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IN THE HIGH COURT OF SOUTH AFRICA,

FREE STATE DIVISION, BLOEMFONTEIN

Case number:   2479/2016

In the matter between:

MARIUS WESSELS N.O                                                                                   1^st Appellant

HELEN WESSELS N.O                                                                                    2^nd Appellant

MARNIA WESSELS N.O                                                                                  3^rd Appellant

and

KLEO INVESTMENT (PROPRIETARY) LTD                                                        Respondent

 

INRE

KLEO INVESTMENT (PROPRIETARY) LTD                                                         Applicant

and

MARIUS WESSELS N.O                                                                               1^stRespondent

HELEN WESSELS N.O                                                                                2^nd Respondent

MARNIA WESSELS N.O                                                                             3^rd Respondent

CORAM:                        NAIDOO, J et MBHELE, Jet MHLAMBl, J

HEARD ON:                  20 NOVEMBER 2017

DELIVERED ON:          21 December 2017

MHLAMBI, J

INTRODUCTION

[1] This is an appeal against the whole of the judgment and the costs order of Molitsoane, AJ delivered on 20 January 2017 in terms of which the following order was made:

“1. It is declared that the lease agreement dated the 15th OCTOBER 2008 and subsequently renewed, is a valid agreement between the parties;

2.    It is declared that the agreement aforesaid was validly terminated  and/or cancelled;

3.   It is ordered that the respondent or any other person and/entity occupying the premises known as Shop 1, Shumans Buildingt Jasmyn Street 1, Wilgehof, BLOEMFONTEIN, on the ground of any right or title of the respondent evict the said premises on or before the 19th March 2017;

4.   The Sheriff of this court is hereby authorised to evict the respondent  or  any  other  person  occupying  the  premises herein aforementioned by virtue of any right of title of the respondent if the order in paragraph 3 above is not complied with;

5.     Respondent is ordered to pay the costs of this application.”

GROUNDS OF APPEAL

[2] The main grounds of appeal are that the court erred in finding that:

2.1       Marius Wessels did not act on behalf of the Trust at all material times and that the Trust was not one of the parties to the Spar agreement.

2.2       Who the parties to the Spar agreement were, did not create a factual dispute which could not be adjudicated on the documents before court.

2.3      The original lease agreement was the valid agreement which was not substituted by the Spar agreement.

2.4      It was not necessary to adjudicate on the fulfilment or otherwise of the suspensive condition as contained in the Spar agreement.

2.5      Clause 24(2) of the original agreement stipulated only two jurisdictional requirements which must be satisfied before the said clause is invoked.

2.6       It allowed new facts or evidence set out in the replying affidavit.

BACKGROUND

[3] The respondent is the owner of a 60 year old building which was formerly the joint property of Christina Kleovoulou and Demetris Phillipou; the latter having entered into a lease agreement dated 16 October 2008 with the appellants in their capacities as trustees of the Wessels Trust. It was valid for a period extending from 1 December 2008 to 30 November 2013 whereupon it was renewed for a further period which would end on 30 November 2018. This   is the agreement  that is styled the original  agreement and which  is the subject of the dispute. The leased premises are described  as  "Retail  offices  on  Ground  floor  of/in  the  building  known as Shumans Building situated at: Jasmyn Avenue, Gardenia Park, Bloemfontein, measuring 400 m2 as indicated on  the  attached plan. For business purposes, the said premises were known as Rolina Stores, Shop 1, Shumans Building, Bloemfontein.

[4] An offer to rent, marked as annexure "AA7" to the founding affidavit. which was typed on the letterhead of  The Spar Group  Ltd Central Office, was signed on 5 October 2014 between the respondent and the tenant's representative, Marius Wessels, the first appellant, with the details of the tenant described on the document as "Name: To be advised". The premises to be rented was Shop No 1, Shop No 2, Shumans Building Erf No 10285, Jasmyn Avenue, Wilgehof, Bloemfontein. The landlord and/or the respondent was represented by P Kleovoulou.

