Fountainhead Property Trust and Another v Gospel Direct (Pty) Ltd and Another (70335/11) [2014] ZAGPPHC 249 (11 April 2014)

30 Reportability
Land and Property Law

Brief Summary

Lease Agreement — Cancellation — Claim for arrear rental — Plaintiffs, Fountainhead Property Trust and Attfund Limited, sought payment from defendants, Gospel Direct (Pty) Ltd and Lukas Hermanus Carelsen, for unpaid rent and restoration costs following cancellation of a lease agreement due to breach — Defendants admitted liability for arrear rent but disputed claims for restoration costs and future rental loss — Court held plaintiffs entitled to claim for arrear rent, but failed to prove claims for restoration costs and future rental loss, resulting in partial judgment in favor of plaintiffs.

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[2014] ZAGPPHC 249
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Fountainhead Property Trust and Another v Gospel Direct (Pty) Ltd and Another (70335/11) [2014] ZAGPPHC 249 (11 April 2014)

IN
THE NORTH GAUTENG HIGH COURT PRETORIA
(REPUBLIC
OF SOUTH AFRICA)
CASE NO.
70335/11
DATE: 11 APRIL 2014
NOT REPORTABLE
NOT OF INTEREST TO
OTHER JUDGES
In the matter
between:
FOUNTAINHEAD
PROPERTY
TRUST
...............................................................
1
ST
PLAINTIFF
ATTFUND
LIMITED
................................................................................................
2
nd
PLAINTIFF
and
GOSPEL
DIRECT (PTYO
LTD
..........................................................................
1
st
DEFENDANT
LUKAS
HERMANUS
CARELSEN
...................................................................
2
nd
DEFENDANT
CORAM:EBERSOHN
AJ
HEARD
ON 16 AUGUST 2013
JUDGMENT
HANDED DOWN ON 11 APRIL 2014
JUDGMENT
EBERSOHN AJ.
[1] The plaintiffs
are Fountainhead Property Trust and Attfund Limited.
[2] The defendants
are Gospel Direct (Pty) Ltd. as principal debtor and Lukas Hermanus
Carelsen as surety.
[3] On or about the
13
th
December 2007 the plaintiffs and the first defendant
entered into a five year lease agreement in terms whereof the
plaintiffs let
to the first defendant certain shop premises in
Centurion. The second defendant signed as surety for the obligations
of the first
defendant. The commencement date of the lease was the
1
st
October 2007. The first defendant was to pay certain
amounts as rental, monthly in advance, to the plaintiffs including a
10% turnover
rental to the plaintiffs. In addition to the rental the
first defendant had to pay certain operating and maintenance costs to
the
plaintiffs and also a monthly contribution towards the recovery
of municipal rates and taxes. The first defendant also had to pay
a
monthly contribution towards the Marketing Fund. Besides all the
foregoing the first defendant also had to pay mora interest
to the
plaintiffs on any arrear amounts.
[4] Clause 26.02 of
the Standard Terms and Conditions initialled and attached to the
lease read as follows in the event of certain
stated types of
breaches of the lease on the part of the first defendant having
occurred::

While
the lessee remains in occupation of the leased premises and
irrespective of any dispute between the parties, including but
not
being restricted to, a dispute as to the lessor’s right to
cancel this lease, then -
a) The lessee
shall continue to pay all amounts due to the lessor in terms of this
lease on the due dates of the same;
b) The lessor
shall be entitled to recover and acceot those payments;
c) The acceptance
by the lessor of those payments shall be without prejudice to and
shall not in any manner whatsoever affect the
lessor’s claim to
cancellation of this lease or for damages or claim of any other
nature whatsoever.
Should
the dispute between the lessor and lessee be determined in favour of
the lessor, then the payments made to the lessor in
terms of this
sub-clause shall be regarded as amounts paid by the lessee on account
of the loss and/or damages sustained by the
lessor as a result of the
holding over by the lessee of the leased premises.

