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THE REPUBLIC OF SOUTH AFRICA
IN THE HIGH COURT OF SOUTH AFRICA
(WESTERN CAPE DIVISION, CAPE TOWN)
Case. No.:3639/2024
Hearing on 8 March 2024
Judgement on 18 March 2024
In the matter between:
DANIEL WOUTER VENTER First Applicant
MELANIE CHRISTINA VENTER Second Applicant
and
JOHANN ELS
AND ALL THOSE HOLDING TITLE UNDER First Respondent
STELLENBOSCH MUNICIPALITY Second Respondent
This judgment was handed down electronically b y email circulation to the parties’
legal representatives’ email addresses.
JUDGMENT
SLINGERS J
Introduction
[1] This application was instituted on or about 21 February 2024 and was
enrolled for hearing on the urgent roll of 29 February 2024 . On 29 February
2
2024 the application was postponed to 8 March 2024 together with a
timetable setting out the further conduct of the matter.
[2] In this application the court is primaril y required to determine whether it was
correctly brought as an urgent application in accordance with the provisions
of Rule 6(12) and whether the provisions of section 14(2)(b) of the
Consumer Protection Act, Act 68 of 2008 (‘the CPA’) overrides an early
cancellation clause contained in a written lease agreement concluded
between the applicants and the first respondent.
[3] The facts are mostly common cause and there are no material factual
disputes which require resolution. I set out the common cause facts below.
Facts
[4] The first applicant is a software engineer and the second applicant is a civil
engineer. The first respondent is the group chief economist of Old Mutual
Limited.1
[5] The applicants were the registered owners of immovable property described
as Erf 5 […], 1 […] G[…] Street, W […] V[…], D […] Z[…] W[…] G[…] E[…],
S[…] (‘the property’).
[6] During 2018 the applicants moved to Australia but as they were not sure if this
move was permanent, they agreed to lease out the ir property. During
September 2020 the applicants and the respondent concluded a written
1 The second respondent did not participate in these proceedings. Henceforth any reference to ‘the
respondent’ should be understood as referencing the first respondent.
3
lease agreement in terms whereof the respondent would lease the property
from 1 December 2020 to 31 December 2023.
[7] During February 2023, the respondent approached the first applicant to renew
the lease beyond 31 December 2023. At this stage the applicants had
determined that their move to Australia was permanent and had resolved to
sell the property. This was conveyed to the respondent. The applicants
were reluctant to conclude a further l ease agreement in respect of the
property in light of their decision to sell same. They informed the respondent
that any lease agreement would be subject to a three (3) month notice
period. Although the respondent was desirous of a four (4) month notice
period, he accepted 3 months. This position was recorded in clause 29.2 of
the lease agreement which states:
‘The Landlord shall be entitled to terminate this Agreement on 3 (three)
months written notice to the Tenant before termination date.’
[8] The monthly rental payable in terms of the lease agreement is R32 400.
[9] In furtherance of the applicants’ intention to sell the property, it was duly
marketed during the last week of October 2023. Thereafter, the applicants
concluded a sale agreement in terms whereof the property was sold. As the
sale agreement made provision for the applicants to give the purchasers
vacant occupation on 1 April 2024, the applicants gave the respondent
notice to vacate in accordance with clause 29.2 of the lease agreement.
[10] In WhatsApp communication between the first applicant and the respondent
dated 21 December 2023, the respondent expresses the sentiment that he
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hoped that they could have discussed the matter to arrive at a mutually
beneficial arrangement. In further communication on 22 December 2023,
the respondent references the principle of ‘huur gaat voor koop’ and states
that the contract is between himself and the owner of the property whether it
be the first applicant or the new owners. The respondent also concedes that
it was not necessary for the new owners to give him notice and that the first
applicant was entitled to do so.
[11] On 28 January 2024 the applicants receive d a letter from the respondent’s
attorney wherein they are advised that the lease they concluded is a fixed
term agreement subject to the CPA and that section 14 thereof prohibits the
early termination of the lease agreement. On 2 February, the applicants
responded via the attorney who attended to the transfer of their property and
who specialized in conveyanc ing. This response records that the parties
had agreed on the 3 months-notice period.
