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[2011] ZASCA 100
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Maphango (Mgidlana) and Others v Aengus Lifestyle Properties (Pty) Ltd ([2011] 3 All SA 535 (SCA)) [2011] ZASCA 100; 611/2010 (1 June 2011)
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THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Case No: 611/2010
In the
matter between:
NTOMBIZODWA
YVONNE MAPHANGO
(NOW
MGIDLANA) AND 17 OTHERS
.....................................................
APPELLANTS
v
AENGUS LIFESTYLE PROPERTIES
(PTY) LTD
................................................................................................
RESPONDENT
Neutral
citation:
Maphango v Aengus Lifestyle Properties
(611/2010)
[2011] ZASCA 100
(1 June 2011)
Coram:
Brand, Lewis, Cachalia, Shongwe JJA and Plasket AJA
Heard:
17 May 2011
Delivered:
01 JUNE 2011
Summary:
Termination of lease agreements ─ tacit term
contended for that landlord will not employ termination clause in
order to renegotiate
new leases at higher rental ─ found not to
have been established ─ reliance on s 26(1) of the Constitution
and other
considerations of public policy ─ unsuccessful
________________________________________________________________
ORDER
________________________________________________________________
On appeal from:
South Gauteng High Court (Johannesburg) (Van
der Riet AJ sitting as court of first instance).
The appeal is dismissed.
________________________________________________________________
JUDGMENT
________________________________________________________________
BRAND JA
(LEWIS, CACHALIA, SHONGWE JJA and PLASKET AJA):
[1] The 18 appellants are lessees of flats in a ten storey building
known as Lowliebenhof, in Braamfontein, Johannesburg. The respondent
is the owner of the building. Proceedings started when the respondent
brought an application in the South Gauteng High Court, Johannesburg,
for the eviction of the appellants and their families from the flats
on the basis that their leases had been duly terminated by
notice on
its behalf. The appellants opposed the application, essentially on
two grounds. First, that the respondent’s purported
termination
of the leases was invalid. Second, that, even if the leases were
validly terminated, it would not be just and equitable
to evict them
from the flats. For the second ground they relied on the provisions
of s 4(6) of the Prevention of Illegal Eviction
from and
Unlawful Occupation of Land Act 19 of 1998, that generally became
known as PIE.
[2] When the application came before Van der Riet AJ in the court a
quo, the respondent conceded that the leases of two of the
appellants, Ms Siguca and Ms Masemola had not been validly
terminated. With regard to the sixteen other leases involved, Van der
Riet AJ upheld the respondent’s contention that the termination
was valid. He further held, in respect of nine of the appellants,
that there were no grounds of justice and equity, as contemplated in
s 4(6) of PIE, that would justify the refusal of their
eviction.
These nine appellants were therefore evicted. As to the other seven
appellants, he concluded that an eviction order would
render them
homeless and would thus not be just and equitable as contemplated by
s 4(6) of PIE. At the behest of these appellants,
he therefore
postponed the application for their eviction for three months so as
to afford them the opportunity to join the City
of Johannesburg as a
party to the proceedings and to obtain a report from the latter,
setting out what steps it could take to provide
them with alternative
accommodation. As to the costs of the application, Van der Riet AJ
decided that since the matter involved
constitutional issues, the
parties should pay their own costs.
[3] The appeal against the judgment of Van der Riet AJ is with his
leave. In essence it is aimed at two findings in the judgment.
First,
that the leases were validly terminated. Second, that Ms Siguca and
Ms Masemola should pay their own costs.
Termination of the lease agreement
[4] I start with the issues surrounding the termination of the
leases. The respondent purchased the property in 2007, but only
became the owner in May 2009, shortly before the eviction
applications were launched. It was not a party to any of the leases.
They were concluded over the years between the different appellants,
as lessees, and whoever happened to be the respondent’s
predecessor as owner of the building at the time, as lessor. However,
by operation of the common law principle of
huur gaat voor koop
,
the respondent became the successor to all rights and obligations
deriving from these lease agreements, when it became the owner
of the
building.
