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[2009] ZAGPPHC 161
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Breau Investments (Pty) Ltd v Maverick Trading 326 CC (50347/2008) [2009] ZAGPPHC 161; 2010 (1) SA 367 (GNP) (14 August 2009)
IN
THE HIGH COURT OF SOUTH AFRICA
(NORTH
GAUTENG, PRETORIA)
CASE
NO: 50347/2008
In
the matter between:
BREAU
INVESTMENTS (PTY) LTD
Applicant
And
MAVERICK
TRADING 326 CC
Respondent
JUDGMENT
LEDWABA,
J
[1]
The
applicant is seeking an order in terms whereof the respondent should
be evicted from shop 3, Village Square Shopping Centre,
Amandalboom
Road, Doornpoort Extension 35, Pretoria, Gauteng (the premises).
[2]
On 31 March 2004 the applicant and the respondent entered into a
lease agreement for a period of three (3) years.
[3]
In clause 2.3 of the agreement it is stated that at the end of the
lease period the lessee, the respondent had an option to
renew the
lease for a further period of three (3) years on the said terms and
condition except regarding the rental and renewal.
The last part of
the clause regarding the rental should the lease be renewed by the
respondent reads as follows:
"...The
rental for the renewal period shall be negotiated between the parties
and in the event of the parties being unable
to reach an agreement as
to rental it shall be referred to the LESSOR
'S
auditors
for determination, whose decision shall be final and binding on the
parties."
[4]
In
July 2006 the respondent exercised its right to renew the lease and
requested the applicant to provide it with the rental amount
and
escalation percentage, see annexure B page 31.
[5]
The parties could not agree on the rental and entered into
negotiations but could not reach a settlement.
[6]
In about July 2008 D. P. Funch and Associates CC appointed by the
applicant determined the rental payable to the applicant
in respect
of the premises as follows:
"For
the period 1 April 2007-31 March 200, R100,00 per square meter. For
the period 1 April 2008 to 31 March 2009 R110,00 per
square meter."
[7]
The respondent disputed the amount determined by D. P. Finch and
Associates CC and on the 29
th
August 2008.
[8]
In paragraph 5.1 of the particulars of claim the respondent
(plaintiff in the action proceeding) made the following allegation:
"The
Defendant attempted to unilaterally determine the rental in respect
of the extended term of lease on 27 March 2007 by
invoicing Plaintiff
with rent amounting to R100-00 per square metre from 1 April 2007
onwards, which unilateral determination was
not accepted by the
Plaintiff."
[9]
Respondent further alleged in paragraph 6.2 and 6.2 that the
determination of rent is
'so
grossly excessive that it bears no reasonable relationship at all to
the value of reasonable rent payable in respect of the
leased
premises; and no reasonable person in the position of the auditors of
the defendant would have determined the rent payable
for the extended
lease period as D P Fuchs & Associates CC did.'
[10]
The respondent alleged in its particulars of claim that the value of
the reasonable rent should be R84-29 per square metre
from the 1
st
April 2007-31
st
March 2008 with an escalation of 12% rent from 1
st
April 2008.
[11]
In terms of Annexure 'E' (page 41) dated the 14
th
August applicant's attorney informed the defendant's attorneys that
as at 31
st
March 2008 the respondent was indebted to the plaintiff in the sum of
R81 527-53, should payment not be received before the close
of
business the 29
th
August 2008 their instructions are to proceed further against the
respondent and,
inter
alia,
apply
to the court for eviction.
[12]
On 5
th
September 2008 (in a letter erroneously dated 14
lh
August
2008), applicant's attorneys informed the respondent's attorneys that
since the respondent failed to comply with the contents
of annexure
'E' the applicant was in terms of clause 30 of the agreement of lease
agreement cancelling the lease.
[13]
Both counsel during arguments submitted that the applicant and the
respondent were
ad
idem
that
D P Fusch was not the applicant's auditors and Wasserman was the
applicant's auditors Wassermas determination was similar to
the one
made by D P Fusch.
[14]
It is clear that there was no agreement on the rental amount. The
legal position in such a situation states that the lease
agreement is
in existence. See
Hurwitz
& Others NNO v Table Bay Engineering and Another!994 (3) SA 449
(C).
[15]
Advocate Morrison's submission that there is no lease is misplaced.
[16]
Applicant's counsel in the alternative argued that if the lease
agreement is in existence same was cancelled in terms of annexure
'E'.
