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[2026] ZAGPJHC 299
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Gilda Agency (Pty) Ltd v Masstores (Pty) Ltd and Another (030581/2022) [2026] ZAGPJHC 299 (25 March 2026)
REPUBLIC OF SOUTH
AFRICA
IN THE HIGH COURT OF
SOUTH AFRICA
GAUTENG DIVISION,
JOHANNESBURG
Case Number: 030581/22
(1)
REPORTABLE: NO
(2)
OF INTEREST TO OTHER JUDGES: NO
(3)
REVISED: NO
In the matter between:
GILDA AGENCY (PTY)
LTD
Applicant
/
Plaintiff
and
MASSTORES (PTY)
LTD
1
st
Respondent
/
Defendant
MASSDISCOUNTERS (PTY)
LTD
2nd Respondent / Defendant
JUDGMENT
MAKUME, J
Introduction
[1] This is an
application in terms of Rule 33(4) of the Uniform Rules in which the
plaintiff seeks an order that merits of
their dispute be heard first
separately and that quantum be heard after a decision shall have been
made on liability.
[2]
It
is trite law that this rule is aimed at facilitating the convenient
and expeditious disposal of litigation. It proceeds on the
accepted
premise that the governing enquiry is one of convenience as stated in
Absa
Bank Bpk Vs Botha
[1]
,
once convenience is established an order for separation ordinarily
follows. The court should grant such an application unless
it appears
that the question cannot conveniently be decided separately.
[3]
The plaintiff is a private company
registered and incorporated in accordance with the company laws of
the Republic of Botswana.
First and second defendants are
related companies duly registered and incorporated in accordance with
the company laws of the Republic
of South Africa and conduct business
in Durban and in Johannesburg.
[4]
It is common cause that during or about 4
April 2019 and at Durban, the plaintiff and the second defendant, a
wholly owned subsidiary
of the first defendant, concluded a written
lease agreement in respect of premises in a shopping centre still to
be developed by
the plaintiffs on Plot 50637, Block 10, Gaborone,
Botswana.
[5]
It was a term of the lease that the
defendants would take occupation on 31 October 2020 and trade thereon
as Game Stores for a period
of 10 years expiring on 31 October 2030.
[6]
The defendants were designated anchor
tenants in the shopping complex; hence, it was a further term of the
lease as set out in Clause
10.2 of the lease which reads as follows.
“
The
tenant mix of the line shops is to be approved by the tenant.”
[7]
Clause 10.7 of the lease agreement reads as
follows:
“
There
must be direct flow of vehicular and pedestrian traffic between the
airport junction and the Game Centre. The plans
for this must
be agreed to by the tenant as indicated on Annexure B attached.”
[8]
On 20 May 2019, Ms Anna Nirmal, acting on
behalf of the defendants, addressed a letter to Mr Sabet, of the
plaintiff and conveyed
the following to him:
“
I
am happy to confirm that we have received our board approval.
We need to set up a spec and project meeting and it would
be
preferable that this takes place in Johannesburg. We will also
start preparing the draft lease agreement.”
[9]
It would appear that when this last letter
was sent, the plaintiff had already commenced with construction of
the shopping centre.
Then suddenly events started taking a
different shape when, on 13 August 2019, Ms Anna Nirma addressed a
letter to the plaintiff
in the following words:
“
We
believe that the opening date should be moved to March 2022 to enable
you to have sufficient time to complete the development.
If you
are in agreement, then send me a formal letter notifying me of the
opening date moving to March 2022 so that it can be read
in
conjunction with the signed offer to lease.”
[10]
On 28 February 2020, Mr Armin Sabet,
writing on behalf of the plaintiff, informed the defendant that:
“
We
are in the advanced stage in this project as per your initial request
to accelerate it if possible.”
In response to that
letter, Mr Adrian Otto, who had by now taken over from Ms Nirmal,
told Mr Sabet that they would be happy to
take occupation by July
2021, no longer in the year 2022.
[11]
On 27 May 2020, Adrian Otto sent a letter
to the plaintiff complaining about how Covid-19 had affected their
cash flow and requested
that the occupation date be moved to February
2022.
[12]
It was on 3 September 2020 that events took
a drastic turn which directly led to this litigation. In that
letter addressed
to the plaintiff, the following was said:
“
The
construction was met with certain hindrances occasioned by delay,
consequently the delivery of the contractual terms that were
essential to the contract, more specifically the beneficial
occupation date as well as the trading date failed to be delivered.
This imposed upon the terms of the agreement, essentially having to
move out the affected date. Protocol compelled us to
submit a
new proposal to the board of directors due to the request of having
essential terms of the agreement being valid which
entailed proposal
of a new opening date. We unfortunately, with deep regret
inform you that the subsequent proposal submitted
to our board was
met with rejection, hence we are unable to proceed with leasing of
the premises.”
