Hotel group that took Santam to court now headed to the ConCourt over lockdown eviction

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Ma-Afrika Hotels has taken its landlord to the Constitutional Court over a 2020 eviction order.
Ma-Afrika Hotels has taken its landlord to the Constitutional Court over a 2020 eviction order.
Photo by Gallo Images/Nicolene Olckers
  • Ma-Afrika Hotels has taken its landlord to the Constitutional Court over a 2020 eviction order.
  • Earlier in November, the Supreme Court of Appeal referred the matter to the Western Cape High Court to determine how big the claim for rental arrears should be.
  • But Ma-Afrika is blaming the lockdown for its inability to pay full rent.
  • For more stories, go to the News24 Business front page.

Ma-Afrika Hotels, the first company that took insurers to court over lockdown claims and won, has now fired another legal salvo, this time against its landlord.

The hospitality group, with hotels in Stellenbosch, has launched an application for leave to appeal to the Constitutional Court against an eviction order brought by its landlord.

The company is arguing that the pandemic, exacerbated by the government's lockdown restrictions, made it impossible for Ma-Afrika to pay its rent during that period.

Ma-Afrika's landlord, Venezia Trust, took the hotel group to court in February 2021, seeking an eviction order because it didn't pay rent for a guest house during the pandemic. The guesthouse did not earn any revenue during the lockdown period from 26 March to 20 September 2020, as it had no guests.

Ma-Afrika had a 10-year lease agreement with Venezia Trust for its Rivierbos Guest House. But the Western Cape High Court dismissed Venezia Trust's application for eviction, and the landlord took the matter to the Supreme Court of Appeal (SCA).

The trust says that Ma-Afrika's rental was in arrears to the tune of R872 266 by the end of December 2020. It continued to service the mortgage bond repayments to avert foreclosure of the guesthouse.

The SCA ruled that even though the lockdown regulations up to 20 September 2020 impacted Ma-Afrika's ability to pay rent for the guesthouse, restrictions on the guesthouse's ability to trade changed after that. It referred the claim for arrear rental back to the Western Cape High Court for determination earlier this month.

But the company argued that its occupancy rates continued to be adversely affected for months afterwards. It could only accommodate guests on a restricted basis from 18 August 2020. 

So, it wanted to pay only part of its rent from mid-August 2020 to early December when the restrictions were eased to alert levels 2 and 1.

It said it "scrupulously" paid its rent from when the lease began in April 2019 up to the lockdown in March 2020. 

"The pandemic, government restrictions regarding travel, and the negligible income it received from September to December 2020 made it objectively impossible for Ma-Afrika to meet the full cost of rental during this period," wrote the company in a statement.

It argued that the enforcement of the lease was unconstitutional and it now wants the apex court on land to give tenants the ability to raise partial remission of rent as a defence when landlords want to evict them for non-payment of full rent. Common law currently does not allow this defence.

However, Ma-Afrika has successfully claimed 18-month business interruption insurance from Santam. The Venezia Trust had already cancelled the guesthouse lease by the time of that victory. So, it's unclear whether the courts will consider the Santam payment. But Ma-Afrika hopes this will be another precedent-setting judgment, just like the one passed by the courts during its legal tussle with Santam.

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