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2012
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[2012] ZAKZDHC 52
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Calicom Trading 54 (Pty) Ltd and Another v Gowrie Mews Investments CC (8044/12) [2012] ZAKZDHC 52 (18 September 2012)
In
the KwaZulu-Natal High Court, Durban
Republic
of South Africa
Case
No : 8044/12
In
the matter between :
Calicom
Trading 54 (Pty) Ltd
....................................................................
First
Applicant
Protea
Mall Body Corporate
.................................................................
Second
Applicant
and
Gowrie
Mews Investments CC
.....................................................................
Respondent
Remo's
Coffee Shop
.
.....................................................
Party
seeking leave to intervene
Judgment
Lopes J
[1] This is a vindicatory application
in which the applicants seek an order for the ejectment of the
respondent from an exterior
area measuring approximately 20m²
situated in the sectional scheme Protea Mall situated at Lighthouse
Road in Umhlanga Rocks,
north of Durban. In this judgment I shall
refer to the first applicant as ‘Calicom’, the second
applicant as ‘the
body corporate’, the respondent
interchangeably as ‘the respondent’ or ‘LM Grill’
depending on the
context, and the intervening party as ‘Remo’s’.
Background
:
[2] The history of the matter may be
summarised as follows :
Calicom is the owner of all the
sectional title units contained in the Protea Mall and the body
corporate is the body corporate
constituted for the Protea Mall in
terms of the
Sectional Titles Act, 1986
;
the Protea Mall is a busy commercial
centre on the corner of Chartwell Drive and Lighthouse Road in
Umhlanga Rocks;
for at least the last 18 years the
business of a restaurant has been conducted, under various guises,
from the premises situated
at Shops 5/6 of the Protea Mall;
the current tenant of those shops is
the respondent, which carries on the business of a restaurant under
the name and style ‘LM
Grill’, pursuant to an agreement
of lease concluded between Calicom and the respondent on the 26
th
March 2010;
on the eastern side of LM Grill and
immediately adjacent to it are shops 4, 3, 2 and 1 in the Protea
Mall, which are occupied
by Remo’s which runs a restaurant
from the premises under the name and style ‘Remo’s
Coffee Shop’ pursuant
to an agreement of lease concluded
between Calicom and Remo’s on the 14
th
December
2011;
shops 1, 2, 3, 4 and 5/6 all face
northwards onto Lighthouse Road. Originally the fronts of all these
shops formed a straight
line, and were set back from the pavement on
Lighthouse Road. Prior to the respondent acquiring the business of
LM Grill, shops
5/6 were extended so that the north-facing front of
LM Grill was extended to the edge of the Lighthouse Road pavement.
The eastern
side of shops 5/6 then formed an ‘L’ shaped
courtyard in front of Remo’s and that is the area in
contention
(‘the courtyard’).
the dispute between the parties is
that LM Grill claims that it and its predecessors have always had
the right to use, and have
in fact used, the courtyard as outside
seating for their diners, whilst Calicom maintain that LM Grill has
no right to use the
courtyard and seeks the ejectment of LM Grill
from the courtyard;
when Remo’s concluded their
agreement of lease with Calicom, Remo’s carried out extensive
renovations to the premises
of shops 1, 2, 3 and 4 and began to
enclose the area between the fronts of those shops and the pavement
edge of Lighthouse Road.
As those renovations included converting
the courtyard, effectively excluding the respondent from occupying
it, the respondent
successfully brought a spoliation application to
restore its possession of the courtyard.
[3] These vindicatory proceedings were
thereafter initiated by way of an application for the ejectment of LM
Grill from the courtyard.
The application was opposed and affidavits
were delivered. Remo’s brought an application for leave to
intervene in the vindicatory
application. It has been agreed between
the parties that :
Remo’s will be allowed to
intervene as a respondent;
neither Remo’s nor LM Grill
will seek any order of costs against the other in these proceedings;
Remo’s does not, as an
applicant, seek the ejectment of LM Grill from the courtyard, but
appears in order to place, what
it regards as relevant
considerations, before the Court.
Order sought
:
[4] The matter was referred for the
hearing of oral evidence pursuant to an order granted by this court
on the 21
st
August 2012 and in terms of which I am
required to determine :
whether the courtyard area referred
to in Clause 21(c) of the lease agreement concluded between Calicom
and LM Grill refers to
the contested area (and which I refer to in
this judgment as ‘the courtyard’) or to the U-shaped
courtyard or piazza
described by Calicom as the central courtyard of
the Protea Mall (which I refer to in this judgment as ‘the
central courtyard’);
if the reference to ‘the
courtyard’ in Clause 21(c) of the LM Grill lease does not
refer to the courtyard, whether
the lease agreement falls to be
rectified;
failing rectification, whether an
agreement was expressly, tacitly or by conduct concluded between
Calicom and LM Grill entitling
it to use the courtyard as part of
its restaurant;
if LM Grill has a right to occupy the
courtyard area pursuant to one of the two bases set out above,
whether that right endured
for the duration of the lease, and
whether Calicom had the right to terminate that right separately
from the lease agreement,
and if so on what grounds;
in the event of all of the above
failing, whether Calicom represented expressly or by conduct to LM
Grill that it was given permission
to use the contested area as part
of its business for the duration of the lease, whether LM Grill
acted upon that representation
by incurring expenses and acting to
its prejudice such as to give rise to an estoppel preventing Calicom
from withdrawing its
apparent permission, and obtaining the
ejectment of LM Grill from the contested area for the duration of
the lease;
the use to which LM Grill and its
predecessors in occupation had put the contested area.
[5] It was common cause between the
parties that I was to take into account the evidence contained in the
affidavits in the spoliation
application, the vindicatory application
and the application for leave to intervene brought by Remo’s,
and the oral evidence
heard before me in arriving at a decision on
the matters placed before me. I have also read and had regard to a
Rule 37
bundle containing extensive answers by the representatives of
LM Grill to queries raised by the other parties. This included
details
of the defence of LM Grill to the vindicatory application.
