Radzyn Investments Shareblock (Pty) Ltd and Another v Gwashana and Others (2007/999) [2007] ZAGPHC 15 (30 March 2007)

Cases number 2007/999

IN THE HIGH COURTS OF SOUTH AFRICA

(WITWATERSRAND LOCAL DIVISION)

In the matter between

Radzyn Investments Shareblock (Pty) Ltd

First Applicant

Seswick Court CC Second Applicant

Gilmark Real Estate CC

Third Applicant

and

Joseph Gwashana

First Respondent

and others

Second to Thirty Fifth Respondents

Judgment of J P Coetzee AJ

1. The first applicant is the owner of a building called Seswick Court. The respondents occupy apartments in that building. The shares in the first applicant belonged to a Mr Maker, who died in May 1994. After Mr Maker died, the present shareholders purchased the shares in the first applicant. This application claims the eviction of the respondents from the building. The applicants were represented by Mr Williams. Nine of the respondents do not oppose the application. The remaining respondents were represented by Mr Fhedzisani.

2. The respondents took a point in limine that section 4 of the Prevention of Illegal Eviction from and Unlawful Occupation of Land Act 19 of 1998 (“PIE”) had not been complied with. During argument, it appeared to me as if Mr Fhedzisani was unaware of events in this regard. That is hardly surprising since those events include an ex parte application. I allowed the application to stand down, to give counsel an opportunity to compare their documents. When the matter continued, Mr Fhedzisani abandoned this point in limine.

3. The respondents represented by Mr Fhedzisani also took a second point in limine, namely that the second and third respondents do not have locus standi. Mr Fhedzisani argued that there is no legal nexus between his clients and the second or third respondent. This point does not influence the outcome of the application. If the first applicant is entitled to an eviction order, it would not make any difference if the second and third applicants are not so entitled.

4. The respondents or some of them probably concluded lease agreements with the applicant while Mr Maker was still alive. This fact is not adequately dealt with in the papers, but I cannot ignore it. The following are some examples of facts and circumstances from which I infer that such lease agreements were probably concluded:

a. In paragraph 15 of the main answering affidavit, the first respondent says that, prior to May 1994, all occupants of the building were tenants of the first applicant and/or Mr Maker and all rentals and other payments in respect of the building were paid to Mr Maker. The reference to tenants was not contested in the replying affidavit.

b. Before the application was launched, the applicants (including the first applicant), claimed specific amounts of rental from the respondents and threatened to cancel the “tenancy” of the respondents.

5. The papers do not contain details of the probable lease agreements, such as which of the respondents they were concluded with and their terms, for example the duration of the leases and whether the lease agreements contained a lex commissoria. The papers also do not state how the lease agreements came to an end, if that happened.

6. If there were lease agreements, it is for the applicants to allege and prove that those lease agreements are no longer in existence. See for example Ndlovu v Ngcobo; Bekker v Jika 2003 (1) SA 113 (SCA) at 131B-D. Mr Williams could and did not rely on a lex commissoria, because there is no evidence of the such a term. He raised the following two arguments:

a. The first argument was that the respondents were in breach of the probable lease agreements. The first applicant acquired the right to cancel the leases by way of notices dated 16 November 2006, which recorded that failure to pay the amounts claimed, would result in the cancellation of the respondents’ “tenancy”. They failed to pay, and the first applicant cancelled the leases as he was entitled to do.

b. The alternative argument was that the respondents’ failure to make any payments since 1994, coupled with their refusal to conclude written lease agreements and their creation of their own committee to collect money for and to pay for services, constituted a repudiation, which entitled the applicants to cancel the leases without the need of a prior notice.

7. One of the requirements for success of the first argument is that the notice must provide a reasonable time. See for example and Microutsicos and Another v Swart 1949 (3) SA 715 (A) at 730 and Nel v Cloete 1972 (2) SA 150 (A) from 164B. The notices of 16 November 2006 required performance by 17:00 the next day. In my view that period is unreasonable short.

8. I turn to deal with the alternative argument. Olivier JA held as follows in Singh v Mccarthy Retail Ltd t/a Mcintosh Motors [2000] ZASCA 129; 2000 (4) SA 795 (SCA) at 803F-G:

“The test, whether the innocent party is entitled to cancel the contract because of malperformance by the other, in the absence of a lex commissoria, entails a value judgment by the Court. It is, essentially, a balancing of competing interests - that of the innocent party claiming rescission and that of the party who committed the breach. The ultimate criterion must be one of treating both parties, under the circumstances, fairly, bearing in mind that rescission, rather than specific performance or damages, is the more radical remedy. Is the breach so serious that it is fair to allow the innocent party to cancel the contract and undo all its consequences?”

9. It follows that, in this case, I must make a value judgment as to whether factors such as the following constitute sufficiently serious malperformance to warrant cancellation without a notice as was considered when I dealt with the main argument of Mr Williams:

a. The respondents who oppose the application say that they were confused as to whom they should pay rental to. The demands they received, included demands by the second and third applicants, whom they did not know or trust.

b. The respondents made unreasonable demands for information, including, for example, information as to the payment by the new shareholders for the shares in the first applicant.

c. The respondents were aware of the identity of the first applicant and knew that the first applicant was the owner of the building. Many of the respondents are represented by an attorney, who can ascertain the identities of the directors of the first applicant.

d. The respondents did not pay any rental to the first applicant for a period of approximately 13 years.

10. On the other hand, I have already pointed out that, if there were lease agreements, it was for the applicants to make out a case that those lease agreements no longer exist. In Radebe v Eastern Transvaal Development Board 1988 (2) SA 785 (A) at 793D-F, Kumleben AJA (as then) held as follows:

“The remarks of Miller J in Hart v Pinetown Drive-in Cinema (Pty) Ltd 1972 (1) SA 464 (D) , though made in reference to a petition, are pertinent. At 469C - E it was stressed that

'where proceedings are brought by way of application, the petition is not the equivalent of the declaration in proceedings by way of action. What might be sufficient in a declaration to foil an exception, would not necessarily, in a petition, be sufficient to resist an objection that a case has not been adequately made out. The petition takes the place not only of the declaration but also of the essential evidence which would be led at a trial and if there are absent from the petition such facts as would be necessary for determination of the issue in the petitioner's favour, an objection that it does not support the relief claimed is sound.'

Even viewed simply as a pleading the answering affidavit falls short.”

11. Applied to the present matter:

a. The applicants do not deal with the lease agreements in their founding affidavit. Their existence is inferred from (inter alia) annexes to the founding affidavit.

b. The founding affidavit does not advance reasons why the first applicant should not have been required to give a notice as aforesaid.

c. No detail of the terms of the lease agreements, the right to cancel them and their cancellation is dealt with in the applicants’ papers.

Without this information, I cannot make the said value judgment. The respondents cannot be blamed for not dealing with these topics in their answering affidavit in that they should have been raised by the applicants.

12. I make the following order:

The application is dismissed with costs.

J P Coetzee AJ