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[2017] ZAWCHC 142
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Makah v Magic Vending (Pty) Ltd; Ngolo v Magic Vending (Pty) Ltd (A325/2016; A326/2016) [2017] ZAWCHC 142; 2018 (3) SA 241 (WCC) (16 May 2017)
IN
THE HIGH COURT OF SOUTH AFRICA
WESTERN
CAPE DIVISION, CAPE TOWN
In
the matter between
[REPORTABLE]
Case
No: A325/2016
ERIC
MONGOSO
MAKAH
Appellant
And
MAGIC
VENDING (PTY)
LTD
Respondent
Case
No: A326/2016
IDRIS
KWETE
NGOLO
Appellant
and
MAGIC
VENDING (PTY)
LTD
Respondent
JUDGMENT DELIVERED ON
16 MAY 2017
SALIE-HLOPHE, J:
[1]
These are the consolidated appeals against the orders handed down by
the Goodwood Magistrate’s Court on 28 April 2016
in respect of
two eviction applications brought by the respondent respectively
against Eric Magoso Makah and Idros Ngolo Kwete.
Both appellants are
tenants in separate units of an apartment named Kimberly Heights,
Goodwood. The matters were consolidated in
that the facts and issues
present in both matters and which fall to be determined on appeal are
substantially the same. The
respondent, Magic Vending (Pty) Ltd
applied for the eviction of the appellants from the respective units.
[2]
It is common cause that the appellants were in breach of their
obligations to pay rental amounts to the respondent, the consequence
of which applications for their eviction from the properties were
granted by the court a quo. The evictions of the appellants were
granted in terms Prevention of Illegal Eviction From and Unlawful
Occupation of Land Act (Act 19 of 1998) (hereinafter “PIE”).
BACKGROUND:
[3]
The appellants entered into month-to-month lease agreements (“the
agreements”) with the Respondent, in respect of
units K214 and
K310 of the aforesaid apartment block. Both agreements were
concluded on 1 July 2013, for a monthly rental
in the sum of R4
950,00. The appellants breached the lease agreements when
they failed to pay their respective monthly
rentals. Clause 14
of the lease agreement stated that in the event of breach on the part
of the appellants, the respondent
was entitled to immediately cancel
the agreements. However, the respondent entered into settlement
agreements with both appellants
providing the appellants an
opportunity to liquidate the arrear rental amounts, which were due
and payable to the respondent.
It also recorded that a failure
to timeously meet their obligations under the lease agreement would
result in cancellation thereof.
When the appellants did not
comply with the terms of the settlement agreements and the lease
agreements, the appellant cancelled
same and demanded their
vacation.
[1]
Proceedings
in terms of PIE were instituted, the respondents were legally
represented and the matters were opposed.
[4]
The notices of appeal set out a multiplicity of grounds on appeal.
However, the crux of this appeal is whether the lease
agreements were
validly cancelled which, if so, would render the respondents’
occupation of the respective properties unlawful.
[5]
The agreements state that the duration thereof would be on a
month-to-month basis, in other words not a fixed term. Section
14(2) of the Consumer Protection Act, No 68 of 2008 (hereinafter the
“CPA”) is prefaced by the phrase: “
If
a consumer agreement is for a fixed term”.
[6]
The CPA spells out the rights of consumers and responsibilities of
suppliers of goods or services. It focuses on consumer
protection by aiming to “
promote
a fair, accessible and sustainable marketplace for consumer products
and services and, for that purpose, to establish national
norms and
standards relating to consumer protection”.
It is the result of the Department of Trade and Industry’s
intention to create and promote an economic environment
that supports
and strengthens a culture of consumer rights and responsibilities.
[7]
The CPA acknowledges the reality of many South African consumers:
high levels of poverty, illiteracy and others forms of social
and
economic inequality, protection for vulnerable consumers
stemming from a limited ability to read and comprehend, language
impediments, vision and language impairment etc. The need to
fulfil the rights of historically disadvantaged persons and
to
promote their full participation of consumers is evident from the
content of the Act.
[2]
[8]
The CPA also states where there is conflict in legislation relating
to a particular issue in a consumer contract an attempt
must be made
to reconcile the conflicting provisions, failing which that provision
which provides the most protection to the consumer
applies.
