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[2012] ZAKZDHC 7
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Maribo Media (Pty) Ltd t/a Maribo Outdoor Media v Body Corporate of the Chartwell Centre Scheme (1456/2012) [2012] ZAKZDHC 7 (23 February 2012)
In
the KwaZulu-Natal High Court, Durban
Republic
of South Africa
Case
No : 1456/2012
In
the matter between :
Maribo
Media (Pty) Ltd t/a Maribo
Outdoor
Media
…...............................................................................................
Applicant
and
The
Body Corporate of the Chartwell
Centre
Scheme
….........................................................................................
Respondent
Judgment
Lopes J
[1] The applicant in this matter
carries on business providing a variety of media and advertising
services, including the sourcing
and leasing of outdoor advertising
sites. It concluded a series of agreements with the respondent in
terms of which the respondent
granted the applicant permission to
erect advertising structures on the north and south facing walls of
its property known as Chartwell
Centre in Umhlanga Rocks,
KwaZulu-Natal.
[2] The basis of the agreement was
that the respondent allowed the applicant to erect advertising
structures and to advertise for
its clients on those structures, and
in return the applicant paid to the respondent a monthly rental. The
applicant paid the rental
to the respondent out of income which it
received from an advertising agency (in this case referred to as
Rapid Media Outdoor Services
(Pty) Ltd (‘Rapid’)) who in
turn procured the ultimate client, Cell C, whose wares were
advertised on the billboards.
[3] The contract endured for a number
of years with the Cell C advertisements being flighted on the
structures erected on the respondent’s
building by the
applicant. On the 16
th
September 2011 the respondent’s
attorney addressed a letter to the applicant. That letter was clearly
precipitated by concerns
which the respondent’s insurers had
regarding the structures erected on the respondent’s building
by the applicant.
In the letter the respondent requested that the
applicant provide certain information to it. In addition it referred
to an outstanding
amount of rental as at the 31
st
August
2011 being a sum of R60 499,74 in respect of which the respondent’s
attorney urged the applicant ‘to ensure
that the account be
brought up to date as a matter of urgency.’
[4] On the 20
th
October
2011 a letter was addressed to the applicant by the respondent’s
attorney, purporting to cancel the agreement. The
cancellation was on
the basis of the applicant’s failure to comply with the terms
of what it referred to as ‘the breach
letter’ of the 16
th
September 2011. It recorded that ‘the material breaches of the
material terms of the Agreement which we have referred to
in the
breach letter, have not been rectified’.
[5] As a consequence of the
respondent’s purported cancellation of its agreement with the
applicant, Rapid was notified that
an entity known as Africa Responds
Clearly Media Holdings (Pty) Ltd (‘Arc’) claimed to have
been given the rights to
place advertising on the applicant’s
billboards, and Rapid was requested to pay Arc for that advertising
as from the 1
st
December 2011. Rapid had adopted the
attitude of a stakeholder and refused to pay either Arc or the
applicant.
[6] The upshot of the aforegoing is
that the applicant would be denied its income from Rapid. According
to the applicant’s
Director of Development, one Dwarikapersadh,
this revenue represents the applicant’s largest single source
of income and
is allegedly its only steady and reliable income
stream, constituting approximately half of the applicant’s
monthly turnover.
The applicant is consequently dependant upon that
income in order to continue operating and, in addition were that
income to be
suspended, the applicant would be compelled to cancel
various agreements with independent contractors who operate as its
staff.
[7] Accordingly the applicant has
brought an application for urgent relief in terms of which it seeks a
rule nisi declaring the
purported cancellation of the lease agreement
to be invalid, with interim relief interdicting and restraining the
respondent from
interfering with its rights in terms of the lease
agreement and its use of the respondent’s building to
advertise; and further
interdicting and restraining the respondent
from claiming or receiving any amounts in respect of the advertising
on its building
other than rental from the applicant.
[8] The respondent has opposed the
interim relief and answering and replying affidavits were delivered
and the matter was argued
before me. The respondent has raised the
following points in opposition to the relief sought by the applicant
:-
the citation of the applicant;
the failure of the applicant to join
Rapid and Arc in the application;
the fact that the applicant has
failed to make out a case for urgency; and
the fact that the applicant has
failed to make out a case for the relief sought.
