THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Reportable
Case No: 793/2016

In the matter between:

TUDOR HOTEL BRASSERIE & BAR (PTY) LTD
APPELLANT

and

HENCETRADE 15 (PTY) LTD
RESPONDENT

Neutral citation:
Tudor Hotel Brasserie & Bar (Pty) Ltd v Hencetrade 15 (Pty)
Ltd (793/2016) [2017] ZASCA 111 (20 September 2017)

Coram:
Navsa ADP, Leach and Swain JJA and Molemela and Mbatha
AJJA

Heard:
4 September 2017

Delivered:
20 September 2017

Summary:  Lease – agreement to pay rental in advance without deduction –
exclusion of reciprocity – landlords failure to grant full beneficial occupation of entire
leased premises – tenant obliged to pay rent.

ORDER

On appeal from: Western Cape Division of the High Court, Cape Town (Binns-Ward
J, sitting as court of first instance):

The appeal is dismissed with costs.

JUDGMENT

Swain JA (Navsa ADP, Leach JA, Molemela and Mbatha AJJA concurring):
[1] The respondent, Hencetrade 15 (Pty) Ltd, successfully brought an
application before the Western Cape Division, Cape Town (Binns-Ward J) for the
eviction of the appellant, Tudor Hotel Brasserie & Bar (Pty) Ltd, from premises
located at 153 Longmarket Street, Cape Town, used by the appellant to conduct the
business of a hotel.
[2] The right to occupation of the premises by the appellant was based upon a
written lease agreement concluded between the parties on 29 June 2012. The
eviction was granted on the basis that the respondent had validly cancelled the lease
after the appellant had fallen into arrears with the rental payments. Despite the
respondent having afforded the appellant the requisite notice to cure its default, it
had failed to do so.
[3] The appellant admitted that it had not paid the rental in terms of the lease
agreement, but denied that any was due, on the basis that its obligation to make
payment was suspended as a result of the failure by the respondent to afford to the
appellant, ‘vacant occupation or beneficial use of the entire leased premises’. It was

common cause that at the time that the appellant was given occupation of the
premises, the respondent had retained a portion of the third floor to store property.
[4]    The legal basis for the argument of the appellant was the exceptio non
adimpleti contractus. (the ‘exceptio’). The appellant submitted that this raised the
legal question of whether the exceptio was available to a lessee who received only
partial occupation of leased premises, but did not cancel the lease.
[5]    The court a quo pointed out that the appellant's approach to the issue of its
liability to make payment of the rental ran counter to a line of authority commencing
with Arnold v Viljoen 1954 (3) SA 322 (C) and stated (at para 9) that:
‘In terms of that line of authority, a lessee who takes occupation of premises which are
deficient in any respect is obliged, while it remains in occupation, to pay the full rental
stipulated in terms of the lease. Its remedy is to claim compensation by way of an abatement
of rental and/or damages. A lessee who, having taken occupation, fails to pay the full rental
is exposed to the cancellation of the lease for non-payment.’
[6]    The court a quo then referred to the decision in Ethekwini Metropolitan Unicity
Municipality (North Operational Entity) v Pilco Investments CC [2007] ZASCA 62;
[2007] SCA 62 (RSA) para 22, where the following was stated:
‘It follows that, upon taking occupation of the property in late 1994, the plaintiff became
obliged to pay rent to the defendant, as stipulated in clause 1 of the lease. Of course,
because the plaintiff was, until early June 1997, deprived of the use of that portion of the
property which was being used by the person making pre-cast fencing, the plaintiff would be
entitled to a remission of rent over the period in question, proportional to its reduced use and
enjoyment of the property. If the amount to be remitted was capable of prompt
ascertainment, the plaintiff could have set this amount off against the defendant's claim for
rent; if not, the plaintiff was obliged to pay the full rent agreed upon in the lease and could
thereafter reclaim from the defendant the amount remitted.’
[7]    The court a quo applied this principle and concluded in para 13 that:
‘ . . . unless the abatement in rent to which the respondent might have been entitled in
respect of the part of the third floor of Huys Heeren XVII not made available by the applicant

