Dunsteyn Produseerders (Pty) Ltd v Metcash Trading Africa (Pty) Ltd (A63/2018) [2020] ZAGPPHC 233 (21 April 2020)

IN

THE HIGH COURT OF SOUTH AFRICA

(GAUTENG DIVISION, PRETORIA)

Case number: A 63/2018

Date:

In the matter between:

DUNSTEYN PRODUSEERDERS (PTY) LTD

(Registration No: 1959/004177/07)

APPELLANT

AND

METCASH TRADING AFRICA (PTY) LTD

(Registration No: 2003/018184/07)

RESPONDENT

JUDGMENT

TOLMAY, J:

INTRODUCTION

[1] The appellant’s claim for arrear rental payments in terms of a written lease

agreement was dismissed by the Court a quo. The counter claim for repayment of the deposit was granted. The Court a quo refused leave to appeal. This is an appeal based on leave to appeal having been granted by the Supreme Court of Appeal (SCA).

[2] The respondent leased a commercial property from the appellant for a period of approximately twenty-five years. In terms of the most recent lease agreement concluded between the parties, the appellant leased the premises to the respondent for the period 1 December 2012 to 30 November 2017. Before December 2012 the

respondent occupied the whole of the leased premises as described in the lease agreement. However, with effect from 1 December 2012, a portion (900 m2) of the premises were separately leased to Liquor City. The premises of Liquor City were situated adjacent to the leased premises occupied by the respondent. During the evening of 4 December 2014 a fire broke out on the premises of Liquor City. This fire caused serious damage to the premises of Liquor City. The dispute between the parties related to the extent of the damage to respondent’s premises and whether the damage caused by the fire rendered it unsuitable for beneficial use.

[3] The appellant’s case was that only a minimal amount of smoke and soot entered the premises leased by the respondent, and consequently that it remained suitable for beneficial use at all relevant times. The respondent on the other hand, contended that the damage was significant and rendered the property not suitable for beneficial use, further that the appellant ought to have cancelled the lease in terms of clause 14 that therefore according to it the lease is deemed to have been cancelled in terms of clause 14.1 of the lease agreement.

[4] The parties were in agreement that the rental of the premises was not paid from January

2015 up and until the date of the trial and that it amounted to R2 003 293-49, including VAT, in arrear rentals. It was

further agreed that should the Court find for the appellant, it would be entitled to payment of that amount. On the other hand, should the Court find for the respondent, it was entitled to judgment in terms of the counter-claim, which constituted repayment of the deposit in the amount of R169 632-00.

[5] The respondent based its defence exclusively on the provisions of clause 14.1 of the lease agreement. In view thereof that the terms of the lease agreement and the amount of the arrear rental were not in dispute, Mr Els who appeared for the appellant, submitted that the respondent bore the onus to prove that the premises were damaged to such an extent that it prevented the respondents from having beneficial occupation. He further submitted in oral argument that at trial the appellant agreed to commence leading its evidence, in view of the respondent’s threat to request a postponement, if they were to commence with the leading of evidence. Further, in view thereof, that the respondent relied on clause 14 of the lease agreement, it is apparent that the respondent bore the onus to prove that the damage to the property was such that it was unsuitable for beneficial occupation. The respondent thus was obliged

to commence with the leading of evidence. Despite the fact that the appellant commenced with the leading of evidence in the court a quo, the respondent remained bearing the said onus.

THE RELEVANT PROVISIONS OF THE LEASE AGREEMENT

[6] Clause 14 of the lease agreement reads as follows:

“14.

DESTRUCTION

14.1 Should the leased premises be destroyed or damaged to an extent which prevents the Tenant from having beneficial occupation of the whole of the leased premises, then the Tenant shall have no claim of any nature whatsoever against the Landlord as a result thereof, no matter how such destruction or damage has been caused. The Landlord shall be entitled within 30 (thirty) days after such destruction or damage, to determine whether or not this lease shall be cancelled and shall notify the Tenant of its decision in writing within such period. Should the Landlord not notify the Tenant of its decision within such period, then the Landlord shall be deemed to have elected to cancel this lease.