The oral evidence hearing
:
[6] At the outset of the oral evidence
hearing it was agreed between the parties that LM Grill would start
its case without conceding
any onus or obligation to do so.
[7] The first witness was Ivin
Chutergun Rattan (‘Rattan’) who had deposed to the
answering affidavit in the vindicatory
application and the replying
affidavit in the spoliation application on behalf of LM Grill. Rattan
testified that :
he was the sole member of the
respondent, Gowrie Mews Investments CC, the owner of LM Grill. He
had purchased the business of
the restaurant from one Praveen
Govinthu (‘Govinthu’) pursuant to a purchase and sale
agreement concluded on the
27
th
May 2010, although the
effective date of the agreement was recorded by the parties to it as
being the 15
th
August 2009;
the agreement of sale makes no
reference whatsoever to the extent of the premises upon which LM
Grill operated prior to its purchase
by Rattan. Rattan pointed out,
however, that in the notice given in terms of s 34 of the Insolvency
Act, 1926 and which was published
on the 2
nd
June 2009 in
a local newspaper, reference is made to the fact that Govinthu
intends to dispose of the business carried on as
‘LM GRILL –
UMHLANGA ROCKS at shop 5+ 6 and existing Patio Protea Mall,
Lighthouse Road, Umhlanga Rocks ...’.
(Although it was the
obligation of Govinthu to publish the notice, Rattan did so,
presumably to protect himself);
Rattan told the court that he had
agreed with Govinthu that he would pay for the renovations of the
restaurant, that Govinthu
would then continue to run the restaurant
for a month to ensure a smooth takeover, and Rattan would run it
thereafter;
basically the restaurant was gutted
and rebuilt from scratch with the exterior walls being re-tiled. At
the same time the courtyard
was re-tiled and a low wall around the
courtyard removed and replaced. At some stage the re-built walls
around the courtyard
had to be reduced in height, with one portion
of the wall having to be removed because it constituted an
obstruction to pedestrian
traffic wanting to access the neighbouring
premises in Shop 4, which was then operating as a liquor store under
the name and
style ‘Lighthouse Liquors’;
during the reconstruction process the
landlord was aware of the work as it was progressing at all times
particularly because it
was necessary to deal with complaints of
noise and the removal of construction rubble;
when the renovations were complete
the courtyard was used as part of LM Grill’s premises;
the courtyard is used as a seating
area with a number of tables and chairs being placed on it for use
by restaurant patrons. The
tables and chairs are, for security
reasons, placed inside the restaurant at night when the business is
not operating;
as was evident from photographs
produced in evidence, on the exterior eastern wall of LM Grill were
two loudspeakers used to provide
music for the outside area;
during the construction work one Mrs
Bell, described by Rattan as the centre manager, visited the
building works from time to
time;
three entrances to the LM Grill were
constructed or replaced – double doors facing onto the
Lighthouse Road pavement on
the northern side of the restaurant, an
entrance on the western side which facilitated patrons coming from
the nearby Protea
Hotel, and an entrance on the eastern side
adjacent to the premises of Lighthouse Liquors and at the end of a
walkway running
across the front of Shops 1, 2, 3 and 4 and
providing an entrance to LM Grill. This was the main entrance to the
restaurant behind
which there was a reception desk, reservations
book, etc.
[8] Under cross-examination, Rattan
conceded that he had never met Mrs Bell personally and all
negotiations with her were via the
manageress of LM Grill. When he
had purchased the business of LM Grill, the courtyard had been
described to him by Govinthu as
a ‘smoking area’. The
word ‘patio’ which appears in the Insolvency Act notice
was his word and not that
of Govinthu. Rattan conceded that he never
thought of the disputed area as ‘a courtyard’.
[9] With regard to the negotiations
conducted with Calicom for the conclusion of the lease agreement,
Rattan conceded that he had
never (up until he gave evidence) read
the written lease, nor had Mr Bell, the director of Calicom who
signed the lease, ever discussed
the courtyard with him. Rattan’s
only reliance for believing that the LM Grill premises included the
use of the courtyard
came from Govinthu.
[10] Rattan conceded he had only ever
met Mr Bell twice – once during a settlement meeting, and once
whilst negotiating the
lease agreement, when Govinthu told Mr Bell
that Rattan would be taking over the business of LM Grill. The only
discussion between
them related to possible business coming the way
of LM Grill from patrons of the Protea Hotel situated at the centre.
[11] Rattan testified that during the
2009 renovations the then existing low sandstone-type wall around the
courtyard was demolished,
and that the new wall which was erected,
fitted into the decor of the new exterior of LM Grill.
[12] After the 2009 renovations, the
then tenant of Shop 4, Nicholas Adrian Orphen (‘Orphen’)
who ran the business of
Lighthouse Liquors from Shop 4 (a bottle
store) complained to Calicom and LM Grill that the re-built wall and
umbrellas obscured
his premises. As a result Rattan caused the wall
to be considerably lowered, and a portion of the wall running between
the pavement
margin of Lighthouse Road directly towards the premises
of Shop 4 (effectively forming an ‘L’ shape around the
courtyard)
was demolished. The discussions surrounding this had been
conducted by one Nishani Deeplall, the manageress of LM Grill. Rattan
had not personally been involved in these discussions.
[13] Much debate ensued in the
cross-examination of Rattan regarding the fact that LM Grill regarded
the eastern door leading out
onto the courtyard as its main entrance.
This was despite the fact that two doors fronted onto the Lighthouse
Road pavement containing
stickers advertising the restaurant, the
credit cards which it accepted, etc. Photographs which formed Exhibit
‘A’
also showed a ‘Specials’ board outside
these doors. Rattan, however, was adamant that the main entrance was
the eastern
doorway. It was common cause that there was also an
entrance on the western side of LM Grill, mostly used by pedestrians
from the
nearby Protea Hotel.
