IN THE HIGH COURT OF SOUTH AFRICA
(WESTERN CAPE DIVISION, CAPE TOWN)
JUDGMENT
Not Reportable
Case no: 7742/2021
In the matter between:
WEBRAM FOUR (PTY) LTD PLAINTIFF
and
TRANSFORMATION CAPITAL
GROUP (PTY) LTD FIRST DEFENDANT
MICHAEL ESLICK SECOND DEFENDANT
REGINALD BATH THIRD DEFENDANT
Coram: AG CHRISTIANS AJ
Heard: 25, 26 and 27 November 2025
Written Submissions: 5 December 2025
Delivered: 4 June 2026
JUDGMENT
Christians AJ
Introduction
1. The Plaintiff claims from the Defendants, jointly and severally,
payment of arrear rental and damages in the amount of R9 18 550.35
arising from a commercial lease agreement between the Plaintiff and
the First Defendant. The Second and Third Defendants stood surety
for the First Defendant’s obligations under the lease.
2. The First Defendant counterclaims for payment in the amount of
R1 006 221.44, comprising the deposit it paid pursuant to the lease
agreement and the value of certain alterations and additions effected
to premises.
3. At the commencement of the hearing, counsel for the Plaintiff
indicated that the Second Defendant’s estate had been placed under a
final order of sequestration and, as a consequence, the Plaintiff ’s
claim, as against the Second Defendant, was withdrawn. In what
follows, therefore, an y reference in this judgment to “the
Defendants” shall mean the First and Third Defendants.
The pleadings
4. The relevant parts of the Plaintiff’s particulars of claim may be
summarised as follows:
4.1. The Plaintiff is the registered owner of certain immovable
commercial property in Cape Town, in respect of which it
concluded a lease agreement with the First Defendant on or
about 29 November 2019. The lease was intended to endure
for a period of five years and six months, commencing on
1 February 2020 and terminating on 31 July 2025. The
monthly amounts payable in terms of the lease agreement
included rent and contributions towards a generator levy,
utility charges, municipal rates , the CID levy and a n
amortised contribution towards tenant installations.
4.2. In terms of the lease agreement, the First Defendant paid a
deposit in the amount of R411 995.25 and the Plaintiff, in its
discretion, was entitled to apply the deposit toward the
payment of rent or any other obligation for which the First
Defendant is liable.
4.3. The Second and Third Defendants bound themselves to the
Plaintiff as sureties in solidum and as co -principal debtor for
the due and punctual payment and performance of the First
Defendant’s debts and obligations arising from the lease
agreement.
4.4. As at the date of summons, being 6 May 2021, the First
Defendant was in arrears in the amount of R920 500.62.
Pursuant to certain calculation discrepancies which emerged
during the evidence, this figure was ultimately adjusted to
R918 550.35 (i.e. having deducted the amount of R1 950.28
from the initial claim amount).
4.5. Plaintiff claimed payment of the arrears plus interest at the
prescribed rate and costs on the scale as between attorney and
client, the scale of costs being provided for in the lease
agreement.
5. Save to deny that the First Defendant owed the Plaintiff the amount
claimed, or any amount at all, the Defendants did not dispute the
allegations summarised above.
6. Instead, the Defendants alleged that the Plaintiff repudiated the lease
agreement in June 2021 and that the repudiation was accepted by
First Defendant, which acceptances was communicated to the
Plaintiff on 23 June 2021. A s a result, so the contention went, the
enforcement of the Plaintiff’s claims would be “ unfair,
unreasonable, unjust and/or against ubuntu, and accordingly against
public policy”.
7. Flowing from these broad public policy considerations, and the
allegation that the Plaintiff was unjustly enriched as a result of its
repudiation of the agreement in June 2021, being one and a half
years into a five and a half year lease, the First Defendant claimed
payment in the amount of R1 217 352.74, comprising of the
following:
(a) R411 995.25, being the deposit;
(b) R 61 044.59, being the difference between what the it paid
for additions/alterations to the interior of the leased premises
and the amount the Plaintiff reimbursed it for the
additions/alterations;
(c) R211 131.30, being amounts paid from January 2020 to
October 2020 as amortised tenant installation costs in respect
of the additions/alterations referred to above;
(d) R533 181.60, being the value of the benefit it is alleged to
have forfeited in respect of the additions/alterations for the
remainder of the lease period; and
(e) R101 490.50, being amounts it paid for certain
fixtures/fittings/equipment to the leases premises.
