Bodies Under Construction CC and Others v Permasolve Investments (Pty) Ltd (19457/2023) [2023] ZAWCHC 326 (20 December 2023)

82 Reportability

Land and Property Law

Brief Summary

Spoliation — Alternative power supply — Applicants, gym tenants of the respondent, disconnected from alternative power supply installed by the respondent — Dispute over additional payment for power supply referred to arbitration — Applicants claimed unlawful disconnection constituted spoliation — Court held that the applicants had a quasi-possessory right to the alternative power supply, integral to their use of the premises, and ordered reconnection to the power supply pending arbitration.

Comprehensive Summary

Summary of Judgment

1. Introduction

The proceedings were an urgent spoliation application in which the applicants sought interim restoration of access to an alternative electricity supply (a generator-based power supply) at leased commercial premises, after the respondent landlord caused the applicants to be disconnected from that supply during load shedding.

The parties were Bodies Under Construction CC, Specialised Weight Endurance and Aerobic Training CC, and Fluidity Wellness CC as applicants (collectively operating a high-end gym business), and Permasolve Investments (Pty) Ltd as respondent (the owner/landlord of premises in a shopping centre).

The matter was heard in the Western Cape Division of the High Court. It proceeded on an urgent basis on 17 November 2023, when the court granted interim relief directing reconnection to the alternative power supply, together with ancillary orders aimed at having the underlying payment dispute resolved by arbitration. The respondent delivered a notice seeking leave to appeal the day after the interim order was granted, and later requested reasons. The reasons for the interim order were delivered on 20 December 2023.

The general subject-matter of the dispute concerned whether the respondent could, pending arbitration about additional “diesel recovery” or similar charges, unilaterally disconnect the applicants from an alternative electricity supply that had historically been available to them as tenants, and whether that conduct constituted spoliation of a closely connected quasi-possessory right associated with the applicants’ occupation and use of the leased premises.

2. Material Facts

It was common cause that the applicants had leased premises from the respondent for the express purpose of operating a gymnasium and related services, and that they had been tenants for more than a decade. The gym was located in a shopping centre, and the respondent had installed a generator that could supply electricity to tenants during load shedding. The generator switched on automatically when the municipal supply was interrupted.

It was also not in dispute that the applicants had used this alternative power supply for many years during load shedding, and that the ability to continue operating during power interruptions was important to their business. The court treated the applicants’ sustained historical use of the alternative supply, and the disruption caused by disconnection, as material to characterising the right asserted for spoliation purposes.

The judgment recorded that the lease agreement did not provide for a separate additional payment for access to the alternative power supply. About two years before the litigation, the parties concluded an addendum in which the applicants agreed to pay an all-inclusive monthly fee for expenses related to leasing the premises, with the effect (as described in the judgment) that the applicants would no longer pay separately for electricity consumed at the premises.

After the addendum, the respondent demanded—described in the judgment as “out of the blue”—that the applicants pay an additional amount towards the costs of the alternative power supply, under threat of disconnection. The applicants did not accept this demand. The parties then agreed that the dispute about whether any additional payment was owed (and the interpretation of the addendum in that regard) would be referred to private arbitration, and steps were taken towards finalising an arbitration agreement and appointing an arbitrator.

A critical factual development, relied upon by the court, was that during the period when arbitration discussions were ongoing, the respondent disconnected the applicants from the alternative power supply, with the practical result that the gym experienced load shedding at the premises. The judgment treated the deprivation as undisputed in the sense that the respondent’s conduct had the effect of preventing the applicants from using the alternative supply.

The applicants brought the urgent spoliation application shortly thereafter, seeking reconnection pending arbitration. The judgment did not determine the merits of the underlying contractual dispute about payment; rather, it focused on whether the respondent’s disconnection amounted to unlawful self-help justifying restoration.

3. Legal Issues

The central legal question was whether the applicants established the requirements for the mandament van spolie in circumstances where the subject of the alleged spoliation was not physical occupation of the premises itself, but continued access to an alternative electricity supply used during load shedding.

This required the court to determine whether the asserted entitlement to the alternative power supply constituted a form of quasi-possession (an incorporeal interest protected through spoliation where the “use” is closely connected to possession of a tangible thing), or whether it was merely a personal right not protected by spoliation.

The dispute therefore primarily concerned the application of legal principles to facts, namely the classification of the applicants’ historical use of the alternative power supply and whether its disconnection substantially interfered with possession of the leased premises in a manner recognised by spoliation doctrine. It also involved an assessment of whether the respondent’s conduct amounted to unlawful deprivation through self-help, as distinct from the lawful assertion of contractual rights (which the court treated as a matter to be resolved in arbitration).

