Waterberg Boulevard (Pty) Ltd v Smulhoekie Tuisnywerheid (Pty) Ltd and Another

On 15 March 2016, Waterberg Boulevard (Pty) Ltd (applicant/lessor) entered into a 3-year written lease agreement with Smulhoekie Tuisnywerheid (Pty) Ltd (first respondent/lessee) for business premises at a fixed monthly rental of R17,100, escalating annually. The second respondent, Mr Louis Boshoff, bound himself as surety. Smulhoekie took occupation but closed the business in October 2016 due to poor performance. Mr Boshoff communicated this to Waterberg's representative and indicated he would find a replacement tenant. A prospective tenant, Mr Hassim, was introduced to Waterberg's representative. Waterberg then initiated two separate magistrates' court actions: (1) case 207/2017 for arrear rental from April to October 2016, which Waterberg won, with the appeal dismissed by the High Court; and (2) case 108/2020 claiming arrear rental of R442,493.33 for the remainder of the lease period after expiration. The lease agreement contained a clause (9.2.3) stipulating that upon cancellation, the tenant remained liable for all rental until the end of the lease term or until an acceptable new tenant was found. The lease also contained a clause (43) consenting to the jurisdiction of the Pretoria Magistrate's Court. Waterberg instead issued summons in Bela-Bela Magistrate's Court.

• Whether a claim for arrear rental constitutes a claim for specific performance in terms of section 46(2)(c) of the Magistrates' Courts Act 32 of 1944
• Whether the magistrates' court exceeded its statutory jurisdiction by considering a claim for specific performance without an alternative claim for damages
• Whether the monetary claim exceeded the monetary jurisdiction of the magistrates' court (R200,000 limit)
• Whether multiple rental claims based on different periods could be combined in a single summons within the magistrates' court jurisdiction
• Whether the lessor had a duty to mitigate damages in terms of the lease agreement
• Whether pre-trial conference agreements and admissions are binding on the court
• Whether the magistrates' court had jurisdiction despite the summons being issued in Bela-Bela rather than Pretoria as specified in the lease agreement

1. Special leave to appeal is granted. 2. The appeal is upheld with costs. 3. The respondents are to pay the costs of the appeal jointly and severally, the one paying the other to be absolved. 4. The high court order is set aside and replaced with the following: (a) The appeal is upheld with costs on scale B, with respondents paying jointly and severally; (b) The magistrates' court order of 25 April 2023 (case 108/2020) is set aside and replaced with an order that defendants pay plaintiff: (i) R442,493.00 jointly and severally; (ii) interest a tempora morae from 25 April 2023 to date of payment; (iii) costs of suit on attorney and client scale.

1. A claim for arrear rental is a monetary claim (ad pecuniam solvendam) and not a claim for specific performance of an act (ad factum praestandum) within the meaning of section 46(2)(c) of the Magistrates' Courts Act 32 of 1944. Therefore, such claims can be brought in the magistrates' court without an alternative claim for damages. 2. Under section 43(1) of the MCA, multiple claims based on different causes of action may be combined in a single summons even if the total value exceeds the magistrates' court monetary jurisdiction, provided each individual claim does not exceed the prescribed limit (currently R200,000). Each period of rental arrears constitutes a separate cause of action. 3. Written consent to magistrates' court jurisdiction under section 45(1) must be read together with section 28, which requires the court to have personal jurisdiction over the parties. Where such consent exists and section 28 requirements are met, the fact that summons was issued in a different magistrates' court than specified in the contract does not oust jurisdiction. 4. Where a lease agreement contains a specific contractual provision governing mitigation of damages (such as clause 9.2.3 requiring mitigation only upon cancellation), that provision governs the parties' obligations. In the absence of cancellation, no duty to mitigate arises. 5. Incorrect legal concessions made by parties during pre-trial conferences are not binding on the court, particularly on questions of jurisdiction which the court retains inherent power to determine.

The court made observations on the historical development of section 46(2)(c) from the Magistrates' Courts Act 32 of 1917 to the current Act, noting that the omission of the words 'of an act' and 'van een verbintenis' in the current version resolves previous conflicts between the English and Dutch/Afrikaans versions. The court expressed approval of the reasoning in Tuckers Land and Development Corporation v van Zyl over the contrary approach in Carpet Contracts (Pty) Ltd v Grobler, endorsing the view of Jones & Buckle that the legislature intended section 46(2)(c) to apply to orders ad factum praestandum rather than orders ad pecuniam solvendam. The court also noted, without deciding definitively, the debate about whether 'specific performance' is confined to contractual obligations or extends to statutory or delictual obligations, though it indicated the distinction was immaterial to money claims. The court observed that the purpose of Rule 22A (pre-trial conferences) is to encourage pre-trial engagement, enhance judicial case management, and promote efficient preparation for hearings.

This judgment provides important clarification on the jurisdictional scope of magistrates' courts under the Magistrates' Courts Act 32 of 1944. It resolves conflicting interpretations regarding whether claims for arrear rental constitute claims for 'specific performance' under section 46(2)(c). The court definitively held that monetary claims (ad pecuniam solvendam) do not constitute claims for specific performance requiring alternative claims for damages, distinguishing them from claims requiring performance of a positive act (ad factum praestandum). This clarifies that landlords can pursue arrear rental claims in magistrates' courts without pleading damages in the alternative. The judgment also provides guidance on: (1) how multiple claims based on different causes of action can be combined in a single summons even if the total exceeds the monetary limit, provided each individual claim falls within jurisdiction; (2) the operation of written consent to magistrates' court jurisdiction under section 45 read with section 28; (3) the principle that contractual provisions govern mitigation of damages where parties have specifically addressed the issue; and (4) that incorrect legal concessions at pre-trial conferences do not bind the court on jurisdictional matters. The case is significant for commercial lease disputes and clarifies important procedural issues affecting access to justice in lower courts.