THE SUPREME COURT OF APPEAL OF SOUTH AFRICA

JUDGMENT

Not reportable

Case no: 394/2015

In the matter between:

CAINE JASON HERR
APPELLANT

and

INNOMET PROJECTS (PTY) LIMITED
RESPONDENT

Neutral citation:
Herr v Innomet (Pty) Ltd (394/2015) [2016] ZASCA 82 (30 May
2016)

Bench:

Ponnan, Majiedt, Saldulker, Swain and Zondi JJA

Heard:

16 May 2016

Delivered:

30 May 2016

Summary:
Contract: Lease agreement – landlord and tenant – reciprocity of
obligations – obligation on lessor to provide peaceful and
undisturbed occupation in return for rental from lessee.

_____________________________________________________________________

ORDER
______________________________________________________________________

On appeal from: Gauteng Local Division, Johannesburg (Makhanya J and Ndamase AJ
sitting as court of appeal).
1. The appeal is upheld with costs.
2. The order of the court a quo is set aside and in its stead the following order is
substituted:
„The appeal is dismissed with costs.‟
______________________________________________________________________

JUDGMENT
______________________________________________________________________

Saldulker JA (Ponnan, Majiedt, Swain and Zondi JJA concurring):

[1] The appellant, Mr Caine Jason Herr (the lessee, Herr) instituted proceedings in
the Boksburg Magistrate‟s Court against the respondent lessor, Innomet Projects (Pty)
Ltd (Innomet) for  payment in the sum of R64 000, being a rental deposit which he had
paid to Innomet pursuant to a lease agreement entered into between them on 20
January 2010 (the lease). Innomet raised a special plea to the lessee‟s claim, which is
not relevant for present purposes. It also instituted a counterclaim against the lessee.
To the extent here relevant the counterclaim provides:
„19. In breach of the Agreement read together with the Addendum, the Plaintiff:

19.1 purported to give the Defendant written notice dated  5 December 2010 terminating the
Agreement read together with the Addendum, which notice is annexe „D‟ to the Particulars of
Claim;
19.2 prematurely vacated the Premises on 28 February 2011.
20. The Plaintiff‟s conduct constitutes a repudiation of the Agreement read together with the
Addendum, which repudiation the Defendant has accepted alternatively accepts subject to its
rights to recover any damages it suffers as a result of the Plaintiff‟s unlawful conduct from the
Plaintiff.
21.1 At the time that the Addendum was concluded it was contemplated by the Plaintiff and
Defendant that the Defendant would suffer damages in the event that the Plaintiff breached the
Agreement read together with the Addendum.
21.2 In order to mitigate its damages the Defendant entered into a written lease agreement with
a tenant for the premises for the period 1 April 2011 to 31 March 2012 at a monthly rental of R
25 000.00. A copy of that lease is annexed marked “P1”.
22. The Defendant has suffered damages as a result of the Plaintiff‟s breach which caused the
premature termination of the Agreement read together with the Addendum in the form of lost
rental income in the amount of R24 000.00 calculated as follows:
22.1 rental income due in terms of the Agreement read together with the Addendum for the
period 1 March to 30 November 2011 at R32 000 per month in the sum of R288 000;
22.2 less rental income received and to be received by the Defendant in mitigation at R25 000
per month for the period 1 April to 30 November 2011 in the sum of R200 000;
22.3 less the Deposit of R64 000.‟

[2] The magistrate‟s court found in favour of the lessee and the following order was
made:

„48.1
The special plea is dismissed with costs;
48.2
Defendant is to pay the amount of R 75 026,17 to plaintiff together with interest of 4.5%
per annum from 26 June 2013 to date of payment;
48.3
The counterclaim is dismissed with costs;
48.4
Costs of suit including of costs of counsel.‟

[3] Aggrieved by this decision, Innomet appealed to the Gauteng Local Division,
Johannesburg. The appeal succeeded before Makhanya J (Ndamase AJ concurring),
who set aside the magistrate‟s court order and replaced it with the following order:
„1.
The appeal succeeds.
2.
The order of the court a quo is set aside and replaced with the following order:
2.1 the appellant‟s special plea is upheld;
2.2 the respondent‟s claim in convention is dismissed with costs;
2.3 the appellant‟s counterclaim against the respondent succeeds with costs;
2.4 The respondent is ordered to pay appellant the sum of R24 000-00 together with
interest thereon at 15.5% per annum from 30 November 2011 to date of final payment;
2.5 Costs are to include the costs of counsel.‟
The further appeal is with the special leave of this court.

