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2012
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[2012] ZAKZDHC 90
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Pareto Ltd v Tetrafull 1060 CC (8714/06) [2012] ZAKZDHC 90 (14 December 2012)
In
the KwaZulu-Natal High Court, Durban
Republic
of South Africa
Case
No : 8714/06
In
the matter between :
Pareto
Limited
...................................................................................................
Applicant
and
Tetrafull
1060 CC
..........................................................................................
Respondent
Judgment
Lopes J
[1] On the 14
th
August 2006
the applicant applied to this court for an order ejecting the
respondent from the premises at shop number 349 (‘the
premises’), The Pavilion Shopping Centre, Westville,
KwaZulu-Natal.
[2] In the applicant’s founding
affidavit, reliance was placed on two factors :
that the applicant is the owner of
the land upon which The Pavilion Shopping Centre is situated; and
the respondent is in occupation of
the premises.
[3] In its answering affidavits the
respondent admitted that the respondent was in occupation of the
premises, and it is now also
common cause that the applicant is the
owner of the premises.
[4] In
Chetty v Naidoo
1974 (3)
SA 13
(A) at 20 C, Jansen JA stated :
‘
The
owner, in instituting a
reivindicatio
,
need,
therefore, do no more than allege and prove he is the owner and that
the defendant is holding the
res
–
the
onus
being
on the defendant to allege and establish any right to continue to
hold against the owner.’
[5] The respondent accordingly bears
the onus of demonstrating that it has a right to occupy the premises.
[6] It is common cause between the
parties that a written lease agreement was previously concluded
between them, (‘the first
lease’), which provided for the
respondent to occupy the premises from the 1
st
March 2001
to the 28
th
February 2006, when the lease ended. After the
end of the first lease the respondent instituted an action against
the applicant,
apparently relying on an entitlement to occupy the
premises pursuant to an alleged renewal of the first lease. This
application
for the ejectment of the respondent was then instituted
by the applicant and was, initially, neither heard nor resolved. At
some
stage after the 21
st
February 2008, the applicant
submitted to the respondent, an agreement of lease (‘the
proposed lease’) which was anticipated
to provide the
respondent with occupation of the premises from the 1
st
April 2008, to the 30
th
March 2013. The proposed lease was
signed by a representative of the respondent, and included some
deletions in the original document,
together with three manuscript
items under the heading ‘Special Conditions’ which
provided :
‘
7.
SIGNATURE OF THIS LEASE WILL CONFIRM THE FOLLOWING :
7.1 THE LEGAL ACTION IN
THE PIETERMARITZBURG HIGH (sic) BETWEEN THE LANDLORD AND TETRAFULL
1080 (sic) CC IS SETTLED.
7.2 THE LEGAL ACTION
TAKEN BY THE LANDLORD AND THE DEFENDANT IN THE DURBAN HIGH COURT IS
SETTLED.
8. THE LANDLORD
UNDERTAKES TO APPROVE AND SIGN THE LEASE BY NO LATER THAN 30
TH
MARCH 2008, FAILING WHICH THE COURT ACTION IN CLAUSE 7, ABOVE WILL
CONTINUE.
9. THIS SETTLEMENT IS IN
REGARDS TO THE COURT ACTIONS IN CLAUSE 7 AND NOT TO ANY MONETARY
SETTLEMENT IN REGARD TO ANY AMOUNTS DUE
TO EITHER PARTY.’
[7] The ‘Overall Conditions’
attached to the schedule of the proposed written lease agreement,
contains at Clauses 17.1
and 17.7 the following :
’
17.1
This Agreement incorporates the entire Agreement between the LANDLORD
and the TENANT and no alteration, cancellation or variation
hereof
shall be of any force or effect unless it is in writing and signed by
both the LANDLORD and the TENANT who hereby acknowledge
that no
representations or warranties have been made by either the LANDLORD
or the TENANT.’
’
17.7
This
Agreement shall only take effect and become binding upon the LANDLORD
when signed by the LANDLORD, failing which the TENANT
may not claim
the existence of the Lease from negotiations having been conducted or
concluded in regard thereto or by reason of
this Lease having been
drafted or signed by the TENANT.’
