IN THE HIGH COURT OF SOUTH AFRICA
(EASTERN CAPE DIVISION, M THATHA)
Of interest
CASE NO. 4233/2024
In the matter between:
TRANSARC INVESTMENTS (PTY) LTD Applicant
and
DKM HEALTHCARE (PTY) LTD Respondent
______________________________________________________________________
JUDGMENT
______________________________________________________________________
LAING J
[1] This is an application for summary judgment. It concerns a lease agreement
concluded by the part ies on 13 March 2023 at Mthatha in relation to erf 435 (‘the
premises’) .
Plaintiff’s case
2
[2] In its particular s of claim , the plaintiff pleads that the agreement would endure for
ten years . A monthly r ental of R237,103 applied, subject to 7% annual escalation. If the
defendant failed to pay any amount due and remained in default for three or more days
after receiving notice, then the plaintiff was entitled to eject the defendant or to lodge any
other claim as a result thereof .
[3] The plaintiff went on to plead that the defendant failed to make payment as agreed.
It made sporadic payments and was always in arrears, despite numerous notices .
Consequently, the plaintiff sought payment of the arrears in the amount of R968,449, as well as cancellation of the agreement and the eviction of the defendant from the premises.
[4] After receipt of the defendant’s plea, the plaintiff launched the present application.
It said that it was entitled to the relief sought because of the defendant ’s breach, which
was not remedied by sporadic payments . The plea, so it contended, did not raise any
issue for trial.
Defendant’s case
[5] In its plea, the defendant admitted the terms of the agreement and its previous
non-payment of rent but explained that it had subsequently paid the arrears . Furthermore,
it had made improvements to the premises to ensure that it could operate a medical
services facility . The defendant pleaded that it would not be in the interests of justice to
cancel the agreement.
[6] The present application prompted the defendant to give notice of its intention to
amend its plea. It also filed its opposing affidavit . To that effect , it argued that previous
instances of non- payment had resulted in the plaintiff’s election merely to issue notice
and insist on payment . The plaintiff had waived it s right to cancel the agreement and to
eject the defendant. Furthermore, the parties had agreed that the premises would be used
as a medical services facility . The plaintiff had, however, knowingly or wrongfully and
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negligently, leased the premises to the defendant when the land was not zoned for the
use agreed upon. This constituted a breach of contract, alternatively a n act of delict, which
result ed in the defendant’s having been unable to operate a medical services facility .
Consequently, i t incurred a loss of R8,050,598 for the period of March to September 2024.
The defendant alleged that the plaintiff was not entitled to rental because the envisaged
use of the premises contravened section 26 of the Spatial Planning and Land Use
Management Act 16 of 2013 (‘SPLUMA’). In any event, no amount was owed to the
plaintiff as the defendant was up to date with payments ; any amount found to be owed
had to be set off against the loss incurred by the defendant .
[7] The amended plea reflects the defences raised by the defendant in its opposing
affidavit. It seeks dismissal of the plaintiff’s claim, judgment in the amount of R8,050,598,
and a declaratory order to the effect that no rent was payable for the period during which the premises were not zoned for the use agreed upon.
Issues to be decided
[8] As will be discussed in the paragraphs that follow , the primary issue for the court ’s
determination is straightforward . It must decide whether the defendant has a bona fide
defence to the plaintiff’s action.
[9] The relevant principles are considered below.
Legal framework
[10] In terms of rule 32(1) of the Uniform Rules of Court (‘URC’), a plaintiff can only rely
on the summary judgment procedure in a limited set of circumstances. Under rule
32(2)(b), the plaintiff must explain briefly why the defence, as pleaded, does not raise any
4
issue for trial. The provisions of rule 32(3) make it clear that all that is required of a
defendant to stave off such an application is either to give security or to satisfy the court
by affidavit that it has a bona fide defence.1
[11] Van Loggerenberg comments that the rule was designed to prevent a plaintiff’s
claim from being delayed by an abuse of process. It was not intended to shut out a
defendant who can show that there is a triable issue.2 After the recent amendment of rule
32, a full court in Raumix Aggregates (Pty) L td v Richter Sand CC and Another3 held that:
‘The purpose of a summary judgment application is to allow the court to summarily
dispense with actions that ought not to proceed to trial because they do not raise a genuine
triable issue, thereby conserving scarce judicial resources and improving access to justice.
