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SAFLII Note: Certain personal/private details of parties or witnesses have been redacted from this document in compliance with the law and SAFLII Policy

IN THE HIGH COURT OF SOUTH AFRICA

GAUTENG LOCAL DIVISION, JOHANNESBURG

CASE NUMBER: 38342/2017

In the matter of

BALVEST CC t/a FOURWAYS GARDEN                                                        APPLICANT

SHOPPING CENTRE

(Reg No: 2008/261705/23

and

FOURWAYS GARDENS SUPERMARKET (PTY) LTD                    FIRST RESPONDENT

t/a TOPS FOURWAYS GARDENS

(Reg No: 2016/010317/07

ZACHARIADES, ANGELO JAMES

(ID No: […])                                                                                  SECOND RESPONDENT

JUDGMENT

DOSIO AJ:

INTRODUCTION

[1] This is an application for summary judgment whereby the plaintiff, Balvest CC t/a Fourways Garden Shopping centre (“the applicant”), seeks payment to the amount of R389 607.02 from the first and second defendant, (“the first and second respondent”).

[2] The application is opposed.

 

BACKGROUND

[3] The applicant is the present owner of a shopping centre known as Fourways Gardens Shopping Centre (“the shopping centre”). The second respondent leases two stores in this shopping centre, namely, SPAR and TOPS. Both stores are now being let to the franchisor, The SPAR Group Ltd, who have taken over the management thereof in terms of an option agreement. The matter in casu relates to the TOPS store.

[4] There was a prior lease agreement concluded on the 22^nd of April 2010 between Rainbow Pepper Trading 76 Ltd (“Rainbow Pepper”) and Highveld Syndication 15 Limited (”Highveld”). Rainbow Pepper traded under the name of Tops Fourways Gardens.

[5] Rainbow Pepper leased the shop premises known as Fourways Gardens Shopping centre (“the leased premises”). This lease is referred to as (“the Highveld Tops lease agreement”).

[6] During the period of the lease, the applicant purchased the property from Highveld on the 14^th of March 2011, which included the lease in casu. This lease expired on the 21^st of April 2015. On the 22^nd of April 2015, the applicant, represented by Nicolaos Baltsoucous and Rainbow Pepper, duly represented by the second respondent, entered into a verbal agreement in terms of which Rainbow Pepper continued to occupy the leased property on the same terms and conditions as the Highveld Tops lease agreement on a month to month basis (“the verbal agreement”). Despite the terms of the verbal agreement, Rainbow Pepper was in arrears.

[7] On or about the 15^th of March 2016, Rainbow Pepper, represented by the second respondent entered into a written agreement of lease with the applicant. The lease would commence on the 1^st of July 2015 and would continue for a period of five years terminating on the 30^th of June 2020. Rainbow Pepper was already in occupation of the premises as from the 1^st of July 2015.

[8] On the same day that the lease was signed, (which according to the applicant is the 15^th of March 2016), the second respondent, acting personally, entered into a written agreement styled “Deed of Surety” with the applicant, who was represented by Nicolaos Baltsoucous. In terms of this surety, the second respondent bound himself as surety and co-principal debtor in favour of the applicant for the fulfilment of all the obligations of the first respondent.

[9] On the 15^th of March 2016, Rainbow Pepper and the first respondent, both duly represented by the second respondent, entered into an agreement of cession with the applicant, duly represented by Nicolaos Baltsoucous, headed “Cession of lease agreement”. Rainbow Pepper agreed to cede and assign all its rights, title and interest as lessee under the lease to the first respondent who would use the leased property for the purposes of a Tops Bottle Store. The second respondent remained as surety in terms of the lease.

[10] Pursuant to the cession, on the 23^rd of May 2016, Rainbow Pepper and the first respondent, duly represented by the second respondent acting personally, entered into an agreement headed “Acknowledgement of Debt” with the applicant, duly represented by Nicolaos Baltsoucous.

[11] The applicant has issued summons against the first and second respondent for three separate claims, namely;

1. Alleged arrear rental due in terms of a lease agreement concluded between Rainbow Pepper Trading and the applicant, which was subsequently ceded and/or assigned to the first respondent in the amount of R389 607-02 as at 1 October 2017.

