Court name
High Court
Case name
Pieterse v Theron
Media neutral citation
[1994] NAHC 12















A
239/94





B.J.
PIETERSE VS C. S.J. THERON



1994/11/03
MULLER, AJ


CONTRACT


Lease
agreement



Whether
option is void for vagueness and therefore unenforceable.



"the
fair market rental" not constituting a fixed or determinable
rental



option
void for vagueness.


jk.
Exercise
of option



letter
containing new proposals for new terms



not
exercising option "on the same terms and conditions"

case
*o£??nM








in
the high court of namibia














In
the matter between








barend
johannes pieterse
applicant


versus


cornelius
stephanus jacobus theron
respondent








coram: muller,
aj.









Heard
on:
1994.09.12


Delivered
on:
1994.11.03








judgment



muller,
aj.

:
The applicant approached this Court by way of notice of motion for an
order directing the respondent to vacate the property known as Erf
1284, Windhoek and for payment of the monthly rental due in respect
of the premises in terms of the agreement of lease from 31st May 1994
to date of vacation thereof and costs. The respondent opposed the
application and filed opposing affidavits, whereto the applicant in
turn replied.








At
the commencement of the hearing the respondent applied
in
limine

for oral evidence to be led in respect of a limited issue, namely
whether a specific letter namely that of 12 January 1994 had been
received by the respondent. After an indication by the Court that it
would not be in favour of

oral evidence at this stage on a single issue, the respondent
reconsidered his position and did not proceed with the point in
limine,
but decided that he would be prepared to argue the matter on the
papers as filed.






Mr
Mouton appeared on behalf of the applicant and Mr Oosthuizen
represented the respondent.








Background


From
the
affidavits filed it appears that the applicant is the owner of the
said Erf 1284, Windhoek and that the respondent rented the premises
by virtue
of
a
written agreement of lease dated the 19th November 1991. The
respondent conducts a business called Pionerspark Central
Supermarket. The lease commenced on the 19th November 1991. Paragraph
2(a) to (c) contains the following provision for an option for
renewal of the lease by the lessee (respondent). Paragraph 2 reads
as follows:











"(a)
The lease shall be for a period of (2) two years and six months and
eleven days, commencing on the 19th November 1991 and terminating on
31st May 1994, provided that should the LESSEE decide to rent the
business premises after the termination of this lease on the 31st May
1994, the LESSEE shall have the option to renew this lease on the
same terms and conditions as contained herein for a further period of
five years.




  1. The
    LESSEE shall give written notice of such decision to the LESSOR by
    not later than 31st January 1994.



  2. Within
    30 (thirty) days of delivery of the said written notice, the parties
    shall agree on the new rental payable for the business premises,
    which rental shall be the fair market rental for the said business
    premises."




The
respondent was in occupation of the premises on the 19th November
1991 and is still in the occupation of it. The applicant in his
application for ejectment of the respondent avers that respondent
failed and/or neglected to give written notice to the applicant on or
before the 31st January 1994 that he exercises his option to renew
the lease as provided for in paragraph 2(b) of the said lease
agreement. The respondent's right to occupy the property consequently
terminated on the
31st
May
1994,
according
to the applicant, but despite demand the respondent failed and/or
neglected to vacate the said business property. The applicant further
avers that he received a letter, dated 15 February 1994, from the
respondent's attorneys endeavouring to exercise the option to renew
the lease. This letter reads as follows:











1994/02/15



BJ
PIETERSE P 0 BOX 11005 Klein Windhoek



Sir



LEASE:
CSJ THERON/YOURSELF







We
act on behalf of Mr Theron who instructed us to direct this letter to
you.



We
refer to the lease and herewith confirm that our client in terms of
article 2(b) of the lease gives notice that he exercises his option
to renew the lease for a further period of 5 years. The renewal
notice was forwarded to the address indicated in the lease, but we
are not sure whether it has reached you, since it indicates a postal
address in Windhoek.



With
reference to your letter dated 25 January 1993 (which surely should
be 25 January 1994) we should like to answer as follows:



a)
Our client denies that it was agreed



verbally
between you and our client that our client shall purchase the
apparatus and accessories for R75 000.00. Our client is not
interested in buying them for R7 5 000.00, but is prepared to lease
them further as set out in article 12(a) of the lease, at the
existing escalation of R100
.00
p.
a. From 1 June 1994 onwards until 31 May 1995 our client shall thus
pay R975.00 per month for the rental of the machinery.



(b)
Our client at present pays rent to the amount of R5484
.00
per
month until 31 May 1994. The rent increased annually by 12%.







Should
you increase the rent to
R10
000.00
per
month, this would reflect an increase of 82.34% which is unacceptable
to our client.



Our
client is prepared to accept an annual increase of 12.5% (per annum)
which means that for the period 1 June 1994 until 31 May 1995 he will
pay the amount of R6169.50 per month. The rent then increases by
12.5% per annum.