Once an application for summary judgment is brought, the applicant obtains a substantive
right for that application to be heard, and, bearing in mind the purpose of summary
judgment, that hearing should be as soon as possible. That right is protected under section 34 of the Constitution.’
4
[12] The meaning of a bona fide defence was considered more closely in Tumileng
Trading CC v National Security and Fire (Pty) Ltd.5 To that effect, Binns -Ward J found that
the amended rule 32(2)(b) makes sense only if the word, ‘genuinely’ is read into it, so that
the plaintiff must ‘explain briefly why the defence as pleaded does not genuinely raise any
issue for trial.’ The learned judge went on to say that the plaintiff is not required to explain
that the plea is excipiable. It must explain why it is contended that the pleaded defence is
a sham.6
1 The rule indicates that the affidavit must disclose, fully, the nature and grounds of the defence and the
material facts relied upon.
2 DE van Loggerenberg , Erasmus: Superior Court Practice (Jutastat e -publications, RS 25, 2024), at D1 Rule 32 –
3. See, too, Meek v Kruger 1958 (3) SA 154 (T), where Boshoff J explained that the summary judgment procedure
was intended to prevent sham defences from defeating the rights of parties by delay, causing great loss to
plaintiffs who were endeavouring to enforce their rights.
3 2020 (1) SA 623 (GJ).
4 At paragraph [16].
5 2020 (6) SA 624 (WCC).
6 At paragraph [21].
5
[13] More recently, in Cohen NO and others v Deans ,7 the Supreme Court of Appeal ,
per Nicholls JA, confirmed the test for deciding whether to grant summary judgment:
‘…[it] was , and remains , whether the facts put up by the defendants raise a triable issue
and a sustainable defence in the law, deserving of their day in court. The defendants must
fully disclose the nature and grounds of their defence and the material facts on which it is
founded. All a defendant has to do is set out facts which if proven at trial will constitute a
good defence to the claim.’8
[14] The above principles constitute the legal framework within which the present
matter must be discussed. This will be done in the paragraphs that follow.
Discussion
[15] The defendant, in terms of its original and amended plea, as well as its opposing
affidavit , has never denied that it repeatedly breached the agreement . It failed to pay the
rent, alternatively it made sporadic payments thereof. The defendant contended,
nevertheless , that the plaintiff’s election merely to issue notice and insist on payment
meant that it had waived its right to cancel the agreement and to eject the defendant. In
this regard, however, clause 13.1 of the agreement entitles the plaintiff to cancel without
further notice in the event of repeated breaches . Furthermore, clause 14.3 stipulates that
no ‘act of relaxation’ on the plaintiff’s part in relation to any of the defendant’s obligations
shall prejudice or be deemed to be a waiver of the plaintiff’s rights. The defendant sensibly
declined to pursue the defence during argument.
[16] It is to the remaining defence that attention must be given. The defendant based
its argument on clause 6 of the agreement , which provides as follows:
7 2023 JDR 1216 (SCA).
8 At paragraph [31]. Footnotes omitted.
6
‘USAGE
The Tenant shall use the Premises as a medical services facility and for no other purpose
whatsoever without the Landlord’s prior written consent, any act or omission in conflict
with the provisions of this clause shall constitute a material breach of this Lease on behalf
of the Tenant.’9
[17] It was contended, essentially, that the defendant could not use the premises
because the land was not zoned for the operation of a medical services facility. The
plaintiff ’s letting of the premises when this was the case amounted to a breach of contract
or an act of delict . Consequently, argued the defendant, it incurred a financial loss ; the
plaintiff , moreover, was not entitled to rental because of the contravention of section 26
of SPLUMA.
