Urban Hip Hotels (Pty) Ltd v KCarrim Commercial Properties (Pty) Ltd

Urban Hip Hotels (Pty) Ltd operated a hotel rental pool at the ICON building in Cape Town. KCarrim Commercial Properties (Pty) Ltd owned multiple residential units in the same building and, following negotiations, placed 48 of its residential units into Urban Hip’s rental pool under a written Memorandum of Understanding (MOU) concluded around 31 March 2011. The MOU fixed a levy of R1 250 per unit and a reduced management fee of 14% of turnover, and expressly stated that no other expense or payment would be allowed unless agreed in writing. Contrary to this, Urban Hip deducted operating costs from KCarrim’s rental income during the term of the MOU. After termination of the MOU in February 2012, KCarrim discovered that operating costs totalling R2 248 156,29 had been deducted and applied to the High Court for repayment. The High Court ordered Urban Hip to repay the amount, and Urban Hip appealed to the Supreme Court of Appeal.

The appeal was dismissed with costs, including the costs of two counsel, and the High Court order requiring Urban Hip Hotels to repay R2 248 156,29 plus interest to KCarrim was upheld.

The case reaffirms South African principles of contractual interpretation, particularly that clear and unambiguous contractual terms cannot be overridden by alleged tacit terms, standard business practices, or subsequent conduct. It underscores the primacy of the written agreement as the exclusive memorial of the parties’ rights and obligations.