[5] The appellants entered into four different pro forma lease
agreements that were identified with reference to the name of the
lessor at the time, as the Ithemba agreement, the Union agreement,
the Artisan agreement and the Eagle Creek agreement. For reasons
that
will soon become apparent, the appellants emphasised those terms of
the four agreements that deal with increases in the stipulated
rental
while the respondent’s focus was directed at the period of the
lease for which the different agreements provide.
[6] As to increases in the stipulated rental, three of the agreements
expressly limit the increment at which the stipulated rent
can be
increased annually. The Ithemba agreement permits an increase of 10
per cent, together with an amount equal to any increase
in rates,
taxes and other stipulated expenses payable by the lessor in respect
of the building, distributed pro rata between the
tenants occupying
the property. In the Union agreement, the annual escalation is 15 per
cent, while the Artisan agreement limits
the increment to the
lessee’s pro rata share of any increase in rates and taxes
payable by the lessor. The Eagle Creek agreement
is the exception. It
does not specifically impose a limitation on the increase of rental,
but it is common cause that in this case
any increase must be
reasonable (see
s 5(6)(c)
of the
Rental Housing Act 50 of 1999
).
Finally, the Ithemba agreements provide that in the event of some
legislative provisions affecting the rental, the respondent
cannot
increase the rent without first approaching the competent authority
for leave to do so.
[7] As to termination of the leases, each of the agreements provides
for an initial fixed period. In the Ithemba agreement, for
example,
it is 12 months. After the initial period, each agreement is
automatically renewed indefinitely. Three of the agreements
contain
an express provision entitling both parties to terminate the
agreement on written notice to the other, though the periods
of
notice required are of different duration. The Artisan agreement does
not have an express term providing for termination by
notice. But it
is not in issue that in terms of the residual rules of the common
law, this agreement is also terminable by either
party after the
initial period, on reasonable notice to the other (see eg A J Kerr
The Law of Sale and Lease
3 ed (2004) at 488; Francois du Bois
(ed)
Wille’s
Principles of South African Law
9 ed
(2007) at 918 para 9(1) and the authorities there cited.) With regard
to termination, the Ithemba agreement again contains
a provision
which is not to be found in the other agreements. It is to the effect
that, if the lease is supported by a Department
of Housing subsidy,
termination shall be at the discretion of the lessee. As it turned
out, the only two leases that were supported
by a Departmental
subsidy were those of Ms Siguca and Ms Masemola. That is why the
respondent conceded that their leases could
not be terminated on
notice by the respondent.
[8] It is common cause that in respect of all the leases the initial
fixed period had lapsed prior to the notices of termination,
to which
I now turn. From about September 2008, the respondent gave written
notice of termination of the leases to each of the
appellants. The
notices called upon them to vacate their flats on different dates
during the period from November 2008 to March
2009. The notices also
informed the appellants that if they wished to stay on in their flats
beyond the stipulated dates, they
would have to enter into new lease
agreements at rentals which were between 100 per cent and 150 per
cent more than what they were
paying at the time. The appellants
refused to accept the termination of their agreements. They also said
that they could not afford
to pay the increased rent. They
accordingly remained in occupation and continued to pay the rental
amounts that they were paying
at the time.
[9] The respondent’s explanation as to why it gave these
notices remained mainly undisputed. According to this explanation,
the respondent’s business model is to acquire buildings in the
Johannesburg CBD that are often derelict, which it then renovates
and
rents out to tenants. This business model requires it to be able to
generate sufficient income from rental in order to service
the
acquisition and renovation costs of the building. It acquired
Lowliebenhof for R11 628 000, which it obtained through
bond finance.
[10] After acquisition of the building, the respondent spent an
amount of over R1 million on renovation and maintenance. It also
employed fulltime guards and cleaners. These expenses appear to have
been advantageous to the tenants of the building. In motivating
why
the appellants would not be able to afford comparable accommodation
in the same area, their attorney, inter alia, said about
other flats
in the area that:
‘
The
buildings are not well maintained and major renovations would have to
be done for them to be a viable alternative to Lowliebenhof.’
[11] But the result of these expenses was that the rent paid by the
appellants (and presumably the occupants of other flats in
the
building) was insufficient to cover the costs of bond finance,
renovation and maintenance. As a result, the respondent found
that
the project was running at a loss. At the same time, so the
respondent said, there were a number of potential tenants who
were
willing and able to pay the increased rental it was constrained to
impose in order to render the project financially viable.