[12] On 7 February 2024 the respondent replied to the letter of 2 February 2024
and reaffirmed his position as set out in the letter of 24 January 2024. At
this stage, the applicants were advised to consult a law firm with the
appropriate litigation experience.
[13] On 10 February 2024 the first applicant contacted the respondent in an
attempt to resolve the matter but he was unwilling to do so as they had
different views pertaining to the issue.
[14] On 14 February 2024 the applicants ’ legal representative, in an attempt to
avoid litigation , again wrote to the respondent ’s legal representative and
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demanded th at he agree to vacate the property. The respondent’s legal
representative responded on 15 February 2024 and it became clear that the
respondent would not vacate the property. On 16 February 2024 the
applicants instructed their attorney to brief counsel to seek urgent relief. A
further attempt to resolve the matter was made on 19 February 2024 when
the applicants again caused correspondence to be sent to the respondent .
On 20 February 2024 it became clear that the dispute would not be resolved
without judicial intervention.
Urgency
[15] The applicants aver that the matter is urgent as the y are contractually
obligated to give the purchasers of the property vacant occupation by 1 April
2024, which is six (6) weeks away. Both the applicants and the purchasers
would suffer irreparable prejudice and material inconvenience if they are
unable to do so. As a consequence of the looming date of 1 April 2024, they
would not be able to obtain adequate redress if the application was heard in
the ordinary course.
[16] The purchasers have in turn sold their own property and cannot continue to
reside in their current home. It is implied that they may have to rent
accommodation from 1 April 2024 if they are unable to take occupation of
the property.
[17] The respondent disputes that the application is urgent, alternatively that if it is
urgent that it suffers from self-created urgency.
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[18] The respondent argues that by 21 December 2023 the applicants knew what
his position was. This is based on his reference to the principle of ‘huur gaat
voor koop’ . However, it is clear from a reading of the exchange of
correspondence that this principle was also referenced in respect of who
could give the respondent notice, with him conceding that the applicants
were entitled to do so. Therefore, it cannot be said that he had already
conveyed his intention not to accept the 3 -month notice by 21 December
2023.
[19] Furthermore, the applicants provided a cogent explanation for the period
between the time of ascertaining the respondent’s intention not to accept the
3-month notice and the bringing of the application. As held in East Rock
Trading 7 (Pty) Ltd v Eagle Valley Granite (Pty) Ltd 2 a delay in bringing the
application is not in itself a reason for refusing to regard the matter as
urgent. A court is obliged to consider the circumstances and the explanation
provided. The crucial q uestion that must be answered is whether the
applicant would be afforded substantial redress if the matter was heard in
the ordinary course.
[20] In Stock and Another v Minister of Housing and Others3 this court held that an
applicant cannot be held to have been dilatory in bringing the application if
he/she first sought compliance from the respondent before resorting to
litigation.
2 2011 JDR 1832 (GSJ). See also Dladla and Others v Ethekwini Municipality (2799/2023) [2023]
ZAKZDHC 15 (4 April 2023)
33 2007 (2) SA 9 (C)
7
[21] After considering the circumstances, the undisputed facts and the explanation
provided, I am of the view that the applicants would not be afforded
substantial redress if the matter was to be heard in the ordinary course and
that it cannot be said that they were dilatory in instituting the application.
Therefore, the applicants’ non -compliance with the time periods, service,
forms, and procedures prescribed by the Uniform Rules of court are
condoned and the application will be entertained in terms of Rule 6(12).
The Consumer Protection Act
[22] I turn now to the issue of whether the provisions of the CPA, more particularly
section 14(2)(b) are applicable to the lease agreement.
[23] As its preamble informs, the CPA was enacted to inter alia promote a fair,
accessible, and sustainable marketplace for consumer products and
services, to prohibit certain unfair marketing and business practices and to
promote responsible consumer behaviour.
[24] Section 2(1) of the CPA prescribes that it must be interpreted in a manner that
gives effect to the purposes set out in section 3.
