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[2016] ZAGPPHC 749
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Transnet SOC Ltd v Stone Sensation and Another (68360/2013) [2016] ZAGPPHC 749 (10 August 2016)
SAFLII
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Certain
personal/private details of parties or witnesses have been
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REPUBLIC
OF SOUTH
AFRICA
IN
THE HIGH COURT OF SOUTH
AFRICA,
NORTH
GAUTENG DIVISION,
PRETORIA
CASE
NO:
68360/2013
DATE:
10/8/2016
NOT
REPORTABLE
NOT
OF INTEREST TO OTHER JUDGES
REVISED
TRANSNET
SOC
LTD
............................................................................................
Applicant
and
STONE
SENSATION (PTY)
LTD
.......................................................................
Respondent
(Registration
Number 2..)
CATHARINE
FREDERIKA
DYKMAN
…...................
..
2
nd
Respondent
JUDGMENT
MSIMEKI
J,
INTRODUCTION
[1]
The applicant, in this application, seeks an order evicting the first
and second respondents from the property situated at [1..
]Lynette
Street, Koedoespoort ("the property"). The applicant
secondly seeks an order directing the respondents, jointly
and
severally to pay to it an amount of R276.353.98 which, incidentally,
was amended as well as costs of suit on the attorney and
client
scale. The application is opposed.
BACKGROUND
[2]
The applicant and the first respondent concluded a lease agreement
pertaining to the property on 16 August 2012. The lease agreement
("the lease") would commence on 1 September 2012 and expire
on 31 August 2015. There were several problems pertaining
to the
property prior to the conclusion of the current lease. The property
was initially used by the second respondent's husband
who carried on
business of manufacturing distribution and selling concrete products.
A Mr Louis Erasmus (Erasmus), after the death
of the second
respondent's husband agreed with the second respondent to do business
together. Erasmus had his own company Talisman
Compressed Air (Pty)
Ltd. The company which was run by the second respondent's husband was
to be liquidated while two other companies
would be formed. The two
companies called Rotsvas Holdings (Pty) Ltd and Rotsvas Trading (Pty)
Ltd were formed.
[3]
Problems arose which resulted in the parting of the second respondent
and Erasmus. Erasmus, the second respondent's husband
and the second
respondent had leased the property from Transnet Ltd. The second
respondent formed the first respondent upon picking
up problems with
Erasmus. The problems led to the first respondent and Transnet Ltd
joining forces in order to evict Erasmus from
the property. It was
not a
n easy
battle.
[4]
The first respondent and Transnet brought an application under case
number 56291/2012 in the North Gauteng High Court, Pretoria,
against
the two companies that were formed, Erasmus and his company seeking
an order evicting them from the property. The matter
was settled.
Erasmus did not immediately vacate the property. This delayed the
first respondent which could not take immediate
occupation of the
property. The first respondent was delayed by six months while the
eviction application was in progress. The
property, according to the
answering affidavit of Gerhard Reiner Coetzee, in the current
application, was maliciously sabotaged
by Rotsvas (the two companies
that were formed) and Erasmus. The damage to the property that was
left behind was huge and considerable
(one must at this stage mention
that the second respondent formed the first respondent and stood
surety for the rental payments,
by the first respondent, to the
lessor in respect of the property).
[5]
The leased property was to be used for "manufacturing of
concrete products distribution and selling". The respondents
contend that the property, when occupation was finally taken by them,
was not fit for its intended purpose. This, according to
them,
resulted from the expensive damage that was caused by Erasmus when
he, too, eventually vacated the property. The respondents
contend
that for the property to be restored to a position where it could
partially be useable they had to part with a considerable
amount of
money. The respondents refer specifically to the clauses of the lease
and then conclude that the applicant breached the
terms and
conditions thereof barring the applicant from being entitled to the
order that it prays for. The applicant disagrees
and contends that
the breach has been committed by the respondents who must pay the
rental that is due owing and payable to it
by the respondents who
must vacate the property.
[6]
In the main, the problems that have to be resolved relate to the
interpretation of the lease.
[7]
The respondents, to substantiate their contention relating to the
damage to the property, have annexed to their answering
affidavit, annexures EH8.1-EH8.34 and, annexures AA 15.1-15.30.
These, according to the respondents, are respectively photographs
of
the property when the respondents took over occupation and after the
property was partially restored. There is clearly a remarkable
difference.
[8]
The respondents' case is that:
1.
The contract was concluded before the property was damaged, and
before occupation was taken by them.
2.
Despite the damage the applicant did not cancel the lease.
3.
The respondent took occupation in the midst of the problems and
negotiations between the applicant and the respondents which
resulted
in the respondents taking over occupation of the property.