We
look forward to hearing from you whether the terms are acceptable to
you in order to enter into a new lease.



We
trust that you will reply soon. Yours faithfully



signed
B. Viljoen pp Dr. Weder, Kruger &
Hartmann"









The
letter referred to in the second paragraph of that the above quoted
letter of 15th February
1994
by
means of which the respondent's attorneys averred that the respondent
indeed exercised his option to renew the lease namely that of 12
January 1994 was never received by the applicant, according to his
affidavit. The applicant then addressed a letter on the 28th February
1994 in reply to the respondent's letter of the 15th February 1994 in
which he accused the respondent of creating a smoke screen by
averring that the option had been exercised timeously and gave notice
to the respondent that he in fact breached the lease agreement
and that the applicant regards that

agreement as cancelled.
The
translated
letter of the 28th February
1994
reads
as follows:











By
Hand B.J. PIETERSE


28/2/94



Messrs.
Weder, Kruger & Hartmann



P
0 BOX 864



WINDHOEK



Sir







LEASE:
CSJ THERON/BJ PIETERSE



Firstly
I
refer
to your letter Mr Viljoen
LZV/93/1209
dated 15/2/94 which you used as a
SMOKE
SCREEN
,
seeing that for years already
(I?)
no
longer use P.O. Box 11005 Windhoek, see letters 2/3/93, 14/3/93, to
you, and letters to your client 15/2/93, 12/1/94 and many others, on
which the above address appears, thus your client failed and for a
smoke-screen to use Windhoek address (Afrikaans text intelligible).







I
refer
your client to article 2(b) that your client failed it reads as
follows (sic!): "The Lessee shall give written notice of such
decision to the Lessor by not later than 31st January 1994",
I
thus
refer you to your letter dated 15/2/94, as you yourself are aware
that your client did not fulfil his duty, you want to make me believe
that Windhoek's postbox was used, see our letters, as already
mentioned above, have a look at the address, it speaks for itself.







Secondly
I
refer
you to article 2(c) where a new rent will be made applicable if your
client complied with the contract, thus he failed, but am willing to
accept new lease as follows:




  1. As
    new lease set out in my letter dated 25 January 1993 (should be
    1994) to accept on or before 7/3/94 or his notice (b).



  2. I
    herewith
    give lessor (owner) B.J. Pieterse notice that lease with Mr C.S.J.
    Theron will be cancelled on 31 May 1994 and that lessor shall take
    the premises for his own use.




Thank
you by anticipation



Yours
faithfully



signed
B.J. Pieterse



Copy
to your client (per ha [...nd?]







I
herewith
acknowledge that
I
received
letter to Messrs Weder, Kruger & Hartmann



from
BJ Pieterse. signed Van Zyl 28/2/94"









The
applicant finally avers that he received no response to the letter of
the 28th February 1994, which allegation was denied by the
respondent, alleging a number of occasions in which he attempted to
contact the applicant, but in vain. This was in turn denied by the
applicant. This was really the only issue in dispute except whether
the letter of the 12th January 1994, which I shall soon refer to, was
received.









The
respondent in his affidavit pointed out that he in fact rented the
same business premises in terms of an earlier lease agreement dated
1st June
1989
which
was succeeded by the lease agreement of 19 November 1991. The
respondent in his affidavit contended that he had already as far back
as 2nd March 1993 through his attorneys of record given written
notice to the applicant of his intention to renew the lease agreement
on a long term basis. This letter reads as follows:











1993
03
02



B
J Pieterse 60 Abelia Street Somerset West
7130



Dear
Sir



LEASE
AGREEMENT: C J S THERON/YOURSELF







We
refer you to the above matter and wish to inform you that we are
acting on behalf of Mr Theron.







With
reference to your facsimile dated 15 February
1993,
we
would like to bring the




following
to your attention:




  1. Mr
    Theron had already commenced preparations to have the premises
    painted and the project will be completed soon. We therefore wish
    to confirm that the Lessee is complying with the provisions of
    clauses 9 and 10 of the Lease.



  2. Mr
    Theron denies all allegations that he is engaged in selling the
    premises and/or the business. Our explicit instructions are that
    these are unfounded rumours that are being spread and we wish to
    confirm that this is definitely not the case.




You
will realise that Mr Theron cannot sell the premises as you are the
owner and Mr Theron is only the Lessee. Mr Theron is also well aware
of clause 5 of the Lease in terms of which the Lessee is prohibited
from sub-letting the premises or ceding it without your written
permission. Our instructions are that Mr Theron is in no way
considering such a possibility since he is using the premises to
conduct his own business and intends doing so in future.



We
trust that your enquiries regarding the matter have been clarified.