[18] For purposes of the immediate application, it is important to note that the plaintiff
does not seek payment of the arrear rental . It merely seeks cancellation of the agreement
and eviction of the defendant from the premises. For this, it relies on the defendant’s non-
or sporadic payment of rent (which was never denied) and the corresponding contractual rights available to the plai ntiff in the face of such breach. The court is merely required, at
this stage, to decide whether the defendant has a bona fide defence to the relief that the
plaintiff seeks . This will depend on whether the facts alleged give rise to a triable issue
and a sustainable defence in law.
[19] The difficulty with the defence advanced by the defendant is that it never pleaded
that the plaintiff’s conduct in letting the premises without the requisite zoning, as alleged,
rendered the agreement unenforceable. Instead, the defendant relies on the plaintiff’s
conduct as the basis for a counterclaim for the loss that it says was incurred while it was
unable to operate a medical services facility. The counterclaim is founded on either a
breach of contract or a delict . The plaintiff’s conduct also serve s as the basis for the
defendant’s seeking a declaratory order that the plaintiff was not entitled to rental while
9 Sic.
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the necessary zoning was outstanding. It has presented no further details in this regard.
Whether the defendant knew of the zoning status when it concluded the agreement, what
steps it took to address the problem, when it was resolved, and why its losses were
restricted to a period significantly later than the commencement date (1 November 2022)
10 remain unknown. This indisputably detracts from the bona fide or genuine nature
of its defence. To the extent that the defendant relie s on misrepresentation to avoid the
plaintiff’s enforcement of its contractual rights , it has failed to plead the necessary
elements .11 For example, i t is far from clear whether it relies on innocent, fraudulent, or
negligent misrepresentation;12 each cause of action in this regard is different, with
different legal consequences if proved.
[20] If the defendant can indeed prove the allegation that the premises lacked the
requisite zoning, then it is still not evident why this precluded the plaintiff from being
entitled to rental. Courts will generally enforce properly concluded contracts, as
expressed in the Latin maxim of pacta sunt servanda. The principle is , admittedly, subject
to a limited set of well -established exceptions, founded on, inter alia , the principle of
fairness.
13 In the present matter, t he terms of the agreement are clear : clause 10.10
obliges the defendant (not the plaintiff) to comply with the requirements of the municipality
and any other authority for the conduct of its business; clause 10.21 stipulates that the
defendant (not the plaintiff) was liable for obtaining, maintaining, and renewing all
necessary licences and permits for the business; clause 11.4 indicates, moreover, that
the plaintiff was not obliged to make any alterations or additions to the premises to comply with the requirements of the municipality or any other authority; and, crucially, clause 11.5 provides that:
10 The defendant pleaded that the period for which ‘it could not trade as medical services [sic]’ ran from March
until September 2024.
11 Counsel for the plaintiff seemed to approach the matter on the basis that the defendant relied on
misrepresentation. This was not, however, the approach taken by counsel for the defendant during argument.
12 See the discussion of the relevant causes of action in LTC Harms, Amler’s Precedents of Pleadings
(LexisNexis, 9ed, 2018), 205 and 262 –5.
13 GB Bradfield, Christie’s Law of Contract in South Africa (LexisNexis, 8ed, 2022), 12 –3.
8
‘[the plaintiff] does not warrant or represent that the Premises are fit for any specific
purpose or that any permit or licence in respect of the Premises or the conduct of the
Tenant’s business therein will be granted or renewed…’14
[21] The defendant contended that the enforcement of clause 11.5 made no
commercial sense and undermined clause 6 regarding the use of the premises. It referred
to the decision in Natal Joint Municipal Pension Fund v Endumeni Municipality15 to argue
that a sensible meaning had to be attributed to the provisions in question rather than one
that led to insensible or unbusinesslike results or that undermined the purpose of the
agreement.16 Why clause 11.5 should be ignored or neutralised, however, was not fully
explained. The text thereof is readily capable of interpretation; the context is a commercial
lease agreement between two private companies; the purpose is to place, entirely, the
responsibility of ensuring that the premises were fit for use upon the shoulders of the
defendant , nothing more, nothing less.
