Van Rhyn N.O and Others v Avhakholwi and Others (17887/2021) [2022] ZAGPJHC 279 (5 July 2022)

Van Rhyn N.O and Others v Avhakholwi and Others (17887/2021) [2022] ZAGPJHC 279 (5 July 2022)

The court held that the lease agreements clearly distinguish between 'LAND' and 'IMPROVEMENTS', with 'LAND' defined as the area indicated on the plans and 'IMPROVEMENTS' as all buildings and structures erected by the lessee. The fair market rental for the renewal period must be determined based on the unimproved...

Source-derived case information.

Citation
[2022] ZAGPJHC 279
Parties
Applicant: Werner Rudolph Van Rhyn N.O; Applicant: Ibrahim Mia N.O; Applicant: Sidney Rean Booysen N.O; Respondent: Nthebe Avhakholwi; Respondent: Transnet SOC Limited; Respondent: BP Southern Africa (Pty) Ltd
Court
South Gauteng High Court, Johannesburg
Jurisdiction
South Africa
Judgment Date
5 July 2022
Case Number
17887/2021
Procedural Posture
Declaratory Application / Judgment
Outcome
Declaratory order granted in favour of the applicants; costs awarded against the second respondent.
Judges
Manoim
Legal Topics
Lease Renewal, Arbitration Clause Interpretation, Valuation Methodology, Declaratory Relief
Land and Property Commercial and Corporate Lease Renewal Arbitration Clause Interpretation Valuation Methodology Declaratory Relief

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Parties

Werner Rudolph Van Rhyn N.O

Applicant

Ibrahim Mia N.O

Applicant

Sidney Rean Booysen N.O

Applicant

Nthebe Avhakholwi

Respondent

Transnet SOC Limited

Respondent

BP Southern Africa (Pty) Ltd

Respondent

Procedural Posture

Declaratory Application / Judgment

Legal Issues

  1. 1 Whether the arbitrator appointed under the lease agreements is empowered to determine legal questions regarding the interpretation of 'fair market value of the LAND'.
  2. 2 Whether the fair market rental for the renewal period must be determined with or without regard to improvements effected to the land.
  3. 3 Whether a declaratory order is competent in the circumstances.

Ratio Decidendi

The court held that the lease agreements clearly distinguish between 'LAND' and 'IMPROVEMENTS', with 'LAND' defined as the area indicated on the plans and 'IMPROVEMENTS' as all buildings and structures erected by the lessee. The fair market rental for the renewal period must be determined based on the unimproved land, excluding the value of improvements. The arbitrator, being a property valuer and not a lawyer, is not empowered to decide legal questions of interpretation. The dispute over the meaning of 'fair market value of the LAND' is a legal one, properly referred to the court for declaratory relief. Once the legal question is resolved, the valuation methodology can be applied by the...

Court Disposition

Declaratory order granted in favour of the applicants; costs awarded against the second respondent.

Orders

  • It is declared that a dispute exists between the Applicants and the Second Respondent as to the proper interpretation of clause 14.1.1 of the IDB Lease and clause 15.1.1 of the CPD Lease, read with clause 2.1 of the lease agreements.
  • It is declared that the lease agreements require the arbitrator to determine the rental for the renewal period by determining the fair market rental for the 'LAND', as defined, in its unimproved state, without regard for improvements effected to the land.