IN THE HIGH COURT OF SOUTH AFRICA
(EASTERN CAPE DIVISION, MAKHANDA)
Not Reportable
CASE NO: 3431/2016
In the matter between:
CLEMEN INVESTMENTS NO. (PTY) LTD PLAINTIFF
and
SITHEMBISO SHARON NDZIMELA FIRST DEFENDANT
HENTIE DE CONING SECOND DEFENDANT
JUDGMENT
Noncembu J
[1] This is an action arising out of a lease agreement that was entered into
between the plaintiff and the principal debt or, GHKS Investments (Pty) limited, a
company duly registered according to the company laws of the Republic of South
Africa (the company) on 19 May 2014.
[2] On the aforementioned date and in East London, the first and second
defendants bound themselves in writing as sureties and co-principal debtors with the
company, in respect of all the compan y’s obligations towards the plaintiff. The action
has been withdrawn against the second defendant.
[3] The lease agreement was subject to, inter alia, the following conditions which
are common cause:
(a) The lease was for a period of two months commencing 1 July 2014 to 31
August 2014, thereafter for a period of five years commencing 1 September
2014 terminating on 31 August 2019.
(b) The company undertook to pay rent in the amount of R38,000 rands per
month plus Vat from 1 July 2014 to 31 August 2014 , and then the amount of
R75, 726.00 per month plus Vat from 1 September 2014 to 31 August 2015,
thereafter the rental would escalate at 8% per annum, compounded on the
annual anniversary date of the commencement of the lease agreement until
the expiry of the lease agreement.
(c) In the event that:
(i) the rental or any other amount payable by the tenant to the landlord
in terms of the lease agreement is not paid on the due date1, or
(ii) the tenant commits or suffers to permit the commission of any
breach of any of the other terms of the lease agreement, whether or
not such breach goes to the root of the contract, and fails to pay such
amount or remedy such breach within seven (7) days after being called
upon by written notice to do so2,
then in the event any one or more of the aforesaid breaches having occurred ,
the landlord shall be entitled but not obliged, notwithstanding any previous
waiver or anything to the contrary contained in the lease agreement, to
1 Clause 21.1.1 annexure “B” to plaintiff’s further amended particulars of claim.
2 Clause 21.1.2 annexure “B” to plaintiff’s further amended particulars of claim.
forthwith cancel the lease and resume possession of the premisses and upon
doing so, remove from the premisses any goods situated therein.
[4] In support of its claim, t he plaintiff led the evidence of two witnesses in terms
of which it alleged that the company was indebted to it in respect of arrear rental and
other expenses. As a result of the alleged indebtedness, the plaintiff alleges that it
elected to cancel the lease forthwith as provided for in terms of the lease agreement.
At the close of the plaintiff’s case, the first defendant applied for absolution from the
instance, with costs.
[5] Two grounds were listed as a basis for the said application. The first one was
that the plaintiff ’s claim failed to show a cause of action. This was premised on the
submission that there was nothing in the pleadings to say that the company was
liable to the plaintiff so as to invoke the first defendant’s obligations as surety and a
co-principal debtor, as there is no judgment against the company.
[6] In this regard the first defendant contend ed that his liability is based on a
judgment of the magistrate’s court, which is non -existent. This arises from the
common cause evidence that the action pertaining to the current claim was initially
instituted at the magistrate’s court against both defendants as well as the company,
and a default judgment was obtained against all three. The said ju dgment, however,
was later rescinded against all three. The action in the magistrate’s court was
withdrawn against first and second defendants.
[7] Although t he plaintiff in its further amended particulars of claim erroneously
refers to the said judgment as having been rescinded against only the two
defendants; it has since become common cause that the judgment was rescinded
against all three. This is evident in that, whilst in argument counsel for the first
defendant sought to take issue with the fact tha t the plaintiff’s pleadings refer to a
judgment and a judgment debt, in his amended plea the first defendant not only
clarifies that the judgment was rescinded against the company as well, but also
raises a special plea of lis pendens.
[8] Such a plea could not be raised if the first defendant believed that the case he
is called to answer already has a judgment in place . Surely there cannot be a
pending case and a judgment based on the same c laim at the same time. The first
defendant therefore cannot probate and approbate.
[9] What is clear however, from both the first defendant’ s pleadings and the
submissions made in terms of the application for absolution, is that t he upshot of his
contention on the first ground , is that in the absence of a judgment against the
company, there can be no liability invoked aga inst the first defendant, as his liability
is premised on that of the company.