[13]
Finally, it was on 10 November 2020 when
the defendant informed the plaintiff that they have decided to
withdraw from the deal because
of the following:
a.
That the plaintiff had failed to fulfil the
material terms of the agreement.
b.
Absence of confirmed tenant.
c.
That plaintiff's letter of 19 October 2020
only confirmed Game as the anchor tenant and that the others were
mere consideration.
d.
That plaintiff has not copiously addressed
the traffic reticulation with the stakeholder at airport junction.
[14]
On 17 September 2021, plaintiff's attorneys
addressed a letter to the defendant accepting the latter's
repudiation of the agreement
and claimed damages under various
heads. Summons was issued on 7 October 2022, pleadings have
become closed and the matter
is ready for trial. Hence, in one
of the case management meetings held before Judge Vally, the
plaintiff intimated a desire
that the issue of merits and liability
be decided first in terms of rule 33(4) of the Uniform Rules.
[15]
It is common cause that the defendants
opposes such proposal and say that there should be no separation of
issues and that it would
not be convenient nor cost saving to
separate as evidence on the merits overlaps to a large extent with
evidence to be led in respect
of damages.
[16]
In the particulars of claim, the plaintiff
pleads repudiation and consequently breach of the agreement in
paragraphs 15 up to 17,
read with the defendants plea in paragraphs
4, 5, 6, 7, 8, 9 and 10. It is these paragraphs that relate to
the liability,
hence they are referred to as the merits issue.
[17]
In paragraphs 18 up to 18.7 of the
particulars of claim, the plaintiff sets out details of damages it
has suffered and continues
to suffer as a result of the defendants
having resiled from the agreement. The defendants’
defence is detailed in paragraphs
11 of the plea. It is a
denial of the breach and a denial that the plaintiff suffered any
damages. The defendants say
they have pulled out of the
agreement because the plaintiff did not ensure that it met the
trading date of 31 October 2020.
Secondly, that the plaintiff
failed to procure a tenant mix of the line shops adjacent to the
proposed Game Store in contravention
of Clause 10.2 of the lease, and
lastly, that the plaintiff failed to ensure a direct flow of the key
vehicular and pedestrian
traffic between airport junction shopping
mall and the planned Game shopping mall in breach of Clause 10.7.
[18]
During submissions before me the defendants
abandoned reliance on the breach of clause 10.7. Their argument
centred on whether
it is the plaintiff who breached the agreement as
pleaded by the defendant or whether it is the defendant who
repudiated the agreement.
[19]
The defendants correctly identified in
their heads that central to the determination of the defendants’
liability to the plaintiff
is the question whether the plaintiff met
the conditions precedent, alternatively the material terms of the
lease that was accepted
by the second defendant on 4 April 2019.
One of those conditions is whether the plaintiff submitted to the
defendant the
tenant mix of the line shops as appears in Clause
10.2.
[20]
The position in relation to clause 10.2
requires closer scrutiny. The defendants’ plea places in issue
whether the plaintiff
complied with its obligation to present the
tenant mix for approval, and whether such compliance constituted a
condition precedent
or material term. The plaintiff’s claim for
damages, in turn, includes alleged losses flowing from the loss of
rental from
prospective tenants and costs associated with securing
replacement tenants.
[21]
The question which arises is whether the
evidence required to establish compliance or non-compliance with
clause 10.2 is substantially
the same as, or materially overlaps
with, the evidence required to establish causation, mitigation and
the quantum of damages.
[22]
If the evidence is discrete and can be
confined to the merits without engaging the detailed factual matrix
relevant to damages,
separation may serve the interests of
convenience. If, however, the same witnesses and documentary material
will be required to
traverse both compliance with clause 10.2 and the
alleged financial consequences thereof, the risk of duplication and
piecemeal
adjudication becomes a material consideration.
[23]
The determination of whether there is a
true overlap is therefore pivotal to the balance of convenience. It
is only once that enquiry
is resolved that the Court can properly
determine whether the issues are capable of convenient separation
within the meaning of
Rule 33(4).
[24]
It is the defendants’ case that the
plaintiff failed to procure and submit to the defendant for approval
the tenant mix of
the line shops adjacent to the planned Game Store.
The evidence in that respect will be presented by Sobet and Salojee
and
supported by the defendants own letter dated 10 November 2020 in
which they confirmed receipt of a letter from the plaintiff dated
19
October 2020 in which they confirmed that “only Game as a
tenant and that the others were mere considerations”.
Clearly, they did receive a list of tenants. It will not be
necessary as the defendants argue that the plaintiff will need
to
lead evidence in support of the quantum of damages.
[25]
The lease agreement is silent as to when
plaintiff was to have submitted the tenant mix, but that was
submitted. On the other
hand, whilst the lease agreement had
dates of occupation and dates of commencement to trade, the evidence
shows that it is the
defendant who kept on shifting dates, citing
firstly financial constraints and later Covid-19 business slump.