[9] With regard to the citation of the
applicant, the applicant was originally cited in the application
papers as ‘Maribo
Outdoor Media (Pty) Ltd’. In its
answering affidavits the respondent pointed out that no such company
existed and submitted
that ‘Until the above issue has been
clarified, it is denied that the Applicant is a duly registered
company and that it
has the necessary
locus standi
to bring
this application.’ Together with its replying affidavit the
applicant filed a notice in terms of Rule 28 to amend
the citation of
the applicant and to reflect it as ‘Maribo Media (Pty) Ltd
trading as Maribo Outdoor Media’. The deponent
to the replying
affidavit has referred to the incorrect citation of the applicant as
being a mis-description which he states was
‘bona fide and
inadvertent’.
[10] I can see no prejudice to the
respondent in allowing the applicant to correct its citation, and I
do not view the mis-description
of the applicant (which has now been
corrected) as a basis for denying the applicant the relief which it
seeks. The incorrect citation
of the applicant was merely a misnomer.
If I were to dismiss the application on that basis alone, another
application would simply
be brought reflecting the correct name of
the applicant. In my view that would be a complete waste of time and
the court’s
resources. The amendment of the citation of the
applicant occasions no prejudice whatsoever to the respondent. No
adjournment seems
necessary in order to deal with the matter.
See
Devonia Shipping Ltd v M
V Luis (Yeoman Shipping Co Ltd Intervening)
1994 (2) SA 363
(C)
at 369 F – 370 B and
Trust Bank Bpk v Dittrich
1997 (3)
SA 740
(CC).
[11] With regard to the non-joinder of
Rapid and Arc :-
annexed to the applicant’s
founding affidavit is a letter addressed to Rapid, notifying it of
the applicant’s intention
to institute legal proceedings, and
enquiring whether it wished to be joined in the proceedings as a
third party. Rapid contented
itself with replying that per its
previous undertaking, it would only pay against an appropriate costs
order, and that if any
costs were awarded against it, those would be
deducted from any amount outstanding, presumably, to be paid by it.
Having been
afforded the opportunity to be joined, and having
declined to do so, I do not believe it can be validly argued that
Rapid should
have been joined in the application.
the position of Arc is somewhat
different to that of Rapid. It is certainly correct that if an order
is granted, the effect of
which is to ensure that the payments for
the advertising are made by Rapid to the applicant instead of to
Arc, that Arc will
be deprived of an income;
however, this is only a financial
interest, and Arc finds itself in the analogous position of a
sub-tenant where a lease is cancelled.
In my view the interest of
Arc is a financial interest which is only an indirect interest in
the current dispute between the
applicant and the respondent. Arc
does not have a substantial and direct interest in the litigation
and in the outcome of it.
It is not a party to the contractual
arrangements between the applicant and the respondent;
not only does Arc not have a direct
and substantial interest in the matter, I do not believe that it can
be submitted that Arc
is a necessary party to these proceedings. Any
order which is made in these proceedings, and particularly because
it would relate
to interim relief only, does not affect the position
of Arc vis-a-vis the respondent and any contractual arrangements
which the
respondent may have with the applicant.
[12] I am accordingly of the view that
the non-joinder of Rapid and Arc in this application is no basis for
refusing it.
[13] Mr
Phillips
also submitted
that the applicant had not made out a case for urgency. He submitted
that this was a matter of ‘commercial
urgency’ and that
the applicant should be left to pursue whatever normal remedies for
damages which it may have as a result
of any unlawful cancellation by
the respondent. In addition he submitted that no case had been made
out to demonstrate that the
applicant would suffer any imminent loss
were the application not to be entertained by me.
[14] I am in respectful agreement with
the dicta of Goldstone J in
Twentieth Century Fox Corporation and
another v Anthony Black Films (Pty) Ltd
1982 (3) SA 582
(W) at
586 F - G, where he stated :-
‘
In my
opinion the urgency of commercial interests may justify the
invocation of Uniform Rule of Court 6 (12) no less than any other
interests. Each case must depend upon its own circumstances. For the
purpose of deciding upon the urgency of this matter I assumed,
as I
have to do, that the applicant’s case was a good one...’
See also
Bandle Investments
(Pty) Ltd v Registrar of Deeds and others
2001 (2) SA 203
(SE) at
213 E – F.
[15] In my view the public’s
constitutionally enshrined right of access to justice would be poorly
served were applicants
to be barred from bringing urgent applications
where they have shown that the very survival of their business, and
the livelihood
of shareholders, employees and others dependant upon
it, are in jeopardy unless an application is heard urgently.
