Court name
High Court of eSwatini
Case number
Civil Case 1958 of 2003

G.S. Franco Investment (Pty) Ltd v Carr Corp Investment (Pty) Ltd t/a Cleopatra's (Civil Case 1958 of 2003) [2003] SZHC 98 (21 October 2003);

Law report citations
Media neutral citation
[2003] SZHC 98
Coram
Shabangu, AJ









IN
THE HIGH COURT OF SWAZILAND


CIV.
CASE NO.1958/03


In
the matter between:


G.S.
FRANCO INVESTMENT (PTY) LTD


VS


CARR
CORP INVESTMENT (PTY) LTD


T/A
CLEOPATRA'S


CORAM SHABANGU
A J


FOR
APPLICANT MR. P. FLYNN


FOR
RESPONDENT MR. S. MDLADLA


JUDGMENT


21st
OCTOBER, 2003


The
applicant has instituted proceedings before this court by way of
application brought ex parte for relief inter alia perfecting the
landlord's hypothec, claiming cancellation of the lease agreement and
ejectment of the respondent from the leased premises. The applicant
appeared to further claim an amount E90,500-00 as arrear rentals.


The
application which was brought ex parte and on a certificate of
urgency was heard by the Acting Chief Justice who granted an order in
terms of prayer one to four of the notice of application dated 11th
August, 2003. The matter was apparently postponed to 22nd August,
2003. On the 22nd August, 2003 the matter was postponed by Justice


2


Matsebula
with an order being made that the respondent should file "documents"
if any by 26th August, 2003." There is also mention in the order
of 22nd August, 2003 of an extension of the rule. I understand that
the requirement that respondent is "to file documents if any"
refers to opposing papers, if any, the respondent would consider
appropriate to file. The matter came before me on 29th August, 2003
on which date it was postponed by agreement of the parties to 12th
September, 2003 on which date the matter was argued. On that date the
applicant sought an order for confirmation of the order granted by
the Chief Justice in terms of prayer three of the notice of
application, being for confirmation of the attachment of the movables
which were upon the leased premises. The applicant also sought an
order for the -


"(a) payment
of rentals and other charges in the amount of E90,500-00;


(b) cancellation
of the lease agreement;


(c) ejectment
of the respondent and all those holding through or under it from the
premises;


(d) interest
on the sum of E90,500-00 at the rate of nine percent annum a tempore
morae:


(e) costs
of suit."


I
will proceed to first consider whether the applicant is entitled to
cancellation and ejectment. Mr. Flynn's submission was that the
application was entitled to cancel the lease agreement and to eject
the respondent upon the mere basis that the respondent had defaulted
in the payment of his rental. In other words Mr. Flynn did no seek at
this stage of his submissions to rely on some kind of cancellation
clause, until it was intimated to him that non-payment of rental by
the tenant does not necessarily in our common law entitle the
landlord to cancel the lease and eject the tenant. Indeed the
proposition that a landlord is not entitled to cancel the lease and
eject the tenant because the latter has defaulted in his obligations
to pay rent was described by the Appellate Division of the Supreme
Court of South Africa, as being trite, in SPIES V LOMBARD 1950(3) SA
AD at 487 quoted with approval by J.T. R. GIBSON, in his SOUTH
AFRICAN MERCANTILE AND COMPANY LAW, 1977 4th ED. at page 192 states -


"Where
the tenant is in breach of his duty to pay the rent the landlord
cannot cancel the contract for the breach is not regarded as material


3


NGWENYA
V. HINDLEY 1950(1) SA (C) 846. 'It is trite law that non­payment
of rent is not per se good cause for cancellation' SPIES V LOMBARD
1950(3) SA(AD) at 487."