[22] The defendant contended further that the enforcement of clause 11.5 would offend
public policy. It referred to Barkhuizen v Napier
17 to support its contention that a no-
warranty clause, such as clause 11.5, w as unenforceable in relation to the performance
of an obligation that went to the very subject matter of a contract.
[23] The facts in Barkhuizen concerned an insured party’s failure to institute action
within the 90- day limit stipulated in the underlying insurance contract . It was argued, in
that matter, that the relevant clause was unconstitutional and unenforceable because it
violated the insured party’s right, under section 34 of the Constitution, to have the dispute
determined by a court. The Constitutional Court, per Ngcobo J, held that :
‘In my view the proper approach to constitutional challenges to contractual terms is to
determine whether the term challenged is contrary to public policy as evidenced by
14 Sic.
15 2012 (4) SA 593 (SCA).
16 The relevant principles emerge from paragraph [18] of the Endumeni judgment.
17 2007 (5) SA 323 (CC).
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constitutional values, in particular, those found in the Bill of Rights. This approach leaves
space for the doctrine of pacta sunt servanda to operate, but at the same time allows
courts to decline to enforce contractual terms that are in conflict with constitutional values
even though the parties may have consented to them.’18
[24] The court went on to state that it was necessary to determine whether the time-
limitation clause was inimical to constitutional values such as those expressed under
section 34 and thus contrary to public policy . If so, then it could not be enforced.19
[25] Returning to the present matter, t he defendant failed to demonstrate what
constitutional value was infring ed by clause 11.5. It failed to explain why the provisions
thereof offended public policy . Whereas Barkhuizen indicates that constitutional value s
have a direct bearing on the determination of whether a contractual term is contrary to
public policy, a court’s interference with the principle of pacta sunt servanda must be
properly reasoned and must be based on the facts placed before it.20
[26] In the more recent, but somewhat contentious, decision in Beadica 231 CC and
Others v Trustees , Oregon Trust and O thers ,21 the Constitutional Court, per Theron J ,
observed as follows:
‘Indeed, this court has recognised the necessity of infusing our law of contract with
constitutional values. This requires courts to exercise both resourcefulness and restraint.
In line with this Court’s repeated warnings against overzealous judicial refor m, the power
held by the courts to develop the common law must be exercised in an incremental fashion
as the facts of each case require. The development of new doctrines must also be capable
of finding certain, generalised application beyond the particular factual matrix of the case
in which a court is called upon to develop the common law. While abstract values provide
18 At paragraph [30].
19 At paragraphs [36], and [70] to [72].
20 See the court’s treatment of the subject in Goliath and Another v Chicory SA (Pty) Ltd 2022 JDR 2874 (ECMA),
at paragraph s [96] to [101].
21 2020 (5) SA 247 (CC).
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a normative basis for the development of new doctrines, prudent and disciplined reasoning
is required to ensure certainty of the law.’22
[27] As already observed, t he parties in the present matter are private companies.
There is no evidence that the relative situation of the parties gave rise to unequal
bargaining power, warranting a finding that clause 11.5 was contrary to public policy.23
The facts, overall, do not require the court to interfere. If anything, then the lack of the
requisite zoning invites the question whether the defendant properly investigated the
feasibility of operat ing a medical services facility on the premises before concluding the
agreement, especially considering the substantial contractual protection afforded to the
plaintiff by the clauses previously discuss ed.
[28] Regarding the defendant’s reliance on section 26 of SPLUMA , it is unclear how
this advances its position. The provisions thereof state that land may be used only for the
purposes permitted by a land use scheme. The defendant’s case is based on the
allegation that it could not use the premises for the operation of a medical services facility .
Consequently , on the defendant’s version, no contravention could have occurred. If the
defendant had intended to invoke the principles associated with illegality of pur pose or
any similar doctrine located within the law of contract , then it was incumbent for it to have
pleaded this properly — and unambiguously . The court cannot second- guess its
intentions. There is, howev er, nothing on the facts put up by the defendant to demonstrate
that the purpose of the agreement, viz. the lease of the premises , was per se illegal.
