AJP Properties CC v Sello

JurisdictionSouth Africa
Citation2018 (1) SA 535 (GJ)

AJP Properties CC v Sello
2018 (1) SA 535 (GJ)

2018 (1) SA p535


Citation

2018 (1) SA 535 (GJ)

Case No

39302/10

Court

Gauteng Local Division, Johannesburg

Judge

Spilg J

Heard

September 8, 2017

Judgment

September 8, 2017

Counsel

JD Robbertse for the applicant.
MJ Koma
for the respondent.

Flynote : Sleutelwoorde

Eviction — Discretion of court — Common-law discretion of court to stay or suspend execution of eviction order — Commercial property — Cancellation of lease should not, where lessee has complied with its terms, result in demise of tenant's business — Court suspending eviction to afford shopping mall tenant three months to relocate.

Lease — Eviction — Suspension of eviction order — Discretion of court — C Commercial property — Cancellation of lease should not, where lessee has complied with its terms, result in demise of tenant's business — Court suspending eviction to afford shopping mall tenant three months to relocate.

Headnote : Kopnota

The applicant, a shopping mall landlord, sought the eviction of the respondent, D a shop owner with whom it had concluded a standard-form five-year lease in 2010. Since the lease continued beyond its expiry date, clause 2.4 of the lease, which, like the common law, set a one-month notice period, was triggered. On 30 May 2017 the applicant gave the respondent one month's notice, requiring it also to return the property to its original condition. E It appeared that by this time the applicant had already secured a new tenant, Pepkor, for the shop. In its papers the respondent argued that the one-month notice period was contra bonos mores because, inter alia, of the potentially devastating effect eviction would have on the business and its employees.

Held F

While a termination clause that mirrored the common law could never be contra bonos mores, this was not the end of the present enquiry: the court retained a residual common-law power to stay or suspend (but not decline) an eviction order so as to give the tenant a reasonable time to vacate the premises (see [14] – [17], [21]). Secondly, the court had to take account of the commercial realities underlying the balancing of the parties' competing G contractual or other economic interests (see [23], [26]). And, thirdly, the court had to consider inroads made on freedom of contract by the contra bonos mores principle and s 39 of the Constitution (see [28]). The court's powers to stay or suspend were the same whether the eviction was from residential or commercial property. In the latter case a reasonable period was determined by the nature of the commercial activity undertaken and H time required for the tenant to relocate it (see [35]).

Relevant to the court's decision whether to stay the present eviction order were the unequal bargaining power of the parties, the fact that the respondent never breached the lease, and prevailing commercial realities such as that the applicant had negotiated the new lease with Pepkor without informing I the respondent (see [37] – [41]). It was in the interests of justice to shun an applicant who, despite having secured a new tenant, failed to afford the respondent a fair opportunity to relocate when it could have done so (see [42]). The economic reality was that the respondent faced financial ruin if it did not find suitable alternative premises (see [44]). It would be inimical to the interests of justice to compel the respondent to vacate immediately instead of affording it the opportunity of finding suitable alternative J

2018 (1) SA p536

premises A that would serve not only its interests but that of its clientele (see [46]). In all the circumstances real and substantive justice required that the respondent be afforded three clear months to relocate (see [50]). So ordered (see [51]).

Cases cited

Administrator, B Transvaal, and Others v Traub and Others 1989 (4) SA 731 (A): dictum at 756G – 758J applied

Barkhuizen v Napier 2007 (5) SA 323 (CC) (2007 (7) BCLR 691; [2007] ZACC 5): dicta in paras [28] – [30] applied

Beyers and Others v Mlanjeni and Others 1991 (2) SA 392 (C): dictum at 397E – 398F applied

Bhyat's C Departmental Store (Pty) Ltd v Dorklerk Investments (Pty) Ltd 1975 (4) SA 881 (A): referred to

Biowatch Trust v Registrar, Genetic Resources and Others 2009 (6) SA 232 (CC) (2009 (10) BCLR 1014; [2009] ZACC 14): dicta in paras [26] – [28] applied

Business Aviation Corporation (Pty) Ltd and Another v Rand Airport Holdings (Pty) Ltd 2006 (6) SA 605 (SCA) ([2007] 1 All SA 421): compared

City D of Cape Town v Rudolph and Others 2004 (5) SA 39 (C) (2003 (11) BCLR 1236): dictum at 72G – I applied

Eke v Parsons 2016 (3) SA 37 (CC) (2015 (11) BCLR 1319; [2015] ZACC 30): compared

EP du Toit Transport (Pty) Ltd v Windhoek Municipality 1976 (3) SA 818 (SWA): dictum at 819B – F applied

GA E Fichardt Ltd v Brand 1928 OPD 56: applied

Graaff-Reinet Municipality v Mkwane 1950 (3) SA 883 (E): applied

Le Roux v Yskor Landgoed (Edms) Bpk en Andere 1984 (4) SA 252 (T): dictum at 261C – F applied

Lovius and Shtein v Sussman 1947 (2) SA 241 (O): applied

Mokone F v Tassos Properties CC and Another 2017 (5) SA 456 (CC): dictum in para [41] applied

