Genac Properties JHB (Pty) Ltd v NBC Administrators CC (Previously NBC Administrators (Pty) Ltd)

• Jurisdiction: South Africa
• Judge: Botha JA, Hefer JA, Milne JA, Van den Heever JA and Nicholas AJA
• Judgment Date: 29 November 1991
• Citation: 1992 (1) SA 566 (A)
• Hearing Date: 12 November 1991
• Court: Appellate Division

Nicholas AJA:

This appeal concerns the interpretation of a clause in an J agreement of lease. The parties were Genac Properties Jhb (Pty) Ltd (a

Nicholas AJA

A company in the General Accident group) as 'the landlord' and NBC Administrators (Pty) Ltd (since re-named NBC Administrators CC) as 'the tenant'. The leased premises consisted of the total lettable area on the second floor of General Building, 110 Jorissen Street, Johannesburg. Clause 3 which was headed 'Period of lease' provided that it should B commence on 1 January 1986 and terminate on 31 December 1990. Clause 5 which was headed 'Rental' stated that the 'rental in respect of the premises shall be as set out in the table below', which provided for rentals increasing from R7 018 in the first year to R9 906,70 in the last year of the lease. The rental was payable monthly in advance to the landlord at 8th Floor, General Building.

C Clause 6 in Part B of the lease reads as follows:

6.1 For the purposes of this clause "the landlord's maintenance and running expenses" means the aggregate of all the landlord's actual and reasonable maintenance and running expenses, after the recovery of such expenses from tenants in the building, in respect of the property and the building in each of the financial years of the D landlord, including, without limiting the generality of the aforegoing, the assessment rates payable in respect of the building and/or the property; any levies of whatever nature imposed in respect of the ownership of immovable property or the improvements erected thereon; the salaries and wages of the landlord's employees in or about or in connection with the building and/or the property, including, without limiting the generality of the aforegoing, security guards, cleaners, parking garage attendants and E manager/supervisor/superintendent; the cost to the landlord of cleaning the building (whether contractual, statutory or otherwise); the premiums payable by the landlord in respect of the insurance of all risks normally covered by owners of immovable property, including loss of rent, public liability and political F riot cover on, in connection with or relating to the building for a total cover as the landlord may reasonably determine; the landlord's costs of maintaining and/or servicing the lifts and/or air conditioning in the building; the costs of electricity consumed on the property and in the building which is not contractually recoverable from tenants; the cost of water consumed on the property and in the building; an amount not exceeding 5% of the aggregate of all of the aforegoing expenses and costs.

6.2 With effect from the commencement date the tenant shall pay monthly G in advance an amount equal to 11,3% of the landlord's estimate of the monthly maintenance and running expenses for each of the landlord's financial years as notified by the landlord to the tenant from time to time, it being recorded that the tenant's share of the estimated monthly maintenance and running expenses at the date of signature hereof is R1,50 per mý per month and that such amount shall be payable pending any variation thereof by the landlord. H

6.3 Within a reasonable period after the end of each financial year of the landlord, the landlord shall determine the maintenance and running expenses for that financial year and within 30 days after notice thereof has been furnished to the tenant, the tenant shall pay to the landlord any shortfall between the amounts paid by the tenant on account of such maintenance and running expenses and the tenant's shares of such expenses, and vice versa.

I 6.4 . . .

6.5 . . .

6.6 . . . '

On 15 April 1987 the landlord issued a summons against the tenant out of the Witwatersrand Local Division in which it made various claims J including claims for 'maintenance and running expenses as defined in the

Nicholas AJA

A agreement of lease'. Further claims were later added by amendment. They included a claim for damages alleged to have been suffered as a result of the tenant's repudiation of the lease in December 1987.

In para 2(b) of its plea the tenant asserted:

'2(b) The lease is void for vagueness in that

(i)

the identity of the tenant;

(ii)

B the premises leased;

(iii)

the plaintiff's maintenance and running expenses as defined in clause 6.1; and

(iv)

the defendant's share of the plaintiff's maintenance and running expenses payable in terms of clause 6.3,

C cannot be determined with reasonable certainty.'

At the pre-trial conference it was agreed that:

'3(a) The only issue to be decided by the Court is whether the lease is enforceable as contended for by the plaintiff or whether it is void for vagueness and invalid as contended for by the defendant in para 3(b) (sic) of its plea.'

D Agreement was also reached on the amount to be awarded to the landlord if it should be found by the Court that the lease was valid and enforceable. It was agreed finally that the original lease would be made available to the Court at the trial and that no evidence would be led by either party. At the hearing the issues were still further limited to those raised in paras 2(b)(iii) and (iv) of the plea.

E In his judgment the learned Judge a quo held inter alia that

'. . . if the provisions of clause 6 are regarded as provisions relating to the payment of rental . . . these provisions and the whole lease are invalid'.

He made an order dismissing the landlord's claims with costs, including the costs of two counsel. The landlord now appeals with the leave of the trial Court. F

Counsel for the tenant summarised his submissions in the first paragraph of his heads of argument:

'1. It is submitted that clauses 6.1 and 6.3 of the lease are void...