Greater Newtown Development Company Soc Ltd v 1 Central Place Shisa Nyama (Pty)Ltd and Another (2017/31940) [2018] ZAGPJHC 105 (11 April 2018)

IN THE HIGH COURT OF SOUTH AFRICA

GAUTENG LOCAL DIVISION, JOHANNESBURG

CASE NO: 2017/31940

Not reportable

Not of interest to other judges

Revised.

11/4/2018

In the matter between:

GREATER NEWTOWN DEVELOPMENT COMPANY SOC LIMITED Plaintiff

and

1 CENTRAL PLACE SHISA NYAMA (PTY) LIMITED First Defendant

KOLA, GIVEN MPHO Second Defendant

JUDGMENT

ADAMS J:

[1]. This is an application by the plaintiff for summary judgment against the first and second defendants. The plaintiff’s cause

of action is based on a written commercial agreement of lease (‘the lease agreement’) concluded between the parties during July 2016 in terms of which lease agreement the first defendant let from the plaintiff premises situate at Shop no: 5, 6, 7 and 8, Ground Floor, East Wing, 1 Central Place, corner Jeppe and Henry Nxumalo Streets, Newtown, Johannesburg (‘the leased premises’) for a period of five years from the 1st of August 2016 to the 31st of July 2021. The second defendant bound himself as a surety and co – principal debtor in favour of the plaintiff for the due payment by the first defendant of amounts due to the plaintiff in terms of the lease agreement.

[2]. The monthly rental payable by the defendant to the plaintiff, as well as the monthly ancillary charges, was agreed upon in the written lease agreement. The initial basic rental payable in terms of the lease agreement was the amount of R25 376 per month and the

agreed monthly charges, including the first defendant’s pro – rata share of the municipal rates, the common area levy and operating costs, was the sum of R12 971.04 per month. The lease agreement also provided that the first defendant would be liable for the monthly charges relating to the consumption of water and electricity, sewerage, refuse removal and other associated charges. In terms of the lease agreement, the use of the premises was expressly provided for as being to operate a ‘restaurant / bar / lounge and serving of light snacks’.

[3]. Pursuant to the lease agreement the first defendant took occupation of the premises on the 1st of August 2016 and is at present, some eighteen months later, still in occupation of the said premises.

[4]. It is alleged by the plaintiff that the first defendant is in breach of the lease agreement in that, as and at the date of the issue of the summons herein on the 25th August 2017, it (the first defendant) was in arrears with payment of the monthly rental and the ancillary charges to the tune of

R410 221.45. The last payment of R25 000 having been received by the plaintiff from the first defendant was on the 1st of March 2017.

[5]. The plaintiff’s first claim and its application for summary judgment is for confirmation of the cancellation of the lease agreement as well as for payment of an amount of R410 221.45, being in respect of arrear rentals and ancillary charges relating to the period of occupation up to and including August 2017. The plaintiff also claims a further sum of R683 194.34, representing damages for breach of contract. There is however no application for summary judgment for this amount.

[6]. The plaintiff’s breakdown of the amount of R410 221.45 indicates that this amount in fact represents short payments on the rental and ancillary charges from inception of the lease, namely the 1st of August 2016, to January 2017, plus the total monthly rental payable and ancillary charges for the months of February to August

2017. It is in fact the plaintiff’s case that from about February 2017 the first defendant, in breach of the lease agreement,

failed to effect payment of any rental and ancillary charges payable in terms of the lease agreement.

[7]. In its affidavit resisting summary judgment the first defendant raises a defence to the plaintiff’s claim based on its interpretation of clause 2.1 of the lease agreement. This clause provides thus:

‘If the lessor is unable to give the lessee occupation of the premises on the date hereinbefore stipulated by reason of the premises being incomplete, or in a state of repair (sic), or by reason of the existing tenant not having vacated the premises, or by reason of any other fact, the lessee shall have no claim for damages or right to cancellation and shall accept occupation on such later date on which the premises are available. In the event of such a delay the period of the lease shall remain and the termination shall be extended accordingly.’

[8]. It is the case of the defendants that in providing in the lease agreement for a ‘beneficial occupation’ period from the 1st of June 2016 to the 31st of July 2016, the parties had in mind that the first respondent would have access to and occupy the premises during this period whilst affecting alterations to the premises and modifying same to enable the first defendant to make use of the premises as envisaged in the lease agreement, namely to operate a restaurant / bar / lounge, which also serves light snacks to members of the public. This also entailed the first defendant obtaining approved building / alteration plans approved by the City of Johannesburg and an ‘occupancy certificate’ to be issued by the City, which would enable the first defendant to lawfully operate a bar selling alcohol to members of the public.

