Urban Hip Hotels (Pty) Ltd v KCarrim Commercial Properties (Pty) Ltd (1177/2015) [2016] ZASCA 173 (25 November 2016)

Urban Hip Hotels (Pty) Ltd v KCarrim Commercial Properties (Pty) Ltd (1177/2015) [2016] ZASCA 173 (25 November 2016)

The Supreme Court of Appeal held that the Memorandum of Understanding (MOU) was the sole memorial of the agreement between the parties for the relevant period and expressly excluded liability for operating costs, except for a fixed levy and management fee. The appellant's argument that its standard agreement or normal business practice entitled it to deduct operating costs was rejected, as the MOU's clear terms could not be altered by contextual evidence or subsequent conduct. The court found no basis for importing a tacit term regarding operating costs, and the respondent was entitled to payment of the sum underpaid. The appeal was dismissed with costs, including the costs of two counsel.

Citation
[2016] ZASCA 173
Parties
Appellant: Urban Hip Hotels (Pty) Ltd; Respondent: KCarrim Commercial Properties (Pty) Ltd
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
25 November 2016
Case Number
1177/2015
Procedural Posture
Civil Appeal / Appeal From Gauteng Division of the High Court, Pretoria
Outcome
Appeal dismissed with costs, including costs of two counsel.
Judges
Lewis, Shongwe, Petse, Willis, Van der Merwe
Legal Topics
Contract Interpretation, Variation of Contract, Deduction of Operating Costs
Commercial and Corporate Contract Interpretation Variation of Contract Deduction of Operating Costs

Case Brief

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Parties

Urban Hip Hotels (Pty) Ltd

Appellant

KCarrim Commercial Properties (Pty) Ltd

Respondent

Procedural Posture

Civil Appeal / Appeal From Gauteng Division of the High Court, Pretoria

Legal Issues

  1. 1 Whether the appellant was entitled to deduct operating costs from rental income payable to the respondent under the Memorandum of Understanding (MOU).
  2. 2 Whether the standard agreement formed part of the contract between the parties.
  3. 3 Whether subsequent conduct of the respondent could alter the clear terms of the MOU.

Ratio Decidendi

The Supreme Court of Appeal held that the Memorandum of Understanding (MOU) was the sole memorial of the agreement between the parties for the relevant period and expressly excluded liability for operating costs, except for a fixed levy and management fee. The appellant's argument that its standard agreement or normal business practice entitled it to deduct operating costs was rejected, as the MOU's clear terms could not be altered by contextual evidence or subsequent conduct. The court found no basis for importing a tacit term regarding operating costs, and the respondent was entitled to payment of the sum underpaid. The appeal was dismissed with costs, including the costs of two counsel.

Court Disposition

Appeal dismissed with costs, including costs of two counsel.

Orders

  • The appeal is dismissed with costs including the costs of two counsel.