2. Damages for rental due for the remainder of the aforesaid lease agreement in the amount of R1 951 881-07.

3. Perfection of the Landlord’s hypothec over any moveable goods of the first and second respondent within the leased premises.

[12] The applicant has requested that claim 2 and 3 be postponed sine die and accordingly only proceeds with claim 1 for arrear rental.

[13] The primary agreement on which the applicant relies for the relief sought is the lease agreement concluded on the 15^th of March 2016 as between Rainbow Pepper and the applicant, together with the subsequent cession and/or assignment  of such lease to the first respondent.

[14] The applicant seeks summary judgment based on the terms of the lease agreement annexed as Annexure “C” to the summons which it alleges was signed on the 15^th of March 2016.

[15] The respondents admit in the affidavit resisting summary judgment that after the lease expired on the 21^st of April 2015 a subsequent lease was concluded on the 15^th of March 2016. However, the respondents have attached their own version of the lease concluded on the 15^th of March 2016 as they allege that the version attached to the applicant’s summons omits several material changes made to the agreement, which have relevance to this matter. The respondent’s version is that this lease agreement was signed a few days prior, namely on the 10^th of March 2016 as opposed to the one provided by the applicant.

 

SUBMISSIONS MADE BY THE RESPONDENTS IN RESPECT TO BONA FIDE DEFENCES

[16] The respondents have raised three separate defences to the applicant’s first claim and two defences to the third claim. In the supplementary affidavit resisting summary judgment two further defences were raised. Due to the fact that the applicant is no longer pursuing claim three, I will only refer to the five defences raised in respect to the first claim.

 

Claim 1: First Defence – Misrepresentation by the applicant inducing the contracts in question

[17] The respondents contend that in the negotiation phase leading up to the conclusion of the lease in question, together with all other related agreements during the month of March 2016 (and in some instances May 2016), the applicant’s represented by Mr Baltsoucous, the SPAR Group Ltd and the second respondent, were engaged in discussions as to how to find a solution to several issues which were faced by the stores and the shopping centre in general.

[18] The second respondent contents that it had been set on selling the store for several years, but due to several irregularities with the centre and the fact that a significant portion of the parking lot of the centre extended into municipal land, there was a real risk of the municipality widening the road into the car park. Accordingly, not a single sale materialised for years, despite the stores being on the market as from 2012.

[19] It was contended that as a result of the assurances made by Mr Baltsoucous to the second respondent and Mr Gatonby of SPAR, that he had fully secured the long-term future of the shopping centre’s car park, this induced the respondent’s to proceed with and sign all the agreements which included the lease, cession and related sureties. It was contended that as shown by evidence in the affidavit resisting summary judgment, this representation made by Mr Baltsoucous turned out to be false, as the municipality have issued proposed building plans for the widening of Uranium Road such that it would cut into a substantial portion of the shopping centre car park. The respondents are unsure as to whether this misrepresentation was made fraudulently or whether it was made negligently, accordingly they argue that viva voce evidence is required to test either possibility.

[20] The defendants referred to the case of Spenmac (Pty) Ltd v Tatrim CC [2014] 2 All SA 549 (SCA) where the following was said at paragraph [27] about an innocent Misrepresentation;

“In the present matter the correct enquiry is whether the error has precluded the parties from reaching consensus ad idem and secondly, whether it is reasonable for the resiling party to labour under a misapprehension.”

[21] The respondents’ contention is that this misrepresentation is material and that there would have been no consensus between the parties had the respondents known of the fact that there was no security of tenure over the shopping centre’s car park and accordingly the contract should be held void ab initio. 

 

Claim 1: Second Defence – Reduction of amount claimed due to operation of turnover rental provision.

[22] The respondents content that the operation of clause 7.2 in Schedule A of the lease, attached to the affidavit resisting summary judgment, served to provide relief to tenants whose turnover was negatively impacted by building activities connected to the shopping centre. This relief comes in the form of a temporary amendment to the rental payable, so that for the duration of the road works, a tenant  will only be liable to pay rent of 2.5% of (gross) turnover. It is contended that this clause has been partially obscured in the version submitted by the applicant but traces of the terms can be seen.

[23] The respondents maintain that the intention of the parties should be ascertained from the version supplied by the respondents and that further evidence would be required in order to clarify these variances and determine the true intention of the parties.

