Maim Gamur (Pty) Ltd v Afgri Operations Limited (A22/2005) [2006] ZAFSHC 108 (9 February 2006)

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[2006] ZAFSHC 108
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Maim Gamur (Pty) Ltd v Afgri Operations Limited (A22/2005) [2006] ZAFSHC 108 (9 February 2006)

IN THE HIGH COURT
OF SOUTH AFRICA
(ORANGE
FREE STATE PROVINCIAL DIVISION)
Appeal No. : A22/2005
In
the appeal between:-
MAIM
GAMUR (PTY) LTD
Appellant
and
AFGRI
OPERATIONS LIMITED
Respondent
(previous
OTK Ltd)
CORAM:
HATTINGH
J
et
EBRAHIM
J
et
VAN
DER MERWE J
_______________________________________________________
HEARD
ON:
14
NOVEMBER 2005
_______________________________________________________
JUDGMENT
BY:
EBRAHIM
J
_______________________________________________________
DELIVERED
ON:
9
FEBRUARY 2006
_______________________________________________________
[1] This
is a civil appeal against the dismissal of an application launched in
the court
a
quo
by the appellant for payment of arrear rental in terms of two leases.
The appellant appeals against the judgment of the court
a
quo
with the leave of the Supreme Court of Appeal.
[2] In
its Notice of Motion launching the application the appellant pleaded
the relief sought as follows:
“
2. Dat
vonnis teen die respondent verleen word vir betaling van die bedrag
van R102 600.00 (Een Honderd en Twee Duisend Ses Honderd
Rand),
alternatiewelik
dat die Respondent gelas word om die maandelikse huurverpligtinge ten
opsigte van persele 7342 en 5592 teenoor Applikant na te kom,
welke
sal insluit betaling van huurgeld ten opsigte van beide persele vir
die periode November 2003 en Desember 2003, hangende die
instel van
‘n aksie deur die Applikant vir spesifieke nakoming van aanhangsel
“A” en “B” welke aksie ingestel moet word
binne 20 dae na die
verlening van hierdie bevel;”
(
Aanhangsel
“A” and “B” refer to the 2 leases.)
[3] The application was
based on the following common cause background facts:
3.1 The appellant is the
owner of two properties in Kroonstad, namely stand 7342 and stand
5592. The two properties are adjacent
to each other.
3.2 The respondent
occupied shop premises and a warehouse on stand 7342 (“the general
dealer premises”) with effect from 1 August
2002 pursuant to a
written lease which it concluded with the appellant on 21 October
2002 (“the first lease”). The first lease
is for an initial
period of 5 years. The monthly rental for November and December 2003
is R31 350.00 (i.e. R27 500.00 plus VAT).
Whilst
the respondent was in occupation of the general dealer premises the
appellant gave it free use of stand 7342 for parking.
In early 2003 the
respondent obtained the Massey Ferguson Tractor Agency. The
respondent negotiated with the appellant that the
appellant would
build a showroom and workshop on stand 5592 (“the new building”)
which the respondent would lease from the
appellant for the purpose
of conducting its new business of selling, servicing and repairing
tractors.
These negotiations
resulted in the conclusion of a written lease on 20 June 2003 (“The
second lease”) in terms of which the
respondent leases the new
building from the appellant for an initial period of 5 years with
effect from 1 June 2003 (Annex “B”).
The monthly rental for
the first year (which included November and December 2003) was R19
950.00 (i.e. R17 500.00 plus VAT).
The new building was
not built by 1 June 2003. This being so the appellant assisted the
respondent in alleviating the problem
of where to store goods which
were arriving for the purpose of its new business by giving it the
free temporary use of other
premises.
Despite an undertaking
that the new building would be ready for occupation by 13 August
2003 it was not.
The respondent was only
given occupation of the showroom part of the new building on 4
September 2003. That part was itself not
fit for the purpose for
which it had been hired in that the cement floor cracked under the
weight of a tractor.
