Brink v The Premier of The State Province

• Jurisdiction: South Africa
• Judge: Wright J
• Judgment Date: 13 November 2007
• Docket Number: 3167/07
• Court: Orange Free State Provincial Division
• Hearing Date: 01 November 2007
• Citation: 2008 JDR 1062 (O)

Wright J:

[1]

The applicant in this matter, which concerns the interpretation of a second option in a lease agreement, is Lois Brink and respondents respectively the Premier of the Free State Province and the MEC for the Department of Public Works, Roads and Transport.

[2]

The applicant requests a declaratory order declaring her exercising the said option contained in a written lease

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between her and the Provincial Government concluded on 3 November 1997 to be lawful and legally binding, and further declaring her renewal of lease for the period from 1 October 2007 to 30 September 2012 to be valid. She also requests a mandamus ordering the respondents to comply with their obligations in terms of the extended lease and to pay the costs of the application jointly and severally on an attorney and client scale.

[3]

Although there is a dispute between the parties whether annexure. "LB8" to the replying affidavit or annexure "MM1" to the opposing affidavit constitutes the lease, it is common cause that the lease has been concluded and implemented for 10 years, and that the relevant clause which has to be interpreted is contained in both the abovementioned documents.

[4]

The lease, which was entered into after a public tender process, made provision for an initial period of five years from 1997 to 2002 and for two further options in respect of two further consecutive periods of five years.

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[5]

The applicant duly informed the second respondent that she was exercising the first option with regard to the period from 2002 to 2007, and applicant therefore leased the property described as "the Pleasure Resort at Jim Fouche" until the 30th September 2007.

[6]

On the 29th January 2007 the applicant forwarded a letter by facsimile to the second respondent exercising her second option to extend the lease for the further five years from 1 October 2007 to 30 September 2012. The letter contains the following paragraph:

"It is my view that the options contained in the agreement are such that the second option which I hereby exercise, will be on the same terms and conditions as contained to in the existing agreement of lease, including the annual escalation of rentals. There is in my opinion thus no other conditions to be negotiated."

[7]

The second respondent replied on the 2nd February 2007 to this missive succinctly stating:

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"4.

Please be advised that as we did the previous year whereby we gave notice that the Department will not renew or extend the leave (sic)."

[8]

A further letter dated 13 February 2007 sent by applicant's attorney contained the following passage:

"Kindly advise as to the possibility of having a round table discussions regarding the renewal of the lease for the final period of 5 years, failure which our client will have to approach the High Court with an Application for a Declaratory Order as to her right of a further extention in terms of the existing agreement."

The letter was marked "WITHOUT PREJUDICE", but attached to the applicant's founding affidavit.

[9]

A final reminder elicited the following response from the second respondent:

" ... there is no second option to be exercised by your client. Alternatively, the Department does not consider itself bound by the second option if it does not exist at all."

Accordingly the present application was lodged.

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[10]

Although both parties referred to other disputed reasons why the application should succeed or fail, (e.g. the applicant referring to an amount of two million rand spent in upgrading the resort and respondent referring to an offer of more than double the existing rental) their counsel both agree that these (and various other aspects) are irrelevant and that the actual dispute between the parties relates to the question whether applicant could unilaterally renew the lease. They also are ad idem that this question depends on the interpretation of the relevant clause in the agreement.

[11]

The clause in question reads as follows:

"The LEASE is for a period of five (5) years from 1 October 1997 to 30 September 2002, with the proviso that the LESSEE shall have an option to extend the lease period for a period of five (5) years with a second option of 5 years on the same and/or new conditions as will be mutually agreed, excluding a further right to renewal. The LESSEE shall give written notice to the LESSOR six (6) months in advance of his or her intention to renew the contract and all negotiations with regard to the renewal of the contract shall be concluded four (4) months before the initial contract lapses. If the LESSEE does not give written notice six

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(6) months before the contract lapses or if all negotiations are not concluded four (4) months before the contract lapses, this option to renew expires." (My underlining.)

[12]

Before setting out the arguments of both legal representatives with regard to the interpretation of the above clause, which mainly relates to the interpretation of the words "and/or" and whether mutual agreement is necessary before the option can be exercised, it is necessary to refer shortly to certain applicable principles.

[13]

The basic rule for interpreting contracts has been set out as follows in COOPERS & LYBRAND AND OTHERS v BRYANT 1995 (3) SA 761 (A) at 767E - 768E:

"According to the 'golden rule' of interpretation the language in the document is to be given its grammatical and ordinary meaning, unless this would result in some absurdity, or some repugnancy or inconsistency with the rest of the instrument ... The mode of construction should never be to interpret the particular word or phrase in isolation (in vacuo) by itself ... The correct approach to the application of the 'golden rule' of

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interpretation after having ascertained the literal meaning of the word or phrase in question is, broadly speaking, to have regard:

(1)

to the context in which the word or phrase is used with its interrelation to the contract as a whole, including the nature and purpose of the contract ...;

(2)

to...