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[2015] ZAFSHC 26
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Transnet Soc Ltd t/a Transnet Property v EBS Funeral and Tombstones Cash and Carry (4126/2014) [2015] ZAFSHC 26 (19 February 2015)
IN
THE HIGH COURT OF SOUTH AFRICA
FREE
STATE DIVISION. BLOEMFONTEIN
Case No: 4126/2014
In the matter
between:-
TRANSNET
SOC LTD t/a TRANSNET PROPERTY
…...........................................................
Applicant
and
EBS FUNERALS
AND TOMBSTONES
CASH
AND CARRY
…...............................................................................................................
Respondent
JUDGMENT
BY:
TSATSI,
AJ
HEARD
ON:
20
NOVEMBER 2014
DELIVERED
ON:
19
FEBRUARY 2015
INTRODUCTION
[1] This is an
application in terms of which the applicant sought an eviction order
to eject the respondent from the properties
that the respondent
leased from the applicant. The applicant is a state owned company
with limited liability and the respondent
is a close corporation, a
private business owner. There are two lease agreements between the
applicant and the respondent. At the
beginning of the hearing the
respondent’s counsel made an application for condonation for
filing and serving the respondent’s
opposing affidavit out of
time. Counsel for the applicant opposed the condonation application.
The applicant asked the court to
grant it an order in the following
terms:
“
1.
That the Respondent and all those occupying the premises by, through
or under him be ejected from the premises being the building
situated
on a Portion of the Remaining extent of Erf 1964, at 2 Charles Road,
Bloemfontein (herein after “the first premises”).
2. That the
Respondent and all those occupying the premises by, through or under
him be ejected from the premises being the building
situated on a
Portion of the Remaining extent of Erf 1964, at 2 Harvey Road,
Bloemfontein (herein after “the second premises”).
3. In the event that
the Respondent and all those occupying the premises by through or
under it do not vacate the premises within
5 (five) days of the date
of this order, the Sheriff is permitted to eject the Respondent and
all those occupying the premises
by, through under him.
4. The Sheriff is to
approach the South African Police Service for any assistance that may
be required and the South African Police
Service is directed to
render such assistance or support that may be required to enforce
this order;
5. That the
Respondent be ordered to pay the costs of this application; and
6. Further and /or
alternative relief”.
FACTS
2.
The
first lease agreement
2.1 The parties
entered into a three year lease agreement on 23 March 2011 of
immovable property called the first premises. The
lease would be from
1 April 2011 to 31 March 2014. The monthly rental was R1449. 46
excluding value added tax, subject to annual
escalation at a rate of
10%. The respondent would be liable for the costs of all water and
electricity consumed on these premises.
This would include the costs
of the rates and taxes, sewer removal, and refuse removal raised by
the local authority which the
respondent was obliged to pay directly
to the local authority.
2.2 The respondent
was expected to pay a rental deposit of R4 349.00 and an
administration fee of R570.00. The total monthly rates
and taxes was
R139, 26.
2.3 It was common
cause that the respondent used the first premises as a mortuary and
other related activities. The respondent was
still in occupation of
the first premises.
[3]
The
second lease
3.1 The parties
entered into a three year lease agreement on 15 June 2011 of
immovable property called the second premises. The
lease would be
from 1 July 2011 to 30 June 2014. The monthly rental was R1127.36,
excluding value added tax, subject to annual
escalation as a rate of
10%. The respondent would be liable for the cost of all water and
electricity consumed on the second premises.
This would include costs
of the sewer removal and refuse removal raised by the local
authority, which the respondent was obliged
to pay directly to the
local authority. A rental deposit of R3382.08 and an administration
fee of R570.00 was to be paid by the
respondent. The monthly rates
and taxes in respect of the second premises was R139.26.
3.2 It was common
cause that the second premises was used as a storage. The respondent
remained in occupation of the second premises.
There were no persons
occupying both the first and second premises. It was also common
cause that the applicant was the owner of
both premises.
4. The respondent
remained in occupation of the two premises after the expiry of the
lease agreements. This was based on the fact
that there was a renewal
of the previous three year agreement which was concluded in 1998 in
respect of the property situated at
number 4 Harvey Road.
