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[1984] ZASCA 144
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Protea Assurance Company Ltd. v Presauer Developments (Pty) Ltd. (113/83) [1984] ZASCA 144 (28 November 1984)
Case no 113/83
M C
PROTEA ASSURANCE COMPANY LIMITED
- and -
PRESAUER DEVELOPMENTS (PROPRIETARY) LIMITED VIVIER AJA.
Case no 113/83
M C
IN THE SUPREME COURT OF SOUTH AFRICA (APPELLATE DIVISION)
In the matter between:
PROTEA ASSURANCE COMPANY LIMITED
Appellant
- and -
PRESAUER
DEVELOPMENTS (PROPRIETARY)
LIMITED
Respondent
Coram
: KOTZé, MILLER JJA et GALGUT, ELOFF,
VIVIER AJJA.
Heard
: 22 NOVEMBER 1984.
Delivered
: 28 NOVEMBER 1984.
JUDGMENT
2
VIV
IER AJA :
-
The respondent is the owner of a building known as
the Bank of Lisbon and South Africa Building, situated on the corner of
President
and Sauer Streets, Johannesburg. In terms of a written contract of
lease and addendum thereto, both documents signed by the lessee
on 22 January
1974 and by the lessor on 31 January 1974, the respondent leased to the
appellant the entire 10th floor and portion
of the 11th floor of the said
building for the period 1 March 1974 to 31 January 1984.
During the currency of the lease the respondent instituted an action in the
Witwatersrand Local Division for the ejectment of the
appellant from the said
building, on the ground that appellant had breached the provisions
of /
3
of clause 11 of the lease by effecting alterations
or
additions to the premises without respondent's prior
written consent.
Respondent alleged that in consequence
of appellant's said breach it had
cancelled the contract
by letters dated 31 August 1981 and 23 September
1981
respectively. In the same action respondent also sought
an ejectment
order against the appellant in respect of
certain parking bays used by
appellant in the said
building, on the ground that due notice to appellant
to
vacate the parking bays had been given.
The trial Judge, F.S. STEYN, J found that the
appellant had not breached the provisions of clause 11
of the lease, and that respondent's purported cancellation
of the lease agreement was not justified. with regard
to the parking bays, STEYN J, held that appellant's
right /
3(a) right of occupation was subject to one month's notice to
vacate, which had been duly given on 31 August 1981. The ejectment order
sought
in respect of the 10th and 11th floors of the said building was accordingly
refused with costs, and an order was granted that
appellant vacate the parking
bays. Appellant noted an appeal against that part of the judgment and order of
the Court a
quo
dealing with the parking bays, and respondent noted a
cross-appeal against that part of the judgment and order dealing with the 10th
and 11th floors of the said building. Appellant has since abandoned its appeal,
so that only the issues raised by the cross-appeal
remain for decision. For
convenience I shall refer to the appellant in the main appeal as the defendant
and to the respondent in
the main
appeal /
4
appeal as the plaintiff.
Before dealing with the merits
of the cross-;
appeal, I must deal with a point in
limine
raised
by
counsel for the defendant that, by reason of the
provisions of sec
20(4)(b) of the Supreme Court Act,
No 59 of 1959, as replaced by sec 7 of the
Appeals
Amendment Act, No 105 of 1982, this Court has no
jurisdiction to
entertain the cross-appeal without the prior leave of the Court a
quo
, or
the leave of the Appellate Division, which was, admittedly, not obtained.
Act 105 of 1982 came into force on 1 April 1983.
The judgment of the court
a
quo
was delivered on 21 March
1983 and the defendant lodged its
notice of appeal on
29 March 1983. There was accordingly a right to
cross-
appeal /
5.
appeal in existence at the date of commencement of
Act 105 of 1982. In terms of Rule 5(3) of the
Appellate
Division Rules the
cross-appellant had 21 days, or such longer
period as may on good cause have been allowed, to exercise
that right.
Although notice of the cross-appeal was
only
lodged on 11 April 1983, it seems to me that the
plaintiff's
right to cross-appeal was, by virtue of sec 26 of Act
105
of 1982 not affected by the
provisions of that Act.
