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[2017] ZAFSHC 6
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Kleo Investments (Edms) Bpk v Wessels N.O. and Others (3068/2016) [2017] ZAFSHC 6 (20 January 2017)
IN
THE HIGH COURT OF SOUTH AFRICA,
FREE
STATE DIVISION, BLOEMFONTEIN
Case
No. 3068/2016
In
the matter between:
KLEO
INVESTMENTS
(EDMS)
BPK
Applicant
and
MARIUS
WESSELS
N.O.
1
st
Respondent
HELEN
WESSELS N.O
2
nd
Respondent
MARNIA
WESSELS
N.O
3
rd
Respondent
JUDGEMENT
BY:
MOLITSOANE, AJ
HEARD
ON:
3 NOVEMBER 2016
DELIVERED
ON:
20 JANUARY 2017
[1]
This is an application for a declaratory order and other ancillary
orders in terms of which the applicant seeks the following
relief:
1.1
That it be declared that the agreement dated 15
October 2008 entered into
by and
between the applicant and Wessels Trust (the Trust)
is a valid agreement
between the parties;
1.2
That the said agreement be deemed to be terminated and /or cancelled;
and
1.3
That an order of eviction be granted against the respondents from the
premises known as shop1,Shumans
Building, Jasmyn Street, Wilgehof,
Bloemfontein.
[2]
Applicant is the owner of a building known as Shumans Building, which
is over 60 years old. He became owner thereof in the year
2010. The
said property was formerly the joint property of Christina Kleovoulou
and Demetris Phillipou.
[3]
Prior to the applicant being the owner of the Shumans Building,
the former owners and the Trust had entered into a lease
agreement in
terms of which the said owners leased the premises aforesaid to the
Trust.
[4]
At the time when applicant became owner of this building, the
Trust continued to be lessees of the applicant by virtue
of the
common law principle of
huurgat
voor
koop
and also by virtue of clause 2.4.1 of the lease agreement dated
15 October 2008(the original agreement).
[5]
The agreement dated 15 October
2008 was valid from
the 1st
December 2008 to the 30
th
November 2013. This agreement
has since been renewed by the parties and in terms of the latest
renewal it is valid till the 30th
November 2018.lt is the validity of
this agreement which is the subject of this dispute.
[6]
On the 5th November 2014 the applicant as landlord, represented by P
Kleovolou and the tenant, described as "to be advised",
represented by Marius Wessels (a trustee of Wessels Trust) signed
another agreement (the Spar Agreement) to lease the premises
shop 1,
Shumans Building erf 10285, Jasmin Street, Wilgehof Bloemfontein.
[7]
The main issue for determination is whether the
original agreement has been substituted by the
Spar agreement,
as a result of which the original agreement, can no longer be
regarded as a valid agreement between the applicant
and the Trust.
[8]
It is further argued on behalf of the trust, in the alternative, that
should I find that the original agreement was still a
valid agreement
between the parties, and then in that case, respondent argues that
termination of the said agreement in terms of
clause 24.2
thereof was
mala
fide,
and therefore unlawful.
[9]
It is not in dispute that a Spar agreement was entered into and
signed as indicated above. According to the applicant the Spar
agreement did not culminate into a binding agreement because the
agreement was subject to a suspensive condition, which condition
was
not fulfilled.
[10]
On the other hand, it is argued on behalf of the Trust that the
agreement of the 15th October 2015 has been replaced by the
Spar
agreement.
[11]
At the onset, it is important to deal with the issue of who the
parties to the Spar agreement are. Messrs Kleouvlou and Wessels
acting on behalf of the applicant and an "entity to be advised"
respectively entered into the Spar agreement which was
reduced to
writing and was signed on the 5th November 2014.lt is argued on
behalf of the Trust that at all material times Marius
Wessels acted
on behalf of the trust when so signed the Spar agreement and in fact
P Kleovoulou was aware that Rollina Stores was
to be turned into a
Spar shop. This is denied by the said Kleovolou. It is argued on
behalf of the trust that the denial of this
fact constitutes a
factual dispute which cannot be adjudicated on the affidavits before
court. It is further argued on behalf of
the respondent that the
version of the respondents should be accepted as correct.