[12] The arguments advanced by the appellants against this background
as to why the leases were not validly terminated, were twofold:
(a) First, they contended that each of the lease agreements contained
a tacit term which forbids the use of the termination clause
to
effect an increase in rental beyond the increment provided for in the
respective agreements;
(b) Second, that to allow the respondent to terminate the agreements
for the sole purpose of allowing it to implement a rent increase
would be contrary to public policy. For their argument based on
public policy, the appellants relied on three grounds: (a) that
the
termination would be unreasonable and unfair; (b) that it would
constitute an infringement of their constitutional right to
have
access to adequate housing in terms of s 26(1) of the Constitution;
(c) that it constituted an ‘unfair practice’
as
contemplated in the
Rental Housing Act 50 of 1999
read with the
Gauteng Unfair Practice Regulations 2001, promulgated under that Act.
Tacit term
[13] I propose to deal first with the argument based on a tacit term.
As explained by Corbett AJA in
Alfred McAlpine & Son (Pty) Ltd
v Transvaal Provincial Administration
1974 (3) SA 506
(A) at
531-532, a tacit term is an unexpressed provision of a contract,
inferred by the court from the express terms of the contract
and the
surrounding circumstances. Because a tacit term is derived from an
inference as to what both parties must have intended,
if they had
applied their minds, the inference will be drawn only if the court is
satisfied that it is a necessary one. Once there
is difficulty and
doubt as to how the term should be formulated or how far it should
go, it can hardly be said that the parties
clearly intended the
proposed term to be part of their agreement (see eg
South African
Mutual Aid Society v Cape Town Chamber of Commerce
1962 (1) SA
598
(A) at 606B;
Desai v Greyridge Investments (Pty) Ltd
1974
(1) SA 509
(A) at 522H-523A).
[14] Over the years our courts have formulated the test to be applied
in order to decide whether the importation of a tacit term
would be
appropriate in various ways. Another variation would hardly
contribute to clarity. Suffice it therefore to refer to the
following
summary by Nienaber JA in
Wilkens NO v Voges
[1994] ZASCA 53
;
1994 (3) SA 130
(A) at 137A-C:
‘
The
practical test for determining what the parties would necessarily
have agreed on the issue in dispute is the celebrated bystander
test.
Since one may assume that the parties to a commercial contract are
intent on concluding a contract which functions efficiently,
a term
will readily be imported into a contract if it is necessary to ensure
its business efficacy; conversely, it is unlikely
that the parties
would have been unanimous on both the need for and the content of a
term, not expressed, when such a term is not
necessary to render the
contract fully functional.’
[15] Relying on the test thus formulated, the appellants contended
that a tacit term, which prohibits the exercise of the right
to
terminate for the sole purpose of effecting a rental increase which
exceeds the increment agreed upon, is necessary to ensure
the
efficacy of the agreements. Without this term, so the argument went,
the landlord could demand an increase in excess of that
agreed upon
by simply threatening to terminate the contract. Moreover, so the
argument continued, absent the proposed tacit term,
there would be no
consensus on an essential term of the contract. A definite or
ascertainable rental is one of the
essentialia
of a lease.
Were the landlord permitted to use the termination clause to effect a
rental increase, the rent would not be definite
or ascertainable.
[16] I find these arguments logically unsound. None of them pertain
to the position while the lease agreements are in place. During
the
currency of the lease, the lessees are not at the landlord’s
mercy insofar as rental increases are concerned. Nor can
there be any
uncertainty about the permitted increases. Both parties are bound by
the terms controlling rental increases. However,
once the agreements
are validly terminated, the landlord is no longer bound by the
express or implied provisions of the erstwhile
lease. Whether or not
a lease agreement was validly terminated depends on the termination
provisions. Thus, for example, any purported
termination during the
initial fixed period would not be valid. During that period the
lessee therefore enjoys the benefits of
the rental increase
provisions. The same goes for the required period of notice. In
short, during the currency of the lease, business
efficacy does not
require an incorporation of the proposed tacit term. After
termination of the lease, the proposed tacit term
would be of no
consequence.