5. The parties
allegedly concluded a written “renewal agreement” signed
and dated 11 July 2005 in terms of which their
previous lease
agreement ending on 30 June 2005 was renewed to continue on a month
to month basis, until termination thereof by
either party on notice
of one month.
6. The applicant
addressed a letter to the respondent on 8 February 2012 in which it
alleged that the respondent breached both the
lease agreements. The
letter indicated that the respondent failed to pay rent in arrears in
the amount of R43 435. 50. In response
the respondent’s
accountants addressed a letter dated 14 June 2012 and indicated that
they were performing a reconciliation
in respect of the schedule of
amounts payable by the respondent in order to verify the correctness
thereof. The accountants also
queried the amounts of the electricity
billing. The respondent’s accountants sent another letter dated
10 July 2012 to the
applicant. In this letter the accountants
requested a detailed monthly billing of water and electricity
separate from other excluding
rent. The applicant allegedly failed to
respond to the two letters written by the accountants and never
provided the respondent
with the information requested.
7. On 22 April 2013
the applicant’s acting manager addressed a letter to the
Mangaung Local Municipality in respect of which
permission was given
to the proprietor of the respondent to open an account for water and
electricity in his own name for the leased
properties. As at 3 June
2014 the total amount of the arrear rentals outstanding was allegedly
R370 629.85.
ISSUES
[8] The main issue
in this application was whether or not the applicant was entitled to
evict the respondent from the two leased
premises. The other issue
was whether or not the applicant could hold the movables of the
respondent as security by hypothec.
SUBMISSIONS
[9] Counsel for the
applicant submitted that the applicant issued a letter of termination
of the lease to the respondent. As a result
the applicant cancelled
the contract it had with the respondent. He told the court that the
amounts due were not for electricity
but for basic rental, rates,
taxes and administration fee. The respondent failed to make payments
as agreed between the parties.
There was no proof of payment of the
rental provided for by the respondent. It was further submitted on
behalf of the applicant
that the letters written by the respondent’s
accountants enquiring about water and electricity accounts were not
evidence
before this court that such accounts were in dispute.
[10]
It was submitted on behalf of the applicant that the respondent was
no longer entitled to occupy the two leased properties
as he breached
the terms of the contract. Counsel for the applicant further
submitted that the respondent’s movable properties
were subject
to a tacit hypothec. The hypothec was security for the arrears in
rental. He asked the court to evict the respondent
from the
properties on the basis of
rei
vindicatio.
[11] Counsel for the
respondent submitted that the disputes of facts arising in this
application were material. He submitted that
the resolution of such
disputes was significant for purposes of determining the lawfulness
of the purported cancellation of the
lease agreements. He further
submitted that this application required the proper ventilation of
issues at trial. It was further
submitted on behalf of the respondent
that the applicant knew at the time of launching this application
that the respondent questioned
the correctness of the alleged
outstanding amounts. It was counsel for the respondent’s
submission that the applicant did
nothing to provide the respondent
with the information that the latter’s accountants required.
[12] Counsel for the
respondent argued that the respondent had been paying his rentals in
respect of the two leased premises. He
queried the amount the
applicant alleged the respondent was owing. His argument was that the
respondent owed far less than what
the applicant submitted. He
further argued that the tacit hypothec application to this court was
not in the notice of motion. He
submitted on behalf of the respondent
that this application was not rei vindicatio. He asked the court to
dismiss the applicant’s
application with costs. He further
argued that the matter be referred to trial.
THE LAW
[13]
The
rei vindicatio
is
a remedy available to the owner to reclaim his property from whomever
is in possession of it. The remedy is available to the
owner in
respect to both movable and immovable property. The remedy merely
restores proprietary interest, it does not award damages.
The owner
has the right to recover the property from whomsoever is in
possession or has detention thereof irrespective whether
the
possession or detention of the thing is
bona
fide
or
mala fide
(Siberberg
& Schoeman: The Law of Property 4
th
Edition
P
225.).
