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[2008] ZAWCHC 166
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Dormex 115 CC v Fred Jones Cockrell t/a Boulevard Motors (18448/2007) [2008] ZAWCHC 166 (19 March 2008)
JUDGMENT
IN
THE HIGH COURT OF SOUTH AFRICA
(CAPE
OF GOOD HOPE PROVINCIAL DIVISION)
CASE NO
:
18448/2007
DATE
:
19
MARCH 2008
In
the matter between:
DORMEX
115 CC
Applicant
And
FRED
JONES COCKRELL t/a
Respondent
BOULEVARD
MOTORS
JUDGMENT
OOSTHUIZEN.
AJ:
[1]
in the instant application it is not in dispute that applicant is the
registered owner of certain property being erf 1586 Goodwood,
that
respondent is in possession of the property and that at such property
respondent operates a motor vehicle service and petrol
station.
[2]
Applicant acquired the property from Polsta (Pty) Ltd (hereinafter
referred to as "Polsta"). In 1987, Polsta concluded
a lease
with BP Southern Africa (Pty) Ltd (hereinafter referred to as "BP")
and respondent in turn sub-leased the property
from BP. Erf 1586
Goodwood is hereinafter referred to as "the leased
property".
[3]
On acquiring the leased property from Polsta, applicant, by operation
of law, stepped into the shoes of Polsta as lessor in
respect of the
lease with BP. Applicant contends that the main lease with BP expired
on 31 August 2007. This contention is borne
out by the lease which is
annexed to the founding affidavit and which is alleged to be that
main lease. Clause 2 thereof reads
as follows:
"This
agreement of lease commences on 1 September 2002 and shall endure
until 31 August 2007".
[4]
The legal position as regards the rights of a sub-lessee where the
main fease has lapsed is correctly reflected,
inter
alia,
in
two judgments of this Division; that of
Laubser
v Foster & Foster
1944 CPD 380
and
United
Watch & Diamond Company (Ptv) Ltd & Others v Dfsa Hotels Ltd
& Another
1972{4) SA 409 CPD. In both those cases it was held that a sub-lease
comes to an end when the main lease lapses. I see no basis
for
departing from the reasoning and conclusions of law set out therein.
[5]
In the instant application the applicant seeks an eviction order on
the basis that the main lease has come to an end on 31 August
2007 by
virtue of the clause already referred to and that the rights of the
respondent as sublease lessee have accordingly
also lapsed in
view of the authorities to which I refer above.
[6]
The respondent advances various grounds of opposition. As to urgency,
the respondent contends that no case is made out for dealing
with the
matter on an urgent basis and submits that that being so, the
application falls to be dismissed.
[7]
It is well established that, in urgent applications, the applicant
must make out a case as to why the matter must be dealt with
as one
of urgency. If the Court is not satisfied that the applicant has done
so, there are various options open to it. It may,
depending on the
circumstances, dismiss the application, strike the matter from the
roll or postpone the hearing thereof to a later
date (see
f
L & B Marcow Caterers (Ptv) Ltd v Greatermans SA Ltd &
Another
and
Aroma
N (Pty) Ltd v Hypermarket fPtv) Ltd & Another
1981(4) SA 108 CPD).
[8]
The application now before me was launched on 18 December 2007. It
was postponed on four subsequent occasions. Three months
have lapsed
since the launching of the application. It appears to me that the
respondent has had adequate opportunity of setting
out the grounds on
which he opposes the relief sought against him and of resisting the
application and canvassing all matters relative
thereto. There is
nothing indicating that the Eaunch of the proceedings on an urgent
basis constitutes an abuse of process by the
applicant. The applicant
states that he wishes to make use of the lease premises to operate a
petrol station, workshops and as
a venue for the sale of motor
vehicles. This intention is not disputed.