APPELLANTS' CONTENTIONS

[5] The appellants contended that it was not in dispute that:

5.1      During 2014 the parties entered into negotiations in terms of which it was suggested that the Wessels Trust, as anchor tenant, would conduct and open a Spar shop in the suggested  renovated building;

5.2      the Rolina Store (the store currently owned by Wessels Trust) would come to an end and be replaced by the Spar shop;

5.3       the Wessels Trust considered conducting the Spar business in the name of a close corporation;

5.4      P Kleovoulou ( the director of the Respondent) was informed that the Wessels Trust would enter into negotiations with the Spar franchise group and that the consideration by the Appellants (Wessels Trust) to run the new Spar business in the name of a close corporation would only take place at a later stage;

5.5      the Respondent did not care which entity would conduct the business of the Spar shop as long as the trust or member of such entity gave surety in respect of the lease amount payable.

[6] It was submitted on behalf of the appellants that:

"7.2        The Respondent was therefore aware, alternatively ought to have reasonably been aware of the fact that, for all intended purposes the Wessels Trust was the contracting party with regard to the Spar agreement.

7.3         The finding by the Court a quo that the Respondent's denial that Marius Wessels acted on behalf of the Trust was not correct. It was submitted that even if the denial was considered as set out in the replying affidavit, then the version of the Appellants should have been accepted as the correct version, alternatively the court should have found that a real factual dispute arose which could not be resolved from the papers.

7.4         The Court a quo's finding that the "question of fact as to which parties were the parties to the Spar agreement, does not create a factual dispute which cannot be adjudicated on the document before court", and that the trust is not a party to the agreement was incorrect. The Wessels Trust contracted with the Respondent in respect of the Spar agreement.

7.5        The Spar agreement substituted the lease agreement between the parties. The parties to the Spar agreement were the Respondent and the Appellants. The Spar agreement, which was signed by the said parties, specifically stated that it superseded any previous offer (to rent) between the parties and the latter was therefore superseded by the Spar agreement which came into operation on 1 October 2015.

7.6         As a result of the said substitution, the Respondent could not rely on the lease agreement for purposes of evicting the Appellants from the premises. The Spar agreement was a binding agreement between the Respondents and the Appellants.

[7] The respondent's contentions

7.1     On 25 October 2017 the Respondent became the registered owner of the Shumans Building and the Respondent became the lessor by virtue of the law in terms of the  lease  agreement of 15 October 2008. Since 2010, the respondent planned the renewal and renovation of the Shumans Building and appointed architects for such renovations in June 2013. At the end of 2013, the term of the lease agreement was extended for a further five years until November 2018.

7.2     On 5 November 2014 Annexure "MT' was signed subject to suspensive conditions. In terms of clause 3.1 thereof, the opening of the new centre (the renovated Shumans Building) was planned for 01 December 2015. This agreement was not the agreement between the appellants and the respondent, as it did not become into a valid agreement because the suspensive condition contained in clause 3.18 was not fulfilled.

7.3     The Appellant in its opposing papers did not deal with this suspensive condition. In contrast thereto the Respondent points out that this aspect goes to the heart of the matter as the Appellant was afforded time to agree with Gardenia Liquor Store and to buy it, but could not between them agree on a price. Therefore such lease agreement for a TOPS@SPAR was not entered into between them, and the suspensive condition was not fulfilled. The Appellant was not willing to move on and to enter in such new agreement (from the current old premises to a newly renovated Spar Shop). Therefore the Respondent  eventually had to utilise  clause

24.2 of the agreement of lease, marked annexure "KS" to the founding affidavit, to terminate the Appellant's lease.

7.4     Secondly, and as could be gleaned from Annexure "AA7" itself, it was an agreement between "the Tenanf' which was an entity described as "name: to be advised" and represented by Mr Marius Wessels.

7.4     Nowhere on the record is there an averment that such an entity "to be advised" conducted the Rolina Stores business in the Shumans Building then. To the contrary, it was the Wessels Trust t/a  Rolina  Stores which conducted  business in Shop 1, Shumans Building and were in occupation of the premises. There was therefore no connection between annexure 11A" and the Wessels Trust t/a Rolina Stores.