[14] Rattan was adamant that the use
of the courtyard was exclusively the right of LM Grill.
[15] The respondent’s next
witness was Ronnie Etty a waiter employed by LM Grill. He had worked
on the premises for the past
18 years. During that time it had been
conducted as a restaurant with various names. The remainder of his
evidence may be summarised
as follows :
the courtyard area had been used for
customers, both for eating and drinking for approximately seven
years prior to the restaurant
being taken over by Govinthu;
Govinthu had sold the restaurant to a
Dr Premchund who had run the restaurant for approximately a year
before handing it back
to Govinthu. During that time there had been
no changes in the use of the courtyard;
Etty was the person depicted in a
photograph (Exhibit A, page 73), which was taken in 2009 showing the
premises prior to the renovations
carried out by Rattan. It shows
the sandstone-type wall which surrounded the courtyard at that
stage. Etty’s evidence was
that that wall had been up there
for five years since approximately 2004. He testified that that
sandstone-type wall had been
built by Govinthu;
Etty told the court that he regarded
Mrs Bell as the owner of the property. She would come around on an
almost daily basis to
check that everything was clean. He could not
recall whether she had had anything to do with the knocking down of
the reconstructed
wall following the complaints by Orphen.
Etty said that tables and chairs, etc
which were used in the courtyard were put inside the premises of LM
Grill at night and put
out again at approximately 11am when LM Grill
opened for business. He remembered that there had been problems with
the umbrellas
obscuring the premises at Shop number 4 –
Lighthouse Liquors – and that they would only put the
umbrellas up before
4.30 in the afternoon if a customer specifically
requested it;
under cross-examination Etty conceded
that when Orphen had had problems with the blocking of the view of
his premises he had spoken
to the manageress, Debbie and the
waiters;
Etty confirmed that the premises of
LM Grill had been extended to the edge of the pavement and enclosed.
At that stage the premises
were leased by Govinthu together with
Shops 1, 2, 3 and 4;
Etty confirmed that the complaints
regarding the obscuring of the Lighthouse Liquors sign had started
when Govinthu sold that
business and Orphen took it over in
approximately 2008. He also confirmed that Orphen had complained
about the reconstructed
wall put up by Rattan which then had to be
reduced because it was too high, and because customers could not
easily access the
bottle store.
[16] The next witness for the
respondent was Nishani Deeplall (‘Deeplall’) who had been
employed as a manageress of
LM Grill since September 2009. She was
employed together with another manageress Debbie, and they worked
shifts. Significant aspects
of her evidence were :
that she knew Mrs Bell as the
building manager who came around three to four times a month,
supervising maintenance and upkeep
of the building;
the courtyard area had been used as
seating since she had arrived in September of 2009 and Mrs Bell had
seen this on many occasions;
she had witnessed the reconstructed
wall being lowered and the L shaped portion being removed completely
from around the courtyard;
she was never told that LM Grill had
no right to put tables and chairs in the courtyard, although she
conceded that the umbrellas
could only be opened after 5pm, or if
guests wanted them opened before then, but that the umbrellas would
have to closed thereafter;
Deeplal confirmed that Rattan had
referred to the courtyard as ‘a smoking area’. She
conceded that the agreement concluded
with Orphen regarding the
opening of umbrellas had not involved the centre management;
under cross-examination Deeplal said
that the arrangement with Orphen concerning the umbrellas had been
concluded between Loshnie
the bottle store manageress, and Debbie
the other manageress at LM Grill.
[17] At that stage the case for the
respondent was closed.
[18] Terence Ackroyd Bell (‘Bell’)
then testified that he was a director of Calicom and the controlling
director of
the body corporate. The offices of Calicom were at his
home at Rydal Place in La Lucia. He conducted the administration of
the
Protea Mall together with his wife from that office. There was an
office on the ninth floor of Protea Hotel at the Protea centre
which
was used for meetings with tenants, etc. Calicom was the owner of all
the sectional title units comprising Protea Mall. The
relevant parts
of Bell’s evidence may be summarised as follows :
although Calicom acquired the Protea
Mall in 2004, he could not remember whether at that stage there was
a wall around the courtyard;
negotiations with tenants who were
not ‘national tenants’ (large operations who conducted
business throughout the
country) would be on the basis of a letter
setting out the terms which Calicom required. Calicom would not
negotiate the terms
with any tenants other than ‘national
tenants’;
he had no recollection of seeing the
lease agreement concluded with LM Grill (although he admits having
signed it) and had no
recollection of any meeting with Rattan,
stating that if there had been such a meeting it would have been at
the insistence of
Govinthu;
he admitted that on the 2
nd
February 2010 he had written a letter to Rattan complaining about
non-compliance with the lease agreement including removing
the
umbrellas in the courtyard which were obstructing the view of the
bottle store, at that stage being run by Orphen;
the reference to Clause 21 (c) of the
lease agreement concluded with LM Grill (‘Use of the courtyard
is subject to the authority
of the LANDLORD.’) was a reference
to the central courtyard which leads to the entrance of the Protea
Hotel and is not
the area in dispute between the parties to this
application. That clause was normally contained in all leases
concluded with
tenants whether or not their premises fronted onto
the central courtyard;
prior to Remo’s having done so,
no-one had sought permission to use the courtyard as a seating area
for serving meals;
Bell had been aware of the issue
which had arisen between Orphen and Govinthu regarding the use of
the courtyard. Calicom had
played no role in that dispute. He had
never seen meals being served in the courtyard although he conceded
only driving past
that area of the mall once in every two weeks.
Bell testified that had only eaten once in the LM Grill, as he
tended not to frequent
tenant restaurants, because he did not view
it as being conducive to good staff relations;
in cross-examination Bell conceded
that he ran a lot of buildings and had only a vague recollection of
the events in question.