[9]
The respondent contends that the operation of this type of business
requires certain licences issued by the regulatory authorities,
and
that the issue thereof may take several months. The details , put up
by the respondent are unclear as to how long that process
or those
processes may take but the facts thus advanced do not, in my view,
defeat the applicant's right to the eviction order
sought. There is
no reason why the applicant should not in the meantime be placed in
occupation and permitted to commence with
whatever steps are open to
him preparatory to launching the business. There is furthermore no
tender by the respondent to vacate
the premises once the regulatory
approval is granted.
[10]
An argument was put up on behalf of the respondent that the founding
papers contain no details showing that the respondent
is a man of
straw. The respondent would therefore be able to continue paying the
rental due in terms of the sub-lease and also,
so it was contended,
any holding-over damages that may later be awarded to the applicant.
For that reason it was submitted the
eviction proceedings cannot be
entertained on an urgent basis.
[11]
That contention loses sight of the fact that the applicant has stated
that it requires possession of the leased property and
it requires to
utilise the leased property for its own ends. H does not require the
property for purposes of re-letting to another
person. No authority
was cited to me in support of a proposition that a right to eviction
is negated simply because the Eessee
is in a position to pay damages
or compensation in some other form, should it be found that the
lessee's continued occupation of
the property was unlawful. That
factor does not, in my submission, negate the applicant's right to
have the matter dealt with
on an urgent basis. I can see no reason
why, in the circumstances I have outlined, it is inappropriate to
deal with the matter
on an urgent basis.
[12]
Turning then to the application itself. The respondent contends that
the main lease which was annexed to the founding affidavit
containing,
inter
alia,
clause
2, the terms whereof I have already quoted, is not properly before
the Court and cannot permissibly be had regard to. The
respondent's
contention is that in making allegations as to the conclusion of this
(ease and placing the document before the Court,
the applicant
breached the evidentiary rule relating to hearsay evidence.
[13]
Applicant's averment that he purchased the property subject to this
lease is of course not hearsay. Applicant is aware of the
terms
governing the sale of the property to it and encumbrances resting on
the property at the time. There is nothing in the documentation
and
the material before me indicating that the lease in question is
anything but genuine. In addition, the existence of the lease
is
confirmed by various letters included in the record from BP and their
attorneys. Furthermore, the existence of a lease is acknowledged
in
the sub-letting agreement concluded between BP and respondent during
2002 and no facts were, in my view, put up by respondent
indicating
that he had any reason to betieve that some lease agreement other
than that annexed to the founding affidavit as Annexure
ES2 is in
existence or was concluded between the applicant's predecessor and
BP.
[14]
Lastly on this issue, even if the evidence regarding the conclusion
of the lease does amount to hearsay, as submitted by respondent,
the
Court is vested with a discretion to receive such evidence by virtue
of section 3 of Act 45 of 1988. The manner in which that
discretion
is to be exercised depends on the nature of the proceedings, of the
evidence proffered, of the purpose which the evidence
would serve, of
the reliability thereof and of prejudice to the other party if the
evidence is allowed.
[15]
To the extent that the document in question (Annexure ES2 to the
founding affidavit) does involve and is introduced by allegations
which amounted to hearsay, I am of the view that this is a proper
case for such evidence to be received in terms of section 3 of
Act 45
of 1998.
[16]
The next point raised by the respondent arises from the fact that
prior to the institution of the instant application, the
applicant
launched an action claiming the same relief in this court under case
number 14712/2007.
in
that
action (hereinafter referred to as "the previous action") a
notice of withdrawal was served on 12 December 2007.
Respondent
contends in argument that such notice of withdrawal was not competent
because, prior to the service thereof, an application
for summary
judgment had been launched and a date for the hearing of the summary
judgment had been fixed.
