IN THE HIGH COURT OF SOUTH AFRICA
(WESTERN CAPE DIVISION, CAPE TOWN)
Case No.: 2025 -004067
In the matter between:
TOWER PROPERTY FUND (PTY) LTD Applicant
and
LIGURIA RISTORANTE (PTY) LIMITED Respondent
REASONS FOR ORDER
ELECTRONICALLY ISSUED ON: 10 MARCH 2025
MANGCU -LOCKWOOD J
A. INTRODUCTION
[1] I hereby provide reasons for an order I granted whilst on urgent duty on 31
January 2025, in which the respondent was evicted from commercial premises
owned by the applicant. The respondent was a tenant, operating a restaurant
business from the premises in terms of a written lease agreement between the
parties, for the period from 1 May 2021 to 30 April 2024 ("the lease agreement").
[2] These proceedings were launched on about 16 January 2025, and sought
immediate eviction of the respondent form the premises. The main ground for
urgency w as that, after the applicant had given various notice s of eviction to the
respondent - the validity of which w ere dispute d and rejected - it had concluded a
written agreement with a new tenant , the Curry Club Collective (Pty) L imited ( “the
Curry Club” ), on 7 October 2024, in terms of which the applicant was to provide
vacant occupation on 1 February 2025 .
[3] It is not in dispute that on 14 January 2025, the Curry Club notified the
applicant that, although it was due to vacate its then premises on 30 April 2025, that
building was due for demolition, and it required occupation of the property in
question in these proceedings by no later than 1 February 2025 as previously
agreed, to commence fitting out the premises, for commencement of the new lease
on 1 May 2025. The Curry Club also stated as follows:
“Should you be unable to make the premises available by this date we
will have no option but to cancel the lease and seek alternativ e
premises. This would place us in a very difficult and urgent situation of
having to find suitable premises within a very short space of time and
would lead to us suffering significant damages including, potentially, loss
of income and reputati onal harm, which damages we would look to you
to cover. ”
[4] I am of the view that, in the circumstances of this case , the merits of which are
discussed below, the applicant has made out a case for urgency as contemplated in
Rule 6(12). It is, by now, trite that c ommercial urgency may found urgency in terms
of the Rule , depending on the circumstances of a particular case .1
[5] It was not disputed that t he applicant would not have been able to obtain
substantial redress in the normal course, since the earliest that the matter could be
heard on the opposed roll was during August 2025. By that time the applicant will
undoubtably have lost the Curry Club as a tenant. In cases similar to the present,
1 See 20th Century Fox Film Corporation Black Films 1982 (3) 582 (W) at 586.
the c ourt has taken into consideration the fact that, by the time this application would
be heard in the ordinary course the applicant would have lost its new tenant .2
[6] Moreover, the respondent in this matter had ample notice of the impending
eviction. I n June 2024 , it was first informed that the lease would not be renewed . On
1 October 2024, the applicant informed the respondent that the lease , which had
expired in April 2024 , had been operating on a month -to-month tenancy , and was
being cance lled, and the respondent was requested to vacate the premises at the
end of January 2025. On 2 October 2024, the respondent rejected the applicant's
cancellation of the lease and the notice period. In light of that rejection, the applicant
withdr ew its not ice of 1 October 2024, and o n 6 November 2024, cancell ed the
month -to-month lease agreement, insofar as it was necessary to do so, and advis ed
the respondent to vacate the premises by no later than 31 December 2024. The
respondent refused to do so, and the se proceedings were launched on 16 January
2025.
[7] Thus, the respondent has been aware since, at the latest, June 2024, that its
lease was tenuous and would likely not be renewed. By October 2024, it was more
than clear that the applicant wanted it to vaca te the premises. I was satisfied that
this matter was sufficiently urgent to be enrolled and be heard as an urgent
application .
B. THE FACTS
[8] It is common cause that the parties entered into a written lease agreement , for
the period commencing on 1 May 2021 and expiring on 30 April 2024. Item 6 of the
schedule to the lease states as follows :
2 HI-Q Automotive (Pty) Ltd v Erga Invest CEZ Investment (Pty) Ltd v Wynberg Auto Body (Pty)
Ltd (41475/2018) [2021] ZAGPJHC 499 (29 September 2021) paras 22 & 23 ments (Pty) Ltd (2024 -
011267) [2024] ZAGPJHC 1755 (21 February 2024) Elkam (Pty) Limited y ; Ferej. Tariku Nure trading
as Magnum General Trading, The Occupants of Shop I, Cumberland Court, 9 Pretoria Street,
Hillbrow, Johannesburg ; Silverbalde Investments 17 (Pty) Ltd v Bay Tower Properties 247 (Pty) Ltd
and Others (2017/38318) [2017] ZAGPJHC 42 0 (30 November 2017) ; CEZ Investment (Pty) Ltd v
Wynberg Auto Body (Pty) Ltd (41475/2018) [2021] ZAGPJHC 499 (29 September 2021) paras 22 &
23.