Our
further instructions are that the current lease agreement expires on
31 May 1994 and that you and Mr Theron have already discussed
renewal of the lease, as well as the possibility of amending certain
clauses in the lease agreement. Mr Theron has also instructed us to
put the following proposals to you in view of the new lease:



1.
Mr Theron would like to enter into a long-term lease for twenty
(20)
years
as the previous contracts as well as the current one provided only
for short periods of about two
(2)
years.
Consequently, the lease agreement must be renewed regularly and this
entails unnecessary paper work. Such short-term contracts create
uncertainty with both parties involved, especially seen in the light
of long-term planning.



You
may therefore deduce that Mr Theron in no way intends selling the
business, but would prefer to plan its long-term establishment in
the existing premises.



You
will also realise that such a long-term lease presents a financial
asset to you as it may be utilised as security for loans, bonds,
etc.



2
. With reference to clause 13 of the lease agreement, we were
instructed that Mr Theron is experiencing several problems with the
refrigeration installation which he is also renting from you.
Attached is a copy of a letter from Messrs Marting Refrigeration
regarding the general condition of such installation.







Our
instructions are that Mr Theron wishes to remove the installation,
which is no longer serviceable, from the shop and replace it with
his own installation. You will see from the attached letter that the
installation can no longer be repaired economically.



We
would like to hear from you regarding your intention about what is
to be done with the unserviceable installation, as it will be kept
in available storage.



3. Further
hereto, with reference to clause
12(a), we would like to hear
from your
regarding your opinion should the rent for
the
installation and equipment be included
in the rent for the
premises. Instead of an
additional amount calculated as rent for
the
equipment, we therefore propose an all-
inclusive amount
as rent. In such a case,
clauses 12(a) and (b) will therefore
lapse,
and be included in the provisions of clause
3 of the
current lease agreement.



Mr
Theron thus offers an amount of R5 700.00 per month with effect from
1 June 1994 for the first year of the new period of lease, with an
annual automatic rate of escalation of 10%.



4. Our
client would, as in the case in the
current clause 2(a), like to
have the option
to renew the lease.






We
look forward to hearing from you regarding your viewpoint on the
proposals by Mr Theron, as well as the clauses you would like to be
incorporated in the new lease agreement. We would appreciate it if
you would furnish the necessary information so that a new lease
agreement may be drawn up in time, or if you prefer to draw up the
contract yourself, to provide us with a copy for submission to Mr
Theron.






We
thank you for your co-operation and await your reply.



Yours
faithfully


DR
WEDER, KRUGER & HARTMANN





Signed
B Viljoen"









The
applicant's reaction to that letter appears from a letter dated 14
March 1993, which I quote:











14/3/93



B
J Pieterse 60 Abelia Street Heldervue Somerset West 7130



Messrs
Dr Weder, Kruger en Hartmann



P
0 BOX 864



Windhoek



Namibia



9000



Dear
Sir







INSTRUCTION:
LEASE AGREEMENT C J S THERON AND B J PIETERSE







With
reference to letter from your Mr Viljoen, LZV93/1209 dated 2/3/93, I
wish to draw your attention to clause 14 to be read with clause 13.
This replies to your letter and is self-explanatory .







I
also wish to refer you to your letter, page 2, paragraph 2 which
reads as follows: (a) Lessee inspected all items properly and found
them to be in a sound condition. Lessee regularly had items serviced
and they were still serviceable. (b) If the lessee buys new articles
for use, these items becomes the property of the lessor - see clause
14. (c) No mention is made anywhere in the lease agreement of lessor
of any items replaced and stored or kept by the lessee.



All
items referred to by you as per attached letter from Messrs Marting
Refrigeration are to be maintained in a proper working order by the
lessee. Should the lessee replace any items at his own expense, the
new item replaces the old -see clause 14.







Regarding
the renewal of the contract, the lessee may decide later.







I
trust that the lessee will comply with the terms of the lease and
duly replace any items and that such items will become the property
of the lessor - the replaced item may be taken by the lessee. No
mention is made anywhere of items



Lessee
is to keep or store for Lessor. All items to be maintained in good
working order by the Lessee.







Thanking
you in advance.



Yours
faithfully



Signed
B J Pieterse LESSOR"









Nothing
apparently happened for the next 10 months when the respondent avers
he instructed his attorneys to write a letter to the applicant which
reads as follows:











1994.01.12



B
J Pieterse P 0 BOX 11005 Klein Windhoek



Sir



C
J S THERON/YOURSELF



We
are acting on behalf of Mr Theron who instructed us to direct this
letter to you.



We
refer to the lease agreement between yourself and our client, and we
wish to confirm that the client wishes to exercise his option as
stated in clause 2(b) of the lease. Our client therefore intends
renewing the lease agreement for a further period of 5 years with
effect from 1 June 1994.







We
look forward to hearing from you in this regard.



