REPUBLIC OF SOUTH AFRICA
IN THE HIGH COURT OF SOUTH AFRICA
GAUTENG DIVISION, JOHANNESBURG
Case Number: 04863/2024
In the matter between:
SILVERBIRD PROPERTY DEVELOPMENT CC
T/A SIGNET TERRACE SHOPPING CENTRE Applicant
and
KHANS TYRES AND EXHAUST CC T/A
SUPER WHEEL & TYRE Respondent
JUDGMENT
PJ DU PLESSIS AJ
In this opposed motion application the request is for a commercial eviction of a long
term tenant (Respondent) who unilaterally extended his lease on the expiry date. This
despite having been given notice by the Applicant that his lease and the extension
afforded in their lease agreement is cancelled due to major renovations.
(1) REPORTABLE: NO
(2) OF INTEREST TO OTHER JUDGES: NO
(3) REVISED: NO
______________ _________________________
DATE SIGNATURE
2
[1] The Applicant submitted from the onset that the Respondent had a right to renew
the lease. He however stated that against that right, is his to terminate the lease
if certain provisions are met, which he did meet on the facts, therefore the lease
was lawfully cancelled on the extension date, bringing the matter to an end.
[2] If the court were however to disagree with the Applicants lawful cancellation the
renew al clause, 4, has a proviso the Respondent didn’t comply with. This is that
there must be written consensus between the parties three months prior to the
expiry date of the lease or the agreement will terminate on the expiry date. This
wasn’t complied wit h so he remains in unlawful occupation since 31 August 2023
and should be evicted.
[3] The Responded retorted that the addendum agreement of lease to clause 4
already contains the consensus as it holds in point 11 “The option to renew being
available at the e nd of the term” and ends off the addendum with “Please note,
all other clauses remain the same as the previous lease agreement”
[4] There are fourteen listed terms in this addendum which include, mention of the
parties and the property, their operating times, basic monthly rental for the next
three years, the annual compounded escalation rate of 10%, the current
agreement expiry date and a few others. The addendum before court is the
addendum signed in October 2020 valid 1 November 2020 to 31 October 2023.
[5] The Responded submits the Applicant never gave notice in terms of the
agreement to cancel the lease, only saying he is not renewing it. As proof of this
contention the court was referred to “FA 6” to the founding affidavit, a letter from
the Applicants attorne y to Respondents attorney dated 16 March 2023 which
states in par 5 “Our client did not cancel the lease agreement instead they made
a polite decision to advise your client, well in advance, that they would not be in
a position to renew the lease agreement in October 2023, this is due to the fact
that our client will be renovating the premises”
[6] The parties therefore at the same time wished to exercise their available options
/ rights which are in conflict with each other. The court is called upon to resolve
this deadlock.
3
[7] A recent not too dissimilar case marked, reportable, was decided by Lucas J van
Tonder AJ , in the matter of Municipal Employees Pension Fund v Aspara and
another.1
[8] It is my finding that if there is ambiguity in a lease agreement, on which condition
/ “right” (cancellation or extension) should prevail, the termination clause i f
enacted fairly and correctly, in compliance within the provisions of the signed
lease , should prevail. Such a view will always break the deadlock in matters
where lease agreements are not specific whether cancellation or extension must
prevail.
[9] If the lessee therefore in accordance with the lease agreements provisions
exercises his right of renewal, the le ssor should generally accept the renewal
unless terminat ing it for valid reasons specified in the lease.2
[10] The entering into a contract of lease is a risk each party is willing to engage in
and they do so voluntarily, signing up for conditions that may hurt later due to
“venturing onto the unpredictable ocean of commercial reality ”. Legal certainty
is given to such an Agreement as parties must keep their word ( pacta sunt
servanda ) agreed on, and cannot retrospectively assign blame for risks they
willingly en gaged in.3
BACKGROUND
[11] The Applicant is the owner of the Signet Terrace Shopping Centre in Lenasia.