[14]
An owner who initiates
rei
vindicatio
to
recover his or her property is required to allege and prove (a) that
he or she is the owner of the thing; (b) that the thing
was in
possession of the defendant at the time the action was commenced and
(c) that the thing which is vindicated is still in
existence and
clearly identifiable
(Chettv
v
Naidoo
1974(3) SA13(A) 20 B-C). In
Chettv v Naidoo
1974 (3) All
SA
304
(AD)
at page 309 Jansen JA set out additional rules to be considered when
proceeding by way of the
rei
vindicatio
action
namely, that if the owner
"... concedes
in his particulars of claim that the defendant has an existing right
to hold (e.g., by conceding a lease or a
hire-purchase agreement,
without also alleging that it has been terminated...) his statement
of claim obviously discloses no cause
of action. If he does not
concede an existing right to hold, but, nevertheless, says that a
right to hold now would have existed
but for a termination which has
taken place, then ex facie the statement of claim he must at least
prove the termination."
[15]
The landlord’s tacit hypothec refers to the security a landlord
retains under common law over his tenant’s movables
situated on
the leased premises for unpaid rent
(Holderness
NO and Others v
Maxwell
and Others
(6518/11)
[2012] ZAKZPHC 49 (31 July 2012, para 24). The scope of the principle
of tacit hypothec and its historical basis were
spelt out by Innes J
in the leading case of
Webster
v. Ellison
1911
AD 73
at pp 86 and 87. This is what he said:
“
A
tacit hypothec over so undefined a subject matter would be of little
practical value (save in a concursus creditorum), without
some
special machinery to enforce it. The law of Holland, therefore,
allowed a landlord whose tenant was in default, by a species
of
informal attachment... to earmark the invecta et illata on the
property, and thereby to perfect and complete his lien. Apparently
no
order of Court was necessary, but when the tenant failed to pay his
rent, a public official entered the premises at the request
of the
landlord, made an inventory of the movables, affixed his seal, and
then closed the doors . . . The result was greatly to
strengthen the
landlord's position; not only were the articles identified and
impounded, but he thereafter enjoyed preference over
their proceeds.
He became a privileged creditor. The exact machinery thus provided in
Roman-Dutch practice is unknown in our modern
procedure; but the
principle of assisting a landlord by summary process to protect his
rights is one approved by all South African
Courts. Sometimes an
interdict restraining removal or alienation by the tenant pending an
action for rent is applied for and granted;
but the issue of an order
of attachment is also well recognized. And such an order operating as
it does directly upon the goods
themselves, seems the appropriate
form of relief in such cases, and the one which most nearly resembles
the remedy afforded by
Roman Dutch law....:”
[16]
The common law tacit hypothec was also stated in W E Cooper
The
South African Law of Landlord
and Tenant
(2nd
ed) p 194:
"In modern
law a lessor perfects his hypothec by applying to court for an order
of attachment or an interdict restraining the
lessee from disposing
of or removing the movables from the hired premises pending payment
of the rent or the determination of proceedings
for the recovery of
the rent. ”
[17]
In Room
Hire Co
(
Ptv)
Ltd v Jeppe Street Mansions Ltd
1949
("
31 SA 1155
(T), this is what Murray AJP stated at page 1161;
“
...There
are certain types of proceeding (e.g., in connection with insolvency)
in which by Statute motion proceedings are specially
authorised or
directed... There are on the other hand certain classes of case (the
instances given...are matrimonial causes and
illiquid claims for
damages) in which motion proceedings are not permissible at all. But
between these two extremes there is an
area in which...according to
recognised practice a choice between motion proceedings and trial
action is given according to whether
there is or is not an absence of
a real dispute between the parties on any material question of fact”
(I
was referred to this case by Counsel for the respondent).”
[18]
In
Plascon-Evans
Paints Ltd v Van Riebeeck Paints (Pty) Ltd
[1984]
ZASCA 51
;
1984 (2) All SA 366
(A) at page 368 Corbett JA stated:
“
...where
in proceedings on notice of motion disputes of fact have arisen on
the affidavits, a final order, whether it be an interdict
or some
other form of relief, may be granted if those facts averred in the
applicant’s affidavits which have been admitted
by the
respondent, together with the facts alleged by the respondent,
justify such an order.” (I was referred to this case
by counsel
for the respondent).”
APPLICATION OF
THE LAW
[19]
Rei vindicatio
is
a remedy available to an owner to reclaim his property, from wherever
it is found and from whosoever is holding it, entitling
him to
"exclusive possession." The
rei
vindicatio
is
clearly a claim to ownership in a thing, in this case the applicant
was claiming ownership of its two premises. It cannot on
any
reasonable interpretation be described as a claim for payment of a
debt. It is my view that the applicant satisfied the requirements
of
rei vindicatio which are: the applicant is the owner of the two
premises, that the respondent is in possession of the said premises
and that such premises are still in existence and identifiable.
