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[2015] ZAGPPHC 139
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Mooirivier Mall (Pty) Ltd v Rowmoor Investments 804 (Pty) Ltd t/a Cape Town Fish Market and Others (A847/2014) [2015] ZAGPPHC 139 (4 March 2015)
IN
THE HIGH COURT OF SOUTH AFRICA
(GAUTENG
DIVISION, PRETORIA)
Case
Number: A847/2014
Date:
4 March 2015
Not
reportable
Not
of interest to other judges
In
the matter between:
MOOIRIVIER
MALL (PTY)
LTD
..................................................................................
APPELLANT
And
ROWMOOR
INVESTMENTS 804 (PTY) LTD t/a
CAPE
TOWN FISH MARKET
POTCHEFSTROOM
.........................................................................................
FIRST
RESPONDENT
NITA
PIENAAR
............................................................................................
SECOND
RESPONDENT
ETIENNE
KINLOCH
PIENAAR
...................................................................
THIRD
RESPONDENT
LLEWELLYN
ADRIAAN
BAKKER
.........................................................
FOURTH
RESPONDENT
JASHMIR
RANGE
SINGH
.............................................................................
FIFTH
RESPONDENT
JESSICA
RANGE
SINGH
...............................................................................
SIXTH
RESPONDENT
JUDGMENT
Fabricius
J,
1.
The
Appellant was the Plaintiff in the Court a quo and instituted action
against the Respondents in terms of which he sought a rent
interdict,
an order confirming the cancellation of the agreement of lease
between them, ejectment of the First Defendant from the
Mooirivier
Mall, payment of an amount R 770 262.33, interest on that amount
and costs on an Attorney and client scale.
I
will deal with the pleadings before I turn to the order that the
learned Magistrate made after a very lengthy trial. Plaintiffs
in
that action entered into a written agreement of lease in terms of
which the First Defendant leased certain premises at which
he
conducted a restaurant as franchisee of the Cape Town Fish Market
chain of restaurants. This lease was to run for a period of
five
years commencing on 1 October 2008 and terminating 30 September 2013
with an option to renew under certain circumstances.
Plaintiff
alleged that rentals and other amounts payable by the First Defendant
would have to be paid monthly in advance on the
first day of every
month. They alleged that Plaintiff complied with all the terms of the
agreement, that First Defendant was still
in occupation of the
premises, but that it did not trade at the time (the Particulars of
Claim are not dated). Plaintiff alleged
that First Defendant refused
to make payment of the amount payable and due, and that in that
context an amount of some R 770 000
was owing. The other
Defendants had bound themselves as sureties and co-principal debtors,
but it is clear that default judgment
had been taken against Fourth
Defendant prior to the trial. At some stage an action had been
instituted against the First Defendant
for arrear rentals, but this
was settled by way of a written agreement which was made an order of
Court during October 2011. This
agreement of settlement was an
annexure to the Particulars of Claim, and stipulates by way of
summary only that Plaintiff in that
action would write off 50% of the
capital amount owing to it on certain terms. One of the terms
contained in this agreement was
that the rent payable would be
reduced to R45 000 a month with effect from 1 August 2011, where
it had previously been some
R 75 000. At the same time the
relevant agreement of lease was reinstated and applied between the
parties thereto.
2.
In
terms of the agreement of lease the lessee paid a deposit of R
180 000. In addition to the rent payable by the lessee, it
was
also responsible for other items such as electricity, water and gas
supplied to the premises and used by it. These amounts,
together with
the rent, had to be paid monthly in advance before the first day of
each month. Amounts other than the rent and costs
mentioned had to be
paid within 14 days “as directed by the lessor from time to
time”. Clause 35 of this lease contained
the provisions that
would be applicable in case of breach of its terms. Clause 35.4
provided that in the event of the lessor cancelling
the lease and the
lessee disputing the right to cancel and
remaining
in occupation of the premises
, the
lessee would be obliged, pending the determination of such dispute,
to continue to pay to the lessor an amount equivalent
to the monthly
rent and other sums payable. The agreement also contained a
non-variation clause with its usual terms, but it is
clear that this
clause itself was not entrenched. I will deal with the significance
of that observation also.
