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NOT REPORTABLE

IN THE HIGH COURT OF SOUTH AFRICA

(WITWATERSRANO LOCAL DIVISION)

JOHANNESBURG

CASE :2000/23927

DATE:2000.11.13

In the matter of:

TYAAK PROPERTIES (PTY) LTD...............................................................................Applicant

and

EXPLORER CORPORATION (PTY) LTD................................................................ Respondent

JUDGMENT

WILLIS, J: This is an application brought by way of urgency in which the applicant seeks the following relief:

1. Payment of the sum of R184 035,61.

2. Interest on the amount of R184 035, 61 at the rate of 15,5 persent calculated from 26 October 2000 to date of payment.

3. An order evicting the respondent from Erf 208 Morningside, also known as Explorer House, corner Glenmore and Lower Road, Morningside, respondent and all persons occupying through or under respondent from such premises and authorising and directing the Sheriff or his deputy to evict the respondent and all such persons therefrom.

4. Costs of suit on the scale as between attorney and client.

It is common cause that a lease agreement exists between the applicant and the respondent in respect of the property referred to in the prayers of the notice of motion. It is also common cause that the lease agreement provides for a schedule of payments to be made under various headings, namely the basic rental, the parking rental and storage area etc.

The rental was stipulated for various periods there being a gradually escalating scale of rentals over a period of time.

Clause 31.1 of the schedule "A" to the lease provides

that:

"This lease incorporates the whole agreement between the lessor and the tenant as it is recorded that no representations of any nature whatsoever have been made by the lessor or any person acting on the lessor's behalf to the tenant.

Clause 31.2 reads:

"No alteration or variation of this lease shall be of any force or effect unless in writing and signed by both the lessor and the tenant."

Clause 31.6 provides:

"No indulgence on the part of the lessor in exercising any rights conferred upon him in terms of this agreement shall constitute a waiver or novation of any such rights nor shall any single or partial exercise of any right preclude any other rights under this agreement."

Clause 6.1 provides that:

"All rentals and other amounts payable by the tenant to the lessor in terms of this lease shall be paid by the tenant monthly in advance on the first day of every calendar month".

Clause 6.2 provides that:

"All amounts payable by the tenant to the lessor in terms of this agreement shall be paid free of exchange, bank commission and without deduction or set off at the place specified in clause 2.9 hereof." (my emphasis) Clause18 of the agreement deals with subletting and

18.4 provides that:

"Notwithstanding the aforesaid the lessor will hereby consent to the tenant's subsidiaries, associates and/or affiliates occupying parts of the leased premises on the terms set out herein and on such further terms as the lessor may reasonably depose which consent by the lessor in no way detracts from any of the tenant' s obligations imposed by the lease."

The claim for R184 035,61 arises from arrear rentals which the applicant alleges are due to it by the respondent.

The respondent does not dispute the existence of the lease agreement as alleged by the applicant. It does, however, allege that "agreement was reached as recorded above at the meetings on 5 and 29 September 2000 whereby the applicant appropriated all amounts received from Mercantile Lisbon Bank pursuant to the presentation of the guarantees as against any outstanding arrears as also against future amounts to which the applicant would become entitled having taken into account the credit due to the respondent in terms of the applicant's overcharging of operating costs" (see paragraph 40.3).

The respondent also alleges that there have been certain overcharges in respect of amounts claimed for operating costs. In paragraph S.3.7 of the respondent's answering affidavit the following is said:

"The nett result of this agreement (i.e. the agreement that there would be a call up of the guarantee) was that after the presentation of the second guarantee and payment of the amount of R13 866,97 the respondent would have paid the full amount of its indebtedness to the applicant as agreed to by the applicant in respect of rent, electricity, interest and operating costs for the months of August, September and October 2000 which, in addition, would result in the respondent being in credit with the applicant in an amount of approximately R209 000."

