Proud Investments (Pty) Ltd v Lanchem International (Pty) Ltd

• Jurisdiction: South Africa
• Judge: Joubert JA, Hefer JA, Vivier JA, Kumleben JA, Eksteen JA
• Judgment Date: 23 May 1991
• Citation: 1991 (3) SA 738 (A)
• Hearing Date: 19 March 1991
• Court: Appellate Division

Joubert JA:

This is an appeal against a judgment of Labuschagne AJ in the Witwatersrand Local Division dismissing an exception of the appellant to the respondent's plea. C

The appellant is the registered owner of certain immovable property in Rosebank on which a building is situated. On 1 September 1986 the parties entered into a written agreement of lease ('the main lease') in pursuance of which the appellant, as landlord, let to the respondent, as tenant, the entire second floor of the building for administrative D offices together with 24 basement parking bays, as from 1 January 1987 for a period of six years.

It is necessary to refer to those material terms of the main lease which are relevant for purposes of the appeal.

1.

Clause 5 provides for payment during the first year of the lease of rent in the fixed amount of R8 750,82 per month for the second floor of the building and a fixed amount of R65 per month for each E of the parking bays. Provision is also made for a percentage increase of the rent during the second and third years of the lease.

As regards the remaining period of the lease the rate of escalation of the rent is to be determined in accordance with an agreed method of F ascertainment by valuers designated by the parties or, failing agreement by the valuers, by a third party appointed by the South African Council for Valuers.

The parties also entered into a written addendum of lease. In terms thereof the respondent undertook to pay the appellant, during the G currency of the main lease, certain fixed amounts of monthly rent for the use of certain furnishings and fittings effected to the leased premises.

The provisions of clause 5, read in conjunction with the addendum of lease, obviously comply with an essential element of a contract of lease of things (locatio conductio rei ), viz that the rent agreed upon by the parties should be fixed in a definite amount (merces certa ) or H be determinable by a third person in accordance with the maxim: certum est quod certum reddi potest. D 12.1.6, D 45.1.74. See De Groot (1583 - 1645) 3.19.7; Voet (1647 - 1713) 19.2.7; Van der Keessel (1738 - 1816) Ad Gr 3.19.7.

2.

Clause 8 reads as follows:

'8.

I Local authority charges

8.1

The tenant shall pay on demand to the landlord or to the local authority, as the landlord may require, the cost of all -

8.1.1

electric current consumed in the premises;

8.1.2

water consumption, sewerage and effluent charges and sanitary fees and business refuse removal fees levied from time to J time in respect of the premises.

Joubert JA

8.2

A Should any amount referred to in 8.1.2 be levied or assessed in respect of the property and/or the building as opposed to the premises, the tenant shall pay an amount equal to the contribution quota of the total amount levied or assessed.'

3.

Clause 9 provides as follows:

'9.

Rates and other expenses

9.1

B The tenant shall pay the landlord a portion equal to the contribution quota of -

9.1.1

the assessment rates payable in respect of the property and/or the building;

9.1.2

any levies of whatever nature imposed in respect of the ownership of immovable property or in respect of services C supplied to occupiers of immovable property;

9.1.3

the reasonable wages or other costs payable or incurred by the landlord in or about or in connection with the administration, cleaning, maintenance and/or security of the building, the property and the gardens thereon;

9.1.4

D the landlord's reasonable costs of maintaining and/or servicing the lifts, electrical installations, safety and/or fire-fighting equipment in the building;

9.1.5

the landlord's reasonable costs of maintenance of the water reticulation, internal or external finishes, roofs and other items and services essential to the effective and safe functioning of the building and the property. E

9.2

If there is any dispute between the landlord and the tenant concerning the reasonableness of any of the operating costs or as to the amount for which the tenant is liable in terms hereof, such dispute shall be determined by the landlord's auditors acting as experts and not as arbitrators and whose decision shall be final and binding on the parties provided that such auditors shall be obliged, in making such F determination, to have regard to whether the services in respect of which the operating costs are paid have been supplied at fair market cost and to call evidence from such persons as the auditors may regard as being suitably qualified to assist them in making their...