REPUBLIC OF SOUTH AFRICA
IN THE HIGH COURT OF SOUTH AFRICA
(WESTERN CAPE DIVISION, CAPE TOWN)
CASE NUMBER: 14487 / 2024
In the matter between:
CAMPS BAY INVESTMENT TRUST
PROPRIETARY LIMITED
(Registration Number: 2022/871627/07)
Applicant
and
INFUSION SOCIAL CLUB CAMPS BAY
PROPRIETARY LIMITED
(Registration Number: 2023/782936/07)
Respondent
Coram: Wille, J
Heard: 10 July 2024
Order: 11 July 2024
Reasons requested: 24 July 2024
Reasons delivered: 19 August 2024
REASONS
WILLE, J:
INTRODUCTION
[1] This was an urgent application for the eviction of the respondent from
commercial premises. The matter came before me in the urgent fast lane during the
court recess. I considered the matter overnight and issued an order the following
day.1
[2] After that, the respondent curiously filed a request for reasons and an
application for leave to appeal on the same day. It is unclea r why the respondent
requires reasons if it, in the absence thereof, could adequately formulate sufficient
grounds for an application for leave to appeal. It may be that the respondent refuses
to abide by the terms of the order granted.2
[3] The respondent is an incorporated private company and trades as the
‘Infusion Social Club’ as its business. The applicant is also a private company, and
its trade consists of managing a portfolio of property investments. The premises from
which the respo ndent conducts its business is a single shop in a portion of the
subject property owned by the applicant.3
[4] The applicant’s business is a family investment business that has done
business for many generations. This family business is respected in the local
community and earned the trust of the residents and traders. The property is situated
in an upmarket address on the beachfront. It is a two-story building that is occupied
by several tenants, including doctors and estate agents . There is also a restaurant
area in the building, which occupies part of the ground floor and part of the upper
floor via an internal staircase . The applicant employed a model for the selection of
tenants to occupy its premises. The core selection criteri a related to the symbiotic
business relationship that any prospective tenant would enjoy with the other current
1 I ordered the respondent to vacate the premises and ordered costs on the attorney and client scale.
2 The request for reasons and the application for leave to appeal were filed together on 24 July 2024.
3 The property consists of a portion of Erf 162, Camps Bay, also known as Central Parade, Victoria
Road, Camps Bay.
tenants and their businesses conducted in the property so that they would operate
harmoniously.4
OVERVIEW
[5] The premises were previously occu pied by a business concern that operated
a restaurant as a café where patrons could enjoy a coffee, freshly pressed juice, or a
smoothie. It was a health -minded space attracting families and the local community.
This business was in keeping with the appl icant’s community and health -minded
approach and operated symbiotically with other tenants who occupied the property.
This café was , however, not financially profitable and ran into arrears in connection
with its rental payments to the applicant.5
[6] The respondent approached the applicant with a proposal whereby the
respondent invested capital and resources to assist the café in improving its
operations and making its business profitable. Ultimately, the café’s business proved
too distressed to be resu scitated, and it was not feasible to continue operating. After
that, the respondent proposed that it would take over the café's business and enter
into a new lease agreement with the applicant.6
[7] At all material times, the applicant understood (and it is alleged that the
respondent so represented to it) that the respondent would be conducting the same
business as the café had undertaken previously. This representation was reinforced
by the express representations contained in a written presentation submitted to the
applicant by the respondent.7
[8] After that, the café’s l ease was terminated, and the respondent concluded a
commercial lease agreement (including an addendum ) to lease the premises f rom
4 The tenants of the building had to be upstanding citizens, and the businesses had to be symbiotic
with each other.
5 The café was indebted to the applicant in the amount of R226,836.50 in respect of arrear rental.
6 The respondent would step in the shoes of the previous tenant who co nducted the business of a
café.
7 The “business proposal/plan” submitted by the respondent to the applicant.
the applicant. The lease agreement contained a vitally important material term in
which the respondent agreed to use the premises to conduct the business ordinarily
undertaken by a restaurant , which include d cooking and selling food and serving
drinks and alcohol.8
CONTEXT
[9] Following this historical context, the respondent agreed that it would not do or
suffer to be done anything that might create a nuisance to the other tenants or
occupants who occupied the property. It also agreed that it would punctually and fully
comply with the laws, by-laws, and regulations, particularly those about the business
carried on by it, and would not commit or allow to be committed any act calculated to
be a nuisance and to disturb the peace and enjoyment of the public.9
[10] In addition, the respondent agreed that if it committed any breach of any lease
agreement terms and failed to remedy such breach within seven days after receipt of
prior notice, the applicant would have the right to terminate the lease without further
notice and retake possession of the premises. Thus, the lease would terminate, and
the respondent would i mmediately give the applicant vacant possession of the
premises.10
[11] Necessary for this case was that the respondent contractually agreed that it
would not under any circumstances have any claim or right of action whatsoever
against the applicant for damages or losses of whatsoever nature and that no act on
the part of the applicant in accepting any payments or amounts from the respondent
would in any way be regarded as a waiver by the applicant of any of its rights.11
8 The lease agreement also recorded that the premises would not be used for any other purpose
without the applicant’s consent.
