Silvermoon Investment 145 CC t/a Ocean Echo Properties v National Minister of South African Police Services and Another (6964/2017) [2018] ZAKZDHC 65 (21 December 2018)

IN THE HIGH COURT OF SOUTH AFRICA

KWAZULU-NATAL LOCAL DIVISION, DURBAN

CASE NO: 6964/2017

In the matter between:

SILVERMOON INVESTMENT 145 CC

t/a OCEAN ECHO PROPERTIES

APPLICANT

and

NATIONAL MINISTER OF SOUTH AFRICAN

POLICE SERVICES FIRST RESPONDENT

NATIONAL MINISTER OF PUBLIC WORKS SECOND RESPONDENT

ORDER

Having read the papers and after hearing counsel, the following order is made:

(a) The first and second respondents and all those occupying the applicant’s premises through the respondent are ejected from such premises described as portion 142 of the farm Marburg Commonage NO / NO 12223, Registration Division EP, Province of KwaZulu-Natal in extent 163 630 (one hundred and sixty three thousand six hundred and thirty) hectors;

(b) Should the respondents fail to vacate the aforementioned premises within thirty (30) days of the grant of this order, the sheriff is ordered and directed to evict them forthwith;

(c) The first and second respondents are directed to pay the applicant’s costs jointly and severally, the one paying the other to be absolved such costs to include costs for senior and junior counsel.

JUDGMENT

Delivered on: 21 December 2018

MASIPA J:

The facts

[1] This is an application wherein the applicant seeks the ejectment of the first and second respondents and all those occupying through them from its premises described as portion 142 of the farm Marburg Commonage NO / NO 12223, Registration Division EP, Province of KwaZulu-Natal in extent 163 630 (one hundred and sixty three thousand six hundred and thirty) hectors (hereinafter referred to as ‘the property’).

[2] The application is opposed by the respondents who contend that the applicant should not have proceeded by way of application among others and seeks an order for the dismissal of the application.

[3] In its founding affidavit, the applicant sets out a fairly simple case proving its ownership to the property and indicating that the property was occupied by the South African Police Services (the SAPS) and its Rescue, Tactical Response and Training Unit. Such occupation was at the instance of the National Department of Public Works (the NDPW) which is in charge of procuring immovable property to be used by organs of State. The applicant set out that despite demand, the respondents have failed to vacate the property.

[4] The respondents set out a detailed explanation as to how the property was occupied by the SAPS. A tender process was engaged by the NDPW on behalf of the SAPS following from this, a written lease agreement was concluded between the applicant and the NDPW on 21 June 2005.

[5] In terms of the lease the date of occupation was for a period of five years commencing on 10 January 2007 and terminating on 9 December 2012. Rental was agreed at R60 764.90 per month plus vat in respect of office space, R 302 040 per month plus vat in respect of parking with escalation at the rate of ten per cent per annum. There was an option to renew the lease for a further period of five years.

[6] According to the respondents, on 11 July 2005, parties concluded an addendum to the lease agreement. In terms of the addendum, the lease would be reviewed on the first day of its expiry for a further period of five years and rental would be R605 548.24 per month with an escalation of six per cent or the CPI rate, whichever is greater. All the other terms of the lease remained the same. By virtue of the first addendum, the lease was extended to 9 December 2017.

[7] A second addendum was concluded on 23 July 2008. The material terms of the addendum were that there would be an adjustment to the number of parking bays and the office space. Consequently, the revised rental payable was R76 199.18 for the old office space and R45 505.15 for the new office space, the total rental for the office space was R121 704.33. Parking was increased to R741 816.16 being in respect of the old parking area and R 363 058.08 in respect of the new parking area. Escalation in respect of both areas was agreed at the rate of ten per cent per annum.

[8] On 22 September 2011, the SAPS issued a procurement instruction setting out its revised parking and office space requirements.

On 23 August 2013, the Bid Adjudication Committee of NDPW met with Sean Ashley Naidoo, a representative of the applicant, to discuss the revised requirements. Minutes of this meeting show that an agreement was reached with the following terms to be applied:

(a) Office space at R117.50 per square metre and parking at R30.00 per square metre.

(b) The period of the lease was to be extended by a period of five years with the overall escalation rate at eight per cent.