[10] The second ground for the application is that the plaintiff has failed to comply
with the breach notice as provided for in terms of its contract. This is premised on the
terms of clause 21.1.2 of the agreement, which require that in the event of a breach
of the terms of the contract, the tenant be given seven days’ notice within which to
remedy such breach. The contention is that the company was not given the requisite
notice in terms of the aforementioned provisions.
[11] As already mentioned above, w ith regards to the first ground the first
defendant has noted a special plea of lis pendens against the plaintiff’s action,
stating that because the magistrate’s court action was never withdrawn against the
company, it is still pending and as such no claim can stand against the first
defendant based on the same cause of action.
[12] This plea is ill -founded and the argument premised thereupon is misguided.
The plaintiff’s case, which is not disputed, is that the company has been de -
registered. As such it has no legal personality, and therefore no action can be taken
against it.
[13] The plaintiff contends that it relies on clause 2 o f the Deed of Suretyship in
terms of which the first defendant renounced the benefits of legal exceptions of
excussion and division with the full meaning and effect of which he was fully
acquainted. It follows thus, that although it can be accepted that gi ven the
deregistration of the company, the plaintiff had exhausted all the remedies it could
against it (the company), it was not necessary for it to establish such exhaustion
given the aforementioned renunciation as the first defendant signed as a co-principal
debtor.
[14] Therefore, the plaintiff did not need to obtain a judgment or exhaust its
remedies against the company before it could institute action against the defendants.
The case for the plaintiff is that it relies on the indebtedness of the com pany to
institute a claim against the first defendant, which it can given the renunciation of
legal exceptions as mentioned above. As to whether or not the indebtedness of the
company has been established, is not a matter for determination at this stage of the
proceedings.
[15] With regards to the second ground, the first defendant referred this court to
various authorities pertaining to strict compliance with the terms of a breach clause
in a contract for a cancellation to follow. 3 The essence of these authorities is that
strict compliance with the peremptory provisions of a breach clause, where a
contract provides certain procedures before cancellation of a contract can take
place, must be adhered to. The contention by the first defendant therefore, is that the
plaintiff failed to comply with the breach clause contained in clause 21of the lease
agreement, in that it did not give the first defendant notice of the breach as well as
the 7days within which to remedy such breach as provi ded for in terms of the lease.
On this ground alone therefore, he contends that he should be granted absolution
from the instance.
[16] The plaintiff on the other hand, argued that it relied on clause 21.1.1 of the
lease agreement, and as such notice was not required in terms of the said provision
as it was only required to communicate its election and intention to cancel, which it
did wit h the service of the summons on the company on 3 September 2014. The
plaintiff’s argument is that clause 21.1.1 is not co -joined to clause 21.1.2, where 7
days is required to remedy a breach.
3 See Datacentrix (Pty) Ltd v O -Line (Pty) Ltd (891/2021) [2022] ZASCA, 162 (25 November 2022);
Hano Trading CC v J R 209 Investments (Pty) Ltd and Another 2013 (1) SA 161 (SCA ) at paras [31]
to [34]
[17] In my view, the issue in this regard is that of interpretation.
[18] It is therefore necessary to regurgitate clause 21 .1 in its entirety in order to be
able to analyse it in its proper context. It reads as follows:
‘21. Breach
21.1.1 Should the rental or any other amount payable by the Tenant to the
Landlord in terms of this lease agreement not be paid on due date , or
(emphasis intended)
21.1.2 Should the Tenant commit or suffer to permit the commission of any
breach of any of the other terms of the Lease, whether o r not such breach
goes to the root of this Contract, and fails to pay such amount or remedy such
breach within SEVEN (7) DAYS after being called upon by written notice to do
so, or (emphasis intended)
2.1.1.3 Should the Tenant be placed in liquidation, whether provisional
or final and whether voluntarily or compulsory, or (emphasis intended)
2.1.1.4 Should the Tenant be placed under Judicial Management
whether provisional or final, or (emphasis intended)
2.1.1.5 Should the Tenant effect or attempt to effect a general
compromise with its creditors or any arrangement with its creditors , or
(emphasis intended)
2.1.1.6 Should a Default Judgment be entered into against it or against
the guarantor and fa il within SEVEN (7) DAYS after such Judgment to satisfy
or take steps to rescind same, or (emphasis intended)
2.1.1.7 Should the Tenant consistently breach is the Lease so as to
show an unwillingness or inability to perform the obligations in terms of the
Lease, then and in such event,
The L andlord shall be e ntitled but not obliged in the event of anyone or
more of the aforesaid breaches having occurred , notwithstanding any
previous waiver or anything to the contrary herein contained, forthwith
to cancel th e Lease and to resume possession of the premises and upon
doing so to remove from the premises any goods situated therein. ’ (emphasis
intended)
[19] The principles enunciated in Natal Joint Municipal Pension Fund v Endumeni
Municipality4 with regards to interpretation have become trite. ‘A sensible meaning is
to be preferred to one that leads to insensible or unbusinesslike result or undermines
the apparent purpose of the document. Judges must be alert to, and guard against,
the temptation to substitute what they regard as reasonable, sensible or businesslike
for the words actually used.’