was capable of prompt ascertainment, the respondent was obliged to have paid the full
rental during the first period.’
Finding that any remission in rental to which the appellant might have been entitled
was not capable of prompt ascertainment, the court a quo decided that the appellant
was in arrears in respect of the payment of rental, when the respondent validly
exercised its right to cancel the agreement. An order evicting the appellant from the
leased premises was accordingly granted.
[8]   The respondent by way of supplementary heads of argument, relied  upon the
unreported decision in Baynes Fashions (Pty) Ltd t/a Gerani v Hyprop Investments
(Pty) Ltd [2005] JDR 1382 (SCA), for the submission that an interpretation of the
provisions of clauses 10.1 and 21.1.3 of the lease agreement is dispositive of the
appeal. The court a quo found it unnecessary to consider the effect of these clauses
upon the right of the appellant to withhold payment of the rental.
[9]    In Baynes Fashions at para 4 the following relevant clauses in the lease
agreement provided as follows:
‘6.2 All rentals payable by the TENANT in terms hereof shall be paid monthly in advance
without any deduction or set-off . . .
. . .
25.4 The TENANT shall have no claim against the LANDLORD for compensation, damages,
or otherwise by reason of any interference with his tenancy or his beneficial occupation of
the premises occasioned by any . . . repairs or building works as herein before
contemplated. . .’
[10]    With regard to the interpretation of these clauses, the following was stated at
para 5:
‘[7] With respect to clause 6.2 it is contended on behalf of the appellants that the word
"payable" confers a right on the lessor to claim payment only when it has performed in terms
of the contract by granting beneficial occupation to the lessee. As the respondent has failed
to grant beneficial occupation to the first appellant, thereby failing to perform in terms of the
contract, so the argument proceeded, the rent was not "payable".

[8] There is no warrant for this construction. The clause imposes an obligation on the lessee
to make payment of rent "in advance". This means that the payment of rent by the lessee is
not contingent upon prior performance by the lessor. In any event, the first appellant
continues to trade and therefore does have beneficial occupation of the premises. The
appellants’ real complaint is that the renovations effected by the respondent have interfered
with the first appellant's right to occupy the premises beneficially in a manner that has led to
the first appellant suffering a substantial loss to its monthly turnover. This loss, contends the
appellants, entitles the first appellant to deduct the rent which is "payable" to the respondent.
The simple answer to this complaint is that clause 25.4 in express terms, precludes the
reduction of rent in these circumstances.
[9] It can hardly be clearer that clauses 6.2 and 25.4 are intended to prevent any deduction
of rent by the lessee where the renovations that are undertaken by the landlord in terms of
clause 25.1 interferes with the lessee's right of beneficial occupation. The appellants signed
the agreement that contained these clauses and cannot now seek to extricate themselves
from its consequences.’
[11]    The agreement that the rent was payable ‘monthly in advance’ had the effect
of altering the usual position, that in the absence of contractual provisions, rent is
payable in arrear at the end of each period in the case of a periodical lease, after the
lessor has fulfilled his obligation. 1  The lease agreement therefore altered the
reciprocal nature of the obligations of the lessor and the lessee. The obligation of the
lessee to make payment of the rent was no longer reciprocal to the obligation of the
lessor to grant beneficial occupation of the premises to the lessee.
[12]   The application of the principle of reciprocity to contracts is a matter of
interpretation. It has to be determined whether the obligations are contractually so

1 A J Kerr The Law of Sale and Lease 4ed (2014) at 427; Ebrahim, N O v Hendricks 1975 (2) SA 78
(C) at 81E-F.

closely linked that the principle applies.  Put differently, in cases such as the present
the question to be posed is whether reciprocity has been contractually excluded.2
[13]    In Baynes Fashions, the interpretation the court placed upon the provision that
the rent was payable ‘in advance’, namely that ‘payment of rent by the lessee is not
contingent upon prior performance by the lessor’, necessarily involved a finding that
the principle of reciprocity was excluded by the terms of the lease.
[14]   The conclusion in Baynes Fashions that the lessee was not entitled to a
‘reduction of rent’, caused by interference with the lessee's right of beneficial
occupation, was based upon the provisions of clause 6.2 that the rent was payable
‘without any deduction or set-off’, and clause 25.4 that the tenant would not have any
claim against the landlord ‘by reason of any interference with his tenancy or his
beneficial occupation of the premises’, caused by repairs or building works.
[15]   The relevant clauses in the present lease agreement must be interpreted
against the background set out above. Clause 10.1 provides that:
‘All payments in terms of this lease to be made by the tenant to the landlord shall be made
on or before the first day of each month without demand, free of exchange, bank charges
and without any deductions or set off whatsoever – ’
[16]   Clause 21 of the lease agreement provides for the ‘Landlords Limitation of
Liability’ in the following terms:
‘21.1 The tenant shall –
21.1.1 . . .
21.1.2 not have any claim of any nature whatsoever against the landlord whether for
damages, remission of rent or otherwise, for any failure of or interruption in the amenities
and services provided by the landlord, any local authority and/or other service provider to the
leased premises, building and/or property unless such failure or interruption is caused by the