14.2 Should the Landlord elect or be deemed to have elected to cancel this lease, then the Tenant shall have no claim of any

nature whatsoever against the Landlord as a result of such cancellation, but shall not be liable for the payment of any rent or

operating costs from the date of such destruction or damage.

The Landlord shall upon such cancellation refund the Tenant the deposit made as set in Schedule 1, taking into account the stipulations

contained in paragraph 4 above.

14.3 In the aforegoing event, and should the Landlord thereafter elect to rebuild (reinstate) the leased premises, the Tenant shall be afforded due and reasonable notice thereof and shall, within 30 (Thirty) days of receipt of such notice, inform the Landlord whether it wishes to occupy the rebuilt premises on the terms and conditions as stated in such notice, and failing the exercise of the Tenant of such election, or should it not respond to such notice, the Landlord shall be entitled to reconstruct the building and premises in such manner as it deems necessary and to deal therewith in its sole discretion.

14.4 Should the Landlord elect not to cancel this lease, then:–

14.4.1 the Landlord shall reinstate, at its cost, the leased premises as quickly as possible in the circumstances;

14.4.2 the Tenant shall not be liable for the payment of any rent or operating costs for so long as it is deprived of

beneficial occupation of the leased premises.

14.4.3 Should the Tenant be given beneficial occupation from time to time of any part of the leased premises, then the provisions of this lease shall apply to such occupation and the Tenant shall make payment of the rent and operating costs therefore

on a pro rata basis.

14.4.4 The period of this lease shall be extended by the period during which the Tenant is deprived of beneficial occupation of the whole of the leased premises.

14.5 Should any part (but not the whole) of the leased premises be destroyed or damaged by any cause whatsoever, then:–

14.5.1 this lease shall not be cancelled;

14.5.2 the rent and operating costs payable by the Tenant shall be reduced pro rata and to the extent to which the Tenant is deprived of the beneficial occupation of that part of the leased premises;

14.5.3 the Landlord shall repair at its cost the damages or destroyed portion of the leased premises as quickly as possible in the circumstances;

14.5.4 the Tenant shall have no claim whatsoever against the Landlord as a result of the said destruction or damage,

no matter how caused.

14.6 If any dispute shall arise between the parties in regard to the operation of application of the provisions of clauses

14.1 and 14.4 above, such dispute shall be determined by an independent expert nominated and agreed upon by both parties, whose

decision shall be final and binding on the parties.

14.7 If the total or partial destruction of the leased premises or the building referred to above is caused by any wilful act or omission of the Tenant or of any person for whose acts or omissions the Tenant is vicariously liable at law, the Tenant shall

be liable to the Landlord through the Tenant’s insurer for all damages suffered by the Landlord as a result of and in connection

with such total or partial destruction.

Upon payment by the Tenant to the Landlord of such damages in full, the Landlord shall pay over or cede to the Tenant, as the case may be, any proceeds which the Landlord may have received from or any claim which the Landlord may have against the insurer under the insurance policy referred to in clause 8.2 above.”

[7] Clause 14.1 of the lease agreement poses no interpretational challenge. Nonetheless, the first issue to be considered is the meaning and effect of clause 14. On a purposive reading of clause 14.1 of the lease agreement, the deemed cancellation would only be triggered in circumstances where the “leased premises” was “destroyed” or “damaged” to such an extent that the respondent was “prevented from having beneficial occupation” of the “whole of the leased premises”. A perusal of the evidence led, and on the argument presented to us, it is clear that the interpretation of the clause is not in issue, but rather whether the damage to the property rendered it unsuitable for beneficial use. This dispute therefore ultimately requires a factual analysis of the evidence.

[8] Clause 14.5 read with 14.5.1 of the lease agreement, provides that, in the event that any part, but not the whole of the leased premises, was destroyed or damaged by any cause whatsoever, then the lease would not be cancelled.