4.T
he
negotiations went on even after occupation was taken. The respondents
contend that they were persuaded to go on with the lease
by the
negotiations.
5.During
the negotiations, the applicant changed it's stance and demanded
payment of the monthly rental and other charges against
the spirit
and content of the negotiations.
6.
The respondents did not pay the amount that the applicant demanded
but, instead, relied on provisions of certain clauses of the
lease to
justify their non-payment.
8.They
were not afforded vacant possession on the agreed date of 1 August
2012.
They
were and are entitled to remission of rent as a "rental
agreement
is a
reciprocal or 'synallegmatic contract' which
creates reciprocal duties on the respective parties".
9.The
applicant is in default for having breached the terms of the lease
and that, therefore,
"exceptio non adimpleti contractus"
is available to the first respondent because the applicant cannot
seek to enforce the terms of the breached lease.
10.
The respondents cannot be evicted under circumstances where the first
respondent is entitled to remission of rent.
11.
The applicant's case is based on a contract.
12."In
the context of the photographs and voluminous correspondence, the
applicant, according to the respondents, failed to
adduce any
evidence whatsoever by a person with personal knowledge of the
condition of the premises". The respondents contend
that they
negotiated a lot with Mr Hansie Marais (Marais), of the applicant,
who ought to have provided an affidavit but did not.
Marais according
to the respondents, is fully aware of the state of disrepair of the
property when occupation was taken. A lot
has been said about him in
the answering affidavit but, despite that, Marais's affidavit,
according to the respondents, is conspicuously
absent. The
respondents attorney, Mr Hein Wiese, who is aware of what caused the
first respondent to go on with the lease has deposed
to an affidavit
in support of the respondents' case. Marais and the applicant's
attorney of record, according to the respondents',
informed the
respondents' attorney "that it would be cheaper to restore the
premises (meaning the property) to the original
condition, than to
continue with the litigation opposing Erasmus in his attempt to
asset-strip the premises, one month after the
first respondent had
taken possession of same".
13.
The applicant, nowhere, suggests that it ever replaced any materials
such as carports, paving or bulkheads and plants and no
corroborating
evidence is supported.
[9]
The respondents rely on the following clauses of the lease:
1.
Clause 47 .3.2 provides:
"The
lessee shall not be liable for the payment of rental for as long as
it is deprived of beneficial occupation of the leased
premises."
(emphasis added).
2.
Clauses 47.5.1 provides:
"47.5.1
The rental payable by the Lessee,
shall be reduced
pro
rata to the extent of the infringement upon the Lessee's right of
beneficial occupation."
(emphasis added).
This
relates to partial damage to the leased premises.
3.
Clause 47.5.2
provides:
"The
lessor shall repair the damage or restore
a
portion of the
leased premises at its own cost as soon as is reasonably possible".
(emphasis added).
4.
Clause 49.1 provides:
"Should
any disputes or claim arise between the parties
....
t
he
parties shall
endeavour to resolve the dispute
by negotiation."
(emphasis added).
Further,
an arbitration mechanism is provided for by clause 49 for the
expeditious resolution of the dispute surrounding the pro
rata rental
payable.
[10]
It was submitted, on behalf of the respondents, that the applicant,
despite proof of the extent of the damages and the content
of the
negotiation, the applicant breached the above clauses. Further, it
was submitted that the general rule is that a lessee
is entitled to a
remission of rent if either through the lessor's fault, or through
vis major,
the lessee is deprived wholly or partly of the use,
and enjoyment of the property let to him. This submission is correct.
The applicant's
breach of its duty to furnish the property in a
condition fit for its intended purpose, according to the submission,
on behalf
of the respondents "amounts to a breach of a
continuing obligation giving rise to the
exceptio non adimpleti
contactus".
(See:
Thompson v Scholtz
[1998] ZASCA 87
;
1999 (1) SA 232
(SCA)).
[12]
It was further submitted, on behalf of the respondents, that certain
types of reciprocal contracts do not envisage simultaneous
performance. The submission relates to instances where a lessor must
perform
before
rental may be demanded. (my emphasis added).
The facts of this case, according to the respondents, seem to
demonstrate that this
is one of the cases in point.
[13]
Advocate S W Davies (Mr Davies), for the respondents, submitted that
the applicant could not "seek to enforce payment
of rent in
terms of a lease agreement,
which it brazenly ignored"
(emphasis added). Cancellation of such an agreement, according to
him, is "invalid". There seems to be merit in the
submission.