[17]
An application for summary judgment requires, by virtue of Rule
32(2), that the notice of motion pertaining thereto must indicate
the
date on which the application will be set down for hearing. That does
not constitute a set-down of the trial as envisaged in
terms of Rule
41(1)(a) and Rule 41(1)(a) is, therefore, inapplicable. In any event,
it cannot be said in this matter that respondent
objected to the
notice of withdrawal. Respondent's stance was confined to the issuing
of a notice in terms of Rule 41(1)(c) demanding
that the costs of the
previous action be paid. There is therefore, in my view, no substance
in the contention that because of the
action previously instituted,
the application before the Court constitutes, in some or other sense,
a
res
iudicata.
[18]
The respondent next relied on the doctrine of tacit relocation of a
lease. That doctrine is described in Cooper:
Landlord
& Tenant
(2
nd
ed.) at page 340 in the following terms:
"The
tacit relocation is an implied agreement to re-let and is concluded
by the lessor permitting the lessee to remain in occupation
after the
termination of the lease and accepting rent from the lessee for the
use and enjoyment of the property. In general our
courts have not
followed the Roman-Dutch writers but have made the duration of a
tacit lease dependent upon the rent period. Thus
the effect of a
tacit relocation of premises originally let for one year at a monthly
rent (it has been held) is to renew the lease
from month to month and
each time only for one month. On this reasoning upon the expiration
of the period, the lessee should be
entitled to vacate the premises
and the lessor to claim his eviction but the courts hold that the
tacit relocation can be terminated
unilaterally only upon reasonable
notice being given, the reason presumably being that in the absence
of an indication to the contrary,
the parties have tacitly agreed
that the relocation will be for an indefinite period".
[19]
The aforesaid passage was approved in the matter of
Pareto
Ltd v Mythos Leather Manufacturing
2000(3) SA 999 (W) at 1004H where the Court said the following:
"The
sufficiency of the termination notice is then relevant .... As I have
said, on both the scenarios which I have outlined
and in which the
sufficiency of the termination became relevant, a periodic lease
comes into existence. Cooper
op
cit
at
65 footnote 43) says that such a lease could be called an open-end
lease. Our courts have accepted that a day's notice is reasonable
in
the case of a daily lease and a month's notice in the case of monthly
lease".
[20]
In the instant matter, notice has been given to the respondent to
vacate the premises at the end of August 2007. Such notice
was given
firstly in a letter from BP to respondent dated 28 May 2007 notifying
him that his occupancy of the leased premises woufd
expire at the end
of August 2007 and secondly, in a later letter from BP dated 14 June
2007 which contains the unequivocal statement
that the lease would
terminate on 31 August 2007. Respondent does not deny the receipt of
these letters and was accordingly, some
two and a half months prior
to the expiry of the lease, notified of the fact that his right of
occupation would terminate on 31
August 2007.
[21]
A tenant or sub-tenant who ignores a valid notice of termination of
this nature and, contrary to the terms of such notice,
remains in
occupation of leased property, cannot contend that a tacit relocation
has occurred. Even if, however, there was scope
for finding that a
tacit relocation had taken place, the respondent was given more than
sufficient notice of the termination thereof
and has failed to put up
any facts showing that the period of the notice or notices that he
was given was unreasonable.
[22]
The respondent next contended, relying on clause 18 of the lease
(Annexure ES 2 to the founding affidavit), that a right of
first
refusal was enjoyed by the respondent in respect of certain
transactions and that he had not been given an opportunity of
exercising that right of first refusal. Clause 18 reads as follows:
"During
the subsistence of this lease or any renewal thereof, the lessee
shall have the sole and exclusive right to match any
bona
fide
offer
from any third party relating to the sale, lease or disposal of the
leased premises which the lessor may wish to accept".
[23]
Firstly, and upon a plain reading of the clause which I have just
quoted, it applies only during the subsistence of the lease
or any
renewal thereof. It does not, as was contended for by the respondent,
survive the lapsing of the lease. The lease in the
instant case, as
already pointed out, terminated on 30 August 2007, there has been no
renewal thereof and the clause is therefore
inapplicable.
