Mthatha Mall (Pty) Ltd v Motion Fitness (Pty) Ltd t/a Motion Fitness and Another (3531/2018) [2018] ZAECGHC 134 (27 December 2018)

SAFLII Note: Certain personal/private details of parties or witnesses have been redacted from this document in compliance with the law and SAFLII Policy

IN THE HIGH COURT OF SOUTH AFRICA

EASTERN CAPE DIVISION, GRAHAMSTOWN

CASE NO: 3531/2018

Reasons available: 27/12/2018

In the matter between

MTHATHA MALL (PTY) LTD

APPLICANT

(Registration No: 2006/011321/70

and

MOTION FITNESS (PTY) LTD T/A MOTION FITNESS 1ST RESPONDENT

(Registration No: 2007/023135/07

NICOLAAS FERDINAND VAN GASS

2ND RESPONDENT

ID No: [….]

REASONS FOR ORDER

ROBERSON J:-

[1] On 21 December 2018 I made the following order:

[1.1] The application is struck from the roll for lack of urgency.

[1.2] The application is to pay the costs of the application

[2] I indicated that my reasons would follow, which they now do.

[3] The applicant (MM) currently leases premises to the first respondent (MF) to be used for the purpose of health and fitness facilities. The second respondent (Van Gass) is the surety for MF’s obligations in terms of the lease. (I shall refer to MF and Van Gass collectively as the respondents.) In addition to the obligation to pay rent, MF is also liable for the costs of electricity, gas, water, refuse and sewerage charges.

[4] Clause 9.6 of the lease provides:

“Should the Lessee fail to pay the charges for electricity within 7 (Seven) days of written demand, then, without prejudice to any other rights it may have, the Lessor shall be entitled to terminate the supply of electric current and water to the Lessee without further notice, and shall not be liable for any damages, including consequential damages, that may be sustained by the Lessee”

[5] In this application, brought as a matter of urgency, MM sought the following order:

“[2] That the applicant is authorised to terminate the supply of electricity to the property known as Shop 157, BT Ngebs Mall, Errol Spring Avenue, Mthatha, Eastern Cape, with immediate effect or on such a date as the above Honourable Court may deem suitable;

[3] That the electricity supply, once terminated, shall only be reconnected once the respondent’s indebtedness to the applicant in respect of arrear electricity charges, have been paid in full;

[4] That a duly qualified and registered electrician, appointed by the applicant, be authorised and directed to do all things necessary so as to give effect to paragraphs 2 and 3 supra;

[5] Interdicting and/or restraining the respondent, or any person acting by, through under, or on behalf of it, from tampering or interfering in any way whatsoever, with the work carried out in terms of paragraphs 2, 3 and 4 supra;

[6] That the respondents pay the costs of this application on the scale as between attorney and client.”

[6] The lease commenced on 1 October 2016, to terminate on 30 September 2026. It is common cause that MM has instituted two actions arising from the lease. One was instituted in this court for payment of the balance of the rent for May 2017, and for payment of rent and other charges, including electricity, for June, July and August 2017. The other action was instituted in the Mthatha Magistrate’s Court, in which rent and other charges, including

electricity, for September 2018, are claimed. Both actions have been defended and in the High Court action the pleadings closed 14 December 2017, but the applicant has not yet applied for a trial date. The parties have, according to correspondence, called on one another to discover.

[7] In the High Court Action MF and Van Gass pleaded that MM had failed to give occupation as contemplated in the lease, namely for use as a gym. They admitted that MF had refused to pay the amounts claimed. MF also counterclaimed for damages arising from MM’s alleged breach of the lease. It listed various defects in support of its allegation that MM failed to maintain the premises in good order. MM denied liability for damages. In the Magistrate’s Court action Van Gass deposed to an opposing affidavit in the summary judgment application in which he raised various defences, including non-performance by MM and a challenge to the amount claimed for electricity consumption. In particular with regard to electricity it was stated that there was no separate electricity meter available and that MM was including amounts for electricity consumed on common property (MF is one of a number of tenants in the building). Van Gass further stated in this affidavit that he reserved the right to challenge the legitimacy of the deed of suretyship.

[8] According to the founding affidavit, MM’s resort to court in this application has been triggered by MF’s non-payment of electricity charges. It is alleged that the total amount currently owing by MF is not less than R6 978 664.89, of which at least R1 031 964.24 is for electricity. A certificate of balance as at 20 November 2018, annexed to the founding affidavit, reflected these amounts. It is alleged that the amount owing for electricity will increase at the rate of about R40 000.00 a month if not paid. It is common cause that MM is liable to the local municipality for payment of electricity charges for the building, irrespective of whether or not it recovers

from the tenants. The shops in the building are usually individually metered so that electricity consumption for each shop

can be monitored and billed. Effectively, so it is alleged, MM is subsidising MF’s electricity consumption. MM cannot cease payment to the municipality because this would cut off other tenants’ electricity supply.

[9] On 25 September 2018 MM sent a letter of demand to MF, demanding payment of at least the arrear utility amounts due, failing which MM would cut off the electricity. In this letter the arrears from inception of the lease were stated as R4 417 833.20 of which R1 129 935.87 was for utilities.

[10] It was further alleged that inasmuch as MF had made payments purportedly in respect of utility charges, MM, as it was entitled to do in terms of the lease, appropriated these payments to water, rates and taxes, sewerage and refuse costs.

