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2016
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[2016] ZAKZDHC 48
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Jeevan's Property Investment (Pty) Ltd v Reunion Cash and Carry CC (13342/2015) [2016] ZAKZDHC 48 (25 November 2016)
IN
THE HIGH COURT OF SOUTH AFRICA
KWAZULU-NATAL
LOCAL DIVISION, DURBAN
REPORTABLE
CASE
NO.: 13342/2015
In
the matter between:
JEEVAN’S
PROPERTY INVESTMENT (PTY)
LIMITED
APPLICANT
and
REUNION
CASH AND CARRY
CC RESPONDENT
JUDGMENT
MADONDO
DJP
[1]
The applicant seeks an order evicting the respondent from commercial
premises, 34 Rana Road, Isipingo Rail, Durban, on the grounds
that
the lease agreement the parties had entered into in the year 2010
terminated by effluxion of time on 31 December 2015.
According
to the applicant the respondent has, therefore, no lawful reason to
remain in occupation of the premises in question.
The
respondent opposes the application on the basis on that it renewed
the lease before its expiry by giving a written notice of
renewal on
28 August 2015. In addition, the respondent contends that the
applicant has anticipated the holding over of the
leased property by
the respondent on termination of the lease during the currency of the
lease. The applicant launched an application
for an eviction order on
17 December 2015, almost 13 days before the termination of the lease
on 31 December 2015. It is common
cause that at the time the
respondent was by then entitled to occupy the premises until 31
December 2015. According to the
respondent, at the time of the
institution of the application, no right had accrued to the applicant
to seek eviction of the respondent
from the premises nor did a
prima
facie
right accrue in its favour. In which event the
application was a nullity from the outset and accordingly the
respondent argues
that on that ground alone the applicant`s
application for an eviction order should be dismissed with costs.
[2]
As a consequence, the respondent brings a counter application for an
order interdicting and restraining the applicant from interfering
with, harassing or in any manner disrupting the respondent’s
peaceful and undisturbed possession and occupation of the premises
in
question, pending the institution of an action for, amongst other
things, a declaration of rights on a lease agreement between
the
applicant and respondent and for damages occasioned by
misrepresentation by one Ebrahim Cassim to be joined in the action as
the second defendant. Such action had to be instituted within
thirty days of the receipt of a replying affidavit by the applicant.
Further, for an order interdicting and restraining the applicant from
representing to the members of the public or respondent’s
customers or respondent’s security company that the managing
director, Ebrahim Cassim, or his agents will take over and operate
the respondent’s business.
Parties
[3]
The applicant is Jeevan Property Investments (Pty) Ltd, a company
duly registered and incorporated according to the laws of
South
Africa and having its registered office at 9 Chestnut Crescent,
Marianhill, Pinetown.
[4]
The respondent is Reunion Cash & Carry CC, a close corporation
duly registered and incorporated according to the laws of
South
Africa, having its registered office at 1 Hulston Road, Clare Estate
and its principal place of business at 34 Rana Road,
Isipingo Rail,
Durban. The respondent conducts the business of general
retailer at the premises in question.
Background
[5]
It is common cause between the parties that on 2 November 2010 they
entered into a partly oral and partly written lease agreement
in
respect of business premises at 34 Rana Road, Isipingo Rail, Durban,
for a period of five years commencing on 1 January 2011
and ending on
31 December 2015. At the time of the conclusion of such
agreement, the applicant was duly represented by Ebrahim
Cassim and
the respondent by Yacoob Goolam Hoosen Asmal and Mariam Bibi Cassim.
It was one of the essential terms of the
lease agreement that the
respondent would pay rental to the applicant in terms of Rent
Schedule, which appears on a manuscript
in the lease agreement and
that at the termination of the agreement on 31 December 2015 the
respondent would vacate the premises.
[6]
The respondent consists of two members namely Mariam Bibi Cassim, the
daughter of Ebrahim Cassim, and her husband Yacoob Goolam
Hoosen
Asmal. Before the conclusion of the lease agreement of November
2010 the respondent had been in occupation of the
premises by virtue
of the earlier lease agreement entered into between the parties.
The November 2010 agreement was in fact
an extended lease.
[7]
Because of the relationship between the members of the respondent and
of the applicant, the respondent had occupied the premises
in
question on favourable terms and the applicant had received a rental
which was below what it could receive in an open market
arms - length
situation. At some stage the mental relationship between Mariam
and Yacoob Asmal deteriorated to such an extent
that Mariam found it
proper to divorce Yacoob Asmal and wind up all the common estate.
This resulted in the applicant being
no longer disposed to granting
the respondent a favourable status it had granted in terms of rental
and no longer wished to keep
the respondent in occupation of the
premises.