In Annexure "N" to the applicant's founding papers is a schedule setting out the amounts which are claimed from the respondent for October. It is clear that there is no dispute that the respondent owes the applicant payment in respect of the amount charged for open bays, basement parking, rent and other rental. It is also clear that the amount of the guarantee, if it were to be called up, would have been R30S 214. The guarantee had previously been called up on 4 September.

It is clear that the respondent cannot dispute that it owes for open bays, basement parking, rent and other rental for October. The total amount thereof, in addition to VAT, comes to R131,175,87. Although the operating costs and amount for electricity are disputed for October, it is quite clear from the respondent's earlier allegations mentioned in paragraph 6.3.7 of its answering affidavit, that the amounts for operating costs charged in the past were settled at this particular meeting which allegedly occurred on 5 September 2000 and that therefore disputed amounts with regard to operating costs and electricity cannot be set off from the amount claimed in October for the "hard items" amouting to R131 175,87. Furthermore, it seems to me that it is decisive that paragraph 6.2 of the lease agreement provide that all amounts payable by the tenant to the lessor in terms of this agreement shall be paid free of exchange, bank commission and without deduction or set off at the place specified in clause 2.9 hereof.

There is no doubt, therefore, in my mind that the respondent does indeed owe the applicant the sum of R131 175,87, although not the full amount of R184 035,61 alleged in the notice of motion.

The essential defence of the respondent is that there was an agreement in terms of which the applicant would call up the guarantee for the amount outstanding and in breach of that agreement has failed so to do. I shall deal with this aspect later.

Mr Joseph who appeared for the respondent raised three preliminary points. The first that he raised was that Mr Andrew Craig Cairns did not have authority to depose to the founding affidavit on the part of the applicant. This aspect seems to have been cleared up to the satisfaction of Mr Joseph during the course of the hearing when it became clear that there did appear to have been the necessary authority. In any event, I do not believe that there is any substance in this point. It is quite clear that the applicant's case is not a brutum fulmen but indeed there was a lease agreement entered into between the parties, that the amounts materially in dispute are clear and that the respondent, as I have said earlier, owes this amount to the applicant. All that is in dispute really is whether there in fact was an agreement that the applicant would call up the guarantee and whether this agreement, if such existed, can override the provisions of the agreement between the parties. There, therefore, seems to be no merit in this first point raised by Mr Joseph.

The second point raised by Mr Joseph was that the matter was not one of urgency and therefore should not be heard in the urgent court. It is of course trite that urgency does not relate only to some threat to life or liberty. Urgency of commercial interest may justify the invocation of the subrule no less than any other interest. This was asserted by Goldstone J, as he then was, in the case of Twentieth Century Fox Film Corporation v Anthony Black Films (Pty) Ltd 1982 (3) SA 582 (w) at 586G. It seems to me that the matter is indeed commercially urgent by reason of the fact that it is clear that the respondent has been experiencing difficulty with payment in the past, that if the applicant were to call up the guarantee, there would be no further guarantee to call up at the end of October, or at least during November, whereupon the applicant would be saddled with a tenant either unable to pay or at least very reluctant to pay any amount of a rental of premises that are clearly highly valuable. The basic rental indeed amounts to some R96 222,36 per month. It seems to me that there is indeed a commercial urgency that permeates this particular matter. That does not mean, of course, that every application for eviction of a tenant or claim for arrear rental is one of commercial urgency. Each case must, in my view, be looked at and decided upon according to its own merits. The merits with regard to urgency are, in my view, plain enough in this particular case.