8. At the trial, counsel for the Defendants indicated that the First
Defendant no longer persisted with the claims referred to in
paragraphs (c) and (e) above. In any event, as I calculated it, the
last-mentioned was not included in the total R1 217 352.74 initially
claimed. The counterclaim was thus reduced to R1 006 221.44.
9. Counsel for the Defendants further submitted that, if the Court finds
that there was no repudiation, then the counterclaim would, likewise,
fall away. In that event, however, it was contended that the deposit
should nevertheless be set off against any claim granted in favour of
the Plaintiff.
10. From th e above submission, it follows that the primary dispute in
respect of the Plaintiff’s claim is also whether it repudiated the lease
agreement and, if it did, whether it is entitled to claim the arrear
amounts. If either of these questions are answered in the Plaintiff’s
favour, it will be necessary to determine the amount the Defendants
are liable to pay to the Plaintiff.
11. In the circumstances, I consider the alleged repudiation first.
Did the Plaintiff repudiate the lease agreement
12. As indicated above, the Plaintiff instituted its action in May 2021 for
amounts that were then calculated to be in arrears. At that time, the
lease agreement had not been cancelled, nor did the Plaintiff give
notice to the First Defendant of an intention to cancel the lease
agreement.
13. The high water mark of the Defendants’ claim that the Plaintiff
repudiated the lease agreement is the following:
13.1. whilst the lease agreement remained extant, the Plaintiff
advertised the leased premises as available to lease;
13.2. by letter dated 17 June 2021 the Plaintiff’s attorney indicated
that the Plaintiff had received an offer from a third party to
rent the leased premises at a substantially reduced rental;
13.3. the Defendants viewed the aforesaid communication as
confirmation that the Plaintiff did not wish to comply with
the remaining aspects of the lease and thus a repudiation of
the lease agreement;
13.4. the Defendant accepted the repudiation and undertook to
vacate the leased premises by 15 July 2021.
14. These letters, however, cannot be viewed in isolation but must be
considered within the context within which they were exchanged.
The evidence demonstrated the following:
14.1. The last payment made by the First Defendant was in January
2021 and even that was to discharge arrear amounts that were
due and payable in December 2020.
14.2. As early as 22 January 2021 the Second Defendant, Mr Mike
Eslick (Eslick), informed the Plaintiff’s Mr Clifford Toerien
(Toerien) that the Defendants had appointed a third party,
Betapoint, to asssit them “ with the possibilities around our
lease, sub lease, cost savings and alternatives that ultimately
will bring about a win win for all parties ”. On
8 February 2021 Eslick again indicated that they are working
with Betapoint to assist them “ with various scenarios – sub
tenant and other etc”.
14.3. Over the ensuing period, the discussions included settlement
of the arrears and potential payment plans. Despite these
discussions, the First Defendant did not honour any of its
payment obligations under the lease agreement. It is apparent
from the contemporaneous correspondence and Eslick’s
evidence that the source of the First Defendant’s inability to
honour its financial obligations under the lease agreement
related to the withdrawal of its sub-tenants.
14.4. On 10 February 2021 Betapoint’s Mr Grant Steppe (Steppe)
confirmed its appointment by the First Defendant . He also
referred to a conversation between him and Toerien the
previous day and, inter alia , sought to confirm that the two
had discussed “lease restructuring ” options. Toerien
responded on the same day and denied that they had
discussed restructuring. Toerien , in turn, stated that the
discussion had included possible assistance with sub-let / re -
let efforts. Toerien’s evidence was that, during that
discussion, he explained to Steppe that, with a sub -let, the
First Defendant would remain the main tenant; and under a
re-let, a new lease would be concluded with a different
tenant.
14.5. On 11 February 2021 Steppe thanked Toerien for the
assistance with the sub -let / re -let efforts and requested
Toerien to send him a re-let mandate for the First Defendant
to sign.
14.6. In an email dated 16 February 2021 Toerien informed Steppe
that the Plaintiff had taken steps to source clients to “sub-let”
and requested the First Defendant’s cooperation in giving it a
re-let mandate. The email expressly stated that Plaintiff
would assist with marketing the proposed sublease portion or
the full premises and would add the leased premises to its
vacancy schedule upon signature of the re -let mandate. It is
apparent from Toerien’s email and the content of the re -let
mandate that it entaile d various costs and potential financial
risk to the First Defendant, as the existing tenant.
14.7. On 17 February 2021 Steppe confirmed receipt of the ‘re-let
mandate’ and undertook to return a signed copy, together
with a floor plan indicating the sub-let portion.
