Case Law[2023] ZAGPJHC 540South Africa
Fast Motion Trade and Investment (Pty) Ltd v Avon Justine (Pty) Ltd (21158/2019) [2023] ZAGPJHC 540 (22 May 2023)
Judgment
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## Fast Motion Trade and Investment (Pty) Ltd v Avon Justine (Pty) Ltd (21158/2019) [2023] ZAGPJHC 540 (22 May 2023)
Fast Motion Trade and Investment (Pty) Ltd v Avon Justine (Pty) Ltd (21158/2019) [2023] ZAGPJHC 540 (22 May 2023)
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sino date 22 May 2023
REPUBLIC OF SOUTH
AFRICA
IN THE HIGH COURT OF
SOUTH AFRICA
GAUTENG LOCAL
DIVISION, JOHANNESBURG
CASE
NO:
21158/2019
NOT REPORTABLE
NOT OF INTEREST TO
OTHER JUDGES
NOT REVISED
In
the matter between:
FAST
MOTION TRADE AND INVESTMENT (PTY) LTD
Plaintiff
And
AVON
JUSTINE (PTY) LTD
Defendant
Neutral
citation
:
Fast Motion Trade and Investment (Pty) Ltd Vs Avon
Justine (Pty) Ltd
(Case No: 21158/2019) [2023]
ZAGPJHC 540 (22 May 2023)
JUDGMENT
MAHON AJ:
[1]
In July 2010, a lease agreement was concluded between
New
Frontier Properties (Pty) Ltd (“New Frontier”) and the
defendant, in respect of a certain property described as
“Faritec
House” situated in Gallo Manor (“the premises”).
[2]
In terms of an amalgamation agreement concluded
between New Frontier and the plaintiff (amongst others), New
Frontier’s rights
and obligations in terms of the lease were
ceded and assigned to the plaintiff and, ultimately, the plaintiff
became the owner
of the premises.
[3]
The lease agreement provided that the defendant
was required to maintain the premises at its own cost. It also
provided that if
any alterations or additions were made by the
lessee, it would, on the expiry of the lease, remove them and
reinstate the premises
to the condition it occupied before the
additions and alterations were effected.
[4] The lease
terminated on the 28 February 2019 and the defendant vacated the
premises.
[5] The plaintiff
contends that the defendant breached the lease agreement by failing
to maintain the leased premises and
by failing to re-instate the
leased premises into the condition it occupied prior to any additions
and alterations.
[6]
As a consequence of these breaches, the plaintiff
claimed damages in an amount of R12 834 041.05, made up as
follows:
[6.1]
R6 089 250.69 for reinstating the premises
into
its proper condition; and
[6.2]
R6 744 790.36, for being unable to re-let the
premises for the months of March to June 2019.
[7]
Prior
to the termination of the lease and seemingly in an effort to
identify the work which was to be undertaken by the defendant
in
order to reinstate the premises to the required condition, the
parties appointed Delta Built Environment Consultants (Pty) Ltd
(“Delta”) to undertake an assessment of the condition of
the building and to provide a report in relation thereto (“the
Delta report”).
[8]
The
defendant contends that the parties had agreed that the defendant’s
obligations to reinstate the property would be discharged
upon
completion of the work required to be undertaken as identified in the
Delta report and that no further work would be required
of the
defendant. The plaintiff disputes this contention. I will return to
this issue presently.
[9] The plaintiff
called two factual witnesses, Mr Wilkie and Mr White, as well as an
expert, Mr Bush. The defendant called
Mr Van Rensburg as its factual
witness and Mr Adams as an expert witness. A further expert, Mr
Hartman, provided a report on behalf
of the defendant in regard to
the reasonable monthly rental payable in respect of the premises. The
contents of Mr Hartman’s
report were admitted by the plaintiff,
thereby dispensing with the need to call Mr Hartman as a witness.
[10]
Mr
Bush and Mr Adams were called in order to address the question of
quantum. They prepared expert summaries and a joint minute
dated 8
October 2020. After further meetings between them on 16 and 17 March
2023, they ultimately produced a final joint minute
on 23 March 2023
(“the joint minute”).