(See:
Ntshiqa v Andreas Supermarket (Pty) Ltd 1997 (3)
SA Transkei Supreme Court 60 at 66A-C),
where the court
emphasised, as a corollary of the
exceptio non adempleti
contractus,
that the aggrieved tenant was entitled to withhold
performance as a means of enforcing the landlord's counter
performance (See:
Ntshiqa v
Andreas Supermarket
(Pty) Ltd
(supra)
at 67H-68B).
[14]
A claim for remission is not defeated by an agreement to pay rent
"without any deduction or abatement whatever'' (See:
T H
Restaurants (Pty) Ltd v Rana Pazza (Pty) Ltd and Others
2012
(5) SA 378
(WCC)).
[15]
The applicant relies a lot on the following clauses:
Clause
20.3 which provides:
"the
Lessee shall not be entitled to withhold or delay payment of any
moneys by the Lessee to the Lessor in terms of this
Lease Agreement
by reason of the leased Premises or any part
thereof
being in
a
defective condition or in
a
state of
disrepair, or for
any other reason whatsoever."
The
lease, according to Mr Davies, expressly allows the tenant the common
law remission of rental and the landlord's contribution
to the costs
of rendering the property suitable for its intended purpose.
2.
Clause 60.1-60.3 which provide:
"60.1
This Lease Agreement (including all schedules and/or annexures
attached to this Lease Agreement) contains the entire
agreement
between the Parties hereto and no conditions, warranties or
representations made by any Party shall be of any force and
effect,
unless it is in writing and signed by both the Lessee and Lessor.
60.
No officer, agent or representative of either Party
shall have any auth
ority to make representations,
statements
or warranties that are not herein expressed
unless the
same
are made in writing and signed by
a
duly
authorised person.
No waiver by any Party of any of the
terms of this Lease Agreement, or of
a
breach of any of the
provisions thereof,
shall be deemed to be
a
waiver
thereafter of any such terms or of
any succeeding
breach.
60.3
No amendment, addition or cancellation of this
lease
Agreement shall be of any force or effect unless it is reduced
to writing and signed by the Parties or their duly authorised
representatives."
[16]
It is noteworthy that the applicant did not decide to cancel the
lease because of the destruction that was caused by Erasmus
and the
two Rotsvas companies. This, according to the respondents, happened
before the first respondent took occupation of the
property. The
applicant therefore cannot claim to have cancelled the lease in terms
of clause 47.4. In fact, the applicant complains
of non-payment of
rental.
[17]
The facts of the case, according to the respondents Counsel, disclose
that clauses 47.5, 47.5.1-47.5.2
(supra)
are very relevant to
the case. These clauses deal with a situation where there is partial
damage to the property.
[18]
Th
e views
of the parties
regarding this matter are divergent. There are, also, several
disputes of fact which are glaring. The correspondence,
according to
the respondents, demonstrates that the applicant was aware of the
disputes even before the first respondent took occupation
of the
property. With the knowledge of the disputes of fact existing
in the matter, according to the respondents, the applicant
ignored
negotiation and arbitration procedures provided for by clauses 49.1,
49.2, 49.3 and 49.5 of the lease.
[19]
Some of the disputes of fact, to mention but a few, relate to:
1.
Pro rata
rental;
2.
repairs necessary to render the property fit for its intended
purpose;
3.
water and electricity;
4.
the rate at which the water and electricity would be supplied;
5.
the alleged breach of the terms of the lease by the applicant;
6.
refusal by the applicant to compensate the respondents for restoring
the property so as to make it partially useable; and
7.
whether or not the defence of
exceptio non adimpleti contractus
is applicable to this case.
[20]
In
Room Hire Co. (Pty) Ltd v Jeppe Street Mansions (Pty) Ltd
1949
(3)
SA 1155
(T) at 1162,
Murray A.J.P dealt with the two methods
employed when the court is called upon to resolve disputes. A party
may institute an action
or bring motion proceedings. Motion
proceedings are preferable where there are no disputes of fact. This,
because the delay and
expense involved in a trial action can be
avoided. According to the judge, "a
claimant
who
elects
to proceed
by
motion
runs
the
risk
that
a
dispute
of fact may be shown to exist'.
Again
at 1162 the Court said:
"..
.or
the
application may even
be
dismissed with
costs,
particularly
when
the applicant should have realised when launching
his application that
a
serious dispute of fact was bound to
develop.
It
is certainly not proper that an applicant
should commence proceedings by motion with knowledge of
the
probability of
a
protracted enquiry into disputed facts not
capable of
easy ascertainment, but
in
the
hope of
inducing the Court
to
apply Rule
9
to
what
is essentially
the
subject
of
an
ordinary
trial
action".