7.6      The appellants did not rely on rectification  of annexure "AAT'  to rectify clause 3.2 of the Spar agreement but simply relied on the allegations contained in the first paragraph marked "7.2" of paragraph 6 above.  The said contentions could not  be read into the offer to rent or annexure "AA7" without the rectification of clause 3.2 which the appellants failed to do.

[8] In considering the grounds of appeal, I mention that I cannot fault the reasoning of the court a quo and align myself therewith as indicated by the contents of the following paragraphs:

"[11] At the onset, it is important  to deal  with  the  issue  of  who the  parties to the Spar agreement  are. Messrs Kleovoulou and Wessels acting on behalf of the applicant and an "entity to be  advised"  respectively entered  into the Spar  agreement  which  was  reduced to writing  and  was signed on the 5^th November 2014.lt is argued on behalf  of  the  Trust  that at  all  material  times  Marius Wessels acted  on  behalf  of  the  trust when so signed the Spar agreement and in fact P Kleovoulou was aware that Rollina Stores was to be turned into a Spar  shop. This  is denied  by the said Kleovolou.  It is argued on behalf of the trust that the denial of this  fact constitutes a factual dispute which cannot be adjudicated on the affidavits before court. It is further argued on behalf of the respondent that  the version of the respondents should be accepted as correct.

[12] It is my considered view  that  the  fact  of  who  the  parties  to  the Spar agreement are, do not create a factual dispute which cannot be adjudicated on the documents before court. This agreement has been annexed ta the affidavit for the perusal of the court.

[13] In the Spar agreement it is clear that Marius  Wessels acted  for 'the entity to be advised'. When Mr Wessels applied for  membership  of  the Spar  Guild of Southern  Africa  (Annexure AA4 to respondents  affidavit), he

did not purport to act on behalf of the Trust in his application.  He also did not purport to act on behalf of an entity to be formed or to  be  advised.  When he applied for membership above, which  fact  he uses to fortify  the fact that the Spar agreement had been  concluded  between  the applicant and the Trust, he applied in his personal capacity. The reason for drawing this inference is the following:

[14]  Annexure  AA4  reveals  that  Applicant  is Marius Wessels. Paragraph 1.2 of this annexure, deals with registration in the case of a company or a close corporation or identity number in the case of an individual or partnership.  Mr  Wessels  supplied his identity  number.  Mr Wessels did not supply the registration number of the trust. One would have expected him  to at least insert the registration number of the trust and not his identity number.  Nowhere  in the  said  application  does  he  purport  to act for the trust or for the entity to be formed.

[15]       Furthermore, following the said application for membership, a membership agreement was entered into by and between the Spar Guild of Southern Africa (NPC) and Marius Wessels wherein he is referred to as a 'retailer member'. The word 'retailer member' has been defined in the said membership agreement. According to the membership agreement "a retailer member"  means  "a  member,  so  styled,  of  the  Guild  and  the   'retailer member' means specifically the retailer member who is a party to this agreement' Mr Wessels did not purport to  act in   a representative capacity of  either the Trust or the "entity   to be advised"  or   even  still,  for  an entity  to  be formed  when  he so applied  for  the  membership. Nowhere in this  application before me  does Marius  Wessels purport  to  act  in order to protect the rights of an entity to be formed.

[16]   Paragraph 5 of the application for membership clearly states that such retailer membership "cannot be sold or transferred". If such membership was thus granted to Mr Wessels in his personal capacity as it is, he can therefore not transfer it to the trust. Respondents contends that the applicant was aware that Marius Wessels was acting on behalf of the trust and later the trust was to be substituted by another entity. If it were so then in that case the Spar  agreement  could  have simply  been entered  into by and between the trust and the Trust. Such did not happen. The Spar membership was therefore not for the trust.