[3]
[9] Section 14(2)(b)(ii)
reads:
“
the
supplier may cancel the agreement 20 business days after giving
written notice to the consumer of a material failure by the
consumer
to comply with the agreement, unless the consumer has rectified the
failure within that time;”
[10]
The argument for the appellants are that though the lease agreements
in
casu
were on a month-to-month basis, this court ought nonetheless to find
that the 20 business day cancellation period is applicable
and
mandatory since the respondent had couched the leases in the form of
a monthly lease to circumvent the 20 day termination requirement
as
prescribed in Section 14(2)(a)(ii).
[4]
[5]
In support of this argument
Mr. Langenhoven referenced to Section 51 of the CPA which prescribes
that a term in a consumer agreement
which has the effect of
circumventing the purposes of the CPA is void.
[6]
So the argument followed that the provision in the lease allowing for
immediate cancellation in the event of breach is invalid,
the
consequence of which is for this court to find that the 20 day
business day cancellation period had to be complied with by
the
respondent. Further to that and in light of the absence of such
notice to the respondents, the appellants were therefore
not in
unlawful occupation and eviction could not be brought in terms of
PIE.
[11]
An agreement which imposes a month-to-month residential lease is a
consumer agreement falling within the ambit of the Act.
However, the point of departure is that cancellation in terms of
Section 14(2)(b)(ii) is only applicable to fixed term contracts.
It would be disproportionate to invoke a 20 business day notice to
cancel a monthly lease. The period of such notice
does in
fact amount to a calendar month. It is also important to note
that the appellants were asylum seekers whom were seeking
refugee
status. Their future in South Africa was unknown and resort to
residence on the basis of an indefinite stay was convenient
and
suitable to them taking into account their personal circumstances and
needs.
[12]
In this appeal, the appellants persist that their eviction was
unlawful because they were not unlawful occupiers as required
in
terms of the PIE Act. They persist that their occupation were
on the basis of lease agreements that had unlawfully been
terminated
– in their view – contrary to the notice provisions in
section 14(2)(b)(ii) of the CPA. The appellants
contend that
the terms of the lease agreement are in conflict with the statutorily
mandated notice periods in terms of section
CPA, that the respondent
is therefore obliged to afford them with at least 20 business days’
notice of any alleged breach
before cancelling the lease agreements.
[13]
In my view it is apparent from the reading of Section 14 of the CPA
that a 20 day business day notice prevails in all contracts
of a
fixed period. The wording of Section 14(2) clearly singles out
fixed term contracts as being the category of contract
being
applicable to the provisions thereof. The word “if”
induces a condition or supposition that it only applies
to a certain
type of contract in relation to its period. The lease
agreements before this court are in my view none other
than for an
indefinite period as opposed to a fixed term. The distinction
drawn in the CPA is further illustrated in Section
14(4) which
provides
inter alia
that the Minister may, by notice in the Gazette, prescribe the
maximum duration for fixed-term consumer agreements, generally,
or
for specified categories of such agreements.
Consumer
Protection Act Regulation
, Government Gazette, 1 April 2011 (No.
34180) specifies at
regulation 5(1):
“
For purposes of section
14(4)(a) of the Act, the maximum period of a fixed-term consumer
agreement is 24 months from the date of
signature by the consumer –
(a)
Unless such
longer period is expressly agreed with the consumer and the supplier
can show a demonstrable financial benefit to the
consumer;…”
[14]
To read into the CPA that this 20 day notice requirement to a monthly
and indefinite lease, would be to offer protection in
circumstances
not envisaged by the Act. There would be no basis to excise
Clause 14 (the cancellation clause) from the contract.
The
provisions of Section 14(2)(b)(ii) are not applicable to these lease
agreements and accordingly the respondent was not required
to provide
the appellants with 20 business days’ notice to remedy their
breach of the agreement. The respondent’s
right to cancel
the respective agreements in terms of the contract accrued as soon as
the appellants breached their respective
leases. However, as it
happened the parties entered into settlement agreements in an attempt
to afford the respective appellants
a reasonable opportunity to
remedy their breaches. After conclusion of the settlement
agreements, both appellants failed
to pay up their arrear rental and
in addition thereto further breached the material terms of the
respective lease agreements.
It was at this stage when the
respondent elected to cancel the appellants’ respective
leases.
[15]
Clause 14 of the lease agreements reads as follows:
“
CANCELLATION
:
Should
the Lessee fail to pay any rent on its due date, or commit a breach
of any other terms of this lease, or should the lessee
surrender his
estate or should his estate be sequestrated, provisionally or
otherwise, the lessor shall have the right forthwith
and without any
further notice to the lessee.”
