Al-Waaris Investment CC v Kotu t/a Shimmy Kotu Ministries (18884/2017) [2018] ZAGPJHC 99 (14 March 2018)

REPUBLIC OF SOUTH AFRICA

IN THE HIGH COURT OF SOUTH AFRICA

GAUTENG LOCAL DIVISION, JOHANNESBURG

CASE NO: 18884/2017

In the matter between:

AL-WAARIS INVESTMENT CC Applicant

Registration No: 2002/091838/23

and

SHIMMY KOTU t/a SHIMMY KOTU MINISTRIES Respondent

JUDGMENT

MODIBA, J:

[1] The applicant, Al-Waaris Investments CC (“Al-Waaris”) seeks an order for the eviction of the respondent, Shimmy Kotu t/a Shimmy Kotu Ministry from the property described as Erf 196 Klipriviersoog Ext 1 Soweto (“the property”) and for the payment of an amount of R972 381.75 in arrear rental as well as an amount of R50, 979.20 in respect of water and sanitation services.

[2] The respondent is cited in his personal capacity trading as Shimmy Kotu Ministries. The same reference to the respondent appears in the lease agreement that is at the heart of the dispute between the parties. Where I refer to the respondent in his personal capacity, I refer to him as “Kotu”.

[3] The following facts are common cause. Al-Waaris is the registered owner of the property. It entered into a lease agreement with Kotu on 15 September 2009 in terms of which it leased the property to Kotu for use as church premises. Kotu is the Overseer of Shimmy Kotu Ministries (“SKM”). The lease agreement does not reflect SKM as a party even through SKM’s registration as a legal entity pre-dates its conclusion. A certificate of change of name in respect of this entity, dated 2002 is attached to Kotu’s answering affidavit. It reflects SKM’s incorporation in South Africa as a section 21 company in terms of the Companies Act 61 of 1973. Where I refer to the church as a registered legal entity, I use the reference “SKM”. SKM is in occupation of the property.

[4] In its answering affidavit Al-Waaris has extensively pleaded the terms of the lease agreement on its versions. These are largely not in dispute between the parties. It would serve no purpose to regurgitate them here. I make reference to such terms to the extent that they are disputed by Kotu. Al-Waaris alleges that the lease agreement makes provision for the initial lease period of three years. Al-Waaris also alleges that on expiry thereof, Kotu remained in occupation at the property. In terms of the common law, such occupation endured monthly on the terms of the lease agreement. Al-Waaris has since cancelled the lease agreement. Kotu remains in occupation. Kotu’s occupation at the premises is unlawful because it has cancelled the lease agreement. Al-Waaris further alleges that Kotu has defaulted on rental payments as well as payments for water and sanitation services for which Kotu is liable in terms of the lease agreement.

[5] The respondent has raised two points in limine. The points in limine are as follows:

5.1 Non-joinder SKM.

5.2 Prescription of Al-Waaris’s claim.

[6] The legal principle on non-joinder has been applied by our courts repeatedly (See Amalgamated Engineering Union v Minister of Labour[1]). It is trite that a party with a direct and substantial interest in any order which cannot be sustained or carried into effect without

prejudicing him or her ought to be joined, unless the court is satisfied that the party has waived its entitlement to be joined. See also Gordon v Department of Health: KwaZulu-Natal[2] where the SCA held that the test is whether a party that is alleged to be a necessary party has a legal interest in the subject matter, which may be affected prejudicially by the judgement of the court in the proceedings concerned. On these authorities, as far as the monetary relief sought by Al-Waaris is concerned, the non-joinder point lacks merit. Kotu is a party to the lease agreement in his personal capacity. It follows that he is personally liable to Al-Waaris in respect of obligations arising from that agreement. As a non-party to the lease agreement, SKM does not have an interest in the outcome of the monetary relief sought by Al-Waaris. Whatever arrangements are in place regarding SKM’s occupation of the premises relate to Kotu and SKM and bear no relevance to Al-Waaris in respect of the prayer for monetary relief. Therefore the non-joinder point stands to fail in respect of that relief.

[7] As far as the relief for eviction from the property, is concerned, the non-joinder point bears merit. As a legal entity with separate legal personality from Kotu, given that it occupies the property, SKM has a substantial interest in the eviction relief sought by Al-Waaris. Al-Waaris sought to raise estoppel against Kotu from relying on this point because he entered into the lease agreement in his personal capacity knowing that SKM is a separate legal entity. Estopping Kotu from relying on this point in limine does not absolve Al-Waaris from the test for joinder. Al-Waaris could not show that the eviction order cannot be carried out without

affecting the rights of SKM as the occupier of the property. Therefore, the point in limine for the non-joinder of SKM stands to be granted.

[8] Counsel for Al-Waaris requested the court in the event that it upholds the point in limine for the non-joinder of SKM to postpone the prayer for eviction to allow Al-Waaris to join SKM to these proceedings. A postponement of this relief as requested by counsel for Al-Waaris is appropriate in these circumstances.

PRESCRIPTION

[9] Kotu contends that Al-Waaris’s arrear rental claim has prescribed because the lease agreement expired in 2012. This contention lacks merit for two reasons. After the expiry of the initial lease period, Kotu remained in occupation. By implication, the lease agreement endued on a month to month basis.[3] The submission by counsel for Kotu that Kotu terminated the lease agreement and that subsequently, Al-Waaris entered into a monthly

verbal lease agreement with Kotu is not supported by any averment in the answering affidavit. Kotu’s contention that SKM is responsible for paying rental to Al-Waaris and that SKM is operated by a committee and not Kotu personally does not assist Kotu. Whatever arrangements are in place regarding SKM’s occupation at the property and Kotu bear no relevance to Al-Waaris.