After
quoting the abovementioned statement by the Appellate Division in
SPIES V

LOMBARD
supra the learned author continues to describe the position of the
landlord and his remedies as follows:


"he
[the landlord] may, of course, sue for the rent (van der Linden
1:15.12.). But the tenant remains entitled to occupation in terms of
the lease. And the fact that he can sue for the rent may be cold
comfort to the landlord. 'It is true that the landlord can always sue
for his rent, but lessees are not infrequently men of straw.' JOOSUB
LTD V ISMAEL 1953(2) SA AD at 753. In order to avoid this situation,
it is common for landlords to insist on a 'forfeiture clause' as a
term of the lease. The parties, in other words, expressly agree that
the landlord will be entitled to cancel the lease and eject the
tenant if the latter breaches certain specified terms, one of which
is usually the payment of the rent on due date."


See
GIBSON J.

T.
R.
SA MERCANTILE AND COMPANY LAW 4th ED (1977)

at
193.


Similarly
W.E. COOPER LANDLORD AND TENANT 2nd ED. at page 167 states "At
common law a lessee's mere failure to pay rent did not, in the
absence of a lex commissoria, entitle the lessor to cancel the lease
unless the lessee was at least two years in arrear with his rent. "


Further
support for this legal proposition is found in WILLIE & MILLIN'S
MERCANTILE LAW OF SOUTH AFRICA th edition at page 250 wherein the
learned authors contrast the position of the statutory tenant in
South Africa from that of the common law tenant as follows:


"If
the tenant fails to pay the rent when due the all-important question
arises whether the landlord is entitled to claim the cancellation of
the lease and the ejectment of the tenant. The answer to this
question depends on the nature of the lease and on whether the lease
does or does not contain what is known as a forfeiture clause. A
statutory tenant under the Rents Act, as


4


stated
earlier in detail, is liable to be ejected if he fails to pay, within
seven days of the due date (or a further seven days at the discretion
of the court), the rent agreed upon with the landlord or the rent
prescribed by the Act.... As regards other leases, i.e. leases under
the common law, in the absence of a forfeiture clause, the landlord
is only entitled to cancel the lease if the tenant is in arrear with
his rent for two years or more."


It
is clear therefore that the textbook writers and case law authority,
is to the effect that non-payment of rent per se on the part of the
tenant does not entitle the landlord to cancel the lease and eject
the tenant. Furthermore for a collection of the old Roman Dutch
authorities on the subject (see W.E. COOPER SUPRA at page 167
footnote 94 and GOLDBERG V BUYTENDAG BOERDARY BELEGGINGS 1980(4) SA
775 A at 786E. This common law rule was the subject of criticism by
WOUTER DE VOS IN 1962 ACTA JURIDICA 167 who pointed out that the
'common law rule in the analogous case of sale was similar" but
that since the law has changed, in this branch of the law, to allow
the seller to give notice of rescission and on subsequent non-payment
to cancel the contract, the same position should apply in the case of
leases. PROFESSOR DE WOS' suggestion appears to have been accepted by
the APPELLATE DIVISION OF THE SOUTH AFRICAN SUPREME COURT IN GOLDBERG
V. BUYTENDAG BOERDARY BELEGGINGS 1980(4) SA 775 (A) at 786 discussed
in the seventh edition of Gibson's SA MERCANTILE AND COMPANY LAW at
page 189 where on the basis of the appellate division's decision in
Goldberg's case supra they state


"The
present position, therefore, is that where the tenant is in breach of
his duty to pay the rent, the landlord may demand payment and give
notice that if payment is not made within a reasonable time he will
cancel the contract. Failure by the tenant to respond to the demand
and pay the rent will entitle the landlord do cancel."


See
J.

T.
R.
Gibson, supra 7th edition at page 189.


It
is important to note that even in the new South African position
following from the Goldberg case supra the non-payment of the rental
by the tenant per se does not entitle the landlord to cancel the
lease and eject the tenant. The landlord is still


5


required
to "demand payment and give notice that if payment is not made
within a reasonable time specified in the notice he will cancel"
the lease. The difference in the position ushered in by the SOUTH
AFRICAN APPELLATE DIVISION in the GOLDBERG'S case is that the
landlord is no longer required to stipulate by way of a cancellation
clause for a right to cancel, once a demand and notice to remedy the
breach has not been complied with by the tenant. This right for the
landlord would on the basis of the Goldberg case in South Africa be
implied ex lege into a contract of landlord and tenant.


