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IN THE HIGH COURT OF SOUTH AFRICA
WESTERN CAPE DIVISION, CAPE TOWN
Case Number: 16453/2023
In the matter between:
THE FORMER CASH CRUSADERS FRANCHISEES Applicant
and
CASH CRUSADERS FRANCHISING (PTY) LTD Respondent
JUDGMENT
BORGSTRÖM AJ:
INTRODUCTION
1. This matter presents the latest instalment in a lively contestation between the
Applicants and the Respondent (“ CCF”) – which operates as a franchisor for a
chain of outlets specialising in the sale of new and pre-owned goods and
appliances. These outlets trade under the name of “Cash Crusaders”.
2
2. The Applicants 1 form a loose affiliation of entities that entered into franchise
agreements with CCF, and operated Cash Crusaders outlets in locations
throughout the country. In previous proceedings before this Court (to which I shall
return), they identified themselves as “ Cash Crusaders Franchisees ”. In the
current proceedings they now identify themselves, somewhat tendentiously, as
“Former Cash Crusader Franchisees”, or “ex-franchisees”. This assumes that the
franchise agreements between CCF and the Affected Franchisees have validly
been brought to an end . This is a matter which is tangentially relevant in the
current proceedings, and is the subject matter of on -going arbitration
proceedings. I refer to the Applicants as “the Affected Franchisees”.
3. The current matter is embedded in a tangle of intertwined proceedings in this
Court and in private arbitration. The substantive relief that the Affected
Franchisees seek is an order suspending the operation and execution of an
Order granted by this Court ( per Mr Justice Dolamo) on 3 October 2023 (“ the
Interdict Order”).2
1 The entities involved in the current matter is not entirely clear. The heading to the Notice of Motion
suggests that the Applicants are “listed in annexure ‘A’ to the Notice of Motion ”. There is, however, no
such list. The Applicants’ founding affidavit indicates that they are identified in annexure “FA1” to that
affidavit. That list is also unhelpful, taken on its own, as it merely lists various affected retail outlets, and
the name of an “operator” – without identifying the entities that entered into franchise agreements with
CCF in respect of each location. In reply, the Applicants submitted confirmatory affidavits from persons
authorised to represent various entities. If these confirmatory affidavits are read together with annexure
“FA1” (to the current application), and the more detailed list of parties attached as annexure “ADP1” to
the previous interdict proceedings, the following is evident:
- The Applicants’ group in the current matter comprises at least the First; Sixth; Eighth to Tenth;
Thirteenth; Twentieth; Twenty -First to Thirty -Ninth; Forty -Fifth; Fifty -Third; and Fifty -Fifth to
Sixtieth Respondents as reflected in annexure “ADP1”.
- Annexure “FA1” lists further affected stores, which – according to annexure “ADP1” to the
interdict application – are owned by the Second, Fifteenth, Eighteenth; Nineteenth and Twenty -
Third Respondents as listed in annexure “ADP1” to the review application. However, none of the
confirmatory affidavits clearly applies to these entities.
- In annexure “ADP1”, Casgoli (Pty) Ltd is listed as the Sixty-First and Sixty-Second Respondents,
but with different registration numbers. These entities are reflected as owning the affected outlets
in Malmesbury, Wellington, and Paarl – which are also listed as being outlets that remain involved
in the current matter (in annexure “FA1”). In a confirmatory affidavit of Mr Vernon Ashley Galp,
he asserts that he is the owner of these stores, without identifying any juristic entity involved.
- In a confirmatory affidavit, Mr Marius Rikus Groenewald identifies himself as the “director” of
Casgoli CC and Linefresh Restaurant CC. These two close -corporations are not reflected in
annexure “ADP1” as the owners of any of the affected retail outlets.
- A confirmatory affidavit is attached from Mr Brendan Russel Booth, who avers that he represents
affected businesses, without indicating the affected outlets, or the entity/entities that own these
outlets.
2 Under the same case number as the present matter.
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4. The Interdict Order (which the Affected Franchisees now wish to see suspended)
arose as a result of a notice sent by the attorneys for the Affected Franchisees ,
to CCF. on 18 September 2023 – recording complaints and indicating that the
Affected Franchisees intended to cancel their franchise agreements with CCF
unless remedial action was taken within 10 days.
5. On 22 September 2024 CCF launched the Interdict Application, and set it down
for hearing in the ‘fast lane’ on Thursday, 28 September 2024. In this application
CCF sought: (a) to prevent the Affected Franchisees from cancelling the
franchise agreements; and (b) to compel the Affected Franchisees “ to abide by
and fully comply with their obligations” under the franchise agreements, pending:
5.1. The final determination of a separate application in this Court, which had
been launched in September 2022 (under case number 16436/22) but
never been set down. I refer to this as “ the Declarator Application”. That
application was brought by a group of franchisees (which included the
Affected Franchisees, as well as others who had since stopped operating
or ‘returned to the fold’), and concerned the lawfulness of different iterations
of the system that CCF ha d crafted for use by its franchisees in “ pawn
transactions” – as that term is defined in section 1 of the National Credit Act
34 of 2005 (“ the NCA”). In the nomenclature adopted by CCF, these are
referred to as “suspensive security buy transactions” (“SSB transactions”);
or
5.2. Alternatively, the final determination by an arbitrator of the issues raised in
the main application in the Declarator Application; and
5.3. Thereafter, the final determination by an arbitrator whether the issues
raised in the Declarator Application afforded the Affected Respondents the
entitlement to cancel their respective franchise agreements with CCF.
6. The merry -go-round sped up when, in the early evening of Tuesday, 26
September 2023, the Affected Respondents (through their attorneys) purported
to cancel the franchise agreements – even though the 10-day period for remedial
action was still running; and proceedings regarding this very issue were pending
before the Court.
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7. The Court ultimately dealt with this by allowing CCF to amend the relief sought –
and on 3 October 2023 ordered as follows:
“34.1 Pending the final determination by an arbitrator or by court of the
applications pending before court of a dispute between the parties as to the
respondents' entitlement to cancel their respective franchise agreements
(the franchise agreements) conclu ded with the applicant on the basis set
out in the letters of MacGregor Stanford Kruger of 18 and 26 September
2023, the respondents are interdicted from cancelling the franchise
agreements and are directed to abide by and comply fully with their
obligations under the respective franchise agreements.
34.2 This interdict shall operate for a period of sixty (60) days from day hereof.
The applicant is to enroll the applications which are pending before and
which have not been enrolled, alternatively, refer the disputes to arbitration,
whichever the partie s elect to do within the period of sixty (60) days
stipulated, supra. The interdict would lapse on the expiry of the sixty (60)
days period if there has been no enrolment or referral to arbitration.”
8. But yet, the merry-go-round only spun faster. The Affected Franchisees adopted
the position that the Interdict Order, despite being framed as interim relief, was
in fact final in effect. On this basis, the Affected Franchisees sought leave to
appeal – and more importantly, contended that the Interdict Order was
suspended while those applications continued, in terms of section 18(1) of the
Superior Courts Act 10 of 2013 (“the SC Act”).
9. Moreover, the Affected Respondents continued to sever their ties with CCF.
Since 3 October 2023 (i.e. the same date as the Interim Order was handed down)
the Affected Respondents started trading under the name and style of “ Cash
Xchange”.
