Hennops Sport (Pty) Ltd v Luhan Auto (Pty) Ltd (A52/2022) [2022] ZAGPPHC 953 (2 December 2022)

Hennops Sport (Pty) Ltd v Luhan Auto (Pty) Ltd (A52/2022) [2022] ZAGPPHC 953 (2 December 2022)

The court held that the COVID-19 lockdown regulations did not constitute supervening impossibility of performance under the lease agreement. The premises remained available for use and enjoyment, and the respondent's inability to generate income was a commercial risk, not a legal impossibility. The lease agreement was not amended or novated, as the non-variation clause was not complied with and no new agreement was signed. Rectification was not available as there was no common mistake at the time of contracting. The penalty for late payment was enforceable as agreed, and the respondent failed to prove any disproportionality between the penalty and the prejudice suffered by the appellant....

Citation
[2022] ZAGPPHC 953
Parties
Appellant: Hennops Sport (Pty) Ltd; Respondent: Luhan Auto (Pty) Ltd
Court
North Gauteng High Court, Pretoria
Jurisdiction
South Africa
Judgment Date
2 December 2022
Case Number
A52/2022
Procedural Posture
Civil Appeal / Appeal From Magistrate's Court Judgment
Outcome
Appeal upheld. Magistrate's Court judgment and order (except costs order) set aside and replaced.
Judges
Moshoana, Cajee
Legal Topics
Lease Agreement, Supervening Impossibility, Covid Regulations, Conventional Penalties Act, Non Variation Clause, Novation
Commercial and Corporate Land and Property Lease Agreement Supervening Impossibility Covid Regulations Conventional Penalties Act Non Variation Clause Novation

Case Brief

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Parties

Hennops Sport (Pty) Ltd

Appellant

Luhan Auto (Pty) Ltd

Respondent

Procedural Posture

Civil Appeal / Appeal From Magistrate's Court Judgment

Legal Issues

  1. 1 Whether COVID-19 lockdown regulations constituted supervening impossibility of performance under the lease agreement.
  2. 2 Whether the lease agreement was amended, novated, or subject to rectification due to the parties' conduct during the lockdown.
  3. 3 Whether the penalties imposed for late payment of rental were disproportionate under the Conventional Penalties Act.

Ratio Decidendi

The court held that the COVID-19 lockdown regulations did not constitute supervening impossibility of performance under the lease agreement. The premises remained available for use and enjoyment, and the respondent's inability to generate income was a commercial risk, not a legal impossibility. The lease agreement was not amended or novated, as the non-variation clause was not complied with and no new agreement was signed. Rectification was not available as there was no common mistake at the time of contracting. The penalty for late payment was enforceable as agreed, and the respondent failed to prove any disproportionality between the penalty and the prejudice suffered by the appellant....

Court Disposition

Appeal upheld. Magistrate's Court judgment and order (except costs order) set aside and replaced.

Orders

  • The respondent is ordered to pay the appellant an amount of R292,437.23 in respect of arrear rental and penalties.
  • The respondent is ordered to pay interest on the amount from 10 July 2020 to date of payment.