[11]
The
joint minute:
[11.1]
takes
the form of a spreadsheet comprised of two parts. Part A is said to
consist of a series of items of work which, according
to the
plaintiff, are to be carried out in order to reinstate the property
to the appropriate condition. Part B is said to comprise
of items of
work which have been carried out, the existence of which is said to
be corroborated by documentary evidence of work
undertaken;
[11.2]
sets
out various categories and sub-categories of work, the corresponding
action required and the experts’ respective views
in regard to
each item and its associated quantification. In Part B, the
contractor who is alleged to have caried out the work
in question is
also identified; and
[11.3]
comprises
63 line items of work in Part A and a further 20 items in Part B
(some of the item numbers do not relate to items of work
but to
totals or sub-totals and the item numbers therefore run to 86).
[12]
The experts concluded, subject to what is stated
below, that in respect of the 83 line items of work making up the
minute, the defendant
is liable to pay the plaintiff an amount of
R6 414 009,56 made up as follows:
[12.1]
Defects total: R4 694 778,17
[12.2]
Contingency (10%) R329 906,17
(applicable only to work yet to be undertaken);
[12.3]
Professional fees (11%) R552 715,28;
[12.4]
VAT (15%) R836 609,94.
[13] The experts
qualified their opinion in respect of items 1, 4, 5, 13, 14, 18, 19,
23, 31, 37, 45, 74, 83 and 84 of the joint
minute.
[14] Prior to the
presentation of argument, the defendant indicated that it accepted
liability for items
4, 23, 45, 74, 83 and 84
in
the joint minute and that they were no longer in issue.
[15] During closing
argument, the defendant indicated that it also accepted liability for
items 31 and 37.
[16] Items 1, 2, 5, 13,
14, 18 and 19 remain in dispute, as does the plaintiff’s claim
for loss of rental.
[17] It is accordingly
necessary to consider the parties’ respective contentions in
regard to each of these items of work.
I shall thereafter deal with
the loss of rental claim.
[18] However, I consider
it necessary at this juncture, to address the defendant’s
defence to the effect that its reinstatement
obligations were
confined to those items of work which had been identified by Delta.
# THE AGREED REINSTATEMENT
OBLIGATIONS
THE AGREED REINSTATEMENT
OBLIGATIONS
[19]
The
express provisions of the written lease agreement concluded between
the parties are not in dispute. This agreement required
the defendant
to reinstate the property into the condition which it occupied at the
commencement of the lease.
[20]
As
previously stated, the defendant contends that the parties had agreed
that the defendant’s obligations to reinstate the
property
would be discharged upon completion of the work required to be
undertaken as identified in the Delta report and that no
further work
would be required of the defendant.
[21]
The
defendant further contended that, at a meeting between the parties
which took place on 15 January 2019, the parties “…
amplified the said report in the
respects as set out in the email confirmations dated 25 January
2019
…”
, attached to the
defendant’s plea marked “A” and “B”.
[22]
It
is difficult to understand how an agreement which limited the
defendant’s obligations in this regard, in the absence of
a
valid variation of the written lease agreement or a waiver, could
validly operate in conjunction with the written lease agreement
–
especially where clause 32.1 of the agreement provided that
no
alteration or variation of the lease would be of any force or effect
unless it was recorded in writing and signed by both the
lessor and
the lessee.
[23]
The
defendant did not rely upon a waiver and, although it sought to rely
on an variation to the agreement in argument, it accepted
that a
variation to the agreement had not been pleaded. In an attempt to
overcome this difficulty, the defendant relied upon the
decisions in
Courtis Ruthterford and Sons CC v Sasfin Pty Ltd
(1999)
3 ALLSA 639
(C) at 649
and
E C
Chenia and Sons CC v Lame and Van Lerk
(2006) JOL 16965
(SCA) at
paras 12 and 13
. These judgments echo the principle which rose to
prominence more than 80 years ago in
Robinson v
Randfontein Estates G.M. Co Ltd
1925 AD 198
and
Shill v Milner
1937 AD 101
, namely that:
“
The
importance of pleadings should not be unduly magnified. "The
object of pleading is to define the issues; and parties will
be kept
strictly to their pleas where any departure would cause prejudice or
would prevent full inquiry. But within those limits
the Court has
wide discretion. For pleadings are made for the Court, not the Court
for pleadings. Where a party has had every facility
to place all the
facts before the trial Court and the investigation into all the
circumstances has been as thorough and as patient
as in this
instance, there is no justification for interference by an appellate
tribunal merely because the pleading of the opponent
has not been as
explicit as it might have been…”.
