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[2011] ZAGPJHC 151
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Hyprop Investment Ltd v Sophia (23649/2011) [2011] ZAGPJHC 151; 2012 (5) SA 220 (GSJ) (2 September 2011)
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REPORTABLE
SOUTH GAUTENG HIGH COURT,
JOHANNESBURG
CASE NO: 23649/2011
DATE: 2011-09-02
In the matter between:
HYPROP INVESTMENT
LIMITED .............................................Applicant
And
SOPHIA'S
RESTAURANT CC.......................................First
Respondent
NICKOLAS GEORGE PROXEMOS.........................Second
Respondent
_________________________________________________________
J U D G M E N
T
_________________________________________________________
Landlord and
tenant – reduced rent during renovations of premises – common law
principle that remission of rent available
to lessee if profitable use of
premises reduced – common law principle only applicable in the absence of
agreement to the contrary
WEPENER J:
[1] The
applicant is the owner of commercial property leased to the first respondent.
The second respondent is a surety for the obligations
of the first respondent
and no argument regarding the validity of the suretyship or its enforceability
was submitted. The applicant
seeks summary judgment for arrear rentals and the
ejectment of the first respondent from the property leased to it pursuant to the
applicant having cancelled the lease agreement due to non-payment of rental. It
is common cause that the first respondent is substantially
in arrears with rent
payments.
[2] The defence raised by the first respondent regarding the
arrear rental is this: It is not disputed that the full monthly rental
amount
was not paid for a considerable period of time, but it is alleged that the first
respondent is entitled to a remission of
rent by virtue of the fact that it does
not have full use and enjoyment - commodus usus - of the premises due to
renovations and or alterations which the applicant intends to embark upon.
Hereinafter I refer to the renovations
and alterations as either renovations or
alterations, each reference thereto having the same meaning.
[3] The
affidavit of the first respondent alleges that there was a duty on the
representative of the applicant to disclose facts regarding
the intended
renovations at the time when the lease was negotiated, that he did not do so and
fraudulently withheld the information
from the first respondent. It continues
to state that had the first respondent known of the intended renovations it
would not have
entered into the lease on the terms and for the rent which were
agreed to in writing.
[4] The major portion of the argument advanced by
Mr Pincus, on behalf of the first respondent, revolved around the first
respondent's
right to pay reduced rent in circumstances where renovations of the
leased premises occur. Assuming that a tenant would be entitled
to a reduction
of rent in such circumstances it is necessary to determine whether the first
respondent can rely on the alleged failure
to disclose and the alleged
fraudulent withholding of information regarding the intended renovations, which
would result in reduced
trade and profitability for the first
respondent.
[5] In my view the first respondent has an insurmountable
obstacle. Clause 25 of the lease agreement provides as follows:
"25.1 The landlord shall be entitled at any and all times during the
currency of this lease to effect any such repairs, alterations,
improvements
and/or additions to the premises or the buildings and/or erect such further
buildings on the property as the landlord
in its discretion may decide to carry
out or erect and for any such purpose erect or cause to be erected scaffolding,
hoardings and/or
building equipment and also such devises as may be required by
law or which the architects may certified to be reasonably necessary
for the
protection of any person against injury arising out of the building operations
in such manner as may be reasonably necessary
for the purpose of any of the
works aforesaid, in, at, near or in front of the premises.
25.2 The
landlord shall further be entitled by itself, its contractors and
sub-contractors, its architects, its quantity surveyors,
its engineers and all
artisans and all other workman engaged on the works to such rights of access to
the premises as maybe reasonably
necessary for the purposes
aforesaid.
(3) The landlord shall be further be entitled to lead
pipes and other services through the premises should it be necessary to link
such pipes or other services with any other premises provided that in doing so
that the landlord does not unduly interfere with the
tenants beneficial
occupation of the premises. In exercising its above rights landlord shall use
its best endeavours to cause as
little interference with the tenant's beneficial
occupation of the premises.
(4) The tenant shall have no claim against the landlord for compensation,
damages or otherwise, nor shall the tenant have any right
to remission or
withholding of any amounts payable in terms of this agreement, by reason of any
interference with its tenancy of
its beneficial occupation of the premises
occasioned by any such repairs or building works as are herein before
contemplated or arising
from any failure or interruption in the supply of water
and/or electricity and/or heating and/or gas and/or any other amenities to
the
premises for the temporary sesation or interruption of the operation of any
lifts, elevators and hoists in the building."
