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[2016] ZAGPPHC 781
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Sena Trucking CC v Pangourne Properties Limited and Others (38538/2013) [2016] ZAGPPHC 781 (24 August 2016)
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REPUBLIC OF SOUTH
AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA,
NORTH
GAUTENG DIVISION,PRETORIA
CASE
NO: 38538/2013
Reportable:
No
Of
interest to other judges: No
Revised.
24/8/2016
In
the matter between:
SENA TRUCKING
CC
Applicant
and
PANGBOURNE
PROPERTIES
LIMITED
1
st
Respondent
JHIPROPERTIES
(PTY)
LTD
2
nd
Respondent
STANDARD
BANK OF SA
LTD
3
rd
Respondent
CAPITAL
PROFUND (PTY)
LTD
4
th
Respondent
JUDGMENT
MSIMEKI
J,
INTRODUCTION
[1]
The applicant, in this application, seeks final interlocutory relief
in terms of which the third respondent is ordered to credit
the
applicant's bank account held with the third respondent using account
number 375515283 with an amount of R2313 671 00.
BACKGROUND
[2]
on 24 February 2012 the first respondent, as lessor, and the
applicant, as lessee, entered into a Lease Agreement ("the
lease") in respect of a property known as […] S. Road
Roodekop ("the leased premises"). The applicant leased
the
property from the first respondent for a period of three (3) years
from 1 February 2012 to 31 January 2015. A deposit of R2
313 671 00
in the form of a Bank Guarantee was required. The Guarantee was
furnished by the respondent in the format marked annexure
"H"
to the lease agreement. In terms of clause 12.2 of part B of the
lease the first respondent would have the right
of applying the whole
or portion of the deposit towards payment of rent, water,
electricity, gas or other charges, key replacements
or any other
liability of whatever nature for which the applicant would be liable,
including damages attributed to the cancellation
of the lease. The
deposit would be retained by the first respondent and/or its
designated person free from interest until the applicant
vacated the
property and was completely discharged from its obligations to the
first respondent arising from the lease. Clause
37 of part C of the
lease provides that the applicant, upon termination of the lease, was
to return and redeliver the leased premises
to the first respondent
in good order and repair and make good and repair at its own cost on
demand any damage, breakages or in
the alternative, at the first
respondent's written election, reimburse the first respondent for the
cost of replacing, repairing
or making good any broken, damaged or
missing articles howsoever caused. In terms of paragraph 2 of
annexure "K" to the
lease Agreement, an assessment of the
property, as a recordal of the condition of the property upon
occupation by the applicant
to which the premises had to be returned
at the end of the lease, had to be undertaken and would form part of
the lease.
[3]
The lease was concluded as a result of a Storage Agreement and its
addendums which the applicant and Hitachi Power Africa (pty)
Ltd
("Hitachi") entered into during December 2009. The last
addendum seems to have been concluded on 1 March 2012. Clause
3.2 of
addendum 3 provides that the lease would have been terminated on 17
February 2015.
[4]
The lease was to expire on 31 January 2015. The lease guarantee, too,
was to expire on 31 January 2015 or upon payment of the
guaranteed
amount, whichever event occurred first. On 16 February 2012 the
guarantee was extended to 30 April 2015.
[5]
At all relevant times, the second respondent acted as the management
agent for the first respondent.
[6]
The lease was to expire on 31 January 2015 while the Storage
Agreement was to expire on 17 February 2015 which would have been
seventeen days after the expiry of the lease. This necessitated
negotiations between the legal representatives for the parties
to
have the applicant vacate the property on 17 February 2015. This was
achieved. The applicant vacated the property on 17 February
2015.
[7]
The applicant concedes that a dispute of fact has arisen between it
and the first, second and fourth respondents relating to
whether or
not the property was properly reinstated. The applicant has further
conceded that the dispute cannot be resolved during
the course of
this application. The applicant, as a result, decided to seek no
relief against the first, second and fourth respondents.
The
applicant has withdrawn the application against them.
[8]
The first respondent's attorneys addressed a letter to the applicant
which was delivered by hand dated 3 March 2015 calling
on the
applicant to reinstate the property "as provided for in the
agreement of lease within a period of seven (7) days"
from 3
March 2015 failing which their client would " in accordance with
the provisions of the agreement of lease carry out
the required
reinstatement works" and then hold the applicant liable for the
reinstatement costs.