Yours
faithfully



DR
WEDER, KRUGER AND HARTMANN



Signed
B Viljoen"









This
is the letter which the applicant avers in his affidavit he never
received. About this letter the respondent in his answering
affidavit says in paragraph 7(7):



"This
was not meant as the original notice, it was a mere repetition in
order to get applicant to respond."









Also
in paragraphs
10,
11
(3),
12(3)
and 12(6) of the respondent's affidavit he clearly states that he in
fact exercised his option by means of the letter of the 2nd March
1993 and that the letter of the
12th
January
1994
was
a mere confirmation of the earlier letter. The respondent then
continues by denying that any material term of the contract was
breached and that the applicant is obliged to enter into a further
lease agreement for another 5 years on the same terms and conditions
as that contained in the lease agreement, qualified only in respect
of the rental payable, which shall be the fair market rental for the
said premises. The respondent avers that "nothing more than N$7
500 per month" would constitute a fair rental. The respondent
also attached to his affidavit a letter received from the applicant
dated 25 January 1993 which according to respondent was the first
reply to his letter of 2nd March 1993. The letter of the 25th
January 1993 reads as follows:











"B
J Pieterse 60 Abelia Street SOMERSET WEST 7130



2
5
January
1993



Dr
Weder, Kruger & Hartmann



P
0
BOX
864



WINDHOEK



9000



Dear
Sir



LEASE
AGREEMENT: C J S THERON AND MYSELF



With
reference to your letter, Mr Viljoen LZV 93/1209 dated 2 March
1993,
and
my letter dated



14
March
1993,
I
refer to the following:



The
discussion between your client and myself:



a. The
renewal of a new lease on 1 June
1994:
That
the installation and equipment will no
longer be leased, but
become the property of
the Lessee upon payment of R75
000.00
(seventy
five
thousand Rand) to the Lessor.







b. The
new rent with effect from
1
June
1994
will
amount to R10 000.00 (ten thousand
Rand) per month escalating at
12V2%
per
annum
for a period of 5 (five) years, to include
the
following: "Pioneer Central Super
Market, servants'
quarters, double garage
next to said servants' quarters and
outside
toilet." Further, the lease agreement to
remain
the same excluding clauses
11,
12
(a),
(b)
and
13,
which
will no longer apply.



I
trust this replies to your letter and I await your client's
application.



Thank
you.



Signed
B J Pieterse"









The
respondent also denies that the
R10
000
per
month rental referred to in the said letter constitutes fair market
rental for the said business premises.






In
his replying affidavit the applicant dealt with the letter of 2
March 1993 which the respondent avers was the instrument of
exercising his option. The applicant made the point that as this
letter proposed a renewal of the lease on different terms and
conditions than that contained in the lease agreement, it was not a
proper exercise of the option as provided for in clause 2(a) of the
lease agreement. Applicant denied that he received the letter of the
12th January 1994 and although he concedes that his Windhoek Post
Box number was still functional it was not used by himself anymore
and that the respondent corresponded with him at his



Somerset
West address. Applicant also avers that the content of the letter of
12 January 1994 was totally different from that of the 2nd March
1993 letter. Applicant denies that the fair market rental for the
business premises is N
$7500
and
states that it is N
$10
000
per
month. It also appears from his affidavit that applicant was in fact
in Windhoek during the period 9 January 1994 until 2 February 1994
and during that period visited and inspected the leased premises.
During these occasions the appliances were discussed but the
respondent didn't inform him about the exercising of the option
which he had the opportunity to do. The dispute about the fair
market value also appears from a letter by respondent's attorneys to
the applicant dated 15 February 1994 to which I have referred
earlier herein and which according to the applicant was addressed to
him in response of his letter of 25 January 1993 a quoted supra.






Determining
the issues on the papers



As
mentioned before the parties were satisfied that the issues be
determined on the papers as filed. In determining the issues I am
conscious of the so-called Stellenvale rule as set out in
Stellenbosh
Farmers Winery v Stellenvale Winery (Pty) Ltd

1957(4) SA 234(C) at 235E-G where the following was said in
Afrikaans of which the English translation was quoted in
Plascon-Evans
Paints v Van Riebeeck Paints

1984(3) 623(A) at 634F:











"...
where there is a dispute as to the facts a final interdict should
only be granted in notice of motion proceedings if the facts as
stated by the respondents together with the admitted facts

in the applicants affidavit justified such an order .... Where it is
clear that facts, though not formally admitted, cannot be denied,
they must be regarded as admitted."