The Respondent is the owner of Super Wheel and Tyre, leasing and doing
business there since 2008. The lease has been renewed for a three year period
1 (2023/009050 ) [2024] ZAGPJHC 530 (31 May 2024)
2 MEPF v ASPARA Par 41 “ In short, save for unlawful conduct, the landlord’s motive or predetermined
intention, not to renew the lease constitutes extra contractual conduct unrelated to or irrelevant for
purposes of interpreting a contract or determining the fairness of what had been agreed to prior to such
conduct. ”
3 MEPF v ASPARA Par 33
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at a tim e on the same terms and conditions with is a 10% rental escalation
annually.
[12] The Applicant admits the Respondent to be good tenant especially when it comes
to rental payment, which he has even complied with since his unilateral action of
lease extension in October 2023. This action of the Respondent, the Applicant
says, caused unl awful occupation since 1 November 2023 of the commercial
property premises and he must be evicted forthwith.
[13] The Respondent claims he invoked his renewal right therefore he may still
lawfully lease the premises until 31 October 2026. He however seem to ha ve
acquired a new location for his business and has indicated he is willing to vacate
the premises by 31 October 2025.
ANALYSIS
[14] The court will now on the evidence, interpret and adjudicate the lease conditions
applicable. In Natal Joint Municipal Pension Fund v Endumeni Municipality4 the
Supreme Court of Appeal on the interpretation of contracts said that it is an
objective process to give a sensible meaning to the purpose of the document.
Important is the context within the provision and the reason for i ts existence. The
language, grammar and syntax used must be considered to determine the
apparent purpose for the parties involved. If more than one meaning is possible
the objective sensible one should prevail.
[15] The termination clause in this matter is fou nd in the lease agreement under point
23 RE -BUILDING: Apparent from this provision is that the Lessor (Applicant) may
give 6 (six) months written notice of agreement termination, or any renewal
thereof , if the premises or building is going to be demolished ; or if reconstruction
/ redevelopment / renovation, of a substantial and major nature is taking place.
[16] The renewal of the lease is dealt with under point 4 of the lease agreement titled
RENEWAL PERIOD. Apparent from this provision is that the Lessee
4 2012 (4) SA 593 (SCA).
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(Resp ondent) has an entitlement to renew the Agreement by giving 6 (six)
months written notice prior to the expiry date of 31 October 2023, therefore on or
before 30 April 2023. The proviso being that “ written agreement is reached and
signed by or on behalf of the parties at least 3 (three) calender months prior to
the expiry date ( 31 October 2023, therefore on or before 31 July 2023), failing
such consensus this Agreement will terminate on the expiry date.”
[17] There is also for consideration the ADENDUM referred to in par [4] supra on
which the Respondent is heavily reliant.
[18] The common cause facts of the parties are
18.1 That the Applicant is the owner of the commercial premises and
therefore PIE5 and ESTA6 does not a pply.
18.2 The Respondents passed and present occupation and the terms
and conditions of the 2013 lease Agreement and 2020
addendum thereto.
18.3 They further admit the original 2013 lease agreement is lost, but
identical to the one provided to th e court.
18.4 All the communications they had with each other and their
attorneys provided to the court.
[19] The factual chronology of the parties are that on 24 February 2023 the Applicant,
via Whatsapp communication informed the Respondent that the lease
Agreement will not be renewed due to intended extensive renovations. The
Respondents reply to this was to ask for an extension of time for relocation.
[20] On 2 March 2023 on a Signet Terrace letter head is indicated in writing par 2:
“You are hereby notified that your lease agreement will not be renewed, you are
5 Act 19 of 1998
6 Act 62 of 1997
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therefore required to vacate the premises on the 31st of October 2023” Notably
the reason “intended extensive renovations” is omitted.
[21] On 9 March the Respondent through his attorney in a letter to the Applicant
replied that Applicant is “bound to the terms and conditions of the lease
agreement … inter alia, the option to renew the lease …) also that Respondent
“… does not accept your (Applicants) purported cancellation of the lease
agreement … ”
[22] This started a “To and From” by the attorneys and their correspondence content
I will not deal with except where necessary. The important aspect however is that
in a letter by the Respondents attorney to the Applicants attorney dated 24 April
2023 is written: “ 2.1 our client wishes to exercise its right of renewal, this is based
on past renewals”
[23] Although the Applicant never expressly mentioned the reason for the non -
renewal as per par 20 supra, in his attorneys letter of 25 April 2023 par 3 and 4
the reason (r enovation) for it is made very clear.