Secondly
it is clear that the APPELLATE DIVISION OF THE SUPREME COURT IN SOUTH
AFRICA departed from the Roman Dutch common law position following
the criticism of the common law rule by Professor Wouter de Vos. This
court does not have the power to depart from the Roman-Dutch common
law, even if the court considers that the contemporary
appropriateness of the Roman-Dutch law rule is questionable. Once the
appropriateness of a Roman-Dutch law rule has become doubtful it is a
matter for the legislature to intervene by passing appropriate
legislation to address the situation. This position is further
supported by our reception statute which takes a different form from
the manner the Roman-Dutch law was received in South Africa. Our
statute which has been cited as being responsible for receiving the
Roman-Dutch law into Swaziland provides, in Section 3 of the GENERAL
ADMINISTRATION ACT, 1905.


"The
Roman-Dutch common law, save in so far as the same has been
heretofore or may from time to time hereafter be modified by statute,
shall be law in Swaziland."


From
the above section it seems to me that the Roman-Dutch common law may
only be modified statute and that unless so modified the court is
bound to apply it without any amendments by the said court. In any
event even if the court could modify the common law position there
does not appear to be any justification for that because it is always
open to the lessor to stipulate for a cancellation clause.


On
the basis of the aforegoing Mr. Flynn's submission that the applicant
herein is entitled to claim cancellation of the lease and ejectment
of the tenant merely on the


6


basis
that that the tenant has breached its duty in terms of the lease to
pay the rentals, cannot succeed.


The
next question is whether the applicant is entitled to cancellation of
the lease and ejectment of the respondent on the basis of a
cancellation clause. The applicant would be entitled to such
cancellation and ejectment of the respondent if indeed there was
infact a cancellation clause in the lease, that the cancellation
clause has been properly pleaded and that the landlord has complied
with all the requirements of the said cancellation clause before he
claimed cancellation and ejectment of the respondent from the
premises. It is only under this circumstances that the applicant
would be in a position to place a proper reliance on the cancellation
clause.


The
application pleaded the right to cancel or the cancellation clause in
paragraph 8.9

of
its founding affidavit as follows:


"8.9. If
the tenant was in breach of any of the terms of the agreement, in
particular the term relating to payment of rent and remanded (sic) in
such breach seven days after due date, and if the tenant failed to
remedy such breach fourteen days after written notice to stop the
breach, then the lease agreement would be automatically cancelled.
That would be without prejudice to the landlord's rights to recover
all or any arrears or rent and damages for breach of contract.


8.9.1. The
landlord agreed to transfer to the tenant the restaurant and liquor
licences for the premises leased. Similarly, the tenant undertook to
take all steps that were necessary for the renewals necessary for the
duration for the lease.


8.9.2. The
costs of drawing up the lease agreement including stamp duty were to
be paid by the tenant."


Paragraphs
8.9.1. and 8.9.2 of the applicant's is not necessarily connected with
the cancellation clause even though the paragraphs have significantly
been pleaded together in the same main paragraph with the
cancellation clause. Even though paragraph 8.9 of the founding
affidavit does not attempt to identify the clause in the written
lease containing what is pleaded in paragraph 8.9 it would appear
that such


7


clause
is contained in paragraph sixteen of the lease agreement, which is
annexed to

the
founding affidavit. Clause sixteen of the lease provides -


"Should
the tenant be in breach of any of the terms of this agreement, in
particular the term relating to payment of rent and remain in such
breach 7 (seven) days after due date, and should the tenant fail to
remedy any breach of the provisions of this agreement for 14
(fourteen) days after written notice to stop the breach shall have
been delivered to the tenant, this lease agreement from that date be
automatically cancelled and the landlord or his agents shall have the
right to enter upon and repossess the leased property from any person
who may be in occupation, but without prejudice to the landlord's
right to recover all or any arrears or rent and damages for breach of
contract."