[17] For their further arguments in support of the tacit term they
propose, the appellants relied on what Nienaber JA referred
to in the
quotation from
Wilkens NO
as the celebrated bystander test. It
will be remembered that according to this test the enquiry is what
the response of both parties
would have been if, at the time the
contract was being negotiated, the officious bystander were to ask
them ‘what would happen
in such and such a case?’.
Incorporation of the proposed term requires the unanimous
confirmation of the proposed term with
the comment ‘we did not
trouble to say that; it is too clear’. (Per
Scrutton LJ in
Reigate v Union Manufacturing Co (Ramsbottom) Ltd
[1918] 1 KB 592
(CA) at 605).
[18] With reference to this test, the appellants argued that if the
officious bystander were to ask the parties whether they intended
the
owner to be able to circumvent the rental increase provisions by
making use of the termination clause, the answer would have
been no.
They found support for their argument in the provisions of the
Ithemba agreement to the effect that if the lease is supported
by
Departmental subsidy, termination would be at the discretion of the
lessee. This shows, so the argument went, that these leases
were
entered into with security of tenure in mind.
[19] As I see it, the last-mentioned part of the argument goes
against the appellants. What it indicates is that, where the parties
intended to qualify the termination provisions so as to provide the
lessees with additional security of tenure ─ beyond the
initial
fixed period and the notice period ─ they knew exactly how to
do so. Of greater significance, however, is that in
my view the
question put forward by the appellants as the one that the officious
bystander would ask, is wrongly formulated. In
consequence, the
answer to the officious bystander is likely to be wrong. The question
is not whether the landlord may circumvent
the rental escalation
provisions by means of the termination clause. What the officious
bystander would ask is whether either party
would be entitled to
terminate the agreement, after the initial fixed period and in
accordance with the termination clause, in
order to negotiate a new
lease with different contractual terms. As I see it the answer would
then be ─ why not?
[20] As formulated by the appellants, the question posed by the
officious bystander would introduce the consideration of motive
in
the exercise of a contractual right, while that consideration is
generally irrelevant (see eg
Bredenkamp v Standard Bank of South
Africa Ltd
2010 (4) SA 468
(SCA) para 7). Introduction of motive
through incorporation of a tacit term would in my view elicit the
question ─ what motive
for termination by notice would be
acceptable? Would the landlord have to justify its motive for
termination in every case? Is
the lessee also required to have a
valid motive for terminating the agreement on notice? If so, would
the fact that the lessee
can no longer afford the rental constitute a
valid reason? As I see it, all these difficulties stand in the way of
the incorporation
of the tacit term for which the appellants contend.
[21] In addition, acceptance of the appellants’ argument would
mean that the landlord had entered into a lease of infinite
duration
without being entitled to terminate the agreement, even when the
enterprise seeks to be commercially viable. Why this
notion is
inherently untenable is illustrated by the situation that arose in
this case. In my view, it stands to reason that this
unlikely
intention on the part of the landlord can hardly be incorporated into
the lease agreements on the basis that it is self-evident.
Reasonableness and fairness
[22] I now turn to the appellants’ case based on public policy.
Their first contention in this regard was that termination
of the
leases was, in the circumstances, unreasonable and unfair and should
therefore not be enforced on grounds of public policy.
In support of
this contention the appellants argued that it had been decided by the
Constitutional Court in
Barkhuizen v Napier
[2007] ZACC 5
;
2007 (5) SA 323
(CC) that, as a matter of public policy, our courts will not give
effect to the implementation of a contractual provision which
is
unreasonable and unfair.
[23] I believe that the argument is fundamentally flawed because the
proposition on which it relies is not supported by the decision
of
the Constitutional Court in
Barkhuizen,
nor does it reflect
the principles of our law of contract as they stand. Reasonableness
and fairness are not freestanding requirements
for the exercise of a
contractual right. That much was pertinently decided in
Bredenkamp
(para 53). As to the role of these abstract values in the law of
contract, this court expressed itself as follows in
South African
Forestry Co Ltd v York Timbers Ltd
2005 (3) SA 323
(SCA) para 27:
‘
. . .
