HIGH COURT OF LESOTHO
(PTY) LTD Plaintiff
INTERNATIONAL OF LESOTHO (PTY)LTD Defendant
by the Honourable Mr. Justice WCM Maqutu On the 23rd March, 2005
(a lessee) brought an action of damages against the lessor in respect
of the damage to its information technology electrical
was caused by a fire when the lessors servants were maintaining a
building in which the equipment was. Plaintiff
has in its declaration
given the particulars of the negligence that plaintiff accuses the
defendants servants of. Defendant in
its plea had denied liability in
terms the exclusion of liability clause that exonerates the lessor
for the negligence of its servants.
Defendant has also denied the
negligence and put plaintiff to the proof of the damages claimed.
has been called upon to settle one preliminary legal issue on the
agreed statement of facts. The issue is whether at this
stage of the
relationship of landlord and tenant clause 18.1 of the sub-lease
agreement is still part of the month to month lease
after the failure of the parties to renew the one year lease at the
end of March 2002. Clause 18 provides:
Exclusions of liability
18.1 "Neither the sub-lessor nor any of its directors, agents,
employees or servants shall be liable for personal injury to
death of any person or the loss of or damage to any property of
whatsoever nature on the premises or on the property, howsoever
arising or caused and whether by reason of the default or negligence
of the sub-lessor or of any of the said persons or otherwise.
18.2 the sub-lessee hereby indemnifies the sub-lessor and its
directors agents, employees and servants against any claim of
nature which may be made against any of them arising out of
any of the aforegoing occurrences.."
are in agreement that the lease was ex lege tacitly renewed. The
submission of the plaintiff against clause 18 is succinctly
Counsel for plaintiff as follows:
"The crux of the matter is whether the exclusion clause
excluding liability of a landlord in Lease Agreements can be renewed
impliedly or tacitly."
claim damages on account of the negligence of defendant's servants
that allegedly caused a fire that damaged plaintiffs
says the entire lease was tacitly in operation during the period
plaintiff was in occupation on a month to month basis.
clause 18 was in operation. Therefore the defendant is not liable for
the damage to plaintiffs property.
disputed issues such as whether the damage to plaintiffs property was
due to the negligence and proof of damages are deferred
depending on the ruling of the court on the preliminary issue.
purposes of making a ruling I have to proceed on the basis that the
defendant's servants have been negligent. The issue for
is whether their negligence notwithstanding, clause 18 is still part
of the ex lege tacit renewal. If that is so
the parties take the view
that the issue of negligence will have been settled - as defendant is
exempted from liability by clause
for defendant (for effect of exemption clauses) referred me to
Central South African Railways v Adlington & Co 1906
TS 964 and
South African Railway & Habours v Conradie 1922 AD 137. They are
"owners risk cases" in transportation
of goods where there
are two prices. For "owners risk" a lower price is charged,
and for goods requiring special care
a higher price is charged. To
that extent they were not helpful. They are not for that reason
exemption clauses in leases - they
are in fact part and parcel of
well-grounded carriage of goods contracts and rules of the South
African Railways and Harbours.
They are fair and balanced.
African Railways & Habours v Lyle Shipping Co Ltd 1958 (3) SA 417
Steyn JA after noting that exemption clauses such
risk" are directed against negligence, said they have to be read
together with English admiralty laws consequently
at page 420 said: "
It follows from this that the exemption is not to be construed as
excluding negligence." It should
be clear from this that clause
18 of the contract if it applies has to be read together with the
general law of landlord and tenant
to determined whether it is
incident to the relation of lessor and lessee in landlord and tenant
law and practice where ex lege,
a tacit renewal is deemed to have
of First National Bank ofSA Ltd v Rosenblum & Another 2001 (4) SA
189 extends the exclusion of liability beyond culpa
levis to include
gross negligence, this case highlights the problem I have to deal
with, because it oust the common law which normally
would uphold the
exclusion of negligence culpa levis but not gross negligence which is
negligence culpa lata. As framed clause
18 exempts defendant from
gross negligence as well. Consequently it might not follow that gross
negligence is not included - as
Mr Molete argued in trying to make
clause 18 reasonable and fair.
problem I have with the case of Levy v Blanket Holdings (Private) Ltd
1956 (3) SA 558 on which Mr Matoane relies is that its
based on its particular facts not on a general principle. The rubric
of the case does not coincide with the facts
and Tredgold CJ's
analysis of them. The renewal of the lease was part of an ongoing
dispute whose settlement contained a counter-offer
which might be
deemed to exclude the exemption of liability clause. The lessor on
the other side was silent for two years while
occupation was taken.