[24] Even if I were to
assume that a full enquiry into the question of variation had been
fully canvassed and investigated, I would
still have to be persuaded
that the variation contended for is sustained on the facts. This
requires an examination of the import
of the confirmation emails
annexed to the plea marked “A” and “B”.
[25] The enquiry begins
with the email from a certain Mr Murray which was sent to all parties
at 10:41 on 25 January 2019. It states
as follows:
“
Rob / lan
I refer to the meeting
held at the Avon offices on 15th January. The meeting was attended by
Rob Wilke, Clinton White, lan Van Rensburg,
Dale Holshausen and
Kieron Murray.
I felt that it was a
very productive meeting and as agreed, I understand that the Avon and
Tri-Colour representatives have subsequently
met on the site to work
through what is needed to be done to the building to allow for
successful hand over at lease end date.
For absolute clarity, I
confirm what was agreed on the 15th January as follows…”
[26] The email then lists
a series of bullet points, each describing what had apparently been
discussed in relation to outstanding
items of work.
[27]
The
email was responded to by Mr Wilkie of the plaintiff, on the same
day, in the following terms:
“
Hi
Kieron
I agree with the
below, thank you.
Just for clarity, by
minor repairs we mean snagging of work already done…”.
[28] The defendant’s
argument, as I understand it, is that these emails constitute a
written recordal of what had been orally
agreed at a meeting between
the parties which took place on 15 January 2019 and that, having been
reduced to writing in the form
of email correspondence, they
constituted a valid variation to the lease agreement in compliance
with the non-variation clause.
[29] I readily accept
that an exchange of email correspondence between the parties which
purports to vary the terms of a written
agreement will satisfy the
requirement of a non-variation clause which requires a variation of
the agreement to be contained in
writing and signed by the parties.
See
Spring
Forest Trading Cc v Wilberry (Pty) Ltd t/a Ecowash and Another
2015
(2) SA 118
(SCA)
[30] However, I am
unconvinced that the email exchange indeed records an agreement to
vary the provisions of the written lease agreement
in the manner
contended for by the defendant.
[31] As a starting point,
the email exchange does not expressly state that the defendant’s
obligations would be limited to
what was contained in the Delta
report, as amplified by the discussions held on 15 January 2019. It
merely identifies a number
of items of work and records what the
parties’ respective understanding was in relation to how
those
items of work were to be carried out for purposes of compliance with
the written lease agreement.
[32] If the plaintiff was
willing to agree to the curtailment of its rights under the lease
agreement, one would have expected the
defendant to ensure that that
was expressly recorded. Indeed, when the plaintiff subsequently made
it clear in its email of 25
February 2019 that, in its view, “…
the Delta report is simply a guide line for the re-instatement of
the building and does not supersede the lease agreement
”,
Mr Van Rensburg appears to have suggested that the defendant’s
obligations were “
well documented and minuted
”.
Whilst this response must, of course, be seen in the context of an
assertion by Mr Van Rensburg that the defendant’s
obligations
had been narrowed, the fact remains that, despite a number of issues
being “
well documented and minuted
” the
curtailment of the plaintiff’s rights under the agreement, does
not appear from the documents of record.
[33] But if this were not
enough to dismiss the notion of a variation on the terms contended
for, then the issue can be put to bed
with reference to Mr Van
Rensburg’s own
ipsissima verba
.
Mr
Van Rensburg expressly conceded that his understanding of the
prevailing position was that if a legitimate defect was identified
but not included in the Delta report, the defendant would not be ‘
off
the hook’
in respect of that
defect. Counsel for the defendant submitted that Mr Van Rensburg’s
subjective opinion in this regard was
irrelevant. I disagree.