[26]
There exists various and substantial issues
which fall to be determine prior to determining the extent of
damages, if any, suffered
by the plaintiff.
[27]
It is both convenient and cost-effective to
deal with issues relating to liability first before embarking on
damages. The
quantum issues are substantial and have been fully
covered and dealt with in the plaintiff’s founding affidavit.
The
determination of the damages suffered by the plaintiff will
occupy substantial factual and expert evidence.
[28]
Flemming
AJP, in the matter of
Rauff
v Standard Bank Properties
[2]
at 703 stated that:
”
The
entitlement to seek the separation of issues was created in the court
rules so that an alleged lacuna in the plaintiff's case
or an answer
to the case can be tested, or simply so that a factual issue can be
determined which can give direction to the rest
of the case and in
particular to obviate a parcel of evidence. The purpose is to
determine the fate of the plaintiff's claim
or one of the claims
without the costs and delays of a full trial.”
[29]
The factual issues that are in dispute in
this matter are twofold. First, it is whether the dispute arose
as a result of any
act or omission on the side of the plaintiff.
Secondly, whether the dispute is as a result of any act or omission
on the
side of the defendant. It is in my view convenient that
the parties do not incur substantial costs associated with the issue
of damages. It is accordingly not only convenient, but it has
the advantage that an inquiry into damages issue will only
arise in
the event of a finding of breach by the defendant. If the court
does not find in favour of the plaintiff on merits,
it will be the
end of the matter and time and costs will be saved
.
[30]
The defendants contend that a separation
will result in an overlap of evidence required to prove any of the
remaining issues.
It is correct that a court should not grant a
separation where it is clear that an overlap would occur resulting in
witnesses having
to be recalled. The defendants contend that
the merits issue and quantum issue are inextricably linked in
relation to two
issues, namely that the plaintiff's alleged breach of
Clause 10.2 of the lease, in that it failed to procure the approval
of the
second defendant in respect of the tenant mix of the line
shops adjacent to the planned Games Store. Secondly, the
alleged
breach of Clause 10.7 which the defendant has now abandoned.
[31]
The defendant's interpretation of Clause
10.2 is not in line with what the parties agreed upon. Firstly,
in their own letter
dated November 2020, the respondents did confirm
that they received names of prospective tenants and they chose to
refer to them
as mere considerations. The defendant does not
explain what they meant by mere considerations.
[32]
The evidence and factual considerations
relevant to whether or not the plaintiff presented the tenant mix of
the line shops for
approval, if so and when, are narrow and crisp and
will not necessarily traverse the issue of damages. The
evidence will
not require that plaintiff lead evidence to determine
quantum issues.
[33]
The
court in the matter of
Minister
of Agriculture v Tonga Brook
[3]
held that:
“
The
interest of the parties and the ends of justice will be better served
by disposing of a particular issue before considering
other issues
and that depending on the result of the issues singled out may fall
away or become confined to substantially narrower
limits.”
[34]
I have come to the conclusion that a
separation of merits from quantum will be in the best interest of the
parties as it will not
only curtail costs, but it is to the advantage
of both parties.
Order
[35]
For these reasons, I make the following
order.
1.The issues regarding –
a. The conclusion of the
agreement between the plaintiff and the defendant as pleaded in
paragraphs 5, 6, 7, 8, 9, 10, and 11 of
the particulars of claim read
with paragraphs 4 and 5 of the defendants’ plea,
b. The plaintiff’s
compliance with the agreement as pleaded in paragraphs 12, 13, and 14
of the particulars of claim, read
with paragraphs 6, 7, and 8 of the
defendants’ plea,
c. The defendants(or any
of their breaches and/or repudiation) of the agreement as pleaded in
paragraphs 15, 16, and 17 of the particulars
of claim, read with
paragraphs 9 and 10 of the plea,
d. Whether in consequence
of the foregoing the defendants, (or any of them) are liable to the
plaintiff,
be
determined separately from, and prior to the damages suffered by the
plaintiff and the quantum thereof as more fully stated in
paragraph
18 of the particulars of claim, read with paragraph 11 of the plea.
2. The remainder of
the issues in the action be and are postponed sine die.
3. The defendants
are ordered to pay the plaintiff's cost of this application on a
party-and-party scale including cost of
two Counsel on Scale C.
MAKUME
JUDGE OF THE HIGH
COURT
GAUTENG DIVISION,
JOHANNESBURG
Appearances
For
the Applicants:
W LA Grange
SC
For
the Respondent:
Adv J Babamia SC
Instructed
Clyde & Co
[1]
1997(3)
SA 510 (0) at 513 (C).
[2]
2002
(6) SA 693 (W).
[3]
1976
SA 357
(D).