4. Court’s Reasoning

The court approached the matter through established spoliation doctrine. It emphasised that spoliation is a robust and extraordinary remedy directed at preventing self-help and restoring the status quo ante, and that once the requirements are satisfied a court has limited discretion.

The court identified the two essential allegations required for spoliation: first, that the claimant was in peaceful and undisturbed possession; and second, that the respondent unlawfully deprived the claimant of that possession. While acknowledging that incorporeal rights are not “possessed” in the ordinary sense, the court accepted that South African law recognises spoliation protection in the context of quasi-possession, where the “possession” of the alleged right lies in its actual use, provided that the use is closely connected with possession of a tangible thing.

In applying these principles, the court considered whether the applicants’ use of the alternative power supply was sufficiently incidental to, and closely connected with, their possession and use of the leased premises to qualify as a close-connected quasi-possessory right. It described such a right as one that arises where a person’s relationship to property has developed beyond the transient, and where recognition provides security and stability to someone with a substantial connection to the property.

The judgment treated the applicants’ right to use the alternative electricity supply as historic in nature and critical to the use of the premises for the gym business. On the facts, the court found that without this access the applicants’ possession and use of the premises would be significantly disrupted, particularly given the unpredictability and practical impact of load shedding. The court accepted that the disconnection of the alternative supply amounted to a substantial interference with possession of the premises and therefore fell within the category of quasi-possession protected by spoliation principles, as articulated in the case law to which the court referred.

A further consideration in the court’s reasoning was the respondent’s conduct in disconnecting the applicants despite ongoing arbitration discussions aimed at resolving the underlying dispute about payment for the generator supply. The court considered that the respondent had taken the law into its own hands to enforce a contested levy that had not historically been charged, which aligned with the kind of self-help that spoliation seeks to prevent.

On costs, the court linked the adverse costs order to the conclusion that the respondent acted unlawfully by disconnecting the alternative supply in the context of pending arbitration engagement and a longstanding status quo.

5. Outcome and Relief

The court granted interim urgent relief. It ordered the respondent to immediately reconnect the premises occupied by the applicants to an alternative power supply so that they could continue occupation and use of the premises. In the event of non-compliance, the court authorised the sheriff to effect reconnection to the alternative electricity supply installed at the property.

The court directed that the parties’ dispute regarding whether the applicants were required to pay for the alternative power supply over and above rental under the addendum would be referred to arbitration. The reconnection relief was made conditional: if the applicants failed to submit the dispute to arbitration within 45 days, the reconnection orders would lapse.

The respondent was ordered to pay the costs of the proceedings on the party-and-party scale, including the costs of two counsel if retained.

Cases Cited

Shoprite Checkers Ltd v Pangbourne Properties Ltd 1994 (1) SA 616 (W).

Du Randt v Du Randt 1995 (1) SA 501 (O).

Makeshift 1190 (Pty) Ltd v Cilliers 2020 (5) SA 538 (WCC).

Legislation Cited

Constitution of the Republic of South Africa, 1996.

Rules of Court Cited

No specific Uniform Rules of Court were cited in the judgment. The judgment referred generally to the court’s practice directions in relation to requests for reasons and the filing of the court file.

Held

The court held that the applicants’ longstanding use of the respondent’s alternative power supply during load shedding constituted a closely connected quasi-possessory right incidental to their possession and use of the leased premises, and that the respondent’s unilateral disconnection amounted to an unlawful deprivation for purposes of spoliation.

The court accordingly restored the status quo by ordering reconnection on an urgent interim basis, pending arbitration of the underlying contractual dispute about whether additional payment for the alternative supply was due.

LEGAL PRINCIPLES

Spoliation is a remedy aimed at preventing self-help and restoring the status quo ante. Once the requirements are met, it operates as a robust remedy and leaves the court with limited discretion as to restoration.

A claimant must allege and establish peaceful and undisturbed possession and unlawful deprivation. The remedy is not concerned with the merits of competing rights to the property or service, which are to be resolved in appropriate proceedings (here, arbitration).

Although incorporeal rights cannot be possessed in the ordinary sense, spoliation protection may extend to quasi-possession where the “possession” consists in the actual use of a right that is closely connected to possession of a tangible thing, such that interference with the use substantially interferes with possession of the thing itself.

Where a historically exercised use (such as access to a service integral to the occupation and use of premises) is critical to the effective enjoyment of the premises, unilateral termination of that use by a landlord may constitute spoliation if it substantially disrupts possession and amounts to unlawful self-help.