Any meeting which he would have had with
Rattan at the instance of Govinthu would have been a social meeting;
Bell may have known that Govinthu was
selling the business. Bell accepted that it must have been up to him
to decide whether Rattan
was an acceptable tenant. He conceded that
it could have happened that they had met in his offices at the
Protea Hotel;
Bell was adamant that he would not
have been interested in the terms and conditions of the agreement
concerning the business which
Rattan was purchasing. His only
interest would have been in Rattan as a tenant. He only knew about
the advert which had been
placed by Rattan in terms of s 34 of the
Insolvency Act, once he had seen the papers. He had not seen it
before. He was unable
to comment on the suggestion that the notice
described what Rattan believed he was purchasing;
Bell told the court that he had no
interest in the interior alterations to the restaurant, and would
only have become involved
if the exterior had been altered. He had
no independent recollection of having authorised a two month rental
moratorium when
building operations were going on;
Bell was adamant that he did not
allow the construction of a wall around the courtyard and he was not
aware of the adjustment
that had taken place to its height. Although
he conceded that at the time of the renovations he had given
directions that the
area next to the LM Grill wall had to be level
along the courtyard area, he had never seen the steps outside the
eastern doors
of LM Grill;
he disputed that Etty was correct in
saying that tables had been used in the courtyard for approximately
18 years. Although the
sandstone-type walls may have been built
around the courtyard in 2004, he would never have considered
allowing that;
he conceded that his wife Mrs Bell,
was employed by a management company which operated as an agent of
Calicom. She was expected
to walk around the Protea Mall and check
on cleaning and maintenance staff. He did not wander around the
Protea Mall, because
he was fairly busy;
he conceded that it was possible that
Mrs Bell had inspected the wall which was rebuilt by Rattan in 2009,
and had regulated the
height adjustment of the wall;
Bell could not deny that LM Grill had
made use of the courtyard, placing tables there and serving diners
there since 2009. He
conceded having written the letter dated the
2
nd
February 2010 to Rattan shortly before the conclusion
of the lease. That letter had expressed his annoyance at Rattan’s
failure to comply with the requirements for signing the lease. With
regard to the reference to the removal of umbrellas in item
3 of
that letter, he had known that they had existed there together with
tables and chairs, although he said that they were there
at some
stages and not at others;
in response to the suggestion that
the area had been used since September or November of 2009 as an
eating area and that Rattan
had purchased the business on that
basis, Bell stated that he was not aware of those facts, and had he
known that they were serving
food from the courtyard he would have
reacted to that and not allowed the serving of food to continue;
Bell stated that Remo’s, as the
tenant for Shops 1, 2, 3 and 4 would be entitled to use the area in
front of those premises
as far as they extended to the boundary of
Calicom’s property, which was the pavement edge in Lighthouse
Road . He said
that this would have to be done by written
arrangement, and although he was unable to point to any writing
regarding Remo’s,
he maintained that such writing should
exist;
in cross-examination by Ms
Annandale
SC for Remo’s, Bell conceded that Govinthu had previously
operated a trading store from Shops 1, 2, 3 and 4 which had been
later reduced to Shops 1 to 3 with a bottle store being operated by
him from Shop 4. He then stated that he was not sure whether
Govinthu was concurrently a tenant in all four premises;
Bell was adamant that unless a
dispute between tenants actually involved Calicom, he tried to stay
out of such disputes. He knew
that the courtyard was being used, but
did not know that it was being used for food and would have reacted
if anyone had complained.
He conceded that there had been many
complaints made by Orphen regarding the courtyard and the use of
chairs and tables. He had
regarded his letter of the 2
nd
February 2010 to Rattan as a final warning from the landlord;
Bell referred to the fact that the
municipality had originally paved the pavements along Lighthouse
Road and the courtyard had
been paved in precisely the same
material. The municipality had then put up a public bench and
telephone exchange and postbox
on the premises owned by Calicom. He
had had to get this sorted out to enable the tenants to be able to
use the area;
on his instructions, Calicom’s
attorneys had eventually addressed a letter to LM Grill, withdrawing
any permission which
it may have perceived it had to use the
courtyard.
in response to questions by the court
Bell conceded that he was concerned not to allow anyone to use
tables in the courtyard for
eating. However in response to the
question whether he had been aware that they were being used for
that purpose he had stated
‘I gather so’;
Bell conceded that the courtyard
could have been used for eating and drinking for years and he may
not have known about it. Bell
stated that the complaints he had
received were not about eating, but about the tables and chairs
being left there and the presence
of umbrellas which obscured the
view of Lighthouse Liquors.
[19] The next witness for the
plaintiff was Karen Bell (‘Mrs Bell’) an employee of
Focus Administration which had its
offices at the home shared by her
and Bell. She was employed as a bookkeeper who sent out rent invoices
and checked on the cleaners
and painters at the Protea Mall. No
particular building or area was her responsibility.
[20] Mrs Bell was a particularly
reluctant witness and when asked :
how she introduced herself to
tenants, she said that she would never have had to do so because
everyone knew who she was;
why she went to the Protea Mall, Mrs
Bell said that she does everything at home and delivers it to the
ninth floor at Protea Mall;
when asked if a tenant wanted to
speak to her, what they would do, Mrs Bell replied that they do not
speak to her and have to
email her;
what occasion she would have had to
give instructions to tenants, she replied that she did not have too
many occasions to do so.
If there was a problem, she would invite
tenants to write a letter.
[21] When it was put to her that there
was evidence that she had gone regularly to the Protea Mall, she
maintained that she had
gone to deliver documents to the ninth floor
and to check on the painters and cleaners. Mrs Bell had no
recollection of when the
sandstone-type wall had been put up or taken
down. She also had no idea when the stairs on the eastern side of LM
Grill were built.
[22] In reply to the suggestion under
cross-examination that she had acted as if she were the owner of the
Protea Mall (according
to witnesses) she said that was probably
because people had seen her talking to cleaners and painters. She
conceded having gone
to the Protea Mall in the last eight months and
eventually conceded that she had previously gone there on a daily
basis just before
lunch. She would invariably go to a room where the
cleaners worked. She did not circulate throughout the mall. She
denied having
any involvement in resolving the problem with tables
and chairs and umbrellas in the courtyard.