. [A]lthough abstract values such as good faith, reasonableness and
fairness are fundamental to our law of contract, they
do not
constitute independent substantive rules that courts can employ to
intervene in contractual relations. These abstract values
perform
creative, informative and controlling functions through established
rules of the law of contract. They cannot be acted
upon by the courts
directly. Acceptance of the notion that judges can refuse to enforce
a contractual provision merely because
it offends their personal
sense of fairness and equity will give rise to legal and commercial
uncertainty.’
(See also eg
Brisley v Drotsky
2002 (4) SA 1
(SCA) paras 21-25
and 93-95)
[24] In
Barkhuizen
, Ngcobo J, writing for the majority, first
explained (para 80) what he meant by the notion of ‘good
faith’, namely
that it encompasses the concepts of justice,
reasonableness and fairness. He then proceeded to express the
principles of our law,
as formulated by this court, inter alia in
Brisley
, in the following terms (para 82):
‘
As the
law currently stands good faith is not a self-standing rule, but an
underlying value that is given expression through existing
rules of
law. In this instance good faith is given effect to by the existing
common-law rule that contractual clauses that are
impossible to
comply with should not be enforced . . . . Whether, under the
Constitution, this limited role of good faith is appropriate
and
whether the
maxim
lex
non cogit ad impossibilia
alone
is sufficient to give effect to the value of good faith are,
fortunately, not questions that need be answered on the facts
of this
case and I refrain from doing so.’
[25] Unless and until the Constitutional Court holds otherwise, the
law is therefore as stated by this court, for example, in
South
African Forestry Co, Brisley
and
Bredenkamp
. Accordingly,
a court cannot refuse to give effect to the implementation of a
contract simply because that implementation is regarded
by the
individual judge to be unreasonable and unfair. Strictly speaking the
enquiry into the reasonableness and fairness of the
respondent’s
termination of the contract of the leases is therefore unnecessary.
But in any event, I am not persuaded that
in the circumstance the
termination of the leases can be denounced as unreasonable and
unfair. The respondent’s business
venture, to acquire and
upgrade residential buildings in the inner city of Johannesburg, is
commendable. Amongst other things,
it appears to be in line with the
initiatives of the Johannesburg City Council. However, since the
respondent is not a charitable
organisation, it cannot be blamed for
its unwillingness to pursue this commendable business venture at a
loss as would be the result
if the current leases were to be
maintained at the agreed rentals. The respondent therefore decided to
terminate the leases, as
it was contractually entitled to do, to save
its business from commercial demise. In doing so, it behaved
transparently by disclosing
its motive, which it was not obliged to
do. Had it not done so, the present litigation would probably not
have ensued. Objectively,
I can find nothing in the respondent’s
conduct that can justifiably be described as unreasonable and unfair.
The impact of s 26(1) of the Constitution
[26] The appellants’ further argument relied on the proposition
that the termination of the leases was contrary to public
policy,
because it constituted an infringement of their right of access to
adequate housing in terms of s 26(1) of the Constitution.
The logical
progression of their argument proceeded as follows:
(a) According to well-settled principles of our common law, a term of
a contract will not be enforced if either the term itself
or its
enforcement will be contrary to public policy (see eg
Sasfin (Pty)
Ltd v Beukes
1989 (1) SA 1
(A) at 7I-J).
(b) Public policy represents the legal convictions of the community.
Since the advent of our constitutional democracy, public policy
is
informed by our Constitution and the values which underlie it (see eg
Afrox Healthcare Bpk v Strydom
2002 (6) SA 21
(SCA) para 18;
Barkhuizen v Napier
[2007] ZACC 5
;
2007 (5) SA 323
(CC) para 28).
(c) Consequently, a term in a contract that is inimical to the values
enshrined in the Constitution is contrary to public policy
and
therefore, unenforceable (see eg
Barkhuizen
para 29;
Bredenkamp v Standard Bank of South Africa Ltd
2010 (4) SA 468
(SCA) para 43).
(d) Even if a contractual provision is not in itself in conflict with
any constitutional value, its enforcement may be. In that
event, the
first question is whether the rights so infringed ─ such as the
right to practise a trade, occupation or profession,
or the right to
freedom of expression ─ can in principle be limited in terms of
s 36 of the Constitution. If so, the second
question is whether the
limitation brought about by the enforcement of the contractual
provision is fair and reasonable in the
circumstances (see eg
Bredenkamp
paras 47-48).