The third preliminary point which was raised by Mr Joseph was that there had not been a joinder of the sub-tenants. In my view clause 18 of the agreement makes it quite clear that as between the applicant and the respondent any sub-lease is entirely irrelevant in so far as the respondent's obligations are concerned. The matter was, moreover, dealt with in the case of United Watch and Diamond Co v Pisa Hotels 1972 (4) SA 409 (C) by Corbett J, as he then was.He says at 416H:

"As I understand the case of the applicants, the interest claimed by them is their status as subtenants of the leased premises, it being contended that the termination of the main lease will inevitably bring to an end not only the lessee's right of occupation of the whole premises but also their rights to occupy the shops subleased by them, which rights are derived from CHCT {that is the lessee). No other interest, such as for example an interest as potential creditors of CHCT was claimed and, in my opinion, rightly so. The interest of a subtenant in regard actions for ejectment against the tenant at the suit of the landlord (owner) has been discussed in several cases and the generally accepted view is that the subtenant has no legal interest in the contract between the landlord and the tenant 'although he may have a very substantial financial commercial interest therein which may be prejudicially effected by the judgment' (see Henri Viljoen (Pty) Ltd v Awerbuch Bros, supra, at 167) . This, with respect, would seem to be the correct approach. The subtenant's right or interest in the continued occupancy of the premises subleased is inherently a derivative one depending vitally upon the validity and continued existence of the right of the tenant to such occupation. The subtenant in effect hires a defeasible interest (Ntai and Others v Vereeniging Town Council and Another 1953 (4) SA 579 (AD) at 591) . He can consequently have 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 will affect him commercially and financially." It would seem to me that, on the strength of this well-known authority, the applicant is entirely correct in contending that there is no merit in the objection raised by the respondent that certain subtenants of the premises in question should have been joined in these proceedings.

I turn now to the substantive defence o f the respondent. This is that there was an agreement entered into between the applicant and respondent in terms of which the applicant would call up the guarantee in existence rather than pursue the respondent directly for the payment of arrear rentals. It is alluded in a subsequent affidavit that the applicant is estopped from seeking the relief it does by reason of having entered into this agreement.

Mr Joseph referred me to the case of Phillips and Another v Miller and Another (2) 1976 (4) SA 83 (W) at 91-4 to argue that the applicant was estopped from seeking to enforce this agreement. In the case of garnett v Van der Merwe 1980 (3) SA 606 (T) Coetzee J, as he then was, with whom Van Reenen J concurred, said the following at 610H:

"In Kontraktereg en Handelsreg deur De Wet en Yeats 4de uitg te 76 word in voetnota 11 hierdie beslissing van Margo R afgemaak as ''n baie swak vermomde poging om die verskansing te ontduik'. Hoewel ek my distansieer van hierdie ongelukkige onbeheerstheid van die geleerde skrywers se kritiek, is ek ook, respekvol, van mening dat al die stellings van Margo R nie letterlik opgeneem kan word soos hy dit gestel het nie en in sekere opsigte nie korrek is nie. Ek verskil dus van horn. Verskansing teen daaropvolgende mondelinge wysiging en die integrasiereel is twee geheel en al verskillende beginsels met verskillende bestaansredes wat nie verwar noet word nie. In die Phillips-saak supra, het Margo R vir sy stellings ten opsigte van die verskansingsreel gesteun op dicta wat slegs betrekking het op die integrasiereel en niks te make het met die verskansingsreel nie. Dit is natuurlik gevaarlik om ten opsigte van enige besondere regsreel dicta, wat ten opsigte van 'n ander een uitgespreek is, daarop toe te pas aleer duidelikheid verkry is oor die mate van toepaslikheid indien hoegenaamd toepaslik. Waar hy meld dat 'Steyn CJ plainly recognised that the effect of such a clause could be altered by estoppel', is dit, myns insiens. nie korrek nie." (my emphasis) "In die passasie waarna hy verwys te 765 van die Shifren-saak, het Steyn HR, voordat hy die die twisvraag behandel het, ingegaan op die pleitstukke in die saak voor horn ten einde te kan bepaal wat presies in geskil is en dus voor die Appelhof gedien het vir beslissing. Hy het verwys na die pleitstukke en toe ges£:

'Na my mening kan die pleit, wat 'n sessie voor die ooreenkoms betref, alleen in dieselfde sin verstaan word. Dit is tewens die grondslag waarop die Hof benede by albei geleenthede gevra is om die geskil te besleg. Geeneen van die partye het die pleitstukke anders verstaan nie. Duidelikheidshalwe moet ek by voeg dat hier ook geen estoppel ter sprake is nie.' Dit is dus hoegenaamd nie ' n geval dat Steyn HR 'plainly recognised that the effect of such a clause could be altered by estoppel' sods my geleerde Kollega se nie."

