Company failed to pay rent at two East Cape premises
Motion Fitness’ plans to penetrate the South African gym market with boutique-style gyms have been thrown into disarray following an Eastern Cape court ruling that the company must vacate two premises after it failed to pay rent at two malls running into millions of rand.
The Grahamstown High Court last week dismissed with costs the company’s application for leave to appeal against the same court’s judgment in September
to allow the Mthatha Mall to evict the company.
According to Mthatha Mall’s court papers, Motion Fitness is in arrears of more than R8-million.
Motion Fitness argued it was entitled to withhold rental payments since the premises were not suitable.
The Cape Town-headquartered company opened its Motion Fitness Health Club in Mthatha in 2016.
The lease, which was concluded on September 9 2016, was for 10 years, commencing on October 10 2016 and terminating on September 30 2026. Motion Fitness was supposed to pay rent of R189 000 (excluding VAT), escalated at 7% a year.
The opening of the Mthatha gym was quickly followed by that of a second one in Mdantsane the same year. The Mdantsane Shopping Centre also approached the courts to evict Motion Fitness claiming the company owed it more than R7-million in rentals.
Motion Fitness used the same argument it used in the Mthatha Mall matter, arguing it could not pay as the premises were not up to scratch.
But the court also gave the green light for the shopping centre to boot out Motion Fitness.
“The undisputed facts of this matter are that the first respondent [Motion Fitness] is in arrears with its rental payments, which currently stand at an amount
of R7 123 457, 71, [yet] remains in occupation of the premises despite its failure to pay and despite the cancellation of the lease agreement,” reads the judgment.
“On those basis, the respondent’s opposition must fail. The stance adopted by the respondent amounts to no less than holding the applicant
[Mdantsane Shopping Centre] to ransom.”
Motion Fitness said it would appeal against both high court decisions.
By Kabelo Khumalo