CIV/APN/200/87

IN THE
HIGH COURT OF LESOTHO

In the
matter of:

YOUNI
(PTY) LIMITED 1st Applicant

ROBERT
ELIAS MATJI 2nd Applicant

v

MAPUTSOE
MARKET (PTY) LIMITED Respondent

JUDGMENT

Delivered
by the Honourable the Chief Justice Mr. Justice B.P. Cullinan on the
30th day of June, 1987

This is
an application for ejectment. The application is brought by way of
notice of motion in vacation under rule 8(22) on the
basis of
urgency.

On 20th
February, 1986, the second applicant by way of written contract
leased business premises to the respondent. The lease was
expressed
to be for a period of two years and eleven months, commencing on 1st
June, 1986, with an option to renew for a similar
period. The
operative clauses in the lease read as follows:

"3. THE LESSEE shall pay R6 per M2 rental per month plus an
escalation of 10% per annum as from the 1st day of June 1986".

"9. Should the rent not be paid by the LESSEE within SEVEN (7)
days after due date, or should the LESSEE contravene any other
term
or condition of this lease, and fail to cease from such
contravention, or rectify such breach complained of within SEVEN (7)

days of the receipt of written notice of complaint from the LESSOR,
or should the LESSEE be placed in liquidation, provisional
or final
liquidation or

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sequestration the LESSOR shall have the right forthwith to cancel
this Lease without any compensation to the LESSEE, and evict
the
LESSEE from the said premises and retake possession thereof. The
exercise of these rights by the LESSOR shall in no way prejudice
any
claim which the LESSOR may have against the LESSEE for arrear(s) (of)
rental and/or damages."

The
second applicant, who is a director of the first applicant,
transferred his interest in the lease to the first applicant (whom
I
shall hereafter refer to as "the applicant"). shortly after
the signing of the contract. The monthly rent at R6 per
square metre
was calculated by the parties to amount to M2,580 per month.

On 7th
May 1987 the applicant served notice to vacate the premises by "the
end of June 1987", in order that a sale to
another party, with
vacant possession, could be effected. The notice was invalid as the
contract provided for 90 days notice.

On 3rd
June, 1987, the respondent drew a cheque in the amount of M2,580 in
favour of the applicant. On presentation by the applicant's
bankers
the cheque was dishonoured by the respondent's bankers on 5th June.
The cheque bears the stamp of the respondents bankers
for 5th June
and 8th June, so that it appears that by the latter date it had not
been honoured. Ultimately, on 25th June, 1987
the respondent effected
payment to the applicant of M2,580 by way of a certified cheque.

The
applicant seeks ejectment on the basis that the respondent is in
breach, in failing to pay the rent for June 1987 within 7 days.
The
respondent claims that under clause 9 of the contract he was entitled
to 7 days written notice of complaint of non-payment,
which he did
not receive. Further,he claims that the applicant held a deposit to
cover such non-payment. In this respect an opposing
affidavit sworn
by a director of the respondent reads as follows:

"I admit that rentals were payable monthly in advance

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and I admit having paid the first rental on the 1st of June 1986, but
submit that on Applicants insistance we paid an amount of
R5,280,00
(FIVE THOUSAND TWO HUNDRED AND EIGHTY RAND) on the 1st of July 1986
and the reason for that, being that Applicant required
some form of
security in case Respondent falls in arrears with one payment.
Applicants are presently holding an amount of R2,700,00
(TWO THOUSAND
SEVEN HUNDRED) as security for rental because the rental is only
R2.580,"

With
regard to the figure, of R2,700,a replying affidavit indicates that
therein was included a figure of M120 in respect of electricity

consumed by the respondent, so that only R2,580 had been paid by the
respondent "as a security deposit". The ultimate
figure of
R2,580 is not in dispute.

The
learned Counsel for the applicant Mr. Redelinghuys submits that the
word "breach" in clause 9 of the contract can
only refer to
the earlier words "any other term or condition of this lease".
He submits that under clause 9 there are
three grounds for
cancellation of the lease:

(i) non-payment of rent within 7 days after the due date; (ii)
failure to rectify any contravention or breach of any other term
or
condition of the lease; and

(iii) liquidation etc. of the lessee.

