Tenants win right not to pay Sea Point mall’s ‘diesel recovery costs’ incurred during load shedding

27 Dec 2023

A ‘high-end’ gym, which has operated in a Sea Point shopping mall for more than a decade, had taken the owners of the centre to court over demands for extra payment for generators used during load shedding.

The applicants – Bodies Under Construction CC, Specialised Weight Endurance and Aerobic Training CC and Fluidity Wellness CC – argued that the all-expenses-included lease they had signed with Permasolve Investments did not provide for additional payments for generator use.

In the Western Cape High Court, Judge Derek Wille granted the order with costs supporting the tenant’s right to access the alternative energy supply. Disconnecting the business pending an arbitration process had been unlawful, he noted.

Permasolve, whose directors include businessman and former trade unionist Johnny Copelyn and lawyer Raymond Berman, had installed a generator at the shopping centre which tenants used during load shedding.

Wrongful deprivation

The gym had used this alternative energy source for many years, noted Judge Wille, ruling on the application for “spoliation” or “wrongful deprivation” on 20 December.

The gym sought urgent intervention from the court when Permasolve disconnected the business from the centre’s generators during power cuts, because it had not paid a “levy”.

Earlier, Judge Wille granted relief to the gym pending the outcome of private arbitration between the parties, issuing an interim order that the matter be categorised as urgent and that Permasolve reconnect the premises immediately.

He noted that “this alternative power supply is necessary so that the applicants can offer certain specialised fitness classes to their members. Load shedding is financially and reputationally disastrous for the applicants’ business”.

The relief was immediately appealed by Permasolve.

“I can only interpret this as an adverse reaction to the injunction I had issued the previous afternoon. Or it was an attempt by the respondent not to abide by the injunction’s terms,” the judge said.

Over the past 10 years the gym had never paid Permasolve any additional levy or further financial contribution for using the alternative power supply and the lease agreement had not provided for any additional payments, he said.

Our Constitution does not limit property to ‘corporeal’ things. Our jurisprudence also has a history of protecting quasi-possession by way of spoliation.

“About two years ago, an addendum to the lease was executed in which the applicants [the gym] agreed to pay the respondent [Permasolve] an all-inclusive monthly fee for all expenses related to the lease of the premises.”

About 18 months after the addendum to the lease had been entered into, Permasolve had, “out of the blue”, demanded, under threat of disconnection, an additional amount for “diesel recovery”.

The gym owners disputed this and the matter was taken to private arbitration. The gym, noted Judge Wille, had used the alternative power supply before Permasolve disconnected them.

Possession 9/10 of the law

“The issue to be considered is ‘quasi-possession’ for a spoliation claim. Our Constitution does not limit property to ‘corporeal’ things. Our jurisprudence also has a history of protecting quasi-possession by way of spoliation,” the judge said.

The disconnection had been “undoubtedly a substantial interference with the possession of the premises by the applicants”, he said, and he had been persuaded by the gym owners.

Read more in Daily Maverick: Eskom news

“Their fate was tied to the unpredictable and ever-changing load shedding schedule experienced in this country. The impact of the respondent’s unlawful conduct was significant and the respondent did not engage with this at all despite having the full opportunity to do so.” DM

Categories:

Tags:

DM is much better if you are signed in...

South Africa

Wrongful deprivation

Possession 9/10 of the law