Stand 59 Chamdor Properties (Pty) Ltd v De Heus (Pty) Ltd (20/41712) [2021] ZAGPJHC 400 (3 August 2021)

Stand 59 Chamdor Properties (Pty) Ltd v De Heus (Pty) Ltd (20/41712) [2021] ZAGPJHC 400 (3 August 2021)

The court held that the expert determination clause in the lease survived the expiry of the lease, as such clauses are secondary obligations intended to provide a mechanism for resolving disputes even after the contract's primary obligations have ended. The expert, MMS, was entitled to determine the quantum of the respondent's liability for electricity charges, and the respondent's failure to participate in the process or make submissions prior to the determination precluded it from objecting to the procedure or outcome. The determination by MMS was found to be final and binding under clause 7.6 of the lease, and the court declined to substitute its own judgment or refer the matter to...

Citation
[2021] ZAGPJHC 400
Parties
Applicant: Stand 59 Chamdor Properties (Pty) Ltd; Respondent: De Heus (Pty) Ltd
Court
South Gauteng High Court, Johannesburg
Jurisdiction
South Africa
Judgment Date
3 August 2021
Case Number
20/41712
Procedural Posture
Civil Application / Final Judgment
Outcome
Application granted in favour of the applicant.
Judges
B M Slon
Legal Topics
Lease Dispute, Expert Determination, Contractual Interpretation, Finality of Expert Decision
Commercial and Corporate Civil Procedure Lease Dispute Expert Determination Contractual Interpretation Finality of Expert Decision

Case Brief

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Parties

Stand 59 Chamdor Properties (Pty) Ltd

Applicant

De Heus (Pty) Ltd

Respondent

Procedural Posture

Civil Application / Final Judgment

Legal Issues

  1. 1 Does the expert determination clause in the lease survive the expiry of the lease agreement.
  2. 2 Is the determination by the applicant's auditors binding and final under the lease.
  3. 3 Was the respondent entitled to make representations to the expert before the determination.

Ratio Decidendi

The court held that the expert determination clause in the lease survived the expiry of the lease, as such clauses are secondary obligations intended to provide a mechanism for resolving disputes even after the contract's primary obligations have ended. The expert, MMS, was entitled to determine the quantum of the respondent's liability for electricity charges, and the respondent's failure to participate in the process or make submissions prior to the determination precluded it from objecting to the procedure or outcome. The determination by MMS was found to be final and binding under clause 7.6 of the lease, and the court declined to substitute its own judgment or refer the matter to...

Court Disposition

Application granted in favour of the applicant.

Orders

  • The respondent is ordered to pay the applicant the sum of R2,680,046.39 with interest at the prime rate from 25 October 2019 to date of payment.
  • The respondent is ordered to pay costs on the scale as between attorney and own client.