Lessor permitted to evict lessee upon valid termination of the lease despite lessor’s lack of title

May 10, 2016 | 2015, News

In a recent case involving Engen, the Constitutional Court (CC) has found that a subtenant is not allowed to raise a sub-lessor’s lack of title as a defence to eviction. In this matter, Engen Petroleum Ltd (Engen), entered into a lease agreement with the owner of a property. Engen then sublet the property to Mighty Solutions, the applicant, to operate an Engen-branded service station.

Some time later, Engen terminated the sublease and provided Mighty Solutions with the required notice period to vacate. Mighty Solutions, however, did not vacate and continued to operate its business using Engen’s equipment and signage – without paying rental. Following the termination of the main lease, Engen applied for an eviction order against Mighty Solutions.

The High Court found that a lessor (or sub-lessor) is allowed to evict a lessee (or sub-lessee) upon the valid termination of the lease, even if that lessor has no title to the property.

After being refused leave to appeal against this decision by the Supreme Court of Appeal, Mighty Solutions applied to the CC. The CC unanimously agreed with the High Court’s decision that a lessee or sub-lessee, upon valid termination of a lease, cannot resist eviction on the basis that a lessor or sub-lessor has not proved a right to occupy the property. The CC emphasized that this rule serves a valuable purpose and is consistent with the spirit, purport and object of the Bill of Rights and therefore ought not to be developed.

Read the judgment here: http://www.saflii.org/za/cases/ZACC/2015/34.html