(c) The extent of the actual space to be occupied by SAPS was subject to verification by NDPW Key Account Manager.

[9] Naidoo was informed that the renewal was subject to approval by the NDPW Head Office but that rental would be paid until the lease was finalised. Approval was obtained and Naidoo was informed of this by way of a letter dated 1 October 2013. The renegotiated lease was to expire on 30 September 2018. The revised lease was signed by the Director General of the NDPW, M. Dlabantu and the Senior Administration Officer and Portfolio Administrator of the SAPS, Lumkile Mgoduka, forwarded it to the applicant by courier delivery services. It however does not appear that the applicant signed and returned the lease to NDPW.

[10] On 13 March 2014, the applicant wrote to the NDPW and advised that the current lease was accepted at 988.12 m² at the rate of R117.50 and that the difference of 418.69 m² would be partitioned off and available to other clients immediately. The 26.998 m² of parking was to be decided upon with input from the client but could be subdivided. The respondents contend that the result was that a second lease was concluded expiring on 30 September 2018. The applicant’s version is that the letter of 13 March 2014 included certain suspensive conditions which had to be met before the second lease could come into effect. These conditions required that the use of the leased premises be restricted only to the Vehicle Identification and Safeguarding Unit (VIS) of the SAPS, which condition was never fulfilled.

[11] NDPW effected payment to the applicant as agreed. On 4 July 2016, the applicant issued summons against the second respondent and the Minister of the National Department of Finance, for unpaid rental in the sum of R 17 229 294.85 and tenant instalment in the sum of R19 930 068.37. This claim is disputed by the defendants and is defended.

[12] The Special Investigating Unit (the SIU) joined in the action with a view to seek certain relief against the applicant. The SIU contends that it conducted an investigation on the lease agreement concluded with the applicant and that there was improper conduct by officials of the second respondent. It was therefore seeking to recover certain losses and damages from the applicant. This was in respect of rental over payment in the amount of R37 617 938.00.

[13] On 16 February 2017, the applicant despoiled the SAPS, barring them access to the property. The applicant contended that the second respondent was in arrears with its rental for January and February 2017. The SAPS obtained a spoliation order on 18 February 2017 for the restoration of occupation and possession.

[14] On 23 February 2017, Naidoo wrote to the NDPW and suggested that it was only Vehicle Identification and Safety Guarding who were entitled to be in occupation of the property and not the Tactical Response Unit. He demanded that the Tactical Response Unit vacate the property, failing which, he would lock the SAPS from the property. Despite the fact that he had raised this in his acceptance letter of 13 March 2014, NDPW disputed Naidoo’s suggestion that the Tactical Response Unit was obliged to vacate the premises and informed Naidoo of this on 24 February 2017. On the same day, Naidoo addressed a letter to NDPW terminating the lease on one month’s notice, effective 1 March 2017.

[15] The respondent denies that there was any breach of its obligation in terms of the original or fresh lease agreement. They accordingly contend that the notice letter was irregular, improper and invalid. There was no notice of breach served on the respondents nor were they called upon to remedy any breach.

[16] On 27 February 2017, Naidoo proposed to meet Eric Ramsamy, the Acting Director of Property Management of the Department of Public Works (KwaZulu-Natal) to discuss the notice. The State attorney thereafter wrote to Naidoo on 1 March 2017 inviting him to a without prejudice meeting, provided that he tabled matters he proposed to raise in advance and withdrew the purported notice of termination. As Naidoo failed to comply, the meeting did not materialise.

[17] On 15 March 2017, the State attorney addressed a letter to the applicant stating that it (the applicant) had overstated the extent of the office space occupied by SAPS by 176.08 m² for the period until 31 March 2008 and thereafter by at least 293.47 m² and parking space was overstated by at least 2589 m² for the period up to 31 March 2008 and thereafter by at least 4315.4 m². The NDPW prepared a spreadsheet which reflected the amount of the rental overpayment up to 28 February 2017. The amount was R21 515 075.78 plus interest of R17 205 761.17.

[18] The calculation from NDPW were based on a report by Gavin Brown, a Professional Land Surveyor at the instance of SIU. It was contended that the overpayments were effected by NDPW in the bona fide belief that it was due, which was a mistake. The respondents contend that the applicant was unduly enriched to the value of such overpayments while they were impoverished.