3.
In
its plea Defendants raised the following defences, and I will only
refer to the material terms:
3.1
It
was admitted that First Defendant had a franchise agreement with the
Cape Town Fish Market which was cancelled by the latter
during
October 2011;
3.2
As
a result thereof Plaintiff cancelled the lease agreement on 13
October 2011;
3.3
First
Defendant did not dispute this cancellation although it was wrongful,
and therefor accepted it;
3.4
At
the time of the cancellation of the agreement, rent had been paid in
advance up to and including end of October 2011;
3.5
At
the same time Plaintiff was still in possession of the deposit of R
180 000;
3.6
Accordingly,
First Defendant denied that any amount was due to Plaintiff either in
regard of the rent or other costs or on the basis
of a so-called
“holding-over”;
3.7
As
a result of previous litigation a settlement agreement had indeed
been entered into which had reduced the monthly rental to R
45 000
per month;
3.8
After
the cancellation of the written agreement as the result of the
termination of its franchise with the Cape Town Fish Market
Organization, First Defendant made a presentation to Plaintiff on 6
October 2011 in terms of which it would continue as a restaurant
under the name and style of “Fusion”;
3.9
It
was agreed that First Defendant would continue with that business
until the end of February 2012, whereupon it would be decided
whether
or not this period would be extended on the same terms as the
previous agreement of lease;
3.10
In
the meantime the terms of the lease and the terms of the settlement
agreement would still be of application;
3.11
Plaintiff
had communicated to First Defendant that the cancellation letter had
been sent only as a matter of formality, and that
the agreement
relating to the “Fusion” concept could continue;
3.12
As
a result before, a new oral agreement existed between the parties in
this particular context;
3.13
Despite
that agreement Plaintiff repeatedly repudiated it by sending a
written e-mail to First Defendant on 23 November 2011 in
terms of
which it purported to cancel this agreement with effect from the end
of January 2012;
3.14
At
the same time and by way of an e-mail dated 22 November 2011
Plaintiff purported to cancel the oral agreement or to vary it,
by
stating that it would only run from month to month;
3.15
These
repudiations were accepted by Defendant and it therefor refused to
make any further payments to Plaintiff except by paying
an amount of
R 45 000 in January 2012 as an attempt to bring Plaintiff to the
negotiating table;
3.16
On
29 February 2012 Plaintiff locked out the First Defendant from the
premises and it could not and did not do any business thereafter.
At
the same time the First Defendant instituted a counter-claim against
Plaintiff for the repayment of an amount of some R 96 000
which
it alleged had been overpaid as rent as well as an order that it was
entitled to the delivery of its assets which had remained
in the
premises. In its plea to the counter-claims Plaintiff admitted that
payments were made from 1 August 2011 to 30 November
2011 in terms of
the settlement agreement referred to, but denied that these payments
were made timeously. Further, it was pleaded
that in December 2011
only a partial payment in the amount of some R 20 000 was made.
4.
The
trial proceeded on these issues and others and during the trial the
parties agreed that the question of merits and quantum ought
to be
separated by the Court. Whereas I could not find any order made in
this regard by the learned Magistrate in the record, it
does appear
that the trial proceeded on that basis or at least partially so. I
say partially so because despite that agreement,
and the Magistrate’s
understanding thereof, witnesses were examined and cross-examined in
great detail as to the accuracy
or otherwise of certain statements
and/or invoices. These invoices are not contained in the record of
the proceedings before us,
and it is thus impossible to understand
the evidence of these witnesses, or to determine whether or not any
of those particular
invoices were accurate or not. In any event, the
proceedings must be looked at from the point of view that the quantum
aspect of
the action had not been decided by the Court a quo, and for
obvious reasons cannot be decided by us. The Magistrate made a number
of findings in his judgment of some 30 pages and in additional
written reasons of some 20 pages, after a very lengthy and in my
view
improper interrogatory. It is not necessary to deal with all of these
findings for purposes of this appeal. The material findings
made by
him and which I deem necessary to deal with are the following:
4.1
Cancellation
of the lease agreement took place on 13 October 2011;
4.2
There
was no legal basis thereafter for a claim based on “holding-over”,
more particularly in light of the fact that
First Defendant was not
in occupation of the premises as a restaurateur in terms of the lease
after February 2012;
4.3
As
far as First Defendant’s first counter-claim for the
over-payment of rent was concerned, this would be dealt with during
the trial on quantum;
4.4
The
rent payable by First Defendant was in fact R 45 000 per month
plus other costs due to Plaintiff as per the cancelled agreement
of
lease. I have referred to these;
4.5
The
deposit of R 180 000 had to be taken into account when any
determination of quantum was made;
4.6
As
far as the second part of the counter-claim was concerned, this claim
succeeded, but the quantum of that claim would be dealt
with at a
later stage.