[9] The leased premises was at all relevant times utilised for commercial use and the lease period was 5 years.

THE EVIDENCE

[10] The appellant led the evidence of five witnesses. The respondent called only one witness, namely Mr Rogers.

[11] The fire, which occurred on 4 December 2014, occurred mainly on the part of the premises occupied by Liquor City. Mrs Truter, called on behalf of the appellant, testified that the building leased by the respondent was built specifically for the respondent and that it was an industrial type of building. A person called Junior, who was employed by the respondent, was the contact person with whom she discussed issues surrounding the lease agreement. On the Tuesday after the fire a meeting was held at the leased premises. The meeting was attended by Junior (who kept the keys to the leased premises), the appellant’s broker, Mr S Truter, a person involved in construction and a person representing Zurich Insurance. When she entered the leased premises she was shocked, not because of any damage caused by the fire, but as a result of the fact that no business was conducted on the part of the building occupied by the respondent. All the shelves had been removed and piled together. There were only a few pallets of stock in the middle of the building. She specifically confronted Junior with the fact that there was no stock left. She suggested to him that the respondent negotiate with the appellant about an early settlement, as it was clear that the respondent was not trading from the premises. Junior however insisted that the respondent intended to use the premises as a distribution

centre (DC). Apart from water on the floor and a small portion of damage to the sisalation, there was no other damage to the building itself. Regarding the water on the floor, she testified that it could be compared to puddles of water on a tennis court. “It was a little bit there, a little there.” The appellant continued to send monthly invoices to the respondent. The rental was not paid and for the first time on 20 May 2015 the respondent relied on a deemed cancellation in terms of clause 14.1 of the lease agreement.

[12] When Mr Rogers, the respondent’s only witness, deposed to an opposing affidavit resisting an

application for summary judgment, he stated under oath that ceilings had collapsed. However, Mrs Truter specifically testified that there were no ceilings, save for the office portions occupied by the respondent and that no ceilings had collapsed. She emphasised the fact during cross-examination that the appellant paid a massive premium for insurance. It was consequently of importance to the appellant to ensure that any damage caused as a result of the fire was to be repaired. It was, according to her, apparent that no significant damage occurred on the side of the building occupied by the respondent. She was informed by Junior that the respondent intended to continue to trade on the leased premises and to change it to a distribution centre (DC). She stated that, at the time of the fire, the respondent had no fresh produce on the premises. She confirmed that the building was still occupied by the respondent at the time when she gave evidence. During cross-examination the respondent’s counsel put to Mrs M Truter that, at the time of the fire, the respondent was still trading from the premises. Mrs Truter denied this. She stated that it took about a week to replace the sisalation. She expressly disputed that the roofing and the sisalation on that part of the premises occupied by the respondent rendered the whole premises unusable.

[13] The evidence of Mr Ngele, who was employed by the respondent prior to the fire occurring and called by the appellant, testified that twenty days before the fire, on 14 November 2014, the respondent ceased its business operations at the leased premises. This fact only came to the attention of the appellant after the fire had occurred, as was testified by Mrs Truter. Mr Ngele, who was employed by the respondent for more than twenty years, testified that he was given a document on 11 November 2014, informing him that his last day of work would be 14 November 2014. Mr Ngele further testified that he was only contacted by the respondent shortly after 14 November 2014 to assist the respondent to remove the shelves and the existing stock on the leased premises. According to Mr Ngele only “expired stuff” was left in the building. It was emphatically stated by Mr Ngele that, when he left the leased premises on 14 November 2014, there were no fresh produce, like meat or vegetables on the leased premises. The aforesaid evidence of Mr Ngele was not challenged in cross-examination. It was only put to Mr Ngele that he could not dispute the fact that the respondent intended utilising the leased premises in future as a wholesale depot.

[14] During cross-examination Mr Ngele was asked why he did not ask to stay on until 2015. He responded as follows:

“... They said the shop is going down, there is no business, and even us, we have seen there was no business and then they started to break all the shelves.”