[24] It was contended that should I hold that the provision under clause 7.2 has been Triggered, on trial of this matter, that this would substantially lower the quantum of the rental payable as from January 2017 when construction commenced (on average around R20 000-00 per month).

 

Claim 1: Third Defence – The landlord did not provide undisturbed use of the premises for the purpose it was leased.

[25] It was contended that a fundamental principal of any lease agreement is that the premises leased must be reasonably fit for the purposes for which it was let. It was contended that in the case of Gateway Properties (Pty) Ltd v Bright Idea Projects 249 CC and Another [2014] 3 All SA 577 (KZP) it was held that according to common law, the use to which the leased premises is to be put is of substantial importance. The respondents contend that they could not ‘use and enjoy’ the premises or that they were fit for the purposes for which they were leased in the first place as the  pervasive influence of construction and widening of roads, made it impossible to run a liquor store. It was further contended that the first respondent’s clientele’s access to the store had been severally affected by the road works and would only become worse in the future when the construction would cut into the parking lot.

 

Claim 1: Fourth defence – Change of ownership over the shopping centre

[26] The counsel representing the respondents stated this defence was not good in law because irrespective whether there was a new owner or not, the rent was still owed. Accordingly this defence was abandoned.

 

Claim 1: Fifth defence – Surety not on behalf of first defendant

[27] It was argued that the second respondent did not sign a written deed of surety on behalf of the first respondent.

 

SUBMISSIONS MADE BY THE APPLICANT IN RESPECT TO THE DEFENCES RAISED

The first defence – the misrepresentation

[28] As regards the first defence, the applicant’s counsel contends that the claim under consideration is one of arrear rental and the possible widening of the road in the future, cannot constitute a defence for the non-payment of past rentals. It was further contended that the alleged misrepresentation is not one inducing a new tenant to conclude a lease as TOPS was in occupation of the property since 2010, and the “new” lease was concluded in 2016.

[29] Counsel contended that nowhere in any of the terms of either the lease agreement signed on the 10^th of March 2016 or the 15^th of March 2016 was the parking lot issue, recorded or dealt with, evincing the conjured nature of the alleged misrepresentation on the parking lot issue.

[30] Counsel contended that a possible sale of the business, to a prospective third-party purchaser, has no bearing on the lease agreement and the first respondent’s failure to pay rental is still due and payable. It was further contended that if the sale issue and the parking lot was material, such would have been recorded in the lease agreement.

[31] The only references to parking in the lease agreement appear from clause 4.2 which refers to parking bays allocated to the first respondent and payment of same. This clause, which is the same in both the lease agreements handed in by the applicant and respondents states as follows:

“4.2 The LESSEE shall throughout the LEASE PERIOD have the right of the number of parking bays as specified in item 5 on the SUMMARY PAGE at an initial monthly rental per parking bay …”

[32] A further clause referring to parking bays for the first respondent’s employees, is clause 38. Clause 38.1 provides that;

“The LESSOR will provide the number of parking bays as indicated in Item 5 to the LESSEE in a demarcated area of the shopping centre…”

[33] Counsel contended that none of the purported representations or negotiations, which precedes the agreement concluded on the 15^th of March 2016 can have any bearing on the matter, as the agreement expressly provides at clause 25 that;

“This LEASE AGREEMENT represents the total agreement between the parties and no guarantees, promises, terms or amendments of any nature whatsoever will be binding upon the LESSOR, unless in writing and signed by both parties thereto.” 

[34] Counsel contended that the defence based on an alleged misrepresentation, is also stumped by the parol evidence rule. (Reference was made to the cases of Marquard & Co v Biccard 1921 AD 366 at 373, Union Government v Vianini Ferro-Concrete Pipes (Pty) Ltd 1941 at 47 and Venter v Birchholtz 1972 (1) SA 274 A at 282.)

[35] Counsel argued that the lease agreement provides for special conditions to be inserted in the lease, and notably the purported parking bay issue is not raised under the heading “Special Conditions” which is clause 10 of the lease allegedly signed by the parties on the 10^th of March 2016, (according to the respondents version).

