The lessee of a property under a 30-year notarial land lease agreement with Transnet Limited sublet portions of the property to sub-lessees who subsequently acquired rights under a lease assignment agreement. When the lessor bought the property, payment obligations under the lease assignment agreement terminated.
A sub-lessee who had taken assignment of rights under the lease which included an ongoing payment sought to enforce the right to receive those payments.
The court, referring to the common law of confusio dealt with in a 1920 Appellative Division decision, reaffirmed that confusio in the circumstances is the “concurrence of two qualities or two capacities in the same person, which mutually destroy one another”. Speaking generally, confusio destroys obligations in respect of which it operates because someone can be neither their own creditor nor their own debtor. The owner of the property cannot also be the lessee of a property and the rights and obligations created in the lease agreement could not survive termination nor be exercised independently of the lease in the context of the transactions. The financial obligations could not be created perpetually by the lessee when it was the lessee because its rights were derived under the lease at the time and terminated with the lease.
These facts will not arise often. The case is worth quoting because confusio in this sense does not often crop up in our law reports.