10. Predictably, the bold conduct of the Affected Franchisees resulted in another
application before this Court, which was heard on 10 November 2023 – which I
shall refer to as “ the Enforcement Application”. As that name suggests, CCF
sought declaratory relief that the Interdict Order was interlocutory in effect, and
thus was not suspended by any application for leave to appeal – in accordance
with section 18(2) of the SC Act. Alternatively, CCF contended that if the Interdict
Order was interpreted as being fi nal in effect, this Court should direct that its
terms were immediately effective – in accordance with section 18(3) of the SC
Act.
--
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11. This issue was resolved in a judgment and order of this Court (per Mr Justice
Lekhuleni) of 26 January 2024 (“the Enforcement Judgment ” and “ the
Enforcement Order ”).3 The Court found that the judgment in the Interdict
Application had made legal findings that were final in effect. These underlying
legal findings in the judgment, so the Court reasoned, meant that the Interdict
Order was not merely interlocutory. Accordingly, the Interdi ct Order was
automatically suspended pending the finalisation of applications for leave to
appeal. The Court also refused CCF’s application to make the Interdict Order
immediately effective.
12. Insulated by this development, the Affected Franchisees pursued applications for
leave to appeal through this Court, the SCA, and the Constitutional Court. I am
not surprised that none of these courts were enticed to hear an appeal by the
Affected Franchisees against the Interdict Order. The Affected Franchisees ran
out of momentum when the Constitutional Court finally dismissed their
application for leave to appeal on 22 July 2023. The Interdict Order could thus
no longer be avoided.
13. By this time the arbitration proceedings envisaged in the Interdict Order had been
initiated, and serve before a highly regarded retired judge of this Court (“the
arbitration proceedings ”). Those proceedings concern the validity of the
actions by the Affected Respondents to cancel their franchise agreements with
CCF. The Affected Franchisees indicate that in these proceedings they will also
ask the arbitrator to make a finding regarding the lawfulness of CCF’s SSB
system.
14. The hearings in the arbitration proceedings commenced on 2 May 2024 and
continued intermittently to 7 June 2024, and were scheduled to recommence on
9 September 2024. The Affected Franchisees indicate that the “ arbitration is
extensive”, with 66 000 pages of discovered documents and multiple witnesses.
At the break in proceedings on 7 June 2024, the Affected Franchisees had led
3 Reported as Cash Crusaders Franchising (Pty) Ltd v Cash Crusaders Franchisees (16453/2023)
[2024] ZAWCHC 11; [2024] 2 All SA 49 (WCC); 2024 (4) SA 141 (WCC) at para 3
At paragraph 3.
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the evidence of three witnesses, and they intended to call more witnesses. After
this CCF would call its witnesses.
15. It is in this setting that the Affected Franchisees now approach this Court, in an
endeavour to ensure that they are again alleviated from the duty to comply with
the requirements of the Interdict Order. They frame their application as being one
made in t erms of Uniform Rule 45A of the Uniform Rules of this Court (“ Rule
45A”), which codifies an element of this Court’s inherent power (as developed
under the common law, and now enshrined in section 173 of the Constitution) to
protect and regulate its own process, taking into account the interests of justice.4
16. However, the peculiarity of the relief sought is immediately apparent in the fact
that the period of the desired suspension is:
“pending the outcome of the application under case number 1636/2022 in
respect of which the applicants are still awaiting a date of set -down and
pending final determination of the arbitration proceedings before Retired
Judge Fourie …”.
17. The reference to case number 1636/2022 relates to the Declarator Application
(which is actually before this Court under case number 16436/22).
18. What thus appears is that the order now sought and the Interdict Order are
defined with reference to the very same proceedings. In other words, the
suspension now sought by the Affected Franchisees is for the very same period
that the Interdict Order applies.
19. The Affected Franchisees argue that this is not an insuperable obstacle, and that
this Court has a wide power to suspend the execution of an earlier order if this is
in the interests of justice. In this regard the Affected Franchisees point to the
following:
19.1. The Intedict Order “ should never have been granted ”; and obliging the
Affected Franchisees to respect the Interim Order would mean that they
would again have to implement the SSB system determined by CCF –
4 Section 173 of the Constitution states as follows:
“The Constitutional Court, the Supreme Court of Appeal and the High Court of South Africa each
has the inherent power to protect and regulate their own process, and to develop the common
law, taking into account the interests of justice.”
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which they argue remains unlawful. Thus, if this Court refused the
suspension, it would be giving its imprimatur to CCF’s unlawful SSB system
and would compel the Affected Franchisees to implement an unlawful
system. This, they say, would be unconscionable . It would expose the
Affected Franchisees to penalties, and its customers to unlawful fees. At
the very least, the Affected Franchisees submit that this Court should not
“put into effect” the Interdict Order when “ there is a good prospect of that
Order being expunged” once the Declarator Application is finalised.
19.2. The Affected Franchisees believe that they were not given a fair hearing
before the Interim Order was granted. This, they say, is evidenced by the
facts that the Court improperly allowed CCF to introduce a last -minute
amendment to the relief it originally sought; overlooked a supplementary
affidavit filed on behalf of the Affected Franchisees in this regard; and
“crafted an order for the franchisor which [the Court] thought would be best
suited to address the franchisor’s best interests”.
19.3. The Interdict Order was fatally flawed as it sought to prevent the Affected
Franchisees from cancelling their franchise agreements with CCF. But the
Affected Franchisees had already cancelled their franchise agreements by
the time the Interdict Order was h anded down. It was now impossible to
meet the terms of the Interim Order.
19.4. If this Court refused to suspend the Interim Order, it would be prejudging a
key issues in the on -going arbitration proceedings – namely whether the
Affected Franchisees validly cancelled their franchise agreements with
CCF; and, if not, whether specific p erformance could be granted to force
the Affected Franchisees back into their relationship with CCF.
19.5. The second paragraph of the Interim Order (quoted in paragraph 7 above),
properly interpreted, means that the Interim Order only applied for 60 days,
or until the disputes were referred to arbitration. The Interdict Order has
thus lapsed.
19.6. Implementing the Interim Order would be inequitable and impractical. The
Affected Franchisees point out that they have been operating their stores
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as Cash Xchange since 3 October 2023, and it would cause hardship if they
were now compelled to revert to operating under the name of Cash
Crusaders, and alter their systems and operations to accord with CCF’s
requirements. Furthermore, it would cause hard ship if they are compelled
to re -enter a franchisee -franchisor relationship with CCF, against a
backdrop of mistrust and open antagonism.
19.7. In addition, the Affected Franchisees contend that CCF is perempted from
enforcing the Interdict Order because it “ expressly alternatively through its
conduct perempted the terms of the Court order”.
20. CCF contends that the relief sought by the Affected Franchisees does not merely
seek to suspend the execution of the Interdict Order for a defined period. Rather,
the Affected Franchisees ask this Court to completely neutralise the Interdict
Order; or to revisit the terms of the Interdict Order in a stealth appeal process.
BACKGROUND FACTS
21. In order deal with the current matter, and the many arguments raised by the
Affected Franchisees, it is necessary to deal in greater detail with the disputes
between the parties, and the many proceedings before and after the Interdict
Order was granted.