Even
though clause sixteen of the lease may raise some difficulties of
interpretation as a result of the wording used therein, it appears to
me that what is stipulated for is not only a right on the part of the
landlord to claim cancellation and claim ejectment in the event of a
breach by non-payment of rental on the part of the tenant, but the
clause further provides that the exercise of any remedies as a result
of a breach by the tenant of any of the terms of the lease shall
follow notice given to the tenant requiring him to remedy the said
breach within 14 (fourteen) days after delivery of the said written
notice to the tenant. A further requirement in terms of clause
sixteen, which must be satisfied before the right to claim any of the
remedies available to the lessee, is that the notice calling upon the
tenant to rectify the breach cannot be given before the expiry of
seven days after the date upon which performance is due. For example,
if the breach involved the non-payment of rent which was due on the
8th of each month the landlord would have to wait a further seven
days from the eighth day of the month before giving the 14 (fourteen)
days notice requiring the tenant to rectify the breach by paying the
rental. This may mean that the notice of 12th June, 2003 could not
properly be given in respect of rental which may have accrued for the
month of June, 2003, because even if one assumes the rental payable
on the 8th of each month in terms of the lease would be rental which
had accrued to the landlord in respect of the current month, which
month would be June, 2003 herein, seven days would not have elapsed
from 8th June 2003 to 12th June, 2003. This would be the case if the
rental was payable in advance of each month, but the lease agreement
does not state whether


8


the
rental was payable in advance or in arrear. Under the common law it
appears that in the absence of any express agreement to the contrary
rent is payable in arrear. (See J.

T.
R.
Gibson supra page 185. See also W.E. Cooper, LANDLORD AND TENANT
supra page 154 and WILLIE & MILLIN'S, MERCANTILE LAW OF SOUTH
AFRICA supra 249. It is possible that when the parties stipulated
that the rental was payable on the 8th of the month they had in mind
that on the eight of each month the lease the rental which had
accrued in respect of the previous month became payable. In other
words the rental would be payable monthly in arrear. I do not however
wish to say anything more on this aspect of the matter and nothing in
this judgment ought to be construed as having turned on this
question.


In
so far as the question whether the applicant has alleged and proven
that the provisions of the cancellation clause have been complied Mr.
Flynn sought to rely on paragraph thirteen of the founding affidavit
and annexure MFDA referred to in that paragraph. In paragraph
thirteen the applicant pleads as follows:


"During
June 2003 I duly demanded payment from the respondent of all monies
due to applicant and to date the money has not been paid. A copy of
the letter of demand is annexed hereto and marked MFDA."


The
said paragraph thirteen does not allege and prove that the conditions
precedent for the exercise of the right of cancellation in terms of
clause sixteen of the lease agreement and supposedly pleaded in
paragraph 8.9 of the applicant's founding affidavit, have been
complied with before the launching of this application. Specifically
what is not stated in paragraph thirteen is that the respondent was
given the 14 days to rectify the breach and that failing such
rectification the applicant would consider the lease cancelled. In so
far as the fourteen days notice which the applicant was required to
give to the respondent to rectify the breach it only becomes apparent
that the notice may have been given when one looks at annexure
"MFDA". This is not a proper way to plead. Even though it
is possible to consider that the letter of 12th June, 2003 which is
annexure MFDA was intended to comply with the requirements of the
cancellation clause, the wording of paragraph thirteen of the
founding affidavit would not alert the respondent that the applicant
sought to rely on clause sixteen of the lease in claiming
cancellation of the lease and ejectment of the respondent from the
leased premises. Indeed that explains why counsel for the applicant
did not intend