Sec 26 of Act 105 of 1982 provides as follows :-
"No
provision of this Act shall affect an
appeal or any proceedings in
connection
therewith noted in terms of any Act before
the commencement of
such provision, and
any such appeal shall be continued and
concluded in
every respect as if this
Act had not been passed."
The /
6
The words "any proceedings in
connection therewith"
(compare the words "enige verrigtinge in verband daarmee" in the Afrikaans
version) mean, in the context in which they are used, any
step in connection
with the appeal. The lodging of the notice of cross-appeal in terms of the said
Rule 5(3), which is a step taken
by the cross-appellant in response to receiving
notice of appeal from the appellant, would clearly be such a proceeding in
connection
with the appeal. In my view, therefore, the words "any proceedings in
connection therewith" in sec 26,are wide enough to include
a cross-appeal. The
appeal having been noted before the commencement of Act 105 of 1982, the
cross-appeal is thus by virtue of sec
26 of Act 105 of 1982 not affected by the
provisions of sec 20(4)(b) of Act 59 of 1959.
I proceed / .
7
I proceed to deal with the merits of
the
cross-appeal. The sole issue for decision is
whether
the defendant breached clause 11 of the lease,the
relevant portion
of which provides that:-
"The lessee shall not make any alterations or additions to the premises
without the lessor's written consent."
The construction of clauses of this nature
depends upon a consideration of the nature, effect and
scope of the lease and the intention of the parties as
gathered from the lease. As
Vaughan Williams, LJ
said in
Bickmore
v
Dimmer
(1903) 1 Ch 158
at 165 :-
"We have to take into consideration the whole of the lease, and the purposes
for which it was granted, and then to see what is the
proper construction of the
particular covenant."
The /
8
The leased premises form part of a modern, high-rise building,
constructed according to the so-called central core concept, intended
for use,
primarily, as office accomodation. In a building of this kind the central core
contains the lifts, fire escape, services,
airconditioning ducts and other
facilities, leaving the entire area between the central core and the outside
walls available for
use by the owner or his tenants. Office space thus created
could be used either according to the open plan system, in which no partitioning
from floor to ceiling is used and a division of the open area is created by the
use of furniture or screens, or according to the
cellular system, in which the
open space is divided into offices by the use of internal demountable
partitions.
The /
9
The architect, Hoff, testified that the advantage of
the central core system is that no brickwork or plastering
is involved in the inside walls, so that the internal
partitioning could easily be changed to suit the particular
needs of individual occupants.
In clause 2 of the lease the leased premises
are described as follows :-
"The Lessor hereby lets to the Lessee which hires the entire 10th floor and
portion of the 11th floor of the building known as Bank
of Lisbon & South
Africa Building, situate on the Cor. President & Sauer Strts., Johannesburg,
measuring in extent 15 205
sq. ft. formerly occupied by Computer Sciences Sigma
Limited and more particularly delineated coloured red in the plans attached
(marked 'X' (10th floor plan) and 'Y' (11th floor plan) and initialled by the
parties for identification and shall hereinafter be
referred to as the 'leased
premises')."
As /
10.
As only the changes effected by defendant on the 11th floor of the building
were relied upon by plaintiff as a ground for cancellation,
I need refer to that
floor only.
The area delineated in red on the plan of the 11th floor shows a
combination of the open plan and cellular systems. It depicts four
offices
created by the use of demountable partitions with the remainder of the area left
as open plan. It was common cause at the
trial that the partitions on the 11th
floor, as depicted on the plan marked "Y", did not belong to plaintiff. These
partitions had
been erected by the previous tenant. Computer Sciences Sigma Ltd
(CSSL). It was also common cause that the parties concluded the
lease in the
knowledge /
11.
knowledge that these partitions did not suit the defendant's requirements and
would be removed and new partitions erected in order
to meet defendant's needs.
At the time the lease was negotiated by the parties, plaintiff's lease with CSSL
still had until 1981
to run, and having
already vacated the premises, CSSL was obviously anxious
to be released from its obligations under its lease.