[9]. As and at the date of the signing of the affidavit resisting summary judgment the first respondent had not been issued with an ‘occupancy certificate’, and it has accordingly not been able to lawfully trade in the building. The main difficulty, I understand, is the fact that the first defendant has to date hereof not been issued with a liquor licence. This, so the first defendant argues, means that ‘lawful occupation has not taken place for purposes of trading as was the sole purpose of the lease agreement’.

Accordingly, so the argument is concluded on behalf of the defendants, the first defendant is still on ‘beneficial occupation’ and the lease has therefore not commenced. What the defendants are saying is that the occupation has not yet happened and therefore the commencement of the lease agreement has therefore been postponed and / or delayed as provided for in terms of clause 2.1 of

the lease agreement.

[10]. There are a number of difficulties with this argument for the defendants, not the least of which is the fact that same is not supported by the wording of the lease agreement itself. The agreement expressly provides that the period of the ‘beneficial occupation’ shall be from the 1st of June 2016 to the 31st of July 2016. There is no provision in the contract for any extension of this period. In fact, according to the schedule of the lease, the first respondent was required to take occupation of the premises on the 1st of August 2016, which is in fact what the first defendant did. In my judgment, the defendants’ interpretation of clause 2.1 is a complete misreading of the particular provision in the contract. This clause has nothing to do with the purpose of the occupation of the premises in terms of the lease. It deals expressly with the situation in which the premises are uninhabitable. The difficulties in the defendants’ case are compounded by the ‘non – variation except in writing’ and ‘whole agreement’ clause.

[11]. Additionally, if regard is had to the wording of the lease agreement, there is no onus on the applicant to ensure that the first

defendant is able to conduct the business and trade as envisaged in the lease agreement. The obligation to ensure that the premises

comply with the first defendant’s trade and business requirements falls squarely on the shoulders of the first defendant

as the lessee. In that regard, clause 7 of the lease agreement provides as follows under the heading ‘Suitability of Premises’:

‘7. The lessor does not warrant that this lease and this lease is not made on the basis:

7.1 that the premises are or will at any time be fit for the use set out in this agreement or for any other purpose whatsoever;

7.2 that the lessee will be granted licences or permits in respect of the premises for the conduct of any business or factory or for any other type of use or that any such licence or permits will be renewed from time to time. If any authority or competent jurisdiction requires any alterations or additions to be effected to the premises as a condition to the grant of a renewal of licences required by the lessee in order to enable it to carry on its business, the lessor shall not unreasonably withhold its consent to the necessary work being carried out by the lessee upon all the terms and conditions specified in 8 hereof’.

[12]. Pacta sunt servanda – therefore, the first respondent, having committed himself to the lease agreement and the provisions thereof, cannot now be heard complaining that, in direct contrast to the covenant contained in the lease, he does not have to pay rental. That view is not sustainable.

[13]. Uniform Rule of Court 32(3)(b) requires the defendants to satisfy the court by affidavit that they have a bona fide defence to the plaintiff’s claim. ‘Satisfy’ does not mean ‘prove’. What the rule requires is that the defendants set out in their affidavit facts which, if proved at the trial, will constitute an answer to the plaintiff’s claim. In casu the defendants have set out facts which cannot be accepted for the simple reason that those facts are belied by the common cause facts relating to the wording of the lease agreement. In my judgment, the defendants have not demonstrated a bona fide defence to the plaintiff’s claim.

[14]. The first defendant furthermore alleges that it has a counterclaim against the plaintiff for damages. It is not altogether clear from the defendants’ resisting affidavit whether the intended counterclaim for damages would be based on the breach of the lease agreement or not. On the one hand it is alleged by the defendants that the counterclaim ‘flows from the lease in question’, and on the other hand the second defendant claims that the ‘second defence relates to the fact that there is no legal lease agreement giving rise to the claim against him’. Either way, the ‘counterclaim’ is bad in law. Clauses 11 and 12 of the lease agreement provides as follows:-