[4] Before us, counsel for Innomet conceded that there was no basis for it to have
withheld the deposit, which Innomet had been obliged to repay to Herr together with
interest in terms of the lease agreement. In the light of that concession, it follows that
the magistrates‟ court had correctly entered judgment against Innomet for payment of
the amount of R 75 026.17 together with interest and there was accordingly no warrant

for the high court to have overturned that order on appeal. That leaves Innomet‟s
counterclaim.

Background
[5] On 20 January 2010, Herr, entered into a written lease agreement with Innomet,
duly represented by Mr Martin van Wijngaarden, for the rental of an apartment situated
at Heron Waters, in Clifton, Cape Town (the premises). The parties agreed that the
lease agreement would commence on 1 February 2010 and terminate on 30 November
2010. It was further agreed that the monthly rental for the premises would be R32 000,
and a deposit of R64 000, to be paid by the lessee in terms of the agreement, would be
repayable by the appellant to the respondent, subject to the lease agreement, within 14
days after termination of the lease.

[6] On 24 August 2010 an addendum to the lease agreement was signed by the
parties, for the renewal of the agreement on the same terms and conditions for a further
period of twelve months from 1 December 2010 until 30 November 2011. In terms of the
addendum, should the lessee require early termination of the agreement, he would give
Innomet four calendar months‟ written notice which could only be given after 31 January
2011.

[7] However, during December 2010 Herr learnt that the owner of another unit in the
same sectional title complex, Mr Gerald Goott, intended embarking on a major structural
renovation of his unit in the complex, which was directly below Herr‟s unit and which

construction would commence in April 2011. Herr notified Innomet by e-mail on 5
December 2010 of Goott‟s planned construction and informed Innomet that it would be
impossible to live on the premises with a newborn baby during the construction. Herr
gave notice that he and his wife would be moving out of the apartment not later than
March 2011. There was no response to this e-mail.

[8] On 28 January 2011 Herr, represented by his wife, Meagan, informed Innomet by
e-mail that he had secured alternative accommodation in the light of the planned
construction project, and notified Innomet that he would vacate the premises on 28
February 2011, which he did.

[9] Pursuant to such notification, Innomet instructed its duly authorised agent to
conduct an inspection of the premises and to collect the keys to the premises. On 1
March 2011 a final inspection was carried out on behalf of Innomet, which recorded that
the apartment had been left in an excellent condition by the Herrs.

[10] Subsequent to the Herrs vacating the apartment, Innomet entered into a lease
agreement with a new tenant, a Mr David Cook, at a rental of R25 000 per month for the
period of 1 April 2011 to 31 March 2012.

Legal Principles
[11] In argument before us it was accepted that the lease agreement imposed
reciprocal obligations on the parties. In R H Christie & GB Bradfield Christie’s The Law
of Contract in South Africa 6 ed (2011) at 437, the authors state the following:
„In BK Tooling (Edms) Bpk v Scope Precision Engineering (Edms) Bpk 1979 1 SA 391 (A) the
Appellate Division reviewed in some detail the history and scope of what have come to be
known as the principle of reciprocity and the exceptio non adimpleti contractus. The principle of
reciprocity recognises the fact that in many contracts the common intention of the parties,
expressed or unexpressed, is that there should be an exchange of performances, and the
exceptio gives effect to the recognition of this fact by serving as a defence for the defendant
who is sued on the contract by a plaintiff who has not yet performed or tendered to perform.‟

[12] This court explained the duties of a landlord in Sishen Hotel (Edms) Bpk v Suid-
Afrikaanse Yster en Staal Industriële Korporasie Bpk [1987] ZASCA 20; 1987 (2) SA
932 (A) where the facts were briefly as follows: the lessor let a hotel to the lessee for
twenty years. When entering into the lease the lessee acquired the previous lessee‟s
interest in the building and the hotel business for a substantial sum (R350 000). At the
same time the parties orally agreed that the lessee would construct additional
accommodation and upgrade other facilities, upon which the lessee spent R360 000.
The lessor conducted mining operations in the surrounding district and, to ensure that
hotel accommodation of a high standard was available for visiting officials, the lease
embodied provisions which obliged the lessee to conduct its business according to
certain high standards. The lease prohibited the removal or transfer of the hotel liquor
license without the lessor‟s written consent. The hotel was situated next to the national

road between Kuruman and Upington and, because of its situation, attracted
considerable custom. Eight years after the parties had entered into the lease the lessor,
with the approval of the provincial administration, diverted the national road so that it
could extend its mining operations. The diversion had an immediate impact on the
profitability of the lessee‟s hotel business. The hotel attracted considerably less custom
than before, and its profits dropped - a thriving business changed into an unprofitable
one and the lessee was eventually forced to close the hotel. The lessee sued the lessor
for damages. The trial court non-suited the plaintiff.