[17] Nowhere in the documents filed is it alleged that such an 'entity to be advised' is the current lessee of the  building  in question.  It is also  clear that  the  trust is  still  carrying  on  business  in  the  said premises  on  the same terms as in the original agreement. The trust  still  occupies  the  same space as previously leased as opposed to the increased space as set out in the Spar  agreement.  The  trust  is  still  paying  the  rental  as agreed in the original agreement as opposed to an increased rental as set out in the Spar agreemen.t

[18]   Clause  25(a)  of  the  original   agreement   contains   a non-variation clause which states that any variation to the said agreement shall be in writing and signed by the parties. When the Spar agreement was signed, Marius Wessels signed on behalf of  an  'entity  to  be advised'.  He clearly did not sign on behalf of the trust. If it were not so,  he  could  have  indicated that he was signing on behalf of an entity to be formed.

[19] For the reasons set out above I am unable to find that the trust is one of the parties to the Spar agreement and consequently I cannot find that the Spar agreement has substituted the original agreement.  It is  my finding that the original agreement 1s, therefore, the current valid agreement between the parties”. The reasoning of the court a quo is fortified by the terms of the Spar agreement and the original lease agreement.

[9] Clause 3.18 of the offer to rent, also known as the Spar agreement reads as follows:

"Acceptance of Offer and Suspensive Condition:

This offer to Lease is further subject to the conclusion of a lease agreement for TOPS@SPAR located at the Kwikspar entrance identified on the attached Shopping Centre Plan. The Landlord undertake to assist the tenant in securing the current liquor store. This offer is subject to approval of Spar Membership being given by the Spar South Rand Regional Committee”.

[10] Clause 24 of the agreement of lease reads as follows:

“24.1............

24.2 Should the lessor at any time during the currency of this lease decide

(a)  to demolish the building for any reason whatsoever, or

(b)  to substantially renovate the building and /or the  leased  premises  for any   reason   whatsoever,   then   notwithstanding   anything   to   the contrary  contained  or  implied  in  the  lease,   the   lessor   shall   be entitled to terminate  this  lease on  not less than  3(three)  calendar months'

notice given in writing  to the lessee. The decision of the lessor's    architect

as to what constitutes substantial renovations to the building and/or the leased premises for the purposes of (b) above shall be final and  binding upon the lessee."

24.3...

24.4 The lessee will have first right at refusal to be the anchor tenant, and has to be exercised  with 60 (sixty) or such  written  notice  from the lessor.   The lessor however has the right to withdraw his first right of refusal if the lessee cannot obtain financing to be approved by an accredited franchisor within 60 calendar days.

24.5....”

CONCLUSION

[11] It is evident that the trust was not a party to the Spar agreement in terms of clause 3.2 of the Spar agreement as the contracting party in that agreement is termed:

"Details of Tenant: Name: To be advised

: Registration No.: To be Advised

: VAT Registration No. : To be  advised."

Had the parties to the Spar Agreement intended the Trust to be so bound, then its proper particulars, name and title would have been reflected on the agreement. The Spar agreement  was  therefore not a valid agreement of which the Trust was a party.  Consequently, it could neither supersede nor substitute the lease agreement which was valid until 2018.

[12] Clause 25(a) of the agreement of lease prescribes that  it  is the whole agreement between the parties and that any agreement to vary  it  shall  be  in  writing  and  signed  by  the  parties.  The Spar agreement cannot be such other agreement as it was not signed by the Respondent and the Wessels Trust. On this ground alone the appeal should fail.

[13] I agree with the respondent's contentions as contained in paragraph

7.3 above in that the suspensive condition in clause 3.18 of the Spar agreement was never fulfilled as the lease agreement for TOPS@SPAR, to which the Spar agreement was subject, was not concluded. In the light of the above, I find it unnecessary to traverse the other grounds raised and come to the conclusion that the court a quo's decision was correct.

[14] COSTS

In the result costs should follow the event.

[15] ORDER

The appeal is dismissed with costs. 

I concur

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MHLAMBI, J

I concur

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NAIDOO, J

I concur

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MBHELE, J

Counsel for Appellant: Adv. Maree

Instructed by               : Symington and De Kok

                                      169 Nelson Mandela Drive

                                      Bloemfontein

Counsel for Respondent: Adv Benade

Instructed by                  :  WA Wessels Attorneys

                                      : Tweepres Building

                                      : 29 President Steyn Avenue Westdene

                                      : Bloemfontein

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