‘11.1 Neither the lessor nor its agents or employees are liable for any damage or injury or loss of life which may be caused to any asset of the lessee or anyone else including stock in trade, fixtures, fittings, books, papers and otherwise in the premises or to the lessee or its employees, invitees, licensees, directors, servants, agents and customers in consequence of the overflow of water supply or fire or any leakage or of any fault in the plumbing works or any electrical faults or by reason of the elements of the weather or failure on the part of the Lessor or its agents or employees to carry out any work required of any of them in a proper manner or by reason of negligence by them or by reason of any defect in the premises or any portion thereof or any at the equipment of the lessor as a result at any other cause whatsoever, and the lessee indemnifies the lessor against any claim by its employees, invitees, licensees, directors, servants, agents and customers in respect of any such damage, injury or loss of life.

11.2 No action by the lessor, including in particular the provision of any security service to the building or premises shall be construed in any way whatsoever as an acceptance by the lessor of any responsibility whatsoever towards the Lessee or any other person.

EXCLUSION OF CLAIMS AND RIGHT TO WITHHOLD RENT

12 The lessee shall not under any circumstances be entitled to cancel this lease or have any claim or right of action whatsoever against the lessor for any damages, loss, or otherwise, nor be entitled to withhold or defer payment of rent by reason of the premises or any appliances, air conditioning, lifts, escalators or other installations, fillings and fixtures in the said premises or the

building being in a defective condition or falling into disrepair or any particular repairs not being effected by the lessor or for any other reason whatsoever, the lessee shall not have any right of cancellation or claim for damages, abatement of rent, or otherwise, against the lessor by reason of the escalators or lifts, air conditioning installations, or other amenities in or on the premises being out of use or out of order for any reason whatsoever or for any period whatsoever. The lessor shall not be responsible for any damage or inconvenience which the lessee may suffer owing to any difficulties from time to time in the supply of electric current, water, gas, air conditioning installation, lifts, escalators or other amenities or the complete cessation of such amenities nor shall the lessee be entitled to cancel this lease or to an abatement of rent in respect of any such occurrence’.

[15]. In view of these exclusionary clauses agreed upon between the parties in the lease agreement, there can be no doubt that the first defendant cannot possibly withhold payment of the rental due in terms of the lease nor can it claim damages against the plaintiff on any cause whatsoever.

[16]. In terms of Uniform subrule (5): ‘The court may enter summary judgment.’ The word ‘may’ in this subrule confers a discretion on the court, so that even if the defendant’s affidavit does not measure up fully to the requirements of subrule (3)(b), the court may nevertheless refuse to grant summary judgment if it thinks fit. The discretion, clearly, is not to be exercised capriciously, so as to deprive a plaintiff of summary judgment when he ought to have that relief. I do not intend exercising my discretion in favour of the first defendant for the simple reason that it has been occupying the premises free of charge for the approximately twelve months.

[17]. The defences raised by the defendants in their affidavit resisting summary judgment are both bad in law. They do not comply with the requirements of Uniform Rule of Court 32(3)(b). I am not persuaded that in their affidavit resisting summary judgment the defendants have demonstrated a bona fide defence to the claim of the plaintiff.

[18]. Plaintiff is therefore entitled to summary judgment.

Order

Accordingly, I make the following order:

1. Summary Judgment is granted in favour of the plaintiff against the first defendant, as follows:

1.1 Ejectment of the first defendant and anyone claiming occupation through it from the commercial leased premises situate at shop number: 5, 6, 7 and 8, Ground Floor, East Wing, 1 Central Place, corner Jeppe and Henry Nxumalo Streets, Newtown, Johannesburg (‘the leased premises’).

2. Summary Judgment is granted in favour of the plaintiff against the first defendant and the second defendant, jointly and severally, the one paying the other to be absolved, as follows:

2.1 Payment of the sum of R410 221.45.

2.2 Payment of interest on the said amount of R410 221.45 at the rate of 12.25% per annum from the 2nd August 2017 to date of final payment.

2.3 Payment of plaintiff’s cost of suit on the scale as between attorney and client.

_________________________________

L ADAMS

Judge of the High Court

Gauteng Local Division, Johannesburg

HEARD ON: 5th April 2018 JUDGMENT DATE: FOR THE PLAINTIFF: 11th April 2018 Adv J G Dobie INSTRUCTED BY: Reaan Swanepoel Attorneys FOR THE DEFENDANTS: Adv N R Ralikhuvhana INSTRUCTED BY: Rapuleng Attorneys