(a) The franchise agreements and CCF’s System before 1 November 2021
22. As noted in the judgment of Dolamo J in the Interdict Application – before the
fall-out with the Affected Franchisees, CCF was a franchisor with 249 outlets
throughout South Africa. Of these stores, 150 outlets were operated by
franchisees who had individually concluded franchisee agreements with CCF –
which included all of the Affected F ranchisees. The remainder were what is
known as corporate-owned stores.5
23. The business of all of Cash Crusaders outlets involves three modalities:
23.1. First, they sell new goods;
5 Interdict judgment, para 4.
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23.2. Second, they buy and sell used goods; and
23.3. Third, they enter into SSB transactions . C ustomers pledge movable
property as collateral for a cash loan, which is granted for a specified period
(usually 30 days). As alluded to in paragraph 5.1 above, these SSB
transactions fall within the definitional ambit of “ pawn transactions ” as
defined in section 1 of the NCA. Consequently, when entering into SSB
transactions, the franchisees operate as “ credit providers ”; and the
agreements between the franchisees and the consumer are “ credit
agreements” (section 8(4)(a) of the NCA). The manner in which these SSB
transactions are handled in CCF franchise outlets, lies at the heart of a long-
running dispute between CFF and the Affected Franchisees.
24. The relationship between CCF and all of franchisees is regulated in separate,
but substantially identical, franchise agreements (“the franchise agreements”).
25. The franchise agreements require the franchisees to operate and advertise “only
under the name ‘Cash Crusaders’ without prefix or suffix ” (clause 9.2.3), and
impose various requirements to ensure standards and quality.
26. The agreements also regulate amounts that franchisees must pay to CCF, which
include:
26.1. Weekly or monthly payments of a “royalty fee” equal to 11.1% of the gross
profit in that period (clause 5.3 and clauses 5.11.1 and 5.11.2).
26.2. “[M]onthly expenditures and contributions to advertising and promotion ”
(clause 5.5. and 11.1).
26.3. An annual royalty and advertising contribution in respect of stock write-offs
which exceed 2% of the monthly retail sales of the outlet (clause 5.11).
27. In addition, franchisees are required to “ purchase all new products, equipment,
supplies, and materials used or sold by the Franchised Business solely from
suppliers (including manufacturers, wholesalers or distributors) which
demonstrate, to [CCF’s] continuing reasonable satisfaction, the ability to meet
[CCF’s] standards and specifications for such items ”, as well as other
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requirements. These suppliers must pre -approved by CCF (clause 7.12). It
appears in practice this required franchisees to source new products and
supplies from Crusaders Corporate (Pty) Ltd.6
28. The agreements further provide for a dispute resolution mechanism through
arbitration for all disputes arising out of the agreement, or relating to its
interpretation (clause 25.4). This does not preclude CCF “ from seeking
interdictory or declaratory relief or instituting action proceedings ” if CCF “ in its
sole discretion, elected not to proceed by way of arbitration in respect of such
dispute” (clause 25.13).
29. In concluding the agreements, the franchisees acknowledged that that they had,
inter alia, “conducted an independent investigation of the rights granted by this
agreement” and that they recognised that “business venture contemplated herein
involves business risks …” (clause 27.1.1).
30. Importantly for current purpose, it is striking that the agreements are almost
completely silent on the manner in which SSB transactions must be handled.
These operational aspects are, instead, regulated in the “Franchisor’s Operating
Manual” (“the Manual”) and “ such other manuals as [CCF] may develop and
issue from time to time” (clause 1.13).
31. These operational aspects form part of CCF’s “System” (“the System”), which is
defined to mean “ the distinctive business and franchise system developed by
[CCF] and conducted under the name of ‘Cash Crusaders’ relating to the
establishment and operation of retail businesses selling pre -ownes and new
goods to customers predominantly for use in a domestic environment ” (clause
1.18).
32. With regard to the Manual and the System, the agreements provide, inter alia,
that:
6 Judgment in the Interdict Application, para 4.
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32.1. CCF had developed and owned “ the right to franchise the System ”, which
it had produced “ as the result of the expenditure of time, skill, effort, and
money” (clause 2.1).
32.2. The distinguishing characteristics of the System included the operation of
businesses and training “all of which may be changed, improved, and
further developed by [CCF] from time to time” (clause 2.2).
32.3. Franchisees understood and acknowledged “ the importance of [CCF’s]
high standards of quality, appearance and service, and the necessity of
operating the Franchised Business in conformity with [CCF’s] standards
and specifications” (clause 2.5); and “that every detail of the System … [is]
essential” to CCF for its operations and to protect its goodwill and reputation
(clause 7.1).
32.4. CCF would “ loan” a single copy of the Manual for the duration of the
agreement (clause 6.2) to the Franchisee. This Manual was confidential,
remained the property of CCF, and could not be copied or distributed
(clause 10.1).
32.5. Franchisees were obligated to “ensure the highest degree of quality and
service”, and to operate “in strict conformity with such methods, standards,
and specifications that [CCF] may from time to time prescribe in the Manual
or otherwise in writing” (clause 7.7).
32.6. Franchisees acknowledge and agreed that CCF “may, from time to time in
its sole discretion, revise the Manual to incorporate System changes ”.
Franchisees were obligated to keep the Manual current; and to “implement
any System changes ” upon notice and in the period specified by CCF
(clauses 7.1 and 10.2).
33. Before 1 November 2021, the Manual and the System effectively provided that
franchisees would levy repeated “initiation fees” against customers to extend the
period in an SSB transaction. In simple terms, when a franchisee entered into an
SSB transaction with a customer, the franchisee would charge an initiation fee.
The franchisee would then extend a loan to the customer, usua lly for a 30 -day
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term, and hold moveable property provided by the customer as security for
repayment. But, in many cases, the customer would be unable to repay the loan
at the expiration of the term. The franchisee would then effectively extend the
term. But, because this extension was treated as a fresh SSB transaction, the
franchisee would again charge an initiation fee. I refer to this as “ the original
SSB System”.
34. A concern arose that this aspect of the System was unlawful, in that:
34.1. Section 101(1)(b) of the NCA permits an initiation (in a prescribed amount)
if “the application results in the establishment of a credit agreement with
that consumer”.
34.2. But, section 101(2) of the NCA continues that “ a credit provider who is a
party to a credit agreement with a consumer … and enters into a new credit
agreement with the same consumer that replaces the earlier agreement in
whole or in part ”, could only charge a fresh initiation fee “ to the extent
permitted by regulation, having regard to the nature of the transaction and
the character of the relationship between the credit provider and consumer.”
34.3. This was problematic in light of Regulation 43 of the NCA Regulations,
which provides that “ supplementary conditions shall apply on the
application of the maximum initiation fee ”, including (in Regulation 43(2))
that “no initiation fee may be charged on credit agreements as envisaged
in section 101(2).”