[15] Mr Smith, called on behalf of the appellant, testified that he was present on the evening of the fire. He confirmed that he did not see anything else, apart from water, being used by the fire brigade to extinguish the fire.

[16] Mr Ferreira, called on behalf of the appellant, testified that he was instructed by SA Eagle Insurance Company during December 2014 to assess the damage to the appellant’s building in Burgersfort. He testified that he could only see evidence of water being used to extinguish the fire. During cross-examination it was put to him that foam was used, he however stated that no sign of anything else being used was observed by him. He confirmed that the fans in the building were still turning on the day of the inspection. From this I infer an indication that there was an electricity supply to the premises occupied by the respondent. He stated that all the sisalation in the premises of Liquor City was replaced. He further testified that, in total, approximately 60 m2 of sisalation was replaced in the leased premises of respondent. He stated that the IBR wall, which separated the Liquor City part of the premises from the respondent’s leased premises, was replaced in its entirety. According to him there was no structural damage and that this could be seen on the final invoice. He confirmed during cross-examination that the figures reflected in his initial report was based on a worst-case scenario and that the actual damage was less than his initial assessment indicated in his report. When a closer inspection was ultimately made, it transpired that less repairs were required. He confirmed that the Liquor City side of the building had a separate “DB board”. When Mr Ferreira was asked to explain why less sisalation was eventually replaced, he provided the following answer:

“M’ Lord, the builder, as I stated earlier, they work from the top, they have to remove the corrugated iron in order to replace the sisalation. When they got to the reach of the roof they started to remove the sheets on Metro side, and at that stage he said there is no need to replace that, they are only going to replace the first meter or so inwards which was subjected to heat, and the reason it was subjected to heat is because that was directly above the partition.”

[17] Colour photographs formed part of the evidence that was presented by the appellant. Mr Ferreira confirmed that he took these photographs and that they were taken during his first inspection of the premises on 10 December 2014. From the aforementioned photographic evidence, it is clear that there was only an extremely limited amount of soot in the leased premises occupied by the respondent. For instance, there was only some soot visible in a few spider webs on the ceiling.

[18] Mr Truter, on behalf of the appellant, testified that the IBR panels which separated the Liquor City premises and the respondent’s leased premises, became discoloured as a result of the fire. He confirmed that the IBR panels on respondent’s side were not replaced. He testified that they added new IBR panels on the Liquor City side of the premises only. He testified during cross-examination that the photograph depicting that the IBR panels were still discoloured, was taken by him in May 2016. It would seem that Mr Ferreira was not correct in stating that the IBR panels were all replaced. In my considered view, this inconsistency did not impact on the value of the rest of his evidence, as he explained that his report was based on a worst-case scenario and he was obviously mistaken about the actual replacement of the IBR panels.

[19] The only witness who testified on behalf of the respondent was Mr Rogers. He also deposed to the answering affidavit in the summary judgment application previously referred to. He testified orally that he was employed to handle the risk portfolio for Metcash and Devland. He attended the leased premises for the first time on 9 December 2014. He saw that both the lights and fans were working. He testified that Junior had told him that the DB board “had blown”. This was clearly hearsay evidence and Junior, who was apparently available to testify, and clearly an important witness, did not testify to confirm that fact. His evidence was also inconsistent with all the other evidence led. Furthermore, it was not explained why the lights and fans were working if the DB board “had blown”. This clearly indicates that his evidence in this regard was untrue. He stated that the respondent wished to downscale on the staffing and that the respondent intended to commence with a DC at the premises. He was specifically asked in examination in chief, why the respondent did not utilise the premises as a DC. He answered as follows:

“Well, the store was affected adversely by the fire, so firstly the plug points were a major issue and we could not operate from there, the back office had to be taken away because there was no power there either.”