9


to
rely on the cancellation clause both in his written heads of argument
and his initial oral submissions in court. Not only is there lack of
an allegation that the demand contained in the letter of 12th June,
2003 gave the respondent 14 days within which to rectify the breach,
but there is nothing to suggest that the demand notified the
applicant that the respondent would regard the lease as cancelled, on
applicant's failure to comply with the demand. (See PONISAMMY AND
ANOTHER V VERSAILLES ESTATES (PTY) LTD 1973 (1) SA 372 where it was
held not only that the creditor's demand must contain a notice of
rescission but that such notice must be clear and unequivocal. (see
MICROUTSICOS V SWART 1949(3) SA 715(A). Furthermore, the demand in
order to be valid and have the effect of placing the debtor in mora
must be in relation to a debt due. (see CHRISTODOULIDES & ANOTHER
V S.A. DRY CLEANERS (PTY) LTD 1962(3) SA 596. The debtor cannot be
liable where he has a valid defence against the creditor's claim such
as the exception non adimpleti contractus, for unless the creditor
has proven that he has performed or tenders his own obligations which
are reciprocal to the right he is claiming he is not entitled to
claim enforcement of his right. This brings me to the defence raised
by the respondent in this matter.


The
submission made by Mr. Mdladla on behalf of the respondent is that
the applicant is not entitled to any of the relief claimed in the
"Notice of application" because the alleged arrears claimed
by the applicant are not due. There appears to be a number of reasons
relied upon by Mr Mdladla for saying the amount claimed is not due.
The reasons appear to be as follows:


(a) That
no rentals accrued to the landlord in respect of the leased premises
during the month of October 2002 to January, 2003, because the
applicant had not performed its obligations under the lease in that
the applicant failed to deliver the premises in good order and in a
fit state for the purpose for which they were leased, namely the
operation of a restaurant and bar, all of which required a liquor
licence.


(b) That
because of the fact stated in the aforegoing paragraph the respondent
was unable to operate the business of a restaurant and bar, which is
the purpose for which the premises were leased until on the 12th
January, 2003. I may add in this regard that indeed according to
clause 5 with the heading "Use of Leased Property', agreement
was as follows:


10


"5.1. The
tenant undertakes to use the leased premises for the business of a
restaurant with a liquor licence and bar with a wine and malt
licence.


5.2. The
tenant shall not change his business operations by including other
business without the consent of the landlord first having being
obtained, which consent shall not be unreasonably withheld.


5.3. The
tenant undertakes to carry on lawful business only on the leased
property."

Then
in clause seventeen of the lease it is further provided under the
heading

"Licensing".


"The
parties agree that the landlord will transfer to the tenant hi:
Restaurant and Liquor licences for the premises leased for the
duration of the lease and renewal thereof. The tenant undertakes to
take all steps that are necessary for the renewals necessary for the
duration of the lease." my underlining.


It
seems to me that (a) the parties' agreement contemplated that the
premises were leased for the purpose of operating a restaurant and
bar with a liquor licence and wine and malt licence, which licences
the landlord in clause seventeen undertook to transfer to the
respondent.


(b) In
order to enable the respondent to operate lawfully and in accordance
with the law the applicant undertook to "transfer to the tenant
his restaurant and liquor licenses for the premises leased for the
duration of the lease and renewal thereof." It seems to me again
that the quoted portion of clause seventeen read with clause five
contemplates that at the commencement of the lease the applicant
(landlord) the respondent will also have received the transfer of the
licences, together with premises ready and fit for the purpose of
carrying on the business of restaurant and bar. The parties appear in
clause seventeen to clearly contemplate that the transferred licence
will be available for the duration of the lease' which duration
commenced at the beginning of October, 2003.


11


(c) Proper
delivery of the premises by the applicant to the respondent would
require that at the time of delivery the premises would not only be
fit for the purpose for which they were let, but would also mean that
the respondent is by such delivery placed in a position to conduct
the business of a restaurant with a liquor licence and bar with wine
and malt license' which licences had to be transferred by the
applicant to the respondent in terms of clause seventeen of the lease
together with the physical delivery.


(d) The
first rental which would only have accrued in accordance with the
lease not only after the premises were brought into a condition where
they could be said to be fit for carrying on of the restaurant and
bar business, but also after the liquor licence had been transferred
to the respondent to enable him to lawfully carry out the business
for which the premises were leased; both of which events only
occurred after 11th January, 2003. The first rental would therefore
have become due on 8th February 2003.