In the result and on 17
October 2003 the respondent (i.e. through its attorneys) put the
appellant on terms to make the new building
available for
occupation by the respondent within 7 days failing which the
respondent would cancel the lease.
The appellant failed to
do this and on 28 October 2003 the respondent’s attorneys
informed the appellant that the respondent
had cancelled the second
lease.
The appellant then
began to move its equipment from the incomplete building but was
unable to complete its move until 3 December
2003 because it was
unable to secure alternative premises until then.
Despite the common
cause fact that the appellant had not given the respondent
occupation of the new building, the appellant obtained
payment of
rental from the respondent for the new building for the 5 months
from June to October 2003 (i.e. in a total sum of
R99 750.00 (i.e.
5 x R19 950.00)).
The respondent alleges
that this was done fraudulently. This, the appellant denies and
alleges that it was entitled to the rental.
The respondent remained
in occupation of the general dealer premises but failed physically
to pay the rental in respect thereof
to the appellant in terms of
the first lease for November and December 2003.
In a letter written on
24 November 2003 the appellant denied that the respondent was
entitled to cancel the second lease, recorded
that it had been
informed on 21 November 2003 that the respondent had no interest in
taking occupation of the new building and
demanded payment of
rental for November 2003 in respect of both properties.
In
its response of 28 November 2003 the respondent’s attorneys
reiterated that the respondent had cancelled the second lease
and
informed the appellant that payment of the November rental for the
general dealer premises had taken place by way of set-off
“against
the payments wrongfully obtained from it in respect of Erf 5592
...”
and that the respondent intended to set-off future rentals against
those payments.
During
argument in the court
a
quo
counsel for the appellant abandoned his claim for final relief and
confined his submissions to the claim for interim relief in
accordance with the alternative prayer in the Notice of Motion.
Rampai J however, was quite incorrectly, requested to apply the
test
for final relief as set out in
PLASCON-EVANS
PAINTS LTD v VAN RIEBEECK PAINTS (PTY) LTD
[1984] ZASCA 51
;
1984 (3) SA 623
(A) in adjudicating the matter. This in all
likelihood led him to making a final judgment, dismissing the
application on the basis
that a valid cancellation of the second
lease had been effected by the respondent. In dealing with the
matter on this basis Rampai
J, with respect, erred as the only
question before him was whether or not the requirements for the
granting of interim relief had
been satisfied by the appellant in
these proceedings.
[5] On
appeal before us counsel for the appellant, in conceding the
erroneous approach adopted by the court
a
quo
,
extended the ambit of the appeal arguing that different relief ought
to be granted in respect of the two leases. He requested that
final
relief be granted in the sum of R62 700.00 in respect of the first
lease and the interim interdict be granted in respect of
the second
lease. He argued that final relief is competent in respect of the
first lease on the basis that the set off of rentals
claimed by the
respondent against the amounts due to it under the second lease is
prohibited by clause 5.8 of the first lease
5.1 Clause
5.8 reads as follows:
“5.
HUURDER
SE VERPLIGTINGS
DIE
HUURDER SAL:-
5.8 Nie geregtig wees om betaling van
huurgeld of ander geld aan die VERHUURDER te weerhou as gevolg van
enige beweerde defek of tekortkoming
wat betref die gebou of die
toestand daarvan of om enige ander rede nie, onderhewig aan paragraaf
7.1 hiervan.”
There are two cogent
reasons why this argument must fail and why a final judgment cannot
be granted in respect of the first lease:
the
relief was expressly abandoned at the hearing in the court
a
quo
;
and
witholding
payment cannot be regarded as equivalent to a set-off. It is the
very antithesis thereof. A set-off is a payment
by operation of
law.
[6] In
any event in the present case if one applies the restrictive rule of
interpretation and the
eiusdem
generis
rule
the words “om enige ander rede” in clause 5.8 clearly relate to
the condition or state of the premises under the lease.
Any
withholding in the present case is for monies wrongly paid in respect
of another transaction in which fraud is alleged to have
been
committed by the appellant and not as a result of shortcomings in the
landlord’s performance which have manifested during
the currency of
the lease and which would at common law have given the tenant the
right to withhold rental or part thereof.