[12]
It is my considered view that the fact of who the parties to the Spar
agreement are, do not create a factual dispute which
cannot be
adjudicated on the documents before court. This agreement has been
annexed to the affidavit for the perusal of the court.
[13]
In the Spar agreement it is clear that Marius Wessels acted for 'the
entity to be advised'. When Mr Wessels applied for membership
of the
Spar Guild of Southern Africa (Annexure AA4 to respondents
affidavit), he did not purport to act on behalf of the Trust
in his
application. He also did not purport to act on behalf of an entity to
be formed or to be advised. When he applied for membership
above,
which fact he uses to fortify the fact that the Spar agreement had
been concluded between the applicant and the Trust, he
applied in his
personal capacity. The reason for drawing this inference is the
following:
[14]
Annexure AA4 reveals that Applicant is Marius Wessels. Paragraph 1.2
of this annexure, deals with registration in the case
of a company or
a close corporation or identity number in the case of an individual
or partnership. Mr Wessels supplied his identity
number. Mr Wessels
did not supply the registration number of the trust .One would have
expected him to at least insert the registration
number of the trust
and not his identity number. Nowhere in the said application does he
purport to act for the trust or for the
entity to be formed.
[15]
Furthermore, following the said application for membership, a
membership agreement was entered into by and between the Spar
Guild
of Southern Africa (NPC) and Marius Wessels wherein he is referred to
as a 'retailer member'. The word 'retailer member'
has been defined
in the said membership agreement. According to the membership
agreement "a retailer member" means "a
member,
so
styled,
of
the
Guild
and
the
'retailer
member'
means
specifically
the retailer
member
who is
a
party
to this
agreement'
Mr
Wessels did not purport to act in a representative capacity of either
the Trust or the "entity to be advised"
or
even still, for an entity to be formed when he so
applied for the membership. Nowhere in
this application before me
does Marius Wessels purport to act in order to protect the rights of
an entity to be formed.
[16]
Paragraph 5 of the application for membership clearly states that
such retailer membership "cannot be sold or transferred".
If such membership was thus granted to Mr Wessels in his personal
capacity as it is, he can therefore not transfer it to the trust.
Respondents contends that the applicant was aware that Marius Wessels
was acting on behalf of the trust and later the trust was
to be
substituted by another entity. If it were so then in that case the
Spar agreement could have simply been entered into by
and between the
trust and the Trust. Such did not happen. The Spar membership was
therefore not for the trust.
[17]
Nowhere in the documents filed is it alleged that such an
'entity to be advised' is the current lessee of the building
in
question. It is also clear that the trust is still carrying on
business in the said premises on the same terms as in the original
agreement. The trust still occupies the same space as previously
leased as opposed to the increased space as set out in the
Spar agreement. The trust is still paying the rental as agreed
in the original agreement as opposed to an increased rental
as set
out in the Spar agreement.
[18]
Clause 25(a) of the original agreement contains a non-variation
clause which states that any variation to the said agreement
shall be
in writing and signed by the parties. When the Spar agreement was
signed, Marius Wessels signed on behalf of an 'entity
to be advised'.
He clearly did not sign on behalf of the trust. If it were not so, he
could have indicated that he was signing
on behalf of an entity to be
formed.
[19]
For the reasons set out above I am unable to find that the trust is
one of the parties to the Spar agreement and consequently
I cannot
find that the Spar agreement has substituted the original agreement.
It is my finding that the original agreement 1s,
therefore, the
current valid agreement between the parties.
[20]
In view of my finding regarding the parties to the Spar agreement, it
is in my view not necessary to adjudicate on the fulfilment
or
otherwise of the suspensive conditions as contained in that Spar
agreement.