[5] In terms of
clause 14 of the Standard Terms the lessee may , with the prior
consent of the lessor install any fixtures, fittings
and equipment in
the leased premises for the purpose of carrying on the lesee’s
business “and may at any time and prior
to the termination of
the lease if so required by the lessor, remove any such fixtures or
fittings provided that the lessee shall
repair any damaga caused by
the installation or removal of such fixtures, fittings or equipment.
If the lessee does not remove
any fixtures and fittings and equipment
on vacating the leased premises these shall become the property of
the lessor and the lessee
shall not at any time or under any
circumstances have any claim whatsoever against the lessor for any
fixtures and fittings and
equipment not removed on the termination of
this lease whatever the reason may be. However, the lessee shall be
liable to reimburse
the lessor on demand for any and all costs
incurred by the lessor in having such fixtures and fittings and
equipment removed and
the leased premises reinstated on behalf of the
lessee.
[6] In terms of
clause 26.01 of the Standard Terms and Conditions the parties agreed
that should the 1
st
defendant make default with any
payment in time the plaintiffs could summons the 1
st
defendant and claim cancellation of the agreement and its ejectment
from the premises. The 1
st
defendant in fact breached the
agreement and the plaintiffs forthwith cancelled the lease agreement
during June 2011 by the issuing
of a summons in the Magistrates Court
for Pretoria in case 50333/2011 and obtained default judgment against
the 1
st
defendant for payment of certain sums and
ejectment from the premises. The sum claimed in case 50333/2011 was
paid in full with
costs.
[7] Despite the
cancellation of the lease agreement during June 2011 the first
defendant did not vacate the said premises and remained
in occupation
thereof until the 3
rd
October 2011 when it vacated the
premises.
[8] The first
defendant from time to time whilst still being in occupation of the
premises made certain payments to the plaintiffs.
Whilst still being
in occupation of the premises the first defendant was liable in terms
of clause 26.02 of the Standard Terms
and Conditions to pay all
amounts provided for in the lease as if the lease was still in force.
[9] The plaintiffs
claim three amounts from the defendants. Firstly, R93 066,75
(particulars of claim par. 13.5) being amounts due
as rent in terms
of the lease agreement. Secondly, R93 964,50 (particulars of claim
par. 14.4) being allegedly in respect of the
reasonable costs of
restoring the premises to a good condition after the first defendant
vacated the premises. Thirdly, R88 608,24
(particulars of claim par.
15) being in respect of future loss of rental.
[10]
The first defendant called one witness to testify namely a Mr.
Carelsen. He testified that when the first defendant moved into
the
premises in October 2004 in terms of the first lease it was an empty
shell with nothing in there and the walls were damaged
. The first
defendant fixed the walls and they installed shop fittings that
suited the specific purposes of the first defendant
and installed
counters and a hung ceiling. The first lease between the parties with
regard to the premises commenced on 1 October
2004 and lapsed on 30
September 2007 and the second lease between them commenced on 1
October 2007 and was to lapse on 30 September
2011. On the 12
th
August 2011 the plaintiffs obtained default judgment against the
defendants for
inter
alia
cancellation
of the lease in the Magistrate’s Court after they summonsed the
defendants for arrear rental. The amount owing
in terms of the
default judgment was paid by the defendants.
[11] He testified
that the first defendant removed everything they installed during the
currency of the lease, when the premises
was vacated, the walls were
plastered and everything was left in a perfect condition. He
testified that he did not see the premises
again after the first
defendant vacated from it.
[12] It was put to
him that the first defendant did not get the consent of the
plaintiffs to remove the ceiling and fittings but
he stated that the
plaintiffs’ centre and operational managers consented and
handed them the keys to remove the belongings
of the first defendant
and to bring the place in the same good condition. This was not
disputed by the counsel of the plaintiffs
in Carelsen’s
cross-examination and no evidence in rebuttal was led by the pa
intiffs.
[13] The area
manager of the plaintiffs testified too. He stated that when he saw
the premises it was in a good nice condition.
He stated that the
procedure is that they get a quotation before renovation is done. One
thing that lacked in the evidence of the
plaintiff’s’
witness is that he did not state that it was their contractor that
renovated the premises bearing in mind
that the evidence of Carelsen
was to the effect that the first defendant cleaned and repaired the
premises themselves.
[14] The area
manager testified that he was not around in 2004 and could not give
any evidence of the state the premises was in
when the first
defendant took occupation.
[15] The plaintiffs
did not present any evidence as to the alleged future loss of rental,
being the third amount claimed.
[16] In the premises
the plaintiffs are entitled to the first of the three amounts (being
in respect of the rent whilst the first
defendant was still in
occupation of the premises.) it is owing and was in any case
admitted. The claim with regard to the second
amount was not proven.
The contractor was not called and although the amount was admitted
the merits were disputed. The claim with
regard to the third amount
was also not proven.
[17] The defendants
raised a defence to the effect that the plaintiff could not base a
claim on the cancelled contract. In this
case, however, the amount
was admitted and liability was not disproved.
[18]
The end result is that the plaintiffs succeed regarding the first
amount and the claim cannot be met by the maxim
ne
bis in idem
(“once
and for all rule”) (see Union Wine Ltd. V E. Snell and Co. Ltd
1990 (2) SA 189
(C)); but fail with regard to the second and third
amounts claimed. It will only be fair if no costs are awarded.
[19] The following
order is made:
1. Judgment is
granted to plaintiff with regard to the first portion of the claim
namely for R93 066,75 (particulars of claim par.
13.5) being an
amount due as rent in terms of the lease agreement, with interest on
it at 14% per year calculated from the date
of issuing of the summons
to the date of payment of the R93 065,75.
2. The plaintiffs’
claim for the second and third portions of the claim namely for
respectively R93 964,50 (particulars of
claim par. 14.4 being
allegedly in respect of the reasonable renovation costs of the
premises after the first defendant vacated
the premises ) and R88
608,24 (particulars of claim par. 15 being in respect of loss of
future rental.) is dismissed.
3. Each party must
pay its own costs.
The plaintiffs’
counsel: Adv. G.T. AWAKOUMIDES
The plaintiffs’
attorney: Halse, Havemann & Lloyd
Ref. Mnr. Van
Stade/Cindy
Tel. 012 348 5534
The defendants’
counsel: Adv. D.A. JACOBS
The defendants’
attorneys: Mark Efstratiou Inc.
TEL. 012 809 4301
REF. Mr.
Efstratiou/E 10880