[24]
In any event, the right of first refusal pertains only to the
circumstances where the applicant wishes to effect the sale,
lease or
disposal of the leased property to someone other than BP. There is no
indication on the material before me that any such
disposal, sale or
lease to a third person is contemplated so that even if the right of
refusal did remain
extant,
the
circumstances under which it would come into operation have not
arisen.
[25]
Reliance was then placed on a contention that contractually the
doctrine of legitimate expectation came into play and that
by reason
of such doctrine, the respondent had a legitimate expectation that he
would be entitled to remain in occupation of the
premises for a
further three years or, alternatively, that a further sublease
for a three year period would be concluded with
him.
[26]
In this regard, reliance was placed on the judgment of
Lamprecht
& Another v McNeillie
1994(3) SA 665 AD. That matter concerned the dismissal of an employee
employed in terms of a contract of employment concluded between
two
private persons. The question arose whether it was a term of the
contract of employment that in dismissal proceedings certain
disciplinary guidelines which the employer had caused to be published
to its employees had to be followed. The Court found that
those
disciplinary guidelines did not have any contractual force. The Court
at 671C-D expressly left open the question whether
the doctrine of
legitimate expectation can operate in the field of contract, finding
it unnecessary to decide on this issue.
[27]
It must be borne in mind that
tamprecht
& Another v McNeillie
concerned disciplinary guidelines and there is abundant authority
that an employer who has published such guidelines cannot, without
good reason, depart there from in the conduct of disciplinary
proceedings.
[28]
Leaving aside, however, that consideration specific to the
Lamprecht
case, it is well established, in regard to the doctrine of legitimate
expectation, that the party raising such an expectation must
show
that the representation underlying the expectation was clear,
unambiguous and devoid of relevant qualifications and that the
expectation generated thereby must be reasonable. (See in this regard
National
Director of Public Prosecutions v Phillips & Others
2002(4) SA 60 (W) at 61;
South
African Veterinary Council & Another v Szymanski
2003(4) SA 42 (SCA) at 49E-I)
[29]
In the instant case and in relation to the legitimate expectation
which the respondent says he has, he refers to the fact that
at a
stage prior to the launch of the instant application the applicant
indicated an interest in buying the respondent's business.
The
applicant also allegedly at some or other stage indicated that it was
not interested in continuing the relationship with BP,
and indicated
that it had had a fall-out with BP.
[30]
Even if one accepts these allegations as true, I cannot by any
stretch of imagination see that they would give rise to the
expectation alleged, namely that the respondent would be entitled to
remain in occupation of the property for a further three years
and
the reliance on the doctrine of legitimate expectation is, in my
view, misplaced.
[31]
Lastly, the respondent contended that he is entitled to remain in
occupation of the premises by virtue of an enrichment
lien.
It
is well established that such a
fien
exists
where the person asserting the
lien
has
expended money or done work in respect of the property alleged to be
the subject matter of the
lien.
(See
LAWSA (1
st
reissue) Vol. 15 paragraph 50, paragraph 64)
[32]
In the instant case at best for the respondent it appears that he has
operated a successful business at the premises for some
period of
time. There is nothing in the material put up showing that he has
expended money or labour in the improvement of the
property and as
such there is nothing which would give rise to any
lien
recognised
in terms of the applicabfe principles of our law,
[33]
fn the premises, I am of the view that none of the grounds raised by
the respondent in resisting the relief sought constitute
a legally
valid reason for refusing the eviction that the applicant seeks in
these proceedings. The applicant is accordingly entitled
to succeed.
As regards the costs of the application, I am of the view that the
costs on the ordinary scale are appropriate and
that there is no
basis for ordering any costs on a punitive scale.
[34]
In the circumstances, an order is issued in terms of prayers 2
,
3
and 4 of the notice of motion. As regards costs, it is ordered that
they shall include all the costs standing over in respect
of previous
occasions on which the matter was heard.
OOSTHUIZEN,
A J