Airports Company South Africa Ltd v Airport Bookshops (Pty) Ltd t/a Exclusive Books

• Jurisdiction: South Africa
• Judgment Date: 27 September 2016
• Citation: 2017 (3) SA 128 (SCA)

Airports Company South Africa Ltd v Airport Bookshops (Pty) Ltd t/a Exclusive Books
2017 (3) SA 128 (SCA)

2017 (3) SA p128

Citation	2017 (3) SA 128 (SCA)
Case No	945/2015; [2016] ZASCA 129
Court	Supreme Court of Appeal
Judge	Lewis JA, Shongwe JA, Willis JA, Zondi JA and Potterill AJA
Heard	September 12, 2016
Judgment	September 27, 2016
Counsel	A Bava (with N Mbelle) for the appellant.; A Subel SC (with JJ Meiring) for the respondent.

Flynote : Sleutelwoorde B

Lease — Termination — Lease for undetermined period — Notice of termination — C Reasonable notice — What constitutes — Lease must be interpreted to determine whether notice reasonable, having regard to factual matrix and commercial sensibilities — In circumstances of present case, lessor not proving that six weeks' advance notice of termination of month-to-month lease reasonable.

Headnote : Kopnota

The appellant (Acsa) had given the respondent (Exclusive) six weeks' advance notice of termination of a written lease agreement extending — on D a month-to-month basis — their fixed-term lease agreement which was soon to expire. This was after Exclusive had failed to secure a new lease for the premises in a competitive bidding process. During the notice period Exclusive brought an application to review Acsa's bidding process, claiming E it was tainted by illegality; and after expiry of the notice period Acsa applied for Exclusive's eviction, claiming it had lawfully terminated the lease.

This case concerns Acsa's appeal against the High Court's dismissal of the latter application. The factual dispute in the eviction application centred on the interpretation of a letter recording the extension of the fixed-term lease, more particularly the meaning of the phrase 'month on month'. The version F advanced in Acsa's founding affidavit was that it meant that the lease was a monthly tenancy, terminable on one month's notice, so that six weeks' notice was reasonable. Exclusive's version as per their answering affidavit — uncontested in Acsa's replying affidavit — was that reasonable notice, in the circumstances of the case, meant reasonable notice upon a valid tender process being finalised. In its replying affidavit Acsa did not controvert any G aspect of Exclusive's version as set out its answering affidavit.

Held

Whether the lease was terminable on a month's notice or on reasonable notice depending on the circumstances, depended on the interpretation of the lease extension itself. (Paragraph [14] at 133H – 134B.)

When claiming eviction, a lessor must prove lawful termination of a lease. Acsa H alleged a lease and a termination; it was therefore incumbent on it to prove valid termination. The common law imposed a duty on a lessor to give a lessee reasonable notice of termination of a periodic or open-ended lease, eg a month-to-month lease. Whether the notice given by Acsa to Exclusive was reasonable in the circumstances depended on the interpretation of the extension agreement, having regard to the factual matrix and commercial sensibilities. I (Paragraphs [20] – [21], [24] and [26] at 135C – F, 136B – E and 137B – D.)

The result of applying the Plascon-Evans rule to the fact that Acsa did not contest Exclusive's version in its replying affidavit, or attempted to show that Exclusive's interpretation was in any way implausible or not credible, was that Exclusive's challenge of the tender award fell to be considered on Exclusive's version alone. And what Exclusive said it contemplated was J entirely plausible and credible and made complete commercial sense of the

2017 (3) SA p129

extension agreement. In all the circumstances, Acsa did not prove that it had A a right to terminate the lease with Exclusive on one month's notice. (Paragraphs [14], [22], [26] and [28] at 133H – 134B, 135F – H, 137B – D and 137G – J.)

Cases cited

Southern Africa B

Airports Company South Africa Ltd v Airport Bookshops (Pty) Ltd t/a Exclusive Books 2016 (1) SA 473 (GJ): confirmed on appeal

AM Paruk v Hayne & Co (1906) 27 NLR 380: referred to

Bastian Financial Services (Pty) Ltd v General Hendrik Schoeman Primary School 2008 (5) SA 1 (SCA) ([2008] ZASCA 70): referred to

Boompret Investments (Pty) Ltd and Another v Paardekraal Concession Store (Pty) Ltd C 1990 (1) SA 347 (A): referred to

Boshoff v Union Government 1932 TPD 345: referred to

Botha v Coopers & Lybrand 2002 (5) SA 347 (SCA): referred to

Byers v Chinn and Another 1928 AD 322: referred to

Cape Coast Exploration Ltd v Scholtz and Another 1933 AD 56: referred to

Chetty v Naidoo 1974 (3) SA 13 (A): dictum at 20C – H applied D

City of Cape Town (CMC Administration) v Bourbon-Leftley and Another NNO 2006 (3) SA 488 (SCA) ([2006] 1 All SA 561; [2005] ZASCA 75): referred to

Ekurhuleni Metropolitan Municipality v Germiston Municipal Retirement Fund 2010 (2) SA 498 (SCA) ([2009] ZASCA 154): dictum in para [13] applied

Fulton v Nunn 1904 TS 123: referred to E

Joel Melamed and Hurwitz v Cleveland Estates (Pty) Ltd; Joel Melamed and Hurwitz v Vorner Investments (Pty) Ltd 1984 (3) SA 155 (A): referred to

Karim v Baccus 1946 NPD 721: referred to

Konstanz Properties (Pty) Ltd v Wm Spilhaus en Kie (WP) Bpk 1996 (3) SA 273 (A) ([1996] ZASCA 28): referred to