[17]
On the contrary the respondent's counsel submitted and argued that
the applicant could not in law cancel the agreement because
the
respondent had already issued summons. To support the submission he
referred the court to
Van
Heerden v Basson
1998 (1) SA 751
on
page 720 wherein Hartzenberg J said the following
:
"Dit
is derhalwe nou duidelikdat daar 'n reeks van beslissings bestaan in
minstens drie Afdelings van die Hooggeregshof wat
'n regstelling van
'n prys deur 'n derde erken en wat voorts aanvaar dat ingeval van 'n
regstelling daar 'n keuse gegee moet word
aan die ander party om te
besluit of hy gebonde wil wees aan die ooreenkoms of nie. Dit kan,
myns insiens, aanvaar word dat daar
op 'n vasstelling van die prys
deur 'n derde ooreenkom is omdat die partye voorsien het dat hy dit
spoedig en relatief goedkoop
sal doen. Indien dit nou nie geskied nie
omdat die vasstelling onbilik is en daar moet n vasstelling van
regswee geskied wat bale
duur gaan wees of die inwerkingtrede van die
ooreenkoms lank kan laat sloer, skyn dit bilik te wees dat die party
van wie die regsstelling
vereis word die keuse moet he om, voordat
litigasie
ontstaan
,
aan te dui dat hy nie bereid is om betrokke te raak by duur en
tydrowende litigasie nie en aanvaar dat die ooreenkoms tot niet
gegaan het omdat daar nie 'n behoorlike vasstelling was nie."
(Own
underlining).
[18]
Respondent's counsel submitted that the words
"voordat
litigasie ontstaan"
should
be interpreted to mean that after litigation commenced i.e after
summons has been issued and a party does not have a choice
to cancel
the agreement, I disagree. In
Van
Heerden's
case
Hartzenberg J referred to
Hurwitz
case
at
457 A-C wherein the court said
:
7
do
not conceive it to be the law that, where a third party nominated by
the parties fixes a rent which is shown to be manifestly
unjust, the
contract ipso facto fails to the ground. Whether in any particular
case that will be the consequence will depend, so
it seems to me, ob
the subsequent actions of the parties. If a party signifies that he
will accept the determination of a court
in lieu of the third party's
determination, there is no good reason why he should not be bound to
do so thereafter He has agreed
thereby to a variation of the rent
fixing method originally agreed upon. But, if he declines to accept
such a determination by
a court, I do not think that he can or should
be compelled to do so. Why should he not be entitled to say, for
example, that he
concedes that the third party's determination is
indeed manifestly unjust and therefore not binding, but that he is
not prepared
to become involved in a litigious proceeding to
determine what the rent should be, and prefers to allow the lease to
lapse for
want of the contractually agreed determination."
[19]
The court in Van Heerden's never said after litigation commenced the
contract cannot be cancelled.
[20]
The respondent's counsel argued that the applicants reason for
cancelling the lease as set out in annexure [' is not to avoid
being
involved in litigious proceedings that the
respondent
instituted. The cancellation cannot therefore be valid.
[21]
Despite the fact that the applicant did not clearly state that the
lease is cancelled on the basis of avoiding litigious proceedings,
the applicant made it clear that to the respondent that it wanted the
respondent to be evicted. In my view, that is an indication
that the
applicant did not want to be involved in litigation regarding the
reasonableness of the rent.
[22]
In the application before me I am not required by the parties to rule
on whether the determination is reasonable or not.
[23]
However, since there is a pending action, I think in eviction
proceedings, I cannot ignore the contents of the particulars
of claim
read with the contents of the affidavit before me. Without binding
the court that may adjudicate in the action proceedings,
in my view,
the respondent does not have a strong case.
[24]
Should I be wrong in considering the respondent's prospects of
success in the action proceedings. I still think the applicant's
cancellation of the lease is valid.
[25]
! therefore, make the following order:
(i)
The respondent and all persons claiming to occupy Shop 3, Village
Square Shopping Centre, Amandalboom Road, Doornpoort Ext 35,
Pretoria,Gauteng should vacate the premises within 1 month of the
granting of this order.
(ii)
Should the respondent fail to comply with the first order the sheriff
of the court is authorised to evict
the respondent.
(iii)
Respondent is ordered to pay the costs.
A.
P. LEDWABA
JUDGE
OF THE HIGH COURT