Zitonix (Pty) Limited v K201250042 (South Africa) (Pty) Limited

Zitonix (Pty) Ltd, a retail company controlled by Mr Marcel Joubert, was the tenant under five lease agreements for shops at the Gateway Theatre of Shopping in Umhlanga, KwaZulu-Natal, owned by K201250042 (South Africa) (Pty) Ltd. Joubert signed the leases in February 2016 in Cape Town and bound himself as surety. The leases contained a clause entitling the lessor to cancel if any surety was sequestrated. After repeated rental defaults and attempted reinstatements, Joubert was finally sequestrated on 22 August 2016. Relying on the sequestration of the surety as a contractual breach, the lessor cancelled the leases and sought confirmation of cancellation and eviction in the Western Cape Division of the High Court. Zitonix raised several defences, including lack of jurisdiction and alleged iustus error regarding ignorance of the suretyship clause.

The appeal was dismissed with costs, including the costs of two counsel. Paragraph 3 of the Western Cape Division’s order authorising execution by the Western Cape sheriff was set aside.

The case clarifies that claims for cancellation of leases and eviction based solely on contractual rights, and not on ownership or possessory remedies, are in personam and may be heard by a court with concurrent jurisdiction, not only the forum rei sitae. It also affirms strict enforcement of lease clauses allowing cancellation upon sequestration of a surety and limits the scope of justus error in commercial contracts.