[34]
It
is true that a witness’ subjective interpretation of a written
agreement is not admissible when attempting to interpret
the meaning
of a written document. However, this is a different scenario.
Presently, one is not concerned with the interpretation
of a written
document, but with the establishment of an oral agreement, the key
feature of which does not appear from the written
recordal relied
upon.
[35] Therefore, even if I
were inclined to permit reliance upon the defence of an alleged
variation, notwithstanding that it had
not been pleaded, I would
reject it on a conspectus of the facts before me.
[36] I cannot accept the
contention that the parties agreed
that the
defendant’s obligations to reinstate the property would be
discharged upon completion of the work required to be
undertaken as
identified in the Delta report and that no further work would be
required of the defendant.
[37]
The
matters discussed on 15 January 2019, as recorded in the subsequent
email exchange of 25 January 2019, merely served to capture
the
discussion which the parties had had in relation to the manner in
which the items of work referred to, would be carried out.
[38]
I
turn now to each of the items which remain in dispute.
# ITEMS 1 AND 2
ITEMS 1 AND 2
[39] Line item 1 consists
of internal painting work and line item 2 is the repair of cracks.
[40]
The
defendant contends that it should be credited for other internal
painting work allegedly undertaken by a contractor by the name
of GFC
(Gauteng Furniture Manufacturers) and for other work relating to
the
repair of cracks, chips and loose paint.
[41]
In regard to Item 1, the experts agreed that the
defendant is liable to pay the plaintiff an amount of R631 198,89
(which includes
a credit of 425m² for painting work), subject to
the qualification that if the defendant is able to prove that other
additional
painting work was done by GFC, then the value of such work
ought to be deducted from the amount payable.
[42] Mr Van Rensburg
testified for the defendant. Under cross examination he stated that
he was present when GFC painted the interior
and exterior of the
building, prior to vacating same and that he could confirm that GFC
did indeed paint the interior and exterior
of the building. The
defendant’s expert was, however, of the view that this painting
work could not be quantified in the
light of the absence of
sufficient documentary evidence in regard to the quantification of
this activity.
[43]
In
evidence, reference was made to a quotation from GFC for R12 285,00
in respect of painting work and another one for R750,00
which appears
to relate to an undercoat.
[44] In support of his
view that painting work ought to be deducted, Mr Van Rensburg
referred to what was called the “GCS
Document”, which
apparently reflected the work undertaken by GCS. I was urged to infer
from this document that GCS had undertaken
additional painting work,
the value of which had to be deducted from the amount payable by the
defendant in respect of Item 1.
[45] The difficulty with
that proposition, however, is that the document does not make any
attempt at quantifying the work with
reference to any rates or
quantities. Moreover, although
the document
apparently shows locations, none of the defendants’ witnesses
attempted to identify, with reference to this document,
what portion
related to the work which was to be deducted and the extent of such
work.
[46]
No
doubt mindful of this difficulty, the defendant’s counsel
sought to argue that
if the quantity of work performed by the
defendant could not be determined, then the experts were unable to
state the amount of
work that needed to be done when the defendant
vacated the premises and that the plaintiff’s claim for this
work ought to
fail for want of quantification.
[47] This submission is
in conflict with what the experts had agreed. Contrary to suggesting
that an amount payable to the plaintiff
in regard to the painting
work could not be quantified, they in fact agreed on the plaintiff’s
entitlement subject to the
qualification that such amount fell to be
reduced by such amount of additional painting work as could be
demonstrated. The amount
of such additional painting work was not
demonstrated and the amount regarded by the experts as having been
proved, that is, the
amount of
R631 198,89
,
is thus payable.
[48] Insofar as Item 2 is
concerned, the defendant sought to similarly argue that this amount
fell to be reduced by proven work
undertaken by GCS in regard to the
repair of cracks.
[49]
Again, however, it was clear that the defendant
sought to rely solely on the GFC document referred to above. Its
defence in relation
to Item 2 must accordingly fail for the reasons
already mentioned in respect of item 1.
[50]
The
amount of R28 080,00 is accordingly payable in respect of Item
2.