5.
As
I have said, after the Magistrate gave his written reasons a request
was made for further reasons in terms of the provisions
of
Rule
51 (1) of the Rules of the Magistrates’ Courts
.
In this document the learned Magistrate was asked 49 questions which
he answered by way of a 20 page document. There after a Notice
of
Appeal was filed and this notice contains 37 grounds of appeal. It
ought to be clear at this stage that issues before the Court
a quo
were rather narrow, and in many instances closely related to facts
which were indeed common cause between the parties. I
must therefore
express my distinct disapproval of the manner in which Plaintiff
handled this case in the Court a quo, and also
in the manner in which
the record was prepared for purposes of this appeal. As I have said,
it contains very lengthy debates before
the learned Magistrate which
were not necessary for purposes of this appeal, inasmuch as they
wholly and solely related to the
quantum of any particular claim or
counter-claim. In the same vein, Plaintiff’s Counsel (the
Appellant herein) drafted Heads
of Argument of some 64 paragraphs
which deal with all types of collateral issues and disputes which are
not relevant to the determination
of the actual dispute between the
parties.
6.
Having
read the whole record of some 12 volumes I am of the view that the
determination between the parties and this appeal can
in essence be
decided on the evidence of the Plaintiff’s witnesses
themselves. They gave evidence and/or made concessions
during
cross-examination which in my view were wholly destructive of
Plaintiff’s claim, and which indeed supported the Defendants’
version that I referred to when I dealt with its plea. I will
therefore only deal with those allegations made by Plaintiff’s
witnesses which I have in mind in this context, and I will ignore all
other collateral issues that were raised, and dealt with
in the
greatest possible detail, and wholly unnecessarily so. On 13 October
2011 Plaintiff’s Attorneys wrote to First Defendant,
and
referred to the cancellation of the Cape Town Fish Market franchise,
and said that they had been instructed to cancel the agreement
of
lease with immediate effect. First Defendant was asked to vacate the
premises forthwith. On 7 February 2012 Plaintiff’s
Attorney
again wrote saying that the settlement agreement that I had referred
to had been made an order of Court and alleged that
First Defendant
was again in arrears with rentals and related charges in an amount of
some R 266 000. It also said that a
payment of some R 40 000
had been made on 16 January 2012. It again confirmed that the
relevant agreement of lease had already
been cancelled and that First
Defendant had been given one month’s notice to vacate the lease
premises by no later than 29
February 2012. As a result of the
breach, and in terms of the settlement agreement, and amount of some
R 448 000 remained
outstanding due to the fact that none of the
rentals from August to November 2011 were paid timeously. Apart from
that it was alleged
that First Defendant had to pay the rentals for
the period of 1 December 2011 to February 2012. On 23 February 2012 a
further letter
followed in terms of which Plaintiff said that if the
amount of some R 266 000 was paid by 24 February 2012, his
client would
be willing to extend the lease on a month to month basis
with a mutual notice period of 30 days. On 17 April 2012 First
Defendant
was told that an amount of some R 492 000 was due on
that day, and that this would be reflected on a warrant of execution.
He also annexed a so-called reconciliation as at 17 April 2012 in
terms of which an amount of some R 800 000 was now due.
I must
add that I referred to these e-mails in this order because they
appear in the record in that order. The next relevant letter
in the
record is dated 4 October 2012. It is stated herein that First
Defendant’s Attorneys are aware that it was contended
that all
agreements had been validly cancelled, and it was pointed out that
First Defendant was in unlawful occupation of the leased
premises.