[36] Counsel referred to clause 6.5 of the lease agreement which states that;

“The LESSOR does not guarantee that the LEASED PREMISES is suitable for the purposes that the LESSEE rents it for…”

[37] Counsel contended that the lease agreement relied on by both parties was concluded in 2016, long after the report which raised the parking lot issue, which is dated 2012. The first respondent was therefore aware of the municipal land occupied, yet still agreed to be bound by the property description, as per the title deed. Accordingly it was contended that any reliance on a purported misrepresentation, in conflict with a title deed, cannot pass muster and cannot be of assistance to the respondents.

The second defence – Turnover rental

[38] Counsel argued that this defence warrants very little attention in that clause 7.2 of the 15^th of March 2016 lease agreement provides that;

“ 7.2 The LESSEE will not be entitled to cancel the LEASE AGREEMENT as a result of any building activities on the building whereof the LEASED PREMISES forms a part.”

[39] Counsel contended that even if the 10^th of March 2016 agreement is the operative one, then the turn-over defence still fails as clause 7.2  of the 10^th of March 2016 lease agreement merely adds the following words which have been highlighted in bold, namely;

“7 OCCUPATION

7.2 The LESSEE will not be entitled to cancel the LEASE AGREEMENT as a result of any building activities on the building whereof the LEASED PREMISES forms a part but will be allowed to pay a 2,5% turnover rental should the LESSEE be able to prove to the LESSOR that the building activities affected the turnover negatively. The turnover rental in this case would only apply until building activities has been completed.”

[40] Counsel contended there is no suggestion anywhere of building activities on the building occupied by the first respondent. The only complaints levied are in respect to the City Council beginning construction on Uranium road which runs adjacent to the shopping centre.

[41] Counsel contended that the only clause operative, in the circumstances complained of, is clause 13 of the lease agreement, which expressly provides that;

“…The LESSEE will not be entitled, as a result of such defect or interruption, to decrease the rental, retain payment or rental, claim damages or cancel the LEASE AGREEMENT.”

[42] Counsel stated that even if it could be argued that the building operations on a road outside the shopping centre, could somehow affect beneficial occupation, this is not a defence in light of the matter of Tudor Hotel Brasserie & Bar (Pty) Ltd v   Hencetrade 15 (Pty) Ltd (793/2016) [2017] ZASCA 111 (20 September 2017).

[43] It was further contended that if clause 7.2 could find application, same would only serve as a defence if the respondents could prove the losses sustained, however this has not been adequately addressed in the affidavit resisting summary judgment.

 

The third defence – Commodus Usus

[44] Counsel once again stated clause 6.5 and 6.7 of the lease agreement unequivocally provides that the applicant did not guarantee that the leased premises were suitable for the purposes for which they were let and that the premises were let subject to the conditions in the title deed.

[45] Counsel contended that at best the respondents are contending some possible future interference with parking bays, however there is no complaint of an absence of current or past commodus usus when the rent was not paid. Even if there was some past interference with occupation, which the plaintiff strongly denies, the judgment of Tudor v Hencetrade (supra) states that where rental was to be paid monthly in advance, without deduction, reciprocity was excluded. Counsel argued that the third defence raised by the respondents must also fail.

 

Fifth defence - Suretyship not on behalf of first defendant

[46] Counsel argued that on the deed of surety that was attached to the respondent’s supplementary affidavit resisting summary judgment, it clearly states that the second respondent is bound as the trading name is “TOPS Fourways Gardens”

 

THE LAW

[47] The object of Uniform Rule 32 is to prevent a plaintiff’s claim from being delayed by what can amount to an abuse of the court process.

[48] In Maharaj v Barclays National Bank Ltd 1976 (1) SA 418 (A) on page 426 Corbett JA noted the following:

“The defendant need not deal exhaustively with the facts and the evidence relied upon to substantiate them, he must at least disclose his defence and the material facts upon which it is based with sufficient particularity and completeness to enable the Court to decide whether the affidavit discloses a bona fide defence.”

[49] In the case of Joob Joob Investments (Pty) Ltd v Stocks Mavundla Zek Joint Venture 2009 (5) SA 1 (SCA) it was held that;

“[31]…the summary judgment procedure was not intended to ‘shut (a defendant) out from defending’, unless it was very clear indeed that he had no case in the action. It was intended to prevent sham defences from defeating the rights of parties by delay, and at the same time causing great loss to plaintiffs who were endeavouring to enforce their rights.”

