Ma-Afrika Hotels, one of the many hospitality groups affected by Covid-19-related government restrictions, has launched an application for leave to appeal to the Constitutional Court against an eviction order brought by its landlord Venezia Trust.

The group will argue that the pandemic, government restrictions and lockdown made it impossible for it to pay rent for that period.

Ma-Afrika has also been involved in a two-year legal battle against Santam to honour its Covid-19 business interruption (BI) insurance claims.

Santam paid out these claims in February this year, by which time Venezia Trust had already cancelled the lease. 

Ma-Afrika said the application for leave to appeal the Supreme Court of Appeal (SCA) order of November 4 has suspended the eviction order pending the outcome of the Constitutional Court application. 

The application follows Venezia Trust taking it to court in February last year to seek an eviction order over Ma-Afrika’s inability to pay rent for its guest house during the pandemic. 

Ma-Afrika had a 10-year lease agreement with Venezia Trust in respect of the guest house, for which it had paid rent from when the lease started in April 2019 until the lockdown in March 2020.

The Western Cape High Court dismissed Venezia Trust’s application for eviction. The court instead ordered Ma-Afrika to pay the arrear rental of R872,266.98 to the trust with interest.

Aggrieved by the order dismissing the application for eviction, the trust sought and was granted leave to appeal that order to the SCA. However, the SCA referred the claim by the trust for arrear rental back to the high court for determination.

Ma-Afrika contends that a grand-scale disaster in the form of a pandemic was not in the contemplation of the parties when the lease agreement was signed. It argues that the enforcement of the lease and the eviction notice were against public policy and unconstitutional.

It said as a result of the pandemic and government's lockdown, occupancy at the guest house from April to August 2020 was zero, and then under subsequent national disaster alert levels it could only accommodate guests on a restricted basis from August 18 2020. 

Ma-Afrika said the pandemic, government restrictions on travel and the negligible income it received from September to December 2020 made it impossible to meet the cost of rental during that period.

Ma-Afrika won a precedent-setting judgment in October 2020, when the Western Cape High Court found Santam was liable to honour Ma-Afrika’s full 18-month business interruption insurance. 

This judgment was confirmed by the SCA in October last year.

Ma-Afrika said the high court’s landmark decision on BI insurance was crucial for thousands of tourism and hospitality businesses whose Covid BI insurance claims had been rejected by Santam and other insurers.

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