# ITEM 5
ITEM 5
[51]
I
have already dealt with the defendant’s defence relating to the
alleged variation and the reasons why I do not accept it.
Item 5 is
the only item which is presently in dispute which is implicated by
that finding. In light of my finding on the variation,
I must
necessarily find that Item 5 was required to have been carried out by
the defendant.
[52]
The
only question which remains in relation to this item relates to the
manner in which this item of work was to be carried out.
[53]
Item
5 is described in the joint minute as “
Repaint
all louvres (20mm) to achieve uniformity”
.
[54] There was a further
email exchange between the parties dated 25 January 2019 which dealt
with louvres. Paragraph 4 of the e-mail
sent by Mr Van Rensburg
reads as follows:
“
There
was a question from one of the contractors on a bend louver. Avon
will reinstate or try and match existing as close as possible.
But
let's just all keep in mind matching existing is not always possible.
The contractor then mentioned that we need to then replace
all the
louvers. This will by no means be the case.
Avon
will not be replacing every louver in the building just cause we
cannot match existing. It now feels that there is nit-picking
on
things that should we rather find a common solution for both parties.
Unrealistic expectations on matching existing cannot be
done.
Especially on things like louvers. We have attic stock of certain
items. We will try our utter best to match existing. However
if we
cannot match existing it would be as close as possible.”
[55] Mr White responded
on behalf of the plaintiff by stating: “
Please replace all
bent or damaged louvers. These should match existing louvers as close
as possible
.”
[56] Under
cross-examination, Mr Van Rensburg stated that his reliance upon an
obligation to “
match existing as close as possible
”
related to item 4 (“
Replace damaged/bent
louvres”
) and not to item 5. The
defendant was therefore not excused from re-painting the louvres. He
also accepted that that if the experts
determined that the louvres
required repainting, then the defendant was obliged to have
re-painted.
[57]
The
experts determined that, subject to any agreement to the contrary,
the defendant was liable for an amount of R46 710,00
in relation
to this item. No agreement to the contrary has been established and
the defendant is accordingly liable for this amount.
# ITEM 13
ITEM 13
[58] Item 13 is described
in the joint minute as “
Remove heavy
commercial carpet tiles including skirting”.
[59]
The
joint minute reflects that an amount of R29 131,10 is payable by
the defendant unless it can be proved that the parties
had agreed
that certain areas of carpet tiles could permissibly remain in place.
[60]
On
this score, the defendant again relies on the contents of the email
exchange
recording the agreement reached on 15
January
2019
, in which the following is stated:
"Vinyls to be
removed in certain areas (pink vinyls). Common areas to stay in place
and all vinyls that are neutral colour.
Re-instatement will be
done according to Avon’s plans attached."
[61] Under
cross-examination, it was put to Mr Van Rensburg that the reference
to common areas could not have been intended to refer
to open office
areas and that it could only have referred to common areas in the
typical sense of the phrase. According to my understanding,
the term
“
common areas
” normally refers to the areas in a
premises which would typically be available for use by more than one
tenant.
[62] Mr Van Rensburg
accepted that the phrase “
common areas
” was
perhaps an unfortunate turn of phrase, but insisted that, in
his
business, the term included open office areas other than board rooms
or closed offices and that “
everyone’s understanding
of common areas could be different
”.
[63] It appears therefore
that Mr Van Rensburg’s version was that, what
he
intended,
was a reference to common areas in an atypical sense and that the
phrase ought to be understood to mean something other
than what the
phrase’s ordinary meaning should be.
[64] I am willing to
accept that parties may use terminology in their dealings with one
another which is intended to bear a meaning
which is different to
what would customarily be understood. However, in order for the
defendant to succeed with this defence, it
is incumbent upon it to
establish that the plaintiff also understood the meaning of the
phrase in that way.
[65] It was not suggested
by Mr Van Rensburg that the plaintiff’s representatives shared
his understanding of the phrase in
question. On the contrary, Mr Van
Rensburg, despite having accepted that the phrase would ordinarily be
understood in a manner
which is different to what was intended by
him, emphasised that the meaning which he sought to attribute to the
phrase was the
meaning “
within my [his] business
”.