(e) The
inability to transfer the licences is also some evidence of the
fitness of the premises because ordinarily the liquor licensing board
is unlikely to agree to transfer the licences, until the premises are
in a proper condition.


(f) Further
in any event unless there had been a proper transfer of the licences
in respect of the premises from the applicant to the respondent it is
arguable that the applicant would not have given vacua possessio to
the respondent who could be evicted for trading on the premises
without a licence.


(g) The
first rental which accrued in terms of the lease on 8th February,
2003 was actually paid on 10th February, 2003. As to the date of
payment of the first rental the parties are agreed and I refer to
paragraph ten of the applicant's founding affidavit.


(h) It
seems again to be common cause that there was no payment during the
month of March and April, and then a payment of E12,000 was made on
13th May,2003. This payment was less by E500 from the fixed rental.


(i) Then
on 12th June, 2003 before the applicant was entitled to issue a
demand for the rental for the month of June, 2003, it issued the
letter of demand which is annexure MFD 4 and has already bee referred
to above.


12


(j) According
to Mr. Mdladla's submission, and if it be sustainable, the only
amount in arrear and in relation to which the applicant could give
notice or demand in terms of clause sixteen of the lease is an amount
E25,500 in respect of the rentals for the month of March and April,
2003, which amount was paid less E500-00 by guaranteed cheque which
was sent to the applicant under cover of a letter dated 18th June,
2002 and is annexure MFD5 of the applicant's own founding affidavit.


(k) The
applicant could not demand payment in terms of the cancellation
clause in relation to the rental which fall due on 8th June, 2003
because the seven days which was required to lapse from the date the
amount became due, required by the lease had not lapsed.


However,
that seems to be the basis upon which Mr. Mdladla submitted the
arrear rental due and which could properly have been demanded by the
letter of 12th June, 2003 was paid. A basis for this submission is
found in paragraphs thirteen and fourteen of the respondent's
answering affidavit wherein it is stated -


"I
note the contents herein however, I fail to understand what is meant
by branches (sic) and it is further correct that the applicant had
with the full knowledge of the material defects within the building
failed to disclose such information to me such that the respondent
could not operate its business timeously and legally in terms of the
lease agreement. It is correct that the respondent still intends to
pursue the claim for damages."


Then
in the next paragraph the respondent states-


"Whilst
it may be correct that the lease agreement was signed in October,
2000. I may further add that the said agreement could not be complied
with as at the stated period the premises were not in good order and
neither could the tenants do business as envisaged in terms of the
lease agreement."


I
have already alluded to clauses five and seventeen of the lease and
to their possible effect on the obligations of the parties under the
lease. The failure by the respondent to effect transfer of the
licence until 16th January, 2003, the closure of the premises by the
Board in October, 2000 (which is the first month of the commencement
of the lease) apparently in accordance with an order of the Board
made on 11th January,


13


2002,
and the objection by the City Council to the "grant" of the
licence in its letter to the Chairman of the Liquor Licensing Board
dated 9th December, 2003, all amongst other factors support the
respondent's allegations that the premises were not delivered in a
condition which rendered them fit for the purpose for which they were
leased, to the respondent.


In
HUNTER V CUMNOR INVESTMENTS 1952(1) SA 735 C at 740 it was stated
"One of the incidents of a contract of lease in Roman-Dutch law
is that the lessor is obliged to hand over the leased premises at the
outset of the lease in a condition reasonably fit for the purpose for
which they are let... A failure to do so on the part of the lessor
constitutes breach of contract and the lease becomes entitled to
certain remedies and the defaulting lessor becomes subject to
corresponding liabilities. Depending on the nature and extent of the
lessor's breach, the lessee may treat it as a repudiation of the
contract and quit the premises, or he may claim a proportionate
reduction of the rent, or, after prior notice to the lessor, he may
effect the repairs at his own expense and deduct the costs thereof
from the rent."


