C of A (CIV) No. 16 of 2006
IN THE APPEAL COURT OF LESOTHO
In the matter between:
STRININAIDOO APPELLANT
AND
BOLOETSISENTI RESPONDENT
CORAM:
RAMODIBEDI, JA
SMALBERGER, JA
MELUNSKY, JA
HEARD : 18 OCTOBER 2007
DELIVERED: 24 OCTOBER 2007
JUDGMENT
SUMMARY
Appeal by appellant (defendant) against judgment in favour of the respondent (plaintiff) in High Court trial - main issue whether sublease agreement entered into - plaintiff and defendant only witnesses - mutually destructive versions - proper approach of Court - plaintiff held to have discharged onus of proof on him -validity of sublease - hypothec over defendant's property on leased premises - appeal dismissed with costs.
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[1] The appellant was the defendant in an action in the High Court instituted against him by the respondent (as the plaintiff) for payment of an amount of M108 000-00 in respect of arrear rentals, plus interest a tempore morae and costs. The appellant denied liability for the sum claimed, and in turn counterclaimed for the return of certain movable property belonging to him and costs.
[2] The matter came before Hlajoane J. The only witnesses to testify were the respondent and the appellant. The learned trial judge eventually granted judgment in favour of the respondent as prayed and dismissed the appellant's counterclaim with costs. The present appeal is directed against the whole of her order in that regard. For convenience I shall refer to the respondent as "the plaintiff" and the appellant as "the defendant".
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[3] As appears from his evidence, the plaintiff is an experienced businessman with substantial business interests. Included amongst
these is a filling station operated on premises situated at Maputsoe leased by the plaintiff from Total Lesotho in terms of a written
lease agreement - referred to by the plaintiff as "a beautiful garage". The rented property forms part of a larger complex and includes a shop ("the building") which the plaintiff was entitled to sublet with the written consent of Total.
[4] According to the plaintiff the defendant approached him sometime before April 2003 with the request that he sublet the building to him (the defendant) from 1 April 2003. The defendant was known to him but no close relationship existed between them. The defendant intimated that he wished to conduct a fast-food business specializing in chicken known as Mochachos in the building as his tenancy of certain premises in Maseru was due to expire at the end
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of March 2003. The plaintiff and the defendant inspected the building together and verbally agreed upon a lease for an initial period of twelve months at a rental of M12 000-00 per month payable monthly in advance.
[5] The plaintiff stated that he handed over the keys of the building to the defendant. After taking occupation the defendant carried out certain renovations and alterations, including the installation of a chimney, and placed furniture, fittings and equipment in the building. Despite doing all of this the defendant failed to open and conduct a business on the premises. The defendant failed to pay the initial rental in advance, and thereafter persistently defaulted despite repeated promises to pay. This ultimately led to the plaintiff issuing summons against the defendant for eight months outstanding rentals. Eventually, in what he described as an attempt to assist the defendant, the plaintiff found another tenant for the building and moved the defendant's property
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(which formed the subject of the counterclaim) to different premises for safe-keeping.
[6] The defendant told a very different story. According to him he had conducted business with the plaintiff for a number of years and had rendered him various favours. He described their relationship as "friends, quite close friends". He had operated his Mochachos undertaking in the LNDC Centre in Maseru in terms of a five-year lease which was due to expire in 2005. Because of changing business conditions he was no longer operating profitably and was obliged to close down the business and terminate his lease prematurely. He needed somewhere to store the furniture, fittings and equipment utilized in the business.
[7] The defendant testified that he met the plaintiff by chance and told him of the predicament he was in. The plaintiff undertook to store his property for him somewhere in
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either Maseru or Maputsoe. Eventually it came to be stored in the building in Maputsoe. Although he initially suggested the storage would be free, the defendant eventually accepted that he would be obliged to pay for storage. However, the cost of storage was never agreed upon but left over for later discussion. He never made or tendered any payment to the plaintiff because he was waiting for invoices from him. The defendant denied that he had entered into any lease agreement with the plaintiff in respect of the building; that he had been given the keys to the building; that he had carried out any renovations or fitted out the building; and that he had ever had any intention of conducting a business there. He further claimed that he was entitled to the return of his property in the custody of the plaintiff.