[66] There was no
evidence to suggest that the plaintiff shared Mr Van Rensburg’s
understanding of the term and, as pointed
out by the plaintiff’s
counsel in argument:
[66.1]
Mr Wilkie, of the plaintiff was not cross-examined
on this alleged agreement;
[66.2]
when Mr White was cross-examined, it was simply
put to him that the carpets had been cleaned, not that there was an
agreement not
to remove them; and
[66.3]
similarly, when Mr Bush was cross-examined, it was
not suggested that there was an agreement not to remove the carpets.
It was put
to Mr Bush that the defendant had complied with its
obligation because it
had
removed carpets.
[67] In the
circumstances, the alleged agreement
that certain
areas of carpet tiles could permissibly remain in place, as
contemplated in the experts’ qualification in regard
to item
13, has not been established.
[68]
The
amount of R29 131,10 is accordingly payable in regard to item
13.
# ITEMS 14 AND 18
ITEMS 14 AND 18
[69] These items relate
to the deep cleaning of carpets, tiles and basement floors.
[70] The experts have
qualified these line items by stating that:
“
The experts
agree that in the absence of the Defendant providing evidence
of the Deep Cleaning …..the Defendant is
liable
.”
[71] Mr Van Rensburg
testified that the basement and offices were deep cleaned. He
testified that he was present at the time and
personally witnessed
that the deep cleaning took place.
[72]
However, numerous photographs were considered which reflected a
distinct lack of deep cleaning. Indeed, t
he
experts view was informed by numerous photographs of the property
which were taken at the time that the defendant vacated the
premises
and it was on the basis of these photographs that they concluded that
the carpets required cleaning.
[73]
What is more, Mr Van Rensburg himself accepted
that in a number of instances, the photographs depicted an
unacceptable level of
cleaning.
[74]
The evidence corroborates the view held by the
experts that the defendant is liable for this item. The vague
confirmation that cleaning
had been undertaken in Mr Van Rensburg’s
presence is not sufficient to rebut the view of the experts on this
score.
[75]
The
amounts of R11 836,80 and R17 920,00 are payable in respect
of these items.
# ITEM 19
ITEM 19
[76] Item 19 is
described as “
Install waterproofing on
exterior balconies and reapply epoxy”.
[77]
The
experts have qualified this item to the extent that it may be proved
that a different waterproofing solution was agreed to between
the
parties.
[78]
The
first point which is raised by the defendant is that this item
differs from the waterproofing remedy which is referred to in
annexure POC5 to the particulars of claim. On this basis, the
defendant contends that
the claim for waterproofing should be
disallowed as a case was not pleaded for this line item.
[79] It seems to me,
however, that even if annexure POC5 to the particulars of claim
contemplated a different waterproofing solution,
this has been
overtaken by the subsequent agreement between the experts to the
effect that the defendant is liable for this item
(subject, of course
to the qualification referred to above). The experts met and
specifically discussed this item on a number of
occasions and the
issue was fully dealt with in evidence and in argument (See
Robinson
v Randfontein Estates
and
Shill v Milner
supra
).
[80] The defendant
contends that the agreement regarding the waterproofing is found in
the email from Mr Van Rensburg to Mr White
dated the 25
th
of January 2019. Paragraph 2 of the said email records that:
“
Tiles on the
balconies we will strip existing paint. Please let us know if you
would like us to repaint. We suggest using a waterproofing
epoxy
.”
[81] The response from
Clinton White is “
Please use a waterproof epoxy
”.
[82] The evidence
established an understanding between the parties that what was
required in regard to this item was that the tiles
would be stripped
and that a waterproofing epoxy would be applied. The question,
however, is what that entails.
[83] The email, on its
own terms, did not
only
require the application of epoxy. It
required a stripping of the existing paint and the application of
epoxy thereafter. The evidence
of Mr Bush, which was endorsed by Mr
Adams under cross-examination, was that this process would
necessarily involve stripping of
the paint and the existing epoxy,
honing of the tiles, “
making good
” the joints and
then re-applying epoxy. Mr Adams also accepted that the appropriate
quantity to be applied was 390 square
metres.
