Nedbank Eswatini has lodged an appeal before the Supreme Court, seeking to overturn a High Court judgment ordering it to pay businessman Issufo Calu E1.7 million in outstanding rentals and related costs.
This follows a protracted legal battle over the termination of a commercial lease agreement.
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In September, the High Court found in favour of Calu, ruling that Nedbank had unlawfully terminated a lease and failed to pay arrear rentals for premises it had occupied.
The court directed Nedbank to pay rent up to June 30, 2024, the original expiry date of the lease, as well as for the continued use of space by its automated teller machines (ATMs) beyond that date.
Judge Bonginkhosi Dlamini further ordered the parties to reconcile their accounts to determine the exact amount owed to Calu, who had approached the court after Nedbank vacated the premises in June 2024 but allegedly failed to settle its rental obligations.
Appeal Lodged
However, Nedbank is challenging both the judgment and the orders, arguing that the High Court made several legal and factual errors.
In its notice of appeal, the bank contends that the court “misdirected itself by concluding that the bank was liable to pay rentals from the date of termination in June 2024 through to June, despite the existence of what it says was a lawful and valid termination.”
According to Nedbank, the lease agreement allowed Calu, the landlord, to terminate on notice and that “by extension, the appellant should have been accorded a similar right to terminate on reasonable notice.”
The bank maintains that it vacated the premises at the end of June 2024 and therefore should not be required to continue paying rent for a property it no longer occupied.
Dispute Over ATM Space
A significant portion of the appeal relates to the ATMs that remained on the leased property after Nedbank vacated.
The High Court ordered Nedbank to continue paying rentals for this space until the machines were decommissioned or removed.
Nedbank said this order was both legally and factually flawed, arguing that “Calu never pleaded any claim for ATM space rentals in his court papers, and that the judge granted relief that was not prayed for.”
Further, the bank claimed that Calu himself prevented the removal of the ATMs, thereby prolonging their presence on the property.
“The conduct of the respondent in preventing the removal of the ATMs was unnecessary, and the appellant should not be burdened by it,” Nedbank argued.
Motion Proceedings Questioned
The bank further faults the High Court for concluding that Calu’s only remedy for the alleged breach was a claim for rentals rather than damages.
It argued that once it terminated the lease and vacated the premises, “any claims should have been pursued through an action for damages, not continued rent.”
“The court erred in concluding that an agreement of lease cannot be terminated on valid grounds and on reasonable notice,” Nedbank said.
The bank also argued that the High Court should not have entertained Calu’s claim through motion proceedings (which are based on affidavits), given that the matter involved material disputes of fact that required oral evidence.
“The court ought to have found that motion proceedings were not competent for the relief sought but action proceedings,” the appeal reads.
Costs and Relief Sought
Additionally, Nedbank is challenging the costs order issued against it, insisting there was “no valid and lawful reason” for the court to have ordered it to bear Calu’s legal costs.
Nedbank is asking the Supreme Court to uphold the appeal with costs, set aside the High Court order, and replace it with an order dismissing Calu’s application with costs, as well as to direct Calu to pay the costs of the appeal.
Background of the Dispute
The dispute stems from a commercial lease agreement Nedbank entered into with Calu for business premises.
In June 2024, Nedbank vacated the property, saying it had lawfully terminated the lease. Calu, however, argued that the termination was unlawful and that the bank continued to occupy the premises through its ATMs while failing to pay rent.
After hearing the matter, the High Court sided with Calu, awarding him arrear rentals and future payments until the lease’s expiry date.
Nedbank’s appeal now places the E1.7 million payout in limbo, pending a decision by the Supreme Court.
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