“Section 6 the Lease Period : 3 (THREE) Years from the commencement date
with optional 3 years ”
[9] On 11 January 2024, the property management and administration company
acting on behalf of the applicant in this matter (RDC) , per Ms. Manganye, addressed
an email to the respondent , noting that the lease was due to expire on 30 April 2024 ,
and requested certain itemised FICA documents in order to “start with the renewal
process” . On 20 January 2024 , Mr Brenna of the respondent provided the requested
documents, and o n 22 January 2024, Ms Manganye promised to “review and revert” .
[10] After some silence, Mr Brenna request ed transmission of the necessary
forms for conclusion of t he lease renewal , on 16 February 2024 . It was only o n 3
June 2024, that Ms Karin Retief ("Ms Retief") of RDC, addressed a letter as follows:
“The purpose of this letter is to inform you that your lease for the
property will not be renewed.
Your lease expired on 30 April 2024 and the Landlord has agreed that
you will be able to trade on a month -to-month basis on the same fixed
rental charges a s per your expired lease - excluding the increases in
Rates, Refuse, CID as per council increases in July of each year, until
further notice ....
Your premises has been advertised on our vacancy schedule and we
would appreciate your co -operation with reg ards to allowing brokers
and prospective tenants viewing times...”
[11] The respondent did not accept the notice of non -renewal and responded on
the same da te pointing to the above correspondence between the parties in which
he had provided requested documents and information , and stating that “we would
like to exercise our option (as per the lease agreement) to extend our lease
agreement ”, and again requesting all necessary documentation needed for
extending the lea se.
[12] On 4 June 2024, the applicant (via its property administrators) stated as
follows in an email to Mr Brenna :
“You will appreciate that, notwithstanding a process may have been
started, no agreement with the Landlord has been reached and, of
course, it is an express requirement of the Lease that any agreement
needs to be reduced to writing and counter -signed by both parties in
order to be binding.
This has not been done and your lease remains on a month to month
basis.
We maintain that you never had a 'real' option as there are no terms
specifying its mechanics and, in the event that you did, it was not
exercised timeously and has thus expired…”
[13] There was also reference to the tired physical state of the restaurant, with
which the applicant was not h appy, but which is not central to the issue before me . In
his response of 17 June 2024, Mr Brenna stated as follows , amongst other things :
“…Firstly, I acknowledge your statement regarding the necessity for
any agreement to be documented and counter -signe d by both parties
to be binding. However, as per Clause 37.1 of our lease agreement
under "Special Conditions, " it is my understanding that the lease terms
would continue until a renewal agreement is reached. This clause
appears to indicate that the lease does not automatically revert to a
month -to- month basis unless explicitly agreed upon by both parties.
Regarding the option for an additional three -year term, I would like to
clarify that the lease does indeed provide for an optional extension.
Although you mentioned that there are no specific terms outlining the
mechanics of this option, the intention behind Clause 37.1 seems to be
to prevent the lease from defaulting to a month -to-month arrangement
while renewal terms are being negotiated…”
[14] Clause 37.1 of the lease agreement stated as follows:
“Should the tenant and Landlord not reach agreement on renewal
terms prior to the expiry of the lease term and the Tenant remains in
occupation. The rental will escalate by 10% until such time as a formal
renewal is concluded .”
[15] On 18 June 2024 Mr Brenna sent further communication stating as follows:
“Please confirm your opinion of what is marke t- related so that I don't
waste a possible 3 years putting together a renewal proposal based on
what I con sider to be market related. Considering the fact that I am
already at plus minus R 168 per sq, are you suggesting an extra R 7
per sq as per your current market related deals or do you suggest I go
a lot higher?"
[16] On 19 June 2024, Mr Katz of the applicant ’s property management company ,
who is also the deponent to the applicant’s affidavits, stated as follows in an email to
Mr Brenna:
“We have tested the market and received 2 offers at rates that range
from R195 - R220/sqm (including the outside seating ar eas). Your
rental is below market as a result of having been negotiated during
covid and if you're interested in renewing your proposal should be at a
market related rental and include provisions to do further upgrades.
