Transnet Ltd v National Pride Trading 39 (Pty) Ltd

• Jurisdiction: South Africa
• Judge: Msimang J
• Judgment Date: 26 September 2008
• Docket Number: 4208/2008
• Court: Durban and Coast Local Division
• Hearing Date: 06 September 2008
• Citation: 2009 JDR 0230 (D)

Msimang J:

The applicant is a public company duly registered and incorporated with limited liability and trading as Transnet National Ports Authority. During October 1998 and January 1999 the applicant concluded a lease agreement with J & I Container Depot CC ("J & I) in terms of which the applicant leased to J & I a certain property ("the property"). In terms of the said agreement the lease would commence on 1 August 1998 and would thereafter continue for a fixed period of ten (10) years terminating on 31 July 2008. Clause 18.1 of the agreement reads as follows :-

"18.1

The lessee shall not have the right to cede or assign, mortgage or sublet or otherwise dispose of or in any way hypothecate this lease or the premises or any portion thereof, without the prior written consent of the lessor."

2009 JDR 0230 p2

Msimang J

After initially taking occupation of the property, in due time J & I fell into dire financial straits and could not meet the demands placed on it in respect of its monthly rental obligations to the applicant. After having assured the respondent that all formalities had been complied with, J & I agreed to cede its right, title and interest in the agreement with the applicant to the respondent. After such purported cession, the respondent took occupation of the property and operated its business thereon involving the storage of containers. It avers that it had to conduct extensive earthworks in order to render the property suitable for the storage of containers and that, for that purpose, it was involved in an outlay of approximately R1 400 000.00

It would appear that, notwithstanding the assurances which J & I had given to the respondent, there had been non-compliance with the provisions of clause 18.1 during the said purported cession and that the applicant's prior written consent contemplated in that clause had not been obtained. It was for that reason that, on 18 August 2005, the applicant despatched a letter to J & I placing it on record that such non-compliance amounted to a breach of the agreement, in terms of the provisions of clause 28.3 of the agreement, requiring J & I to remedy the said breach within a period of thirty (30) days and, in the event of failure by J & I to remedy the breach within the period, threatening to terminate the agreement and to proceed with eviction proceedings. Two further letters couched in similar terms were written to J & I by applicant's attorneys, one dated 22 December 2005 and the other dated 12 July 2006. Notwithstanding this correspondence, J & I never remedied

2009 JDR 0230 p3

Msimang J

the breach neither did the applicant ever implement its threat...