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Cape Town - The luxury hotel, Cape Royale The Residence, has withdrawn its liquidation action against the Zar Lounge after the upmarket nightclub on Main Road, Green Point, agreed to vacate the premises.
Cape Royale The Residence (Pty) Ltd had taken Gayton McKenzie (Pty) Ltd, trading as Zar Lounge, to court over unpaid rent, levies and electricity totalling almost R1 million.
On Thursday, Western Cape High Court Judge President John Hlophe made the agreement between the parties an order of court. The hotel and Zar agreed to pay their own costs.
McKenzie confirmed that Zar had moved out about two weeks ago and that he was no longer interested in the nightclub scene. He had decided to focus on politics instead.
“I’m not in interested in clubbing. I’m busy with other projects. We killed the Zar brand - there are no future plans (for Zar),” McKenzie said.
McKenzie leased the ground floor of the hotel in February 2011, and agreed to pay a monthly rent of R71 500, which would increase annually.
According to the company’s financial manager, Jacques Janse van Rensburg, Zar had failed to pay rent and levies for more than six months and was effectively “squatting” on the premises.
“(This) effectively amounts to ‘squatting’ and thus constitutes grounds that this matter be heard on an urgent basis, given the irreparable harm which (the company) continues to suffer by virtue of (McKenzie’s) continued operation under insolvent circumstances,” Janse van Rensburg said in court papers.
An initial provisional liquidation application was heard before Judge Owen Rogers on April 10, when the company alleged that McKenzie owed it R849 000 as of March 1. But the application was withdrawn because the rental was ceded to the bond holder, Absa bank, and R126 700 for unpaid levies and electricity was paid five days before the hearing.
According to Janse van Rensburg, McKenzie was in arrears with rental, levies and electricity amounting to R1.1million. But McKenzie had paid a damages deposit of nearly R250 000 and, if it was applied, the total arrears was listed at R954 700.
Janse van Rensburg said no further payments were made after April.
“I would submit that the only inference that can be drawn is that (McKenzie) is not in a position to make payments of its debts as and when such debts fall due for payment…” Janse van Rensburg said.
High Court Judge James Yekiso had ordered that the liquidation application be heard on October 24. Zar was then granted the opportunity to show why the company should not be placed under final liquidation.
But the hotel’s lawyer said the parties had agreed to settle the matter. He added the hotel would take further action to recover the arrears rental.
McKenzie said he would also pursue his own civil suit against the hotel.