35. CCF states that most major players in the industry also charged multiple initiation
fees when extending the period of pawn transactions. This had never been
flagged as an issue by any of the relevant authorities. But, once this concern was
raised, CCF obtained several legal opinions, which came to divergent
conclusions. It also sought input from its franchisees. Ultimately CCF states that
it took “ a strategic business decision ” to revise the SSB System. This revised
System was contained in amendments to the Manual introduced on 1 November
2021. I refer to this as “the revised SSB System”.
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36. The Affected Franchisees have completely altered their views regarding the
lawfulness of the original and the revised SSB Systems over time . As noted
above, in the proceedings before me they contend that the Systems are unlawful.
They also contend that this unlawfulness is addressed in the system that they
now apply in their Cash Xchange outlets (although the outlines of this system are
never dealt with).
37. But, at the time that the revised SSB came into effect, they adopted a very
different view – borne of their frustration that the revised SSB System would have
the effect of them foregoing considerable profits that they previously earned by
levying initiation fees under the original SSB System. The Affected Franchisees
thus contended that the original SSB System was lawful, and that they had been
sold a business model that included the ability to charge multiple initiation fees
when extending the term of an SSB transactions. The introduction of the revised
SSB System was thus viewed as an unjustified incursion by CCF into their ability
to operate their business profitably.
(b) The revised SSB System of 1 November 2021
38. As noted above, the Affected Franchisees have now pivoted, and implore this
Court to come to their assistance – in that they contend that CCF’s revised SSB
System remains unlawful. However, in their founding papers, the Affected
Franchisees fail to deal with the terms of the revised SSB System or explain why
it is unlawful.
39. CCF has explained that terms of the revised SSB System limits franchisees to
charging a single initiation fee, and does not permit franchisees to levy repeated
initiation fees when extending SSB transactions. In this regard, the revised
System envisages an original loan period of between 30 and 32 days (depending
on when in a month the loan was granted), with up to three 30 -day extensions.
Thereafter, a final extension is extended to the end of the next calendar month.
This allowed customers the greatest op portunity to repay the loan and recover
their property (used to secure the loan). In this scheme a single initiation fee
would be charged, but additional income would be possible through increased
interest rates in the extension periods.
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40. After this period, customers would have several options, namely:
40.1. They could forfeit the property presented as security, ending their
obligation.
40.2. They can forfeit the property presented as security, and then re-purchase it
from the franchisee under a standard lay -by facility (with payments over
three months).
40.3. They could conclude a new loan, with a new initiation fee, provided this was
“materially different” from the original loan.
41. The material difference, envisaged in the last option, would be achieved by:
41.1. The customer bundling a second asset together the property put up to
secure the original loan. To ensure a material difference, this second asset
would have to have a value of at least 50% of the original asset.
41.2. Paying a minimum of 50% of the capital value and settling fees for the
original loan.
41.3. Revaluing the asset put up in the original loan, and advancing a minimum
of an additional 50% of the original capital value and settling fees of the
original loan.
42. To mitigate any potential loss of income for franchises, CCF provided its
franchisees an ex gratia concession on the royalty and marketing contributions
arising from profits on SSB transactions.
43. CCF notes that this did not undermine profits, as other players in the industry still
charged multiple initiation fees – and the commercial advantage of a single
initiation fee charged by CCF’s franchisees had translated into an increase in the
number of SSB transactions.
(c) The Declarator Application
44. At the time that the revised SSB System came into effect, a cohort of disgruntled
franchisees – including the Affected Franchisees, and others – raised a dispute
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against CCF, seeking a return to the original SSB System. This was referred to
mediation on 20 April 2022, but failed to reach an acceptable resolution.
45. The disgruntled franchisees elected not to refer this issue to arbitration (in terms
of the dispute resolution mechanisms in the franchise agreements). This was so
because, in their view, the lawfulness of the SSB System could only be resolved
by this Court.
46. But, before approaching this Court, the Affected Franchisees sought clarification
from the National Credit Regulator (“ NCR”).7 The NCR refused to entertain this
matter.
47. Accordingly, on 29 September 2022 the Affected Franchisees launched the
Declarator Application (referred to in paragraph 5.1 above). In this application,
the Affected Franchisees sought declaratory relief that:
47.1. The original SSB System, and the levying of multiple initiation fees, was
lawful;
47.2. Alternatively, that the original SSB System complied with section 101(2) of
the NCA; and
47.3. The revised SSB System was lawful.
48. The papers in the Declaration Application are not before me. However, what is
evident is that CCF opposed the application, and indicated that the issues should
be dealt with in arbitration proceedings (as provided for in the franchise
agreements). Allied to this, CCF brought a counter -application for a stay of the
proceedings pending the finalisation of such arbitration proceedings.
49. The Affected Franchisees opposed the counter-application, sticking to their guns
that issues of lawfulness could not be dealt with in private arbitration
proceedings.
7 Established in terms of section 26 of the NCA.
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50. Another aspect that is evident from the papers before me is that the Respondents
to the Declarator Application included the National Credit Tribunal (“the NCT”);8
the NCR;9 and the Minister of Trade, Industry and Competition (“the Minister” –
as the executive authority responsible for the NCA).
51. On 8 November 2022 (and after the exchange of pleadings between the Affected
Franchisees and CCF), the office of the State Attorney noted that the Minister
was considering entering the matter. In so doing, it was pointed out that the
argument raised by the Affected Franchisees suffered an elementary flaw. The
case was premised on section 101(2) of the NCA – which recognises the notional
possibility that a new initiation fee could be charged to the same customer when
extending an existing pawn transaction. But what had been ignored was that this
was only possible to the extent permitted by Regulations; and Regulation 43(2)
explicitly provides that no such additional initiation fees can be charged in pawn
transactions. The State Attorney thus suggested that “ there is no interpretive
issue that needs to be resolved as the applicable regulation is express in its
wording.” In the event, the State Attorney called on the Affected Franchisees to
withdraw the Declarator Application, failing which a punitive costs orde r would
be sought.
52. On 1 December 2022 the NCR also provided a non-binding legal opinion, setting
out the provisions of the NCA and Regulation 43(2). No conclusions are offered,
but it seems that the provisions were viewed as self-explanatory.
53. The Affected Franchisees, however, did not withdraw the application; and note
that it still needs to be set down before this Court. They pin responsibility for the
delay on CCF, which they blame for failing to agree to an order confirming the
correctness of the approach in the State Attorney’s letter.
54. I do not intend making any findings in this regard. As noted, I do not have the
papers before me. Furthermore:
54.1. It is not clear to me why the application presents a live dispute. The relief
primarily relates to the lawfulness of the original SSB System, which no
8 Established under section 27 of the NCA.
9 Established under section 12 of the NCA.
17
longer finds application. Instead, it would appear that the Affected
Franchisees wish to use the Declarator Application to receive the benefit of
an order that they can utilise to their advantage in the arbitration
proceedings.
54.2. It is also not clear to me the basis the Affected Franchisees could expect
any order, other than one dismissing it. The relief sought by the Affected
Franchisees is, after all, that original and revised SSB Systems were lawful.
But as matters have turned out, the Affected Franchisees no longer support
that proposition.
(d) The Interlocutory Application to Stay the Interdict Application
55. Curiously, on 3 May 2023 the Affected Franchisees then launched an urgent,
interlocutory application, in which they now sought relief that:
55.1. The main and counter applications in the Declarator proceedings be stayed
pending a final determination in arbitration proceedings (which would
consider various issues, including the lawfulness of the original and the
revised SSB Systems); and
55.2. The Court should direct that an arbitrator be appointed and required to
determine various issues, including the lawfulness points.