This case, i.e. the one of Barnett v Van der Merwe, was followed with approval again in this division by Nestadt J, as he then was, and Human J in Van As v Du Preez 1931 (31) SA 760 (T). I quote from 764D: "As Louise Tager in her instructive article entitled The Effect of Non-Variation Clauses in Contracts, 1976 SALJ 423 observes at 434, the importance of the Impala Distributors case is that it has the effect of considerably reducing the potency of a no-variation clause by confining its operations to the variation of the terms of the contract. Basic to the decision (and that of Barnett v Van der Merwe) is the drawing of a distinction between a variation and a waiver. It is not an easy one to make. It is pointed out in the article referred to (at 435) that English writers on The Law of Contract regard the distinction as baseless and as vague and artificial. in Venter v Birchholtz 1972 (1) SA 276 (A) at 286 Jansen JA, dealing with the distinction made in certain English cases between a variation and other departures from written contracts refers to Cheshire and Fifoot's (1947) 3 LQR. 283 at 290 et seq) description of the distinction as "an affront to one's intelligence". It is unnecessary to canvass what the juristic nature of a waiver is and, more particularly, whether it is contractual in form or merely a unilateral Act. Suffice it to say that however brought about, it is the abandonment or surrender with the necessary knowledge of a right (Alfred McAlpine & Son tPty) Ltd v Transvaal Provincial Administration 1977 (4) SA 310 (t) at 323) . It does not per se result in the contract being altered. Herein lies the difference between it and a variation. This is the distinction drawn by Hiemstra J in the Impala Distributors' case. The English approach, as Tager (at 435) points out, is similar, namely a waiver is a 'mere forbearance or concession afforded by one party or the other for the latter's convenience and at his request' whereas a variation involves 'a definite alteration, as a matter of contract, of contractual obligations by mutual agreement of both parties. (The quotations are from English text books.) It will be a question of fact (and perhaps of law) in each case as to whether the conduct or agreement in question is merely a waiver or whether it goes further and amounts to a variation. Whether the right in question is one which has already accrued or whether it is only enforceable in the future, will be an important determining factor. In the latter case it is difficult to imagine the waiver not being other than in the form of an agreement which has the effect of varying the original contract giving rise to the right." He goes on to say (at 765C)

"It is clear that the agreement constituting the waiver has the effect of varying the written lease. Yet such agreement (because of clause 16) would not be binding; indeed evidence to prove it would not be admissible. The alleged waiver would be still-born. The oral agreement does not cease to be a variation of the writing simply because it contains within itself a waiver. They are inseparable from each other. The defendant cannot, as he in effect seeks to do, discard or ignore the agreement and yet rely on it to prove a waiver. Where, as here, the waiver relied on rests entirely on or is constituted by an oral agreement which, because it purports to vary the writing, is in conflict with the no-variation clause, then it too is precluded thereby.

The argument for the defendant raises the following riddle: when is a variation not a variation? The answer sought to be given is: when it is a waiver. This is untenable. In the words of De wet and Yeats Kontraktereg en Handelsreg 4th ed at 76, where the Shifren principle and what a variation is is dealt with, it is 'haarklowery' . A rose by any other name smells just as sweet. An oral variation masquerading as or in the guise of a waiver remains for present purposes what it truly is; or at least it follows the same fate. To hold otherwise would be to render nugatory the principle of the effectiveness or contractual entrenchment as laid down in Shifren's case. What Coet2ee J said in this regard in Barnett v Van der Merwe at 611 is apposite:

'In die Impala Distributors-saak eupra word die verskansingsbeginsel uitvoeriglik behandel en se Hiemstra R te 27 7C dat in daardie geval die verweerder deur middel van sy pleit iets wou bewerkstellig wat prakties sou beteken ' dat met een asemstoot die hele sorgvuldig opgeboude Shifren struktuur aan skerwe le'. Myns insiens moet daar teen gewaak word am nie hierdie sorgvuldig beredeneerde beginsel met uitsonderings wat nie regswetenskaplik verantwoord is nie, op te kerf nie.'