[20] It is to be noted that the fans and lights worked and thus his evidence in this regard was clearly

untrue. No evidence was led by the respondent that there was any problem with the supply of electricity. One would also have expected

correspondence in this regard. There was none. Mr Rogers referred exclusively to electricity supply in his quoted response. He conceded further that the respondent decided to close its business as a retail outlet at the leased premises due to the fact that it was no longer profitable. During examination in chief Mr Rogers testified that he went to the leased premises alone on 9 December 2014. During cross-examination he conceded that Junior was also present at the premises. The respondent’s counsel, during the cross-examination of Mrs Truter and Mr Ferreira, put to them that, as a result of the fact that Junior’s name did not appear on the preliminary report prepared by Mr Ferreira, indicated that he was not present. Mr Rogers also conceded that Junior would be the first line of communication between the respondent and the appellant. He was specifically asked to explain the purpose of his inspection on 9 December 2014. He responded as follows:

“The purpose of my inspection was to go and see what damage had been caused and whether we were going to be at risk in any way, if there was any kind of contingency plan that we would need to then enter into.”

[21] Mr Rogers stated in his affidavit in the summary judgment application that “There were various verbal complaints on my part to representatives of the applicant.”. During cross-examination he expressly stated that he did not personally speak to any representative of the appellant. In the opposing affidavit resisting summary judgment, Mr Rogers stated that “The fire brigade was deployed and the entire building was hosed down with chemical foam.” During cross-examination he stated that he noticed something that “would look like a residue on some of the pallets and on the base of the cash office wall which I, in my opinion, thought was possibly foam”. He further testified that he saw something that looked like a dirty ring on a bath. Based on this observation he made the statement that chemical foam was used. One would have expected the respondent to lead expert evidence in this regard. During cross-examination it was specifically put to Mr Rogers that the premises could be cleaned. The following was put to him, together his response thereto:

“I am talking about the actual premises, that could be cleaned in no time, do you agree with me? – Ja, I am sure you could clean certain surfaces, yes, for sure.”

[22] He conceded that it was not going to be complicated to clean the floors after the fire. He also conceded that there was no meat and fresh produce in the shop at the time of the fire. During cross-examination the respondent’s counsel put the following question to Mrs Truter: “Are you aware that my client had fresh produce there, and meat in the premises?” This is in direct conflict with the evidence presented by the respondent’s only witness, Mr Roger. It was also contradictory

to the evidence of Mr Ngele.

[23] Mr Rogers was further asked the following in cross-examination:

“The doors physically closed for the public on 14 November 2014, full stop, no doubt about that, so as at 14 November there was no wholesale and retail customers coming in, do you agree with that? – Correct.”

[24] During cross-examination Mr Rogers was confronted with a statement made in the summary judgment affidavit

where he referred to various verbal complaints to representatives of the appellant. The respondent’s counsel objected in the following terms:

“Mr Riley: With all due respect, M’ Lord, that is not what it says. It does not say that he spoke to anybody, it says that: “there were various verbal complaints on my part.”

It does not say I made the complaints personally, it says: verbal complaints on my part.”

He was then asked to indicate specifically to whom he spoke to. He answered as follows:

“I did not personally speak to any representative from Dunsteyn. My line of communication was to Junior because he was at the store.”

[25] Later in his cross-examination Mr Rogers stated that he made a telephone call to an unknown representative of the appellant. He conceded that the DC was never commenced with in Burgersfort. He was unable to explain why there was no written

correspondence from the respondent to the appellant dealing with the fact that the respondent was unable to beneficially occupy the leased premises.

[26] Mr Rogers was not a credible witness. His version in Court differed substantially from the version

contained in his affidavit in the summary judgment application. He inter alia stated that the whole property was hosed down with chemical foam, which caused some of the ceilings to collapse. He testified that he contacted appellants and informed them that the premises were “wholly and completely unfit for the intended purpose”. Mr Rogers contradicted himself to such an extent that he cannot be regarded as a credible and truthful witness.

EVALUATION OF THE

EVIDENCE

[27] When the evidence of a witness is evaluated, each portion of the evidence should be weighed against the inherent probabilities. It is also necessary not to place too much emphasis on the demeanour of a particular witness[1].