14.8. Then, in an email dated 24 February 2021, Steppe informed
Toerien that “we have been through the re -let mandate and
have a few questions we would like to ask”.
14.9. It is common cause that the re -let mandate was never signed
on behalf of the First Defendant.
14.10. By letter dated 10 June 2021, which was after these
proceedings were launched, the Plaintiff’s then attorneys
wrote to the Defendants’ attorneys and , after referring to
earlier settlement proposals, recorded the following:
“In terms of the lease agreement, there remains a period of
over 4 years still remaining, for which your clients are
exposed. There is a significant value attributable to the
remaining term of the lease… for which our client’s rights
remain reserved to the extent that it is unable to mitigate its
damages insofar as sourcing a replacement tenant…”
14.11. On 17 June 2021 the Defendants’ attorney made a further
settlement proposal, the details of which were redacted.
14.12. The Plaintiff’s then attorney responded on 22 June 2021 and,
in relevant part, recorded the following (here again, the
details of the settlement proposals were redacted):
“In the interim, our client has received an offer to rent for the
entire leased premises… which our client is in the process of
considering in an attempt to mitigate its damages as a result
of your client’s repeated an d unsubstantiated breaches of the
lease agreement.
…
We will revert further in respect of the aforesaid offer to
lease, and the ramifications thereof.”
14.13. It was this last-mentioned letter that the Defendants
apparently regarded as a repudiation by the Plaintiff.
14.14. Notably, the vacancy schedule for June 2021 reflected the
leased premises as being available subject to one month’s
notice.
15. Against that backdrop, the Defendants’ claim that the Plaintiff
repudiated the agreement largely turned on three principle
contentions:
15.1. First, that First Defendant did not sign the re-let mandate and,
therefore, the Plaintiff was not entitled to re -let the leased
premises;
15.2. Second, b ecause the lease agreement did not expressly
provide for re-letting by the Plaintiff in the event of a breach
by the First Defendant, Plaintiff was not entitled to re -let the
leased premises without first cancelling the agreement;
15.3. Third, and flowing from the above , the Plaintiff’s conduct in
advertising the leased premises for re -let, and its
consideration of offers before the lease agreement was
properly cancelled, constituted a repudiation of the lease
agreement.
16. For the reasons I explain below, none of these contentions have
merit.
17. On the re -let mandate, Eslick sought to suggest in his evidence that
he did not sign the mandate because the Defendants never
contemplated a re -let. According to him, the Defendants were only
ever considering a sub -let arrangement because they wished to
remain in occupation for the duration of the lease agreement. I found
Eslick’s evidence to be very unconvincing.
17.1. Firstly, his evidence demonstrated a singular lack of
appreciation for the seriousness of the First Defendant’s
failure to meet any of its financial obligations under the lease
agreement since January 2021. He seemed to expect the
Plaintiff to wait indefinitely for payment simply because the
Defendants wished to stay in the leased premises for the full
five and a half year period. This despite the First Defendant
making no payments at all towards rent and other costs due to
the Plaintiff. The most incred ible part of his evidence was
that, not only did he attempt to suggest that the Defendants
should be absolved from paying the arrears, but also that the
First Defendant should be compensated for improvements to
the leased premises that were actually paid for by the
Plaintiff. Here again, the justification was that the
Defendants had always intended to benefit from those
improvements and, so the contention went, they were denied
such benefit because of the Plaintiff’s alleged repudiation.
Whether these ideas were influenced by legal advice, or as a
result of Eslick’s own ingenuity, the general tenor of his
evidence made him a poor witness.
17.2. The fact of the matter is that the Plaintiff went to great
lengths to accommodate the First Defendant’s financial
difficulties, including offering to find an alternative tenant
when it became abundantly clear that the First Defendant
could not afford the costs associated with the lease
agreement.
17.3. That the Defendants did not want the lease to come to an end
is irrelevant. I am, in any event, not convinced by Eslick’s
suggestion that this was the reason the re-let mandate was not
signed. In all probability, the failure to sign the re -let
mandate was because it would result in yet further financial
risk to the First Defendant. In my view, that was the primary
purpose of the re -let mandate: viz to give the Plaintiff a right
to recoup the costs and losses that might be occasioned by a
re-let. Save fo r this, the Plaintiff did not require the First
Defendant’s agreement to advertise its own property as
available to be let. Notably, the Plaintiffs have not sought to
recover any amounts pursuant to the unsigned re-let mandate.