A no-variation clause would of course not protect a party against his own fraud (Shifren and Others v 5 A Sentrale Ko-op Graanmaatskappy Bpk 1964 (2) SA 343 (0) at 346D-E)

And then he continues at 766A:

"I come to the same conclusion in relation to the defence of estoppel (in so far as it is based on the oral agreement). Even if the necessary allegations as to representation by the plaintiff and that the defendant acted upon it to his prejudice can be implied (which I doubt) it must fail for the same reasons set out above. Support for this conclusion is to be found in Baraett v Van der Merwe (supra at 612). I respectfully agree with Coetzee J's remarks concerning Phillips and Another v Miller and Another (2) 1976 (4) SA SS (W)."

In my respectful view the position is well set out by Christie in his Law of Contract 3rd ed. At 496.

"When a non-variation clause appears in a contract it creates a situation in which the same argument of freedom of contract or pacta sunt servanda can lead to two opposite conclusions. It can be argued that the original contract must be respected and a subsequent agreement that is not in writing must be ignored. Or it can be argued that the subsequent agreement, being made animo contrahendi must be respected and the non-variation clause ignored. After some controversy the Appellate Division chose the former of these two irreconcilable views in S A Sentrale Koop Graan Maatskappy Bpk v Shifren 1964 (4) SA 760 (A) . Any attempt to agree informally on a topic covered by a non-variation clause (including cancellation and an extension of time for payment, if covered by such a clause) or to vary informally a contract containing anon-variation clause must therefore fail." (my emphasis)

The agreement between the parties in question clearly contains, as I have indicated earlier, a non-variation clause providing that variations can only be effected in writing to be valid. That is not the case of the respondent. It alleges an oral agreement. Whether this agreement is to be described as a variation, a waiver, a cancellation or an estoppel does not matter. whatever terminology may be used, the respondent is contending that the re was a variat ion agreed upon which variat ion i s impermissible save as is concluded in writing.

Accordingly, in my view, the applicant must succeed in its application for the eviction of the respondent.

With regard to the amount claimed, as I have already indicated, at this stage an amount of R131 175,37 is all that has been proven and accordingly this is the amount that I shall order in the order that will follow hereupon.

With regard to costs of suit on a scale as between attorney and client, it is common cause that the agreement concluded between the parties provides accordingly and there can be no real opposition by the respondent to such an order being made. The parties agreed that in so far as the costs reserved to date are concerned, the appropriate order would be that each party is to pay its own costs.

Consequently the following order is made:

1.The respondent is to pay the applicant the sum ofR131 175,87.

1.1. .

2. The respondent is to pay the applicant interest on the amount of R131 175,87 at the rate of 15,5 persent calculated from 26 October 2000 to date of payment. 3-The respondent is evicted from Erf 208 Morningside, also Jcnown as Explorer House, Corner of Benmore and Lower Road, Morningside, the respondent and all persons occupying through or under the respondent from such premises and authorising and directing the Sheriff or Ms deputy to evict the respondent and all such persons therefrom.

4. The order in paragraph 3 above is to take effect from Monday, 20 November 2000.

5. The respondent is to pay the applicant's costs of this application on a scale as between attorney and client.

6. All costs reserved before the hearing today are to be borne by each party paying its own costs.

ON BEHALF OF APPLICANT : ADV P BELTRAMO
Instructed by :Ramsay Webber & Co -

ON BEHALF OF RESPONDENT : ADV S JOSEPH SC

Instructed by .Allan Levin and Associates

DATE OF JUDGMENT :13 NOVEMBER 2000

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