In a separate agreement concluded with defendant, CSSL accordingly undertook
to pay defendant the amount of R25 000,00 in order to
provide its own
partitioning and carpeting subject to the condition that defendant concluded a
lease with plaintiff, thereby releasing
CSSL from its lease. It was further
agreed between defendant and CSSL that defendant would be responsible for
dismantling the existing
partitions. The agreement
arrived /
12
arrived at between the defendant and CSSL is
reflected
in the lease between plaintiff and defendant, clause 31
of the lease
providing as follows :-
"It is furthermore recorded that the Lessee and Computer Sciences Sigma
Limited, former occupants of the 'premises' have mutually
agreed upon a formula
insofar as payment for partitioning and carpeting etc., is concerned and that
there is no obligation whatsoever
upon the Lessor to either party in this
regard. It is recorded, however, that the Lessee shall take over from Computer
Sciences Sigma
Limited all existing partitions and carpeting on the premises and
the Lessee shall be responsible for the erection of any new partitioning
and or
removal of any of the existing partitioning as may be necessary."
In clause 31 of the lease, plaintiff thus ack=
nowledged that it did not own the partitioning installed
by CSSL on the 11th floor and that defendant could remove
it /
13. it and install new partitioning at defendant's own cost. The
clause also made it clear that there was no obligation upon plaintiff
to provide
or pay for any partitioning required by defendant.
From the aforegoing it is
clear, in my view, that the demountable partitions erected by CSSL on the 11th
floor, as depicted on the
plan, marked "Y", did not form part of the leased
premises and that it was never the intention of the parties that defendant would
lease the 11th floor as subdivided by these partitions. All that was let on this
floor was the open space, with its outer limits
or boundaries depicted on the
plan marked "Y". Within those boundaries, defendant was free to place its own
partitions in the way
which best suited
its /
14. its own needs, subject, of course, to defendant not thereby
breaching any of the conditions of the lease or municipal by-laws.
I proceed
to consider the nature and extent of the alterations which have been made. The
undisputed evidence for defendant was that,
after the commencement of its lease,
it initially changed, the partitioning on the 10th floor only. Although this was
done without
the plaintiff's prior written consent, the plaintiff at no stage
objected. The 11th floor was originally intended by defendant for
future
expansion and the partitioning on that floor, which it took over from CSSL, was
left intact. Apart from a minor change during
1979, which was effected at
plaintiff's request, when defendant was asked to give
up /.....
15
up a portion of the 11th floor in favour of another tenant, it was only
in 1981, when defendant decided to sublet its portion of the
11th floor, that
the partitioning left by CSSL on the 11th floor was removed and other
demountable partitioning installed by defendant
to suit the needs of its
subtenant. These changes led to the said letters of cancellation. In the letter
dated 31 August 1981, it
was alleged that the partitioning installed by
defendant was of a permanent nature and that it substantially altered the
"structure,
form and identity" of the premises. At the trial it was conceded by
counsel on behalf of plaintiff that the partitioning was not,of
a permanent
nature, nor did it alter the structure of the premises.
The /
16
The demountable partitioning erected by
defendant during 1981 on the 11th floor consisted of
light material boarding, fitted to the acoustical
ceiling and the floor by
screws. The acoustical
ceiling is a perforated type of fibre board which
is
suspended below the concrete. Hoff testified that the
11th floor, like other floors in a central core building,
is constructed on a modular basis, so that the aircon=
ditioning, lighting and power outlets are co-ordinated
onto a square pattern in relation to the central core
and the outside windows. As long as partitioning is
placed on a module the power and other services are not
interfered with. It is clear from Hoff's evidence that
the partitioning in question does not interfere with any of
the said services and that it can easily be removed with
hardly /
17. hardly any trace. Hoff said that the holes left by the
screws in the acoustical ceiling are not noticeable among the other random
holes, and the holes left in the floor are covered by the carpet.
The
partitioning erected by defendant on the 11th floor had the effect of creating
five offices where there had previously been four,
and creating a further office
near the kitchen. Although the plan which depicts the changes in the demountable
partitioning effected
by defendant also shows that one door was removed and two
new ones installed in the fire corridor, there is no evidence to show when,
and
by whom, these changes to the fire corridor were effected. It certainly cannot
be assumed that they were brought about by defendant.
