United Watch & Diamond Co (Pty) Ltd and Others v Disa Hotels Ltd and Another

• Jurisdiction: South Africa
• Judge: Corbett J
• Judgment Date: 29 August 1972
• Citation: 1972 (4) SA 409 (C)
• Court: Cape Provincial Division

United Watch & Diamond Co (Pty) Ltd and Others v Disa Hotels Ltd and Another
1972 (4) SA 409 (C)

1972 (4) SA p409

Citation	1972 (4) SA 409 (C)
Court	Cape Provincial Division
Judge	Corbett J
Heard	August 22, 1972; August 23, 1972
Judgment	August 29, 1972

Flynote : Sleutelwoorde D

Practice — Judgments and orders — Cancellation or variation of — Who has locus standi to apply for — Nature of legal interest required — Sub-lessees of a company in provisional liquidation have no locus standi to apply for an order setting aside an order authorising E the provisional liquidator to cancel the lease of the premises in which they carry on business.

Headnote : Kopnota

An applicant for an order setting aside or varying a judgment or order of Court must show, in order to establish locus standi, that he has an interest in the subject-matter of the judgment or order sufficiently direct and substantial to have entitled him to intervene in the original application upon which the judgment was given or order granted. What is F required is a legal interest in the subject-matter of the action which could be prejudicially affected by the judgment of the Court.

A sub-tenant has no direct legal interest in proceedings in which the tenant's continued right of occupation is in issue, however much the termination of that right may affect him commercially and financially.

The sub-tenants of a company in provisional liquidation have no locus standi to apply for an order setting aside an order of Court authorising the provisional liquidator to cancel the company's lease of the premises G upon which they are carrying on their businesses.

Case Information

Return day of a rule nisi. The facts appear from the reasons for judgment.

G. Friedman, SA (with him L. R. Dison), for the applicants.

E. M. Grosskopf, S.C. (with him R. G. Comrie), for the respondents. H

Cur adv vult.

Postea (August 29th).

Judgment

Corbett, J.:

On 2nd August, 1972, and upon the application of the first respondent (Disa Hotels Ltd.) my Brother VAN HEERDEN granted

1972 (4) SA p410

Corbett J

an order placing a company known as G.H.C.T. (Pty.) Ltd - hereinafter referred to as 'G.H.C.T.' - under provisional liquidation and issued a rule nisi returnable on 25th August, 1972, in the usual terms. Apart A from the customary directions as to service the remainder of the order reads as follows:

'4.

That the provisional liquidator or liquidators of respondent be and is/are hereby authorised to cancel the lease agreement between respondent and Woolworths Properties (Pty.) Ltd.

5.

That the provisional liquidator or liquidators of respondent be and is/are hereby authorised to sell respondent's movable assets to the best advantage and by auction sale or private treaty, subject to the confirmation of any such sale by the Master of this Court.'

B It is to be noted that the above-quoted paras. 4 and 5 constitute outright orders.

On 3rd August, 1972, the second respondent (Mr. L. Maister) was C appointed the provisional liquidator of G.H.C.T. in liquidation by the Master. Subsequently, i.e. on 9th August, 1972, first respondent applied for and obtained a rectification of para. 4 of the original order by the substitution of the name 'Grand Hotel Cape Town (Pty.) Ltd.' for the name 'Woolworths Properties (Pty.) Ltd.' The reason for the rectification of the order in this respect is briefly as follows. The lease agreement referred to in para. 4 relates to a property consisting D of hotel premises and four shops situated on the ground floor. Upon the hotel premises known as the 'Grand Hotel' a hotel business was being conducted by G.H.C.T. The owner and lessor of the entire property was Grand Hotel Cape Town (Pty.) Ltd - hereinafter referred to as 'Grand E Hotel' - and it was the lease between Grand Hotel and G.H.C.T. that was intended to be referred to in para. 4 of the Court's order. The erroneous reference in this connection to Woolworths Properties (Pty.) Ltd - hereinafter referred to as 'Woolworths' - arose from circumstances which will be more fully described later.

In pursuance of the amended para. 4 and on 9th August, 1972, second F respondent gave notice of the termination of the lease to Grand Hotel. This notice replaced one given erroneously on the previous day to Woolworths in pursuance of para. 4 in its unamended form.

The present application is for an order setting aside para. 4 of the order of Court dated 2nd August, 1972, as rectified on 9th August, 1972, G and further for an order setting aside the purported termination of the lease by the second respondent in his capacity as provisional liquidator of G.H.C.T. The application is brought by four companies, viz.: United Watch & Diamond Co. (Pty.) Ltd. (first applicant), Riebeek's Shoe Store (Pty.) Ltd. (second applicant), Julian Albert Adler (trading as Edward's Pharmacy) (third applicant) and The Mans Shop (Pty.) (fourth applicant). H Each of these applicants is in occupation of one of the four shops forming portion of the hotel building and derives the right to so occupy from a sub-lease granted by G.H.C.T.; and each conducts a business from the shop so sub-leased.

In order to appreciate the grounds upon which the application is brought it is necessary to make some reference to the events preceding the application for the provisional liquidation of G.H.C.T. G.H.C.T. was incorporated on 20th January, 1970 as a wholly owned subsidiary of first respondent. At that time the hotel premises were leased to the

1972 (4) SA p411

Corbett J

S.A. Breweries Ltd. and G.H.C.T., which was formed in order to conduct a hotel business upon these premises, obtained from SA Breweries Ltd. a sub-lease commencing as from 1st February, 1970. At about the same time Grand Hotel became a wholly owned subsidiary of Woolworths. This was in A pursuance of a scheme of purchase whereby Woolworths acquired a large block of land comprising the hotel site and an adjacent property previously owned by Cleghorn & Harris (Pty.) Ltd. upon which a departmental store known as Cleghorns was operated. Woolworths acquired these properties with a view to a redevelopment scheme involving the B total demolition of both Cleghorns and the Grand Hotel buildings. At that stage the scheme of redevelopment could not be proceeded with immediately. A building permit from the Department of Community Development was required and such permit had been refused; and it had been indicated that it would not be granted until early in 1975. The leasing and sub-leasing of the hotel premises were accordingly in the C nature of interim arrangements pending the grant of the necessary permit and the commencement of the redevelopment scheme.

On 29th February, 1972, the main lease between Grand Hotel and SA Breweries Ltd. terminated and thereupon the property was leased by Grand D Hotel to G.H.C.T. This, as I have indicated, is the lease referred to in para. 4 of the Court order in question. The agreement provided that the period of the lease was to be from 1st March, 1972, until 31st March, 1974, subject to a proviso that, in the event of the owner and lessor, i.e. Grand Hotel, procuring the necessary building permit before 1st February, 1975, or in the event of the legal necessity for procuring E such a permit being abolished before that date, the lease could be terminated upon six months' written notice provided that such notice was not given so as to terminate the lease before 30th June, 1973. In fact the legal necessity for procuring a permit was subsequently abolished F and it thus became competent for Grand Hotel to terminate the lease, with due notice, on 30th June, 1973.

After G.H.C.T. became the lessee of the building the applicants became sub-lessees of G.H.C.T. in respect of the shop premises respectively occupied by them. In the case of the first applicant the sub-lease is contained in a written agreement which provides, inter alia, that it is to continue until 31st March, 1974, save that the lessor, i.e. G.H.C.T., G shall have the right to terminate the lease upon six months written notice, provided that notice shall not be given to terminate the lease before 30th June, 1973. In the case of the other applicants there are no written sub-leases and according to the affidavits filed on their behalf there appears to be some dispute as to whether they are sub-lessees or lessees vis-a-vis the...