[28] On a proper evaluation of the evidence the following facts can be distilled. The fire that broke out in Liquor City caused damage to the leased premises of Liquor City. Some smoke and soot entered the leased premises occupied by the respondent. The soot residue could be removed quickly. The water on the floors could also be dried up quickly. The fans and lights were still working. The evidence presented by Mr Ferreira that no repairs were effected in respect of the electricity supply to the leased premises occupied by the respondent could therefore not be rejected. The only inference that can be drawn from this was that the electricity had always been fully operational on the premises occupied by the respondent.

[29] The IBR wall was clearly not replaced. Mr Truter testified specifically that the wall was only replaced on the side of the premises occupied by Liquor City in the sense of only adding a new IBR wall to the existing wall. From the photographs it is apparent that the IBR wall was not replaced in the sense of removal of the existing wall and replacement with a new one.

[30] Only a small portion of the sisalation was replaced in the leased premises occupied by the respondent. This small portion of sisalation that was replaced, within a short space of time, could not have impacted upon the respondent’s

beneficial occupation of the premises.

[31] The respondent leased the premises for almost twenty-five years from the appellant. About twenty days before the fire, the respondent ceased its operation as a retail outlet. After the fire the appellant continued to provide monthly invoices for the rental to the respondent. Although the insurance approved the appellant’s claim, it is clear that minimal repairs were effected to the leased premises occupied by the respondent.

[32] It is inherently improbable that, if the premises were indeed not suitable for occupation, the respondent

would have remained silent for about six months and not alert the appellant to that fact. The respondent would at least have addressed

some or other letter or e-mail to the appellant stating why it was unable to occupy the premises. The only reasonable inference that can be drawn from the respondent’s conduct was that it subsequently decided not to continue with the DC in Burgersfort and was merely looking for an excuse to get out of the agreement with the appellant.

[33] No evidence was led by the respondent that the premises leased by it was in fact contaminated with soot or could not be used as a DC. It appears from the judgment of the Court a quo, that the so-called “concessions” were an extremely important issue that was taken into consideration when deciding to dismiss the appellant’s claim. In the absence of any direct evidence that the leased premises were in fact contaminated by soot, it is inconceivable that this “concession” could have impacted upon the appellant’s version of no “contamination”

as a result of soot. The possible contamination of meat and fresh produce is a completely hypothetical issue. At the time of the fire, there was no fresh meat or vegetables on the leased premises. In fact, as testified by Mr Ngele, there was only a small amount of expired stock on a few pallets. The possible effect of soot on meat and fresh produce was an issue that should have been dealt with by an expert and not by a lay witness. In any event, it was irrelevant in the light of Mr Ngele’s evidence, as corroborated by Mrs Truter, who only saw shelves being removed and no stock present during the inspection.

CONCLUSION

[34] The deemed cancellation was raised by the respondent in its plea. As a consequence, the respondent bore the onus to prove the necessary facts in support of the deemed cancellation. In the judgment of the Court a quo the issue of the onus was not addressed or considered. The Court a quo failed to consider or evaluate the credibility of the various factual witnesses, their reliability, or the inherent probabilities. Mrs Truter gave detailed evidence with reference to specific facts, that the leased premises were not damaged as a result of the fire. Mr Ferreira, the assessor, also gave detailed evidence regarding the fact that the leased premises were not damaged and in particular, based on the final investigation, it was found that, save for a small part that was replaced, the sisalation was not damaged. It was confirmed by both Mr Ferreira and Mrs Truter that only a very small portion of sisalation in the leased premises was replaced. The Court a quo did not evaluate the evidence given by Mr Ferreira and Mrs Truter in this regard against the contradictory evidence of Mr Rogers.