[25] Section 3 provides that:
‘(1) The purposes of this Act are to promote and advance the social and
economic welfare of consumers in South Africa by-
(a) establishing a legal framework for the achievement and maintenance
of a consumer market that is fair, accessible, efficient, sustainable and
responsible for the benefit of consumers generally;
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(b) reducing and ameliorating any disadvantages experienced in
accessing any supply of goods or services by consumers-
(i) who are low -income persons or persons comprising low -income
communities;
(ii) who live in remote, isolated or low -density popul ation areas or
communities;
(iii) who are minors, seniors or other similarly vulnerable consumers; or
(iv) whose ability to read and comprehend any advertisement,
agreement, mark, instruction, label, warning, notice or other visual
representation is limited by reason of low literacy, vision impairment or
limited fluency in the language in which the representation is produced,
published or presented;
(c) promoting fair business practices;
(d) protecting consumers from-
(i) unconscionable, unfair, unreasonabl e, unjust or otherwise improper
trade practices; and
(ii) deceptive, misleading, unfair or fraudulent conduct;
(e) improving consumer awareness and information and encouraging
responsible and informed consumer choice and behaviour;
(f) promoting consumer confidence, empowerment, and the development
of a culture of consumer responsibility, through individual and group
education, vigilance, advocacy and activism;
(g) providing for a consistent, accessible and efficient system of
consensual resolution of dispu tes arising from consumer transactions;
and
9
(h) providing for an accessible, consistent, harmonised, effective and
efficient system of redress for consumers.’
[26] Section 4(3) provides that if any provision, read in its context, can reasonably
be construed as having more than one meaning then the meaning which
best promotes the spirit and purposes of the CPA and which will best
improve the realization and enjoyment of consumer rights generally, and in
particular by the persons contemplated in section 3(1)(b) is to be preferred.
[27] The CPA defines a ‘consumer’ as ‘in respect of any particular good s or
services, means-
(a) a person to whom those particular good s or services are marketed in the
ordinary course of the supplier’s business;
(b) a pe rson who has entered into a transaction with a supplier in the
ordinary course of the supplier's business , unless the transaction is
exempt from the application of this Act by section 5 (2) or in terms of
section 5 (3);
(c) ...
(d) ..
[28] A consumer agreement is defined as an agreement between a s upplier and a
consumer other than a franchise agreement and business is defined as the
continual marketing of any goods or services. Supplier is defined as a
person who markets any goods or services.
10
[29] Supply when used as a verb is defined as ‘in relation to goods, includes sell,
rent, exchange and hire in the ordinary course of business for
consideration.'4
[30] Business is defined as the continual marketing of any goods or services.
[31] It is clear from section 3 that the CPA is aimed at, inter alia, promoting fair
business practices, protecting consumers against unconscionable, unfair,
unreasonable, unjust, and improper business practices, and establishing a
legal framework to achieve and maintain a fair consumer market which is
efficient, sustainable, and accessible.
[32] The CPA has to be interpreted purposively, with the focus on the broad policy,
purpose and spirit of the Act. Any interpretation of the CPA must give effect
to the objectives it strives to achieve. As seem from the preamble and
section 3, the CPA see ks to prescribe certain standards and norms to
promote the fair and responsible treatment of consumers in their business
dealings in the marketplace. It does not seek to destroy, distort or hamper
sound business practices. Furthermore:
‘The promotion of fairness does not require that consumers be protected to
the extreme, or that consumers be given the right in all instances to escape
from the consequences of their business transactions simply beca use they
changed their minds. The Act seeks to protect co nsumers against
exploitation, unfair treatment an unscrupulous business practices, not to
empower consumers to act deceitfully or to exploit suppliers. ... A balance
4 I do not include the definition under part (b) as it is not relevant to the current proceedings.
11
must be struck between the legitimate expectations of consumers on the one
hand, and that of suppliers on the other. What is required is a sensible
interpretation of the Act, not an interpretation skewed towards consumers
without properly evaluating the notion of fairness.’5
[33] Delport argues that:
‘... section 14 is not directed at fixed -term agreements where the period of
the agreement is open for negotiation between the parties and the consumer
enjoys the freedom to determine the duration to suit his needs. The section
is aimed at fixed -term agreements offered to consumers on a take -it – or –
leave -it basis, where the supplier unilaterally determines the period and
customers have no choice but to accept the fixed term offered to them. This
is typically the case on health -club contracts and mobile -telephone
agreements. It is fair in these s ituations to allow the consumer to cancel the
agreement early, subject to the payment of a reasonable penalty, since the
consumer is from the outset locked into the fixed -term dictated by the
supplier, without having any bargaining power. This would explain why the
fixed-term agreements are limited to two years and why the onus is on the
supplier to show a “demonstrable financial benefit" to the consumer if the
term is to exceed two years. However, bringing lease agreements and sole
5 Henk Delport Problematic Aspects of the Consumer Protection Act 28 of 2008 In Relation to
Property Transactions: Linked Transactions, Fixed-Term Contracts and Unsigned Sale Agreements
Obiter 2014 at pages 68-69
12
mandates under section 14 would not in any way promote the purposes of
the Act but would in certain circumstances actually prejudice the consumer.’6
[34] On the facts of this case, it cannot be said that the bargaining power was
skewed in favour of the applicants or that the respondent was forced to
agree to the fixed term on a take -it-or-leave-it basis. The undisputed facts
show that it was the respondent who requested the lease renewal for a
period of 3 years and that he was at all material time s informed that the
applicants intended to sell the property.
[35] If section 14 does apply to fixed term lease agreements, it will only apply to
the parties’ lease agreement if it was concluded in the ordinary course of the
applicants’ business.7 This follows from the definition of the term consumer
in the CPA and from the definition of business which requires an element of
continuity.
[36] The CPA does not define the term ordinary course of business . In
Amalgamated Banks of South Africa Bpk v De Goede en ‘n ander 8 the court
interpreted the phrase as it appeared int eh Matrimonial Property Act, Act 88
of 1984 and held that it was irrelevant whether the person in question
conducted such transactions regularly. Rather the issue was whether the
impugned act was conducted in the ordinary course of his business. On this
6 Henk Delport Problematic Aspects of the Consumer Protection Act 28 of 2008 In Relation to
Property Transactions: Linked Transactions, Fixed-Term Contracts and Unsigned Sale Agreements
Obiter 2014 at pages 78
7 MW Steenkamp The Impact of the Consumer Protection Act 68 of 2008 and Related Legislation on
Typical Lease Agreements. Submitted in fulfillment of the requirement for the degree of Magister
Legum in the Faculty of Law, University of Pretoria, December 2012
8 1997 (4) SA 66 (SCA)
13
approach, a single, isolated activity could in the proper circumstances
constitute an act that was committed in the ordinary court of business.9
[37] Within the context of income tax law, a rental transaction would be in the
ordinary course of business if the rental income was the product of a bona
fide investment with the purpose of earning an income from that investment.
Income tax would be payable on the profit made and any rental loss would
be deducted from the rental income for the purposes of income tax. Where
a lease is concluded by an individual who, aside from his/her own property
has another property which he/she leases to generate an income , the lease
would have been concluded in the ordinary course of business and would be
subject to the provisions of the CPA, even if this was not the supplier’s
(lessor’s) main or only business.10
[38] The concept of in the ordinary course of business was considered by the
National Consumer Tribunal in Doyle v Killeen and others. 11 The Tribunal
held that the legislature could not have intended for the CPA to apply to
persons selling goods in once -off transactions which were distinct from the
selling of goods as a continual enterprise. This conclusion was based on
section 3, the defin ition of transactio n and the various references in the Act
to suppliers, course of business, business and market.
9 T Naudé The Consumer’s Right to Safe, Good Quality Good and the Implied Warranty of Quality
Under Sections 55 and 56 of the Consumer Protection Act 68 of 2008 (2011) 23 SA Merc LJ 336-351
at page 337
10 T Naudé The Consumer’s Right to Safe, Good Quality Good and the Implied Warranty of Quality
Under Sections 55 and 56 of the Consumer Protection Act 68 of 2008 (2011) 23 SA Merc LJ 336-351
at page 338
11 (NCT/12984/2014/75(1)(b) [2014] ZANCT 43 (25 September 2014)
14
[39] The Tribunal went on to hold that an objective evaluation is required when
considering the concept of ordinary course of business and that all the
relevant factors would have to be considered when determining if the
transaction was concluded within the ordinary course of business. Relevant
factors would include:
(i) whether the person has a registered business;
(ii) the nature of the business the person engages in;
(iii) the nature of the goods normally sold by the person;
(iv) the frequency with which the goods are sold by the person; and
(v) whether the person advertises or markets his goods on an
ongoing or frequent basis.