[23] Mrs Bell said that she may have
seen the steps leading from the sliding double doors but had never
seen the speakers used to
play music in the courtyard. She was aware
of the renovation works which were being done, and any complaint
which she received
in writing from Orphen, she had passed onto Bell.
She did not regard the building operations which took place as her
concern, and
did not regard herself as checking on the tenants. In
her view the courtyard was simply used for the storage of tables and
chairs
which, everytime she went past, were piled up outside the
bottle store against the windows.
[24] The plaintiff then closed its
case.
[25] The first witness for Remo’s
was Orphen who purchased and operated the business described as
Lighthouse Liquors in Shop
4 in Protea Mall from the 1
st
January 2008. He had purchased it from one Neil Venter and thereafter
sold the business in 2010 shortly before the start of the
World Cup.
Apparently Venter had purchased the business from Govinthu and had
run it for approximately a year.
[26] When Orphen purchased the
business, the courtyard had contained the sandstone-type wall running
in an L shape along the front
of the pavement edge and then turning
in towards his premises. He thought that was part of the complex.
Patrons wishing to access
the business had to walk past the wall to
get into the bottle store. He conceded that although tables, chairs
and umbrellas had
been in place in the courtyard, the umbrellas were
not normally open. He had had a problem with the courtyard being used
because
it was right in front of his shop, and he wished to have his
business identified as a business separate and distinct from LM
Grill.
Because he was new and needed to learn the business and had no
knowledge of how matters worked, he had initially not complained.
Venter had told him that there was a loose arrangement that LM Grill
could use the area provided there were no umbrellas and no
chairs in
the passages immediately outside Shops 1, 2, 3 and 4.
[27] The bottle store was run by one
Loshnie who controlled a staff of six. She was supervised by a
manageress who moved between
the three bottle stores owned by Orphen
and his associates. Because he had had a woman working on her own in
charge of the shop,
he had installed cameras but was happy to have
other people from LM Grill milling around in front of the store. He
regarded this
as an additional security measure.
[28] Problems however arose when the
umbrellas were up and the LM Grill staff ignored his requests to take
them down. He recalled
the sandstone-type wall being demolished in
2009 and the new wall being erected. It was higher than the
sandstone-type wall and
made the area feel completely enclosed.
Because the cladding was the same as LM Grill it looked like a
continuation of LM Grill
and blocked his premises.
[29] After his complaints were reduced
to writing, the wall along the pavement was reduced in height
considerably and the ‘L’
shaped section removed. At some
stage there was a suggestion by someone at LM Grill that a roof would
be put over the courtyard,
but he made it clear that he would object
to that procedure. From time to time he had sat in the chairs outside
the area.
[30] The dispute arose over the
umbrellas because they were being put up during trading hours and
would block his signage. He complained
to the manageress at LM Grill.
He disputed that he accommodated LM Grill by allowing them to have
umbrellas up during the day if
patrons wished it.
[31] Orphen ended up having an
argument with Govinthu over these issues, and Govinthu threatened him
by saying that his liquor licence
would be taken away if he continued
with his complaints. Once the rebuilt wall had been reduced, Orphen
was of the view that a
working arrangement had been reached, and he
stopped complaining. Three months later, after Govinthu had sold the
business, the
issue of umbrellas was an ongoing problem, and on the
2
nd
November 2009 Orphen addressed a letter to LM Grill
threatening to charge them rental for the use of the courtyard,
failing which
steps would be taken against LM Grill by the landlord,
including a claim for compensation for loss of income suffered by
Orphen’s
business. An accommodation was reached, partly because
of the threats from Govinthu, and partly because Rattan’s
brother
supplied alcohol to Orphen’s business, which Orphen
considered would become a problem for him. He conceded that until he
had copied the landlord with the letter of the 2
nd
November 2009 which he addressed to LM Grill, the landlord may have
been under the impression that everything was in order.
[32] Orphen denied that waiters
usually operated in the courtyard area. He would drive past every day
and attend the premises approximately
once a week. Pursuant to his
objection to the tables, chairs and umbrellas and LM Grill treating
the courtyard area as its own,
he believed that Bell had come there
to look at the area. He had said that he had phoned Bell about five
times concerning the problems.
He did not know how much Bell knew,
but he said he would have thanked him for getting the wall lowered
and continued to complain
about the umbrellas. He had only once ever
seen people eating in the courtyard.
[33] The case for Remo’s was
then closed.
[34] I now deal with the questions I
am required to answer as they were set out in the order of Govender
AJ dated the 21
st
August 2012.
Whether Clause 21(c) of the lease
referred to the courtyard
:
[35] By the end of all the evidence it
was clear that in almost all the leases concluded between Calicom and
the tenants in the
Protea Mall, Clause 21 (c) (as I have set it out
above) was recorded.
[36] In interpreting this and other
aspects of the lease I regard myself as having to read it in context,
having regard to the purpose
of the provision and the background to
the preparation and production of the documents.
See
NJMPF v Endumeni
Municipality
2012 (4) SA 593
(SCA)
[37] The language of Clause 21(c) is
unhelpful in determining what was intended by the reference to ‘the
courtyard area’
because there is no description in the lease
which would enable one to identify it. All that the lease agreement
refers to in its
description of the premises is ‘PREMISES 5/6
PROTEA MALL, LIGHTHOUSE ROAD, UMHLANGA’. It was common cause
that the
physical description of Shops 5 and 6 did not include the
courtyard. The suggestion was rather that the courtyard formed part
of
the business by virtue of its incorporation in Clause 21(c) of the
lease agreement.