[29] The plaintiff referred to the decision of the Supreme Court of Appeal in Tudor Hotel
Brasserie & Bar (Pty) Ltd v Hencetrade 15 (Pty) Ltd.24 In that regard, the respondent
successfully applied in the court a quo for the eviction of the appellant on the basis that
the underlying lease agreement had been cancelled after the appellant had fallen into
22 At paragraph [76].
23 The Constitutional Court, with reference to the decision of the Supreme Court of Appeal in Afrox Healthcare
Bpk v Strydom 2002 (6) SA 21 (SCA), endorse d the relevant principle in Barkhuizen (n 1 7), at paragraph [59].
24 (793/2016) [2017] ZASCA 111 (20 September 2017).
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arrears with rental . The appellant denied that it was due because the respondent had
failed to grant vacant occupati on or beneficial use of the entire property. It was common
cause that the respondent had retained a portion of the property upon which to store
certain items . On appeal, the court found that the appellant’s contractual obligation to pay
rent in advance did not give rise to a reciprocal obligation on the respondent’s part to
grant occupation or use of the entire property. Furthermore, the appellant was
contractually precluded from withholding payment. The appeal was dismissed.
[30] In the present matter, the defendant was required under clause 5.3 to pay rental in
advance. Furthermore, clause 10.13 stipulated that:
‘[the defendant] shall not be entitled to withhold, delay or abate payment of any amounts
due to the Landlord in terms of this Lease by reason of any breach or alleged breach of
the Landlord’s obligations hereunder…’
[31] On the facts of the present matter, Tudor Hotel is authority for the assertion that
the lack of the requisite zoning did not allow the defendant to withhold payment of rent .
The plaintiff was entitled to enforce its contractual right s when the defendant fell into
arrears.
Relief and order
[32] The court is required to decide whether the defendant has a bona fide defence to
the plaintiff’s claim for cancellation and eviction. The details provided by the defendant
are simply inadequate; they do not, in the language of Tumileng , genuinely raise any issue
for trial. It is difficult to avoid the conclusion that the defence, as pleaded, is a sham. Consequently, based on the test enunciated in Cohen, it cannot be found that the facts put up by the defendant raise a triable issue and a sustainable defence in law, deserving of a day in court.
12
[33] Regarding the relief to be granted, the plaintiff suggested a period of 21 calendar
days within which the defendant be ordered to vacate the premises. Considering the
nature of the defendant’s business and the potential prejudice that could result to health care users, a longer period would seem to be reasonable.
[34] The only remaining issue is that of costs. As the successful party, the plaintiff is
entitled to the reimbursement of its expenses ; clause 13.2 of the agreement envisages
the implementation of an attorney -and-client scale. There is no reason why not to make
an order to that effect , including the costs of the postponement of the matter on 14
January 2025.
[35] In the circumstances, the application is granted, and the following order is made:
(a) with effect from 1 July 2025:
(i) the lease agreement concluded by the parties on 13 March 2023 at
Mthatha is hereby cancelled;
(ii) the defendant is evicted from the premises situated at erf 435 Mthatha;
and
(b) the defendant is ordered to pay the plaintiff’s costs of suit, including those for 14 January 2025, on an attorney -and-client scale.
_________________________
JGA LAING
JUDGE OF THE HIGH COURT
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APPEARANCE
For the applicant: Adv Quinn S C
Instructed by: Zilwa Attorneys
Suite 452 – 4th Floor
Development House
York Road
MTHATHA
Tel: 047 531 1572
Fax: 047 531 1573
Ref: TI0003: Mr. Zim/S
For the respondent: Mr Maswazi
Instructed by: Makangela Mtungani Inc.
50 Blakeway Road
MTHATHA
Tel: 047 531 4446
Ref: MM / 24 (MSS Bongo)
Date heard: 4 March 2025.
Date delivered: 6 May 2025.