[50] A defendant will fail if it is clear from the affidavit resisting summary judgment that the defence raised was done simply to delay the obtaining of a judgment to which the defendant well knows that the plaintiff is entitled to.( see Skead v Swanepoel 1949 (4) SA 763 (T) at 766-7.)

[51] The duty of the court is to consider the facts alleged by the defendant and to determine whether they constitute a good defence in law.

 

EVALUATION

[52] As regards the first defence, TOPS was in occupation of the premises since 2010, accordingly the respondents must have been aware of the concerns facing the widening of the road.

[53] Annexure A23, dated the 26^th of June 2012, which is annexed to the respondent’s affidavit resisting summary judgment, is a letter addressed to George Skoutellas from Hanno Van Helsdingen who was employed by Urban Context. The contents of this letter support the fact that the respondents must have been aware of these concerns as the letter states that the parking is indeed situated in the road reserve of Uranium road and that it did not form part of the initial site development plan. The letter states further that even though a company named Redwall Developments applied to the Joburg Metropolitan municipality to approve a new updated site development plan, the municipality denied it. The contents of the letter explains that the parking requirement for the site was 276 bays and the current site development plan provided for 176 bays.

[54] The letter further stated that the Joburg Roads Agency could not confirm whether the road would be widened in the near future, but should this be required a huge amount of parking areas would become nullified and it would have a negative impact on the centre.

[55] From the contents of this letter the first respondent must have been aware of the situation, yet still agreed to be bound by the property description as per the title deed. These parking issues were realised as far back as 2012. The lease agreement concluded on the 15^th of March 2016 was concluded four years after knowledge of these supposed defects. I fail to see how this can now constitute a misrepresentation in 2016. Accordingly a reliance on a purported misrepresentation cannot be of assistance to the respondents many years later. If anything, the lease agreement concluded on the 15^th of March 2016 should have alluded to all these parking concerns. The lease agreement does not allude to the parking issues at all.

[56] The case of Oriental Products (Pty) Ltd v Pegma 178 Investments Trading CC and Others 2011 (2) SA 508 (SCA) at paragraph [13] states that ;

“Even though there is no guarantee of title, the record needs to be accurate, though subject to correction. The record provides proof of the present registered owner of the property or right”.

From the above-mentioned passage in the case of Oriental v Pegma (supra), it is clear that if the lease agreement says that the property is subject to the terms contained in the title deed and the title deed is a public document, then it must be regarded as falling within the personal knowledge of the respondents, when they signed the lease agreement. This knowledge of the respondents is confirmed in the affidavit resisting summary judgment where it states that;

“I direct this Honourable Court to the diagram of the Fourways Gardens building plan, which was an annexure to the initial lease concluded between Highveld Syndication 15 Ltd and Rainbow Pepper purporting to demonstrate the possible setback of 2,5 m for ‘possible widening” 

[57] Not only did the respondents have the title deed which they could peruse, but they actually referred to the site plan in their affidavit resisting summary judgment, so they had all the requisite knowledge as to the extent of the parking lots.  

[58] If the parking issues were of real concern to the respondents, they should have been included in clause 10 under the heading “Special conditions”. At most, if they later became a concern, the respondents should have sought an amendment in writing to include these concerns. Clause 25 of the lease agreement states that the lease agreement represented the total agreement between the parties and that if there were any amendments they should have been in writing. Therefore, any prior negotiations have no force or effect unless reduced to writing.

[59] Clause 6.5 of the lease agreement unfortunately does not assist the respondents either, as it states that the lessor does not guarantee that the leased premises are suitable for the purposes that the first respondent let it for and that the leased premises were subject to the conditions contained in the title deed of the leased premises.

[60] Notwithstanding that there were negotiations between the applicant and the respondents leading up to the signing of the lease agreement concluded on the 15^th of March 2016, the respondents cannot rely on these negotiations to stop paying rent. As stated by the learned Boruchowitz AJA in the case of Affirmative Portfolios CC v Transnet Ltd t/a Metrorail [2008] ZASCA 127; 2009 (1) SA 196 at paragraph [13];

“The appellant is precluded from relying on the alleged oral agreement by virtue of the so-called ‘parol’ evidence or ‘integration’ rule…It is a well-established principle that where the parties decide to embody their final agreement in written form the execution of the document deprives al previous statements of their legal effect.”