[8]
In contemplation of the termination of the agreement by effluxion of
time on 31 December 2015, the applicant’s attorney
of record,
Shaukat Karim, sent the respondent’s erstwhile attorneys an
email dated 10 April 2015 reminding them that the
respondent’s
lease would expire on 31 December 2015 and requesting the respondent
to indicate whether or not it would vacate
the premises timeously.
If it failed to make such an indication, the applicant’s
attorneys would bring an application
for an eviction order on the
instructions of the applicant.
[9]
On 12 May 2015 the applicant sent the respondent an email notifying
it of the unanimous decision of the applicant’s directors,
taken at the then recent directors’ meeting, that as the lease
would expire on 31 December 2015 it would not be renewed.
The
applicant further advised the respondent that it was then given seven
months to deplete its stock and vacate the premises on
the
termination of the lease and that there would be no negotiations as
the decision by the applicant’s directors was final.
The
respondent did not respond to any of the correspondence the applicant
had forwarded to it.
[10]
On 28 August 2014 the respondent purported to renew the lease
agreement for a further period of five years by addressing a
written
notice in this regard to the applicant. The applicant denies receipt
of such notice nor did the respondent make any effort
to ascertain
whether or not the applicant did receive such intended renewal
notice. However, in a letter dated 9 December
2015 the
applicant’s attorneys sought an undertaking from the respondent
that it would vacate the premises upon termination
of the lease
agreement on 31 December 2015. Notwithstanding all such
notifications and reminders the respondent did not make
any
undertaking or show any intention to vacate the premises on
termination of the lease agreement.
[11]
Since the applicant did not want to find itself in a situation where
it could only commence eviction proceedings after 31 December
2015,
in the event of the respondent failing or refusing to vacate the
premises, it instituted eviction proceedings against the
respondent
on 17 December 2015 before expiry of the lease period. The
respondent had feared that the eviction proceedings
after the
termination of the lease agreement on 31 December 2015 might be
protracted and that delay in evicting the respondent,
in the event of
its refusal of move, would cause the applicant to suffer losses in
terms of finding a tenant who would pay a market
related rental.
[12]
The applicant contends that it was reasonable for it, in the face of
the respondent’s failure to respond to any of the
notifications, reminders or requests the applicant had forwarded to
it, to assume that on 31 December 2015 the possibility of the
respondent refusing to vacate the premises was too great.
Accordingly, the applicant argues that it was reasonable and
advisable
for it to launch this application in anticipation of such
refusal by the respondent to vacate the premises on termination of
the
lease.
Issues
[13]
The issues arising from the facts of this case are:
(a) whether the
respondent is entitled to remain in occupation of the premises after
the expiry of the lease; and
(b) whether the law
relating to eviction allows the applicant to anticipate the holding –
over of the leased property by the
respondent (i.e. remaining in
occupation of the leased premises after termination of the lease).
[14]
It is common cause between the parties that during November 2010 they
entered into a lease agreement which terminated by the
effluxion of
time on 31 December 2015. Accordingly, the question whether or not
the applicant validly and lawfully terminated the
lease does not, in
the circumstances, arise. However, the date of termination of the
lease has come and gone but the respondent
remains in occupation of
the leased premises.
[15]
The first question for decision is whether the respondent is entitled
to remain in occupation of the property after the termination
of the
lease. In
Chetty v Naidoo
1974(3) SA 13 (A) at 20 the court
held:
‘
It is inherent in
the nature of ownership that possession of the res should normally be
with the owner and it follows that no other
person may withhold from
the owner unless he is vested with some right enforceable against the
owner (i.e. a right of retention
or a contractual right). The owner,
in instituting a
rei vindication,
need,
therefore, to do no more than to allege and prove that he is the
owner and that the defendant is holding the res- the
onus being on
the defendant to allege and establish any right to continue to hold
against the owner.’
See
also
Pretoria Stadsraad v Ebrahim
1979(4) SA 193(T) at 195
E-F.
[16]
In the present case, as it is common cause that the parties had
entered into the lease agreement and that the lease has terminated,
the onus is on the respondent to allege and prove that it is entitled
to remain in occupation of the premises even after the termination
of
the lease. The respondent avers that it had before the expiry of the
lease entered into an oral lease agreement with the applicant
in
terms of which the applicant would extend the lease for a period of
five years subject to five percent rental increase. According
to the
respondent, in fact, Hassim Seedat of the applicant had given it a
perpetual right to renew the lease. The respondent has
gone on to
state that a written renewal notice was not required as a term of the
contract but only to give directors a peace of
mind. The respondent
alleges that Seedat had told it that formal renewal of the lease was
not necessary. Seedat went on to advise
the respondent that all that
was required, was to write a renewal letter closer to the expiry of
the then current lease.