[6] If, as Mr Pincus argued, there was a duty to disclose, the landlord,
in my view, did disclose by inserting the term in the agreement
contracting for
the right to do renovations without a remission of rent. It told the first
respondent in no uncertain terms that
it could embark upon a project to repair,
alter and improve the building. The first respondent accepted that this could
happen and,
that if the applicant did embark on effecting renovations, the first
respondent would have no right to remission of rent.
[7] The allegation
of fraud is refuted by the terms of the contract itself. The first respondent
unequivocally contracted on the
basis that renovations or alterations could take
place without an entitlement to a remission of rent. The reliance by Mr Pincus
on the cases which decided that a tenant may be entitled to a remission of rent
in certain circumstances, are all distinguishable
as in none of those cases did
the agreements contain a similar clause to the one that govern the contractual
relationship between
the parties in this matter.
[8] The first
respondent relied on Sishen Hotel v SA Yster en Staal Industriële
Korporasie 1987(2) SA 932(A). In that matter there was no clause in the
contract comparable with clause 25 contained in the agreement between
the
applicant and the first respondent. The Sishen matter found the landlord
to be in breach of the contract (at page 959 B to C). In the matter before me
there is no such breach,
it is a contractual right to do the renovations.
[9] The first respondent relied further on Fourie
NO v Potgietersrusse Stadsraad 1987 (2) SA 921 (A). Also in that
matter there was no clause such as clause 25 contained in the present agreement.
Indeed at page 931 D, Joubert
JA said:
"Die huurkontrak het nie hierdie gemeenregtelike verpligting van die
stadsraad as verhuurder beperk of uitgesluit nie."
It implies that the
obligation to allow commodus usus can be excluded.
[10] The
manner in which liability by a lessor to a lessee for reduced beneficial use of
premises can be excluded in the event of
the premises having to be renovated is
by way of agreement. In the case before me the common law obligation to give
the first respondent
commodus usus of the premises is indeed limited and
excluded by agreement between the parties. Malan J, as he then was, in
Sweets From Heaven Pty Ltd v Ster Kinekor Films Pty Ltd 1999 (1) SA 796
(w) said at paragraph 9:
“The rules relating to the impairment of the commodus usus of a
lessee and the consequent reduction of rent and the remedies of the
lessee are
based on ordinary contractual principles (Sishen at 955 I - J, De Wet and
Yeats Die Suid Afrikaanse Kontrakte en Handelsreg
(1978) fouth ed at 323). It
follows that where the lessee expressly or tacitly accepts the risk or where the
lease is concluded
on the supposition that the lessee may be deprived of the
beneficial use of the property, he cannot rely on any breach by the lessor
in
that regard. Cooper Landlord and Tenant (1994) 2nd ed at 126
says:
‘It is self - evident that the lessee of a business premises
may claim damages from a lessor who causes the profitability of
the premises to
be reduced. This accords with a lessor's obligation to afford the lessee
commodus usus. At the same time the lessor's
obligations to abstain from
conduct which affects the lessee's profitable use of business is not absolute.
A myriad of examples
may be cited to illustrate this. For a lessee of business
premises to succeed in a claim against the lessor for reduced profitability
caused by the lessor's conduct the lessee must prove that the parties either
explicitly or tacitly agreed that they would abstain
from such
conduct.’”
[11] It follows that the first respondent can
only succeed if it can show that the right to commodus usus was not
limited by agreement.
[12] The applicant contracted for the right to
effect alterations to the building without the first respondent being entitled
to any
remission of rental should it do so and the first respondent accepted
that contract. Its reliance on the common law principle can
therefor not be
sustained.
[13] A further argument advanced by Mr Pincus is that the
applicant waited for three months after its notice of demand to cancel the
lease. It was argued that by continuing the lease, after the demand, the
applicant elected to keep the lease in esse and that it cannot now
elect to cancel the agreement.
[14] There are no facts to show that the
period of three months between the date of demand and the date of cancellation
is unreasonable
and I was not able to find any facts on the papers before me.
Save for the perceived delay to effect cancellation of the lease,
no other
defence regarding the cancellation has been raised. In my view the cancellation
was properly effected and it is valid and
enforceable.
[15] Having
reached this conclusion, the applicant is entitled to summary judgment. I
consequently grant an order in terms of prayers
1, 2, 3 and 4 of the notice of
application for summary judgment dated 20 July 2011. The date from which
interest is to run in paragraph
2 is the date of service of summons being 24
June 2011.
________________
W L Wepener
Judge of
the High Court
Counsel for applicant: G Dobie
Attorney for
applicant: Rooseboom Attorneys
Counsel for respondents: S P
Pincus
Attorney for respondents: Biccari Bollo Mariano Inc
Date of
hearing: 01/9/2011
Date of judgment: 02/9/2011