Case name: Corub Property (Pty) Ltd v Paul Gancalves Barbuzano
Citation: (427/2022 [2023] ZASCA 89
Court: Supreme Court of Appeal
Date of judgment: 8th June 2023
This case concerned – a contractual dispute between a property owner and a tenant, over municipal water and electricity charges of a supermarket situated in a shopping centre.
The central question was whether or not the property owner had proven the amount in municipal charges that the tenant was liable to pay.
The legal issue in this case related to the interpretation of certain provision of a lease agreement between the two parties.
This case is important because it considers the common scenario where one party does not pay their due under a lease agreement because they are aggrieved by an unrelated matter.
The Greater Johannesburg Metropolitan Electricity By-laws. The by-laws govern the supply and payment of electricity in the greater Johannesburg region.
According to section 17 of the municipal by-laws, electricity supplied by the municipality may be resold. In this case, electricity for each sub-purchaser must be metred through a sub-meter.
The relevant provisions of the lease agreement between the parties provided the following:
Corub Property purchased electricity from the municipality and resold this electricity to its tenants. As required by the municipal by-laws, every tenant, including Mr Barbuzano, had a sub-meter installed in their shop.
The water and electricity payment arrangement in the lease agreement between Mr Barbuzano and Corub Property was in accordance with the municipal by-laws.
Mr Barbuzano operated a supermarket at a shopping centre in Johannesburg. He leased his shop from Corub Property (Pty) Ltd, who owned the shopping centre.
Corub Property appointed a company called Collective Utility Management (CUM) as its agent to manage the centre’s utilities. CUM was responsible for doing monthly meter readings and providing each tenant with a monthly invoice of how much water and electricity it owed.
The electricity meter at Mr Barbuzano’s supermarket had a kilovolt (KVa) register and a kilowatt hour (KWh) register. The monthly readings were captured by CUM on both registers.
The circuit breaker installed at the supermarket was a 200 Ampere circuit breaker. This circuit breaker was considered suitable for a supermarket which is a large electricity consumer.
The shopping centre was previously owned by the Van Der Linde Family Trust (VLFT).
In 2008 Mr Barbuzano and VLFT entered into a five-year written lease agreement in respect of the shop where Mr Barbuzano ran his supermarket.
Corub Property bought the shopping centre from VLFT in 2012 and became its new owner.
In 2013 Corub Property renewed the lease agreement with Mr Barbuzano on the same terms as his previous lease agreement with VLFT.
Mr Barbuzano defaulted on his electricity payments and Corub Property approached the regional court to claim the arrears. The regional court ordered Mr Barbuzano to pay the arrears.
However, he was unhappy with the decision of the regional court and appealed to the High Court. The high court upheld his appeal.
Corub Property appealed the decision of the High Court at the Supreme Court of Appeal and won.
Mr Barbuzano and Corub Property are parties to a lease agreement.
The court had to determine if Mr Barbuzano was, in terms of the lease agreement, liable to pay for both the kilovolt amp (KVa) component and kilowatt amp (KWa) component of the monthly readings of the electricity meter installed at his supermarket.
Mr Barbuzano argued that the supermarket only needed an 80 AMP circuit breaker instead of the 200 AMP circuit breaker that was currently installed.
He said that he had requested Corub Property to replace the 200 AMP circuit breaker, but that Corub Property refused to do so.
He contended that the reason for the 200 AMP circuit breaker was because there was previously a bakery at the supermarket, which consumed more electricity, but which had been closed for years.
Corub Property called four witnesses who were all employees of CUM. The witnesses testified that the monthly meter readings for the supermarket were undertaken properly and recorded accurately.
Their evidence showed that Mr Barbuzano was charged the correct tariffs for the KVa and KWh readings.
The court found the evidence presented by the CUM witnesses to be credible.
The court pointed out that Mr Barbuzano neither denied this evidence nor presented any opposing evidence.
The court said that Mr Barbuzano only disputed the correctness of the meter readings in his pleadings.
He did not raise the issue of the 200 AMP circuit breaker in his pleadings.
He also did not raise this issue at the trial in the regional court.
This issue only surfaced at the high court. Furthermore, Mr Barbuzano did not lead any evidence to support this argument.
The court reiterated the following principles relevant to the contractual dispute at hand:
The exception to this principle is that a court has the discretion to allow a party to raise issues at the trial that were not raised in the pleadings only if:
The other party will not be prejudiced.
All the facts are placed before the court at the trial.
The court was satisfied that Corub Property proved Mr Barbuzano’s liability and ordered that Mr Barbuzano pay the arrears in municipal water and electricity charges.
The court considered the language, context and purpose of the disputed provisions of the relevant provisions of the lease agreement.
Language – The court said that it is clear from the language of the lease agreement that Mr Barbuzano is obligated to pay the electricity charges.
Context – The court took the view that there is nothing in the context of the agreement or the broader factual context that justifies a different interpretation.
Purpose – According to the court, the purpose of the relevant provisions is self-evident. It is to place on the tenant the obligation to pay for the cost of electricity consumed on the premises.
The court further said Corub Property would be prejudiced if Mr Barbuzano was allowed to raise the issue of the 200 AMP circuit breaker on appeal because it was not raised in the pleadings or at the regional court.
This case confirmed that there is no reason why a court will not give effect to a legitimate lease agreement.
Potential clients should be aware that non-payment is not an option where there is a legitimate liability to pay under a lease agreement. It is also important to note that in preparation for a court case, all relevant facts and arguments must be raised in the pleadings.
Individuals facing concerns over their lease agreements are advised to seek advice from legal professionals.
Judges: Coram: DAMBUZA ADP and NICHOLLS, GORVEN, MEYER and GOOSEN JJA
For the appellant: S McTurk
Instructed by: Otto Krause Inc, Roodepoort; Honey Attorneys, Bloemfontein
For respondent: R Erasmus
Instructed by: Riekie Erasmus Attorneys, Roodepoort; Symington & De Kok Attorneys, Bloemfontein
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Corub Property (Pty) Ltd v Paul Gancalves Barbuzano
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