Later the exemption from liability was insisted upon. There had never
been (on the facts) any definite meeting
the parties. Consequently in Levy v Blanket Holdings (Private) Ltd at
page 563 Tredgold CJ said:-
"When a party to a composite agreement of this sort agrees to
renew a lease he, unless the contrary is indicated, agrees to
the lease and those features of the agreement that are an integral
part of the lease, but no more."
case before me, there may or may not exist such complications. It
might or might not be a simple and straight forward tacit
the lease. Voet XIX .2.9 says:
"To make this more perfectly plain you should know that not only
express but also tacit leases are approved in law. On those
the lessee does not at all hand back the use on completion of the
time which was originally specified for hiring, but
persists in using
without objection from the lessor, the lease appears to have been
prolonged or renewed. It is renewed together
with any obligation of
pledge which the lessee had established over his own property in
security of the original lease or rent.
exemption clause is not admitted by plaintiff to be part of the
original contract when it was ex lege tacitly renewed. Defendant
argued that it is a term of the renewed contract while plaintiff has
now disputed that it is a term of the tacit renewal. What
X1X.2.9 seem to have had in mind is the landlord's hypothec on the
lessee property as security for rent, which is implied
in every lease
in modern times. This is not the same thing as a term of exclusion of
liability in the tacitly renewed contract.
Morrison v Angelo Deep Gold Mines Ltd 1905 TS 775 an employee had
been employed under a contract that exonerated the employer
liability for negligence of fellow employees towards that employee.
That employee was dismissed for a few weeks as redundant.
later he was reemployed and was (not long thereafter) injured.
The employee claimed damages on the ground that the
was not part of the reemployment contract, the court held it was
part of the re-employment contract because
it was implied.
reasoning in Morrison v Angelo Deep Goldmines Ltd in 1905 - which was
expressed a century ago - in my view would not readily
approval today. The concept of public policy has changed a great
deal. There has been a shift towards protecting the
weak from the
strong. The judgment of Morrison v Angelo Deep Goldmines Ltd revolves
inter alia on what Innes CJ said at pages 781
-82 to the effect that:
"The general rule is that any person may waive rights conferred
by law solely for his benefit. Cuilibet licet renuntiare juri
introducto. But where public as well as individual interests are
concerned, where public policy requires the observance
of a statute,
then the benefit of its provisions cannot be waived by the
individual, because he is not the only person interested.
duty is imposed by common law, the result of its non-observance may
be waived by the person interested unless public policy
so doing. I cannot see that the same
rule should not apply where the liability arises from the neglect of
a duty imposed by statute."
case of Administrator Natal v Trust Bank Van Africa Bpk 1979 (3) SA
824 at page 833 to 834 Rumpff CJ quoted with approval
passage from an English law book by Fleming The Law of Torts 4th
Edition at page 136:
"In short, recognition of a duty of care is the outcome of a
value judgment, that the plaintiffs invaded interest is deemed
of legal protection against negligent interference by conduct of the
kind alleged against the defendant. In the decision
whether or not
there is a duty, many factors interplay: the hand of history, our
ideas of morals and justice, the convenience of
rule and our social idea's as to where the loss should fall. Hence,
the incidence and extent of duties are liable
to adjustment in the
light of the constant shifts and changes in community attitudes."
Southernport Development (Pty)Ltd v Transnet Ltd 2005 (2) SA 202 at
page 205. The Supreme Court of Appeal noted that private
like leases should not be treated in the same manner as contracts of
employment where harmony in the work-place is in
interest. Nevertheless it noted international trends from the
European countries like Germany, Italy and Belgium.
In particular at
page 205 J the following was noted from a passage in the United
Stated Uniform Commercial Code:
"Section 205 provides: 'Duty of Good Faith and Fair Dealing
-Every contract imposes upon each party a duty of good faith and
dealing in its performance and its enforcement."
and the courts today would consider it to be inequitable to regard
exemption clauses as tacitly included in terms that can
not "fair dealing" in the performance and enforcement of
contractual obligations. Such terms if they are
to stand would have
to be proved to have been unequivocally agreed by the parties. The
court cannot favour the landlord at the
expense of the tenant. In
other words courts should avoid writing contracts for the parties and
stick to their adjudicative role.