[21]
The applicant according to Mr Davies was high handed and that this
caused the present application. Mr Davies submitted that
"the
applicant, refused to discuss the respondents' contentions relating
to vacant possession, the costs of remedial work,
and the
pro rata
rental and purporting to cancel the agreement based
inter alia
on a claim for rental when the respondent was not in possession".
[22]
Mr Gerhard Reinier Coetzee, the deponent to the answering affidavit,
in paragraph 21.2 says:
"It
is not clear on what basis the deponent can act on behalf of
the Lessor, and his authority to do so and to institute these
proceedings
is
in dispute, as is his authority
to depose to the founding affidavit".
This,
clearly, demonstrates that the respondents have properly objected to
the deponent's authority to institute the proceedings
and his
authority to depose to affidavits.
[23]
I have, above, demonstrated that there are several disputes of fact
which the applicant, in my view, was aware of before it
launched this
application. The applicant, indeed, as correctly pointed out by Mr
Davies, proceeded regardless. Indeed, the applicant
took a risk. The
application, for that reason, in my view, deserves to be dismissed
with costs on a punitive scale.
[24]
The authority to institute proceedings, and to depose to affidavits,
according to Mr Davies, appears questionable. Advocate
T Manchu (Mr
Manchu), for the applicant, holds a different view.
[25]
Mr Manchu submitted that annexure RA2, to the replying affidavit,
resolves the dispute. An artificial person which would be
a company
or co-operative society, for instance, functions only through its
agents and resolutions are required for proper decisions
to be taken
by them. These resolutions are passed in the manner that is
prescribed by their constitutions. Those who represent
companies,
where proceedings have been commenced by way of petition, have in
their affidavits, to demonstrate that they have duly
been authorised
to do so. This, indeed, is a "salutary rule" which applies
also to motion proceedings. (See:
Mall (Cape) (Pty) Ltd v Merino
Ko-operasie Bpk
1957 (2) SA 347
(C) at 351D-H).
[26]
The respondents, in the answering affidavit, challenged the authority
of Petrus Jacobus Human, the deponent to the applicant's
founding
affidavit (See paragraphs 21.2 of the answering affidavit on page 139
of the papers). This, according to Mr Davies, is
an express challenge
which called for a response which, according to him is lacking. The
institution of proceedings and the prosecution
thereof must be duly
authorised. This is done to show that the institution and the
prosecution of a matter is not done by an unauthorised
person on its
behalf. It has to appear from the papers that the proceedings have
been authorised by the company or the artificial
person concerned. To
prove that the proceedings have been properly authorised, an official
of the company annexes a copy of a resolution
to a founding
affidavit. (See:
Mall (Cape) (Pty) Ltd v Merino Ko-operasie Bpk
(supra)).
[27]
To deal with the challenge, a special delegation of power was annexed
to the replying affidavit as annexure "RA2".
Mr Davies
submitted that the institution of the proceedings in the name of the
applicant does not appear from annexure "RA2".
Annexure
"RA2", according to Mr Davies, shows that Job Mbetana
Malobola, in his capacity as Manager: Legal Services of
Transnet
Property with authority and powers delegated to him by the Group,
Executive of Transnet Property on 21 December 2012 delegated
with the
authority and power to sub-delegate same further, to Petrus Jacobus
Human in his capacity as Acting Regional Manager (Inland
Region) of
Transnet Property to execute and sign all affidavits in respect of
the matter of Transnet Soc Ltd ("The applicant")
and Stone
Sensation Pretoria (Pty) Ltd ("the Respondent"), Catherine
Fredrika Dykman ("the Second Respondent").
Malobola did
this on 19 October 2014. Human accepted the delegation in September
2014 before he was delegated in October. The proceedings
were
instituted on or about 5 November 2013. The replying affidavit was
deposed to on 9 October 2014 before the special delegation.
[28]
Because of this annexure "RA2" is seen by Mr Davies as
questionable. The question is: How could Human accept the
delegation
before it existed? The delegation, too, seems to relate to the
execution and signing of all affidavits and not to the
institution
and the prosecution of the proceedings. Mr Davies submitted that the
board of Directors of the applicant did not authorise
the present
application. The application, in my
view, was
not authorised
and even if I am wrong the application is replete with very serious
disputes of fact which the applicant, in my view,
was aware of even
before the application was launched. The application, again, and on
this basis, should be dismissed with costs
on a punitive scale.
ORDER
[29]
In the result, the following order is made:
The
application is dismissed with costs on the scale as between
attorney and
client.
M.W.
MSIMEKI
JUDGE
OF THE HIGH COURT SOUTH AFRICA
GAUTENG
LOCAL DIVISION OF THE HIGH COURT
PRETORIA