[35] The Court a quo did not evaluate, nor consider the meaning and effect of clause 14 of the lease agreement. The Court a quo failed to refer to clause 14.5 at all. In the judgment reference was made to the evidence of Mr Rogers that lights in the cash office were not working[2]. The Court a quo did not refer to the concession made by Mr Rogers that the earth leakage on one of the DB boards was switched off. This appeared from a photograph that was taken by Rogers himself. Rogers conceded that this would have the effect that some of the electricity would not work.

[36] In the judgment the Court a quo found that “the premises leased by the defendant were damaged by the fire and thus rendering that area, not of beneficial use for the lease by the defendant”[3]. The Court a quo referred to the evidence of Mr Ferreira where he testified that the IBR wall, separating the Liquor City premises and the leased

premises, was replaced[4]. The husband of Mrs Truter, Mr Truter, expressly testified that the IBR wall was not replaced, but that the contractor merely put in new panels on the side of the premises occupied by Liquor City. Mr Truter furthermore made reference to photographic evidence that supported his version that the IBR wall was not replaced. Based on the evidence presented by Mr Truter, it was obvious that Mr Ferreira merely made a mistake. He thought that the IBR wall was replaced as such as was suggested in his initial report.

[37] The Court a quo also referred to the fact that Mrs Truter “conceded during cross-examination that soot and smoke entered the premises of the defendant as a result of the fire”. In this regard, as quoted earlier, express evidence was given in this regard by Mrs Truter. The Court a quo made reference to the fact that the proposition that the damage to the property was only nominal, could not be sustained “when regard is had to the costs of the repairs as assessed by the insurance evaluator”[5]. The evidence presented by Mr Ferreira is referred to earlier in this judgment, in particular with reference to the fact that he testified that only a small portion of sisalation was replaced on the premises leased by the respondent and that the remainder of the sisalation was not replaced “because it was not damaged”. Save for limited repairs to the premises occupied by the respondent, all the costs were incurred in respect of the Liquor City premises. It was not, as referred to in the judgment, that the quotation was “exaggerated”. The actual costs incurred were much lower. Therefor, the findings in judgment in that regard are not supported in view of the undisputed evidence of Mr Ferreira[6].

[38] Regarding the statement made in respect of the sisalation in the final report (which dealt with both the Liquor City premise and the leased premises together) the following evidence was given by Ferreira during cross-examination:

“So what you are saying is that the entire roof’s sisalation was exposed – No, you have to see that in conjunction with the final repair calculation.

That is not what you said. You do not say the sisalation about the deficit, you do not say parts of the sisalation was exposed, you do not say a small portion of the sisalation. What do you say: “The sisalation was exposed to smoke and soot and cannot be cleaned successfully. The only viable solution is to remove the IBR roof in phases, replacing the sisalation and refit the existing IBR to the roof structure.”

Sir, that is your version. I asked you twice: Is it correct – Yes

Yes – Yes, and I said I accept that, and if we can just refer back to the final repair calculation, where that was done for 800 m2 odd …”

[39] Mr Ferreira also testified that the sisalation on the Liquor City premises was about 800 m2.

[40] It was stated in the judgment that “… the testimony of Mr Rogers who essentially testified that the premises will not, after the fire, be fit for the purposes of conducting the business of the respondent in it”[7]. Save for the leading question put to Mr Rogers by the respondent’s counsel during examination in chief, Mr Rogers did not present such evidence. The Court a quo specifically found that Mr Rogers conceded “that once cleaned the premises could operate with new stock”[8]. This was conceded by Mr Rogers. This evidence by Mr Rogers is irreconcilable with his later evidence that, as a result of the soot, the sisalation was “contaminated”. There is consequently no basis for the conclusion to which the Court a quo came.

[41] The Court a quo found that it had a discretion to refuse the monetary judgment sought by the appellant, because it was a claim for specific performance[9]. In this regard the court a quo specifically referred to Haynes v King Williamstown Municipality[10] (The reference given in the judgment is incorrect.) In the Haynes matter, the municipality was bound by an agreement to release 250 000 gallons of water a day from its storage dam. Due to an unprecedented drought an order for specific performance would result not only in great hardship, but also place the health of the community in danger. It is for this reason that specific performance was not granted in the Haynes matter. The facts in this case are not at all comparable to the facts in the aforesaid matter. The issue in the present matter turns on the factual evidence, i.e. whether the premises were fit for beneficial use, as set out in clause 14.1 of the agreement, or not. The Court a quo further did not consider the provisions of clause 14.5 of the lease agreement.