(e) Security of tenure is a constitutional element of the right of
access to housing in terms of s 26(1) of the Constitution (see
Jaftha
v Schoeman
;
Van Rooyen v Stoltz
[2004] ZACC 25
;
2005 (2) SA 140
(CC) para
29;
Gundwana v Steko Development CC
(CCT 44/10)
[2011] ZACC 14
(11 April 2011) para 40).
(f) The rights enshrined by s 26(1), including the right to security
of tenure to one’s home, embodies both a positive and
a
negative element. Positively, it does not bind private persons, but
its provisions oblige the state to take reasonable measures
to
achieve the realisation of the right. In its negative aspect it also
binds private persons. Apart from the obligations of the
state, it
thus forbids private persons from interfering with the rights of any
other person in terms of the section (see eg
Standard Bank of
South Africa Ltd v Saunderson
2006 (2) SA 264
(SCA) para 12).
[27] In furtherance of their case, the appellants then sought to
apply these principles in the following way. The termination
provisions, so they conceded, are not in themselves inimical to the
rights enshrined in s 26(1), since there is nothing wrong with
providing for the termination of a lease on notice. Yet the
implementation of these provision resulted in an infringement of
their
right to security of tenure to the flats that are their homes.
In consequence, the respondent was bound to exercise its right under
the termination provisions in a manner that was reasonable and fair.
Since the termination of their leases was in the circumstance
unreasonable and unfair, it was contrary to public policy.
[28] Though I agree with the general principles relied on by the
appellants, my difficulty lies with the way in which they sought
to
apply these principles in furtherance of their case. What their
argument appears to lose sight of is that a lessee of property
has no
security of tenure in perpetuity. The duration of the lessee’s
tenure is governed by the terms of the lease.Generally
speaking a
lease can be for a fixed period, say 10 years or six months or for an
uncertain period, eg until X dies. If the period
of the lease is left
undetermined, it can be terminated on notice. If the period of notice
is not specifically agreed upon, the
residual rules require that the
notice must be reasonable. One thing a lease cannot be is ‘for
ever’. A purported lease
in perpetuity is not a lease: it
constitutes another contract, namely emphyteusis or ‘
erfpag
’
(see eg A J Kerr
The Law of Sale and Lease
3 ed (2004) p
273-274; 14
Lawsa
2 ed para 4 sv ‘Lease’; De Wet &
Van Wyk
SA Kontrakte en Handelsreg
5 ed (1992) p 356).
[29] Beyond the period of the lease, the lessee has no security of
tenure. If the lease is for say 10 years, it goes without saying
that
the lessee’s security of tenure is for 10 years only. If after
10 years the lessor insists that the lease has been terminated
through effluxtion of time, no one will suggest that such insistence
amounts to an infringement of the lessee’s security
of tenure
under s 26(1) of the Constitution. Perhaps less obvious is the
situation where the lease is terminated on notice. But
the principle
remains the same. The parties agreed at the outset that the lessee’s
tenure can be terminated on notice. What
this amounts to, is an
agreement that the lessee’s security of tenure will never
endure beyond the end of the notice period.
[30] The position of owners, on the other hand, is quite different.
The right of an owner to possession is of indefinite duration.
That,
I believe, is the main distinction between cases like
Jafta
,
Saunderson
and
Gundwana
, on the one hand and the
present case on the other. Those cases dealt with interference with
the right of security of tenure of
an owner to his or her home. The
combined effect of those cases is that a termination of that right
may only follow upon judgment
in a court of law. In this case, as I
have said, the appellants had no security of tenure beyond the
duration of the leases. Put
in another way, this security of tenure
was circumscribed by the leases themselves. It therefore cannot be
said that termination
in accordance with the leases, constituted an
infringement of their right to security of tenure.
Provisions of the Housing Act 50 of 1999 and the Gauteng Unfair
Practice Regulations, GN 4004 of 2001
[31] Finally, the appellants contended that the termination of the
leases was contrary to public policy because it constituted
an unfair
practice in contravention of the
Rental Housing Act 50 of 1999
and
the relevant regulations promulgated under that Act. From the
appellants’ argument it never became clear why they chose
this
circuitous route instead of simply relying on a contravention of the
Act. But be that as it may.