The most significant letter is however dated 22 November 2011 and it
emanates from Ms H. van Niekerk (not all the e-mails
that are
referred to in the evidence and in the Notice of Appeal are in fact
contained in the record). This letter says that with
regard to a
meeting held on 21 November it was agreed that “We would extend
your temporary tenancy until the end of February
2012 to allow you
the opportunity to prove/convince the landlord of a permanent
tenancy/extended lease agreement as an independent
operation”.
It is said that this decision by the landlord will be assessed on the
performance of the restaurant and more
specifically on the year on
year growth amongst others. A final decision would be made by the
landlord in early February 2012.
It is also said then that “until
you are notified otherwise you will continue trading on a month to
month basis”. This
was said despite an earlier e-mail of 3
November 2011 in which the same Ms Van Niekerk said that
“unfortunately we are not
able to commit to any further tenancy
beyond January 2012 at this stage”.
7.
On
2 March 2012 Plaintiff’s Attorneys wrote and said that in
context of the goods on the leased premises they held instructions
to
instruct the sheriff to proceed with the sale and execution.
8.
Mr
A. Louw gave evidence and he was the Senior Asset Manager of
Plaintiff. He confirmed the back-ground evidence that i have referred
to and also stated (Volume 3 page 266) that Defendants could continue
with the “Fusion” –concept, and that they
were
given until the end of February to establish themselves in this
context. At the same time however he said that after 13 October
2011,
despite the cancellation of the lease agreement, there was a
month-to-month agreement on the same terms and conditions as
contained in the original agreement of lease. He however also
admitted that Ms Van Niekerk had said with reference to the e-mail
that I have mentioned, that the temporary tenancy would continue
until February 2012 inasmuch as he had been present at the relevant
meeting. He was asked about the agreement between the parties
relating to the duration of the oral lease after 13 October 2011
and
again confirmed (page 278) that it was until the end of February
2012. Despite that he added that the agreement was in fact
on a
month-to-month basis. On the face of it, these two statements do not
make sense as they appear to contradict each other but
it is clear
from his evidence as a whole, and the undisputed evidence on behalf
of First Defendant, that substantial investments
were made, that all
parties were
ad idem
that the minimum period of the lease under the “Fusion”
-concept would be until the end of February 2012. He also admitted
that First Defendant did not do any business on the particular
premises after February 2012.
9.
Mr
Louw could also not dispute that on 29 February 2012 the Deputy
Sheriff arrived at the relevant premises, locked them, confiscated
the keys, and admitted that First Defendant could not do any business
thereafter.
Having
regard to his evidence under cross-examination there can be no doubt
about that: First Defendant did not do any business
as a restaurateur
after 29 February 2012 and that the Deputy Sheriff had taken
possession of the keys, and it was prevented access
to the premises
by amongst others security guards. Plaintiff also had decided that
there would be no removal of the First Defendant’s
assets from
the premises. (page 416) Mr Louw also conceded that after 13 October
2011 an oral agreement had come into existence.
It is strange that
Appellant’s Counsel now disputes the correctness of his own
witness’ evidence and he apparently
does so (but is not
entitled to do so) on the basis of the judgment of
SA
Sentrale Co-Op Graanmaatskappy Bpk vs Shifren
1964 (4) SA 760
(A)
.
This decision relates to the effect of a non-variation clause that is
contained in the agreement of lease between the parties.
It is
however clear from all relevant authorities including the
Law
of Contract, Fourth Edition, R. H. Christie, Butterworth, at 520
,
that where a non-variation clause does not entrench
itself
against variation, the agreement between the parties may be cancelled
or varied by them. This in any event also appears from the
Shifren-decision at 766 par. E and also from
Impala
Distributors vs Taunus Chemical Manafacturing Company (Pty) Ltd
1975
(3) SA 73
(T) at 278
. I am not
suggesting that Counsel is entitled to ignore the evidence of his own
witness, or to make submissions that directly contradict
such
evidence, but in any event the reliance by Appellant’s Counsel
on the
Shifren
-decision
is misplaced in law, quite apart from the fact that it is not
supported by his own evidence. The learned Magistrate was
therefore
quite correct in holding that after 13 October 2011 an oral agreement
between the parties had come into existence, and
that the period of
until the end of February 2012 had been agreed upon. Mr Louw at the
same time purported to rely on a month-to-month
agreement whatever
that may have meant in the context, but at the same time repeatedly
agreed that it had been expressly decided
that First Defendant would
be given the opportunity to test the “Fusion” -concept
until at least the end of February
2012. (page 433)
10.