[38] Bell testified that every lease
agreement concluded with a tenant at the Protea Mall contained that
clause. It was a reference
to the central courtyard leading to the
Protea Hotel. It is common cause that the central courtyard is not
the disputed area, and
a photograph of it formed Annexure TAB3(a) to
the affidavit of Bell in the vindicatory application. It is clear
from that photograph
that there is a very large courtyard area, with
a fountain centrepiece with a further area with palm trees, which
does not front
onto Shops 1, 2,3, 4 and 5/6 and has nothing to do
with the courtyard in dispute in this application.
[39] This was confirmed by Bell in his
founding affidavit in the spoliation application at paragraphs 6 and
20. According to Bell,
tenants are allowed to use the central
courtyard with the permission of the landlord. As foreshadowed in
condition 21 (c) of the
lease tenants could apply to use the area,
and the clause was inserted into all lease agreements some years ago
when one of Calicom’s
other tenants insisted on placing chairs
in the central courtyard. Significantly, that clause was not included
in the original
lease concluded between Calicom and Govinthu on the
29
th
November 2006. In his replying affidavit in the
vindicatory application Bell indicates that the central courtyard
could be used
by tenants to conduct promotions.
[40] In my view it is relevant to look
at the reasons advanced by the witnesses of LM Grill for their
collective impression that
the courtyard referred to in Clause 21(c)
of the lease was the courtyard in question.
[41] In the spoliation application,
Deeplal deposed to the founding affidavit. In paragraph 11 of that
affidavit she states :
‘
When
the lease was concluded it was expressly agreed and recorded as a
special condition that the courtyard area would continue
to be used
as it had been used in the past on the basis that it formed part of
the business that was being operated but “subject
to the
authority” of the landlord, presumably as to noise, décor
and so on.’
[42] Given the reference to the
authority of the landlord, Deeplal was clearly referring to Clause
21. In the oral evidence hearing
however, she made no reference
whatsoever to having concluded, or having been involved in the
negotiations for the conclusion of,
the lease. Indeed, on her own
evidence she would not have had authority to do so because she did
not even have authority to ask
the centre management for instructions
about the umbrellas.
[43] In his replying affidavit in the
spoliation application at paragraph 4, Rattan stated :
‘
When
the lease was concluded I understood that this is the area that was
referred to as the courtyard in the last special condition
of the
lease. There is no other courtyard that is relevant to the
applicant’s business. The interior courtyard is inside
the mall
and the restaurant has no access to it. I have always understood that
the courtyard referred to in the lease was the small
courtyard
outside the Applicant’s premises which was being used by the
business when the Applicant bought it ...’
[44] In his opposing affidavit in the
vindicatory application, Rattan stated in sub-paragraph 4(e) :
‘
When
the lease was concluded I understood Clause 21(c) of the lease to
refer to this courtyard in the last special condition of
the lease
which provided that its use was subject to the authority of the First
Applicant ... There was implicit agreement that
it had been used and
would continue to be used in this way when Respondent purchased the
business and made changes to the premises
with the First Applicant’s
consent.’
[45] These latter statements were
included among the various arguments put forward by Rattan as to why
he was entitled to use the
courtyard.
[46] However, when Rattan gave
evidence at the hearing he repeatedly stated that he had never read
the lease and never discussed
it with Bell. His belief as to what LM
Grill was entitled to use was based solely on what he had been told
by Govinthu. In his
evidence he stated that up until the day he
testified he had not looked at the lease.
[47] In those circumstances it is
difficult to understand how Rattan can ever contend that Clause 21(c)
was a reference to the courtyard
immediately adjacent to LM Grill.
His view in his affidavits that that was so could only have been
derived from what Govinthu told
him, or, from an interpretation
placed on the lease by others – apparently ignorant of the fact
that the clause formed part
of the leases of all the other tenants in
the Protea Mall.
[48] Suffice it to say that upon a
conspectus of all the evidence, common sense dictates that the
courtyard area referred to in
Clause 21(c) did not refer to the
courtyard adjacent to LM Grill, and was not understood by Rattan, as
the party who concluded
the lease agreement, that it did so.
Rectification
[49] The second question which I am to
decide is if the ‘courtyard’ referred to in Clause 21(c)
does not refer to the
contested area, whether the lease falls to be
rectified, presumably to include the courtyard as part of the area
leased by LM Grill.
[50] Insofar as rectification has as
its object to have a written agreement conform to the common
intention of the parties, the
party claiming rectification bears the
onus of establishing it. The requirements which must be alleged and
proved are the following
:
an agreement between the parties
which was reduced to writing;
that the written document did not
correctly reflect the common intention of the parties as it existed
when the agreement was reduced
to writing;
an intention by both parties to
reduce the agreement to writing;
a mistake in drafting the document
which may have been the result of either a bona fide mutual error or
an intentional act on
the part of the other party;
the wording of the agreement as
rectified. In this regard it is insufficient to set out the general
import of the common intention.
[51] It is relevant to this
application that rectification may be relied upon as a defence
without having to claim rectification.
See
Propfokus 49 (Pty) Ltd
and others v Wenhandel 4 (Pty) Ltd
[2007] 3 All SA 18
(SCA)
[52] It is common cause that there was
a lease agreement between the parties which was reduced to writing.
The main issue is whether
that document reflected the common
intention of the parties. If not, the common continuing intention of
the parties has to have
been established by LM Grill.
[53] It is clear from the evidence of
Bell that it was never the intention of Calicom to include the
courtyard as part of the premises
leased to LM Grill. That much is
made clear both from the annexure to the lease agreement and the
description of the premises as
well as the conclusion I have come to
regarding Clause 21(c) of the lease agreement.
[54] What then of the evidence
established by LM Grill? On the evidence of Rattan he never read the
lease agreement, and never discussed
it with Bell. The only other
representative of LM Grill, Deeplal, did not claim to have read the
lease agreement nor have any first
hand knowledge of it.