[8] The above is a brief resume of the respective versions of the plaintiff and the defendant. They are mutually destructive of each other. The onus rests on the plaintiff to
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prove his case on a balance of probabilities. The general approach to a matter such as the present appears from the judgment of Eksteen AJP in National Employers' General Insurance Co Ltd v Jagers 1984 (4) SA 437 (E) at 440 E-H
where the learned judge said:
"[W]here the onus rests on the plaintiff as in the present case, and where there are two mutually destructive stories, he can only succeed if he satisfies the Court on a preponderance of probabilities that his version is true and accurate and therefore acceptable, and that the other version advanced by the defendant is therefore false or mistaken and falls to be rejected. In deciding whether that evidence is true or not the Court will weigh up and test the plaintiffs allegations against the general probabilities. The estimate of the credibility of a witness will therefore be inextricably bound up with a consideration of the probabilities of the case and, if the balance of probabilities favours the plaintiff, then the Court will accept his version as being probably true. If however the probabilities are evenly balanced in the sense that they do not favour the plaintiffs case any more than they do the defendant's, the plaintiff can only succeed if the Court nevertheless believes him and is satisfied that his evidence is true and that the defendant's version is false."
A more comprehensive guideline to the resolution of irreconcilable versions is to be found in the judgment of Nienaber JA in Stellenbosch Farmers Winery Group Ltd and Another v Martell et Cie and Others 2003 (1) SA 11 (SCA) par [5].
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[9] The trial judge made no findings on demeanour in respect of either the plaintiff or the defendant. A consideration of the plaintiff's
evidence reveals it to be straightforward, logical, consistent with good business practice and free of any material criticism. As such it is not only persuasive, but has a distinct ring of truth to it.
[10] The plaintiff's evidence to the effect that his relationship with the defendant was that of businessmen operating at arms length is to be preferred to that of the defendant, who tried to portray their relationship as one of "quite close friends" with the plaintiff doing him a favour in providing him with storage. Significantly, the suggestion of being "quite close friends"
was never put to the plaintiff under cross-examination, and justifies the inference that it was an afterthought to bolster the defendant's defence. As mature businessmen one would, as a matter of probability, have expected the plaintiff and the defendant to have agreed upon
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a monthly payment, whether for rental (as claimed by the plaintiff) or storage (according to the defendant). The defendant's evidence that no agreement on payment was reached either initially or at any time thereafter, simply defies business logic.
[11] It appears to be common cause that the building was located in a well situated business complex and as such a good rental prospect. That being the case, it is unlikely that the plaintiff, as a reasonable businessman, would have contemplated it being used for the less lucrative purpose of storage. With a monthly rental obligation to Total Lesotho it is only natural that the plaintiff would want to ensure that the building realized its maximum earning potential.
[12] The criticism directed against the plaintiffs evidence based on alleged inconsistencies between his evidence and certain further particulars furnished on his behalf is, on a proper analysis, more apparent than real and ultimately
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without substance. Nor does the plaintiffs failure to seek payment of outstanding rental earlier necessarily detract from his evidence.
[13] It was also argued on appeal that the fact that the defendant never carried on business in the building was destructive of the plaintiff's evidence that the defendant had rented the building for that purpose. The fact that the defendant failed to open up a business may be due to a variety of reasons; that he so failed is not necessarily inconsistent with an original intention to do so.