18. As to the second contention, the Plaintiffs were not obliged to cancel
the lease agreement without first ensuring that it could mitigate its
loss by securing a new tenant. Importantly, Plaintiffs did not
conclude a new lease agreement while the agreement with the First
Defendant was still in force. At most, the Plaintiff advertised the
leased premises to invite offers from potential tenants. To that end,
the vacancy schedule clearly stipulated that the leased premises was
available subject to one month’s notice. This demonstrates the
Plaintiff’s intention to comply with the terms of the agreement –
albeit to exercise its right to cancel the agreement as a consequence
of the First Defendant ’s persistent breach of its obligation to pay the
amounts due to it.
19. In the circumstances, I conclude that the Plaintiff was entitled to
advertise the lease d premises in the manner that it did,
notwithstanding that the First Defendant did not sign the re -let
mandate or the absence of any express provision to do so in the lease
agreement.
20. That, then, brings me to the third issue. Did the advertisement and
consideration of an offer constitute a repudiation of the lease
agreement?
21. Counsel for the Defendant correctly submitted that repudiation is to
be determined by applying an objective test and asking whether the
words or conduct of the Plaintiff would lead a reasonable person in
the position of the First Defendant to conclude that the Plaintiff did
not intend to carry out its part of the contract properly or at al l. In
this regard, the test has been described as follows:
“Where one party to a contract, without lawful grounds, indicates to
the other party in words or by conduct a deliberate and unequivocal
intention no longer to be bound by the contract, he is said to
“repudiate” the contract…”1
(Emphasis added)
22. No doubt the Defendants seek to rely only on the Plaintiff’s
obligation to give them occupation of the leased premises as the
basis for the contention that any indication that it intended not to do
so would amount to a repudiation. But the obligation to give
occupation of the leased premises is not absolute. The lease
agreement provides that, in the event of a failure to pay any amount
due within a week of the due date, the Plaintiff would have the right
to, inter alia, terminate the lease agreement on one month’s notice.
23. The Plaintiff elected not to do so immediately but, instead, and
expressly to mitigate its losses, it advertised the leased premises for
possible re-let.
24. I have already found that, in the context of the First Defendant’s
persistent default, and the discussions between the parties since
January 2021, the Plaintiff was entitled to advertise the leased
premises to invite offers from potential new tenants. In the context
of this case, the Plaintiff had lawful grounds to do so – especially so
because the leased premises was advertised as being available on one
month’s notice.
25. Moreover, on 22 June 2021, the Plaintiff indicated no more than an
intention to consider an offer made to it and to revert to the
Defendants at a later date. At best for the Defendants, the letter
signalled an intention to cancel the lease agreement in the near
future, which the Plaintiff would have been perfectly entitled to.
26. Thus, no reasonable tenant in the position of the First Defendant,
who had not paid any rent or related costs for five months, could
conclude that the Plaintiff no longer intended to perform in terms of
the lease agreement. Indeed, nothing in the 22 June 2021 letter
suggested that the Plaintiff would not continue to honour the lease
agreement if the Plaintiff paid the arrears. Thus, a reasonable tenant
in the position of the First Defendant, if it seriously wished to avoid
cancellation, would have remedied its breach.
27. Instead, the Defendants sought to snatch at a bargain by calling the
letter a repudiation, in the hope that they might avoid their own
obligations arising from the lease agreement and suretyship.
28. In the circumstances, I find that the Plaintiff did not repudiate the
lease agreement.
29. As indicated above, counsel for the Defendants submitted that, if I
find there was not repudiation, the the counterclaim must likewise
fall away. I agree with the submission. Although I do not need to
deal with the merits of the counterclaim, it is worth mentioning that
it was hopelessly misconceived. The First Defendant sought to rely
on principles of justice, public policy and ubuntu 2 to justify a claim
for compensation relating to benefits that had largely been paid for
by the Plaintiff pursuant to a lease agreement in respect of which the
First Defendant failed to honour its own obligations. It would offend
those very principles of justice, public policy and ubuntu to reward a
recalcitrant tenant, and penalise a landlord, in these circumstances.
30. I turn now to address the Plaintiff’s claim.
Plaintiff’s claim for arrears
31. As I indicated above, pursuant to certain calculation discrepancies
which emerged during the trial, the Plaintiff’s claim for payment was
reduced to R918 550.35, being the total arrears owed by the First
Defendant to the Plaintiff as at the date of the summons. The
correctness of this figure was not challenged.
32. However, the Defendants contend that the deposit of R411 995.25
should be set off against the arrears as at the date of the summons.