[84] In regard to these
activities, the experts were in agreement as to the rates and
quantities which were applicable, namely:
[84.1]
Stripping epoxy R75/m² R29 250,00;
[84.2]
Honing tiles R250/m² R97 500,00;
[84.3]
Making good joints R15/m² R5850,00;
[84.4]
Re-applying epoxy R230/m² R89 700,00
R222 300,00
[85] In light of my
finding in regard to the agreement relating to Item 19, the amount
payable by the defendant in regard to this
item is R222 300,00.
# THE RENTAL CLAIM
THE RENTAL CLAIM
[86] The plaintiff claims
that as a result of the failure on the part of the defendant to
re-instate/maintain the Property, the
plaintiff was unable to re-let
the property for the months of March 2019 to June 2019.
[87] The expert report of
the defendant’s valuer, Mr Hartman, is admitted. He opines that
a fair market-related monthly rental for the
premises is R524 175,00.
[88] The issue in dispute
relates to the reasonable period during which it may be said that the
plaintiff could have been prevented
from letting the property as a
result of the need to carry out the reinstatement works.
[89] The defendant’s
counsel submitted that the plaintiff had suffered no loss because it
was clear that the plaintiff did
not intend to rent out the property
for the months March to June 2019 as it intended to accommodate a
prospective tenant who wished
to lease the entire office park –
Adcorp. This was said to be evident from the following:
[89.1] the defendant
requested an extension of the lease for one month, that is to the end
of March 2019. The request was refused
by the plaintiff in a letter
dated the 18
th
of October 2018, paragraph 2;
[89.2] Mr Wilke testified
that it was refused as the plaintiff was in discussions at the time
with a prospective tenant. He testified
that it was too high a risk
to allow the defendant to remain for a further month. The tenant was
identified as the Adcorp group;
[89.3] the written lease
agreement subsequently entered into between Adcorp and the plaintiff
provided for:
[89.3.1] a commencement
date of 1 January 2020;
[89.3.2] a beneficial
occupation date of 1 September 2019; and
[89.3.3] early occupation
from 1 July 2019 to the 31
st
August 2019 at a reduced
rental amount of 50%.
[90] In the result, so
the argument goes, because the plaintiff only intended to commence
leasing the Property to Adcorp from 1
January 2020 and from that date
to charge Adcorp the full rental, no rental can be recovered for the
period during which the reinstatement
works were being carried out.
[91] Apart from the
glaring fact that none of the defendant’s contentions in
relation to the Adcorp lease was put to any of
the plaintiff’s
witnesses, I am in any event unpersuaded by the defendant’s
reasoning on this aspect.
[92] This is so because I
am enjoined to assess the plaintiff’s damages as at the date of
the breach. In this instance the
date of the breach is 28 February
2019, when the defendant failed to return the property in the
condition required.
[93] In
Sandown
Park (Pty) Ltd v Hunter Your Wine & Spirit Merchant (Pty) Ltd and
Another
1985 (1) SA 248
(W)
, a lessor terminated a lease as a
result of a breach by the lessee and sought the lessee’s
immediate ejectment. After a period
of holding over, the lessee
ultimately vacated the property, leaving it in a state unfit to
enable the lessor to relet the property
for some time thereafter.
[94]
The
lessor alleged that lessee's refusal to vacate the premises was
wrongful and that the lessor had suffered damages. The lessee
alleged
that by reason of its holding over, the lessor was able to, and did,
conclude a financially more advantageous lease than
otherwise would
probably have been the case. According to the lessee, the lessor was
financially better off, and the lessee's breach,
in failing timeously
to vacate, had not resulted in the lessor suffering any damages.
[95]
The
court,
per
Nestadt
J, held that the lessor’s damages were not to be assessed with
reference to the more favourable lease. The benefits
which flowed
from the later lease were to be disregarded as being collateral and
fortuitous and therefore
res inter alios
acta
because the lessor’s damages
had to be assessed as at the date of the breach.
[96]
By
parity of reasoning, I am disinclined to have regard to what may
fortuitously have arisen in regard to the Adcorp lease. The
question
of whether or not the plaintiff was able to re-let the premises as a
result of having to undertake the reinstatement work
and the period
during which it was unable to do so, must be objectively assessed as
at the date of the breach, without regard to
the subsequent Adcorp
lease.