J.
T.
R.
Gibson 4th edition supra summarises the position as follows at page
190 -


"Where
the landlord is in breach of his duty to deliver the breach is
material and the tenant may treat the contract as cancelled and file
for damages or claim specific performance and damages (DU PLESSES V
SINGER 1931 CPD 105, WOODS V WALTERS 1921 AD 303."


See
also WILLE & MILLIN supra page 243 under subheading "repairs".
It is clear therefore that the failure of the applicant to deliver
the leased premises in a condition which rendered them fit for the
purpose for which they were leased would have amounted to a material
breach which would have entitled the respondent to cancel the lease
or to the other remedies mentioned above. However more importantly as
mentioned earlier the respondent would be entitled to raise as a
valid defence the exceptio non admpleti contractus against the
applicant's claim for rental. According to this exceptio in the case
of a reciprocal agreement where performance of the parties must be
simultaneous or the plaintiff is required to perform before the
defendant, the creditor, must in his demand tender performance or
show that he has performed,


14


otherwise
his claim can always be defeated with the exceptio non adimpleti
contractus. That a defendant should be able to raise the exceptio non
adimpleti contractus against a plaintiff who has not performed at all
is, of course, obviously fair and reasonable. But what is the
position where the plaintiff or applicant has rendered performance
but his performance is defective. To allow a defendant who has
accepted and is using the plaintiff's performance (either because the
defect is not sufficiently serious to justify rejection of the
performance or because the defendant prefers to accept rather than
reject the defective performance) to raise the exceptio against the
plaintiff's claim for counter performance might operate extremely
unfairly against the plaintiff. The defendant will have the (often
considerable) benefit of the plaintiff's performance while the
plaintiff will receive nothing in return. On the other hand, to order
the defendant to render full counter performance in return for the
plaintiff's defective performance will be unfair to the defendant. In
BK TOOLING V SCOPE PRECISION ENGINEERING 1979(1) SA 391(A) the
APPELLATE DIVISION OF THE SUPREME COURT OF SOUTH AFRICA is said to
have determined the abovementioned issues as follows. Any contracting
party has in principle a right to the specific performance by the
other party, that is he has the right, in principle, to enforce the
contract strictly according to its terms. The right of a party to a
reciprocal contract to withhold his own performance until the other
party performs in full, is a powerful weapon to enforce full
performance. In principle, therefore, a defendant who has accepted
the plaintiffs defective reciprocal performance is still entitled to
raise the exceptio non adimpleti contractus against the plaintiffs
claim, even though the plaintiff's performance is defective in minor
respects only. Where, however, fairness so requires, a court may, at
its discretion, refuse to allow a defendant to raise the exceptio and
order him to render a reduced performance. Having regard to the
aforegoing, the applicant in an application based on a reciprocal
contract must, to have his pleadings in order, allege and prove in
his founding affidavit that he has rendered full performance from his
side or must tender full performance.


If
he is unable to prove that he has indeed performed in full and wishes
the court to exercise its discretion in his favour by awarding him a
reduced counter performance, he then must allege and prove:


15


(a) That
the respondent is utilising or utilised during the relevant period
the defective performance.


(b) That
circumstances exist which render it fair (equitable) that the court
should exercise its discretion in applicant's favour.


(c) By
how much the counter performance ought to be reduced. This would
normally be by the amount which it would cost the defendant to
convert the plaintiff's defective performance or incomplete
performance into proper performance.


See
J.

T.
R.
Gibson's seventh edition supra at page 93 note 101, commentary on the
B.K. Tooling case. See also SCHOLZ V THOMPSON 1996(2) SA 409 (C).


At
page thirty one HARMS LTC in AMLER'S PRECEDENTS OF PLEADING

THIRD
EDITION expresses the above in this manner.


"Where
a contract imposes reciprocal obligations upon the parties,
performance and counter performance should generally take place at
the same time. MILLMAN N.O. V. GOOSEN 1975(3) SA 141 (0) 142. Certain
types of contract form an exception to this rule: thus a lessor of
property must perform before he can demand rental and an employee
must perform before he can claim his emoluments; similarly a
contractor must himself first perform."