[21]
I will now deal with original agreement. Clause 24 of the original
agreement deals with '
change
of
ownership
and
renovation
'. It is argued on
behalf of the trust that the applicant has no right to cancel the
original agreement at all. Reliance for
this assertion is based on
clause 24( 1) which provides thus:
"Should
the
l
essor at any time during the currency of this
lease sell
the
property of which the
leased premises form part or should any of the
holders
of the shares
in the
l
essor sell
such of those
shares
with the
result
that
the
purchaser/s
therefore
acquire/s
control
of
the
l
essor,
then
notwithstand
i
ng anything to the contr
ary
elsewhere contained or
impl
i
ed
herein, the
l
essor or the
purchaser/s
of such
building, or
the purchaser/s
of
the
said
shares
shall
not
be
entitled
to
terminate this
lease."
[22]
Clause 24(1) of the original agreement deals with circumstances where
the building is being sold or alienated. In this dispute
before me,
there is no talk of the sale or alienation of the building.
Applicant's case is based on termination of the agreement
on the
basis that it wants to bring about substantial renovations to the
building as envisaged in clause 24(2) of the original
agreement.
Clause 24(1) of the original agreement in my view only reiterates the
common law principle of
huurgat
voor koop.
This
clause essentially asserts that sale or any kind or alienation of the
building to a third party shall not divest the lessees
of their
rights to continue with the lease. Reliance by the trust on clause
24(1) of the original agreement to assert that
applicant shall
not be entitled to terminate the original agreement in circumstances
where applicant wishes to conduct substantial
renovations to the
building is, therefore, misplaced.
[23]
There have been arguments on the documents regarding the exercise of
the right of first refusal by the respondents to be the
anchor
tenant. Much argument centred on when notice was given to the
respondents to exercise such a right and within what period
such a
right should be exercised. Numerous correspondences were exchanged
between the parties and such correspondences were attached
to the
affidavits as annexures. Clause 24(4) of the original agreement
provides as follows:
"The
l
essee
will
have
first
right
of
refusal
to
be
the anchor
tenant
(my emphasis),
and
has
to be
exercised
with
60(sixty) calendar
days of such written
notice from the
l
essor. The lessor however has
the
right to withdraw
this
right
of refusal if the
l
essee cannot obtain financing
or be approved
by an accredited franchisor
within 60(sixty)
calendar
days."
[24]
It is clear that clause 24(4) pertains to an anchor tenant in the new
building or in a building to be renovated. This right,
the lessee
does not acquire in the original agreement as an anchor tenant but as
a lessee in the original agreement he acquires
the right
to
be the
anchor
tenant
in a building to be renovated or
built. It is, therefore, not a requirement where termination was
envisaged on the ground as indicated
by the applicant to have even
given notice to the respondent to exercise their right of first
refusal. It would actually be absurd
that any owner of a building
would be required to obtain permission from a tenant in order to
renovate or enhance the value of
his building. If it were so, it
would also set the owner at the mercy of a tenant where he wanted to
renovate his building as the
lessee may simply exercise his right and
refuse any attempt at renovations and or enhancement of the property.
[25]
Clause 24(2) of the original agreement provides that:
"Should
the lessor at any time during the currency of this lease decide
(a)
to demolish the building for any reason whatsoever, or
(b)
to substantially renovate the building and /or the leased premises
for any reason whatsoever, then notwithstanding
anything to the
contrary contained or implied in the lease,
the lessor shall be
entitled to terminate
this lease on not less than 3(three) calendar months' notice given in
writing to the lessee. The decision
of the lessor's architect as to
what constitutes substantial renovations to the building and/or the
leased premises for the purposes
of (b) above shall be final and
binding upon the lessee."
[25]
Careful reading of clause 24(4) of the original
agreement stipulates two jurisdictional requirements
which must
be satisfied before the said clause is invoked, namely,
·
a decision by the applicant to renovate the building
substantially; and
·
a decision by the architect of the lessor as to what
constitutes substantial renovations.