[7] Turning
to the second lease and the request for interim relief in respect
thereof, it is clear the salient issue here is whether
the
requirements for the grant of such relief have been met. It is trite
that there are four essential requirements for the granting
of an
interim interdict. The applicant for interim relief must:
establish
a
prima
facie
right to the relief sought;
show that he will
suffer irreparable harm if the relief sought is not granted;
that the balance of
convenience is in his favour; and
that he has no
satisfactory alternative remedy.
See
WEBSTER
v MITCHELL
1948 (1) SA 1186
(W);
SETLOGELO
v SETLOGELO
1914 (AD) 221 at p. 227;
ERIKSEN
MOTORS (WELKOM) LTD v PROTEA MOTORS, WARRENTON AND ANOTHER
1973 (3) SA 685
at 691 (AD);
BEECHAM
GROUP LTD v B-M GROUP (PTY) LTD
1977 (1) SA 50
(T) at 55 B – G.
Although
I have accepted without deciding finally, in the appellant’s favour
that he has made out a
prima
facie
case, there appears to be no case made out by the appellant that it
has a reasonable apprehension that it will suffer irreparable
harm
and/or that it has no satisfactory alternative remedy were the relief
sought not to be granted. The only case made out by the
appellant in
its founding papers (which is the proper place to make out its case)
is that it has incurred obligations in respect
of the improvements
which it has made to the leased premises for the purpose of making it
suitable for the respondent’s needs.
In addition the applicant
alleges that non-payment of rentals will result in serious cash flow
problems for it. A cash flow problem
is by definition a temporary
shortage of cash despite the availability of sufficient assets.
Clearly this does not prove a probability
of irreparable harm. It is
not disputed that the respondent is a public company that will be
able to pay any amount found to be
due by it to the appellant. The
appellant therefore also did not establish that an action for payment
is not a satisfactory remedy
in the circumstances.
[8] A
further reason which militates against the appellant succeeding in
this appeal is that the application launched in the court
a
quo
amounts
to an attempt to deny the respondent its procedural rights under Rule
22(4) of the Uniform Rules of the Superior Court. See
Erasmus
Superior
Court Practice
.
The appellant proposes to institute action. It is clear that the
respondent will raise its claim for repayment of rent irrespective
of
whether or not same is capable of set-off. (See paragraph 5.16 p. 23
of the Respondent’s Heads of Argument.) Assuming such
is not
capable of set-off, the procedural rules would afford the respondent
a stay of the appellant’s claim for rent, pending the
determination
of its counterclaim for repayment of its rent. No compelling reasons
exist in the appeal for the denial of the respondent’s
procedural
rights under Rule 22(4) in the proposed action.
[9] The
respondent also raised the issue of the appellant’s
locus
standi
to bring the proceedings. The respondent contends that since the
appellant had ceded its claim to Nedbank, it could not establish
a
prima
facie
right to the relief sought as it had no
locus
standi
to launch the proceedings in the first place. According to the
respondent the only basis on which the appellant could have launched
the proceedings in the court
a
quo
was
if it had taken re-cession of its claim from Nedbank. In view of the
approach I have adopted to the issue whether or not the
appellant had
satisfied the requirements for the granting of interim relief, I am
of the view that it is not necessary for the question
of whether or
not the claim had in fact been ceded and whether or not the appellant
had
locus
standi
to bring these proceedings, to be finally decided.
[10] In the circumstances
the appeal is dismissed with costs.
____________
S.EBRAHIM, J
I agree.
_______________
G.A. HATTINGH, J
I agree.
_______________________
C.H.G. VAN DER MERWE,
J
On
behalf of the appellant: Adv. A.J.R. van Rhyn SC and
Adv.
S.J. Reinders
Instructed
by:
Honey
Attorneys
BLOEMFONTEIN
On
behalf of respondent: Adv. E.A. Limberis
Instructed
by:
Lovius-Block
BLOEMFONTEIN
/sp