Oatman Properties (Pty) Ltd v Maroun 1973 (3) SA 779 (A): dictum at 785C applied

Paulsen and Another v Slip Knot Investments 777 (Pty) Ltd 2015 (3) SA 479 (CC) (2015 (5) BCLR 509; [2015] ZACC 5): dicta in paras [71] – [72] applied

Phame G (Pty) Ltd v Paizes 1973 (3) SA 397 (A): dictum at 418H – 419B applied

Potgieter and Another v Van der Merwe 1949 (1) SA 361 (A): referred to

R v Sibiya 1955 (4) SA 247 (A): dictum at 261 applied

S v Graham 1975 (3) SA 569 (A): dictum at 576F – 577A applied

S H v Grayston Technology Investments (Pty) Ltd and Another [2016] 4 All SA 908 (GJ): compared

Soja (Pty) Ltd v Tuckers Land and Development Corporation (Pty) Ltd and Another 1981 (2) SA 407 (W): dictum at 411E – F applied

Strime v Strime 1983 (4) SA 850 (C): dictum at 852A – B applied

Van Reenen v Kruger 1949 (4) SA 27 (W): applied

Voortrekker Pers Beperk v Rautenbach 1947 (2) SA 47 (A): applied

Woudstra I v Jekison 1968 (1) SA 453 (T): applied.

Case Information

JD Robbertse for the applicant.

MJ Koma for the respondent.

An application for an eviction order. The application was granted (see J para [50] for the order).

2018 (1) SA p537

Judgment

Spilg J: A

Introduction

[1] AJP Properties CC launched an urgent eviction application against Mr Sello, the sole proprietor of Kempton Gate Pharmacy.

[2] The facts are straightforward. The applicant is the lessor of the Elgin B Shopping Mall in Kempton Park. In December 2010 it concluded a five-year lease with the respondent in respect of premises situated in the mall. In terms of the lease the premises were to be used exclusively as a pharmacy. The premises were identified on an attached plan of the mall.

[3] Although the standard-form lease agreement that was signed made C provision for an option to renew, this clause was excluded from the terms of their agreement. The reason for the renewal clause not being included was not explained and is irrelevant to the determination.

[4] The lease continued beyond its expiry date which triggered the provision of clause 2.4. The clause provides: D

'After the expiry of the period . . . then all the terms and conditions of the lease shall remain in force save that:

2.4.1

the monthly rental shall vary from time to time provided the lessor shall have given the lessee not less than one calendar month's written notice of a change in rental; E

2.4.2

the lease shall be terminable by either party giving to the other one calendar month's written notice of termination.'

[5] The respondent's pharmacy continued to occupy the premises for another one and a half years with rental increases in terms of clause 2.4.1, which allowed for increases on one calendar month's notice. F

[6] However, on 30 May 2017 the applicant gave the respondent one month's written notice of cancellation of the lease, terminating on 30 June. The letter also required the pharmacy to reinstate the premises by dismantling all fixtures and furnishings, all interior building works G and alterations, restoring the ceiling to a flat, lay-in acoustic board ceiling, removing floor coverings, restoring the cement screed to a condition that will receive a floor finish, and removing all stock in trade and advertising signs.

The disputes H

[7] The respondent's initial response, albeit a few days before the date by when he was to vacate (it is however apparent that there were negotiations to provide him with alternative premises within the mall), was to request that he not be evicted from the premises until he could find suitable premises to relocate the pharmacy. A spoliation application was I threatened on the grounds that the pharmacy employs 20 people whose jobs would be affected, that the business was worth R3,5 million and that it would not be possible to vacate within the time allowed. It was also alleged that the applicant was negotiating with the respondent in a manner which created the impression that it would buy his business for that amount, which lulled him into believing that he did not have to find J

2018 (1) SA p538

Spilg J

alternative A premises, and that only a week earlier (ie on about 21 June) an offer was made to the respondent of R1 million which he rejected. It was finally alleged by the respondent that there were other suitable empty premises in the mall which could be utilised without evicting him.

[8] The reply to the letter was a denial of any negotiations to purchase B the business. All that had occurred according to the applicant was a suggestion that the respondent should contact the Pick n Pay pharmacy group to enquire if they were interested but there never was an offer...

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1 practice notes
  • Giving Practical Effect to Good Faith in the Law of Contract
    • South Africa
    • Juta Stellenbosch Law Review No. , May 2019
    • 27 May 2019
    ...s Leisure Holdings (Pt y) Ltd v Southern Sun Hot el Interests (Pty) L td 2017 4 SA 243 (GJ). Also see AJP Propert ies CC v Sello 2018 1 SA 535 (GJ) paras 28 sqq, but the question t here was whether evictio n was warranted. Be adica 231 CC v Trustees, Oregon Unit Trust is dealt with above i ......
1 books & journal articles
  • Giving Practical Effect to Good Faith in the Law of Contract
    • South Africa
    • Juta Stellenbosch Law Review No. , May 2019
    • 27 May 2019
    ...s Leisure Holdings (Pt y) Ltd v Southern Sun Hot el Interests (Pty) L td 2017 4 SA 243 (GJ). Also see AJP Propert ies CC v Sello 2018 1 SA 535 (GJ) paras 28 sqq, but the question t here was whether evictio n was warranted. Be adica 231 CC v Trustees, Oregon Unit Trust is dealt with above i ......

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