Steak restaurant, The Butcher Shop & Grill, ordered by judge to pay over R2m in withheld rent
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Cape Town - A Western Cape High Court judge has ordered a well-known Mouille Point restaurant, The Butcher Shop & Grill, to pay over R 2 million in rent, which it had withheld citing the effects of pandemic restrictions between August last year and June this year.
The case centred around the question whether a commercial tenant is entitled to withhold payment of rental to the landlord payable in terms of a lease agreement during the period of national lockdown and whether such a tenant is entitled to claim a rental remission as a result of the legislative restrictions caused by the imposition of the regulations.
The judgment said: “The leased premises are used as a restaurant, butchery, deli and wine shop with the largest part of the leased area being used as the well-known premium steakhouse restaurant.
“The conclusion of the lease agreement on February 14, 2014 and its terms are common cause between the parties and so too the fact that the restaurant occupies the bulk of the leased premises, at least 90% thereof.
“The base rent payable monthly in advance at the launch of the main application was R286 114. 87 excluding VAT for the entire leased premises.
“Until March 2020, prior to the declaration of the national state of disaster, the respondent had paid the full rental and operational charges timeously,” the judgment said.
With the imposition of the hard lockdown, restaurants were required to close with the result that The Butcher Shop & Grill ceased operation of its restaurant on March 23, 2020.
There followed correspondence between the restaurant and its landlord referred to in the judgment as “the trustees for the time being of the Bymyam Trust” regarding the restaurant’s rental obligations under the lease.
As alert levels changed in 2020, the restaurant was allowed a seating capacity of 50% and in the case it argued that the regulations imposed affected its business negatively with a substantial loss of turnover and as such did not fulfil its obligations fully in terms of the lease.
The restaurant argued that during the lockdown, it was exempt from paying the full rental in terms of the lease agreement because the legislative regulations constituted an act of God.
In the judgment, acting Judge Mas-Udah Pangarker quoted a letter from the restaurant to the landlord which said: “These are unprecedented circumstances which require a collaborative stance from landlord and tenant.
“Hopefully, the anticipated publication of new lockdown regulations will be beneficial to our restaurant business and we can then negotiate further in good faith as to further future rentals. Both landlord and tenant, self-evidently, wish to return to normal business circumstances,” the letter said.
Referring to the letter Judge Pangarker said: “These words by the respondent, which are contained in correspondence addressed to the applicant’s legal representative, epitomise what 2020 and the sudden arrival of the Covid-19 pandemic and its resultant government regulations, meant for a long-established and successful restaurant business in Cape Town.”