About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: North Gauteng High Court, Pretoria
SAFLII
>>
Databases
>>
South Africa: North Gauteng High Court, Pretoria
>>
2015
>>
[2015] ZAGPPHC 378
|
|
Beaux Lane (SA) Properties (Pty) Ltd v Minister of Public Works N.O and Another (21316/13) [2015] ZAGPPHC 378 (15 May 2015)
IN THE HIGH COURT OF
SOUTH AFRICA
GAUTENG DIVISION,
PRETORIA
Case Number 21316/13
DATE: 15 MAY 2015
In the matter between
BEAUX LANE (SA) PROPERTIES (PTY)
LTD
......................................................................
Plaintiff
And
THE MINISTER OF PUBLIC WORKSA
N.O
............................................................
First
Defendant
THE EXECUTIVE AUTHORITY OF THE
DEPARTMENT OF PUBLIC
WORKS
....................................................................
Second
Defendant
JUDGMENT
BAM J
(Appearances: For the plaintiff: Adv
I Miltz SC
For the Defendants: Adv J A Motepe.
)
1. The plaintiff instituted action
against the defendants for contractual damages in the amount of 7,SM.
The main issue turned upon
the allegation that the Defendants are
liable for damages upon a certain leased property, after termination
of the lease agreement,
not having been timeously, free and
undisturbed, restored to the plaintiff.
2. The parties were ad idem that the
matter should be before the court in the form of a stated case.
However, initially the parties
seemed to have disagreed whether the
totality of the merits should be adjudicated upon and whether only
part of it, and the quantum,
should be separated. In terms of the
plaintiff's notice of application for separation in terms of Rule
334), the only question
the plaintiff wanted to be adjudicated was
whether the leased property, in terms of the agreement, had been
restored to the plaintiff,
to have free and undisturbed possession.
During argument Mr Motepe contended that the defendants actually
agreed that the merits
should be disposed of in totality, leaving
only the quantum. This was subsequently conceded by Mr Miltz.
Accordingly only the issue
of quantum had to be separated and an
order in terms of Rule 33(4) separating the merits from the quantum
is therefore made.
3. From the stated facts and the
concessions made during argument, the following is common cause.
The dispute in this matter arose from a
written lease agreement entered into on 14 September 2000 between
Leopont 163 Properties
(Pty) Ltd and the Department of Public Works,
(the "Department" ), (the First Defendant is the
responsible minister and
the second defendant cited in its
representative capacity).
On 3 August 2007 the plaintiff
purchased the property and the rights and obligations of Leopont, the
former proprietor, were ceded
to the plaintiff.
In terms of the agreement the date of
termination was 31August 2010. The occupiers however remained in
occupation and the plaintiff
continued to raise rental charges to the
Department. The Department continued to pay the rent.
The termination date was later by
agreement between the parties extended to December 2010.
The purpose for which the premises,
consisting of, amongst others, "flat units", was leased by
the Department, was stated
to be "Official Residence".
The Department then utilised the
premises providing for residence for officers of the Department of
Correctional Services, ("D.O.C.").
The Department paid the monthly rent to
the plaintiff.
During late 2009 the D.O.C. decided not
to renew the lease and gave its officers notice to find alternative
accommodation.
On 7 December 2010 the D.O.C. gave
notice to its officers to vacate the property by 16 December 2010. A
number of the occupants
failed to comply. On 24 December 2010 the
Department notified the D.O.C. that the agreement would terminate on
31 December 2010
and that the property should be vacated by that
date. Upon inspection by the Department on 20 January 2010 it was
found that large
number of the D.O C's officers was still in
occupation of the flats. The Department again requested the D.O.C. to
have the property
vacated by not later than 21 January 2011. It was
of no avail.
The Department still continued to pay
the rent to the plaintiff.
On 24 January 2011the plaintiff sold
the property to Midnight Storm Investments 399 (Pty) Ltd. The
purchase price was R40M. It was
a term of the contract that vacant
occupation and possession of the property would be given to the
purchaser on 11April 2011, failing
which, Midnight Storm would have
the right of cancellation. The latter date was extended to 11 May
2011. On 12 May 2011the plaintiff
and Midnight Storm agreed that
vacant occupation would be given on 1June 2011.
In the meantime, on 29 March 2011the
plaintiff gave the Department one month's written notice of the
termination of the lease agreement,
effective from 30 April 2011.
On 24 May 2011the plaintiff obtained an
eviction order against the Department and the D.O.C. occupiers to
vacate the property within
7 days.
On 28 June 2011the D.O.C. occupiers
intervened and obtained a court order setting aside the eviction
order. The intervening parties
alleged that they were involved in an
unresolved labour dispute with the D.O.C. concerning the vacation of
the flats. They further
alleged that the procedure provided for in
the Prevention of Illegal Eviction from and Unlawful occupation of
Land Act, Nr. 19
OF 1998, ("P.I.E") had to be followed
before they could be evicted.
On 26 July 2011, whilst about 54 or 58
of the flats were still occupied by officers of the D.O.C. the
plaintiff and Midnight Storm
concluded a further agreement with the
specific term that Midnight Storm would take possession of the
property, whilst the Department
remained in occupation of the
property, subject to the condition that the purchase price would be
reduced to R32, 5M. The purchase
amount was subsequently paid by
Midnight Storm and the property was transferred in its name.
On 11April 2014 the plaintiff issued
the summons.
4. The plaintiff's claim for damages in
the amount of R7, 5M -- the difference between the initial purchase
price of R40M and the
purchase price of R32, 5M paid by Midnight
Storm -- is based on an alleged material breach of the agreement by
the Department in
failing to procure the departure of the occupiers
timeously.