The
next witness was Ms E. van Niekerk. She was the Centre Manager at the
time and wrote the e-mails that I have referred to amongst
others.
She also said that the lease agreement was cancelled on 13 October
2011, and I fail to understand how it could be contended
otherwise by
anyone. They then agreed that First Defendant could continue with the
“Fusion” –concept until the
end of February 2012,
although she thought it had initially been until the end of January
2012. Despite this clear evidence she
then continued to vacillate by
saying that there was no agreement on those terms, but it was only a
concession that been made.
I cannot accept that, because it is clear
from the evidence that Plaintiff knew that First Defendant had made
substantial investments,
and it is quite clear from the evidence as a
whole that Plaintiff’s own witnesses had the end of February
2012 in mind at
the very least. It is also clear from the evidence
that Ms Van Niekerk that on numerous occasions she could not remember
what had
in fact been said and by whom, and that she was often
uncertain that had been intended. It is however clear that the end of
February
2012 had been in their minds, and one can accept that this
was the agreement between the parties. She admitted writing the
contradictory
e-mails but did not find this strange for a reason that
was not explained to the Court a quo. It is also clear from her
evidence
that the invoices that were rendered to First Defendant
after August 2011 were in a state of chaos, on her own version.
11.
Ms
M. Wiggel gave evidence and did so in the context of the lot of
documentation of invoices and statements that are not contained
in
the record. For that reason her evidence cannot be sensibly dealt
with, but she did make a number of material concessions. The
first
one is that she admitted that the First Defendant had been locked out
of the premises at the end of February 2012. (page
723) This had been
the effect of the Deputy Sheriff confiscating the keys and the
inability of First Defendant to have access to
the premises. The
other material concession is that at the end of October 2011 the rent
had been fully paid, and Plaintiff had
in its possession a deposit of
R 180 000. I cannot discern why Appellant’s Counsel deems
to contend otherwise during
the trial and before us. Again, he cannot
ignore the very clear evidence of his own witness. Quite apart from
that it is clear
from her evidence that invoices sent to First
Defendant for items apart from the rent often made no sense, were
contradictory and
had to be questioned. It is clear from her evidence
read together with testimony from other witnesses that the defences
relied
upon by First Defendant in its plea are of merit, and are in
fact supported by the evidence of Plaintiff’s own witnesses.
The learned Magistrate in the Court a quo in my view correctly found
this to be so and, as I have said, I fail to see any merit
of the
dozens of grounds of appeal that were raised subsequent to the
judgment.
12.
In
my opinion the conclusion arrived at by the learned Magistrate in the
Court a quo on the material issues were quite correct.
It does not
behove the Appellant to contend otherwise especially not in the light
of the evidence of his own witnesses.
13.
Two
further submissions were made by First Defendant’s Counsel with
which I agree. Plaintiff had launched summary judgment
proceedings on
a basis substantially different to the allegations made in the trial
action. Costs of this application were reserved,
but First Defendant
is entitled to an order in its favour. I agree, and must add that the
lodging of that application was particularly
ill-advised.
14.
The
other submission relates to the liability of the sureties after the
cancellation of the lease agreement. Plaintiff’s own
witnesses
testified that their liability was not debated. They can therefore
not be liable in terms of the oral agreement. Again,
I agree.
Accordingly
the following order is made:
The
appeal is dismissed with costs
.
_____________________________
JUDGE
H.J FABRICIUS
JUDGE
OF THE GAUTENG HIGH COURT, PRETORIA
I
Agree
____________________________
JUDGE
M. ISMAIL
JUDGE
OF THE GAUTENG HIGH COURT, PRETORIA
3
MARCH 2015