Please advise asap if you'll be putt ing forward a proposal? Alternatively
if you want us to put forward a proposal. ”
[17] On the same day, Mr Brenna responded by email stating as follows: “Please
could you put forward a proposal for me to look at and consider and get advice on.”
[18] On 1 October 2024, the applicant stated as follows in an email :
“As you know your lease has expired, not been renewed and remains
on a month to month.
Please accept this email as 4 months' notice of cancellation of your
lease with your last day being 31 January 2025.
You will be required to attend to the reinstatement of the shop ahead of
this date and we will arrange an out inspection to confirm what is
required in due course."
[19] Mr Brenna rejected the cancellation, stating as follows:
“As you a re aware, the original lease agreement, signed, includes a
clause explicitly providing me with the option to renew for a further 3 -
year term upon the expiration of the initial lease period in April 2024. In
accordance with this clause, I formally notified you of my intention to
exercise this renewal option in January 2024, which was well within the
timeline prescribed by the lease.
Despite this, you failed to respond or acknowledge my notice, which,
under common legal principles, constitutes tacit accept ance of the
extension, especially given that I have continued to occupy the
premises and pay rent in full and on time.
…
Your failure to respond to my notice of intent to extend the lease does
not negate the legal enforceability of that notice. By continui ng to
accept rent from me, you have confirmed the extension of the lease.
The current lease, extended under the option to renew clause, is still in
force, and I consider the 4 -month notice to vacate both legally
unfounded and invalid.
…
I hereby request t hat you withdraw your notice and cease any further
actions that may violate the terms of the lease, including marketing the
property. Should you continue to pursue this course of action, I reserve
the right to take legal action to protect my interests."
[20] On 7 October 2024 the applicant concluded a lease agreement in respect of
the premises with the Curry Club , in terms of which the latter was to take occupation
on 1 February 2025.
[21] In a further email dated 8 October 2024, Mr Brenna stated that , by failing to
respond to his notice of intention to extend the lease , the applicant had tacitly
accepted its extension. He also disputed the notion that the respondent’s tenancy
was on a month -to-month basis ; and stated that he had declined the applicant’s
reference to a “market -related offer ”, and that it was in any event irrelevant.
[22] On 6 November 2024 the applicant noted that its notice and terms conveyed
on 1 October 2024 had not been accepted by the respondent, and withdrew them. It
continued as follows:
“…As y ou occupy the leased premises on a month -to-month basis,
letter serves as a formal calendar month's notice to you of the
cancellation of your lease. As such, you are to vacate the leased
premises by no later than 31 December 2024.
Should you fail to vaca te the premises, as you are legally obliged to do,
our attorneys will be instructed to proceed with eviction proceedings
without delay or further notice to you …”
[23] In further communication dated 26 November 2024, the respondent was
notified to vacate the leased premises by no later than 31 December 2024, failing
which eviction proceedings would be launched with a request for a punitive costs
order. The respondent ref used to vacate the premises.
C. RESPONDENT’S CASE
[24] The respondent disputes the authority of Mr Katz , the applicant’s deponent, to
depose to the affidavits , stating that his affidavit is without a resolution from RDC to
do so, and that he, in any event, does not have personal knowledge of the facts of
this case.
[25] Regarding the merits of the case, t he respondent states that a t the time that
the lease was negot iated, the applicant was represented by the then asset manager
Mr Bruce Rogersen . This was during COVID -19, when restaurant businesses were
impacted by the lockdown regulations which limited their operating hours. It was on
the basis of th ose consideration s that, according to the respondent, Rogersen
recommended that instead of concluding the standard 5 -year commercial
agreement, the parties should rather conclude a 3-year agreement with a secured
option for the tenant to renew for a further 3 years. The re spondent accepted the 3 -
year lease agreement on the basis of th e said negotiations and representations . The
intention for both parties was that, once the initial 3 -year period expired, the
respondent could exercise its option to renew, and the renewal woul d be for a further
3 years. The respondent attached a confirmatory affidavit of Rogersen to support this
version.
[26] The respondent also points to the fact that page 2 of the lease, in which the
said option to renew is mentioned - clause 6 of the agreement -, is specifically and
separately initialled by both the applicant and the respondent , unlike the rest of the
lease , to highlight its significance . It is in this regard that t he respondent disputes the
personal knowledge of the applicant’s deponent, Mr Katz.