[61] Although counsel for the respondents argued that the affidavit resisting summary judgment should have referred to the fact that a fraudulent misrepresentation had taken place and not a false misrepresentation, the fact remains that there is nothing in the papers to suggest that the applicant intended to mislead or defraud the respondents. It was not pleaded and the respondents cannot rely on such an allegation.

[62] I do not find that as per the reasoning of the case of Spenman v Tatim (supra) that the parties were precluded from reaching consensus as regards the terms of the lease agreement concluded on the 15^th of March 2016. There are no grounds to suggest that the lease agreement concluded on the 15^th of March 2016 is void ab initio.

[63] Accordingly, as regards the defence of a misrepresentation, I cannot find that the respondents have successfully raised this defence and accordingly it is dismissed.

[64] As regards the second defence, pertaining to the turnover rental and the proposition that the respondents are entitled to a reduction on the rental amount, clause 7.2 clearly states that the lease cannot be cancelled as a result of building activities on the leased premises. The respondents have not complained about building activities on the actual leased premises, all they have complained about is road works on Uranium road which runs adjacent to the shopping centre. 

[65] If the 10^th of March 2016 lease agreement is the operative one, which includes the turnover defence, then this defence still fails as there is no suggestion of building activities on the leased premises occupied by the respondents. Irrespective of whether the lease agreement signed on the 10^th of March or the 16^th of March is referred to, clause 7.2 refers to a “building”, and not a “road running adjacent to and outside a shopping centre”, therefore reliance on the lease agreement signed on the 10^th of March 2016 does not assist the respondents.

[66] Widening of the road cannot be interpreted as falling within the meaning of “building activities”. The only clause that deals with “Service defects and service failures or interruptions” is clause 13, and clause 13 states that the lessee will not be entitled as a result of such defect or interruption to decrease the rental or retain payment of rental. This is supported by the decision of Tudor Hotel v Hencetrade (supra). In the matter of Tudor Hotel v Hencetrade there was a clause which was similar to clause 13 in casu. The court decided, based on the reasoning of the matter of Arnold v Viljoen 1954 (3) SA 322 (C) that;

“a lessee who takes occupation of premises which are deficient in any respect is obliged, while it remains in occupation, to pay the full rental stipulated in terms of the lease. Its remedy is to claim compensation by way of an abatement of rental and/or damages.”

[67] Clause 10.7 of the lease agreement in casu is even more destructive for the respondent’s defence, in that it states that;

“the LESSEE shall not be entitled to any remission of rental or compensation or damages by reason of any alteration to the LEASED PREMISES and /or the building effected by either the LESSEE or the LESSOR”.

[68] Equally destructive to the respondents defence of turnover rental is clause 16.1 of the lease agreement which states;

“The LESSOR will not be liable for any damages of whatsoever nature suffered by the LESSEE, its employees, clients or visitors on the LEASED PREMISES, either in or the property where the LEASED PREMISES is situated, inclusive of damages for loss of profit and the like, from whatsoever cause these damages may arise.”

[69] Therefore if there is no reciprocity in the contract, as is the situation in the matter in casu, then the respondents cannot rely on the exceptio non adimpleti contractus. (see Tudor v Hencetrade (supra)

[70] The respondents concluded this agreement containing the above-mentioned clauses and cannot now seek to extricate themselves from its consequences.

[71] Even if I am wrong and building operations on a road outside a shopping centre could be argued as falling under the ambit of clause 7.2, triggering such a defence, the respondents would still have to prove the losses sustained, which they have not done adequately in the affidavit resisting summary judgment. 

[72] As stated in the case of Soil Fumigation Services Lowveld CC v Chemfit Technical Products (Pty) Ltd 2004 (6) SA 29 (SCA) and Joob Joob Investments (Pty) Ltd v Stocks Mavundla Zek Joint Venture (supra), if the respondents rely on a counterclaim they must quantify it in order to create a sustainable defence. The vague references in the affidavit resisting summary judgment to a possible counterclaim without proper quantification is not sufficient.

[73] Accordingly I find there is not sufficient evidence on the papers to sustain this second defence and it is dismissed.