[14] The defendant's evidence was unsatisfactory in a number of respects and generally lacks conviction. It is contrary to the probabilities
already mentioned which support the plaintiff's version. He shifted his ground with regard to his initial suggestion that the storage of his goods was to be free, later acknowledging that he was obliged to pay for such
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storage. At one time he claimed that he did not know where the goods had been taken for storage; this is unlikely given his concern for their safety and bearing in mind that his own employees transported them to Maputsoe and must have reported back to him. The trial judge listed a number of examples where the defendant gave evidence in respect of matters which inexplicably had not been put to the plaintiff under cross-examination, raising the suspicion that they were no more than an afterthought or a recent fabrication. While they may not all have been material, viewed cumulatively they must inevitably detract from the defendant's overall credibility. Added to this is the fact that a consideration of his evidence on record shows the defendant to have been evasive and argumentative at times.
[15] The trial judge concluded that the evidence of the plaintiff could be accepted on the requisite balance of probabilities. The fact that she did not make any specific
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findings on demeanour does not detract from the undoubted advantage she had of seeing the plaintiff and the defendant testify and forming an impression of their credibility. Apart from reliance being placed in argument on her alleged failure to have regard to suggested deficiencies in the plaintiffs evidence it was not contended that she had misdirected herself in any respect. For reasons already advanced the plaintiff was a credible witness whose evidence was free of material criticism; the same cannot be said of the defendant. Furthermore, the inherent probabilities favour the plaintiff's version of events. In the result it has not been shown that the trial judge erred in accepting the plaintiff's evidence and holding that he had discharged the onus resting upon him.
[16] The plaintiffs legal right to sublet the building was called into question by the defendant. The plaintiff testified that he had obtained the necessary written consent from Total Lesotho to do so as required in terms of his lease,
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although he was no longer in possession of the document concerned. There is nothing to gainsay his evidence in that regard and in the circumstances no reason to disbelieve it. In any event, a breach by the plaintiff of the terms of his lease with Total Lesotho could not be relied upon by the defendant to escape his obligations under the separate sublease with the plaintiff provided he was given undisturbed use and occupation of the building leased. Once the plaintiff had fulfilled his obligation in that regard (which according to his evidence he had done) the defendant was not entitled to question his alleged lack of title but was bound to perform his own obligations. This is in keeping with what was said by Solomon J in Clarke v Nourse Mines Ltd 1910 TS 512 at
520-521:
"It seems to me that the rule [that a lessee cannot dispute the lessor's title] may be based upon one or other of two very simple grounds. The first is, that the lessor having performed his part of the contract, and having placed the lessee in undisturbed possession of the property is entitled to claim that the lessee should also perform his part of the contract and should pay him the rent which he agreed to pay for the use and enjoyment of the premises. The second ground is, that the lessee having had the undisturbed enjoyment of the premises under the lease, and having thus had all
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for which he contracted, it would be against good faith for him to set up the case that the lessor had no right to let him the
property."
See also Hillock and Another v Hilsage Investments (Pty) Ltd 1975 (1) SA 508 (A) at 516 E. What is said of a lessee applies equally to a sublessee.
[17] After the conclusion of the sublease agreement the plaintiff acquired a tacit hypothec over the goods of the defendant brought onto the sublet premises in respect of the amount in which the defendant was indebted to him for rental. In those circumstances a hypothec comes into existence automatically (see Wing on Garment (Pty) Ltd v LNDC and Another LAC (1995-1999) 752 at 758C) and continues for as long as the rent due and payable remains unpaid. It was not contended that the hypothec ceased to operate after the removal of the defendant's property from the building to the place where it was kept under the control of the plaintiff, a move necessitated by the need to make
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way for a new tenant and to relieve the defendant of the liability for further rental payments. However, we express no final view in regard to that.
[18] In the result the appeal fails and the following order is made:
"The appeal is dismissed with costs".
J W SMALBERGER
JUSTICE OF APPEAL
I agree:
M M RAMODIBEDI
L S MELUNSKY
FOR APPELLANT : MR. K.D. MABULU
FOR RESPONDENT: ADV S PHAFANE
