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Dormell Properties 282 CC v Edulyn (Pty) Ltd and Another (5880/2009) [2011] ZAWCHC 94 (21 April 2011)

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12] First Respondent failed to pay any further amounts and consequently, in March 2009, the Applicant instituted legal action against the First-and Second Respondents in the Magistrate's Court. Bellville, claiming payment of the arrear rental at that time, in an amount of R91 154.84. Confirmation of the rent interdict relating to Applicant's hypothec for rent was claimed and granted. There was no mention in the Magistrate's court summons of cancellation of the agreement and the eviction of the First Respondent from the shop was not claimed.

13] In its Particulars of Claim in the Magistrate's Court summons the Applicant claimed that the terms contained in its General Terms and Conditions of Lease applied to the agreement between the parties The Magistrate's Court action was opposed by Respondents. I was informed pleadings were filed and a counterclaim instituted on behalf of Respondents, the quantum of which exceeded the Applicant's claim.

14] Shortly prior to service of the summons in the Magistrate's court action, Applicant's attorneys addressed a letter to First Respondent in terms whereof Applicant purported to cancel the lease agreement. First Respondent was requested to vacate the premises immediately, failing which Applicant would proceed with the necessary action It was submitted by the Applicant in its affidavit before this court, that if it was found that the agreement was not validly cancelled on 9 March 2009, the Applicant cancelled the agreement on the date that this application was served on the Respondent.

15] It is common cause that the First Respondent refuses to vacate the premises and remains in occupation thereof.

16] Second Respondent replied on behalf of First Respondent in the application before this court. He submitted that prior to entering into the lease agreement, he had taken trouble to ascertain the viability of the shopping centre. He found that although the proposed rental was higher than the norm in the area, a business could be conducted successfully in the event that the shopping centre was fully let, which would ensure the presence of many customers. This aspect was discussed with Applicant's representative, who assured him that the centre was indeed fully let and that there was a waiting list of eager tenants. He was allowed three days to sign the lease. The representation appeared to be true, regard being had to the contents of a notice board, put up by Applicant on the premises.

17] Second Respondent alleges that this representation was false, to the knowledge of Applicant and that in fact only 40% of the shops in the centre were let at that stage. The representation was allegedly made in order to persuade First Respondent to sign the offer to lease and did so induce First Respondent to sign the offer to lease. If First Respondent had been aware of the true facts, the lease would only have been signed if the rental had been reduced by R 100,00 m², plus VAT, until the centre was fully let. First Respondent alleged that it had suffered damages as a result of the fraudulent misrepresentation of the Applicant.

18] It was pointed out by Second Respondent that several shops in the centre had been vacated and were not subsequently let. It is his view that the Applicant fails to market the premises adequately, if at all. He confirmed his complaints as described in the letter of 5 February, that I referred to above and pointed out again that building at the centre was continuing, causing inconvenience and disruption and created a bad impression to visitors. The bathrooms were utilised by builders and were messy, the underground parking area was unusable due to rubble, resulting in the lessees having to park elsewhere at high cost. The security was not up to standard. There were problems with the electricity supply, etc. Despite discussions, many lessees were experiencing such difficulties that they were not able to pay full rentals and to Second Respondent's knowledge, Applicant had instituted claims for rental or eviction against eight lessees at that time. Considering the number of empty premises in the centre, this figure was high.

19] First Respondent submitted that the only binding terms of the agreement between the parties are contained in the Offer to Lease Premises, which document was signed on behalf of First Respondent. It was argued that the terms contained in the General Terms and Conditions of the Lease, do not bind the First Respondent, since the Applicant failed to sign the copy of this document after it had been altered and signed by Second Respondent.

20] First Respondent submitted that it had not made payment of full rental by March 2009, in view of the many problems experienced by it It was further submitted that First Respondent was legally entitled to remit the rental previously agreed upon, in view of the fact that Applicant had not complied with its obligations in terms of the agreement.

21] First Respondent alleged that it had paid a reduced amount of rental to its attorney of record, to be held in trust by him, pending the finalisation of Applicant's action instituted in the Magistrate's Court. Second Respondent, in an affidavit filed at court, dated February 2011, informed the court that the business conducted on the premises is the First Respondent's only source of income and, due to Applicant's fraudulent misrepresentation, this business is conducted at a financial loss In the premises, since March 2009, it had continued to pay 50% of the agreed rental in a specially designated account The credit balance in this special account was R 487,87966 by February 2011. Applicant did not challenge the veracity of this statement. I was advised in court that the reason for the payment in this manner was due to Applicant's refusal to accept any reduced amounts from First Respondent

22] First Respondent denies that Applicant is entitled to cancel the agreement and submits that the notice of purported cancellation was defective since Applicant was not entitled to cancel the agreement without placing First Respondent on terms.

