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[2015] ZAGPPHC 189
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Proc Corp 160 (Pty) Limited v Interactive Trading 626 (Pty) Limited and Another (36167/2013) [2015] ZAGPPHC 189 (16 March 2015)
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG DIVISION,
PRETORIA
CASE NO:
36167/2013
DATE: 16 March
2015
Not reportable
Not of interest
to other judges
In the matter
between:
PROC
CORP 160 (PTY)
LIMITED
.......................................................................................
Plaintiff
and
INTERACTIVE
TRADING 626 (PTY)
LIMITED
.....................................................
First
Defendant
ANDRE
GEORGE
LUBBE
.......................................................................................
Second
Defendant
JUDGMENT
Tuchten
J
:
1. The plaintiff
sued the defendants for R895 000, arising from a written lease
between the plaintiff and the first defendant. There
was also a claim
for rectification of the lease but that claim played no part in the
proceedings before me and I shall say no more
about it. The monetary
claim is for the alleged cost of restoring the leased premises to the
same good order and condition in which
they were, fair wear and tear
excepted, at the commencement date of the lease.
2. On the fifth day
of the hearing before me, the plaintiff withdrew its claim against
the second defendant. It was agreed between
the parties that this
withdrawal should carry no cost implications.
3. The plaintiff is
the owner of a shopping centre in Rooihuiskraal, Centurion called the
Mall@Reds. Erection of the mall was completed
in 2003 and the first
defendant was one of the original tenants. It operated a Spur
restaurant in the premises. The plaintiff provided
the first
defendant with what was described in the evidence as a clean shell,
ie empty premises into which the first defendant
installed its own
equipment and finishes. Spur restaurants are a well known brand in
South Africa. It is of the essence of Spur
branding that every Spur
restaurant should have the same finishes. For example, it has special
ceiling boards in its seating area
and characteristic wooden stack
doors at the entrance through which customers are welcomed.
4. The first
defendant was allowed onto the premises before the parties entered
into the lease for the purpose of fitting out the
premises. The
defendant took what was described by the plaintiff’s agent in a
letter dated 27 February 2003 as beneficial
occupation on 17 March
2003. The lease was signed by the first defendant on 10 April 2003
and by the plaintiff only on 25 June
2003. But there is no
possibility of confusion about the commencement date of the lease: it
is given in item 4.1 of the schedule
to the lease as 1 May 2003. The
expiry date is given in clause 4.2 of the same schedule as 30 April
2008 and was subject to an
option to renew given to the first
defendant.
5. The relationship
between the plaintiff and the first defendant descended into
acrimony, apparently almost from inception. The
alleged cause of the
acrimony was referred to in passing during cross-examination by
counsel for the defendants. Who did and did
not participate in the
acrimony and the actual causes of the bad relationship were not made
clear in the evidence.
6. Suffice it to say
that the first defendant did not exercise its option but refused to
vacate on the termination date. The plaintiff
brought an urgent
application in this court under case no. 26533/08 to evict the first
defendant. The plaintiff’s notice
of motion was dated 2 June
2008. The case was heard and judgment reserved. Judgment was only
given on 25 June 2010. By then the
judgment was of academic interest
because the evidence is that the first defendant physically vacated
the premises on 17 November
2009, although it only returned the keys
of the premises to the plaintiff on 12 January 2010.
7. The case for the
plaintiff was that it was unable to gain access to the premises until
after the keys were returned to it and
that on 21 January2010,
MrMonteith, an architect whom the plaintiff retained for this
purpose, made an inspection of the premises
and took a comprehensive
series of photographs. These photographs show that the interior of
the premises had been wrecked. The
term used by some of the
plaintiff’s witnesses was vandalised. Interior walls within the
premises had been partly demolished.
The ceiling, which was
constructed of ceiling boards attached to a system of suspended
trusses had been partly demolished. Much
of the sanitaryware in the
restaurant’s cloakrooms had been smashed. Many of the wires
leading both into and out of the electricity
distribution board had
been cut. Tiles had been detached from both the walls and the floor.
The airconditioning units had been
removed. There was a hole in the
roof. The sprinkler system had been damaged.
8.
On the same day, the plaintiff’s leasing and development
manager, Mr Thomas, instructed Mr Monteith in writing to provide,
in
addition to a report on the condition of the premises and
photographs, to do two costing exercises: firstly
"to
re-instate the premises to its original condition (i.e. clean shell,
before Spur took beneficial occupation)
1
by
01 March 2010" and, secondly, to “amend the premises to
condition agreed for new tenant and to be handed over to new
tenant
by 01 March 2010".