[8] The respondent avers in its
answering affidavits, that on the 21
st
February 2008 it
concluded an oral agreement with the legal representative of the
applicant, in terms of which the previous litigation
between the
parties was settled and the parties were to have concluded the
proposed lease. The terms of that agreement, as recorded
in the
respondent’s particulars of claim annexed to the respondent’s
answering affidavits, include :
‘
6.4
Upon signature of the New Lease Agreement by the Plaintiff and return
to the Defendant, a binding agreement would come into
existence
between the Plaintiff and the Defendant.
...
The Defendant undertook
to sign the New Lease Agreement (for record purposes) by no later
than 30
th
March 2008, failing which the litigation would
continue (Clause 8 Special Conditions), however the New Lease
Agreement would
remain of full force and effect;’
[9] Mr
King
SC, who appeared
for the respondent, submitted that upon a proper consideration of the
proposed lease as disclosed in the particulars
of claim, a court
should not try to interpret the proposed lease as a stand-alone
document. He submitted that a real and genuine
dispute of fact exists
on the papers because of the possible interpretations which could be
placed upon the proposed lease, and
he referred to the test in
National Scrap Metal (Cape Town) (Pty) Ltd and Another v Murray &
Roberts Ltd and Others
2012 (5) SA 300
(SCA) at page 307,
paragraphs 21 and 22. There, the court referred to the test where
there are disputes of fact and where a court
is called upon to decide
the matter without the benefit of oral evidence, that ‘
it
had to accept the facts alleged by the [respondent] unless they were
“so far-fetched or clearly untenable that the court
is
justified in rejecting them merely on the papers” ...”a
stringent test which is not easily satisfied”.’
[10] Mr
King
submitted that
because of the different possible interpretations of the proposed
lease, I should not conclude that the respondent’s
version was
so far-fetched, that it could be dismissed out of hand. In this
regard he pointed to indications in the accounting
documents of the
applicant which, prima facie, indicated that the applicant was
charging the respondent rental on the basis of
the proposed lease. He
also pointed to the applicant’s record of tenant transactions
which refers to a lease starting on
the 1
st
April 2008 and
terminating on the 30
th
March 2013. Mr
King
submitted that this made it likely that both parties regarded an
agreement as having been concluded.
[11] Mr
King
also submitted
that Clause 17.7 of the proposed written agreement falls to be
rectified, because it was included either in error
or deliberately by
the applicant. Mr
King
submitted that on the basis of the
affidavits there is room for a court to conclude that it should never
have been included.
[12] Mr
Salmon
SC, who appeared
for the applicant, accepted that there were disputes of fact on the
papers, and that there is a stringent test
to apply before dismissing
the allegations made by the respondent. He submitted, however, that
the applicant could not succeed
in demonstrating that the proposed
lease was binding on the parties, or that an oral agreement of lease
had been concluded.
.
[13] Mr
Salmon
referred to the
fact that two relevant aspects emerge from the respondent’s
particulars of claim annexed to the respondent’s
answering
affidavit:
that the new lease agreement was to
be in writing; and
that it would be signed by the
respondent and submitted to the applicant for consideration.
[14] Whatever else may be said about
the proposed lease, and whether it constituted an offer or was a
counter-proposal, the respondent
bound itself, by its signature, to
the fact that there would be no lease agreement until the applicant
had signed the proposed
lease. The applicant has not signed the
proposed lease. In those circumstances, so it is submitted, there can
be no suggestion
that there is a concluded lease between the parties.
[15] In signing the proposed lease the
respondent has, by its own hand, bound itself to the fact that the
only lease agreement between
them would be that contained in the
proposed lease. All questions of oral representations having been
excluded, no lease agreement
could be concluded between the parties
unless and until the applicant signed the proposed lease, which did
not occur (see Clauses
17.1 and 17.7 above).
[16] In my view the intention of the
parties could not be more clearly expressed. The respondent by its
signature, made it clear
that it anticipated that should the lease
agreement not be signed by the applicant, then the previous
litigation would not be settled.
That in itself envisages two aspects
:
that the written document was to
constitute the agreement between the parties both as to the
settlement and to the lease; and
that in the event that the applicant
did not sign the proposed lease, neither the lease nor the
settlement would not be of any
force or effect.
