Roazar CC v Falls Supermarket CC (232/2017) [2017] ZASCA 166; [2018] 1 All SA 438 (SCA); 2018 (3) SA 76 (SCA) (29 November 2017)

Roazar CC v Falls Supermarket CC (232/2017) [2017] ZASCA 166; [2018] 1 All SA 438 (SCA); 2018 (3) SA 76 (SCA) (29 November 2017)

The Supreme Court of Appeal held that the lease agreement between Roazar CC and Falls Supermarket CC did not require the parties to negotiate renewal terms in good faith, nor did it contain a deadlock-breaking mechanism that would render such a duty enforceable. The contract expressly allowed either party to terminate the lease on one month's notice if no agreement on renewal terms was reached. The court found that the respondent had not exercised its right of renewal within the stipulated period and that negotiations had failed to produce agreement. The court rejected the argument that constitutional values or ubuntu could be used to import a term requiring good faith negotiation into a...

Citation
[2017] ZASCA 166
Parties
Appellant: Roazar CC; Respondent: Falls Supermarket CC
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
29 November 2017
Case Number
232/2017
Procedural Posture
Civil Appeal / Appeal From Gauteng Local Division, Johannesburg
Outcome
Appeal upheld; eviction order granted against respondent.
Judges
Tshiqi, Majiedt, Plasket, Mokgohloa, Mbatha
Legal Topics
Lease Renewal, Good Faith Negotiation, Eviction, Contractual Interpretation
Commercial and Corporate Land and Property Lease Renewal Good Faith Negotiation Eviction Contractual Interpretation

Case Brief

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Parties

Roazar CC

Appellant

Falls Supermarket CC

Respondent

Procedural Posture

Civil Appeal / Appeal From Gauteng Local Division, Johannesburg

Legal Issues

  1. 1 Whether the lease agreement could be terminated without entering into negotiations for renewal.
  2. 2 Whether there was a duty to negotiate renewal terms in good faith under the contract.
  3. 3 Whether the appellant was obliged to renew the lease agreement.

Ratio Decidendi

The Supreme Court of Appeal held that the lease agreement between Roazar CC and Falls Supermarket CC did not require the parties to negotiate renewal terms in good faith, nor did it contain a deadlock-breaking mechanism that would render such a duty enforceable. The contract expressly allowed either party to terminate the lease on one month's notice if no agreement on renewal terms was reached. The court found that the respondent had not exercised its right of renewal within the stipulated period and that negotiations had failed to produce agreement. The court rejected the argument that constitutional values or ubuntu could be used to import a term requiring good faith negotiation into a...

Court Disposition

Appeal upheld; eviction order granted against respondent.

Orders

  • The appeal is upheld with costs, including the costs of two counsel.
  • The order of the high court is set aside and substituted with an order for eviction of the respondent and all persons occupying through it from the premises.