Ocean Echo Properties 327 CC and Another v Old Mutual Life Assurance Company (South Africa) Ltd

• Jurisdiction: South Africa
• Citation: 2018 (3) SA 405 (SCA)

Ocean Echo Properties 327 CC and Another v Old Mutual Life Assurance Company (South Africa) Ltd
2018 (3) SA 405 (SCA)

2018 (3) SA p405

Citation	2018 (3) SA 405 (SCA)
Case No	288/2017; [2018] ZASCA 9
Court	Supreme Court of Appeal
Judge	Ponnan JA, Willis JA, Saldulker JA, Mothle AJA and Hughes AJA
Heard	March 1, 2018
Judgment	March 1, 2018
Counsel	PJ Tredoux for the appellants.; H Murray SC for the respondent.

Flynote : Sleutelwoorde

Practice — Pleadings — Exception — If upheld, then ordinarily leave to be granted to amend pleading. C

Headnote : Kopnota

Old Mutual [*] issued summons for rental; Ocean [*1] (the tenant) and Mr Giannaros (Ocean's surety) pleaded; and Old Mutual excepted to the plea. The High Court upheld the exception, struck out the plea, and granted judgment. Ocean and Giannaros appealed to the full court; it dismissed the appeal; and they appealed to the Supreme Court of Appeal. It upheld the appeal: D

•

When an exception to a pleading was upheld, ordinarily, a court ought to grant leave to amend the pleading. This, unless there was good reason why it was unamendable. Here, there was none. (See [8].)

•

The plea disclosed a defence: a tacit agreement terminating the written lease sued on. The tacit agreement was evidenced, inter alia, by Ocean vacating the premises; and the rental sued for was from after that time. E (See [3], [10] – [11] and [15].)

The full court's order set aside, and substituted with an order: setting aside the High Court's order, and replacing it with an order dismissing Old Mutual's exception (see [17]).

Cases cited

Constantaras v BCE Foodservice Equipment (Pty) Ltd 2007 (6) SA 338 (SCA): F referred to

Dharumpal Transport (Pty) Ltd v Dharumpal 1956 (1) SA 700 (A): referred to

Ferreira and Another v SAPDC (Trading) Ltd 1983 (1) SA 235 (A): applied G

Group Five Building Ltd v Government of the Republic of South Africa (Minister of Public Works and Land Affairs) 1993 (2) SA 593 (A): referred to

Klub Lekkerrus/Libertas v Troye Villa (Pty) Ltd and Others [2011] 3 All SA 597 (SCA): referred to

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

Lewis v Oneanate (Pty) Ltd and Another 1992 (4) SA 811 (A): referred to

Peters and Others NNO v Schoeman and Others 2001 (1) SA 872 (SCA): referred to

Picbel Groep Voorsorgfonds (in Liquidation) v Somerville, and Related Matters 2013 (5) SA 496 (SCA) ([2013] 2 All SA 692): dictum in para [7] applied

Stadium on Main Investments (Pty) Ltd v Dr A Ahmad WCC 3742/2010: I applied

2018 (3) SA p406

Stewart A and Another v Botha and Another 2008 (6) SA 310 (SCA): referred to

Telcordia Technologies Inc v Telkom SA Ltd 2007 (3) SA 266 (SCA) (2007 (5) BCLR 503; [2007] 2 All SA 243): referred to

Trustees, Bus Industry Restructuring Fund v Break Through Investments CC and Others 2008 (1) SA 67 (SCA): dictum in para [11] applied

Trustees, B Two Oceans Aquarium Trust v Kantey & Templer (Pty) Ltd 2006 (3) SA 138 (SCA) ([2007] 1 All SA 240; [2005] ZASCA 109): referred to

Vermeulen v Goose Valley Investments (Pty) Ltd 2001 (3) SA 986 (SCA) ([2001] 3 All SA 350): referred to.

Case Information

PJ Tredoux for the appellants.

H C Murray SC for the respondent.

An appeal from the Western Cape Division, Cape Town (Hlophe JP, Henney J and Cloete J).

Order

(1)

D The appeal succeeds with costs.

(2)

The order of the full court is set aside and replaced by:

'(a)

The appeal succeeds with costs.

(b)

The order of the court below is set aside and substituted with:

''The E exception is dismissed with costs.'

Judgment

Ponnan JA (Willis JA, Saldulker JA, Mothle AJA and Hughes AJA concurring):

[1] F This is an appeal against a judgment granted in the Western Cape Division of the High Court, Cape Town, by Le Grange J against the appellants, Ocean Echo Properties 327 CC (Ocean Echo) and Mr Angelo Giannaros, in favour of the respondent, Old Mutual Life Assurance Company (South Africa) Ltd (Old Mutual), in an action brought by the latter, as plaintiff, against Ocean Echo, as the first G defendant, and Mr Giannaros, as the second.

[2] Old Mutual's case was founded against:

(a)

Ocean Echo upon a written agreement of lease concluded on 11 November 2008 in terms of which Old Mutual let to Ocean Echo business premises described as Shop 3 Cartwrights Corner, situated H at the corner of Darling and Adderley streets, Cape Town (the premises); and

(b)

Mr Giannaros upon a deed of suretyship executed by him on 29 October 2008 in terms of which he 'bound himself as surety and co-principal debtor . . . to [Old Mutual] for the due and proper fulfilment of all the obligations of [Ocean Echo]' under the lease I agreement.

[3] Asserting that Ocean Echo was in arrears in respect of payments due under the lease agreement, Old Mutual caused summons to be issued against both appellants. The plea raised by the appellants to the J summons was, inter alia, that:

2018 (3) SA p407

Ponnan JA (Willis JA, Saldulker JA, Mothle AJA and Hughes AJA concurring)

'The [Defendants] admit having entered into the lease; however aver A that the lease was tacitly terminated upon the Defendant's vacating the [premises] in December 2011, at which time the [Defendants] were not in arrears in respect of rent, rates or any other charges. The Plaintiff was well aware that the [Defendants] had vacated the [premises], as the Plaintiff began receiving rental, rates and other expense payments from the new tenant, Nandipha Solomon. The Plaintiff no longer sent the B Second Defendant rental statements, but sent such statements to Solomon. By allowing Solomon occupancy and use of the [premises] and by receiving rental, rates and other payments from Solomon, the Plaintiff acknowledged a tacit lease between itself and Solomon.

. . .

The [Defendants] were neither tenants nor occupants of the [premises] C during the period for which the alleged arrears are claimed. The tenant during this period, Nandipha Solomon is liable for the arrears, as per her tacit lease with the Plaintiff.

. . .

The Second Defendant admits having signed the surety as averred, D however points out that the suretyship terminated upon tacit termination of the lease agreement in December 2011.

. . .

Neither the First nor Second Defendant can be held liable for Solomon's obligations as per the tacit lease with the Plaintiff.' E

[4] The plea was met with the following exception:

'1.

The Plaintiff's claim against the First Defendant is for arrear rental and other charges (''the Arrears) due to the Plaintiff by the First Defendant in terms of a written agreement of lease (''the Lease).

2.

All of the Arrears arose during the period of the Lease. F

3.

The Lease contains, inter alia, the following provisions:

3.1

The First Defendant is precluded from giving up possession of the leased premises, or any part thereof, without the Plaintiff's prior written consent (clause 13.1).

3.2

The Lease contains all of the terms and conditions of the G agreement between the Plaintiff and...