[17]
However, the letter dated 28 August 2015 betrays the respondent in
that in the letter the respondent acknowledged that the
lease would
expire on 31 December 2015. As a result, the respondent asked for the
renewal of the lease to June 2021. This contradicts
the respondent’s
assertion that the parties had earlier on entered into an oral
agreement as to the extension of the lease
for a further period of
five years, as from January 2016. In its own version, the respondent
had renewed the 2010 lease agreement
with the applicant by giving
thirty (30) days written notice. This supports the version by the
applicant that the lease renewal
between the parties has always been
in writing. This, further finds support in the alleged oral agreement
between the respondent
and Seedat that a renewal letter was required
for the extension of the lease.
[18]
The respondent alleges that it personally delivered the written
notice of renewal by hand to Ebrahim Cassim of the applicant
on 28
August 2015. This contradicts the respondent’s earlier version
that the renewal notice to the applicant was issued
through the
email. The letter itself specifies that the response thereto should
also be by email correspondence. However, the respondent
has sought
to retract its version, it made under oath, in its Replying Affidavit
in a Counter Application, that the renewal notice
was issued other
than by email. The respondent attributed this to a common error
between it and its legal practitioner. But, its
legal practitioner
has not tendered any evidence to corroborate the respondent’s
version in this regard. All this betrays
the respondent as being
untruthful with regard to the circumstances surrounding the issue of
the renewal notice.
[19]
Mr Padayachee for the respondent has argued that the question whether
or not the applicant had received the renewal notice,
constitutes a
dispute of fact which could not be resolved on the papers. I do not
agree with the counsel for the respondent in
this regard since the
letter of 28 August 2015 specified the mode of response to the notice
as by email correspondence. It therefore,
follows that had any
response been received through email, it should have formed part of
the respondent’s papers as proof
of receipt of the renewal
Notice. Regard being had to the fact that the respondent has
withdrawn its allegation that the renewal
notice was issued other by
email, the only mode in which the applicant could have responded was
by email. In any event, it has
been common cause between the parties
that there had been no response by the applicant to the respondent’s
purported written
notice. Nor did the respondent make any follow-up
to its renewal notice with the intention to establish whether or not
the applicant
had received the notice. If the applicant did receive
the renewal notice, to ascertain whether or not it was accepting the
offer
contained in the respondent’s letter of 28 August 2015.
[20]
This remained the position despite that the applicant had earlier on
told the respondent that it should vacate the premises
on termination
of the lease. Further, the applicant had categorically put to the
respondent that the non-renewal of the lease agreement
was not
negotiable as it was final. The respondent had, seven months before
the expiry of the lease, been advised to deplete its
stock in
preparation to vacate the premises on 31 December 2015. YGH Asmal of
the respondent had personally delivered the renewal
notice of the
earlier lease to MB Cassim of the applicant. The latter verified and
accepted the contents of the renewal letter.
[21]
A notice of renewal is an offer which has to be accepted by the other
party. The ordinary rules of offer and acceptance should
apply. A
basic rule is that:
‘
an acceptance of
an offer made ought to be notified to the person who makes the offer,
in order that the two minds may come together.’
See
Seeff Commercial and Industrial Properties (Pty) Ltd v Silberman
2001(3) SA 952 (SCA) at 958A.
[22]
In the present case notification of acceptance was necessary to
constitute a binding contract between the parties. Such notification
had to be communicated to the respondent through email or otherwise.
However, such communication did not take place, and as a consequence,
no renewal of the lease agreement came into existence between the
parties. See
McCain Frozen Foods (Pty) Ltd vs Beestepan Boerdery
(Pty) Ltd
2003(3) SA 605(T) at 612 F-G. As no renewal of the
lease agreement could have resulted from the unilateral act of the
respondent,
the respondent has failed to prove that it has any lawful
basis upon which it is entitled to remain in occupation of the
premises
after the termination of the lease. Nor could the
respondent’s holding over of the leased property be said to be
a tacit
relocation of the lease agreement, for lack of the
applicant’s consent. See
Golden Fried Chicken (Pty) Ltd v
Sirad Fast Foods CC
2002(1) SA 822(SCA) at 825D-E.
Was
the applicant entitled to anticipate the holding-over of the property
by the respondent?
[23]
The lease between the parties was to terminate by the effluxion of
time on 31 December 2015. For fear that the respondent would
hold
over the property after the termination of the lease, the applicant
saw it fit to bring an application on 17 December 2015
for an order
directing the respondent to vacate the leased premises by no
later than 1 January 2016. It stands to reason
that at the time of
the institution of the eviction proceedings, the relationship of
lessor and lessee between the parties had
not ceased. See
Bowhay v
Ward
1903 TS 771
at 778.
