstances of this matter, it would be appropriate for
the court to include in its order a notice period of three
months in
which to vacate the property. In order to avoid any confusion and
taking into account the time of year when this judgment
will be
handed down, it seems best to fix the date upon which the respondent
is to vacate the property as 31 March 2018.
[34]
For these reasons it is ordered that:
1
The appeal is upheld with costs, such costs to include the costs of
two counsel.
2
The order of the high court is set aside and substituted with the
following:
‘
2.1
The respondent, together with all those persons who occupy the
property fully described as Remaining Extent of Erf 13164 Cape
Town
(hereinafter referred to as ‘the Property’) by virtue of
the respondent's occupation thereof are to vacate the
property, on or
before 31 March 2018.
2.2
Should the respondent or any persons occupying the property through
or under it fail to comply with the order granted in accordance
with
the order in par 2.1 above, that the sheriff of the above Honourable
Court or his lawful deputy is authorised forthwith to
evict the
respondent and all persons/entities occupying the property
through/under it.’
________________________
R
S Mathopo
Judge
of Appeal
APPEARANCES:
For
appellant:
N A Cassim SC
S
Freese
Instructed
by:
Dockrat
Inc., Johannesburg
Honey
Attorneys Inc., Bloemfontein
For
respondent: M C Erasmus SC
W T B
Rigard
Instructed
by:
Fourie
van Pletzen Inc., Constantia Kloof
Symington
& De Kok, Bloemfontein
[1]
Barkhuizen
v Napier
[2007] ZACC 5
;
2007 (5) SA 323
(CC) at para 58.
[2]
Barkhuizen v Napier
(supra) para 59.
[3]
Para 73.
[4]
Para 75.