[9]
On 11 March 2015 the applicant's attorney in an e-mail responded and
advised the first respondent's attorneys that their client
denied any
wrongdoing and/or obligation to effect any further remedial measures
and that any action which their client intended
taking would be
opposed.
[10]
On 12 March 2015 the second respondent addressed two letters to the
third respondent. The first letter enclosed a Letter of
claim of Sena
Tracking CC; the original Bank Guarantee; and a letter confirming
that the second respondent was the management agent
for the fourth
respondent. The second letter advised the third respondent that the
applicant had failed to comply with its obligations
in respect of the
lease and that the second respondent, the managing agent, requested
the third respondent to pay the amount of
R2 313 671 00 (two million
three hundred Thirteen Thousand and six hundred and seventy-one Rand
only) which was then due, owing
and payable into their account number
[…] held with First national Bank in the name of JHI: Capital
property Trust Account
in terms of
Section
32. The branch code
and the reference number were also furnished.
[11]
In short, the applicant's case is that the third respondent issued a
lease guarantee for R2 313 671 00 in favour of the first
respondent.
The guarantee provided that the third respondent was holding the
guaranteed amount on behalf of the applicant for the
benefit of the
first respondent in respect of a lease agreement between the
applicant and the first respondent which amount would
be paid to the
first respondent unconditionally upon receipt by the third respondent
of a first written demand. Pursuant to a letter
from the second
respondent, addressed to the third respondent, (referred to above),
dated 12 March 2015, the third respondent made
payment as directed.
However, it is the applicant's case that payment by the third
respondent of the guaranteed amount was erroneous
and incorrect.
[12]
The applicant, as a result, contends that the payment of the
guaranteed amount as directed was in breach of the strict
stipulations
provided for in the guarantee because:
1. The payment should
have been made into the first respondent's account and not the second
respondent's accounts.
2. The payment was
required to be made at the Sandton branch of the first respondent and
not any other branch.
[13]
The third respondent raised two points
in limine
in respect of
the applicant's case. These are that:
1. The proceedings are
inappropriate;
2. There is no cause of
action against the third respondent.
[14]
Advocate S. Maritz (Ms Maritz), for the applicant, and Advocate J. A.
W. Babamia (Mr Babamia) for the third respondent agreed
that it would
be prudent to argue the whole case and not to deal therewith
piecemeal. The Court acceded to the request and the
parties argued
the matter.
[15]
It is noteworthy that the applicant conceded that:
1. A dispute of fact
arose on the papers between the applicant and the first, second and
fourth respondents which caused it to withdraw
the application
against them and proceed only against the third respondent.
2. The second respondent
acted as managing agent for both the first and fourth respondents.
3. The lease guarantee is
a demand guarantee.
[16]
Mr Babamia submitted that the applicant's claim against the third
respondent should fail because the applicant:
1. Has no right under the
guarantee;
2. Has failed to
demonstrate any injury or prejudice to itself as a result of the
third respondent making payment to the first respondent
through the
second respondent under the guarantee.
3. Failed to demonstrate
the absence of another satisfactory remedy.
According
to Mr Babamia, the applicant failed to make out a case for final
interlocutory relief and that, as a result, the application
at this
level of enquiry should fail. Mr Babamia saw no breach of the strict
stipulations of the guarantee.
[17]
It is imperative to consider the material terms of the guarantee.
These are that:
1. The third respondent
held the guaranteed amount on behalf of the applicant at the disposal
of the first respondent.
2. The guaranteed amount
would be paid to the first respondent
unconditionally
upon
receipt by the third respondent of a
first written demand
.
3. The third respondent's
responsibility under the guarantee
was principal in nature
and
was not subject to the lease or any other agreement.
4. The third respondent
would pay on demand and
would not determine the validity of the
demand or become party to any claim or dispute of any nature which
any party might allege
.
5. Payment under the
guarantee
would only be made at the Sandton branch of the third
respondent against return of the original guarantee by the first
respondent
or the first respondent's duly authorised agent.
(my
emphasis).
Mr
Babamia submitted that the terms of the guarantee clearly reveal that
the third respondent's obligation towards the first respondent
was
wholly independent from the lease agreement. I agree.
[18]
The case of
Setlogelo v Setlogelo
1914 AD 221
at 227
clearly
sets out the requisites for the right to claim an interdict. These
are:
1.