56. I say this interlocutory application is curious as it appears that the Affected
Franchisees were now clutching at an outcome that they had actively opposed
in the Declarator Application. Equally curious is that CCF opposed this
application, even though the relief sought correlates to that which CCF sought in
its counter-application in the Declarator proceedings.
57. In any event, this interlocutory application was postponed for hearing on
16 November 2023. But by that stage matters had been overtaken by
subsequent events.
(e) The Salestalk 330 arbitration proceedings
18
58. On 21 July 2023, one of the Affected Franchisees – being Salestalk 330 (Pty)
Ltd – commenced arbitration proceedings against CCF for damages incurred
from the loss of profits it suffered as a result of the removal of the original SSB
System, and its replacement with the revised SSB System.
59. CCF understood that the other Affected Franchisees would follow suit, and also
seek damages on the same basis.
60. It appears that CCF adopted the position that it would be premature to present
its statement of defence in these proceedings – based on the fact that the
underlying issue regarding the lawfulness of the SSB Systems was still serving
before this Court (in the Declarator Application).
(f) The letter of 18 September 2023
61. Matters came to a head once again on 18 September 2023. At this time the
attorneys for the Affected Franchisees addressed a letter to CCF’s attorneys
alleging breaches of the franchise agreements, and threatening that if these were
not remedied within 10 c alendar days, the Affected Franchisees would cancel
their franchise agreements.
62. The letter of 18 September 2023 is quoted in extenso in this Court’s judgment in
the Interdict Application. It seems to me that a proper understanding of the letter
is essential to an understanding of the Interdict Order.
63. The Affected Franchisees commence by pointing to a “ litany of complaints ”
against CCF, that had now been presented in a letter to the National Consumer
Commission on 1 September 2023 (“ the NCC”).10 But, it does not appear that
these are the source of the alleged breaches of the franchise agreements upon
which the franchisees were relying at this stage.
64. Instead, the complaints raised by the Affected Franchisees link back to the issue
of the lawfulness of the original and the revised SSB Systems. The complaints
seem to have two themes:
10 Established under section 85 of the Consumer Protection Act 19 of 2014.
19
64.1. The first is that CCF had sold a business model to the Affected Franchisees
based on the ability to levy initiation fees as envisaged in the original SSB
System. The fact that the Affected Franchisees could no longer carry on
business in this manner caused them “significant losses on the yield that
they were led to believe by [CCF] that they would be able to earn”.
64.2. The second is that the Affected Franchisees had operated their businesses
based on this unlawful SSB system. This benefitted CCF, in that it resulted
in increased royalty payments from all franchisees. But the franchisees
were now exposed penalties, and th ey could not “operate their franchises
under the threat of this shadow”.
65. The Affected Franchisees contended that in all of the circumstances:
65.1. CCF had not protected the “ legitimate business interests ” of the Affected
Franchisees, “as contemplated in the franchise agreements”;
65.2. CCF’s (unspecified) conduct towards the Affected Franchisees violated
(unspecified) provisions of the Consumer Protection Act 19 of 2014
(“the CPA”) – including “unconscionable conduct”, as defined in section 40
of the CPA. This appears to relate to the manner in franchisees were
supplied with new appliances and household goods.
65.3. CCF’s conduct was designed to manufacture a basis for it to cancel the
franchise agreements, so as reduce the number of parties stacked up
against CCF in arbitration proceedings and proceedings before this Court,
In this regard it was alleged that CCF was “not bona fide”.
65.4. CCF had frustrated the progress of the Declarator Application and
arbitration proceedings.
66. Moving to the remedial action demanded, the Affected Franchisees required
CCF to:
66.1. “Comply with [the Affected Franchisees] demands as set out above”. (I note
that it is not clear to me, and was not clear to CCF’s attorneys, what these
20
demands were, and how these related to obligations in the franchise
agreements).
66.2. Remove any uncertainty about the lawfulness of the revised SSB, and to
provide the Affected Franchisees with a written undertaking that the revised
SSB System was lawful.
66.3. Provide a written undertaking indemnifying the Affected Franchisees
against any “ penalties, claims or damages ” arising from their past and
future actions in implementing the SSB Systems.
66.4. Placing the Affected Franchisees “ in the same earning capacity (i.e.
allowing them to practically earn the same yield on SSB contracts) ” which
the Affected Franchisees enjoyed under the original SSB System, had the
revised SSB System not been implemented.
66.5. Cease and desist “ from any and all threats, intimidation and tactics ”
designed to engineer the cancellation of franchise agreements.
66.6. Commit, in writing, to the existing arbitration proceedings, and other
contemplated proceedings, and seeing these through “ as a matter of
urgency in the most practical and feasible fashion”.
66.7. Provide a written undertaking that the CCF would not use a legal fund,
established under clause 26 of the franchise agreements, in disputes
against the Affected Franchisees, and to refund amounts already spent.
67. In a response, of 19 September 2023, the CCF’s attorneys dealt with the
background facts (as they understood them) and called on the Affected
Franchisees to withdraw the threats that they would cancel the franchise
agreements, failing which CCF would appro ach this Court for urgent relief to
compel them to comply with the franchise agreements, “ pending the
determination by means of arbitration of their entitlement to cancel”.
68. With respect to the demanded remedial action, CCF’s attorneys sought clarity
as to what these were, their location in the franchise agreements, and their legal
basis.
21
69. In a second letter (sent on a ‘without prejudice’ basis), CCF’s attorneys proposed
a practical solution in terms of which the lawfulness of the SSB Systems would
be placed before an arbitrator, who would also determine the costs aspects of
the proceedings before this Court.
70. The attorneys for the Affected Franchisees reverted on 21 September 2023 (in
letters incorrectly dated 18 September 2023). They perceived CCF’s response
to “evince its unequivocal intention not to remedy the breaches in question”; and
in almost ecclesiastical terms offered “ a last opportunity to repent the
repudiation”, which would otherwise be accepted and the franchise agreements
would be cancelled.
(g) The Interdict Application
71. In light of the above, on 22 September 2023 the FFC launched the Interdict
Application. I have dealt with the relief sought in paragraph 5 above. To recap,
CCF sought to: (a) interdict the Affected Franchisees from cancelling the
franchise agreements on the bases set out in the letter of 18 September 2023
(dealt with in paragraphs 61 to 66 above); and (b) compel the Affected
Franchisees to comply with the franchise agreements, pending:
71.1. The final determination of the Declarator Application, or arbitration
proceedings concerning the same issues as those in the main application
in the Declarator Application; and
71.2. The final determination, thereafter, by an arbitrator as to whether the issue
of the lawfulness of the SSB Systems entitled the Affected Franchisees to
cancel their franchise agreements with CCF.
72. In presenting their case, CCF contended that the complaints in the letter of 18
September 2023 “ raise no breach, much less a material breach entitling the
[Affected Franchisees] to cancel the franchise agreements .” Furthermore, the
underlying disputes regarding the lawfulness of the SSB System were pending
before this Court in the Declarator Application.