No
mention /
18
mention was made of any changes in the fire corridor in the said letters of
cancellation.
In construing the words "any alterations or additions" in
clause 11 of the lease, it is clear that some limitation must be put upon
these
words. If the. words were to be given their literal meaning, without any
qualification, it would lead to absurd results and
would, just about render it
impossible for defendant to carry on its business on the premises. It would
mean, for example, that plaintiff's
written consent would be required whenever
defendant wanted to lay a new carpet or fit an electrical socket in the wall. It
would
also mean that plaintiff could defeat the whole scope and purpose of the
central core, open plan design by withholding its consent
to /
19. to the erection of any internal demountable partitions. It seems to me
that this would be an impossible construction.
The need to place a
restrictive construction on clauses of this kind, has generally been recognised
by the courts. In
Bickmore v Dimmer
,
supra
, it was held that the
erection of an advertisement outside a watchmaker's shop (a large clock
supported by iron stays bolted into
one of the stones of the front wall) which
had the effect that, in order to restore the structure to its former condition,
it would
not be sufficient to plug the holes but would require replacing the
stone, was no breach of a clause in a lease prohibiting alterations
without the
lessor's consent. It was held that the word "alteration" must be limited to
something which altered the '
form /
20
form or structure of the building.
In
Joseph v
London
C
ounty Counci
l
(1914) 3 LT 276
it was held that the erection
of an electric sign used for advertising, hung from the upper part of the
building by steel bands fixed
to the stonework of the building and supported by
struts screwed into the wood-work of the windows, which could be removed in a
few
hours , without damage to the fabric, was not a breach of a provision in a
lease not to alter the elevation of the building. ASTBURY
J held at p 277 that
the prohibition referred to an alteration in the fabric of the building and not
to an alteration in appearance
caused by "temporary advertisements and
frameworks which can be removed at any time, leaving the structure the same as
before".
In /
21
In
White v Ryan
(1932) IR 169
it was held,
following the decision
in
Bickmore v Dimmer
, that the
introduction of trade fixtures and
fittings which were
necessary for the purpose of converting the
premises
for the carrying on of the tenant's business, and which
in no way
damaged the premises or altered its form or
structure, fell outside a clause
in the lease prohibiting
any alterations in or additions bo the premises
without
the written consent of the landlord. See also
The
Gresham Life Assurance Society Ltd. v. Ranger
(1899)
15
TLR 454
and
Hyman v Rose
(1912) AC 623
at 632.
A restrictive interpretation of the words
"any
structural alteration" in a lease, was also
given in
Less and Anot
he
r v Bernstei
n and
Anoth
er
1948(4)
SA 333(C), SEARLE J holding (at p 339-340) that the
words /
22
words must be limited to alterations or additions
which are permanent in nature and which alter the
form or structure of the premises, as opposed to mere
superficial or surface changes.
Returning to the present case, I find it
unnecessary to determine the exact limitation to be
placed upon the words "alterations or additions" in
clause 11 of the lease. It is sufficient for present
purposes to say that, having regard to the scope and
purpose of the lease, the nature of the demountable
partitioning in
question, the non-permanent function it
was intended to serve, the fact that it in no way
changed the structure or form of the building and the fact
that it could easily be removed without damage to the
building /
23.
building (these are all factors to be taken into account -
the
list is not exhaustive), the changes effected by
defendant on the 11th floor
of the building do not con=
stitute such "alterations or additions". The defendant, accordingly, did not
breach clause 11 by erecting the
partitioning in question on the 11th floor of the
building.
I am furthermore of the view that the plaintiff, in any event, expressly
authorised the defendant in clause 13 of the lease to install
the partitioning
in question.
That clause contains no time limit within which the new
partitioning had to be installed. Nor is there any
limitation imposed as to the nature or specifications
of the new partitioning.
For these reasons I am of the view that plaintiff was not entitled to cancel
the lease and that the Court
a
quo
/........
24.
a quo correctly refused to grant the ejectment order. The cross-appeal is
dismissed with costs.
W. VIVIER, AJA.
KOTZé JA. )
MILLER JA.) Concur. GALGUT AJA.)
ELOFF AJA.)