Proud Investments (Pty) Ltd v L L G International (Pty) Ltd formerly Lanchem International (Pty) Ltd (405/89) [1991] ZASCA 60; 1991 (3) SA 738 (AD); (23 May 1991)

Proud Investments (Pty) Ltd v L L G International (Pty) Ltd formerly Lanchem International (Pty) Ltd (405/89) [1991] ZASCA 60; 1991 (3) SA 738 (AD); (23 May 1991)

The Supreme Court of Appeal held that the cost items in clause 9 of the lease, when read with clause 9.2, are sufficiently identified and objectively determinable. The mechanism for determining the reasonableness of operating costs by independent auditors ensures objectivity and prevents unilateral determination by the landlord. The use of the word 'reasonable' does not render the rental vague, as the auditors' decision is final and binding. The assessment rates and levies are fixed or easily ascertainable amounts. The Court rejected the respondent's argument that the lease was void for vagueness and found that the lease and addendum are valid and enforceable. The appeal was upheld, and...

Citation
[1991] ZASCA 60
Parties
Appellant: Proud Investments (Pty) Ltd; Respondent: L L G International (Pty) Ltd formerly Lanchem International (Pty) Ltd
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
23 May 1991
Case Number
405/89
Procedural Posture
Civil Appeal / Appeal Against Dismissal of Exception to Plea
Outcome
Appeal upheld; exception sustained.
Judges
Joubert, Hefer, Vivier, Kumleben, Eksteen
Legal Topics
Lease Agreement Validity, Certainty of Rent, Repudiation, Unjust Enrichment
Commercial and Corporate Land and Property Lease Agreement Validity Certainty of Rent Repudiation Unjust Enrichment

Case Brief

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Parties

Proud Investments (Pty) Ltd

Appellant

L L G International (Pty) Ltd formerly Lanchem International (Pty) Ltd

Respondent

Procedural Posture

Civil Appeal / Appeal Against Dismissal of Exception to Plea

Legal Issues

  1. 1 Whether the lease agreement and addendum are void for vagueness due to indeterminate rental provisions.
  2. 2 Whether the cost items in clause 9 of the lease constitute rental and are sufficiently determined or determinable.
  3. 3 Whether the mechanism for determining operating costs in clause 9.2 is valid and objective.

Ratio Decidendi

The Supreme Court of Appeal held that the cost items in clause 9 of the lease, when read with clause 9.2, are sufficiently identified and objectively determinable. The mechanism for determining the reasonableness of operating costs by independent auditors ensures objectivity and prevents unilateral determination by the landlord. The use of the word 'reasonable' does not render the rental vague, as the auditors' decision is final and binding. The assessment rates and levies are fixed or easily ascertainable amounts. The Court rejected the respondent's argument that the lease was void for vagueness and found that the lease and addendum are valid and enforceable. The appeal was upheld, and...

Court Disposition

Appeal upheld; exception sustained.

Orders

  • The exception is upheld with costs, including the costs of two counsel.
  • The order of the court a quo is substituted accordingly.