[24] It is therefore my finding that both parties Applicant and Respondent gave their
respective written notices (non -renewal and renewal) timeously in terms of the
lease agreement. The submissions of the Respondent in par 5 supra is therefore
rejected.
[25] The question now is, if the provisions to these conditions on the express terms
of the lease agreement were met by both Applicant and Respondent.
[26] Attached to the founding affidavit is “FA 15” which details extensive demolis hing
and building which to my mind satisfies and proves the Applicants compliance
with his proviso to terminate or cancel renewal of the agreement. This is what he
is entitled to do - he has complied with it and therefore this should be the end of
the matt er as Adv Lubbe submitted.
[27] I agree, but continue to provide context for my finding and clarify
misapprehensions many legal representatives have regarding obligations
willingly agreed to and wanting to then attack in litigation these agreed to
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obligations under the guise of good faith (fairness and Ubuntu). Using it as a
basis to challenge enforcement of contractual terms by one party stating it to be
contrary to public policy, to the extreme that a right to renewal can be forced
upon the Applicant. This ne eds to be corrected.
[28] The proviso that befalls the Respondent is that “ written agreement is reached
and signed by or on behalf of the parties at least 3 (three) calender months prior
to the expiry date, failing such consensus this Agreement will terminate on
the expiry date.”
[29] The Respondent did repeatedly ask for mediation and even offered to leave the
premises after two years, not the usual three years when he regarded the lease
as renewed.
[30] There is mention in Respondents attorneys letter of 13 July 2023 that the
Applicant is “determined to treat the dispute unilaterally as if the landlord has
rights”. Also par 6 of the letter referring to the terms of Agreement par 4.1 that
the Applicant must negotiate with them in “good faith” stating their availability in
June 2023.
[31] This is clearly the attorney noting the proviso they have to comply with as
mentioned in par 28 supra (signed written agreement 3 months prior the expiry
date of the lease or it will terminate) and most probably realising as the Applicant
has applied his right to cancel the lease and not extend due to major renovations,
he will therefore never come to the table to mediate or “assist” the Respondent
in a way that would prevent the right he invoked.
[32] These requests for mediation and “good faith ” disregards the fundamental
dividing line between an unambiguous obligation willingly agreed to , as opposed
to whether the obligation offends their idea of good faith where the clarity of the
obligation is evident . It does not relate to the reasonableness of the terms of the
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contract agreed to, but rather an extra contractual conduct the Applicant can
perform in enforcing his rights in the terms of the contract.7
[33] I accordingly find that the Applicant lawfully and in terms of the lease agreement
cancelled t he lease. The Respondents unilateral renewal of the lease based on
the addendum and his subsequent occupation of the leased property is declared
unlawful from 1 November 2023. Respondent is to vacate the premises failing
which he stands to be evicted as pe r the order below.
[34] The Respondent did request due to the nature of his business which will require
riggers and the like to vacate the premises, that if the court finds against him, he
be afford at least 3 months to vacate the premises they have occupied fo r 17
years.
[35] The Applicant indicated that the respondent saddled this horse 16 months ago,
actually 22 months if the notice period which was ignored is also calculated.
Giving the Respondent another 3 months will take the matter to end of May 2025
which will defeat the purpose almost of the litigation as he offered to go by himself
on 31 October 2025. He has been aware of the litigation and should have
prepared for a negative outcome. The Applicant requested that he vacate
immediately.
[36] The court aware of the parties past good relationship and the nature of the
business equipment that must be vacated from the premises, is prepared to
afford the Respondent time until 31 March 2025 to vacate, as per order below.
COSTS
[37] The lease agreement at point 33 indicate s the Lessor (Applicant) “at his option”
may bring any action or application arising from the lease agreement in the
Magistrates Court with jurisdiction even if the amount exceeds the Magistrates
Courts jurisdiction.
7 MEPF v ASPARA Par 23 -24
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the judgment to the South African Legal Information Institute. The date for hand -
down is dee med to be 03 March 2025.
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For the
Applicant: Adv. Jan Lubbe
For the
Respondent: Adv LCM Morland
instructed by : V Mohan Attorneys
instructed by : Aashia Saloojee
Attorneys & Conveyancers