[97]
As
for the period which it would reasonably have taken for the
reinstatement work to be carried out, I must observe that this is
entirely dependent upon the extent of the resources deployed to carry
out the reinstatement work. The greater the number of teams
employed,
the faster the work can be carried out, potentially at a greater
cost.
[98]
Unfortunately,
the plaintiff’s expert’s estimation of 2 to 3 months was
based entirely on his “
experience
”
but was not supported by any underlying empirical
evidence or meaningful reasoning. There was no programme presented
which could
have established a reasonable timeline detailing the
various activities to be undertaken with reference to any form of
critical
path. It was also not clear which of the activities required
in order to complete the reinstatement work could have been carried
out concurrently.
[99]
The
defendant’s estimation of 20 business day was equally
unsupported by any empirical data. It also appears that this period
had assumed optimal resources, planning, sequencing and programming,
such that an additional float of 5 days could be assumed.
This much
was conceded by Mr Adams.
[100]
In
the absence of any underlying supporting data or reasoning, I am
unable to accept the plaintiff’s expert’s estimation
of 2
to 3 months. In light of the defendant’s concession in regard
to at least the first 25 business days (20 business days
and 25 days’
float), I can award no more than what was conceded.
[101]
I
would accordingly grant damages for lost rental in an amount equal to
25 business days. The figure can be ascertained by dividing
the
agreed monthly rental amount of R524 175,00 by the number of
business days in the month immediately following the date
that the
property was vacated, and then multiplying that figure by 25 days, as
follows:
[101.1]
Agreed
monthly rental: R524 175,00
[101.2]
Divided
by 21 business days
(during the month of
March 2019) R24 960,71 (per day)
[101.3]
Multiplied
by 25, equals
R624 017,86
# FINAL ANALYSIS
FINAL ANALYSIS
[102] In light of
the agreements reached between the experts, the concessions
subsequently made by the defendant and my findings
on the remaining
items in dispute, as set out above, the total amount due to the
plaintiff from the defendant as damages is R6 832 007,02
calculated as follows:
Total
amount for works as per Part A of joint minute (prior to deduction
as a result of findings above)
R3
299 061,70
Less
reduction of Item 19 from R369 022,50 to R222 300,00 as per
findings above
-R146
722,50
Equals
Sub-Total for works as per Part A of Joint Minute
R3
152 339,20
Add
Contingency of 10% (only applicable to Part A)
R315
233,92
Add
total amount for works as per Part B of Joint Minute
R1
395 716,47
Equals
Defects Sub-Total
R4
863 289,59
Add
Professional Fees @ 11%
R534
961,85
Add
VAT @ 15%
R809
737,72
Equals
Total for Defects Claim
R6
207 989,16
Lost
Rental
R624
017,86
TOTAL
DAMAGES
R6
832 007,02
[103] In its
particulars of claim, the plaintiff sought that costs be awarded on
the attorney and client scale. This was not
pressed in argument and I
do not consider any case to have been made out for costs on a
punitive scale. Costs will accordingly
be awarded on the
party-and-party scale.
[104] I accordingly
grant judgment against the defendant in favour of the plaintiff for:
1. Payment of the
amount of R6 832 007,02;
2. Interest on the
aforesaid amount at the
prescribed legal rate from
date of
mora
until
date of final demand
; and
3. Costs of suit on
the party-and-party-scale.
D MAHON
Acting Judge of the High
Court
Johannesburg
This judgment was
handed down electronically by circulation to the parties’ legal
representatives by email and by being uploaded
to CaseLines. The date
and time for hand down is deemed to be 22 May 2023.
APPEARANCES
:
For
the plaintiff:
Adv
D Baguley
Instructed
by:
Slabbert
Venter Yanoutsos Inc.
For
the defendant:
Adv
M Smit
Instructed
by:
Cliffe
Dekker Hofmeyr Inc.
Date of hearing: 3 to 7
October 2022 and 27, 28 and 31 March 2023
Date of judgment: 22 May
2023
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