[13] The plaintiff appealed to the Appellate Division. The essence of the plaintiff‟s
cause of action was that by causing the diversion of the road, the lessor was in breach
of a tacit term that it would not take any steps which would interfere with access to the
hotel site and prevent the flow of custom to the hotel and therefore interfere with the
plaintiff‟s use of the premises. This court found that the lessor‟s breach of contract was
of such a serious and material nature that the lessee was entitled to cancel the lease.
This court held further that the lessor had committed a breach of its common law
obligation to afford the lessee the commodus usus of the leased premises. (See also
Ashcor Secunda (Pty) Ltd v Sasol Synthetic Fuels (Pty) Ltd [2011] ZASCA 158; 2011
JDR 1208 (SCA)).

[14] In Thompson v Scholtz [1998] ZASCA 87; 1999 (1) SA 232 (SCA) at 247A-D, this
court said the following:
„Where a lessee is deprived of or disturbed in the use or enjoyment of leased property to
which he is entitled in terms of the lease, either in whole or in part, he can in appropriate

circumstances be relieved of the obligation to pay rental, either in whole or in part; the Court
may abate the rental due by him pro rata to his own reduced enjoyment of the merx. This is true
not only where the interference with the lessee's enjoyment of the leased property is the result
of vis major or casus fortuitus but also where it is due to the lessor's breach of contract, e.g.
because the leased property is not fit for the purpose for which it was leased or, as in this case,
because the performance rendered by the lessor is incomplete or partial. . . The lessee would
be entirely absolved from the obligation to pay rental if he were deprived of or did not receive
any usage whatsoever.‟

Conclusions
[15] Applying the legal principles to the facts it is clear that Innomet cannot succeed in
its claim for contractual damages. As landlord, Innomet was obliged in terms of the
lease to provide the Herrs with peaceful and undisturbed occupation. Innomet failed to
respond to the e-mails sent by the lessee on 5 December 2010 and 28 January 2011.
The e-mails gave a graphic account of the effect of the planned construction which
would have deprived the Herrs of the use and enjoyment of the premises. Photographs
handed in as exhibits during the hearing depict the magnitude of the construction which,
inter alia required the use of a large crane, and a large construction crew would have
required direct access to the building on a daily basis. Furthermore building ramps down
to the pool area for concrete and equipment had to be installed for easy movement up
and down on the construction site. All of this would have taken place directly below
Herr‟s apartment. The resultant noise and inconvenience would undisputedly render the
premises uninhabitable. This was conceded under cross examination by Mr van
Wijngaarden, who stated that had he been in a similar situation as Herr he would

probably have found alternative accommodation and that the Herr‟s concerns that the
apartment would be „unliveable from April onwards‟ were not baseless.

[16] Innomet had an obligation towards Herr to object to the planned construction by
Goott, by raising it with the trustees of the sectional title complex. The conduct rules of
the body corporate of Heron Waters state that „an owner shall not make alterations to
his section, which are likely to impair the stability of the building or the amenity of other
sections or the common property‟. Herr as lessee could not himself invoke these
conduct rules. It was for Innomet to do so. That it failed to do even after the planned
construction had been brought to its attention by the Herrs. It follows that Innomet‟s
counterclaim had to fail.

[17] The following order is made:
1. The appeal is upheld with costs.
2. The order of the court a quo is set aside and in its stead the following order is
substituted:
„The appeal is dismissed with costs‟

________________

HK Saldulker
Judge of Appeal

APPEARANCES:

For Appellant

C J Bresler

Instructed by:

Smit Jones & Pratt Attorneys, Johannesburg

Symington & De Kok. Bloemfontein

For Respondent:
R H Wilson (Heads of argument prepared by
E Fasser)

Instructed by:

Webber Wentzel Attorneys, Johannesburg

Honey Attorneys, Bloemfontein