*o£??nM

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.

(2) The LESSEE shall give written notice of such decision to

the LESSOR by not later than 31st January 1994.

(3) 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:

(4) 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).

(5) 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:

(6) 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.

(7) 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;

MULLER, ACTING JUDGE

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

- 26 -

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).