Benlou Properties (Pty) Ltd v Vector Graphics (Pty) Ltd (185/1991) [1992] ZASCA 158; 1993 (1) SA 179 (AD); [1993] 1 All SA 207 (A) (18 September 1992)

Benlou Properties (Pty) Ltd v Vector Graphics (Pty) Ltd (185/1991) [1992] ZASCA 158; 1993 (1) SA 179 (AD); [1993] 1 All SA 207 (A) (18 September 1992)

The Supreme Court of Appeal held that the lease was not invalid merely because the landlord had a measure of discretion in determining components of the rent. The court distinguished between a pure potestative condition, which is invalid, and a mixed condition, which is permissible if the determination does not depend entirely on the unfettered will of one party. The appellant's discretion was limited by objective criteria: only a defined share of increased expenditure actually incurred with third parties could be recovered, and liability arose only if charges for specific listed items increased after the relevant date. The court found that the impugned clauses did not confer an...

Citation
[1992] ZASCA 158
Parties
Appellant: Benlou Properties (Pty) Ltd; Respondent: Vector Graphics (Pty) Ltd
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
18 September 1992
Case Number
185/1991
Procedural Posture
Civil Appeal / Appeal From Declaratory Order in Motion Proceedings
Outcome
Appeal allowed; application dismissed with costs, including costs of two counsel.
Judges
Van Heerden, Hoexter, Kumleben, Grosskopf, Krieger
Legal Topics
Lease Validity, Certainty of Rent, Severability of Contract, Potestative Conditions
Land and Property Commercial and Corporate Lease Validity Certainty of Rent Severability of Contract Potestative Conditions

Case Brief

Summary, issues, holding and outcome

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Parties

Benlou Properties (Pty) Ltd

Appellant

Vector Graphics (Pty) Ltd

Respondent

Procedural Posture

Civil Appeal / Appeal From Declaratory Order in Motion Proceedings

Legal Issues

  1. 1 Whether the lease agreement is invalid due to the rent or additional charges being determinable at the unfettered discretion of the landlord.
  2. 2 Whether the impugned clauses in the lease are severable from the remainder of the contract.
  3. 3 Whether the respondent is liable for increased expenditure incurred by the appellant under the lease terms.

Ratio Decidendi

The Supreme Court of Appeal held that the lease was not invalid merely because the landlord had a measure of discretion in determining components of the rent. The court distinguished between a pure potestative condition, which is invalid, and a mixed condition, which is permissible if the determination does not depend entirely on the unfettered will of one party. The appellant's discretion was limited by objective criteria: only a defined share of increased expenditure actually incurred with third parties could be recovered, and liability arose only if charges for specific listed items increased after the relevant date. The court found that the impugned clauses did not confer an...

Court Disposition

Appeal allowed; application dismissed with costs, including costs of two counsel.

Orders

  • The application is dismissed with costs, including the costs of two counsel.