[24]
The respondent contends that the law of eviction does not allow for a
premature anticipated breach to found an action or application
for
eviction. The eviction proceedings may only be brought when the lease
has validly been terminated. The applicant has brought
this
application on the same papers as at 17 December 2015, being the date
this matter first served before this court. The respondent
was
required to vacate the leased premises not later than 1 January 2016.
It is common cause that the lease would only terminate
on 31 December
2015. While it is true that the order sought would only take effect
on 1 January 2016, it is not the effective date
which matters but the
initial date, being the date on which the application was first
launched before this Court. It, therefore,
follows that this matter
falls to be decided on the papers as they stood on 17 December 2015.
[25]
In
Ndlovu v Ngcobo; Bekker and another vs Jika
2003(1) SA
113(SCA) at 131 B-C the Supreme Court of Appeal held:
‘
When the owner
acknowledges … that the occupier has or had a right of
occupation (for example in terms of a lease), the owner
has, in
addition, to prove that the right no longer exists or is no longer
enforceable, for example that the lease between them
has expired or
has been cancelled lawfully….’
[26]
It is common cause that at the time of the institution of the
eviction proceedings the respondent had a right to hold the property
in terms of the lease agreement. In order for the applicant to
succeed on its claim it must have proved that such right has by
then
terminated. It stands to reason that as at the time of the
institution of the eviction proceedings the lease had not terminated
the applicant’s statement of claim did not have any cause for
action or application.
See
Worcester Court (Pty) Ltd v Benatar
1982 (4) 714 (C) at 721H-
722A;
Henning v Petra Meubels Bpk
1947(2) SA 4079T) at 412. On
the balance of probabilities, the applicant has failed to prove that
at the time of the institution
of the eviction proceedings the
respondent had no lawful reason to occupy the leased property. The
respondent was by then entitled
to occupy the premises until 31
December 2015.
[27]
The unlawful occupier means a person who occupies the property
without the express or tactic consent of the owner or person
in
charge or without any other right in law. The lease had not yet
terminated and the respondent was still entitled to occupy the
property in question. I do agree with Mr Padayachee for the
respondent on that as on 17 December 2015 the lease had not
terminated,
the applicant was not entitled to bring ejectment
proceedings in anticipation of the respondent’s future conduct.
The inevitable
conclusion is that the applicant acted prematurely in
bringing the application for an eviction order on 17 December 2015.
[28]
The applicant states the reason for anticipating the holding over of
the property by the respondent on termination of the lease
as that
the applicant had on three occasions addressed reminders,
notifications and requests asking the respondent to confirm that
it
would vacate the premises on the termination of the lease with no
response. In the circumstances, the applicant contends that
it was
entitled to act pre-emptively.
[29]
The fear of the applicant that on termination of the lease the
respondent would refuse to vacate the premises was still imaginary.
There was no basis for such a conclusion save the assumption that
since the respondent had failed to respond to remainders and
letters
the applicant had addressed to the respondent notifying it to vacate
the property on termination of the lease. Other than
that the
respondent had made no indication that it would hold the property
after termination of the lease. For the applicant to
succeed on its
claim against the respondent, it has to prove that at the time of
institution of the eviction proceedings the lease
had terminated and
that the respondent had no lawful basis for remaining in occupation
of the property. This shall be the position
notwithstanding that the
respondent has now failed to prove that it has any lawful basis to
remain in occupation of the property
after termination of lease.
[30]
The market related rental upon which the respondent also relies as
the reason to evict the respondent during the currency of
the lease
period, could not justify the premature bringing of the application
for an eviction order. The lessor is entitled to
claim damages
arising from the lessee’s continued occupation of the property
after the termination of the contract of lease.
See also
LTC Horns
Amler’s Precedents of Pleadings 8ed
(2015) at P233.
[31]
Claims for holding over are found on a breach of the contractual
obligation of the lease as required by the relevant clause
of the
agreement or as an incidence of the common law. The amount claimable
is not rental but damages being market related rental
value of the
premises. See
Hyprop Investments Ltd and another v NCS Carriers
and Forwarding CC and another
2013(4) SA 607(GSJ). As the
question relating to the determination of the parties rights in the
lease agreement has been addressed
earlier on, I do not find it
necessary to deal with the respondent’s counter application.
Order
[32]
In the result, I make the following order:
The applicant’s
application for an eviction order is dismissed with costs, such costs
to include costs consequent upon the
employment of a senior counsel.
Date
reserved:
19 October 2016
Date
delivered:
25 November 2016
Counsel
for Applicant:
Adv Phillips SC
Instructed
by:
Shaukat Karim and Company
(REF: Mr S Karim/C711)
Counsel
for Respondent: Adv Padayachee SC
Instructed
by:
Campbell Attorneys
(REF: DCC/tw/REU6/0001)