22
73. On 26 September 2023, the Affected Franchisees filed a notice of opposition in
the Interdict Application.
74. But then, after the close of business on 26 September 2023, matters took a
startling turn. The attorneys for the Affected Franchisees now adopted the
position that CCF had indicated their refusal to undertake the remedial action
demanded in the letter of 18 September 2023; and that this entitled the Affected
Franchisees to cancel the franchise agreements immediately – which they
purported to do. This was done notwithstanding the fact that the letter of 18
September 2023 allowed CCF 10 days to undertake reme dial action (in
accordance with the dispute resolution mechanism in the franchise agreements).
This period had not as yet elapsed.
75. CCF set out this new development in a supplementary founding affidavit that it
placed before the Court. CCF indicated that it viewed this attempted cancellation
of the franchises agreements as a repudiation, which was not accepted.
76. In addition, CCF’s supplementary papers attached a draft order setting out
amended relief designed to accommodate the new development – viz. by
seeking relief to direct the Affected Franchisees to abide by the franchise
agreements, pending arbitration proceedings dealing with the right to cancel the
franchise agreements on the grounds set out in the letters of the Affected
Franchisee’s attorneys of 18 and 26 September 2024.
77. On 27 September 2023, the Affected Franchisees filed a bloated answering
affidavit (spanning over 380 pages) – which began by asserting that the Interdict
Application was now moot.
78. The Interdict Application came before this Court (per Dolamo J) on Thursday, 28
September 2023; and the judgment and Order were handed down on Tuesday,
3 October 2023.
79. In its judgment, the Court set out the background facts, as well as the arguments
raised by the parties. I note a few aspects:
--
23
79.1. The Court noted that the clear provisions of section 21(2) of the SC Act
provided it with jurisdiction to hear the matter in respect of the Affected
Franchisees that operated in other parts of the country.11
79.2. The judgment indicates that the Court fully understood that the Affected
Franchisees had purported to cancel the franchise agreements on the
evening of 26 September 2023;12 and that they accordingly now contended
that the original relief sought by CCF was moot.13 Concomitantly, the Court
also fully appreciated that the relief sought by CCF would have to be
amended – and that it would no longer suffice to merely interdict the
cancellation of the franchise agreements. To be effective, the relief would
now also have to direct the Affected Franchisees to abide by their franchise
agreements with CCF.14
79.3. In dealing with the prima facie right established by CCF, the Court
considered the attempt to cancel the franchise agreements, and found that
the “alleged breaches contained in the letter of 18 September 2023 are in
vague terms and have as their foundation the contention that the [original
SSB System] was unlawful. As [CCF] pointed out the letter does not identify
a single clause of the franchise agreement that was allegedly breached.”15
79.4. The Court quite correctly identified that the franchise agreements do not
contain a lex commmissoria, and that as such the Affected Franchisees
could only cancel based on a breach that was, objectively assessed,
sufficiently serious. The Court found was “ not persuaded that [CCF] is in
any way in breach of the franchise agreements nor [does] the alleged
breach stated in the letter of 18 September 2023 justify a mass rescission
of the franchise agreements …”16
11 Judgment, at para 25.
12 Judgment, at para 17.
13 Judgment, at para 21.
14 Ibid.
15 Judgment, at para 28.
16 Judgment, at para 33.
24
79.5. The Court quite clearly appreciated that the relief sought by CCF “ in effect
seeks specific performance of the [franchise] agreements”.17 The Court
also had regard to the argument by the Affected Franchisees that franchise
agreements required reciprocal trust, and that in these circumstances the
relief sought by CCF was inappropriate. 18 In this regard the Court found
that, as a matter of law, franchise agreements do not create a fiduciary
relationship, and the Affected Franchisees could not “import the element of
trust into the franchise agreements”.19
80. In the circumstances, the Court granted the Order, as set out in paragraph 7
above.
(h) The Enforcement Application
81. However, as seen above, the Affected Franchisees did not comply with the
Interdict Order at all. On the contrary, the Affected Franchisees confirm that since
3 October 2023 they have all been operating under the name and style of Cash
Xchange, “ effectively in competition with [CCF], under their own business
systems, own branding, and own suppliers, which are in many respects different
to that of [CCF, and] most importantly as to the previous unlawful SSB systems
of [CCF]”.
82. The immediate justification for this non -compliance with the Interdict Order was
that on 4 October 2023 the Affected Franchisees launched an application for
leave to appeal against the Interdict Order. This was heard by this Court (again,
per Dolamo J) on 6 October 2023 and refused on 25 October 2023.
83. Thereafter, on 26 October 2023, the Affected Franchisees sought leave to
appeal from SCA, in accordance with section 17(2)(b) of the SC Act. At the same
time, the Affected Franchisees adopted the stance that the Interdict Order,
although presented as an interim interdict, was actually final in effect.
17 Judgment, at para 15.
18 Judgment, at para 20.
19 Judgment, at para 29-31.
25
84. In response, on 30 October 2023 CCR launched the Enforcement Application,
referred to in paragraph 10 above. This application had two prongs, depending
on whether the Court found that the Interdict Order was interim or final in effect:
84.1. First, CCR sought a declaration that the Interdict Order operated as an
interim order, without final effect. In accordance with section 18(2) of the
SC Act, this meant that the Affected Franchisees application for leave to
appeal to the SCA did not suspend the immediate effectiveness of the
Interdict Order.
84.2. Second, and in the alternative, CCR dealt with the situation if the Court
found that the Interdict Order was in fact final in effect. In terms of section
18(1) of the SC Act, this would mean that the Interdict Order was
automatically suspended while an application for leave to appeal remained
before the SCA. CCR asked that in this event, the Court should override
the suspension of the Interdict Order, and direct that was immediately
operative – as allowed under section 18(3) of the SC Act.
85. The Affected Franchisees also brought a counter -application to protect their
position if the Court found that the Interim Order was interim in effect. In this
event, they sought that the Court should suspend the operation of the Interdict
Order until all applications for leave to appeal had been finalised.
86. The Enforcement Application came before this Court (per Lekhuleni J) on
10 November 2023. In its judgment and order of 26 January 2024, the Court
accepted the arguments presented by the Affected Franchisees, and found that
the terms of the Interim Interdict were final in effect. This is so in that:
86.1. The Interdict Order would remain in place until the finalisation of arbitration
proceedings, which could be a considerable time. Tethering the Affected
Franchisees to franchise agreements with CCF was “ invasive and far -
reaching, especially considering the breakdown of trust and confidence in
the relationship between the parties.”20
20 Enforcement Judgment, at para 50.
26
86.2. The judgment in the Interdict proceedings made the “factual determination”
that the letters from the attorneys for the Affected Franchisees (of 18 and
26 September 2023) did not validly cancel the franchise agreements. The
Court suggested that this finding could not be reconsidered by another
court; and anticipated the central issue in the arbitration proceedings
between the parties.21
86.3. The Interdict Order is premised on an underlying finding, in which the Court
rejected a jurisdictional defence raised by the Affected Franchisees. This
“had the effect of finally and irreversibly disposing of a self -contained
defence”.22
(i) The exhaustion of leave to appeal processes
87. Interestingly, on 22 January 2024, the SCA (per Mocumie ADP and Kathree -
Setiloane JA) refused the Affected Franchisee’s application for leave to appeal.