Corbett
JA
(as
he then was) amplified this well known rule in the Plascon-Evans
Paints case on page
634G
- 635C
in
the following words:











"This
rule has been referred to several times by
the Court (see
Burnkloof
Caterers (Pty) Ltd v
Horseshoe Caterers (Green Point) (Pty)
Ltd
1976(2)
SA 930(A) at 938A-B;
Tamarillo
(Pty) Ltd
v B N Aitkin (Pty) Ltd

1982(1) SA 398(A) at 430-
1;
Associated
South African Bakeries (Pty) Ltd v
Oryx & Vereiniqte
Backereien (Pty) Ltd en Andere
1982(3)
SA 893(A) at 923G-924D) . It seems to me,
however, that this
formulation of the general
rule, and particularly the second
sentence
thereof requires some clarification and,
perhaps,
qualification. It is correct, that wherein
proceedings
on notice of motion disputes of fact
have arisen on the
affidavits, a final order,
whether it be an interdict or some
other form of
relief, may be granted if those facts averred
in
the applicant's affidavits which have been
admitted by the
respondent, together with the
facts alleged by the respondent,
justify such an
order. The power of the Court to give such
final
relief on the papers before it is, however, not
confined
to such a situation.
In
certain



instances
the denial by respondent of a fact alleged by the applicant may not
be such as to raise a real, genuine or bona fide dispute of fact
(see in this regard
Room
Hire Co (Pty) Ltd v Jeppe Street Mansions

(Pty) Ltd 1949(3) SA 1155(T) at
1163-5;
Da
Mata v Otto NO

1972(3) SA 858(A) at 882D-H) . If in such a case the respondent has
not availed himself of his right to apply for the deponents
concerned to be called for cross-examination under Rule
6(5)(g)
of the Uniform Rules of Court (cf
Petersen
v Cuthbert & Co Ltd

1945 AD 420 at 428; Room Hire case supra at 1164) and the Court is
satisfied as to the inherent credibility of the applicant's factual
averment, it may proceed on the basis of the correctness thereof and
include this fact among those upon which it determines whether the
applicant is entitled to the
final
relief which he seeks (see eg
Rikhoto
v East Rand Administration Board and Another

1983(4) SA 278(W) at 283E-H). Moreover, there may be exceptions to
this general rule, as, for example, where the allegations
or denials of the

respondent are so far-fetched or clearly untenable that the Court is
justified in rejecting them merely on the papers (see the remarks of
Botha AJA in the Associated South African Bakeries case, supra at
924A)."









The
material
facts in this matter are not really in dispute. As mentioned earlier
herein,
the
main
dispute between the parties is whether the letter dated 12 January
1994 was received by the applicant.
The
other
disputes are in connection with the allegations by the respondent of
his attempts to get hold of the applicant in order to negotiate a
fair market rental for the continued lease of the said property as
well as the applicant's denial thereof. As will become more clear
further on in this judgment, the receipt by the applicant of the
letter of 12 January 1994 is not a material factor which would
determine the main issues in this application and that the other
disputes are not really material at all in the determination of the
real issues. The real material issues in my opinion revolve mainly
on the legal position pertaining to this particular situation as
well as the contents of certain correspondence as well as the
undisputed facts on the affidavits.






In
the light of the aforesaid I believe this is a matter where a
robust approach is necessary and advisable. See
Wiese
v Joubert

1983(4) 182(0) at 202E - 203C;
Reid
v Wittrup

1962(4) 437D at 443;


Carrara
& Lecuona (Pty) Ltd v Van Den Heever Investments Ltd and Others

1973(3) SA 716(T) at 719G;


von
Steen v von Steen & Another

1984(2) SA 203(T) at 205D-E;
Rawlins
& Another v Caravan Truck (Pty) Ltd

1993(1) SA



537(A)
at 5411 - 542A;



Michael
Hill v Hildebrandt & 1 Other

unreported case no. A128/94 Namibia High Court, p.4.






I
am therefore satisfied that I can deal with this application and the
issues involved on the papers before me.









Arguments



Mr
Mouton's
first argument was not one which was contained in the affidavits.
However, this argument formed part of the submissions in his heads
of argument which were served on the respondent's counsel. During
the course of the arguments before me it was apparent that Mr
Oosthuizen was prepared to deal with this argument. The first
argument advanced by Mr Mouton was that the option contained in
clause 2(a) of the lease agreement did not constitute a valid
option, as it was void for vagueness. In this regard
Mr
Mouton
contended, as
I
understand
his argument, that one of the
essentialia
for a valid contract such as this is that the price, in this
instance the rent, must be fixed or determinable from the wording of
the contract provisions itself.
Mr
Mouton
submitted that the rental provided for in clause 2(c) is too vague
to constitute compliance with this legal requirement and that as
such it is unenforceable and therefore renders the whole option void
for vagueness. The words complained of as being to vague to
constitute firm rental are "the fair market rental".






