Ocean Echo Properties 327 CC and Another v Old Mutual Life Assurance Company (South Africa) Limited (288/2017) [2018] ZASCA 9; 2018 (3) SA 405 (SCA) (1 March 2018)

Ocean Echo Properties 327 CC and Another v Old Mutual Life Assurance Company (South Africa) Limited (288/2017) [2018] ZASCA 9; 2018 (3) SA 405 (SCA) (1 March 2018)

The Supreme Court of Appeal held that the tacit agreement pleaded by the appellants, if proved, would constitute a cancellation of the lease agreement in respect of future obligations, rather than a variation of its terms. Such cancellation does not offend the non-variation clauses in the lease, as it does not alter the terms but merely terminates future obligations. The court found that the plea was reasonably capable of sustaining a defence and that the exception should have been dismissed. Furthermore, the court held that upholding an exception disposes only of the pleading and not the action or defence, and the appellants should have been granted leave to amend their plea. The...

Citation
[2018] ZASCA 9
Parties
Appellant: Ocean Echo Properties 327 CC; Appellant: Angelo Giannaros; Respondent: Old Mutual Life Assurance Company (South Africa) Limited
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
1 March 2018
Case Number
288/2017
Procedural Posture
Civil Appeal / Appeal From Full Court Judgment on Exception to Plea
Outcome
Appeal upheld; exception dismissed; appellants granted leave to amend plea.
Judges
Ponnan, Willis, Saldulker, Mothle, Hughes
Legal Topics
Exception to Plea, Non Variation Clause, Tacit Agreement, Termination of Contract, Suretyship, Lease Agreement
Civil Procedure Commercial and Corporate Exception to Plea Non Variation Clause Tacit Agreement Termination of Contract Suretyship Lease Agreement

Case Brief

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Parties

Ocean Echo Properties 327 CC

Appellant

Angelo Giannaros

Appellant

Old Mutual Life Assurance Company (South Africa) Limited

Respondent

Procedural Posture

Civil Appeal / Appeal From Full Court Judgment on Exception to Plea

Legal Issues

  1. 1 Whether the tacit agreement pleaded by the appellants constitutes a cancellation or a variation of the written lease agreement.
  2. 2 Whether the plea discloses a valid defence in law against the respondent's claim for arrear rental and charges.
  3. 3 Whether the court was correct to enter judgment after upholding the exception, rather than granting leave to amend the plea.

Ratio Decidendi

The Supreme Court of Appeal held that the tacit agreement pleaded by the appellants, if proved, would constitute a cancellation of the lease agreement in respect of future obligations, rather than a variation of its terms. Such cancellation does not offend the non-variation clauses in the lease, as it does not alter the terms but merely terminates future obligations. The court found that the plea was reasonably capable of sustaining a defence and that the exception should have been dismissed. Furthermore, the court held that upholding an exception disposes only of the pleading and not the action or defence, and the appellants should have been granted leave to amend their plea. The...

Court Disposition

Appeal upheld; exception dismissed; appellants granted leave to amend plea.

Orders

  • The appeal succeeds with costs.
  • The order of the full court is set aside and replaced by: 'The appeal succeeds with costs. The order of the court below is set aside and substituted with: The exception is dismissed with costs.'