2 BK Tooling (Edms) Bpk v Scope Precision Engineering (Edms) Bpk 1979 (1) SA 391 (A) at 418B-D.

negligent or wrongful act or omission by the Landlord or its agent or representative,
notwithstanding the cause of such failure or interruption;
21.1.3 not be entitled to withhold or defer payment of any amounts due in terms of this lease
for any reason whatsoever;’
[17]    The provision that the rental was to be paid ‘on or before the first day of each
month’ had the effect that it was to be paid in advance by the appellant. The
obligation of the appellant to pay the rental was accordingly not reciprocal to the
obligation of the respondent to provide beneficial occupation of the entire premises.
Additionally clause 21.1.2 precluded the withholding of rental  as a result of a ‘failure
of or interruption in the amenities and services provided by the landlord.’
[18]    The terms of the lease therefore precluded suspension of the payment of
rental by the appellant, as a result of the failure by the respondent to afford the
appellant beneficial use of the entire leased premises. As a result, the cancellation of
the lease by the respondent was justified, the appellant being in arrears with the
rental payments.
[19]    Counsel for the appellant, however, referred to the following dictum in Poynton
v Cran 1910 AD 205 at 227-228, in support of his submission that the appellant was
entitled to withhold payment of the rent, as a consequence of the failure of the
respondent to grant beneficial occupation of the entire premises to the appellant:
‘It remains to consider whether the evidence discloses any circumstance which would
deprive the tenant of the legal right which he exercised. I do not think that the clause in the
lease providing for the payment of rent on a certain day "without any deduction whatever"
has that result. That provision cannot relieve the landlady of her obligation to place the
leased property in repair, or deprive the tenant of the remedy, which the law gives him in
respect of her initial default. That default afforded pro tanto a defence to the claim for rent.
And I entirely agree with the learned Judge when he says that "it is only the rent due which
can be stipulated to be paid without deduction.’ (Emphasis added.)
[20]    In Poynton the plaintiff let a hotel to the defendant for a year and 11 months at
a rental of £540 per annum ‘without any deduction whatever’, with certain rights of
renewal. The plaintiff sued the defendant for £90 being two months arrears of rent.

The defence was that the plaintiff had failed to put the hot water apparatus in proper
repair and that after due notice to the plaintiff, the defendant had effected the repairs
himself, the cost of which he set off against the rent due. The highlighted portion of
the judgement that, ‘it is only the rent due which can be stipulated to be paid without
deduction’, must be read in the context of the absence of any reference in the
judgement to the monthly rental being payable by the defendant on the first of the
month, ie in advance. The usual position accordingly prevailed and the rent was
payable by the defendant, as the tenant, in arrear at the end of each month, after the
plaintiff, as the landlady, had performed her obligations. On this basis the rent only
became ‘due’ and therefore payable by the defendant, after the plaintiff had
performed her reciprocal obligations. It was only at this stage that the defendant was
obliged to make payment of the rent ‘without deduction’ to the plaintiff. The case is
accordingly distinguishable on the facts from the present case where the rental was
payable in advance. Moreover it does not appear that there was a clause such as
clause 21.1.2.
[21]     The appeal against the order of the court a quo evicting the appellant from the
premises must accordingly fail. This conclusion renders it unnecessary to deal with
the statement by the court a quo, that any abatement in rent to which the appellant
may have been entitled was not capable of prompt ascertainment, with the result that
the appellant was obliged to make payment of the full rental.
[22]    The following order is granted:
The appeal is dismissed with costs.

K G B Swain

Judge of Appeal

Appearances:
For the Appellant:

S Rosenberg SC

Instructed by:

Jason Freel Attorneys, Cape Town
McIntyre & Van der Post Attorneys,
Bloemfontein

For the Respondent:

P White

Instructed by:

Herold Gie Attorneys, Cape Town

Webbers Attorneys, Bloemfontein

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA

MEDIA SUMMARY OF JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL

FROM

The Registrar, Supreme Court of Appeal

DATE

20 September 2017

STATUS

Immediate

Please note that the media summary is for the benefit of the media and does not form
part of the judgment.

Tudor Hotel Brasserie & Bar (Pty) Ltd v Hencetrade 15 (Pty) Ltd (793/2016)
[2017] ZASCA 111 (20 September 2017)

Media Statement

The SCA today dismissed an appeal by a lessee against an order of eviction granted
by the High Court, after the lessee had fallen into arrears with the rental payments.
The lessee admitted that it had not paid the rental in terms of the lease agreement,
but denied that any was due on the basis that its obligation to make payment was
suspended as a result of the failure by the lessor to afford to the lessee, vacant
occupation of the entire leased premises. The lease agreement obliged the lessee to
make payment of the rental ‘on or before the first day of each month’ and ‘without
any deductions or set off whatsoever’. It was held that the rent had to be paid in
advance by the lessee and was accordingly not reciprocal to the obligation of the
lessor, to provide beneficial occupation of the entire premises. The terms of the lease
therefore precluded suspension of the payment of rental by the lessee, as a result of
the failure by the lessor to afford to the lessee beneficial use of the entire leased
premises. As a result, the cancellation of the lease by the lessor was justified as the
lessee was in arrears with the rental payments.

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