Mr
Oosthuizen
conceded the principle that an option may be a void for vagueness if
the price or the rental is not fixed

or determinable as set out in the particular contract, but he
contended that the words used in this particular contract
constituted a rental that is determinable or that by using a "fair
market rental", it provides for a method to determine such
rental. Mr Oosthuizen submitted that if the provision only provided
for a "reasonable rental", it would have been too vague,
but contended that the words used in this particular contract and
particularly clause
2(c)
thereof takes it out of that sphere. I shall deal with this argument
and the legal position pertaining to it later on herein.









Mr
Mouton's second argument is that on the papers and in particular the
respondent's answering affidavit he based his averment that he in
fact did exercise the option to renew the lease on the letter of
2nd
March
1993
.
This
letter, Mr Mouton submitted, is clearly not in accordance with what
is required in clause
2(a)
of the said contract, because that letter contained an offer for a
new lease on different terms and conditions and not as is required
in clause
2(a)
namely, "to renew this lease on the same terms and conditions
as contained herein . . . " . Mr Oosthuizen countered this
argument by submitting that if it is found that that particular
letter of
2
March
1993
didn't
constitute a proper exercise of the option in terms of the agreement
of lease, then the respondent did exercise his option by virtue of
the letter dated
12
January
1994.






In
a slight variation on this second argument Mr Mouton argued that the
letter of
2
March
1993
clearly
contained a

counter proposal to the existing terms of the agreement and that as
a result of this counter proposal the original offer falls away so
that the respondent wasn't in a position anymore to exercise this
option. Mr Mouton contended that this also pertains to any further
purported exercise of the option, e.g. the letter of 12 January
1994. Mr Oosthuizen on the other hand, submitted that if the letter
of 2 March 1993 should be regarded as a counter offer invalidating
it as a proper exercise of the option, then the letter of 12 January
1994, constituted a separate exercise of the option. I shall also
deal with this argument later herein.









The
final argument advanced by Mr Mouton was that the letter of 12
January 1994 was not received by his client and was never written
and that the probabilities favours a conclusion to that effect. Mr
Oosthuizen submitted that it was never the case of the applicant
that this letter was never written or sent, but only that the
applicant didn't receive it. He further referred me to certain
authorities with regard to delivery and submitted that the
respondent in fact complied with this requirement by posting it to
the address contained in the lease agreement and that the applicant
still had the particular post box facility and could have received
the letter.









Analysis
of the arguments presented
.









One
of the requirements for a valid sale is that the price must be fixed
or determinable and if it appears from the contract that it is still
necessary to negotiate and agree on the price, no valid, agreement
of sale came into operation. The same principle applies to an
agreement of lease with regard to the rental payable.


See
Biloden
Properties (Pty) Ltd v Wilson
,
1946 NPD 736;
Hattinqh
v Van Rensburq

1964(1) SA 578(T) at 582C;
Aris
Enterprises (Finance) (Pty) Ltd v Waterberq Koelkamers (Pty)
Ltd

1977(2) SA 425(A) at 434;


Soteriou
v Retco Poyntons (Pty) Ltd

1985(2) 922(A) at 931G;
South
African Reserve Bank v Photocraft (Pty) Ltd

1969(1) SA
610(C)
at 613D - H.






In
Wasmuth
v Jacobs

1987(3) SA 629 (SWA) Levy J. summarised it at 633G - 634D as
follows:











"Therefore,
if an offer which is an essential element of any option is vague or
capable of more than one meaning, it is open to the offeror to
contend that it is not capable of being accepted and thereby
converted into a binding contract. Where there is an 'offer' which
provides that certain terms are to be 'reviewed' or to be
'negotiated' or 'to stand over' for decision at a later stage, then
pending agreement on such outstanding terms neither party has any
rights against the other.
OK
Bazaars v Bloch

192
9
WLD
37;
Wilson
Bros Garage v Texas Co (SA) Ltd

1936
NPD
3
86;
Scheepers
v Vermeulen

1948(4)
SA
884(0);
Potchefstroom
Municipal Council v Bouwer NO
1958(4)
SA
382(T).







In
Hattinqh
v Van Rensburq

1964(1)
SA
578(T),
a provision in a lease, which provided that the lessee had the right
and option to purchase certain premises at such price as the parties
may agree upon, was held to be of no force or effect until a price
had been agreed upon. There was a similar decision in
Biloden
Properties (Pty) Ltd v Wilson

1946
NPD
73
6,
where
the provision for the Court's consideration was 'upon terms to be
arranged' while in
South
African Reserve Bank v Photocraft (Pty) Ltd

1969(1)
SA
610(C)
the Court held that an agreement which purported to give the tenant
an option 'at a rental to be mutually agreed upon,' in fact did not
give the tenant a 'valid and subsisting option' which he could
exercise. In the South African Reserve Bank case



(at
613H) Steyn J added:



'Neither,
in my opinion, was there any obligation on applicant "to
negotiate" with respondent in order to determine a rental for
any further period. It seems to me to be quite irrelevant that this
provision is contained in an existing contract providing for a
possible renewal of terms in certain respects should the parties
agree on a rental.'