This was a few days before the Order in the Enforcement Application was handed
down (on 26 January 2024 ). I assume that the SCA’s Order was not placed
before Lekhuleni J before he handed down the Enforcement Order.
88. If he had been made aware of the SCA’s Order, Lekhuleni J would have been
compelled to find that the Enforcement Application was moot – in that it related
to the enforceability of the Interdict Order while the SCA considered an
application for leave to app eal. Once the SCA’s Order was handed down, the
relief in the Enforcement Application had no practical effect. Based on the SCA’s
findings in Stransham-Ford 23 and a Full Court in Vinpro,24 the Enforcement
Application should have been dismissed on the basis that the Court no longer
had the jurisdictional power to decide the matter.
89. In any event, armed with the judgment and the Enforcement Order, the Affected
Franchisees applied to the President of the SCA to reconsider their application
21 Enforcement Application, at para 52.
22 Enforcement Judgment, at para 53-54.
23 Minister of Justice and Correctional Services and Others v Estate Late James Stransham -Ford and
Others 2017 (3) SA 152 (SCA) at para 25.
24 Vinpro NPC v President of the Republic of South Africa and Others (1741/2021) [2021] ZAWCHC
261 (3 December 2021) at para 38 and 42
27
for leave to appeal – in terms of section 17(2)(f) of the SC Act. This application
was refused on 4 April 2024.
90. Still undeterred, on 30 April 2024 the Affected Franchisees launched an
application for leave to appeal to the Constitutional Court. In this application the
Affected Franchisees valiantly attempted to argue that the case raised
“constitutional matters”, thus falling with the Constitutional Court’s jurisdiction in
section 167(3)(b)(i) of the Constitution. But these are, with respect, contrived.
Thus, the only basis on which the Constitutional Court would have possibly
entertained the matter would have been if it was found to raise an “arguable point
of law of general public importance which ought to be considered ” by that Court
(in terms of section 167(3)(b)(ii) of the Constitution).
91. In an Order of 22 July 2024, the Constitutional Court refused leave, indicating
that the matter did “not engage its jurisdiction”. I understand this to mean that the
Court found that the case did not meet the requirements set out in section
167(3(b)(ii) of the Constitution.
GENERAL PRINCIPLES
92. CCF contends that the starting point for the consideration of this matter must be
that court orders matter, and must be respected. As the Constitutional Court has
asserted, “all orders of court, whether correctly or incorrectly granted, have to be
obeyed unless they are properly set aside .”25 This is a matter of profound
importance, as “[a] llowing parties to ignore court orders would shake the
foundations of the law, and compromise the status and constitutional mandate of
the courts. The duty to obey court orders is the stanchion around which a state
founded on the supremacy of the Constitution and the rule of law is built”.26
93. Allied to this is the doctrine of stare decisis. In Gcaba27 the Constitutional Court
explained this to mean that “ in the interest of certainty, equality before the law
25 Secretary of the Judicial Commission of Inquiry into Allegations of State Capture, Corruption and
Fraud in the Public Sector including Organs of State v Zuma and others (2021 (5) SA 327 (CC) at para
59.
26 Department of Transport and Others v Tasima (Pty) Limited 2017 (2) SA 622 (CC) at para 183.
27 Gcaba v Minister for Safety and Security and Others 2010 (1) SA 238 (CC) at para 58
28
and the satisfaction of legitimate expectations, a court is bound by the previous
decisions of a higher court and by its own previous decisions in similar matters.”
In Turnbull-Jackson28 the Court added that respect for precedent is “ a core
component of the rule of law ”. On this basis, th ose findings of the Court in the
Interdict Judgment which form part of the ratio decidendi (i.e. which form part of
its rationale and the basis for granting the Interdict Order) ,29 must be respected
unless obviously wrong.
94. But merely invoking principles regarding the value of court orders and precedent
cannot be an answer to the case raised by the Affected Franchisees in these
proceedings. After all, the Affected Franchisees cannot be accused of simply
turning their faces against the Interdict Order; or adopting an attitude of bloody -
minded intransigence.
95. As dealt with above, in the period until 22 July 2024 their refusal to comply with
the terms of the Interdict Order was based on their contention that its terms were
final in effect. This meant that, in terms of section 18(1) of the SC Act, the Interdict
Order was suspended while they pursued applications for leave to appeal.
96. The strategy adopted by the Affected Franchisees may have been somewhat
high-risk and bold (in that if they were wrong , and the Interdict Order had been
found to be purely interlocutory in nature, they would have had no excuse for
their failure to immediately comply with the Interdict Order). But, as found by this
Court in the Enforcement Application, the Affected Franchisees were correct in
asserting that the Interdict Order was final in effect. The Order in the Enforcement
Application must also be respected.
97. As a result, the Affected Franchisees cannot be condemned for their refusal to
comply with the Interdict Order while their applications for leave to appeal
continued. They were acting within their rights.
98. Furthermore, once the Affected Franchisees had exhausted all avenues for leave
to appeal, they acted proactively by launching the current application. This points
28 Turnbull-Jackso v Hibiscus Court Municipality and Others 2014 (6) SA 592 (CC) at para 59.
29 Camps Bay Ratepayers’ and Residents’ Association and Another v Harrison and Another 2011 (4)
SA 42 (CC) at para 30.
29
against any suggestion that the Affected Franchisees are acting in a unilateral
manner and with a flagrant contempt for orders of this Court.
99. The analysis required must focus on the powers of this Court to suspend the
Interdict Order, rather than the incantation of mantras about the general
importance of respecting orders and judgments.
100. As intimated in paragraph 15 above, this Court’s power to suspend the execution
and operation of its orders arises from its inherent powers, now entrenched in
section 173 of the Constitution. In SABC30 the Constitutional Court described the
inherent power of the superior courts as follows:
“The power in section 173 vests in the judiciary the authority to uphold, to
protect and to fulfil the judicial function of administering justice in a regular,
orderly and effective manner. Said otherwise, it is the authority to prevent
any possible abuse of process and to allow a Court to act effectively within
its jurisdiction.”
101. Rule 45A codifies one aspect of this inherent power.
102. Flowing from its inherent power and Rule 45A, the power of superior courts to
suspend the execution of their orders usually finds application in two broad
categories of cases.
102.1. The first category arises where the “underlying causa ” of the order
remains in dispute, or no longer exists, or “when an attempt is made to
use the levying of execution for ulterior purposes ”; and if “ real and
substantial justice compels such action. ” 31 This category of cases is
exemplified by matters in which a party bound by an order brings
proceedings to rescind that order. 32 In these cases, the application for
rescission does not have the automatic effect of suspending the order.