[11] With regard to urgency, it was stated in the founding affidavit that MM has a reasonable apprehension that if MF remains in occupation it will become even more indebted to MM and unable to make payment of the utility charges. MM, so it was stated, has no security for its claim, and to the best of its knowledge MF’s only assets are those used to conduct its business. MM is not sure if these assets are financed, and even if they were sold in execution, it is doubtful that sufficient funds would be raised to cover the arrears. It was submitted that MM would not be able to obtain substantial

redress in due course if the application was not heard as a matter of urgency. It fears that it may obtain hollow judgments in the two actions.

[12] It seems that no further steps were taken by MM with regard to enforcing payment, after the letter of 25 September 2018 was sent, until this application was issued on 23 November 2018. It was served on the respondents by Sheriff on 30 November 2018. The respondents were given until 17h00 on 28 November 2018 to notify MM’s attorneys of their intention to oppose and to deliver answering affidavits by 17h00 on 5 December 2018. The application was enrolled for hearing on 13 December 2018. It seems that the papers were emailed to the respondents’ attorneys prior to 30 November 2018 because the notice of opposition was delivered on 27 November 2018.

[13] I do not intend to go into too much detail about the contents of the answering affidavit. For the purposes of this judgment I shall refer to what I considered to be relevant portions of the affidavit. Van Gass stated that MM has been aware since October 2018 that electricity meter readings are disputed. He annexed email correspondence between one of MM’s employees and Mr P Mzuku, the operations manager of BT Ngebs City, which he says is the name of the premises leased to the various tenants. This correspondence revealed that MF was querying the correctness of previous amounts charged and the identity or whereabouts of the electricity meter relating to MF. Mzuku said that he could not find the meter. On 27 November 2018 MF’s employee emailed Van Gass to the effect that there had been a meeting between him, Mzuku, and three engineers, whereat it was established that the meter reading had been obtained from a meter at substation 3, which was outside the building. Mzuku and an electrician investigated and, so the email went, confirmed that there was no such meter.

Mzuku’s advice was that MF should speak to the accounts section to find out where they obtained the reading because no-one was able to find the meter. Van Gass maintained in his affidavit that there was confusion about which meter applied to MF and that he suspected that meter readings were incorrect.

[14] Van Gass also said that MM had refused to provide invoices since July 2018 and that accordingly MF did not know what amount to pay. He annexed email correspondence which showed that the August 2018 invoice had not been received and had been requested, and that the last invoice had been received in July 2018.

[15] In the replying affidavit it was stated that the meter for MF had subsequently been located by Mzuku. Mzuku deposed to a confirmatory affidavit, saying nothing more than that he confirmed the accuracy of the replying affidavit insofar as it referred to him. Further in the replying affidavit the deponent denied that MM refused to provide invoices and maintained that the email correspondence merely revealed that invoices were apparently not received and were requested.

[16] The respondents opposed the application on a number of grounds, including lack of urgency, lis pendens (the two actions), and non-fulfilment of the requirements for final interdictory relief.

[17] I decided this application solely on the issue of urgency.

[18] These arrear amounts for electricity have been mounting up since the inception of the lease and MM has obviously been aware of this throughout, alternatively at least since summons was issued in 2017. It has not set the High Court matter down for trial, a matter in which there is a dispute concerning what is owed by MF. Even if the parties are engaged in discovery, this does not prevent MM from applying for a trial date. It did nothing to carry out its intention to cut off the electricity expressed in the letter of 25 September 2018 until it launched this application, two months later, on limited time frames. Up until it launched this application, seemingly over a long period there has been little sense of urgency.

As submitted on behalf of the respondents, the application seeks drastic relief at this late stage when it has been open to MM to bring such an application much earlier and on sufficient notice. Suddenly MM says it will not obtain substantial redress in due course on grounds which I considered in any event to be speculative. This concern only relates to the assets of MF and does not deal with the fact that Van Gass is a surety. It is so that Van Gass, in the Magistrate’s Court action, reserved the right to challenge the validity of the suretyship, but as it stands, there is an existing suretyship. MM has not, so it was submitted, laid sufficient grounds for an anti-dissipatory interdict, relief which is implicit in its assertion that it may achieve only a hollow judgment in the actions. It is correct that Van Gass did not in the answering affidavit give details of MF’s or his own financial ability to satisfy a judgment when the challenge was raised by MM, but I was of the view that nonetheless MM failed to provide sufficient substantiation for its fears.

[19] It was submitted on behalf of MM that the respondents had not alleged any prejudice as a result of the application being brought as a matter of urgency. Prejudice may not have expressly alleged, but in my view it could be inferred from the answering affidavit. I did not want to go into the merits of the defence of lis pendens, but my reading of paragraphs 2 and 3 of the order prayed in the notice of motion was that MM is using this application to enforce payment of all outstanding electricity charges to date, including those claimed in the two actions, and those for which invoices were not received. Given the lack of invoices since July 2018 (which is not denied by MM) and the very recent events regarding the location of the meter and the readings, the respondents were, in my view, at a disadvantage because of the shortened time frames in dealing with these disputes. Up until 27 November 2018 there was still mutual uncertainty about the location of the meter. The replying affidavit and Mzuku’s confirmatory affidavit were delivered on 11 December 2018, two days before the hearing. There is a bald statement that the meter has been found but the respondents have not had the opportunity to investigate further. I was of the view that I could not reject the respondents’ concerns about the meter readings as untenable, given the earlier mutual uncertainty of the location of the meter.

[20] In my view MM itself brought about this situation and the respondents should not bear the effects of MM’s sudden leap into action after seemingly letting matters run their course without urgency. I was not prepared to dismiss the application as it was submitted I ought to, and decided rather to strike it from the roll.

[21] These were my reasons.

J M ROBERSON

JUDGE OF THE HIGH COURT