[27] The respondent also points to clause 37.1 of the lease agreement , and
argues that this clause guarantees the tenant’s option to renew . At the same time , it
provides for a rent al increase pursuant to the expiry of the lease a greement , which
remains in place until the terms of the renewal have been finalised . The respondent
further argues that “renewal terms” in terms of this clause refers to “agreement
conclusively on the amount of rent to be paid and whether or not there woul d be a
further option to renew once the initial 3 -year period expired”.
[28] The respondent points to the chronology of events and states that it exercised
its right to renew timeously and prior to the expiry of the lease period. It also states
that unless the re was a breach of the terms of the lease agreement, which there was
not, its right to renew is protected and guaranteed in terms of the lease agreement
itself as well as the Consumer Protection Act.
[29] The respondent states that the applicant's conduct has caused reputational
harm and operational disruption to its business, as customers and business
associates are aware of the ongoing dispute. I f evicted, the respondent stands to
suffer financial prejudice in light of the significant investments it has made to
maintain the premises, which include infrastructural upgrades, equipment purchases,
and compliance with all safety and regulatory standards.
D. DISCUSSION
[30] To the extent that the authority of the applicant’s deponent remains disputed,
the correct mechanism is provided in Rule 7 of the Uniform Rules of Court, and the
respondent failed to follow this mechanism despite invitation or challenge to do so,
with no explanation.
[31] A deponent otherwise does not require a formal resolution or specific
authorisation to depose to an affidavit, provided they have personal knowledge of the
facts of the matter. Even on the respondent's own version, it is evident that the
applicant’s deponent, Katz, corresponded and directly with Mr Brenna of the
respondent r egarding the lease, the purported renewal and the premises.
Accordingly, the respondent's allegation regarding the lack of authority of Katz is
without merit.
[32] Turning to the renewal of the lease , I have already indicated that the parties
agree that the lease agreement was for the period commencing on 1 May 2021 and
expiring on 30 April 2024. Clause 2.1 of the lease agreement states as follows: “The
Lease shall be for the period stated in section 6 of the Schedule.” In turn, section 6 of
the Schedule provi des a s follows: “the lease period: 3 (THREE) Years From the
Commencement Date, with optional 3 years.”
[33] Clause 37.1 provides as follows:
“Should the tenant and Landlord not reach agreement on renewal
terms prior to the expiry of the Lease term and the ten ant remains in
occupation. The rental will escalate by 10% until such time as a formal
renewal is concluded. ”
[34] It is clear that no agreement had been concluded between the parties by the
date of expiry of the lease. Although t he respondent had submitted information as
requested by the applicant, no agreement had been reached . One obvious term of a
renewed agreement would have been an agreed rental amount . There is no doubt
that a rental amount is a material term of any lease agreement, and in th e absence
of consensus between the parties on that issue, there can be no question of a
renewed lease agreement being in place.3 Another difficulty for the respondent is
that the lease agreement contains a non -variation clause, which precludes any
amendment or variation save what is contained in writing and signed on behalf of
both parties. No such written agreement exists.
[35] That n o rental amount was agreed between the parties before expiry of the
lease is borne out by the fact that, as at June 2024, they were exchanging and
negotiating possible rental prices . The negotiation of a market -related rental was
necessitated by the fact t hat the previous rental amount had been negotiated during
COVID . But , it was not only the rental amount that the applicant raised in the
correspondence. One example that appears in the communication of 4 and 17 June
2024 is that there was discussion regard ing the attractiveness of the respondent, in
respect of which the parties would have had to reach a conclusion gong forward.
[36] As already adverted, the respondent relies on clause 37.1, stating that its
effect was to guarantee the existence of a renewal , with a transitional 10% rental
escalation until agreement regarding the new terms.
[37] Such an interpretation assumes many things. For one, it assumes a good faith
agreement on both sides, and specifically that an end to the negotiations was
imminent or would ensue . But t here was no timeframe set in the expired lease
3 See Eden Crescent Share Block Ltd v Olive Marketing CC and Another 2023 (3) SA 476 (SCA).
regarding how l ong such negotiations might take. There is also no requirement that
the parties must agree to th e renewal terms prior to the expiration of the lease. The
expired lease agreement also did not contain any general or overarching deadlock
breaking mechanism in the event that the parties could not reach agreement before
expiry of lease.
[38] I am in agreemen t with the applicant that, in the absence of a recorded
obligation to negotiate in good faith or a deadlock -breaking mechanism regulating
the renewal terms, what the parties agreed to in clause 37.1 of the lease agreement
is an agreement to agree. This is the fundamental reason why the call to aide of the
erstwhile property manager, Mr Rogersen, does not assist the respondent. The other
reason is that the facts demonstrate clear ly that the parties did not in fact conclude a
renewal agreement before expiry o f the lease.