[26]
It is not in dispute that it had always been the intention of the
applicant to renovate the building herein substantially.
Respondent
does not dispute that a decision was taken by the applicant to
renovate the building. Respondent also indicates that
since 2014 the
applicant had mooted the idea of renovating the building. The
building is about 60 years old. It is also not in
dispute that the
architect of the applicant certified that substantial renovations
will be done on the leased premises.
[27]
The respondent, however, over and above the concession
that the applicant had always mooted the idea of renovating
the
building substantially goes further to say that applicant had always
further indicated that it did not have the necessary finance
to carry
out the renovations. It is in the light of this alleged lack of
finance that the respondents argue that the termination
of this
original agreement is
mala fide
as applicant has no money to
carry out the envisaged substantial renovations.
[28]
Numerous correspondences were directed to the applicant by the
respondents attorneys requesting proof that applicant had the
necessary funds to effect the necessary substantial renovations.
Applicant did not supply the said proof as requested. When this
application was launched, in its founding affidavit applicant
fleetingly mentioned that it had the necessary finance to proceed
with the renovations and according to the applicant, the only reason
that renovations could not be started with was that the respondent
was still in occupation of the premises.
[29]
It is pertinently clear that when the applicant launched these
proceedings the question of the applicant's ability to effect
the
renovations was going to be an issue. It is a normal rule of practise
that an applicant must stand and fall by his founding
affidavit. The
general rule is that the applicant must set out his facts in a
complete way and has to make out his case in his
founding affidavit
and he may not introduce new matter in his replying affidavit. The
stating of bald and unsubstantiated allegations
of fact in the
founding affidavit are done at the peril of the applicant as he runs
the risk that the amplification of same may
be refused in the
replying affidavit by the court and the court may order that such
should be struck off. In such a case, however,
the court has a
discretion to allow such new matter to be introduced in the replying
affidavit. This rule, therefore, is not inflexible.
The
court in the case of
Sherperd
v
Mitchell
Gotts
Seafright (SA) (Pty) (Ltd)
1984(3) SA 202 at 205 paras E-G
said the following:
"The
general rule on which the appellant relied, that in motion
proceedings an applicant has to make out his case in founding
affidavit and that he may not introduce new matter in his replying
affidavit, is well established. I need only refer to authorities
such
as
Mauerberger v
Mauerberger
1948 (3) SA 731
(3) at 732
Titty's Bar and Bottle
store
(Pty)
Ltd
v
ABC
Garage (Pty) Ltd
and
Others
1974 (4) SA 362
(T) at 368B- 369A;
Director of Hospital
Services v Mistry
1979 (1) SA 626
(A) at 635- 636F. This rule is
however, not an absolute one, In
Bayat
and Others v
Hansa and
Another
1955 (3) SA 547
(N), Caney J
said at 5530:
'...
that
it applies
save
in exceptional
circumstances.'
And,
in the case of
Registrar
of
Insurance
v Johannesburg
Insurance
Co
Ltd
(1)
1962 (4) SA 546
(w), Hiemstra J at 574 A-B emphasised
that
:
'since
rules of
procedure
are made to
facilitate litigation, they are
always subject
to
the overriding
discretion
of the
Court',
I
t
may
in
an
appropriate
case
allow
an
applicant
to
introduce
new matter in his
replying affidavit."
[30]
The court in the case of
Shepherd
v Tuckers
Land
and Development Corporation
(Pty)(Ltd)
1978(1)
SA 173 (W) at 177G- 178A said the following:
"......
all
the essential averments must
appear
in
the found
i
ng
affidavits
for the
Courts will
not allow
an applicant
to
make or supplement
his
case
in
his
replying
affidavits
and
will
order
any
matter
appearing therein which should
have
been
in the
founding affidavits
to
be struck
out.