9. The reference to
a new tenant was to the Standard Bank which had agreed to take much
of the space formerly occupied by the Spur
restaurant. The Bank
wanted its own layout and finishes and, as might be expected,
required an interior layout quite different
from that of the Spur.
10. The costings
requested by Mr Thomas were in fact done by Mr de Haas, a quantity
surveyor in the employ of Anastasi Projects,
a firm in which Mr
Anastasiades snr either had a substantial interest or control. There
was a family connection between Anastasi
Projects and the plaintiff.
The costings done by Mr de Haas were approved and Anastasi carried
out the work required to get the
premises into the condition required
by Standard Bank. Mr de Haas said in evidence that he thought he
began the work on 28 January
2010 and had finished the work by 22
February 2010. A strange feature of the case is that Anastasi has
never (at least up to 2012)
invoiced the plaintiff for this work and
has never been paid. Apparently the plaintiff was not happy with
Anastasi’s costing
and because of the family connection between
the two firms, Anastasi did not press for payment.
11. The plaintiff
decided to take an expert opinion from Dr PC Botha, a quantity
surveyor of high repute. He furnished a report
dated 31 May 2012. Why
the plaintiff delayed formulating its claim for this lengthy period
was not explained in the evidence. Dr
Botha concluded that the cost
of demolition and reinstatement to bring the premises to the status
of a clean shell was R895 000
inclusive of VAT. Dr Botha identified
58 items of cost in this regard, all of which were subject to upward
adjustment in respects
specified in his report and explained in his
evidence..
12. But the
calculation of the cost to achieve a clean shell status was based on
a misconception which unfortunately permeated the
plaintiff’s
case and caused most of the evidence led on its behalf to be
irrelevant. I shall explain why I say this.
13. The plaintiff’s
case was based squarely on the provisions of clause 12.1.5 of the
lease:
The [first
defendant] shall at its own cost, keep and maintain the premises in a
clean sanitary and good condition. Without derogating
from the
generality of the aforegoing, the [first defendant] shall... at the
expiration ... of this agreement, and in the event
only that the
[first defendant] shall have failed to restore the premises to the
[plaintiff] in the same good order and condition
as they were at the
commencement of this lease, fair wear and tear excepted, pay to the
[plaintiff], on demand, the reasonable
cost of restoring the premises
to the same good order and condition in which it was at the
commencement date. Without derogating
from the generality of the
aforegoing, the cost of restoring the leased premises shall include
the cost of redecoration and the
cost of steam cleaning any carpeting
in the premises.
14. The plaintiff’s
claim is pleaded on the same basis. In paragraph 11 of the
particulars of claim, the plaintiff alleges
that the first defendant
failed to restore the premises to the plaintiff in the same good
order and condition in which they were
at the commencement date of
the lease agreement (fair wear and tear excepted). In paragraph 12,
it is alleged that the reasonable
cost of restoring the premises to
the same good order and repair in which they were at the commencement
date of the lease amounts
to R895 000.
15. But empty shell
status is not what the first defendant promised the plaintiff in
clause 12.1.5 read with the schedule. On 1
May 2003, when the Mall
opened officially to the public, the first defendant had equipped and
was operating a fully functioning
Spur restaurant. It was that
layout, stripped of such fixtures and fittings as were movable and
did not accede to the premises
which the first defendant was required
to hand back to the plaintiff.
16. This was not
appreciated by the plaintiff and its legal representatives. The
result of this misconception was that Dr Botha’s
expert
analysis and evidence was misdirected. The position was also confused
by the fact that by the time Dr Botha had been retained,
Standard
Bank had altered the space allotted to the Bank, which included a
large part of the space previously occupied by the Spur,
to suit the
Bank’s requirements.
17. The plaintiff’s
representatives only appreciated the manifestly correct position
during the fourth day of evidence. For
various reasons, Dr Botha’s
cross-examination had not been completed by then and Dr Botha
returned to the witness box to
concede, apparently enlightened by the
removal of the misconception, that many of the 58 items of cost in
the schedule to his report
were not for the account of the first
defendant. It is not necessary to list those that survived the
enlightenment. Dr Botha still
at that stage was under the impression
that the provisions of clause 12.1.5 required the first defendant to
remove what it had
constructed prior to the commencement date of the
lease. That, as I have said, is not what the lease provided.
18. I need not deal
with the defences raised by the first defendant in its plea. None of
them ultimately was advanced with any vigour
and it is unnecessary to
deal with them because of the conclusions I have reached on the
assessment of the damages claimed by the
plaintiff and certain
concessions made on behalf of the first defendant in argument.