23] First Respondent challenged Applicant's allegation that there was another tenant waiting to let the premises, in circumstances where there were many empty shops in the shopping centre It was speculated that this claim was made falsely to create urgency in the application for eviction in this court. This aspect was not denied by Applicant in replying documentation and was not canvassed at the hearing of the matter, two years later.

24] In March 2009 this court ordered that the urgent eviction application be removed from the roll with costs. The matter was later set down for hearing on 2 February 2011, on which date I was advised that the action that had been instituted in the Magistrate's Court was part heard and was due to continue in March 2011.

25] It was pointed out and argued on behalf of the Respondents that the same Applicant had instituted a claim against the same Respondents in the Magistrate's Court, Bellville, pertaining to the same issue, namely the liability to pay rental allegedly due by First Respondent to Applicant. Applicant had, however, failed to apply for the eviction order in the Magistrate's Court, as it could have. Applicant raised the aspect of lack of jurisdiction in this regard, which allegation is contradictory to the General Terms and Conditions of the Lease that Applicant itself relies on. (Clause 29)

26] It was also argued by Respondents that for a proper adjudication of the matter certain factual disputes had to be resolved, which could only be resolved during the hearing of oral evidence. Such oral evidence has been heard and will continue in the Magistrate's Court. In the circumstances, it was submitted, the Magistrate's Court is in the best position to make an order in this matter.

27] Aspects where there would be reliance on evidence includes the aspect of fraudulent misrepresentation by Applicant and whether or not such misrepresentation, if it happened, entitled First Respondent to payment of a reduced rental. Another aspect for decision after hearing evidence, is exactly which terms and conditions bind First Respondent. This is allegedly an aspect that the Magistrate has made an interim finding on. in favour of the Respondents.

28] In essence the Respondents argue that the Applicant is in breach of its obligation to deliver the benefits for which First Respondent contracted. The lessor is obliged to fulfil all obligations which he expressly or impliedly undertook to fulfil and as such is obliged to make available the use and enjoyment of the rented premises, fit for the purpose for which it was let. Respondents also allege that the purported cancellation of the agreement was defective and as such invalid.

29] On behalf of Applicant it was submitted that the essence of its case is that it legitimately cancelled the agreement with First Respondent on 9 March 2009 It was conceded that Applicant has to establish a clear nght to succeed with a final eviction order, which in turn depends on whether Applicant's cancellation was good in law.

30] Applicant argued further that one of the crisp issues to be decided in this matter is whether the General Terms and Conditions of the Landlord's Agreement of Lease, formed part of the agreement between the parties. Applicant submitted that if the Court were to find that the General Terms and Conditions of the Landlord's Agreement of Lease formed part of the agreement between the parties, it would dispose of all the First Respondent's defences. If the Court should find against the Applicant on this point, 'it is the end of the matter'.

31] While dealing with the issue of disputed facts. Applicant referred to the test laid down by Plascon-Evans Paints Ltd v Van Riebeeck Paints (Pty) Ltd 1984(3) SA 623 (A) and argued that there were exceptions to the rule laid down in that case. The Court has to establish if disputes are genuine, or whether they are far-fetched Disputed facts need to be unambiguously addressed. Applicant argued that its version should be accepted as First Respondent's version did not comply with legal qualifications.

32] Applicant, in its heads of argument, admits that an 'essential question' is whether the First Respondent was entitled to reduce or set-off or withhold its own performance. It relied on the General Terms and Conditions of the Landlord s Agreement of Lease for its argument that First Respondent is not entitled to reduce payment. It is its contention that, due to the wording of the General Terms and Conditions. First Respondent was obliged to pay. regardless of whether or not Applicant performed its obligations Applicant's argument is that First Respondent's remedy is a claim for damages against the Applicant.

33] Ultimately, I am faced with various defences to an order of eviction First Respondent alleges that it is entitled to pay a reduced rental to Applicant in view of Applicant's fraudulent misrepresentation, inducing First Respondent to enter into an agreement that it would not have entered into, on the same terms, had it been aware of the true facts. Ascertaining whether and to what extent Applicant has made misrepresentations to First Respondent and whether and to what extent it has not complied with its obligations as lessor, depends on decisions based on disputed facts. Determining whether Applicant legally cancelled the agreement and determining which terms and conditions bind the parties, depends on disputes of fact and law.