In addition, as pointed out by Mr
Salmon
, the manuscript Clause 8 (written by the respondent’s
representative) requires the applicant ‘to approve and sign the
lease’. This was further evidence of the respondent’s
intention that the lease would not come into existence until
the
applicant signed it.
[17] Mr
Salmon
submitted that
if one has regard to the history of the parties, the applicant at all
stages sought to protect itself by requiring
the agreements between
the parties to be in writing. This is evident from the initial lease
between the parties which contained
the same clauses 17.1 and 17.7
referred to above. In addition, Mr
Salmon
referred to Annexure
B to the original lease, which was the ‘Renewal of Lease
Clause’, and which recorded that any
renewal had to be done in
writing. Any suggestion therefore that an oral agreement of lease
would have bound the parties is entirely
inconsistent with the
parties’ previous conduct, and improbable.
[18] Mr
Salmon
pointed to the
fact that nowhere in the correspondence was there a reference to the
applicant accepting the oral conclusion of
a lease agreement. It is
also made clear in the letter by the applicant’s legal
representatives dated the 2
nd
April 2008 that any proposal
would be subject to a decision by the applicant’s Board, who
would make the ultimate decision.
[19] With regard to the indications in
the applicant’s documentation that a lease was accepted by it,
Mr
Salmon
referred me to the applicant’s tenant
transactions document which records that the amount claimed by the
applicant (and which
accords with the rental payable in terms of the
proposed lease) is described as ‘holding over damages
received’. Mr
Salmon
submits that there can accordingly
be no suggestion that the applicant had accepted the payments as
lease payments in terms of
the concluded agreement between the
parties.
[20] In any event, it seems likely
that the parties anticipated concluding a lease, and the
documentation was, in all probability,
prepared with that in mind.
The precaution, however of describing amounts paid by the respondent
as ‘holding over damages
received’ negates the
respondent’s suggestion.
[21] In these circumstances, I do not
agree that the alleged oral agreement could trump the respondent’s
signed written offer,
which unequivocally expressed its intention
both with regard to the settlement of the previous action and the
proposed lease.
[22] The respondent has also raised
the issue of rectification in that it submits that Clause 17.4 of the
lease agreement falls
to be deleted. In order to establish
rectification, it is necessary for an applicant to allege and prove :
an agreement between the parties
which was reduced to writing;
that the written agreement did not
reflect the common intention of the parties correctly, and the
applicant is required to establish
the continuing intention of the
parties which may be deduced from an antecedent agreement;
an intention by both parties to
reduce the agreement to writing;
a mistake in drafting the document;
the wording of the agreement as
rectified.
See
:
Propfokus 49 (Pty) Ltd
and Others v Wenhandel 4 (Pty) Ltd
2007 (3) All SA 18
(SCA) at 21
g – 22 c.
[23] I have difficulty in
understanding how the respondent can seek to claim rectification when
there is no written contract between
the parties. The law provides
for rectification of a written agreement concluded between the
parties, and not rectification of
an offer made by one party. Unless
and until that written offer was accepted by the plaintiff and a
written agreement came into
existence, the document constituted no
more than an offer by the respondent as expressed in writing and
signed by its representative.
Those written undertakings do not bind
the respondent insofar as it relates to a lease agreement, because
the applicant declined
to sign the agreement. They do, however, bind
the respondent inasmuch as they express the unequivocal intention of
the respondent
as to what it intended to do.
[24] In those circumstances I do not
accept that the respondent has discharged the onus which it bears to
show a right to occupy
the premises. I make the following order :
The respondent is directed to vacate
the premises described as Shop No 349, The Pavilion Shopping Centre,
Jack Martins Drive,
Westville, KwaZulu-Natal by no later than the
31
st
March 2013.
In the event of the respondent
failing to vacate the premises timeously, the Sheriff of this court
is authorised and directed
to eject the respondent and all those
occupying through it from the premises.
The respondent is to pay the
applicant’s costs of suit.
Date of hearing : 11
th
December 2012
Date of judgment : 14
th
December 2012
Counsel for the Applicant : RJ Salmon
SC with DW Finnigan (instructed by Thorpe and Hands Inc)
Counsel for the Respondent J C King SC
with U Lennard (instructed by Afzal Akoo and Partners)