A clear right;
2.
Injury actually committed or
reasonably apprehended; and
3.
The absence of similar
protection by any other ordinary remedy.
[19]
It is Mr Babamia's submission that the applicant has no right under
the guarantee. The applicant, according to him, only caused
the
guarantee to be issued for the benefit of the first respondent.
Further, according to him, the prejudice or absence of a right
is
determined by substantive law. Only the instruction or mandate to the
bank, according to Mr Babamia, regulates the applicant's
and the
third respondent's rights and obligations towards each other. (See:
Oelofse, AN
'The law of
Documentary Letters of Credit in Comparative Perspective'
pages 112- 113). It is for this reason that the applicant's rights
against the third respondent arise from its mandate or instruction
to
the third respondent and not the guarantee. There seems to be merit
in the submission.
[20]
Mr Babamia submitted that the applicant does not rely on any breach
of its mandate. The papers which, according to him give
rise to the
guarantee being issued to the first respondent make no reference to
any mandate or its terms.
[21]
The guarantee, according to Mr Bahamia, relates only to the first
respondent and the third respondent and no other party. The
two
parties under the guarantee are the only ones which have rights and
obligations. Mr Babamia, as a result, submitted that the
applicant's
reliance on an alleged breach of the guarantee was misplaced. I
agree. Only the first respondent, as beneficiary under
the guarantee,
if any breach was committed, according to him, would have recourse
against the third respondent. The applicant,
according to Mr Babamia,
failed to establish a right to the mandatory interdict and the
application as a result should fail. (See:
Lombard Insurance Co
Ltd v Landmark Holdings (pty) Ltd and Others
2010 (2) SA 86
(SCA) at
[20)).
[22]
Mr Babamia submitted that no injury committed to it, as a result of
payments made by the third respondent, pursuant to the
demand, was
shown by the applicant. Even if the applicant had the right, Mr
Babamia added, it still would have been required to
demonstrate that
the third respondent's breach of the strict stipulations of the
guarantee caused injury or loss to it.
[23]
Payment to the first respondent by the third respondent, through the
second respondent, at a branch other than the third respondents
Sandton branch, according to Mr Babamia, could not "conceivably"
be said to have caused any loss to the applicant. Even
if it had, Mr
Babamia further added, that the applicant did not demonstrate it to
be the case. There is also no evidence to show
that the first
respondent, the beneficiary under the guarantee, had complained that
it had suffered injury as a result of the payment.
[24]
The first, second and fourth respondents have in their answering
affidavit confirmed that:
1. the property, the
subject of the lease, was sold to the fourth respondent by the first
respondent and that the property is still
registered in the name of
the first respondent which has to ensure that all of the rights of
the fourth respondent in and to the
property, including those
relating to the lease agreement, remain secure until registration of
transfer takes place.
2. The second respondent
has been appointed as their property managing agent by both the first
and fourth respondents and they both
authorised the second respondent
to,
inter alia,
collect rental payments and cash bank
guarantees on their behalf.
3. The first respondent
instructed the second respondent to demand payment under the
guarantee.
4. The second respondent,
in its dealings with the third respondent, at all relevant times,
acted as the duly authorised representative
of the first respondent.
[25]
The applicant, under the circumstances, according to Mr Babamia,
failed to show any prejudice, loss or injury to itself, resulting
from payment having been made pursuant to the demand. Payment
according to him, was made to the beneficiary through the second
respondent, its duly authorised agent. This again, according to Mr
Babamia, demonstrates that the application falls to be dismissed.
[26]
It is incumbent upon the applicant where a final interdict is
required to allege and establish that it has no alternative legal
remedy. (See:
Erasmus v Afrikander Proprietary Mines Ltd
1976
(1)
SA 950
(W) at 965H).
At page 285 paragraph 4.3, the applicant
in its replying affidavit states:
"The
disputes as between the Applicant and the First, Second and fourth
Respondents will be dealt with in due course, if necessary,
by way of
action."
This,
according to Mr Babamia, is indicative of the fact that the applicant
"has an alternative remedy as against the other
respondents
should it transpire that they were not entitled to the proceeds under
the guarantee". This "unwitting concession",
according
to Mr Babamia, puts an end to the present application. I could not
agree more. The applicant, should it, in due course,
be found that
the first respondent was entitled to the proceeds under the
guarantee, could under the circumstances, never be entitled
to the
return of the guaranteed amount. Mr Babamia, in his submission,
concluded that the applicant's application, at this stage,
ought to
fail as the applicant failed to satisfy the essential requirements
for sustaining a final interdictory relief. I agree.