Consequently, the State attorney proposed a set-off of the amounts against current and future rentals. Alternatively, the

applicant could elect to repay the amount in the account of public works. The applicant was informed that rental payments would resume when the full amount of the overpayment was recovered.

[19] In respect of the determination of the measuring of the physical area, the applicant was advised on 23 March 2017 that the property was available for inspection by any independent surveyors and any other experts engaged by the applicant. The applicant advised that he would engage in a walk through on 23 March 2017.

[20] On 29 March 2017, the applicant addressed a letter to the SAPS to the effect that rental for March 2017 was not paid and proposed a lock out on 3 April 2017. The State attorney raised the issue of a set-off of rentals and cautioned the applicant against effecting the lock out. On 24 April 2017, Naidoo threatened to effect another lock out which was to take effect on 27 April 2017. The second respondent obtained a spoliation order in this court. The respondents contend that the applicant’s calculations by the SAPS was not based on any expert report but was from Naidoo’s erroneous calculations.

[21] According to Naidoo, he had been requesting the NDPW for a meeting as the rent had not been paid for 13 months from August 2008 to September 2009. In addition to the lock out proposed, he indicated that there would no longer be private security in the property. In a letter from the State attorney on 25 April 2017, the applicant was informed that during 16 February 2017, it had acknowledged that rental had been paid up to date. It was further highlighted that in any event, any rental claims for August 2008 to September 2009 had prescribed. The letter informed the applicant that any lock out would be unlawful and would in any event be tantamount to self-help. It appears that this was in respect of a lease relating to Statistics SA; following numerous correspondences exchanged, the applicant undertook not to lock out Statistics SA which occupied a portion of the property. Further correspondence was sent by the State attorney in respect of the SAPS requesting for an undertaking not to lock them out and further indicating that the NDPW was not in a position to deal with the matter without the involvement of the Special Investigations Unit.

[22] The applicant replied to the State attorney and advised that it was in the process of obtaining an eviction order. On 28 April 2017, the respondents learnt that the applicant erected a billboard stating that the property was hijacked by Department of Public Works for SAPS and called it SA Government’s first land grab. Since there had been noncompliance with Municipal by-laws of Roy Nkonyeni Municipality on the erection of the billboard, on 9 May 2017, the respondents, Statistic SA and the South African Government obtained an interim court order.

Issues to be determined

[23] The issues which this court is called upon to determine are as follows:

(a) Whether there exists disputes of fact as a result of which the matter should have been referred to oral evidence;

(b) Whether the SAPS’s occupation of the applicant’s premises is lawful;

(c) Whether termination of the lease agreement was issued prematurely;

(d) Whether this court can determine the quantum of purported rental overpayment by the respondents to the applicant.

Analysis of Argument

[24] Arising from the facts set out above, Mr Gajoo for the respondents submitted that there were material disputes of fact as to whether the lease regulating occupation between the

parties terminated on 9 January 2017 alternatively, whether it was to terminate on 30 September 2018, the material terms of such lease and the quantum of the amount of the rental overpayment. Of course the applicant held a contrary view and as Mr Aboobaker argued, there were no disputes of fact since it was apparent that the first lease terminated and the second lease was not signed by the applicant and the terms were never implemented. The applicant contended that the first lease agreement terminated and that the respondent’s occupation was on a monthly lease which was validly terminated when it gave notice on 24 February 2017.

Consequently, occupation by the SAPS was unlawful.

[25] As was submitted by Mr Gajoo, decisions of fact cannot be made where there is a dispute of those facts unless the court concludes that there is no real and genuine dispute or the allegations by one of the parties is implausible to warrant their rejection or that oral evidence would not disturb the balance of probabilities as they appear from the affidavits.[1] Where however, a dispute cannot be properly determined on the papers, it may be referred to oral evidence, or to trial or may be dismissed with costs.[2] Where a party anticipates a dispute of fact but proceeds by way of application, the application may be dismissed on that ground.[3]

