Edcon Limited v Bay West City (Pty) Ltd (A5029/17) [2018] ZAGPJHC 39 (6 March 2018)

Edcon Limited v Bay West City (Pty) Ltd (A5029/17) [2018] ZAGPJHC 39 (6 March 2018)

The court held that the lease agreement did not contain any express or implied term obliging Edcon to continue trading from the premises. Clause 8.1 did not create such an obligation, and the context of the agreement, including clauses 34 and 36, did not support Bay West's interpretation. The anchor tenants' continued trading was a prerequisite for Edcon's lease, but Edcon's own trading was not a condition for other tenants. The rental clause allowed for payment of basic rental even if no trading occurred. The court found that the absence of an express term or clear implied obligation meant Edcon was entitled to vacate the premises while continuing to honour its rental and maintenance...

Citation
[2018] ZAGPJHC 39
Parties
Appellant: Edcon Limited; Respondent: Bay West City (Pty) Ltd
Court
South Gauteng High Court, Johannesburg
Jurisdiction
South Africa
Judgment Date
6 March 2018
Case Number
A5029/17
Procedural Posture
Civil Appeal / Appeal From Urgent Application; Judgment on Merits
Outcome
Appeal upheld; order of the court a quo set aside; application dismissed with costs.
Judges
M Tsoka, M Twala, I Opperman
Legal Topics
Lease Interpretation, Specific Performance, Anchor Tenant Obligations, Tacit Terms, Commercial Sensibility
Land and Property Commercial and Corporate Lease Interpretation Specific Performance Anchor Tenant Obligations Tacit Terms Commercial Sensibility

Case Brief

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Parties

Edcon Limited

Appellant

Bay West City (Pty) Ltd

Respondent

Procedural Posture

Civil Appeal / Appeal From Urgent Application; Judgment on Merits

Legal Issues

  1. 1 Does the lease agreement oblige the tenant to continue trading from the premises for the duration of the lease period?
  2. 2 Is leaving the premises vacant while paying rent a breach of the lease agreement?
  3. 3 Can a tacit term requiring continued trading be inferred from the lease agreement?

Ratio Decidendi

The court held that the lease agreement did not contain any express or implied term obliging Edcon to continue trading from the premises. Clause 8.1 did not create such an obligation, and the context of the agreement, including clauses 34 and 36, did not support Bay West's interpretation. The anchor tenants' continued trading was a prerequisite for Edcon's lease, but Edcon's own trading was not a condition for other tenants. The rental clause allowed for payment of basic rental even if no trading occurred. The court found that the absence of an express term or clear implied obligation meant Edcon was entitled to vacate the premises while continuing to honour its rental and maintenance...

Court Disposition

Appeal upheld; order of the court a quo set aside; application dismissed with costs.

Orders

  • The appeal is upheld with costs, including costs of two counsel where employed and costs of the application for leave to appeal.
  • The order of the court a quo is set aside and replaced with: 'The application is dismissed with costs, including costs of two counsel where employed.'