The
learned Counsel for the respondent Mr. Snyman on the other hand
submits that written notice of non-payment of rent was required.
I am
inclined to the interpretation submitted by Mr. Redelinghuys. I
consider that if it were intended that the words "such
breach"
should refer to the non-payment of rent, then in order to follow the
sequence of the earlier part of the clause, the
words "rectify
such breach" and the word "or would have preceded the words
"cease from such contravention".
Secondly, I respectfully
consider that to construe the clause otherwise, would make nonsense
of the law. It is,I believe,trite
law that the debtor must seek out
the creditor. Where no place of payment is stipulated that duty still
devolves upon the debtor
(per Maritz J. in Northmore

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v Scala
Cinemas (Pty) Ltd (1936) TPD 280). The present contract does not
stipulate any form of payment. If payment had to be effected
by cash,
could it then be said that the respondent required notice of
non-payment, when such fact was obviously within his knowledge?

I cannot
see that the proposition advanced is any less tenuous where payment
is effected by cheque. The duty is cast upon the debtor
of effecting
payment. A cheque which is tendered and then dishonoured does not
constitute a payment. Clearly the duty lies upon
the debtor of
ensuring that his cheque is honoured or, in other words, in ensuring
that he is given sufficient credit by his bankers.
There can be no
duty upon the creditor in the matter.

It will
be seen, for example, that under the lease the lessee was obliged to
"pay for all Electricity and Water and Sanitation".
No date
or period of grace is specified in respect of such payments, apart
that is,from the date or period specified by the particular
local
authority. In the case of such payments the lessor was, I consider,
obliged to give seven days written notice of complaint,
on learning
of any non-payment. In the case of rent however, the lease, in
accordance with normal commercial practice, stipulated
a period of
grace of seven days, and I respectfully observe that it makes
nonsense of the lease, as much as the law, to interpret
it as
requiring a further period of grace.

As to the
deposit of M2,580, Mr. Redelinghuys submits that according to normal
commercial practice such deposit was a security against
damage to the
premises by the tenant prior to termination of the lease. It is
significant that the amount represented one month's
rent, a possible
inference being that it was a security against non-payment of rent.
In this respect I observe that rent was, in
any event, payable in
advance, so that security existed to that extent. The director of the
respondent deposes that the applicant
"required some form of
security in case Respondent falls in arrears

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with one
payment". As I see it therefore, the respondent admits that the
written contract was subsequently varied by oral agreement,
to
provide for such security. In my judgment such security must be then
held by the applicant throughout the duration of the lease.
Such sum
of money amounts to no more than a security against non-payment, that
is, financial security against breach of the condition
in respect of
rent. It will be seen that under Clause 9 the exercise of the
lessor's rights, namely cancellation of the lease,
"shall in no
way prejudice any claim which the LESSOR may have against the LESSEE
for arrear(s) (of) rental and/or damages".
Quite clearly the
deposit held would serve to minimise any such claim. The holding of
such deposit could not however impinge upon
the applicant's right to
cancellation.

I hold
therefore that the respondent is in breach. A matter which has
concerned me is whether, in view of the fact that the rent
is now
paid up to date (apart from the provision for a 10% escalation of
rent which the applicant has not pursued), the Court can
in equity
come to the aid of the respondent. Mr. Redelinghuys refers to the
following passage in Maasdorp's Institutes of South
African Law
Vol.III at p.207.

"....the court possesses no equitable jurisdiction to release
lessees from the consequences of their contracts where a clear
breach
is proved."

The
authority for that proposition is the case of Human v Rieseberg
(1922) TPD 157, where Wessels J.P. in the Supreme Court of South

Africa (Transvaal Provincial Division) at pp. 163/166 reviewed the
authorities in the matter. Even were the doctrines formulated
by the
English Court of Chancery applicable however, I conclude that equity
could not come to the aid of the respondent in the
present
circumstances: the breach is clear and no question of any estoppel
arises.

Mr.
Steyman submits that the application should have been brought by way
of an ordinary action, and thereafter by way of an application
for
summary judgment. I consider the matter is urgent, as the applicant
stands to lose the

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benefit
of a contract of sale if he cannot yield vacant possession forthwith.
Apart from the provisions of rule 8(22) there is
ample authority for
the application in its present form in the following passage from
p.209 of Maasdorp Vol.111:

"Proceedings for ejectment need not necessarily be by way of
action, but may sometimes be brought on motion; for where there
is no
doubt as to the facts and the right of the applicant to obtain the
order is perfectly clear, there can be no reason why recourse
should
be had to the more dilatory and costly procedure of an action,
especially in cases of urgent necessity and where irreparable
damage
is to be feared in case the order is not granted."

In all
the circumstances there will be an order for the ejectment of the
respondent.

B.P.
CULLINAN

CHIEF
JUSTICE

30/6/87

For
Applicants: Mr.S. Redelinghuys

For
Respondent: Mr. J.P.L. Snyman