I
should caution however, that in so far as the employment agreement is
concerned the above stated common law position regarding the
employee's right to claim his remuneration appears to have been
changed by Section of the Employment Act, 1980 as amended.


Still
dealing with the same subject LTC Harms. On the next page observes -


"If
a defendant pleads the exceptio the onus will be on the plaintiff to
prove his performance or his ability to perform or the fact that he
is excused from performing in advance or simultaneously."


Applying
the abovementioned principles it seems to follow that respondent's
submission that the leased premises when delivered between October,
2002 and mid


16


January,
2003 were not in a condition which rendered them fit for the purpose
for which they were let raised the exceptio non adimpleti contractus.
The respondent says no rental became due to the applicant in terms of
the lease for this period. The applicant's founding affidavit even
when read with the replying affidavit does not allege and prove that
the applicant had complied with its obligations in terms of the lease
by delivery of the said premises in a condition fit for the purpose
for which they were leased. As already stated above such allegations
and prove must be contained in the founding affidavit. The onus to
allege and prove this is on the applicants. The application ought to
fail on that basis alone. However even if I were to take into account
what is contained in the replying affidavit in respect of this aspect
of the matter at best what can be said for the applicant is that
there is a dispute of fact regarding this question (that is whether
the applicant had delivered the leased premises at the commencement
of the lease in a fit condition having regard to the purpose for
which they were leased.) There was no application by the applicant
that oral evidence be led to clarify this issue, even at the
intimation that this might be appropriate by Mr. Mdladla. However, in
any event this allegations and evidence thereof ought to have been
contained in the founding affidavit. In light of the aforegoing it is
not possible to find in applicant's favour that any rental accrued to
the applicant in respect of the period from October, 2002 to January,
2003. Further because the premises only became ready well after the
eighth day of January, 2003 the first rental in respect of the
premises could only accrue on 8th day of the subsequent month which
is February, 2003. In terms of the lease the rental could be paid by
the tenant within a further seven days after the eighth day of
February, 2003. However even if the respondent would not pay the
rental within the further seven days aforesaid he would still not be
in mora unless and until the applicant would place him in mora by
demanding that he rectifies the breach by paying the rental within 14
days from the date such demand is served on him. The next payment
which was made successfully was in 13th May, 2003. By 12th June, 2003
the respondent was in arrear with a rental for two months which was
paid on 18th June, 2003. By 12th June, 2003 when the applicant wrote
the demand to respondent the condition precedent for the making of
the demand in respect of the June rental had not been fulfilled
because the seven days from 8th June to 12th June, 2003 had not run
out.


17


It
follows therefore at best for the applicant the arrear rentals which
had not been settled by the respondent as at 12th June, 2003 amounted
to E25,500-00. However the demand and the notice dated 12th June,
2003 demanded a very high amount of E88,000 which the applicant
claimed was due instead of E25,500-00. As a result there is at least
a doubt whether the demand was proper and for an amount which was
due. In my opinion such demand was not for an amount proper and due.
This demand cannot be said to be in accordance with what the parties
contemplated in the cancellation clause.


Secondly
as observed earlier on the demand did not contain a notice of
rescission and on that basis it cannot be said it was given in
accordance with what was required by the cancellation clause. In
light of all the aforegoing it cannot be said that the applicant has
established an entitlement to cancel the lease and eject the
respondent. Similarly the applicant as already shown has not
established any right to claim rentals other than the amount of
E500-00 which was not included in the payment for May, 2003. However,
even with regard to this E500-00 the respondent says it has a counter
claim arising from the applicants' failure to deliver the premises in
a fit condition on time. The respondent does not say for how much is
the counter claim, something which would ordinarily defeat the
respondents defence. However, in light of all the circumstances of
the case I am not satisfied that the applicant has established that
he is entitled even to any of the other forms of relief, namely the
confirmation of the order for perfection of the landlord's hypothec
and any arrear rentals as claimed. It follows therefore that the
application must be dismissed with costs.


A.S.
Shabangu


Acting
Judge