[10] Further, payments received in respect of rental were applied to the oldest debt first. This application is consistent with the trite principle on the appropriation of payments to the effect that payments are allocated to the oldest debt first.[4] This clearly appears from the rental statement attached to the affidavit. Also, it clearly appears from the said statement that the amount claimed in respect of arrear rental relates to the period that has not prescribed. This period is reckoned three years backwards from the date the application was served on Kotu, being 28 May 2017 to 1 May 2014. All payments received were applied to the period Kotu alleges to have prescribed. The amount claimed in respect of rental arrears relate to the period that is not affected by prescription. Therefore the prescription point stands to fail in respect of the arrear rental claim.

[11] The prescription point stands to partially succeed in respect of the claim for water and sanitation services. No payments were applied to the relevant amounts. Of the amount of R50, 979.20 claimed, only R39, 865.36 falls within the period not affected by prescription. Therefore the prescription point stands to succeed in respect of this amount.

[12] Kotu has not put up a valid defence on the merits to Al-Waaris claim. I have already found that his defence of a verbal month to month lease agreement between Al-Waaris and SKM lacks merit as it is not supported by any averments in the answering affidavit. No averments support any suggestion that the month to month lease agreement between Al-Waaris and Kotu was terminated and a new lease agreement entered into with SKM. The defence of a purported agreement of sale between Al-Waaris and SKM also lacks merit. On Kotu’s own version, there is no valid agreement of sale between these parties. He only goes as far as attesting to sale negotiations between the parties. He attaches no written agreement of sale which is a peremptory requirement in term of the Alienation of Land Act.[5]

[13] In the premises, Al-Waaris monetary claim against Kotu for R972 381.75 in respect of arrear rental, and the amount of R39, 865.36 for water and sanitation services succeeds. The lease agreement makes provision for costs on the attorney and client scale. I find no reason why should costs not follow the course and why the scale of costs as agreed to between the parties should be departed from.

[14] I therefore make the following order:

ORDER

1. Prayers 1 to 3 of the applicant’s notice of motion is postponed sine die.

2. Judgment is granted against the respondent in the following terms:

2.1. Payment in the amount of R972 381.75 in respect of arrear rentals.

2.2. Payment in the amount of R39, 865.36 in respect of arrear water and sanitation costs.

3. Interest on the aforesaid amounts at the rate of 9% per annum, from 22 February 2017 to date of payment, both days inclusive.

4. The respondent shall pay the costs of the application to the date of this judgment on the attorney and client scale.

______________________________________

MADAM JUSTICE L T MODIBA

JUDGE OF THE HIGH COURT

GAUTENG LOCAL DIVISION, JOHANNESBURG

APPEARANCES

For the applicant:

Mr W Naude

Instructed by:

Sarlie & Ismail Inc

For the respondent:

Matojane Malungana Inc

Instructed by:

Dorothy Mogale

Date heard:

12 March 2018

Date judgment delivered:

14 March 2018

[1] 1949 (3) SA 637 (A) at 657.

[2] [2008] ZASCA 99; 2008 (6) SA 522 (SCA) at para 9.

[3] In ACSA v Exclusive Books (945/2015) [2016] ZASCA 129 (27 September 2016), the Supreme Court of Appeal quoted with approval the following authority in respect of this principle. Wille’s Principles of South Africa Law 3 where the author writes that the duration of the lease is for the period that the parties have agreed expressly or impliedly. ‘An express agreement may provide that the lease shall endure for a definite time, short or long; or until a certain event takes place (which is bound to occur); or the duration may be at the will of the lessor, or of the lessee; lastly, the lease may be periodic, i.e. the lease continues from week to week, month to month, or year to year (according to the period expressly or impliedly agreed upon) until it is terminated by reasonable notice given by either party.’ Wille cites as authority for this principle Mackay v Naylor 1917 TPD 533 at 538 and Tiopaizi v Bulawayo Municipality 1923 AD 317 AT 325, where the court held that in absence of an agreement regarding the period of the renewed lease such period is that in terms of which rent is payable.

[3] In ACSA v Exclusive Books (945/2015) [2016] ZASCA 129 (27 September 2016), the Supreme Court of Appeal quoted with approval the following authority in respect of this principle. Wille’s Principles of South Africa Law 3 where the author writes that the duration of the lease is for the period that the parties have agreed expressly or impliedly.

‘An express agreement may provide that the lease shall endure for a definite time, short or long; or until a certain event takes place (which is bound to occur); or the duration may be at the will of the lessor, or of the lessee; lastly, the lease may be periodic, i.e. the lease continues from week to week, month to month, or year to year (according to the period expressly or impliedly agreed upon) until it is terminated by reasonable notice given by either party.’

Wille cites as authority for this principle Mackay v Naylor 1917 TPD 533 at 538 and Tiopaizi v Bulawayo Municipality 1923 AD 317 AT 325, where the court held that in absence of an agreement regarding the period of the renewed lease such period is that in terms of which rent is payable.

[4] See Italtile Productions (Pty) Ltd v Touch of Class 1982 (1) SA 288 (O) at page 292-293 where the said principle was applied in reference to Reigate v The Union Manufacturing Co 118 LT 483 quoted from 215 of Mullin (Pty) Ltd v Benade 1952 (1) SA 211 (A).

[5] Act 68 of 1981.