9 This was a material term of the lease agreement.
10 It is common cause that this notice was given to the respondent by the applicant.
11 This is important because the respondent belatedly agreed to vacate the premises upon payment of
a large sum of money.
[12] Further, an a ddendum to the lease , among other things, contained the
following express terms: (a) the respondent would settle the arrears o f the former
tenant, (b) the consent of the applicant for the respondent to be a tenant would be
entirely dependent on the nature of the business conducted on the premises and, (c)
and that a symbio tic relationship with the other tenants was speci fied as a pre -
requisite for the applicant to accept the respondent as a tenant in the premises. In
summary, the respondent would not commit or allow any act to be committed that
would result in a nuisance that would disturb the enjoyment of the premises by the
other tenants or the public in general.12
[13] Following the conclusion of th ese commercial agreements , the applicant was
contacted by several tenants in the building and informed that the respondent would
be selling cannabis to the public from the premises and that the respondent would be
operating a cannabis ‘smoking lounge’ from the premises. These tenants informed
the applicant they would terminate their leases if this continued. In addition, a g roup
of concerned residents expressed their dismay that the applicant was facilitating the
sale of cannabis to minor children and stated that they would not support the tenants
in the building should this position be allowed to continue.13
[14] A meeting w ith the representative of the respondent followed , who conceded
that the respondent would be selling cannabis to the public from the premises. The
applicant explained that the sale of cannabis in any context was inconsistent with the
applicant’s family's values and the state d and agreed requirements of the lease
agreements for the business to be operated symbiotic ally with the other tenants
conducting business from the building.14
[15] The respondent also conceded that the food offered in the restaurant would
be infused with cannabis products, including ‘tetrahydrocannabinol’, which is a
scheduled substance with psychoactive properties. It was undisputed that t he
12 This was a material term of the contract of lease read with the addendum to the lease.
13 The applicant was put on terms by several of its other tenants in the building.
14 The applicant contended for an accrued right to terminate. (see De Wet NO v Uys NO 1998 (4) 694
(T) 706).
respondent had failed to mention the cannabis -related trading activities to the
applicant. According to the applicant , these trading activities were inconsistent with
the trading activities for the b uilding. The respondent insisted that excluding these
cannabis-related trading activities from the respondent’s business model was not
feasible.15
[16] The applicant terminated the lease agreement b ecause of this impasse
concerning the respondent’s trading activities . The termination followed because of
the alleged non-disclosure and because an integral part of the respondent’s intended
business model was not a symbio tic f it with the applicant. After that , settlement
discussions ensued, and the applicant allege d that the matter was settled because
the respondent agreed that the lease agreement had been validly terminated.16
CONSIDERATION
[17] Notwithstanding the allegation that the occupancy of the premises had been
settled and that the lease agreement had been validly terminated, the responden t
remained in occupation of the premises. Belatedly after that, the respondent alleged
(for the first time) that it had not materially breached the lease agreement and that no
right to cancel the lease agreement had accrued to the applicant to warrant the
termination of the lease agreement. This was then the core issue for determination in
this application.17
[18] An analysis of the papers revealed that the respondent materially
misrepresented the true nature of its business by failing to disclose its cannabis
business activities to the applicant fully . The lease agreement was conditional on a
complete and accurate disclosure. Further, from a reading of the papers , it seemed
to me that the respondent structured its business in an attempt to exploit a perceived
15 At this time, the respondent insisted that it would be trading with cannabis -related products.
16 The material before me clearly showed that a settlement between the parties had been concluded.
17 I was in the main guided by the jurisprudence in Singh v M cCarthy Retail t/a McIntosh Motors 2000
(4) SA 795 (SCA)
loophole in the law which prohibits the sale of cannabis but permits the growing
thereof by individuals for personal consumption.18
[19] It was difficult (if not impossible) to understan d on what legal basis the
respondent contended it was in lawful possession and occupation of the leased
premises and thus refused to vacate them. The respondent’s stance was that it
seemingly wanted to wish away the materiality of its non-disclosures with complete
disregard for the extant provisions of the lease agreement and the addendum to it.19
[20] The only avenue left for escape by the respondent was to undertake that it
would not trade with these cannabis -related products from the premises . This it
belatedly did. In the circumstances, this undertaking was to be evaluated,
considering the respondent's overall and general business model , which promoted
the sale of cannabis-infused substances (by its group of companies) from several
other premises where it conduct ed business to be its core and primary business .