34] The Court was advised that the Applicant did not wish to apply for deponents to affidavits to resolve disputed issues by means of oral evidence.

35] It is correct, as argued by the Applicant that the existence of disputes of fact does not necessarily preclude the granting of a final interdict. It depends whether the dispute is real and bona fide and whether the court is persuaded of the inherent credibility of the factual allegations relating to disputed matters, by Applicant. In certain circumstances the court may take a robust approach. However, it has been said that the court should only follow this robust approach with circumspection and should not lightly settle a factual dispute solely by weighing up the probabilities emerging from the papers, without the advantage of viva voce evidence. See Dhladhla v Erasmus, 1999 (1) SA 1065 (LLC) at 1072

36] In my opinion the Court is not able, on the affidavits filed, to decide whether the lessor is in breach of its obligations in respect of the rented premises, or whether a material misrepresentation was made to First Respondent, inducing it to enter into a disadvantageous agreement. I cannot, on the documentation filed, make a finding as to whether or not Applicant is entitled to the full rental claimed by it, entitling it to the eviction of the First Respondent There is before me a dispute of fact on many material issues that I believe should be scrutinised.

37] I am of the view, as stated in Winsor v Dove. 1951 (4) SA42 (N) p42, (agreed with in Essack v Essay 1955(2) SA 407 (N) p 407), that motion proceedings should not be the method of obtaining ejectment relief in the face of disputed facts. The circumstances in which an Applicant may proceed to seek such relief on motion has been laid down in many cases. The appropriateness of motion proceedings should be beyond doubt, before the court will make an order on motion. See R v Bakers (Pty) Ltd v Ruto Bakeries (Pty) Ltd 1948(2)SA 626 at p 630 (T). The court should not be required to decide disputed questions of fact on affidavit, nor should it be required from the court to extract from affidavits sufficient allegations of facts, admitted by a Respondent, to entitle the Applicant to an order.

38] In addition there is the defence of res iudicata/Iis pendens. I am aware that there is a Magistrate's Court action between the same parties about the same main aspect, namely the terms of the agreement between the parties and the amount of rental payable by First Respondent to Applicant, that is part heard and still not finalised.

39] In a recent judgment by the SCA, Sawas Socratous v Grindstone Investments 134 (Pty) Ltd, case no 149/10, delivered on 10 March 2011, the aspect of lis alibi pendens in a matter concerning an eviction, was dealt with. The aspect of failure to pay arrear rental for rented premises and the aspect of pending litigation between the parties to determine the right of the Applicant to cancel the lease, was in issue. It was argued that the application for eviction was premature due to the fact that there were proceedings between the same parties based on the same subject matter relating to the same cause of action. The court emphasised the underlying principle of the defence of lis alibi pendens and referred to Nestle (South Africa ) (Pty) Ltd v Mars Inc 2001 (4) SA542 (SCA) par 16:

'The defence of lis alibi pendens shares features in common with the defence of res judicata because they have a common underlying principle, which is that there should be finality in litigation. Once a suit has been commenced before a tribunal that is competent to adjudicate upon it. the suit must generally be brought to its conclusion before that tribunal and should not be replicated {lis alibi pendens) By the same token the suit will not be permitted to revive once it has been brought to its proper conclusion (res judicata) The same suit between the same parties, should be brought once and finally.'

40] I am informed that the hearing between the parties in the Magistrate's Court has not been finalised. As stated, I was advised that an interim finding has been made by the Magistrate relating to the aspect of the binding terms of the agreement between the parties. As stressed by the SCA in the Grindstone Investments case, referred to above, courts are public institutions under severe pressure. Court rolls do not require further congestion by an unwarranted proliferation of litigation. A landlord is entitled to commence new proceedings based on a fresh notice and subsequent to a dismissal of other proceedings, if he can establish that there has been a change in circumstances warranting the issue of a new notice.

41] Where, at the hearing of motion proceedings, a dispute of fact on affidavit cannot be settled without the hearing of oral evidence, the court may, in its discretion, dismiss the application or order oral evidence to be heard on specified issues, or order the parties to trial. In this matter, the only appropriate order, in the circumstances, is the dismissal of the application.

The application is accordingly dismissed with costs.

E. Steyn, J

21 April 2011