[74] As regards the third defence, the complaints levelled in the affidavit resisting summary judgment do not come close to interference with commodus usus. The respondents don’t state how many parking bays were involved in this supposed misrepresentation or how many parking bays were lost. Although the affidavit mentions the road works have commenced, nothing is mentioned about how the parking bays have been affected. All that is mentioned in the affidavit resisting summary judgement is;

“Note that further planned widening as per the building plans specified in the paragraph below has not yet commenced and will further disrupt traffic to the centre”.

The wording mentioned in the passage above is not sufficient for the respondents to rely on it and not pay arrear rentals.

[75] In addition, the respondents have not given up occupation or possession of the premises. Neither have they ceased to carry on business in the leased premises. Accordingly, if the first respondent elected to remain in occupation, despite the possible future disturbance of its commodus usus, then they are liable to pay rent.

[76] In the case of Greenberg v Meds Veterinary Laboratories (Pty) Ltd 1977 (2) (T) at 283 – 285 reference was made to the case of Arnold v Viljoen (supra) where it was stated that;

“‘I think the test for the tenant’s liability for rent is whether he was in occupation or possession of the leased premises and not whether such occupation or possession was beneficial or not. The latter element will of course be a consideration when the tenant’s counter-claim for damages comes to be considered…with or without cancellation, the respondent could only succeed in its claim to be relieved of the payment of rent if it had given up occupation or possession...”

[77] The principle set out in the matter of Arnold v Viljoen (supra) was again reaffirmed in the decision of Basinghall Investments (Pty) Ltd v Figure Beauty Clinics (S.A) (Pty) Ltd 1976 (3) SA 112 (W) where it was held that;

“A tenant who is in occupation of premises is liable for payment of the rent notwithstanding that he claims that by reason of defects in the premises he had not had full beneficial occupation of them. In such circumstances the landlord is not required to claim some sort of quantum meruit based upon the actual value of occupation to the tenant. He is entitled to claim the full amount of the rent. It is then open to the tenant to establish a claim for set-off or a counter-claim for damages”

[78] From the authorities mentioned at paragraphs [76] and [77] supra, it is clear they all say the same thing, and that is, that if you are in occupation of the premises and use them, whether it has defects or not, then you must pay rental. The lease agreement further indemnifies the applicant against any purported damages claim for loss of profits. This is clear from clauses 16.1 and 16.4. Clauses 10.7 and 13 of the lease agreement also do not support the defence of the respondents and accordingly I find that the third defence fails and is dismissed.

[79] As regards the fifth defence, the deed of surety which was attached to the supplementary affidavit resisting summary judgment binds the second respondent as it is clear that the trading name for which the second respondent signed surety is TOPS Fourways Gardens. Accordingly this fifth defence is not sustainable and is dismissed.

[80] On all the defences raised by the respondents, I find that they can be rejected on the papers as farfetched and untenable.  I do not believe the defences raised are good in law or that the defences appear to be bona fide.

 

COSTS

[81] As regards costs, the applicant’s counsel argued that I should order punitive costs against the respondents on the attorney and client scale.

[82] The counsel representing the respondents did not ask for punitive costs during the address before me and merely requested costs in the cause should I grant leave to defend.

[83] In general a court does not grant attorney and client costs unless there are special grounds. There is no indication that the respondent’s conduct during litigation was reckless or malicious. Accordingly such a request for punitive costs is denied.

 

ORDER

[84] In the premises the following order is made;

Having heard counsel for the applicant and having considered the matter, summary judgment is granted in favour of the applicant against the respondents jointly and severally, the one paying the other to be absolved as follows:

1. The first and second respondents shall pay the applicant, jointly and severally (the one paying the other to be absolved), the sum of R389 607.02 plus interest thereon at the rate of 2% plus prime rate that the applicant’s bankers charge on overdraft facilities;

2. The relief claimed in claims 2 and 3 is postponed sine die,

3. The first and second respondents will pay the costs, the one paying the other to be absolved.

 

 

_______________________

D DOSIO

ACTING JUDGE OF THE HIGH COURT

 

 

Appearances:

On behalf of the Applicant: Adv C Van Der Merwe

Instructed by KG Tserkezis Attorneys

On behalf of the Respondents: Adv Du Toit

Instructed by Grosskopf Attorneys

Heard on the 29^th May 2019

Judgment handed down on the  2^nd of September 2019

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