[20]
Since the applicant succeeded in its application based on
rei
vindicatio,
it
is my considered view that the applicant should succeed in its
security under common law over the respondent’s movables
situated on the leased premises for unpaid rent. The hypothec will
allow the applicant to sell the movable goods of the respondent
which
are on the leased premises, because the respondent failed to pay
rent. The applicant is entitled to tacit hypothec on the
movables of
the respondent. My views is that even though the applicant did not
include an order for a tacit hypothec in its notice
of motion, the
applicant included such order in its affidavit.
I was therefore
required to grant an order authorising the applicant through the
sheriff to perfect its hypothec and attach all
movable properties at
the leased premises.
[21] The respondent
is alleged to have been owing rent since 2012. My concern was that
even though the respondent was very evasive
when it came to whether
or not the rent was paid, the respondent failed to produce any proof
of payment. Submissions made on behalf
of the respondent did not
clearly specify how much rent was owed, from when it was owed. It was
argued on behalf of the respondent
that there was a dispute regarding
the figures submitted by the applicant. The respondent did not assist
the court by presenting
what he purported to be the correct figures
owed. I am of the view that the explanation that the respondent gave
as to why he was
owing so much money was not satisfactory. Such
explanation was not adequate and complete
[22]
As regards dispute of facts, it seemed to me that the respondent’s
argument faced difficulties. Counsel for the respondent
quoted the
case of
Scania
Finance Southern Africa (Pty) Ltd v Go Liner
Tours
(Pty) Ltd
(2010/505970)
(2011) ZAGPJHC 99, to support the respondent’s argument about
the material disputes of facts, to refer the matter
to trial. I
disagreed with counsel for the respondent’s argument that the
Scania Finance
SA
(supra)
bore
striking similarities to those which were apparent in the present
case. My reasons emanated from the fact that in the
Scania
matter,
the respondent stated the following:
22.1 That it had
continued paying in terms of the agreement, despite the fact that the
amounts remained in dispute.
22.2 The respondent
also attached to the answering papers an accountant’s report
which sort out a number of discrepancies
in the applicant’s
accounting.
22.3 The report then
tabled the amounts paid by the respondent as against those recorded
by the applicant.
[23]
The respondent
in
casu,
did
none of the above as it happened in the
Scania
matter.
In my view, the respondent faced an insurmountable obstacle in
showing a sustainable defence. In my view, there were no
reasons for
doubting the accuracy of the applicant's calculations. The reason
being that the respondent failed to disprove or proof
the accuracy or
inaccuracy of the applicant’s calculations regarding rent
payments. Nothing was put before me to show that
any of the
applicant's calculations were at any time wrong. The respondent only
submitted that the applicant alleged he owed rent
without denying or
confirming same. The application was not based on failure of payment
of electricity and water accounts but on
rental accounts. Even though
there was dispute of facts regarding water and electricity these are
independent from rental payments.
[24] The respondent
was already owing an amount of R370 629.85 as from June 2014. There
was no indication that the respondent was
paying any rental to the
applicant on the day of the hearing. The respondent cannot have it
both ways, refuse to pay the rent for
occupying the two premises and
at the same time remain in occupation of the said premises. In my
view there was no reason for not
accepting the amount of R370 629.85
as having been duly owed by the respondent in favour of the applicant
as at 3 June 2014.
[25] I am of the
view that the applicant is entitled to the relief sought. I
accordingly make the following order:
25.1 Condonation is
granted for the late filing of the respondent’s opposing
affidavit.
25.2 The applicant
is granted an order, authorising it, through the Sheriff, to perfect
its landlord’s tacit hypothec, over
the movables of the
respondent at the two leased premises, to recover the arrears rental.
25.3 An order is
granted in terms of prayers 1, 2, 3, 4 and 5 of notice of motion.
E.K.TSATSI, AJ
On behalf of
applicant: Adv. S.E. Motloung
Instructed by:
Rosendorff Reitz
Barry
BLOEMFONTEIN
On behalf of
respondent: Adv. A.I.B. Lechwano
Instructed by:
Molefi Thoabala
Attorneys
BLOEMFONTEIN