[40] Lease agreements concluded by lessors who do not let in the ordinary course
of their business are not subject to the CPA. A once off lease or sale
agreement falls foul of the definition of business. It is uncertain at what
stage the repeated letting of a home by the homeowner would constitute the
continual marketin g of the property. In such circumstances, each case
would have to be evaluated within its own factual matrix and
circumstances.12
12 Henk Delport Problematic Aspects of the Consumer Protection Act 28 of 2008 In Relation to
Property Transactions: Linked Transactions, Fixed-Term Contracts and Unsigned Sale Agreements
Obiter 2014 60-80
15
[41] Griffiths v Janse van Rensburh and Another NNO 13 held that an objective test
should be applied in determining whether a transaction was concluded in the
ordinary course of business.14
[42] I cannot fault the reasoning of the Tribunal and agree that an objective
evaluation of all the facts and circumstances is necessary to determine if a
transaction was concluded in the supplier’s ordinary course of business.
[43] On the undisputed facts of this case , it cannot be said that the lease was
entered into during the applicants’ ordinary course of business. They do not
lease out their property on a continual basis nor to derive an income. The
applicants are engineers who leased out the ir primary residence on a
temporary basis while they determined if their move to Australia was
permanent or no t. The lease enabled the applicants to maintain the
residential home pending a final decision on their f uture. In the
circumstances, it cannot be said that the lease of the property was done on
a continual basis or in the applicants’ ordinary course of business.
[44] In the circumstances, I am of the view that the CPA does not apply to the
lease agreement.
[45] If the CPA were to apply to the lease agreement, section 14(2)(b) should not
be read as providing the only circumstances in which the lease may be
terminated. Such an interpretation does not necessarily promote the
objectives and spirit of the CPA nor is it consistent with a literal interpretation
of the provisions of the CPA.
13 2016 (3) SA 389 (SCA) at para [11]
14 The definition of ordinary course of business was addressed within the context of insolvency law.
16
[46] Section 14(2)(b) should rather be seen as factoring in extra protections for the
consumer by nullifying contractual terms which are contrary to the p rovisions
of section 14(2)(b) (i) and which bind a consumer to a fixed term contract
without allowing the consumer to terminate the agreement upon the expiry of
the fixed date, without penalty or charge or at any other time by giving the
supplier 20 business days written notice or in other recorded manner and
form.
[47] If a fixed term agreement could only be cancelled by the consumer and
supplier in accordance with the provisions of section 14(2)(b) it would go
beyond protecting the consumer against unconscionab le, unfair, unjust, or
otherwise improper trade practices unfair and would potentially be unfair to
the suppliers and could be seen as encouraging irresponsible consumer
behaviour. If section 14(2)(b) is interpreted simply as identifying potential
contractual clauses which would be no force and effect as it would be
nullified by section 14(2)(b) it would achieve the purpose of protecting the
consumer while at the same time promoting a sustainable and accessible
marketplace for consumer products and services.
[48] The applicants also sought an eviction order if the respondent, and all those
holding title under him, fail to vacate the property on or before 31 March
2024. However, at this stage the respondent is not in illegal occupation and
there is no basis on which this court can evict him.
[49] Therefore, I make the following orders:
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(i) the applicants’ non -compliance with the time periods, service, forms,
and procedures prescribed by the Rules of Court is condoned and the
application is heard as an urgent application in terms of Rule 6(12);
(ii) section 29(2) of the lease agreement concluded between the
applicants and the respondent is found to be valid and binding on the
respondent;
(iii) the 3 months’ written notice given to the respondent in terms of clause
29(2) of the lease agreement on 21 December 2023 validly cancels
the lease agreement with effect on 31 March 2024;
(iv) the respondent and all those holding title under him are directed to
vacate the property on or before 31 March 2024;
(v) the costs of this application, including the costs of 29 February 2024
shall be for the account of the respondent on an attorney and own
client scale.
Slingers J
18.3.2024