[26] Where there are disputes of fact and no request for the matter to be referred to oral evidence, then as set out in Medica 24 Books (Pty) Ltd v Oxford University Press Southern Africa (ProprietaryPty) Limited Ltd 2017 (2) SA 1 (SCA),[4] the application falls to be decided on the respondent’s version and those facts alleged by the applicant which are admitted by the respondent. Mr Gajoo submitted that in view of the disputes of fact arising in the matter, the application should be dismissed with costs of senior and junior counsel alternatively, that they be referred to trial. As a further alternative, he argued that the lease agreement was due to expire on 30 September 2018, therefore, the notice issued by the applicant on 24 February 2017 was prematurely issued. In view of this, the application falls to be dismissed with costs of senior and junior counsel. He submitted that if the court was disposed to grant the eviction order, the execution of such order should be suspended to allow the respondent reasonable period to secure alternative employment.

[27] Mr Aboobaker, relying on Peterson v Cuthbert (Pty) Ltd 1945 AD 420, [5] submitted that where disputes of fact are said to exist, the court must examine this and determine whether such dispute is real and that the presence of such disputes impedes the satisfactory determination of the matter without the need to refer the matter to oral evidence. In Petersen, the court found that if the examination was not done, fictitious issues of fact could be raised by a lessee to delay the hearing of the matter to the prejudice of the lessor.[6]

[28] On a consideration of the facts in this matter, I am of the view that there exists no dispute of fact to warrant a referral of the matter to oral evidence. It is common cause that the parties concluded the initial lease agreement in June 2005 which was varied and extended by the two addendums. I accept that in terms of this lease, the contract was to terminate on 9 January 2017. The issue which is contentious which in the respondents’ view raises the disputes of fact relates to the purported second/fresh lease. It is accepted from the facts that negotiations took place which resulted in the preparation of this lease agreement. It was clearly signed by an authorised person representing the NDPW and was forwarded to the applicant for signature.

[29] What the parties disagree on is whether the applicant, represented by Naidoo, accepted the offer in terms of the second lease giving rise to the existence of a valid and binding agreement between the parties. If the offer was accepted, then the respondents’

argument that the lease was due to expire on 30 September 2018 would be of substance. In that case, the applicant’s termination of the lease would have been premature. If however the offer was not accepted, then the lease agreement between the parties would have expired on 9 January 2017 and the applicant was entitled to issue the notice to vacate dated 24 February 2017.

[30] It is apparent from the facts that the applicant relies on the applicant’s letter of 13 March 2014 as the acceptance of the offer in respect of the new lease. This view ignored the fact that there were conditions attached to the acceptance which were never fulfilled. It is trite that in order for a contract to exist between the parties, there must be an offer and acceptance. The rule regulating acceptance is that it must be clear or unequivocal or unambiguous and must correspond exactly or in all material respects with the offer.[7] If an acceptance seeks to vary the terms of an offer, this has the effect of destroying the validity of such offer and ordinarily

constitutes a counter-offer.[8]

[31] If it is to be accepted that the proposed variation amounts to a counter-offer, there was no evidence of an acceptance of such

counter-offer. Consequently, it can be said that there was no consensus between the parties since, according to the respondent, the terms of the agreement were as it appeared in the second lease agreement, which terms and conditions it believed to have been

accepted and agreed to between the parties, while this was not so. The position was clearly that a variation or condition was introduced

by the applicant.

[32] Where a proposed variation is in the form of conditions which precedes the coming into being of the contract, then in order for the contract to come into being, such suspensive conditions must be fulfilled. In the absence of the fulfilment, then the contract would not have come into being. There is nothing on the evidence to suggest that the applicant accepted the terms and conditions of the lease in the form offered by the respondent. I say this because the second lease was not restricted to the VISS Unit only and was for use by the SAPS while the applicant sought to restrict the use only by the VISS Unit.

[33] The general rule is that non-fulfilment of a suspensive condition renders the contract void[9]. Arising from this, I accept that the second lease was never accepted by the applicant, is therefore void and o no force and effect.

[34] Once this is accepted, it follows that the lease agreement between the parties would have terminated on 9 January 2017. Upon termination of the first lease, the relationship between the parties was regulated by a monthly lease on the same terms as those which was agreed to between the parties prior to the termination of the first lease. That being the case, there was nothing precluding the applicant from terminating such lease on 24 February 2017 and issuing the notice to vacate. It can also not be said from this that the notice of termination of the lease was premature since this could only have arisen if the second lease had come into effect.

