THE
HIGH COURT SWAZILAND
MBABANE
DEVELOPMENT CORPORATION (PTY) LTD Applicant
And
ZULU
INVESTMENTS (PTY) LTD T/A SWANKS Respondent
Civil
Case No. 2457/2003
Coram
S.B. MAPHALALA – J
For
the Applicant MR. WARING
For
the Respondent MR. MDLADLA
JUDGMENT
(23/01/2004)
Before
court is an application brought under a certificate of urgency for
ejectment of Respondent from Applicant's premises situate at Shop No.
25 Swazi Plaza, Mbabane (hereinafter called the "premises").
According
to the Applicant in its founding affidavit on or about the 1st August
2001 and at Mbabane, the Applicant represented by Mavis Ross, a duly
authorised employee and director, entered into a lease agreement with
the Respondent who was represented by Sibongile Myeni. A copy of the
lease agreement is annexed to the
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Applicant's
founding affidavit marked "MD1". The lease agreement is not
signed and it is averred by the Applicant that Respondent has
neglected to do so despite numerous reminders to that effect. It is
averred in this regard that the Respondent has however by conduct
agreed with the terms of the lease.
The
Applicant alleges that the Respondent has enjoyed the use and benefit
of the leased premises, and has exercised certain rights in terms of
the lease agreement, e.g. Respondent has renewed the lease for a
period of 2 years.
It
is contended that the Respondent has committed a fundamental breach
by failing to pay rentals on time, which may result in the
cancellation of the lease agreement Rent in terms of the agreement
should be paid on the 1st business day of each and every month.
The
Respondent opposes this application and has filed an opposing
affidavit to that end. The defence put forth is found at paragraph 11
of the said affidavit The Respondent avers as follows:
"The
Respondent (sic) cannot at this stage rely on the lease agreement
attached hereto nor any of its clauses as same was never signed. I
aver that to the best of my understanding there was an oral agreement
in place. It has not been breached".
It
was argued for the Applicant that under common law, writing is not an
essential requirements for the formation of a contract. Mere
agreement on essential terms is sufficient. Writing may be intended
merely as a record of the oral agreement already concluded. In this
respect, the court was referred to the case of Woods vs Waiters 1921
A.D 303 at 305 where Innes CJ states that:
"...The
broad rule is that writing is not essential to the validy of a
contract. The consensus of the parties need not be so evidenced".
"The
parties may agree that their contract shall not be binding until
reduced in writing, if they so agree, then no contract shall come
into being until it is in writing".
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It
is contended on behalf of the Applicant that in the present case, the
parties contracted orally, Applicant by letting out the premises to
the Respondent, and Respondent by hiring the premises. No written
contract being signed.
In
deciding whether an oral agreement existed or not the test is
objective. In this regard, the court was referred to Gibson on
Merchantile Law (6th ED) at 52 where Gibson states that:
"...I
must be quite clear that the parties intended to contract, and
deciding that question, the test is objective and not subjective".
Mr,
Waring argued that objectively, no dispute can arise as to a verbal
contract being in place as Respondent has occupied the leased
premises for at least 2 years, leasing the premises on the terms and
conditions as evidenced in the unsigned lease.
He
argued further that, failure to pay rentals on time is a ground for
cancellation of the lease, and Applicant is empowered to exercise
this right in terms of the agreed terms and conditions of the lease,
as evidenced in Clause 4 of the unsigned lease agreement. In this
regard, the court was referred to the case of Oatorian Properties
(Pty) vs Maroun 1973 (3) S.A. 779 (A) at 785 C to the proposition
that the court is not empowered to take away the lessor's right to
cancel a lease agreement. In casu, Applicant has cancelled the lease
agreement and now wants Respondent ejected from the premises.
The
argument advanced au contraire on behalf of the Respondent is that
where the parties have agreed that there shall be no binding contract
between them until the terms of the latter contract have been set out
in writing, there is no valid contract.
The
agreement will only acquire legal effect and obligations when the
contract has been signed. For this proposition the court was referred
to Jourbert, The Law of South Africa Vol 5 at page 80 and the case of
Meter Motors (Pty) Ltd vs Cohen 1966 (2) S.A. 735. In the latter
authority in an action by a seller under a hire-purchase agreement
against the surety, the surety took exception to the declaration on
the ground that the agreement was not signed by the seller. In point
of fact it had been
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signed
by one Smith. It was held inter alia, that as the parties intended
the document to be the very document between the parties, that the
document had to be signed in order to be binding.
The
above are the issues for determination by the court. According to W.E
Cooper, The SA. Law of Landlord and Tenant (2nd ED) at page 75. The
parties to a lease may agree to reduce it to writing if they do so,
two situation may arise:
Writing
may be intended as a requirement for the formation of the lease, or
Writing
may be intended as a record of the oral lease already concluded.
In
the absence of express agreement couched in unequivocal language it
may be difficult to determine whether parties intended (a) or (b) to
ascertain their real intention then becomes a question of inference
and construction, bearing that the onus is on the party alleging that
writing was a formal requirement (see Woods vs Waiters 1921 A.D. 303
at 305) and in accordance with the maxim scriptura est magis ad
probationam quant ad solemnitatem (writing is intended rather as
proof than as a formality) an agreement to record a lease is presumed
to be merely for convenience and to facilitate proof of the oral
agreement already concluded.
If
writing is made a requirement to the formation of a lease, no binding
contract will come into existence unless the lease is reduced to
writing; if not, the failure to reduce it to writing will not affect
the enforceability of the oral lease.
In
Standard Bank of South Africa Limited and another vs Ocean
Commodities Jnc & others 1983 (1) S.A. 276 (A) Corbett JA stated
the following;
"In
order to establish a tacit contract it is necessary to show, by a
preponderance of probability, unequivocal conduct which is capable of
no other reasonable interpretation than that the parties intended to
and did in fact, contract on the terms alleged".
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I
agree with Mr. Waring for the Applicant that in casu, the conduct of
the parties leaves no doubt as to the existence of a contract of
lease in place e.g the Respondent occupies the lease premises; paid
water and electricity exercised its rights in terms of the lease to
renew the contract; paid rentals at Applicant's head office in the
amount agreed upon in the lease; and did not raise any objection when
Applicant made reference to specific clauses in the lease agreement.
I
agree further with the Applicant's contention that the Respondent has
not brought any information or facts or evidence to dispel the onus
which lies on it to show that failure to have the lease agreement
signed, renders the oral lease agreement, non existent. Instead what
Respondent has done is to rely on the existence of an oral lease, in
the form of an indulgence whose terms and conditions it has not
stated. Rule 18 (6) of the High Court Rules provides that " a
party who in his pleading relies upon a contract shall state whether
the contract is written or oral and when, where and by whom it was
concluded, and if the contract is written a true copy thereof or of
the part relied on in the pleading shall be annexed to the pleading".
Respondent
has not complied with this rale and has failed to comply with the
onus on it, by stating with whom it entered into an oral agreement
with and who represented Applicant, where and when and what were
terms of the oral agreement.
For
the afore-going reasons I have come to the conclusion that the
Applicant has proved its case for the relief sought.
In
the result, the application is granted in terms of prayer 5 (a), (b),
(c) and (d) of the notice of motion.
S.B.
MAPHALALA
JUDGE