[16] I am satisfied that the applicant
has made out a case for urgency. The respondent has delivered its
answering affidavits, and
the applicant has delivered replying
affidavits. There was no request from the respondent’s counsel
that the matter be adjourned,
albeit for a short period of time, to
enable further affidavits to be filed. I accept that a fuller and
more complete answer to
the applicant’s application papers will
be delivered in due course by the respondent. However, I am of the
view that there
is no prejudice to the respondent in my hearing this
application, and I accept the reasons for urgency set out in the
applicant’s
affidavit to the effect that cutting off the income
stream which it hitherto enjoyed pursuant to its contractual
arrangements with
the respondent, would imperil the very survival of
the applicant.
[17] What finally needs to be
considered is whether the applicant has established the requisites
for an interim interdict. With
regard to a prima facie right, I have
considered all the affidavits. The contractual arrangements between
the parties prior to
cancellation appear to be common cause. The
cancellation itself has been attacked on the basis that the applicant
was not in default
and that the so-called ‘breach letter’
did not sufficiently comply with the requirements of such a notice as
to bestow
upon the respondent the right to cancel.
[18] It would appear that the
complaints of the respondent in the ‘breach letter’ were
either matters with which the
applicant claims to have already
complied, or were matters not covered by the terms of the agreement.
The outstanding amount alleged
of R60 499,74 as at the 31
st
August 2011 is alleged by the applicant not to have been due at that
stage and that the only amount which was ‘in arrears’
was
R30 000, which was paid. The applicant contends that it was in any
event not due because it was claimed by the respondent on
a basis not
covered by the contractual arrangements between the parties. In my
view the applicant’s right is accurately described
as ‘prima
facie established though open to some doubt’ as envisaged in
Olympic Passenger Service (Pty) Ltd v Ramlagan
1957 (2) SA 382
(D).
[19] There is no doubt that the
applicant has a well-grounded apprehension of irreparable harm if
interim relief is not granted,
and it ultimately succeeds in
establishing that the contract was wrongly cancelled by the
respondent. It will be left with insufficient
operating income to
continue its business.
[20] I am satisfied that the applicant
has no other satisfactory remedy in that it will be cold comfort to
it to recover damages
in due course, if its business has, due to a
lack of operating capital, collapsed and it has lost its goodwill.
[21] With regard to the balance of
convenience, the prejudice to the applicant if the relief is not
granted clearly outweighs the
prejudice to the respondent if the
application is granted. If the application is not granted the
applicant is in danger of losing
its business. If the application is
granted the respondent will continue to receive the rentals to which
it was entitled in terms
of the contractual arrangements between the
parties and which would appear to expire at the end of December 2012.
[22] I am accordingly of the view that
the applicant has established its entitlement to interim interdictory
relief.
[23] With regard to the form of the
order sought, Mr
Phillips
for the respondent criticised the
form of prayer 2.3 in which an interdict was sought restraining the
respondent from ‘diverting
monies due to the applicant in
respect of the sites’. I raised this matter with Ms
Annandale
SC who appeared for the applicant and she provided me with an
alternative prayer which I have incorporated in the relief granted
to
the applicant.
[24] In all the circumstances I make
the following order :-
A rule nisi is issued calling upon
the respondent to show cause, if any, why an order in the following
terms should not be granted
:-
declaring that the respondent’s
purported cancellation of the lease agreement concluded between the
applicant and the
respondent in respect of advertising sites on the
north and south walls of Chartwell Centre is invalid;
interdicting and restraining the
respondent from interfering with the applicant’s rights in
respect of the lease agreement
and its use of the sites;
interdicting and restraining the
respondent from claiming or receiving any amounts in respect of
advertising on the sites, other
than rental from the applicant, and
that Rapid Media Outdoor Services (Pty) Ltd be directed to continue
to pay to the applicant’s
agents JB Media Connection the
revenue applicable in accordance with the contract annexed to the
applicant’s replying
affidavit marked ‘AJD4’.
Those payments are to be made provided that the applicant continues
to pay rental to the
respondent timeously and in full.
The relief set forth in
sub-paragraphs 1(b) and (c) above shall operate as interim orders
with immediate effect, and are to continue
to apply, and the rule is
extended, until confirmed or discharged by an order of this court.
The costs of this application and the
costs of the opposed hearing on the 20
th
February 2012
are reserved for the decision of the court finally deciding the
application.
Date of hearing : 20
th
February 2012
Date of judgment : 23
rd
February 2012
Counsel for the Applicant : A M
Annandale SC with K Chetty (instructed by Maraj Attorneys)
Counsel for the Respondent : D
Phillips (instructed by MGD Attorneys)