Courts should enforce clearly
negotiated undertakings: Southernport Developments (Pty) Ltd v
Transent Ltd at page 21 1D.
clear to rne is that the exemption of common law liability through
exclusion of liability clauses in contracts would require
interpretation where rights conferred by the common law are waived by
a contract. Consequently where reliance is put on
a tacit ex- lege
renewal it has to be in terms of what the common law regards as what
a lease ex lege is expected to entail, unless
the intention of the
parties is proved to be otherwise. The onus of proof is on the party
that claims the exclusion of liability
clauses operate in its favour.
Cardboard Packing Utilities v Edblo Transvaal Ltd 1960 (3) SA 178 the
issue was an exclusion of liability clause in favour of
strict interpretation. The court gave it a strict interpretation in
respect of man-made fire - and per Kuper J the court
said at page
"But be that as it may, the conclusion to which I have come is
that the clause does not refer to claims of damages due to
on the part of defendant's servants in their capacity as agents of
the lessor and certainly not to claims for damages
due to such
negligence when the servants were acting as agents of defendant in
the conduct of its ordinary businesses and not as
agents of the
lessor in the performance of the lessor's obligations in terms of the
case before me the servants of the lessor are specifically mentioned
in the exclusion of liability clause. In Cardboard Packing
v Edblo Transvaal Ltd they were not specifically mentioned. Damage by
fire that was specifically mentioned could be caused
by an act of
God, or a riot -over which defendant had no control. Man-made fires
were not specifically mentioned. The second difference
is that the
fire broke out when the lessor was discharging his obligations as
landlord through servants. Wille's Principles of
South African Law
page 418 puts it as:
"The lessor must make such repairs to the leased premises as are
necessary to maintain them in a condition reasonably fit
purpose for which they were let."
Heerman 's Supermarket (Pty) Ltd v Mona Road Investments (Pty) Ltd
1975 (4) SA 391 at page 393.
issue to determine is whether this particular exclusion of liability
clause is incident to the relation of landlord and
tenant. In Levy v
Blanket Holdings Private Ltd 1956 (3) SA 558 - it was clear that a
clause that imposes a restraint of trade was
not normally an incident
of the relationship of lessor and lessee. The problem I have is that
these exclusion of liability clauses
are found in many leases. It is
not easy to assume they are collateral.
Heerman 's Supermarket (Pty)Ltd v Mona Road Investment (Pty) Ltd 1975
(4) SA 391 Van Heerden J in a case of a lease dealt with
whose clause 7 inter alia had the following words:
"- but it is understood and agreed that the lessor shall not be
responsible for any damage to the property of the lessee or
persons from whatever cause arising."
case there was damage to plaintiffs meat and electrical equipment
caused by a short circuit attributed to the failure of
servants to maintain the roof. The court dealing with the matter by
way of exception found these quite common and acceptable.
however, still does not answer the question whether they are
collateral. Cooper in Landlord and Tennant 2nd Edition page
"In the absence of agreement to the contrary, on renewal of a
lease its collateral parts (it has been said) are deemed to
renewed. This statement, it is submitted, is too wide."
this, I agree each case has to be dealt with on its merits. The right
of pre-emption and a restraint of trade clauses, might
automatic. That depends on the facts of a particular case - the case
of Levy v Blanket Holding Private Ltd does not in my
view establish a
general principle of exclusion of the exemption of liability from all
tacit relocation of tenants. The rubric
or (case summary) does not
(as I have shown) correspond with what was decided in the case.
House Refreshments v O Seia &Ors 1957 (1) SA 345 the problem was
proof of the lessee's right of first refusal in a contract
into in 1938 which expired after two renewals in 1952. The original
lessor had died and the property had been inherited
by the three sons
of the lessor. The lessee had by this time bought the shares of two
of the sons. The third son who had not sold
his share to the lessee
had died - leaving his share to his wife. The lessee had after the
expiration of the lease remained in
occupation and paid one third of
the rent to her. The wife of the third son sold her share to some one
else. The issue for the
court's determination was whether the lessee
could prove that the tacit relocation included the right of
refusal that the lessee had had since 1938, even after the lease was
not formally renewed in 1952. Ramsbottom J held that
the lessee had
to prove that the right of first refusal was also tacitly renewed
when the wife of the third son received the rental
for her one third
share of the original property. In Ramsbotton J's view, the grant of
the right of first refusal was collateral
to, and independent of the
relationship of landlord and tenant - it is not incident to the
relation of lessor and lessee.