KPMG Chartered Accountants (SA) v Securefin Ltd and Another 2009 (4) SA 399 (SCA) F ([2009] 2 All SA 523; [2009] ZASCA 7): referred to

Masstores (Pty) Ltd v Murray & Roberts Construction (Pty) Ltd and Another 2008 (6) SA 654 (SCA) ([2008] ZASCA 94): referred to

Millennium Waste Management (Pty) Ltd v Chairperson, Tender Board: Limpopo Province and Others 2008 (2) SA 481 (SCA) (2008 (5) BCLR 508; [2008] 2 All SA 145; [2007] ZASCA 165): dictum in para [23] applied G

Millennium Waste Management (Pty) Ltd v Chairperson, Tender Board: Limpopo Province and Others 2008 (2) SA 481 (SCA) (2008 (5) BCLR 508; [2008] 2 All SA 145; [2007] ZASCA 165): referred to

Myaka v Havemann 1948 (3) SA 457 (A): dictum at 465 applied

Natal Joint Municipal Pension Fund v Endumeni Municipality 2012 (4) SA 593 (SCA) ([2012] 2 All SA 262; [2012] ZASCA 13): dictum in H para [18] applied

National Director of Public Prosecutions v Zuma 2009 (2) SA 277 (SCA) (2009 (1) SACR 361; 2009 (4) BCLR 393; [2008] 1 All SA 197; [2009] ZASCA 1): referred to

Newcastle Collieries Co Ltd v Borough of Newcastle 1916 AD 561: referred to

North East Finance (Pty) Ltd v Standard Bank of South Africa Ltd 2013 (5) SA 1 (SCA) I ([2013] ZASCA 76): dictum in paras [24] – [25] applied

Novartis SA (Pty) Ltd v Maphil Trading (Pty) Ltd 2016 (1) SA 518 (SCA) ([2015] ZASCA 111): dictum in paras [27] – [31] applied

Pemberton NO v Kessell 1905 TS 174: referred to

Phillips v SA Reserve Bank 2013 (6) SA 450 (SCA) ([2012] 2 All SA 518; 2012 (7) BCLR 732): referred to J

2017 (3) SA p130

Plascon-Evans Paints Ltd v Van Riebeeck Paints (Pty) Ltd 1984 (3) SA 623 (A) ([1984] ZASCA 51): dictum at 634E – 635D applied A

Rhoode v De Kock and Another 2013 (3) SA 123 (SCA) ([2012] ZASCA 179): referred to

Sentinel Mining Industry Retirement Fund and Another v Waz Props (Pty) Ltd and Another 2013 (3) SA 132 (SCA) ([2012] ZASCA 124): referred to

Sitterding v Hermon Piquetberg Lime Co Ltd 1921 CPD 439: referred to

Tiopaizi v Bulawayo Municipality 1923 AD 317: dictum at 326 applied B

Union Wine and Spirit Corporation Ltd v Ferreira 1948 (2) SA 647 (O): referred to

Van Wezel v Van Wezel's Trustee 1924 AD 409: referred to

Wasmuth v Jacobs 1987 (3) SA 629 (SWA): dictum at 637B – C applied

Wightman t/a JW Construction v Headfour (Pty) Ltd and Another 2008 (3) SA 371 (SCA) ([2008] 2 All SA 512; [2008] ZASCA 6): referred to C

Wright v Wright and Another 2015 (1) SA 262 (SCA): referred to.

England

Reigate v Union Manufacturing Co (Ramsbottom) Ltd & Elton Cap Dyeing Co Ltd [1918] 1 KB 592 (118 LT 483; [1918 – 19] All ER Rep 143): referred D to.

Case Information

A Bava (with N Mbelle) for the appellant.

A Subel SC (with JJ Meiring) for the respondent.

An appeal from the Gauteng Local Division of the High Court, Johannesburg E (Dodson AJ). [*] The appeal was dismissed with costs (see order at [29]).

Judgment

Lewis JA (Shongwe JA, Zondi JA and Potterill AJA concurring):

[1] The appellant, Airports Company South Africa Ltd (Acsa), entered F into a lease in respect of premises at the OR Tambo International Airport, Johannesburg, with the respondent, Airport Bookshops (Pty) Ltd t/a Exclusive Books (Exclusive), in March 2009. The contract followed a tender process and was for a period of five years, backdated to 1 September 2008, terminating on 31 August 2013. Exclusive successfully G ran a bookstore at the premises for the full period of the lease.

[2] By mid-August 2013 Acsa had still not started the process necessary for the renewal of the lease or the award of a new tender, either to Exclusive or anyone else. Accordingly, on 15 August 2013, after some negotiation, Acsa and Exclusive signed an agreement that recorded:

'We refer to previous negotiations regarding the extension of the . . . H lease agreement that expires on 31 August 2013.

The said lease agreement is, notwithstanding anything to the contrary contained in the relevant agreement, hereby renewed on month on month at the minimum monthly rental of R585 761,70 excluding VAT.

I This letter will form an integral part of the above lease agreement but it does not waive, extend or change any of the terms and conditions of the lease agreement, except as herein stated.' [My emphasis.]

[3] Exclusive remained in occupation of the premises and continued to trade there. When Acsa issued a request for bids in respect of the

2017 (3) SA p131

Lewis JA

premises on 4 December 2013, Exclusive submitted a bid, in effect to A remain the lessee, before the deadline for submission in January 2014. In June 2014...