- The High Court found that the landlord breached a repair obligation under the lease amounting to an unfair practice.
- The Tribunal’s reasoning was legally flawed, but its outcome on unfair conduct was upheld on different grounds.
- The issue of rental remission was sent back to the Tribunal for a fresh and lawful determination.
A landlord’s refusal to repair a high-value pool training system in a luxury Cape Town property has been confirmed as an unfair practice, even though the Rental Housing Tribunal applied the wrong legal reasoning to reach its conclusion.
The High Court in the Western Cape, in Christopher Joseph Kelly v Rental Housing Tribunal and Peter Douglas Hart, clarified the limits of a tribunal’s powers and how unfair practices must be grounded in the Rental Housing Act and its regulations.
The dispute arose after the Tribunal ordered the landlord to pay R120 000 to the tenant. This was calculated as R5 000 per month over a 24-month lease, together with interest at 10.5 percent if not paid within 10 days. The Tribunal’s ruling effectively reduced the agreed rental from R75 000 to R70 000 per month.
Parties and background
Kelly was the owner of a residential property in an upmarket golf estate. He leased the home to Peter Douglas Hart and his partner Meredith Ellis at a monthly rental of R75 000 for a fixed period of two years commencing on 1 September 2021.
The property had been advertised for sale and highlighted a key feature. The advertisement stated, “Large private sun-splashed swimming pool with counter swim unit for training.” The pool trainer, also referred to as a pool training unit, was a device designed to generate a current allowing a swimmer to remain stationary while swimming.
Before concluding the lease, Hart and Ellis communicated that the property had to be in full working order before occupation. In their email of 21 April 2021, they set out their position clearly. They stated, “We would like to move forward with a fair offer based on the current rental market both within and outside of the estate. We propose that the home be in full working order before the move-in date.”
They added, “This includes but is not limited to repair of the swim training system in the pool.” They further recorded, “The current tenant mentioned that this is not in working order.”
Following discussions, Kelly indicated that the property could be let at R75 000 per month. His agent, Liam Mally, confirmed that a contractor would attend to the issues raised. Mally stated, “Regarding the points below, [Kelly] has tasked Pete to attend to all of them. Pete will assess and effect the necessary repairs.”
An incoming inspection was conducted on 28 August 2021. The inspection report was signed by both parties and incorporated into the lease as Annexure B. It recorded the entry, “Trainer needs to be working.”
Despite this, the system was never repaired.
Authority and legal framework
Acting Judge M W Janisch first dealt with a challenge to the authority of the person who deposed to the founding affidavit on behalf of Kelly. The court noted that the deponent was a rental agent who had managed the property and who had stated that he was authorised to depose to the affidavit.
The tenant argued that there was no written power of attorney and that the application should therefore fail. The court rejected this argument and clarified the position under the Uniform Rules.
Judge Janisch explained the scope of Rule 7(1) and stated, “The reference in Rule 7(1) to the person acting on behalf of a party is to the attorney of record. It does not refer to a person deposing to an affidavit in support of an application.”
Judge Janisch further clarified the position of a deponent, “A deponent may be a complete stranger to the proceedings, and his or her authority to do so need not be demonstrated.”
Tribunal’s reasoning under scrutiny
The Tribunal relied on the advertisement, the inspection report, the parties’ correspondence, and an Excel spreadsheet of defects compiled after occupation. It also relied on the Consumer Protection Act and treated the advertisement as a binding promise that the pool trainer would be functional.
The High Court found that this approach was incorrect. The Tribunal had not identified any provision of the Rental Housing Act or the Western Cape Unfair Practices Regulations that had been breached.
Judge Janisch addressed the limits of the Tribunal’s powers and stated, “The touchstone for the exercise of these powers is the presence or otherwise of an unfair practice. That is not some open-ended or undefined concept of equity.”
Judge Janisch further explained the error in the Tribunal’s reasoning and stated, “The Tribunal appears to have misconstrued the nature of its powers as discussed in Maphango. It must be able to locate the unfair practice either as a contravention of the Rental Housing Act or as a prescribed unfair practice.”
Contractual obligation to repair
Despite setting aside the Tribunal’s reasoning, the court examined whether the facts established an unfair practice on a proper legal basis.
The court found that Annexure B, being the inspection report, formed part of the lease and contained more than a mere record of defects.
Judge Janisch interpreted the wording of the inspection report and stated, “On its plain language, this is something very different from an objective recordal of the existence of a defect. It reflects something that needs to occur, that is something that is required to be done.”
The court considered the pre-contractual exchanges and the conduct of the parties after occupation. It noted that the maintenance list showed the pool trainer as the first item and that it remained incomplete.
The court rejected the argument that clause 14.2 excluded any obligation to repair.
Unfair practice established
Because the lease imposed an obligation on Kelly to repair the pool trainer, his failure to do so constituted an unfair practice under paragraph 4(1)(d) of the Unfair Practices Regulations.
Judge Janisch confirmed this finding, “The evidence before the Tribunal pointed plainly to the existence of an unfair practice for purposes of paragraph 4(1)(d) of the regulations. This was in the form of Kelly’s failure or refusal to repair the pool trainer as required by the lease.”
Relief sent back to the Tribunal
Although the court substituted the Tribunal’s finding on the existence of an unfair practice, it still set aside the rental remission of R120 000.
The Tribunal had not explained how it arrived at a reduction of R5 000 per month or engaged with the statutory requirements governing rental determinations.
Judge Janisch explained the defect in the Tribunal’s approach: “The Tribunal’s ruling does not enter into any discussion as to the basis for finding that a rent remission of R5 000 per month would be fair and equitable to the parties.”
The matter was therefore remitted to the Tribunal to reconsider the appropriate relief.
Costs and conclusion
The court made no order as to costs. It noted that both parties achieved a degree of success and that the dispute had generated significant expense despite the statutory objective of resolving rental disputes speedily and at minimal cost.
Judge Janisch stated, “The proliferation of costs in this sphere is to be discouraged.”
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