[27]
Mr Babamia dealt with the applicant's contention that the third
respondent breached the strict stipulations in the guarantee
when:
1. It made payment into
the second respondent's account, instead of the first respondent's
account;
2. It effected payment at
a branch other than the Sandton branch of the third respondent.
Mr
Babamia's argument is that:
1. The guarantee does not
stipulate that payment should be made into the first respondent's
account. This is so.
2. The second respondent,
at all material times, acted as the managing agent of the first
respondent.
3. There was nothing
wrong in the managing agent instructing the third respondent as to
how and where to effect payment given the
fact that the guarantee is
silent regarding the account into which payment was to be made.
[28]
It is Mr Babamia's submission that the place where the guarantee was
to be called was not a material term. This, because the
clause
generally-
1. Determines the Court
which has jurisdiction in the event of non-payment.
2. Reveals when payment
is perfected by a debtor towards a creditor.
Indeed,
jurisdiction is not an issue. The first, second and fourth
respondents confirm that payment to the creditor's beneficiary
has
been perfected. I dealt with this above.
[29]
The place of payment clause, according to Mr Babamia, was for the
benefit of the third respondent and not the beneficiary,
the first
respondent. The third respondent could have declined payment unless
same was made at its Sandton branch. However, there
was nothing wrong
in discharging an obligation pursuant to a demand as long as the
beneficiary was happy to receive performance
as demanded and where it
preferred. Had the beneficiary wanted to receive performance at the
third respondent's Sandton branch
the third respondent would have had
to oblige. The parties to the guarantee, according to Mr Babamia,
waived the right to make
payment and receive payment respectively at
the Sandton branch of the third respondent. The waiver, according to
Mr Babamia, has
nothing to do with the applicant. Iagree. The
applicant's contentions, according to Mr Babamia, are flawed. Iam
afraid this appears
to be the case.
[30]
Ms Maritz, for the applicant, holds the view that payment should have
been made only into the first respondent's account held
with the
third respondent. The beneficiary, according to her, is not entitled
to payment if it neglects to present a document specified
by the
guarantee or presents a document that does not meet all the
requirements of a guarantee or if the demand is not made in
a manner
and within the prescribed period of the guarantee. Even very slight
deviations according to her, should disentitle the
beneficiary to
receive payment. It is worse, according to her, if it is "not
the beneficiary that requests payment of the
guarantee, and a party
with whom there is absolutely no legal relationship as between the
guarantor, beneficiary and principal,
then and in those
circumstances, no payment should be made."
[31]
It is for this reason, according to Ms Maritz, that the third
respondent was not entitled to make payment in respect of the
guarantee as there was no strict compliance with the terms of the
guarantee as required.
[32]
The applicant seeks an order in terms of prayers 1 and 3 of the
notice of Motion dated 28 May 2015. Prayer 3, unfortunately
seeks an
order that the costs of the application be paid by the second, third
and fourth respondents, jointly and severally, the
one paying the
others to be absolved. The prayer cannot be granted against the
parties who were not in Court and against whom the
application was
withdrawn by the applicant.
[33]
The facts of the case, as shown above, are such that there are a
number of reasons which, according to Mr Babamia, warrant
the
dismissal of the applicant's application against the third respondent
with costs.
[34]
The respondent's attorneys, in their letter addressed to the
applicant's attorneys dated 13 May 2015 appearing on page 270
of the
papers in paragraph 7 said:
"There
is no basis for an application against our client and if an
application is instituted against our client, the application
will
not only
be
opposed, but the
contents of this letter will
be
brought to
a
court's
attention and be used to persuade
a
court to grant punitive costs against your client.”
The
applicant and his attorney were sufficiently forewarned about the
punitive costs and the third respondent, accordingly, is entitled
to
such costs.
[35]
The applicant brought an application seeking condonation for its late
filing of its replying affidavit. In light of the fact
that the
application, in my view, should fail, I see no purpose that will be
served by granting the required condonation.
ORDER
[36]
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 OF SOUTH AFRICA
GAUTENG
DIVISION THE HIGH COURT,
PRETORIA