5. In defending the action it is
contended by the defendants that the Department's notice to the
D.O.C. to have its officers vacate
the property constituted a
discharge of any liability it had towards the plaintiff.
6. In terms of the initial agreement
the Department was contractually bound to vacate the premises on the
termination date, end
of December 2010, which date was, at least
tacitly, extended on several occasions. The reason being that the
occupiers refused
to vacate the property. To that end the Department
relied on notices directed to the D.O.C. which did not have the
required effect.
This eventually led to the formal notice of 29 March
2011notifying the Department to vacate the property, followed by the
application
for the eviction of the Department and the D.O.C.
occupiers.
7. The Department was contractually
obliged to comply with the terms of the agreement in ensuring that at
the day of termination
of the agreement the property is restored to
the plaintiff, "free and undisturbed ." In this respect the
defendants relied
on the Departments conduct by notifying the D.O.C.
that it had to ensure that its officers vacate the property. At all
relevant
times the Department was well aware of the problems
concerning the reluctant occupiers and therefore that it, the
Department, would
not have been in a position, to restore the
property as it was obliged to do, without the occupiers vacating the
property. There
is no indication, before the plaintiff applied for
the eviction order, that the Department, well aware ofthe attitude
of the
recalcitrant occupiers, employed any other lawful means, eg an
application for eviction under the common law, or steps in terms
of
PIE to ensure that the property be vacated in accordance with the
agreement. This, objectively, is what would have been expected
from
the Department who was under the obligation to perform in accordance
with the agreement. This is not a matter where the Department's
obligations in terms of the contract became impossible to perform
caused by some or other supervening impossibility to perform.
The
Department therefore cannot rely on the intervention of the occupiers
and the consequential setting aside of the eviction order
to evade
its obligation in terms of the agreement to have the property
vacated. See Transnet Ltd v Owner of MV Snow Crystal 2008(4)
SA
111SCA, pars[28] to [30].
8. Accordingly there is no lawful
reason why the Department failed to comply with the terms of the
agreement.
9. The Department was the lessee in
terms of the agreement. The responsibility, and Obligation, to ensure
that the property be restored
to the plaintiff, unencumbered, rested
on the Department and nobody else. It follows that the Department was
indeed in breach of
the agreement.
10. It was contended by Mr Miltz, with
reference to authorities, where the lessee has failed to fulfil his
obligations the lessor
has a claim for damages. In this case, Mr
Miltz argued that the damages sustained by the plaintiff naturally
and generally flowed
from the breach of the agreement, and that the
damages were within the contemplation of the parties. At all times,
argued Mr Miltz,
there was a realistic and foreseeable possibility
that the plaintiff will suffer damages in the case of a breach.
11. What therefore remains to be
considered, as contended on behalf of the defendants, are the
following:
(i) That the plaintiff has suffered
damages.
(ii) That there is a causal link
between the breach and damages.
(iii) That the loss was not too remote;
and that it was within the contemplation of the parties that such
damages would probably
result from the breach.
12. In distinguishing between general
and special damages, the Court in Transnet v MV Snow Crystal, at
par[35], stated, firstly
referring to general damages, that to
determine whether damages flowed naturally and generally from breach
of contract, it must
be considered whether it "can be said to
have been reasonable foreseeable as a realistic possibility."
13. In respect of special damages, the
Court in Transnet stated that it is those damages ordinarily regarded
in law as being too
remote to be recoverable, unless the parties, in
concluding the agreement actually or presumptively contemplated that
the damages
would probably result from the breach. The foreseeability
of the damages will in such matters depend on the existence of
special
circumstances known to the parties at the time they entered
into the agreement.
14. I am not persuaded, as argued by Mr
Motepe, that the plaintiff is claiming special damages.
In my view damages of this nature are
general damages that may be foreseeable in given circumstances.
Accordingly the test to be
applied is whether it can be found that in
this case the alleged damages have been reasonable foreseeable as a
realistic possibility
within the contemplation of the parties. See
Shatz Investments (Pty) Ltd Kalovyrnas 1976(2) SA 545 (A); and,
Holmdene Brickworks
(Pty) Ltd v Roberts Construction Co Ltd 1977(3)
SA 670(A).
15. Both plaintiff and the Department,
after termination of the agreement became aware of the apparently
uncompromising attitude
of the occupiers who refused to vacate the
property, and that the problem could only be resolved in terms of
lawful steps taken
against the occupiers. There is however no
indication, or even a suggestion, that this situation was reasonably
foreseeable by
either of the parties at the time the agreement was
entered into. In this regard I am mindful of the fact that the
purpose of the
agreement clearly was the furnishing of accommodation
by the Department to employees of another state department, the
D.O.C.
16. Despite the plaintiff's awareness
of the existing problem, which clearly can lawfully be resolved in
favour of the plaintiff,
it entered into the sale agreement with
Midnight Storm, at first for R40M and subsequently, apparently when
the issue with the
occupiers remained, temporarily, unresolved, for
the reduced purchase price of R32,5M. In this respect it is
remarkable that there
is no stated fact, or concession made by the
defendants, explaining why, and on what basis, the plaintiff was
prepared to accept
the lower offer, and for that matter that the
defendants, or the Department were informed of the reason for the
negotiations regarding
the purchase price between the plaintiff and
Midnight Storm.
17. This situation clearly concerns the
causal link between the damages claimed and the breach. It therefore
also begs the question
how it can be said, in the circumstances of
the case, that the selling of the property at a so called "reduced"
price
could have been reasonable foreseeable as a realistic
possibility.
18. Accordingly it has to be found
there is no fact before this Court substantiating a causal link
between the breach of the agreement
and the damages claimed.
Order.
Plaintiff’s claim is dismissed
with costs.
AJ BAM JUDGE OF THE HIGH
COURT
14 MAY 2015