Shenker Brothers v Bester 1952 (3) SA 664 it was the lessee who was
relying on terms of a verbal agreement of a renewal of lease.
majority in the appellate Division did not deal with effect of tacit
relocation but held the matter revolved around the pleadings
stated there was a verbal agreement. It was the terms of this verbal
contract on which that case should be determined and
it was its terms
that should be proved. The onus of proof was on the plaintiff. Van
den Heever JA at page 677 BC of Shenker Brothers
v Bester (in a
dissenting judgment) said of the verbal renewal of the contract:
"In the absence of express stipulation to the contrary in the
renewal of a lease, its collateral parts are also deemed to
renewed. If this is so in the case of tacit relocation, it must apply
to cases of express renewal. Dig 18.104.22.168.
majority in terms of the law of pleadings held the terms of the
renewal had to be proved. According to Wille Principles of South
African Law 7Ih Edition pages 417 to 422 in the absence of special
stipulations, the provisions which are incident to the relationship
of landlord and tenant are basically those that the law normally
imposes. For the tenant these are:-
of lease property. For the landlord these are:
of occupation to tenant.
of quiet enjoyment to tenant.
for the premises for the purpose they are leased.
against defects known to landlord.
or assignment in the absence of prohibition.
AJA in the Supreme Court of Appeal case of Southernport Development
(Pty) Ltd v Transenet 2005 (2) SA 202 at page 206 summarised
in this way:
"The essentials of a contract of lease are that there must be an
ascertained thing and a fixed rental at which the lessee
is to have
use and enjoyment of that thing."
conditions that seek to avoid these legal obligations have to be a
subject of a clear and specific contract. These cannot
be tacit. They
are collateral and independent of, and not incident to that
relationship. If they are part of a renewed contract
or tacitly they have to be proved.
case before me as Heerman 's Supermarket (Pty)Ltd V Mona Road
investment (PTY) Ltd 1975 (5) SA 391 at page 393 per Van Heerden
"The Roman -Dutch law imposes upon every lessor the duty of
placing the leased premises in a condition reasonably fit for
purpose for which they are let."
condition of a lease that derogates from a landlords legal
obligations can only be deemed to apply to the lessee if there had
been a clear agreement to that effect. If the landlord claims that
this condition applies to a tacitly relocated tenant the onus
the landlord to prove that there was a consensus ad idem on this
issue because it is not incident to the relation of landlord
tenant. "In each case, the real issue is the intention of the
parties when they made a fresh agreement" see Doll
Refreshment (Pty) Ltd v O 'Shea & Ors 1957 (1) SA 345 at 351 A.
person in whose favour the exclusion of liability clause operates is
called a preference. Consequently in Cardboard Packing
(Pty) Ltd v Edblo Transvaal Ltd 1960 (3) SA 178 at page 179 G Kuper J
"In cases of doubt, the contract is interpreted against him who
has stipulated and in favour of him who has contracted the
words if a doubt arises, it must be resolved against the pr oference.
to be the position because of the drastic nature of the exclusion of
liability clause that is strict and wide enough to
cover actions of
servants who could cause the lessee loss or damage to "property
of whatsoever nature on the premises, howsoever,
caused and whether
by reason of the default or negligence of the sub-lessor or any of
the said persons or otherwise."In short
as Cooper in Landlord
and Tenant 2nd Edition page 349 has said about the automatic renewal
of collateral parts:
"This statement, it is submitted, is to wide. The proper
approach is that when the lease is renewed simpliciter all terms
renewed that are incident to the relation of lessor and lessee.
is therefore on the lessor to prove that when the lessee tacitly
agreed to the renewal he tacitly agreed to a condition
that when the
landlord repaired the building at the end of the lease it can do it
negligently through its servants. In First National
Bank of SA Ltd v
Rosenblum & Another 2001
189 the above exclusion of liability clause, it was held would exempt
the lessor from gross negligence as well (contrary
to what Mr Molete
argued). This therefore calls for strict interpretation.
therefore hold that the defendant has to prove that it was the
intention of the lessee to continue to be bound by clause 18 which
lege is not incident to the relation of lessor and lessee.
Furthermore the defendant also has to prove that this tacit month
month relocation of the lessee was not a renewal of the lease
simpliciter, consequently it could include a collateral issue
derogated from those incident to the relation of landlord and tenant
that are implied in every lease agreement of that type.
dealt with this preliminary legal issue the matter may now go to
trial on the merits.
Plaintiff: Mr Matooane
Defendant: Mr Molete
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