[55] In those circumstances it is
difficult to envisage how it could have been suggested by the
witnesses of LM Grill that it was
the intention of Calicom to include
the courtyard in the lease agreement. The only basis on which Rattan
held the subjective belief
that the courtyard was included as part of
the area leased by him was on the say-so of Govinthu. Govinthu
deposed to a confirmatory
affidavit to what was stated by Rattan in
opposing the vindicatory application. In that affidavit Rattan only
suggests that the
seating ‘was allowed by the Applicants, being
the Landlords herein ...’ Insofar as it may have been
considered relevant
he does not go so far as to suggest that that
allowance was by way of incorporation in the lease which Govinthu
concluded with
Calicom. It is clear that Clause 21(c) was not
included in Govinthu’s lease.
[56] In addition, there has been no
evidence before me of a mistake in drafting the lease agreement which
may have been the result
of a bona fide mutual error or an
intentional act on the part of Calicom. Indeed the very contrary is
suggested by both Rattan
and Deeplal inasmuch as they aver that
Clause 21(c) was a reference to the courtyard. Having made that
allegation it is difficult
to understand how they can now suggest
that a further clause should have been incorporated referring to the
courtyard.
[57] With regard to the existence of
an antecedent contract leading to the common error, the evidence of
Rattan precludes such a
finding. On his evidence his subjective
belief that the courtyard was included, came from Govinthu. It is
important to note that
the common continuing intention of the parties
which LM Grill wishes to have rectified, is the one held by them when
they concluded
the agreement.
[58] Even reliance on an alleged
representation by the landlord by allowing the courtyard to be used
by Govinthu and previous tenants
cannot be extended to establish that
that was the intention of Calicom that the courtyard was in fact
included in the lease. This
is because the evidence of Bell is
expressly against that conclusion.
[59] In the circumstances the claim
for rectification must fail.
An express/tacit/by conduct
agreement entitling LM Grill to use the courtyard
:
[60] For the reasons set forth above,
I am of the view that there is no basis upon which it can be
suggested that there was an express
agreement between the parties
that LM Grill could use the courtyard.
[61] What remains under this heading
to be considered then is whether a tacit agreement was concluded by
virtue of the parties’
conduct. As I understand it, the basis
for proving a tacit agreement is that LM Grill would be required to
establish that, upon
a proper inference to be drawn from the proved
facts, the parties agreed to the courtyard forming part of the leased
premises.
[62] In
Standard Bank of South
Africa Ltd and Another v Ocean Commodities Inc and Others
1983
(1) SA 276
(A) at 292 B, Corbett JA stated :
‘
In
order to establish a tacit contract it is necessary to show, by a
preponderance of probabilities, unequivocal conduct which is
capable
of no other reasonable interpretation than that the parties intended
to, and did in fact, contract on the terms alleged.
It must be proved
that there was in fact
consensus
ad idem
.’
[63] This formulation of tacit
contracts in general was later described by Corbett in
Joel
Melamed and Hurwitz v Cleveland Estates (Pty) Ltd
[1984] ZASCA 4
;
1984 (3) SA 155
(A) at 164 I as the traditional statement of the principle. He
pointed out that that general formulation had been questioned on
the
basis that it would indicate a higher standard of proof than that of
a preponderance of probabilities when drawing inferences
from the
proven facts. He suggested that it was possible that his previous
statement required re-formulation. At page 165 B - F,
Corbett JA
continued :
‘
In
this connection it is stated that a court may hold that a tacit
contract has been established where, by a process of inference,
it
concludes that the most plausible probable conclusion from all the
relevant proved facts and circumstances is that a contract
came into
existence ... It appears to be generally accepted that a term may not
be tacitly imported into a contract unless the
implication is a
necessary one in the business sense to give efficacy to the contract
... By analogy it could be said that a tacit
contract should not be
inferred unless there was proved unequivocal conduct capable of no
other reasonable interpretation than
that the parties intended to,
and did in fact, contract on the terms alleged.’
See
also
Charles Velkes Mail
Order 1973 (Pty) Ltd v Commissioner for Inland Revenue
1987 (3)
SA 345
(A) at 357 H – I.
[64] In assessing the evidence of
Rattan it is important to consider that his state of mind was induced
solely by the representations
made to him by Govinthu. In this regard
it is significant to consider how Govinthu’s use of the
courtyard came about. It
is common cause that at some stage Govinthu
was the lessee of Shops 1, 2, 3, 4 and 5/6. His use of the courtyard
in those circumstances
is not surprising. As he was the only tenant
of all those shops he was the only person who could reasonably have
suggested that
he be allowed to use the courtyard. In those
circumstances it is not surprising that Etty’s evidence was
that the courtyard
had previously been used by LM Grill during
Govinthu’s tenancy. That, however, changed when Orphen objected
to the use of
the courtyard because of the nuisance which it caused
to his business.
[65] Rattan’s belief, however,
as expressed in his evidence, was that his use of the courtyard was
subject to the authority
of the landlord. The suggestion that that
authority was limited to the manner in which the area was used, was
something which only
appeared in the opposing affidavit of Rattan in
the vindicatory application. It formed no part of the evidence which
he gave during
the oral evidence hearing. The evidence of Bell was
that Calicom retained the authority to use the central courtyard
area, and
in my view the only reasonable interpretation of Clause
21(c) of the lease is that the landlord had the authority to grant or
withdraw
permission to use the area. If Rattan believed that that was
the courtyard which was being referred to, he also had to have
believed
that the landlord could withdraw its consent to LM Grill
continuing to use it, which it has done.
[66] Given the direct and contrary
evidence of Bell with regard to Calicom consenting to the use of the
courtyard as part of the
premises of LM Grill, I do not see how it
can be suggested that a tacit agreement was concluded between the
parties to include
its use in the lease. It was clear from the
evidence that there was no consensus ad idem in this regard.
[67] In addition, and as this argument
is not part of the claim for rectification, the suggestion of an
implied acceptance of the
agreement based on the conduct of Calicom
is contradicted by the non-variation clause (Clause 14 of Calicom’s
terms and conditions
to the lease).