19. A dispute arose
about who was responsible for the damage to the interior of the
premises. This was not directly foreshadowed
on the pleadings but was
adequately ventilated in the evidence. The plaintiff sought to
demonstrate that the persons who did the
damage could not have been
employed by the plaintiff because the plaintiff did not have keys to
the Spur. The evidence was that
the managing agents did not keep keys
to tenants’ premises within the Mall. On the other hand, there
was credible evidence,
particularly by Mr Lubbe jnr for the
defendants. This witness was in operational charge of the Spur
restaurant. He testified that
the physical relocation of the Spur to
new premises nearly took place over the period 17-18 November 2009.
He was able to fix the
date with accuracy because the last day on
which the Spur traded at its premises within the Mall was on 16
November 2009 and he
wanted to get the restaurant up and running in
its new premises as soon as possible.
20. Lubbe jnr’s
evidence was that the relocation took place under his supervision and
that although he was not present at
the premises in the Mall
throughout the period of relocation, he was there when the premises
were opened to begin the relocation
and when they were locked at the
end of the process. His purpose was to complete the relocation as
quickly as possible. He used
his own staff who would have been on
shift at the time in question but one or two builders might have been
part of his team for
certain specialised work. The tables and benches
and kitchen equipment were removed. In two instances this resulted in
damage to
the premises: the one required a hole to be made in the
roof sheeting to remove the ducts leading upward from the extractor
fan
in the kitchen; the other required the partial demolition of a
brick and mortar unit that housed the salad bar, a feature of Spur
restaurants at which customers help themselves to the salads of their
choice. The only fixture as such, according to Lubbe jnr,
which was
removed from the premises during the relocation process was the
special Spur branded ceiling boards which were in place
over the
seating area. These boards, his evidence went, were donated at the
premises in the Mall to needy persons, some five or
six of whom were
at the premises during the relocation to receive what the first
defendant wanted to give away. In addition to
the Spur ceiling
boards, Lubbe jnr said, he also gave away small kitchen items.
21. Lubbe’s
evidence was corroborated by Mr Bradfield, one of the Spur’s
senior managers who was also present that day
and at some stage
relatively shortly thereafter returned to the premises to make a
telephone call to one of the Spur’s suppliers.
I found both of
these witnesses to be generally credible in the respects I have
described.
22. Lubbe was
extensively cross-examined about why the keys to the premises were
only returned to the plaintiff’s agent in
January 2010. The
reasons he gave for the delay were not very convincing but I think on
the probabilities the delay in handing
over the keys took place
because Lubbe did not regard it as very important to hand back the
keys. He had other things on his mind,
particularly getting his new
restaurant properly operational.
23. Then there is
the fact that although the plaintiff repeatedly asked the first
defendant to participate in a joint inspection
of the premises, the
plaintiff’s requests met with no adequate response and no such
inspection took place. The parties were
on bad terms at that stage
and the material which made up these requests took place largely
through correspondence between the
attorneys for the parties. Lubbe
jnr was not responsible for this aspect of the first defendant’s
administration and said
in evidence that he was not aware of any
request for a joint inspection. Lubbe snr, although available, did
not give evidence.
Quite possibly, Lubbe snr did not respond to the
requests for an inspection because he did not want to cooperate with
the plaintiff.
I do not think that this takes the present dispute any
further.
24. Counsel for the
plaintiff suggested that the damage to the premises might have been
caused by the persons who were at the Mall
premises to receive what
the first defendant wanted to give away. I think that this is highly
improbable and indeed borders on
speculation because there is no
evidence that any of these persons or others returned to the Mall to
strip the premises. Furthermore,
the Mall was policed by a number of
security staff. This would have had to have taken place with their
knowledge and concurrence
and there is no evidence of that either.
25.
This debate is however largely academic because counsel for the
plaintiff argued his case on the basis that the first defendant
vacated as described by Lubbe jnr, ie by at the latest 18 November
2009 and that at the conclusion of the relocation process, the
premises were restored to the plaintiff. So any damage to the
premises which took place
afterthe
conclusion
of the relocation process was, on this basis, not the responsibility
of the first defendant.
26. But I think that
the over all probability is that the damage was caused by a
contractor who was instructed by the plaintiff
or its agent to reduce
the premises to a clean shell preparatory to refurbishment and
occupation of the premises by the Standard
Bank. The damage visible
in the photographs is not the kind of damage which would have been
caused by looters. There would have
been , eg, no need for looters to
expend time and energy and make a noise demolishing the interior
walls and other interior brickwork
and wrecking the sanitaryware. Nor
was there any need for Lubbe jnr to do so. For Lubbe jnr to have
taken the trouble maliciously
to damage the premises would have been
a distraction from his main goal of getting his new restaurant
operational and would have
had to be done in at least earshot of the
mail’s security officers. Lubbe jnr denied that he personally
invested any emotional
energy in the vendetta and there is no reason
to disbelieve him in this regard.