[39] Neither party could point me to judicial pronouncement to the effect that an
agreement to agree clause, including a duty to negotiate in good faith, is enforceable
in the absence of a deadlock breaking mechanism. In Everfresh Market Virginia (Pty)
Ltd v Shoprite Checkers (Pty) Ltd4 and Makate v Vodacom Ltd5 the Constitutional
Court considered the possibility of importing an obligation to negotiate in good faith
into the law relating to an invalid pactum de contrahendo . Pointing to the SCA
judgment of Southernport Developments (Pty) Ltd v Transnet Ltd 6, the Constitutional
Court in Makate held7 that an agreement to negotiate in good faith had been
expanded to the extent that it could be held to be a valid term of an agreement, but
only in the presence of a deadlock breaking mechanism. Apart from the se matters,
the parties could not point to any authority which does not require a deadlock
breaking mechanism where an agreement to negotiate in good faith is sought to be
enforced.
[40] In Seale v Minister of Public Work s8 the SCA stated as follows:
4 Everfresh Market Virginia (Pty) Ltd v Shoprite Checkers (Pty) Ltd 2012 (1) SA 256 (CC)
("Everfresh" ).
5 Makate v Vodacom Ltd 2016 (4) SA 121 (CC) .
6 Southernport Developments (Pty) Ltd v Transnet Ltd [2004] ZASCA 94 ; 2005 (2) SA 202 (SCA) .
7 At paras 96 – 97.
8 Seale v Minister of Public Work s 2020 JDR 2131 (SCA).
“The combined rationes decidendi of the decisions of this court in
Firechem9 and Sourthernport are therefore that an agreement to agree
without a deadlock -breaking mechanism is not enforceable because it is
dependent on the absolute discretion of the parties and/or because it is
too vag ue and uncertain to be enforceable. We are bound by these
decisions, of course, unless we determine that they were clearly wrong.
The appellants did not advance such an argument. I am, in any event,
by no means convinced that these decisions were wrong. Wi th respect, I
fail to see how a mere agreement to agree (in good faith) can be
enforced without violation of the fundamental principle that a court may
not make a contract for the parties. ”
[41] The circumstances of the present case fall within the confines of the
authorities discussed above. Upon their application , it is clear that clause 6, read
with 37.1 of the lease agreement between the parties before me amounted to an
agreement to agree, with no fixed terms of agreement. And since it had no deadlock -
break ing mechanism, it is not enforceable because it is too vague and uncertain to
be enforceable.
[42] As the Supreme Court of Appeal cautioned in Roazar CC v The Falls
Supermarket CC10 there are difficulties in compelling parties to negotiate without
there being a deadlock mechanism in place. Those difficulties are exhibited in the
facts of this case. In effect, a court order to the effect that a renewed lease
agreement exists between the parties would amount to the court imposing
contractual obligations on the parties, which would be a violation of the fundamental
principle that a court may not make a contract for the parties. There is, after all, no
final agreement between the parties as to the terms of any renewed agreem ent,
including the rental amount.
9 Premier of the Free State Provincial Government and Others v Firechem Free State (Pty) Ltd [2000]
ZASCA 28 ; 2000 (4) SA 413 (SCA).
10 Roazar CC v The Falls Supermarket CC 2018 (3) SA 76 (SCA).
[43] As a result, the respondent has no demonstrable right to remain in occupation
of the premises , and the applicant has established a right to the eviction relief it
seeks .
E. ORDER
[44] In the circumstances, the following order is granted:
1. The matter is declared urgent in terms of Rule 6(12) of the Uniform Rules
of Court.
2. The respondent and all persons holding by, through or under it, are
evicted from the leased premises situate at Shop 08, Cape Quarter
Square, 27 Somerset Road, Greenpoint, Cape Town (“the leased
premises”) and shall vacate the leased premises on or before 7 February
2025.
3. Failing compliance with the order in paragraph 1 above, the Sheriff or
his/her lawfully appointed deputy is authorized an d directed to evict the
respondent and all those occupying the leased premises by, through or
under it, from the leased premises on or after 10 February 2025.
4. The respondent shall pay the costs of the application.
___________________________
N. MANGCU -LOCKWOOD
Judge of the High Court
APPEARANCES
For the applicant : Adv J Bence
Instructed by : Harris Incorporated
For the respondent : Adv N Essa
Instructed by : E van Rensburg