[32] With regard to the provisions of the Act, the appellants’
particular focus was on s 4(5)(c). In terms of this section
the
landlord may ‘terminate the lease in respect of rental housing
property on grounds that do not constitute an unfair practice
and are
specified in the lease’. ‘Unfair practice’ is
defined in s 1 of the Act to mean ‘(a) any act or
omission by a
landlord or tenant in contravention of this Act; or (b) a practice
prescribed as a practice unreasonably prejudicing
the rights or
interests of a tenant or a landlord’.
[33] Since the appellants do not contend for any contravention of the
Act by the respondent, we are not concerned with part (a)
of the
definition. As to part (b), ‘prescribed’, is defined in s
1 to mean ‘prescribed by regulation by the Member
of the
Executive Council of a province responsible for housing matters, by
notice in the Gazette’. With reference to the
regulations thus
prescribed by the MEC for Housing in the Province of Gauteng (GN 4004
of 2 July 2001), the appellants relied on
two provisions, namely: (a)
Regulation 41(d) which prohibits a landlord from engaging in
‘oppressive or unreasonable conduct’,
and (b) Regulation
14(1)(f) which provides that ‘a landlord must not conduct any
activity which unreasonably interferes with
or limits the rights of
the tenant . . .’.
[34] I do not agree with the appellants’ contention that the
termination of their leases constituted a contravention of these
statutory provisions. First, the provisions of the Act and the
regulations relied upon are directed against a ‘practice’.
That does not contemplate, as I see it, unacceptable conduct by the
landlord on an isolated occasion (see eg
The Concise Oxford
English Dictionary
which defines ‘practice’ (in this
context) as ‘the customary or expected procedure or way of
doing something’).
It envisages incessant and systemic conduct
by the landlord which is oppressive or unfair. Termination of a lease
would therefore
not qualify as a practice. Secondly, for reasons I
have already stated, I do not believe that the respondent’s
terminations
of the leases could in the circumstances be denounced as
unreasonable or unfair, let alone oppressive.
Costs of two appellants in the court a quo
[35] This brings me to the second part of the appeal which is
directed at the court a quo’s order to the effect that Ms
Siguca and Ms Masemola, who were successful on the merits, should pay
their own costs. It will be remembered that the respondent
conceded
in the court a quo that its eviction application against these two
appellants could not succeed. The reason for the concession
was that
these two appellants had entered into the Ithemba agreement and that,
because their leases were supported by a Department
of Housing
subsidy, these leases could, in terms of the specific provisions of
the agreement, only be terminated at the discretion
of the lessee.
[36] Since the impugned costs orders were made in the exercise of its
discretion by the court a quo, this court can only interfere
on the
basis that the discretion had not been properly exercised. I do not
believe that the appellants have made out that case.
On the contrary,
I think these costs orders were justly made. All the appellants,
including those who were successful and those
who were not, were
represented by the same counsel. They all filed affidavits which were
identical in all material respects. Where
the appellants were
unsuccessful, no costs orders were made in favour of the respondent
and I can see no reason why the position
of the successful appellants
should be any different. Moreover, the defence on which the two
appellants ultimately succeeded was
only raised at a late stage of
the proceedings, when virtually all the papers had been filed.
Costs on appeal
[37] Following the guidance of the Constitutional Court in
Barkhuizen
(para 90) and in
Biowatch Trust v Registrar, Genetic Resources
2009 (6) SA 232
(CC), the court a quo held that, since the
appellants raised important constitutional issues, they should not be
burdened with
costs. It therefore made no order as to costs. I
believe this court should adopt the same approach with regard to the
costs of
appeal.
Order
[38] In the result the appeal is dismissed.
____________________
F D J Brand
Judge of Appeal
APPEARANCES:
APPELLANTS: D I Berger SC (with him S Wilson & I de Vos)
Instructed by Mdladlamba Attorneys, Johannesburg
Lovius Block Attorneys, Bloemfontein
RESPONDENTS: G C Wright (with him N Mbelle)
Instructed by Knowles Husain Lindsay Inc
c/o John Broido, Johannesburg
McIntyre & Van der Post, Bloemfontein