I
respectfully agree with this. In the present case, there was no
obligation on appellant to engage in any negotiations (review
proceedings) in order to arrive at a rental whether such rental was
to be fair and reasonable, or not. (See also
Trook
t/a Trook's Tea Room v Shaik and Another

1983(3) SA 935(N);
Aronson
v Sternberg Brothers (Pty) Ltd

1985(1) SA 613(A).)



For
these reasons I have come to the conclusion
that there was no
valid and enforceable option
contained in the original agreement
of lease
concluded by the parties.
Furthermore



respondent's
purported exercise of the option did not create a valid and binding
contract."









It
has also been held that "a reasonable" price or rental
contained in an option does not constitute a fixed or determinable
rental or a price and that such a term would be too vague to be
enforceable.


See
Erasmus
v Arcade Electric

1962(3) SA 418(T);


Lombard
v Pongola Sugar Milling Co Ltd

1963(4) SA 119D at


128B
and


Adcorp
Spares P.E. Ltd v Hydromulch Ltd

1972(3) SA 663(T). In
Trook
t/a Trook's Tea Room v Shaik & Another

1983(3) 935(N) at 939A Page J. says in this regard:











"Suffice
it to say that, taking all the arguments to the contrary into
account, I remain entirely unconvinced that a stipulation to pay a
reasonable rental is sufficient to enable the parties to establish
with certainty the ambit of the respective rights and obligations. I
find myself respectfully in accord with those South African
Decisions which held that such a stipulation is void for vagueness."



Mr
Oosthuizen, however, contended that the word "fair" used
in clause 2(c) is not the same as "reasonable". In my
opinion the effect of both words are the same when it's used in the
context of a price or rental to be paid. In both instances these
words imply some uncertain and potentially arbitrary measure still
to be fixed. Used in the context of an offer which forms part of an
option I can see no room for rights to be enforced if the "fairness"
or "reasonableness" still has to be determined or may lead
to a difference of opinion. It is apt to refer in this regard to the
summary of this position by Myburgh J. in the Adcorp Spares case
supra at p.668F - H:











"From
the authorities it appears that the price if not specifically agreed
must be determinable by reference to something which in itself is
certain. Such would be the market price of the merx if in fact it
has a market price which is readily ascertainable. The same would
apply to the usual price. An agreement to pay a fair and reasonable
price, in my view, is too uncertain to give rise to a valid contract
of sale. What is the true meaning of a fair and reasonable price?
Who must determine it? How is it to be calculated? These are all
questions which in person or persons. What is to happened if they
differ? The usual price refers to a factual position. That fact can
be proved, and is not like a fair and reasonable price dependent on
opinion. Such an agreement to deliver against payment of a fair and
reasonable amount of money would, in my view, be actionable as an
innominate contract. Such a contract will have its own elements of
risk and obligations as to delivery which would not necessarily
coincide with such elements in a contract of sale."









Mr
Oosthuizen submitted that in clause 2(c) a mechanism is in fact
provided for determining the new rental namely "the fair market
rental for the said business premises." In my opinion, however,
the addition of the word "fair" in that sentence makes it
uncertain and may lead to a difference of

opinion of what is "fair" in market rental and what is
not.
If the word "fair" was omitted, Mr Oosthuizen may
have had
a point because market rental can perhaps be determined
by
way of a proper evaluation by a qualified property
evaluator
with experience of a rental applicable to business
premises
in that particular area. That my expectation that
the
determination of what a "fair" market rental would
be for
the said premises would still be open to dispute is
borne
out by the correspondence between the parties
and
allegations contained in their own
affidavits.
The


respondent
says a fair market rental for the said premises is
N$7500
while
the applicant maintains that it is
N$10
000
and
it is clear that they have disagreed on this for a considerable
period and were unable to reach an agreement.






Consequently
I hold that the option contained in paragraph
2
of
the lease agreement is too vague to be enforceable and that the
first argument advanced by Mr Mouton has to succeed.








With
regard to Mr Mouton's second argument, it is clear on the papers
that the respondent's case is that he exercised his option by way of
the letter dated
2
March
1993
.
In
paragraph
7(2)
of
his answering affidavit he says the following:







"In
a letter dated
2
March
1993,
my
attorneys of record, acting on my instructions, gave the applicant
written notice of my intention to renew the lease agreement on a
long term basis."









This
is repeated in paragraphs
7.5,
10
and
11.3.
The
latter

reference reads:











"I
reiterate
that
I
already
exercised
my
option
during

March
1993."