The duration of permission to use
the courtyard
:
[68] In view of the findings which I
have made above this issue falls away.
Estoppel
:
[69] Any party wishing to rely on an
estoppel must plead it and prove its essentials. Those essentials are
:
the representation of a certain
factual position by words or conduct;
that the party claiming estoppel
acted on the correctness of the facts as represented;
the party claiming estoppel so acted
to its detriment;
the representation was made
negligently;
the person who made the
representation could bind the defendant by means of that
representation.
[70] With regard to the
representation, Mr
Pillemer
SC who appeared for LM Grill,
referred at length to the fact that Calicom had stood by and allowed
Govinthu and his predecessors
to use the courtyard. Indeed, even
after Rattan took over the operation of LM Grill, such use by LM
Grill continued until the conclusion
of the lease agreement in
respect of Shops 1, 2, 3 and 4 with Remo’s, when the use by LM
Grill of the courtyard clashed with
the desire of Remo’s to use
that area. It is however necessary that a representation relied upon
must be clear and unequivocal,
and that the person relying upon the
representation did so in a reasonable way.
See
Southern Life
Association Ltd v Beyleveld NO
1989(1) SA 496 (A) at 503 I
[71] The evidence of Rattan however,
is clear. He did not rely on a representation (by conduct or
otherwise) made by Calicom. He
relied on what Govinthu told him. The
additional question here is whether Bell should reasonably have
expected that Rattan might
be misled by his failure to more closely
monitor and control the courtyard, and by allowing its use as an
extension of the LM Grill
restaurant.
See
Concor Holdings (Pty)
Ltd t/a Concor Technicrete v Potgieter
2004(6) SA 491 (SCA) at
495 B - C
[72] It is true that both Mr and Mrs
Bell were extremely vague on the use to which the courtyard was
actually put, and seemed reluctant
to concede that it was used as an
extension of LM Grill. Indeed Bell stated that had he known it was
being used to serve meals,
he would have put a stop to that practice.
[73] Given the contents of the lease
agreement it is clear that Bell had little reason to suppose that
Rattan would rely on the
previous conduct of Calicom and be misled as
to the incorporation of the courtyard in the lease agreement. There
is therefore no
causal connection between the representations made by
the conduct of Bell and the conclusions arrived at by Rattan.
[74] The alterations to the courtyard
were carried out in 2009 prior to the signing of the lease by Rattan.
He must have realised
at that stage that LM Grill did not have the
exclusive right to use the courtyard. This is because when the height
of the wall
was challenged by Orphen, Rattan immediately agreed to it
being lowered and the ‘L’ shaped section removed
entirely.
That approach is inconsistent with the suggestion that
Rattan believed that he was entitled to use the courtyard as part of
the
leased area. Had he believed this he would have enforced his
rights and told Orphen that he had no business to interfere with his
alteration of the courtyard area. Instead he not only reduced the
height of the wall and removed one section, he agreed to continue
to
lower the umbrellas during working hours in order to facilitate
Orphen. This is not the conduct of someone who reasonably believed
that he was entitled to use the courtyard area as of right. In those
circumstances there can be no question of Calicom being estopped
from
preventing the use of the courtyard by LM Grill.
Quasi-mutual consent
:
[75] Mr Pillemer has submitted that
the doctrine of quasi-mutual consent finds application here in the
agreement concluded between
Calicom and LM Grill. In order to rely on
the doctrine of quasi-mutual consent it is necessary for Rattan to
establish that a reasonable
person in his position would have been
ignorant of the fact that the courtyard was not included as part of
the leased premises.
A reasonable person in the position of Rattan
would at least have read the lease agreement, and, if in any doubt,
asked about the
meaning and extent to Clause 21(c), as this was the
only reference to a ‘courtyard’, albeit subject to the
authority
of the landlord. The nature and exercise of the authority
of the landlord was another matter which would have exercised the
mind
of a reasonable tenant in establishing precisely what area he
was entitled to occupy. That he did not make enquiries, and that he
was entirely ignorant of the position disqualifies him, in my view,
from availing himself of the doctrine.
The use to which the courtyard was
put
:
[76] Insofar as it is necessary for me
to comment on this issue, it is dealt with in my judgment above. As I
have already found,
the use to which the courtyard was put by LM
Grill and its predecessors gives it no entitlement to continue to do
so, because no
basis in law has been established to give it such a
right.
[77] Finally, in my assessment of the
merits of the vindicatory application and insofar as the incidence of
the onus is concerned
it is common cause :
that the courtyard is owned by
Calicom;
that LM Grill is in possession of the
courtyard, such possession having been restored to it by the
judgment of Gorven J in the
spoliation application;
LM Grill relies upon the consent of
Calicom for its right to occupy the courtyard. That right is not
conceded by Calicom, and
in the circumstances it is incumbent upon
LM Grill to allege and prove that right of occupation.
LM Grill has not established any legal
basis upon which it can claim occupation of the courtyard.
See
:
Woerman & Schutte
NNO v Masondo and Others
2002 (1) SA 811
(SCA).
[78] In all the circumstances I grant
the following order :
the respondent is directed to vacate,
within two days of the date of this order, the exterior area
measuring approximately 20m²
located on the eastern side of the
premises currently leased by the respondent from the first applicant
and described as premises
5/6, Protea Mall, Lighthouse Road,
Umhlanga;
in the event of the respondent
failing to vacate the premises within the time period referred to
above, the sheriff of this court
is authorised and directed to eject
the respondent from the premises;
the respondent is to pay the
applicants’ costs of the vindicatory application, including
the costs of the oral evidence
hearing.
Date of hearing : 6
th
September 2012
Date of judgment : 18
th
September 2012
Counsel for the Applicants : A D
Collingwood (instructed by Johnston & Partners)
Counsel for the Respondent : M
Pillemer SC (instructed by Maharaj Attorneys)
Counsel for the Intervening Party : A
M Annandale SC with L Olsen (instructed by R M Strauss Inc)