[16]
The lease agreement therefore does not contain a contractually agreed
procedure for termination. It is trite that in
the absence of
such a procedure, a guilty party (the party who caused the breach of
contract) must be given notice of cancellation
in a clear and
unequivocal manner. This notice, takes effect from the time it
is communicated to the other party, with communication
by a third
party being sufficient. The notices to cancel the agreements
were delivered to the appellants on 12 March 2015
and 27 January 2016
(in respect of first appellant) and 26 August 2015 and 27 January
2016 (in respect of second appellant).
I am satisfied that the
content thereof clearly and unequivocally notified the appellants
that they are in unlawful occupation
of the premises which they
occupied. Needless to say, the settlement agreements were not
separate consumer agreements.
The appellants also sought to
establish that a tacit agreement had been concluded between the
parties which regulate further the
contractual obligations upon the
parties. The test as to whether a tacit term forms part
of a contract is what the
innocent bystander may say in regard to the
situation. The officious or innocent bystander is neither naïve
nor foolish.
She takes into account the facts.
[7]
The appellants submitted, in the alternative, should this court find
that the lease agreements were validly cancelled by the respondent,
that the respondent’s subsequent actions in entering into a
verbal settlement agreement which regulates various issues,
constitutes a revival/renewal of the lease agreements.
Consequently, the agreements had thus not been cancelled by the
respondent.
Reliance is also placed on the fact that respondent
demanded and accepted rental payments from the appellants which were
submitted
to be an act of renewing and/or reviving the lease
agreement. On these papers I do not find what the terms of such
alleged
tacit contract would have been nor that they had successfully
shown the existence of any tacit lease agreement had come into
existence
with the sequence of events which culminated with the
agreement concluded in an attempt to bring the appellants up to date
with
amounts which had been in arrears at time of cancellation. The
innocent bystander would not in these circumstances come to a
reasonable
conclusion that a tacit lease had come into existence and
which required to be cancelled independently. Accordingly the
existence
of a tacit agreement of lease is rejected.
[17]
The respondent is the owner of the property. The appellant has
no lawful title to remain in occupation of the property.
He is
an unlawful occupier as envisaged in the PIE Act. The applicant
in a very faint manner and with unimpressive timidity
attempted to
invoke the rights in section 26 of the Constitution, contending that
he is entitled to continue his occupation of
the respondent’s
property until a lawful notice is given to him to vacate the
property. It seems to me that the respondent
would be entitled to
claim that it has been deprived of its property in the most arbitrary
manner by the appellants who have put
up untenable legal contentions
that have no substance at all. The appellants contend, without
any basis that their entitlement
to remain in the respondent’s
property is in terms of the CPA. The attitude of the appellants
towards the rights of
the respondent is very concerning and if
condoned, would not only undermine the entire edifice on which our
law of property is
constructed but the also the purpose of
legislation enacted to protect consumers, tenants and unlawful
occupiers. The appellants
are not entitled to remain in
occupation of the properties since the basis of their occupation no
longer exist.
[18]
For the reasons set out above and in light of the aforesaid
conclusions, I do not see it necessary to deal with the other
arguments advanced by counsel and in the result I would propose that
both appeals be dismissed with costs. Wherefore I propose
an
order as follows:
“
(i)
The appeal under case number A325/16 is hereby dismissed with costs;
(ii) The appeal under
case number A326/16 is hereby dismissed with costs.”
____________________
SALIE-HLOPHE, J
I
agree and it is so ordered:
____________________
HENNEY,
J
Coram:
HENNEY, J et SALIE-HLOPHE, J
Judgment
by: SALIE-HLOPHE, J
For
the Appellant: Mr J Langenhoven (right of appearance)
Instructed
by: LANGENHOVEN ATTORNEYS
For
the Respondent: ADV. ROSS WYNNE
Instructed
by: REEVA ALVES ATTORNEYS c/o MOWZER TALIEP ATTORNEYS
Date
of Hearing: 17 FEBRUARY 2017
Judgment
delivered on: 16 MAY 2017
[1]
Record page 33 in respect
of A325/2016 and page 34 in respect of A325/2016. Letters of
cancellation were dated 26 August
2015 and 12 March 2015
[2]
Preample of the Act
[3]
Section 2(9)
[4]
Section 14 is headed: Expiry and renewal of fixed-term
agreements
[5]
Section
14(2) reads: “If a consumer agreement is for a fixed
term-“
[6]
Explanatory Memorandum on the Objects of the Consumer Protection
Bill 2008 at page 80
[7]
Airports Company v Airport Bookshops
2017 (3) SA 125
(SCA) at page
144, paragraph 53