Locke v Centracom Property Investments (Pty) Ltd

• Jurisdiction: South Africa
• Judge: Kumleben J
• Judgment Date: 22 November 1984
• Citation: 1985 (2) SA 116 (N)
• Hearing Date: 16 November 1984
• Court: Natal Provincial Division

Kumleben J:

The defendant excepted to plaintiff's particulars of claim on the ground that they do not disclose a cause of action. The following are the relevant allegations in them. E Plaintiff, as substituted lessee, and defendant, as lessor, were parties to an agreement of lease in respect of certain restaurant premises. Clause 31 of the lease states that:

"The lessee shall not, without the written consent of the landlord first having been obtained, sublet the premises nor cede or assign this lease in whole or in part, nor shall he permit or allow any other person or persons whomsoever, whether as licensee, agent, occupier, custodian or otherwise, to enter F into possession and/or to obtain occupation of the leased premises or portion thereof for either a definite or indefinite period or at all. Such consent shall not unreasonably be withheld."

Plaintiff sold the business conducted on the premises to a third party. In terms of the deed of sale the purchaser undertook to apply forthwith for a cession of the lease. It G provided further that in the event of the lease not being ceded the sale "shall thereupon be cancelled". Defendant refused to consent to the cession. Such refusal was unreasonable. This resulted in the purchaser cancelling the sale as it was entitled to do. Plaintiff subsequently sold the business to someone else for a lesser sum. In this instance the defendant did consent to the required cession. The unreasonable H refusal to consent to the cession in respect of the first sale was a breach of a material term of the lease. Thus, it is alleged, plaintiff is entitled to claim damages from defendant, being the difference between the two purchase prices.

A term of the contract is a provision which "imposes a contractual obligation on a party to act, or to refrain from I acting, in a particular manner" (Design and Planning Service v Kruger 1974 (1) SA 689 (T) at 695D). The main argument in support of the exception is that clause 31, and more particularly the last sentence thereof, is not such a term. The essential purpose of such a clause, whether stated in positive or negative form, is to confer upon the lessee a right, the right to cede, but subject to the consent of the lessor, and J with a proviso added that such consent shall

Kumleben J

A not be unreasonably withheld. Thus construed - and the Courts have consistently held this to be the proper interpretation to be placed upon such a clause - a contractual obligation not to refuse consent unreasonably cannot be implied from, or read into what is no more than a proviso or qualification. The passage from R v Dibdin 1910 AC B 57, quoted in Mphosi v Central Board for Co-operative Insurance Ltd 1974 (4) SA 633 (A) at 645, though both Courts were concerned with the effect of a proviso in a statute...