[35] In respect of the claim relating to the overpayment which the respondent seeks to rely on to justify the SAPS’s continued

occupation of the property, it was common cause that the applicant had issued summons for unpaid rent as was set out in paragraph 11 of this judgment. Mr Aboobaker submitted that the respondents were defendants in that matter under case number 6012/2016 and that the relief sought by the respondent in the counter-claim in that action was the same as that which is raised in this application. He submitted therefore that the matter is lis pendens and cannot be determined by this court at this stage. I agree with this submission which is fortified by the disputes of facts which appear in respect of the issue of the arrear rental and the overpayment.

[36] I have considered the issue of delaying the implementation of the order and allowing the respondent to find alternative premises for the SAPS. Notably, the purported lease would have expired on 30 September 2018. The respondent would have by now found alternative

premises. It is therefore unnecessary to extend the time period for the enforcement of the agreement.

[37] On the issue of costs, the parties in this matter were represented by senior and junior counsel respectively. Both Counsel in their address asked for a cost order which included the cost of a senior and junior counsel against the unsuccessful party. The applicant asked for such costs to be on the attorney and client scale which is said was justified by the respondent’s conduct of the matter. While I find no reason to ward costs on a punitive scale, I find no reason to deviate from the general rule that costs follow the result.

[38] I therefore grant the following order:

(a) The first and second respondents and all those occupying the applicant’s premises through the respondent are ejected from

such premises described as portion 142 of the farm Marburg Commonage NO / NO 12223, Registration Division EP, Province of KwaZulu-Natal in extent 163 630 (one hundred and sixty three thousand six hundred and thirty) hectors;

(b) Should the respondents fail to vacate the aforementioned premises within thirty (30) days of the grant of this order, the sheriff is ordered and directed to evict them forthwith;

(c) The first and second respondents are directed to pay the applicant’s costs jointly and severally, the one paying the other to be absolved, such costs to include costs for senior and junior counsel.

MASIPA J

Appearances

Counsel for Applicant : Mr TN Aboobaker SC, with

Mr S Morgan

Instructed by

: Govender, Pather & Pillay Attorneys

Counsel for the Respondents : Mr V I Gajoo SC, with

Mr I J Patel

Instructed by

: The State Attorney, KwaZulu-Natal

Matter heard on

: 15 June 2018

Judgment delivered on : 21 December 2018

[1] Cape Town City v South African National Roads Agency Ltd & others 2015(6) SA 535 (WCC) at 608C-E; Administrator, Transvaal & others v Theletsane & others [1990] ZASCA 156; 1991 (2) SA 192 (A) at 197A-B; Plascon- Evans Paints Ltd v Van Riebeeck Paints (Pty) Ltd [1984] ZASCA 51; 1984 (3) SA 623 (AD) at 634.

[2] Rule 6(5)(g). See Erasmus: Superior Court Practice 2 ed (2015); Room Hire Co (Pty) Ltd v Jeppe Street Mansions (Pty) Ltd 1949 (3) SA 1155 (T) at 1162.

[3] Transnet Limited v Erf 152927 Cape Town (Pty) Ltd 2011 JDR 1180 (SCA) para 29-34.

[4] Media 24 Books (Pty) Ltd v Oxford University Press Southern Africa (Pty) Ltd 2017 (2) SA 1 (SCA) para 36.

[5] Peterson v Cuthbert (Pty) Ltd 1945 AD 420 at 428.

[6] Soffiantini v Mould 1956 (4) SA 150 (E) at 154E.

[7] See G B Bradfield Christie’s The Law of Contract in South Africa 7 ed (2016); Legator McKenna Inc & another v Shea & others 2010 (1) SA 35 (SCA) para 17 and Robarts v Antoni NO & others [2014] 3 All SA 160 (SCA) para 19-21.

[8] Legator McKenna Inc v Shea above; Robarts v Antoni NO above.

[9] Command Protection Services (Gauteng) (Pty) Ltd t/a Maxi Security v South African Post Office Ltd 2013 (2) SA 133 (SCA) at para 10