Case: Gouws N.O and another v BBH Petroleum (Pty) Limited
In the case of Gouws N.O and another v BBH Petroleum (Pty) Limited, a lessor applied to the Pretoria High Court for an eviction order against its lessee. The lessee conducted its fuel filling station business on the leased premises. The parties’ lease agreement had come to an end without the tenant exercising its option to renew, whereafter the parties had various correspondence with each other regarding negotiations for a new lease, while the lessee remained in possession of the premises. Negotiations fell flat however and the lessor proceeded with eviction proceedings. The lessee raised three points on which it resisted eviction- firstly, the lessee argued that a new lease agreement had come into effect by way of the correspondence between the parties; secondly, and in the alternative to the first point, the lessee argued that its failure to exercise the option to renew the lease should be condoned; and thirdly, the lessee argued that it had an improvement lien over the property. All three these defences were compellingly rejected by the Court.
Interesting aspects of the case are:
- In rejecting the second defence of the lessee, namely that the lessee’s failure to exercise the renewal option should be condoned, the Court in its reasoning placed emphasis on the importance of contractual terms, the enforceability thereof and a contracting party’s right to rely on the contractual terms to which it agreed. A party that is unhappy with, or that failed to comply with, an enforceable and legal term of a contract, cannot call upon a court to alleviate such party’s dissatisfaction or failure, or to create a contract for the parties.
- The eviction order was granted, together with a punitive cost order against the lessee. The Court held that there was no merit whatsoever in the lessee’s defences and that they were raised in bad faith in order to achieve an improper purpose in that the lessee wanted continued possession of the premises to the detriment of the lessor in order to continue with their business as well as to enhance their commercial negotiating position against the lessor. The Court went as far as to state that the lessee’s defences were disingenuously advanced in order to use the law’s delays to the lessee’s own commercial advantage.
Written by: Lucas Theron (B. Com Law, L.L.B, Dipl. Fin. Plan); source: https://www.lexisnexis.co.za/
LEXISNEXIS SUMMARY:
Property :: lease agreement
Gouws N.O and another v BBH Petroleum (Pty) Limited
| Case Number: | 69926 / 2017 |
| Judgment Date: | 19 / 03 / 2019 |
| Country: | South Africa |
| Jurisdiction: | High Court |
| Division: | Gauteng, Pretoria |
| Bench: | NB Tuchten J |
Keywords:
Property – Lease agreement – Expiry of – Eviction of occupier
Mini Summary:
Application was made for the eviction of the respondent from business premises on which it operated a fuel filling station and shop.
In a counter-application, the respondent sought to compel the applicants to sign a lease embodying terms to which the respondent alleged the applicants had agreed. In the alternative, the respondent sought to have an earlier lease agreement between the parties, which had elapsed through the effluxion of time, to be regarded as having been renewed.
Held that the evidence established that the parties had attempted protracted negotiations regarding a new lease after the first one had expired. Eventually, in September 2017, the applicants sent the respondent a letter stating that it was no longer going to negotiate and that the respondent should vacate the premises by the end of the following month.
The court rejected the respondent’s allegation that the parties had by their correspondence, intended to enter into a binding agreement giving the respondent the right to occupy the premises for five years until a formal agreement was signed. The correspondence showed that the applicant had made it quite clear that a new agreement would only come about once signed.
The second defence raised was that the respondent’s neglect to exercise an option to renew the agreement should be condoned and treated as if the option had been exercised. The court roundly rejected that submission and reminded that courts will not make contracts for parties.
Finally, the respondent resisted the demands for it to vacate the property, on the grounds of an improvement lien it alleged it had. However, it was not alleged that the applicant had benefited from the said improvements. Moreover, the issue was dealt with by the lease agreement, which required the property to be restored to its pre-lease condition on termination of the lease.
The defences having been dismissed, the eviction order was granted.