(See
Herbstein
and
Van
Winsen
at
75). In
Titty's
Bar
and
Bottle
Store (Pty) Ltd and others
1
974
(4) SA 362
(T) Viljoen J 368 stated:
'It
has always been the practise
of
the
Courts in South Africa
to strike
out matter in replying
affidavits
which
should have appeared
in petitions or
founding affidavits,
including
facts
to
establish locus
standi or the
jurisdiction
of
the
Court. See Herbstein and Van Winsen
Practise
of
the superior Courts
of
South Africa
2
nd
ed at 75,
94. In my
view
the
practise still
prevails'.
This
is
not, however,
an absolute
rule. It
i
s
not a
law
of the
Medes
and
Persians.
The
Court has discretion to allow
a
new
matter to remain in
a
replying
affidavit
giving
the
respondent
the
opportunity
to
deal
with
it
in
a
second
set
of
answering
affidavits.
This
indulgence,
however,
will
only
be allowed
in special
or
exceptional
circumstances."
[31]
As indicated above this rule of our civil procedure to allow a new
matter in certain circumstances to be raised in a replying
affidavit
is not cast in stone. It appears from the replying affidavit of the
applicant that a loan in the amount of R20, 475,000
was approved by
Nedbank on the 23th OCTOBER 2015. It also appears from the
replying affidavit that applicant
accepted
the said financial assistance on the 28
th
OCTOBER 2015. This information should have ideally been included in
the founding affidavit but it was not. At the end of the day
there
are only two jurisdictional requirements as indicated in paragraph
[25] above in. order to invoke clause24 (4). Applicant
contended that
it had financial backing to effect the substantial renovations and
it only gave more information regarding
the said
financing. Also of importance when these proceedings were launched,
such financial assistance had already
been approved and
accepted. For this reason I cannot strike off the information
contained in the replying affidavit concerning
proof of financial
assistance as I do not believe that it will prejudice the respondent.
I accordingly find that the applicant
has the necessary financial
backing to effect substantial renovations to the Shumans Building.
[31]
Respondent further contends that applicant only targeted him and does
not intend to evict the other tenants. In support of
this contention
an affidavit of one of the tenants to the building was annexed to the
opposing affidavit. If one has regard to
paragraph 8.8 of the
applicant, it indicates that notices are going to be given to all
other tenants. It appears to me that at
the time of the issue of this
application such notices had not been given but same were given at a
later stage as it appears on
annexures to the replying affidavit.
[32]
I accordingly cannot find that the applicant acted mala fide when he
gave notice of the termination of the original agreement
to the
respondent.
[33]
Applicant has duly acted properly by giving respondents three
calendar months' notice of termination of the agreement.
I
accordingly make the following order:
1.
It is declared that the lease agreement dated the 15th OCTOBER 2008
and subsequently renewed, is a valid agreement between the
parties;
2.
It is declared that the agreement aforesaid was validly terminated
and or cancelled;
3.
It is ordered that the respondent or any other person
and/entity occupying the
premises known as Shop 1, Shumans Building,
Jasmyn street 1, Wilgehof BLOEMFONTEIN , on the ground of any right
or title of the
respondent evict the
said premises on or
before
the 19th March 2017.
4.
The Sheriff of this court is hereby authorised to evict the
respondent or any other
person occupying the premises herein
aforementioned by virtue of any right of title of the
respondent if the order in paragraph
3 above is not complied with;
5.
Respondent is ordered to pay the costs of this application.
_____________________
P.
MOUTSOANE AJ
For
the Applicant:
Adv. HJ Benade
Instructed
by:
SYMINGTON &
DE KOK
NELSON MANDELA DRIVE
BLOEMFONTEIN
For
the Respondent: Adv. GV Maree
Instructed
by:
WESSELS ATTORNEYS
c/o STANDER &
PARTNERS
VICTORIA STREET WILLOWS
BLOEMFONTEIN