27.
A telling item of evidence given by Lubbe jnr was left uncontested.
He said that the flow of current
into
the
electrical distribution board was under the control of the plaintiff.
The first defendant was only able to switch off current
flowing
out
of
the
distribution board. This meant that anybody cutting the wires at the
distribution board bring current
into
the
distribution board was risking electrocution and therefore his life.
From this it follows that the current to the distribution
board was
probably switched off by or on behalf of the plaintiff for the very
purpose of rewiring the premises.
28. Few of Dr
Botha’s 58 items can survive this analysis. Counsel for the
plaintiff ultimately contended for items 4-8, 27-36,
44, 45, 49, 52
and 53 with an upward adjustment for contractors’ preliminaries
and profit and VAT.
29. Items 4-8
provide for demolition and removal of rubble. The problem for the
plaintiff is that these claims are predicated on
the false notion
that the first defendant was obliged to leave the plaintiff with a
clean shell. Although some rubble must have
been caused when the
salad bar was detached, there is no evidence as to how much rubble
this caused. The place where the salad
bar stood was not the subject
of any of the photographs so the probability is that it did not cause
very much rubble. The rubble
removal claims are for the rubble caused
by the demolition of a raised floor and interior walls. One cannot
extrapolate from this
a cost for removing the salad bar rubble. There
was no specific claim for the removal of the salad bar rubble. These
claims must
fail.
30. Claims 27-36 are
for removal of fixtures such as a cupboard, the ceilings, the
construction of a new ceiling, the removal of
airconditioning
components, removal of carpets, replastering to convert the Spanish
(rough) plaster on the walls to smooth plaster
and removing wall and
floor tiles. Once again, these claims must fail because they are
directed at producing a clean shell.
31. Item 44 is for
the installation of a completely new ceiling, incidently to the
specifications of the Standard Bank. The first
defendant did not have
to provide a new ceiling when it left the premises. The first
defendant was liable of course for reinstating
the ceiling in the
seating area. But there is no evidence to identify the cost of
replacing the Spur branded ceiling boards or
an appropriate
alternative. This claim fails.
32. Item 45 is for a
new airconditioning system. The first defendant did not have to
provide a new airconditioning system when it
left the premises. This
claim fails.
33. Item 49 is for
the servicing of the existing sprinkler system. While this claim
might have been appropriate in the context of
the true liability of
the first defendant under clause 12.1.5, the basis of Dr Botha’s
assessment was that the photographs
showed that the sprinkler system
had been damaged and he testified that he raised this item because of
the damage. As this damage
has not been proved to have been caused by
18 November 2009, this claim too must fail. The same is so in respect
of item 53, the
repair to the electrical system within the premises,
and this claim similarly fails.
34. This leaves, of
the substantive items, item 48 (preparing and painting interior
walls) and repair to the roof where the extractor
fan ducting was
removed. These claims are good and were conceded as such by counsel
for the defendants. Dr Botha accepted that
the quantum he had
allocated for the roof work was excessive and that the true amount
should be, before adjustment, R6 120.
35. To summarise:
the plaintiff has proved damages, before upward adjustment, of R7 560
(painting) plus R6 120 (roof work) = R13
680. To this must be added
15% for preliminaries, R2 052, giving R15 732. To this figure must
then be added 10% for contractor’s
profit, R1 573,20, giving
R17 305,20. Finally VAT at 10% must be added, giving a final figure
of R19 035,72.
36. Counsel for the
plaintiff submitted that although the plaintiff had not succeeded in
proving, except as I have said above, the
case upon which it came to
court, it should nevertheless be awarded certain items on the basis
of what counsel called practicality.
There is simply no conceivable
legal basis for this argument. In any event, it can hardly be
practical to mulct the defendant on
a basis at variance with the
agreement between the parties. Yet another difficulty for the
plaintiff is that no attention was given
in the evidence that the
restoration had to take place subject to fair wear and tear. The
plaintiff of course bears the onus in
relation to the matters which I
have identified in this judgment.
37. I turn to the
question of costs. The plaintiff has manifestly not been
substantially successful. It took up the better part
of four court
days of a five day trial trying to prove a claim based on a
misconception. The first defendant on the other hand
played its cards
very close to its chest and did not disclose the basis of the defence
which ultimately prevailed until after the
issue had been raised by
me during the evidence of the architect, Mr Monteith, on the fourth
day. In addition, the first defendant
has been held liable in a
relatively small amount.
I think the fairest
would be to make no order as to costs.
38. I make the
following order:
1. There will be
judgment for the plaintiff against the first defendant for the sum of
R19 035,72;
2. There will be no
order as to costs.
NB Tuchten
Judge of the High
Court
13 March 2015
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