Infusion Social Club Camps Bay (Pty) Ltd v Camps Bay Investment Trust (Pty) Ltd (Appeal) (A47/2025) [2025] ZAWCHC 524 (13 November 2025)

Case Note

Infusion Social Club Camps Bay (Pty) Ltd v Camps Bay Investment Trust (Pty) Ltd
Case No: A 47/2025
Date: 13 November 2025

Reportability

This case is reportable because it addresses significant issues regarding lease agreements, specifically focusing on the legality of cancellation due to alleged misrepresentation and the procedural requirements for such actions in South African law. The judgment clarifies the implications of lex commissoria within lease contracts and sets a precedent regarding how courts interpret the assent to and validity of agreements. It also discusses the sanctity of contracts and the importance of proper procedure for the cancellation of those contracts, which is of great relevance to commercial landlords and tenants alike.

Cases Cited

• Plascon-Evans Paints Ltd v Van Riebeeck Paints (Pty) Ltd 1984 (3) SA 623 (A)
• Hano Trading CC v JR Investments (Pty) Ltd and Another 2013 (1) SA 161 (SCA)
• Christie GB, Bradfield Christie's Law of Contract in South Africa (7th Ed)
• Ferreira & Another v SAPDC (Trading) Ltd 1983 (3) All SA 346 (A)
• Ocean Echo Properties 327 CC and Another v Old Mutual Life Assurance Company (South Africa) (288/2017) [2018] ZA SCA 9

Legislation Cited

• None specifically mentioned.

Rules of Court Cited

• None specifically mentioned.

HEADNOTE

Summary

The case involves an appeal concerning the validity of a lease agreement cancellation between Infusion Social Club Camps Bay (Pty) Ltd and Camps Bay Investment Trust (Pty) Ltd. The crux of the matter centers on whether the Respondent's cancellation of the lease was valid based on non-disclosure of the Appellant's business activities, specifically the incorporation of cannabis products into its offerings. The court ultimately held that the cancellation was invalid as the proper procedures for cancellation had not been followed and that there was a significant issue regarding the misrepresentation of the Appellant's business operations.

Key Issues

The key legal issues in this case include:

1. The determination of whether the Respondent's cancellation of the lease was valid based on alleged misrepresentation and undisclosed business activities.

2. The procedural requirements that must be adhered to when cancelling a lease agreement, particularly in regard to the lex commissoria rule, which necessitates written notice and the opportunity to remedy breaches.

3. Whether tacit agreements reached through correspondence can stand as binding cancellations of contracts without following the requisite formalities.

4. The implications of misrepresentation in contracts, especially concerning the validity of the contract from inception.

Held

The court held that the appeal was upheld, the order of the court a quo was set aside, and the Respondent was ordered to bear the costs of the appeal. The court found that the cancellation of the lease agreement was invalid due to the Respondent's failure to comply with procedural requirements, specifically that it had not provided the necessary notice to remedy breaches before claiming cancellation, and therefore, the lease agreement remained in force.

THE FACTS

Infusion Social Club Camps Bay (Pty) Ltd entered into a commercial lease agreement with Camps Bay Investment Trust (Pty) Ltd in March 2024 for restaurant premises in Camps Bay. The Rent was set at R75,000 per month for a period of five years, with a deposit of R150,000. The Respondent, CBIT, owned the premises, which had previously been leased by a different tenant that fell into financial distress and left arrears. Infusion agreed to purchase certain assets from this tenant as part of the lease negotiation.

Disputes arose shortly after the lease was signed, primarily over allegations that Infusion intended to serve food infused with cannabis products. Concerns were raised by tenants and stakeholders, leading to meetings where the Director of CBIT expressed dissatisfaction with Infusion’s business model, which he contended had been misrepresented. Following a series of email exchanges, CBIT claimed that the lease was effectively cancelled due to this alleged misrepresentation and a lack of adherence to certain terms of the lease.

THE ISSUES

The court had to resolve several legal questions, chiefly:

1. Was the Respondent entitled to cancel the lease based on alleged misrepresentation and nondisclosure of important information regarding the Appellant's business operations?

2. Did the Respondent comply with the proper procedures for cancellation under the lex commissoria as stipulated in the lease agreement?

3. Should the existing agreement be upheld, considering the alleged material misrepresentation and the nature of the communications exchanged between the parties regarding the lease termination?

ANALYSIS

The court examined the requirements set forth in the lease agreement, particularly clause 20 concerning the cancellation process, which required the Lessor to notify the Lessee of any breach and allow a seven-day period to remedy it before any cancellation could occur. The court found that the Respondent failed to provide such notice and instead relied on an informal email exchange to declare the lease cancelled.

In addition, the court highlighted the significance of the Plascon-Evans rule, which requires that in the face of disputes regarding facts, the version of the party who is the applicant must prevail unless the other party can prove otherwise. The court noted that the arguments made by the Appellant were more substantiated compared to the evidence supplied by the Respondent, particularly regarding the alleged undisclosed cannabis business.

The court further addressed the Respondent's claims of misrepresentation and found that even if there were grounds for concern, the proper procedure was not followed to effectively cancel the contract. The evidence put forth by the Respondent only indicated dissatisfaction with the business model, not a legally binding decision to cancel.

REMEDY

The court upheld the appeal and set aside the order from the court a quo. It confirmed that the lease remained valid and ordered the Respondent to pay the costs of both the application for leave to appeal and the appeal itself. The implication of the court's ruling is that Infusion retained its right to operate its business under the original lease terms.

LEGAL PRINCIPLES

The judgment elucidated several important legal principles, including:

1. The necessity for adherence to contract stipulations regarding cancellation, particularly the requirement for written notice to remedy breaches.

2. The Plascon-Evans rule and its application in disputes of fact concerning contractual obligations.

3. The significance of clear and transparent communication between parties entering into contracts, especially when misrepresentations could affect the validity of such agreements.

4. The concept of lex commissoria as a binding clause in contracts that dictates the conditions under which a party may cancel an agreement, underscoring the need for procedural compliance in every step of the cancellation process.

This case thus serves as a critical point of reference for future litigations dealing with similar commercial lease disputes.