On the Defendants’ approach, any amounts accrued after the date of
the summons should have been claimed – either through an
amendment to the particulars of claim or in separate proceedings. As
the Plaintiff did not do so, the Defendants contend that any such
claims have prescribed.
33. The Plaintiff, on the other hand, contends that it was entitled to set
off the deposit against any further amounts for which the First
Defendant became liable after the date of the summons.
34. In relevant part, the lease agreement provide d that “ [t]he landlord
shall have the right of applying the whole or portion of… the deposit
towards payment of the rent or the amount of any other obligation of
whatsoever nature for which the tenant is responsible…”
35. The evidence demonstrated the following:
35.1. First Defendant remained in occupation of the leased
premises in May, June and for part of July 2021. The First
Defendant, accordingly, remained liable for all amounts due
under the lease agreement for these months.
35.2. The statement of account indicated that the Plaintiff
appropriated the deposit on 26 July 2021, leaving a balance
of R890 018.96.
35.3. Various additional amounts were allocated thereafter,
including amounts allocated in August and September 2021
for utilities consumed in June and July (the meter reading
dates being 05/07/21 and 04/08/21, respectively).
36. In my view, and having already instituted legal proceedings to
recover the arrears up to 1 May 2021, the Plaintiff was entitled in
terms of the lease agreement to set off the deposit against amounts
that accrued and were not paid after that date.
37. However, given the Plaintiff’s election to appropriate the deposit on
26 July 2021, it must be taken to have set off the appropriated
amount against what was due as at that date. Having done so, the
outstanding balance was R890 018.96. Applying the adjustment
necessitated by the error in calculation mentioned above (in the
amount of R1 950.28), the true balance would have been
R888 068.68.
38. In the result, the deposit more than covered the amounts accrued
after the date of the summons. That being the case, it must also be
accepted that some inroads were also made into the claim amount –
that is, the balance owing as at 1 May 2021.
39. For these reasons, I conclude that the Plaintiff is entitled to payment
of the amounts calculated to be due immediately after it appropriated
the deposit on 26 July 2021.
40. Payment of any amounts which accrued after that date should have
been claimed separately.
Miscellaneous
41. After the hearing, both counsel submitted written submissions
dealing with the costs of an application brought by the Defendants in
terms of Uniform Rule 35(7) on 10 November 2025 – i.e. two weeks
before the trial. By the time the trial commenced, the Plaintiff had
complied with the Defendants’ request for further discovery. Thus,
although there was some debate about whether the late discovery
warranted a postponement of the trial, the Rule 35(7) application did
not serve before me. In the circumstances, I do not intend to deal
with the merits or otherwise thereof in order to determine who
should bear the costs occasioned by that application. What is
relevant is that the request for further discovery was made a month
before the trial was set to run. I am willing to accept that the late
request is an ordinary consequence of preparation on the proverbial
eve of the trial. However, that being the case, the Plaintiff can
hardly bear the full blame for not responding to the request
immediately. Viewed through this lens, and although the Plaintiff
ultimately responded to the application, evidently to the Defendants’
satisfaction, I see no reason why the costs should not be costs in the
cause.
Conclusion
42. In the result, I make the following order:
(a) Judgment is granted against the First Defendant and the Third
Defendant, jointly and severally, the one paying the other to be
absolved, for payment of:
i. R888 068.68;
ii. interest on the aforesaid amount at the prescribed rate a
tempora morae, calculated from the date of service of
the summons; and
iii. the Plaintiff’s costs of suit on the scale as between
attorney and client.
(b) The First Defendant’s counterclaim is dismissed with costs on the
scale as between attorney and client.
_____________________________
AG CHRISTIANS
ACTING JUDGE OF THE HIGH COURT
Appearances:
For plaintiff: G Quixley
Instructed by: Rebello Karsten Inc.
For defendant: GV Meijers
Instructed by: Alhadeff Attorneys
1 Datacolor International (Pty) Ltd v Intamarket (Pty) Ltd 2001 (2) SA 284 (SCA) at 294
2 Relying on Beadica 231 CC and Others v Trustees, Oregon Trust and Others 2020 (5) SA 247 (CC), per
majority judgment, at paragraph 71-90; Dikoko v Mokhatla 2006 (6) SA 235 (CC), per Justice Sachs in a
concurring supplementary judgment, at paragraph 113; S v Makwanyane and Another 1995 (3) SA 391
(CC) at 481A/B-E and 501C/D-G; Tshwane City v Afriforum and Another 2016 (6) SA 279 (CC)
paragraph 10-11.