This undertaking was also given after a number of breaches had manifested.20
[21] Despite the termination of the lease, the respondent remained in unlawful
occupation of the premises and refuse d to vacate the premises. What was of
concern was that despite the express state ment by the respondent that
notwithstanding the valid termination of the lease, it steadfastly refused to vacate the
premises. I say this because the respondent conducted a business that was not
disclosed to the applicant, and the lease agreement was conditional on the nature of
the respondent’s trading activities. A condition which the respondent did not meet.21
[22] What remained was the undertaking by the respondent that it would refrain
from conducting cannabis-related business from the premises. This undertaking only
18 See the (The Haze Club (Pty) Ltd v Minister of Police and Others [2022] ZAWCHC 269 : [2023] 1 All
SA 280 (WCC)).
19 This was the reason for the settlement agreement between the parties shortly after the lease was
signed.
20 This was not engaged with in any material manner by the respondent and thus must be accepted
as correct.
21 Thomas v Henry 1985 (3) SA 889 (A).
surfaced after the breach and valid terminati on of the lease. The respondent’s entire
business model and core business were inconsistent with the type of business the
applicant had expected and contractually demanded from its tenants.22
[23] The respondent materially misrepresented the business to be conducted by it
and the business it intended to perform. The applicant, in turn, entered into the lease
agreement on the basis that the respondent’s business was as disclosed in its
business plan. I reasoned t hat the applicant would not have entered into the lease
agreement had it known the true nature of the respondent’s business, even if the
respondent subsequently did not conduct some aspec ts of that business from the
premises.23
[24] More importantly, these misrepresentations c ould not be remedied after the
fact. Further, I found that a settlement had been reached by which the respondent
agreed to terminate the lease and vacate the premises. Certain additional breaches
of the lease also manifested in the form of disturbances emanating from the
premises (including smoke from cannabis consumption ) and complaints from other
tenants impacting their business es. Further, the respondent allowed smoking inside
the premises , violating prevailing extant sub-ordinate legislation. Finally, the
respondent embarked on alterations and branding to the p remises without prior
approval from the applicant in breach of the lease agreement.24
[25] The applicant demonstrated on the papers that , almost daily , it received
complaints from the tenants of the building, occupants of the adjacent premises, and
members of the general public about how the respondent conducted its trading
activities from the premises. The respondent persisted in using the same branding
(which features a cannabis leaf) used by its other businesses, and the focus of its
unilateral alterations made to the premises was inconsistent with its undertaking
22 This was one of the reasons for the addendum to the lease.
23 The misrepresentation was material as it founded the applicant's right to terminate the lease.
24 In breach of the lease agreement and the addendum thereto.
regarding the nature of the café business that it would have conducted going
forward.25
CONCLUSION
[26] I found that the respondent’s conduct, as described, left the applicant with no
alternative but to approach th e c ourt for urgent relief. Undoubtedly, the applicant
stood to lose the business of its other tenants should the respondent be allowed to
continue to occupy the premises, and it would have exposed the applicant to
liabilities against its other tenants , who may have been entitled to cancel their lease
agreements with the ap plicant. The confirmatory affidavits alone exhibited that the
applicant ran the risk of having the premises f orfeited as an instrument in unlawful
trading activities.26
[27] The applicant’s insurer issued a notice of cancellation of the insurance policy
and placed the applicant on notice because of a material change in the risk
occupancy of the premises and opined that they were no longer prepared to keep
the insurance cover over the applicant’s building. Thus, I found that the respondent's
conduct was manifestly unreasonable and allowed the applicant to charter its
application as a matter of urgency. Finally, the applicant took several steps to settle
the matter amicably before approaching the court for relief , and there was no other
remedy available to the applicant.27
[28] These are my reasons for having granted the order together with the costs.
___________
E. D. WILLE
(Cape Town)
25 The breaches could not be remedied by undertaking to conduct business contrary to the
respondent's business model.
26 This may find application in terms of the Prevention of Organized Crime Act, 21 of 1998.
27 Luna Meubel Vervaardiges (Edms) Bpk v Makin and Another (t/a Makin’s Furniture Manufacturers)
1977 (4) SA 135 (W).