I've
already quoted the letter of 2 March 1993 in extenso, but it is
necessary just to highlight the paragraph with which
respondents attorneys introduced certain new
proposals:









"Our
further instructions are that the current lease agreement expires on
31st May 1994 and that you and Mr Theron have already discussed
renewal of the lease,
as
well as the possibility of amending certain clauses in the lease
agreement
.
Mr Theron has also instructed us to put the following
proposals
to you in view of
the
new lease
;"
(My underlining)









The
last paragraph of that letter also underlines that this letter
merely contained new proposals for a new agreement of lease:









"We
look forward to hearing from you regarding your view point on the
proposals
by Mr Grant, as well as the
clauses
you would like to be incorporated in the new lease agreement
.
We would appreciate it if you would furnish the necessary
information so that a
new
lease agreement

may be drawn up in time, or if you prefer to draw up the contract
yourself, provide us with a copy for submission to Mr Theron."
(My underlining)






Clause
2(a) clearly provides for an option to renew the lease "on the
same terms and conditions" as contained in the old existing
lease agreement. I agree with Mr Mouton that the content of the
letter of 2 March
1993
can
certainly not be construed as conveying to the
applicant that the

respondent is thereby exercising the option to renew the lease
on
the same terms and conditions

as contained in the existing lease agreement. The purpose of the
said letter is undeniably one of putting forward certain proposals
to be incorporated in a
new
lease agreement to be entered into between the parties
.
That this was also what the applicant understood from that letter is
borne out by the content of the applicant's letter to the
respondent's attorneys dated
14
March
1993.
In
that letter the applicant clearly referred to the letter of
2
March
1993
and
then continued to deal with certain problems and arguments regarding
equipment. However, in the fourth paragraph applicant said the
following:











"Regarding
the renewal of the contract, the lessee may decide
later."









From
this it is clear that applicant, having regard that the time for
exercising the option was still far ahead considered any reference
to that as premature at that stage.






I
do not find it necessary to deal with Mr Mouton's argument that
because the letter of
2
March
1993
contains
a counter proposal the option was no longer valid. In my opinion the
respondents purported exercise of this option by means of the letter
of
2
March
1993
cannot
be accepted as a proper exercise of the option provided for in
clause
2
of
the lease agreement on the same terms and conditions as contained
therein.









The
only other possible instrument of proof that the








respondent
indeed exercised his option timeously with regard
to clause
2
(b)
of the lease agreement is the letter of
12
January
1994.
This is the letter that the applicant denied
receipt of.
I'm
also of the opinion that it is not


necessary
to deal with Mr Mouton's third argument namely that it should be
held that he never received this particular letter. The respondent
made it abundantly clear in his answering affidavit that he
exercised his option by means of the letter of
2
March
1993
and
not by means of the letter of
12
January
1994.
I
have already referred to and quoted several extracts from
respondent's answering affidavit in this regard but the following
two paragraphs in that affidavit make it absolutely clear that the
respondent's purpose was never to exercise the option by way of the
letter dated
12
January
1994.
Paragraph
7(5)
reads
as follows:











"Due
to applicants non committal attitude after I caused notice to be
given to him as set out in annexures "CJST
1"
and
"CJST
2",
I
instructed my attorney
to
repeat the notice during January
1994
. "









Paragraph
7.7. reads:











"This
was not meant as the original notice, it was a mere repetition in
order to get applicant to respond."


"(The
underlining in both paragraphs is my own)."









Although
Mr Oosthuizen attempted during argument to distinguish between the
two letters when he became aware of the problems with regard to his
argument that the exercise of the option was contained in the letter
of
2
March
1993
and to fall back on the letter of
12
January
1994
as
proof of the exercise of the option in its own right, this is
clearly not what his client's attitude is and what his client in
fact says under oath.









Conclusion









In
the result the application must succeed with costs. I am, however,
of the opinion that to provide only
7
days
for the respondent, who is conducting a running business, to vacate
the property would be unfair. It may also not be to the advantage of
the applicant to have to find a new lessee at such short notice. In
all the circumstances a reasonable time would be until the end of
December of this year, leaving approximately
2
months
to the respondent to make arrangements to vacate the property. The
following order is made:











1.
The respondent is ordered to vacate the said property known as Erf
1284,
Windhoek
on
31
December
1994;







2
.
Respondent is responsible for payment of the monthly rentals due in
respect of the said premises as provided for in the lease agreement
until
31
December
1994;







3.
Respondent is ordered to pay the costs of this application.










ADV.
FOR THE APPLICANT: ATT. FOR THE APPLICANT:



C.J.
MOUTON THEUNISSEN & VAN WYK











ADV.
FOR THE RESPONDENT: ATT. FOR THE RESPONDENT:


G.H.
OOSTHUIZEN


WEDER,
KRUGER & HARTMANN




THE
STATE VS CORNELIUS KOOPER
1994/09/22



Muller
A.J.


CRIMINAL
LAW



MURDER
- dolus eventualis - deceased stabbed with broken bottle neck in the
neck.



SENTENCE
- 15 years imprisonment.



(Leave
to appeal refused).