[21] A closer look at clause 21.1 as a whole evinces that the sub -clauses
contained therein are disjointed, and that each of the sub -clauses individually , or
together with others, can result or entitle the landlord to a cancellation of the
contract. If ever there was any confusion in this regard, the last sub -paragraph
dispels any such confusion as it makes it very clear that any one or more of the
aforementioned breaches could entitle the landlord to forthwith cancel the lease.
[22] This clearly demonstrates that each sub -clause pertains to a separate
breach, and where a particular breach requires a particular notice, this is spelt out
clear in the particular sub -clause ( see for example sub -clauses 21.1.2 - where a
tenant is given 7 days within which to remedy a breach; and 21.1.7 -where a tenant
is afforded 7 days within which to satisfy a judgment debt or take steps to rescind
same).
[23] It is the plaintiff’s contention that it placed reliance on clause 21.1.1 to
forthwith cancel its lease agreement with the company (the tenant), and as such it
was not necessary for it to give the company 7days as that is not a requirement in
terms of the sub-clause in question. It accordingly served a notice of the cancellation
4 2012 (4) SA 593 (SCA) para 18.
when it served the company with summons on 3 September 2014. I accept this
interpretation as being sensible and more business -like with regards to the contract
in question.
[24] The test for absolutio n at the end of the plaintiff’s case was formulated as
follows in Claude Neon Lights (SA) Ltd v Daniel5:
‘When absolution from the instance is sought at the close of plaintiff’s case,
the test to be applied is not whether the evidence led by plaintiff establishes
what would finally be required to be established, but whether there is
evidence upon which a court, applying its mind reasonably to such evidence,
could or might (not should, nor ought to) find for the plaintiff.’
[25] In Gordon Lloyd Page & Associates v Rivera and Another6 the Supreme Court
of Appeal explained the application of the test as follows:
‘This implies that a plaintiff has to make out a prima facie case – in the sense
that there is evidence relating to all the elements of the claim – to survive
absolution because without such evidence no court could find for the
plaintiff… As far as inferences from the evidence are concerned, the inference
relied upon by the plaintiff must be a reasonable one, not the only reasonable
one… The t est has from time to time been formulated in different terms,
especially it has been said that the court must consider whether there is
‘evidence upon which a reasonable man might find for the plaintiff’… a test
had its origin in jury trials when the reaso nable man was a reasonable
member of the jury… Having said this, absolution at the end of the plaintiff’s
case, in the ordinary course of events , will nevertheless be granted sparingly7
but when the occasion arises, a court should order it in the interest of justice.’
[26] Given that, as demonstrated above, the grounds raised for the application for
absolution relied upon by the first defendant cannot be sustained, I am of the view
5 Gordon Lloyd Page & Associates v Rivera and Another 1976 (4) SA 403 (A) at 409 G-H
6 2001 (1) SA 88 (SCA) para 2; Osman Tyres and Spares CC and Another v ADT Security (Pty) Ltd
[2020] 3 All SA 73 (SCA)
7 My emphasis.
that the plaintiff has made out a prima facie case in the sense that there is evidence
relating to all the elements of the claim. Under those circumstances therefore, the
application for absolution cannot succeed.
Order
[27] Consequently, the following order shall issue:
The application for a bsolution from the instance is dismissed with costs, as
contemplated on scale B of the Uniform Rules of Court, as amended.
______________________
V P NONCEMBU
JUDGE OF THE HIGH COURT
APPEARANCES
Counsel for the Plaintiff: Adv Sephton
Instructed by: Manilal Brewis Attorneys
Gqeberha
C/O Huxtable Attorneys
Makhanda
Counsel for the First Defendant: Adv S Collet
Instructed by: Changfoot van Breda Inc
East London
C /O) Neville Borman & Botha Attorneys
Makhanda
Date of hearing: 17 April 2024 and 26 June 2014
Date judgment delivered: 18 December 2024