[42] The Court a quo further failed to distinguish between an order ad pecuniam solvendam and an order ad factum praestandum. The appellant sought payment of the arrear rental.

[43] Shortly before the commencement of the trial, the appellant effected an amendment to its particulars of claim. In this amendment the appellant further sought payment of future rentals (which was not yet due). At the commencement of the trial it was made clear that the appellant only intended to claim arrear rental from the respondent. The Court a quo had no discretion to refuse the claim for payment of arrear rental. There was further no basis for such a refusal.

[44] The Court a quo further failed to appreciate that the rental for each month constituted a separate claim. A deemed cancellation was not contemplated by either the appellant or the respondent after the fire. It was raised for the first time by the respondent in the opposing affidavit resisting summary judgment. Clearly an afterthought on the part of the respondent.

[45] Shortly after the fire, the representative of the respondent, with whom the appellant had all its dealings, Junior, expressly informed the appellant that the respondent was of the intention to continue with the lease agreement. This was not disputed by the respondent and Junior was never called as a witness. If the respondent had any complaints regarding the leased premises, one would have expected the respondent, being a large commercial entity, to at least raise those issues with the appellant at the earliest opportunity. Such intention is clearly contrary to a reliance upon any deemed cancellation of the lease agreement.

[46] Furthermore, no evidence was presented on behalf of the respondent regarding any complaint that was addressed to the appellant prior to the filing of the opposing affidavit resisting summary judgment. It was unlikely that the insurance assessor, Mr Ferreira, would have failed to ensure that all the damage would be properly repaired. It was also highly unlikely that the appellant would have allowed this.

[47] For the reasons set out above, there was no deemed cancellation of the lease agreement. The appellant is consequently entitled to claim the arrear rental from the respondent and as a result the appeal must succeed.

[48] I make the following order:

1. The appeal be upheld with costs;

2. The order granted by the Court a quo is set aside and replaced with an order in the following terms:

“1 The plaintiff’s claim is upheld with costs.

2 The defendant is ordered to pay an amount of R2,003,293.49 (two million three thousand two hundred and ninety three Rand and forty nine Cents) (VAT inclusive) to the plaintiff;

3 The counter claim is dismissed; and

4 The defendant is ordered to pay the plaintiff’s costs.”

R G TOLMAY

JUDGE OF THE HIGH COURT

L M MOLOPA-SETHOSA

C J VAN DER WESTHUIZEN

DATE OF HEARING:

4 MARCH 2020

DATE OF JUDGMENT:

ATTORNEY FOR APPELLANT: COUZYN HERTZOG & HORAK

ADVOCATE FOR APPELLANT:

ADV A ELS

ATTORNEY FOR RESPONDENT: SOOMAR & MALIK ATTORNEYS

ADVOCATE FOR RESPONDENT: ADV G M AMEER (SC)

[1] Protea Assurance Co Ltd v Cassey 1970(2) SA 643 (AD) at 648E Body Corporate of Dumbarton Oaks v Faiga 1999(1) SA 975 (SCA) at 979-980; Dreyer and Another NNO v AXZS Industries (Pty) Ltd 2006(5) SA 548 (SCA) at 558

[2] Dunsteyn Produseerders (Edms) Bpk v Metcash Trading Africa (Pty) Ltd, case number 16460/2015, delivered 25 August 2017, par 26

[3] Supra par 48

[4] Supra par 40 - 45

[5] Supra par 41

[6] Supra par 43

[7] Supra par 41

[8] Supra par 32

[9] Supra par 50 - 55

[10] 1952 (3) SA 371 (AD).