However, a court will take cognisance of the fact that if the rescission
application is successful, the obligation to comply with the dictates of the
order would be removed. Similarly, courts have employed this power
30 South African Broadcasting Corp Ltd v National Director of Public Prosecutions 2007 (1) SA 523 (CC)
at para 90
31 Van Rensburg and Another NNO v Naidoo and Others NNO; Naidoo and Others NNO v Van
Rensburg NO and Others 2011 (4) SA 149 (SCA) at para 51
32 Peach v Kudjoe and another (2016/30120) [2018] ZAGPPHC 291 (10 January 2018) at para 11-15.
30
after refusing an application for rescission, but the party that sought
rescission seeks to appeal that decision.33 Ultimately, if a court suspends
the execution of an order in these circumstances, and the efforts to
rescind that order are unsuccessful, then the order is once again
effective. In a similar vein, in Mokone v Tassos Properties34 and Rissik
Street35 the Constitutional Court invoked the inherent power of superior
courts as a basis for orders staying proceedings for the ejectment of
busness until other related proceedings could be finalised.
102.2. The second category occurs when there is no remaining challenge that
can be pursued to set an order aside – but the temporary suspension of
that order will cause comparatively little prejudice to the party in whose
favour the order was granted; while at the same time immediate
execution of the order would cause another party to suffer “ real and
substantial injustice ”.36 This has found application in cases in which
courts have been called upon to stay an order permitting a sale of
immoveable property in execution;37 to stay an order for ejectment from
commercial premises;38 and to stay payment of money.39 This power is
rooted in the powers of courts to regulate their own processes. 40 As
noted by this Court in Stoffberg, the discretion of a court to suspend the
execution of its orders in such cases must be exercised judicially, based
on the facts and a determination of substantial injustice. 41 It cannot be
based on a “ mere plea ad misericordiam”.42 Furthermore, the temporal
limits of the suspension must be limited appropriately an order.43
33 Janse van Rensburg v Obiang and Another 2023 (3) SA 591 (WCC) at (26 September 2022)
34 Mokone v Tassos Properties CC and Another 2017 (5) SA 456 (CC) (24 July 2017)
35 Rissik Street One Stop CC t/a Rissik Street Engen and Another v Engen Petroleum Ltd 2024 (4) SA
447 (CC)
36 Stoffberg N.O and Another v Capital Harvest (Pty) Ltd (2130/2021) [2021] ZAWCHC 37 (2 March
2021)
37 As in Stoffberg, ibid.
38 AJP Prop CC v Sello 2018 (1) SA 535 (GJ)
39 MEC, Department of Public Works and others v Ikamva Architects 2022 (6) SA 275 (ECB)
40 Van Renburg v Naidoo, supra at para 51; AJP Prop, supra, at para 22; Stoffberg, supra, para 26.
41 Stoffberg, supra, at para 26.
42 Stoffberg, supra, at para 28.
43 Stoffberg, supra, 29; AJP Prop, supra, at para 47.
31
103. In my view further guidance as to the limits of this Court’s powers in suspending
the effect of its orders can also be gleamed from its specific powers of
suspension in other circumstances.
103.1. Most notably, when granting relief in a “constitutional matter”, this Court’s
powers are regulated under section 172(1) of the Constitution. This
provides that this Court “ must declare that any law or conduct that is
inconsistent with the Constitution is invalid to the extent of its
inconsistency” (section 172(1)(a)). But, following on from such a
substantive declaration, this Court has a broad discretion to craft
consequential relief that is “ just and equitable” – which may include an
order “suspending the declaration of invalidity for any period and on any
conditions, to allow the competent authority to correct the defect ”
(section 172(1)(b)(ii) of the Constitution). But, even in such cases, in
which larger societal interest are in play, a successful litigant should be
protected and granted effective relief;44 and orders should be interpreted
to ensure that this occurs. 45 In addition, if remedial action is not taken
within a period of suspension, the impugned law or conduct becomes
invalid and cannot be revived.46
103.2. When reviewing and setting aside administrative action, the Court’s
powers are contained in section 8(1) of the Promotion of Administrative
Justice Act 3 of 2000, which provides that a court may “ grant any order
that is just and equitable ”. This often requires a court to suspend its
substantive finding when an action or decision is unlawful, based on the
public good. But, in Allpay 2,47 the Constitutional Court again highlighted
that an effective remedy was important, and the “ corrective principle”
44 Minister of Home Affairs v National Institute for Crime Prevention and the Reintegration of Offenders
(NICRO) and others 2005 (3) SA 280 (CC) at para 74.
45 SOS Support Public Broadcasting Coalition and Others v South African Broadcasting Corporation
(SOC) Ltd 2019 (1) SA 370 at para 52.
46 Although the Constitutional Court may exercise its powers under section 172(1) to grant fresh
ancillary relief to avoid any injustice that may result from a sudden lacunae. Ex parte Minister of Home
Affairs and another 2024 (2) SA 58 (CC) at para 40.
47 Allpay Consolidated Investment Holdings (Pty) Ltd and others v Chief Executive Officer, South African
Social Security Agency and others 2014 (4) SA 179 (CC) at para 30.
32
means that an order must seek to “ correct the wrongs that led to the
declaration of invalidity”, while also ensuring the public good.48
103.3. Similarly, a court ordering the eviction of an unlawful occupier must
consider a range of factors to determine when the occupiers must vacate
– in terms of sections 4(8) and (9) of the Prevention of Illegal Eviction
from and Unlawful Occupation of Land Act 19 of 1998.
104. Flowing from the above, several guiding principles can be determined which are
important in the current matter.
105. In the first place, a distinction must be made between the substantive legal and
factual findings made by a Court in resolving a dispute; and the discretionary
power it exercises to regulate the operation and execution of its resulting orders.
105.1. This gains particular importance in the current matter. The substantive
and legal findings were made in the Interdict Judgment, and were
translated by that Court into the provisions of the Interdict Order.
105.2. This Court’s remaining powers – under Rule 45A and/or inherent power
– are limited to regulating any issues arising from the implementation of
the Interdict Order. This power may be significant, but is not an invitation
to revisit, reconsider, amend, or qu ietly undermine antecedent findings
of law and fact.49
105.3. In this sense then, the Interdict Judgment must be respected, as must
the provisions of the Interdict Order – which flow from the findings of fact
and law in the Judgment.
48 Allpay 2, at para 31-32.
49 Member of the Executive Council for Finance, Economic Development, Environmental Affairs and
Tourism (Eastern Cape) and others v Legal Practice Council and others 2023 (2) SA 266 (ECMk), at
para 82:
“Execution is a means of enforcing a judgment, or order of court, and is incidental to the judicial
process. The court has the inherent power to regulate its procedures in the interests of proper
administration of justice, and s 173 of the Constitution reaffirms this power. Regula ting the
process of execution is purely procedural, not substantive. The inherent jurisdiction of the high
court does not, however, include the right to tamper with the principle of finality of judgments
other than in the specific circumstances, which do not arise in this case.”
33
105.4. This Court has no general power to revisit orders which are final in effect.
The remedy available to the Affected Franchisees to correct any aspect
of the Interdict Order arising from erroneous findings of fact and law in
the Interdict Judgment was to purs ue an appeal. It attempted to do so,
with vim and vigour, but failed to convince any Court that an appeal was
justified. The precise reasons why leave to appeal was refused by this
Court, the SCA, and the Constitutional Court, are not relevant. The
consequence remains that the findings of law and fact in the Interdict
Judgment remain undisturbed; and the power to regulate the
implementation of the Interdict Order cannot be transmogrified into a
stealth appeal process.
106. In the second place, measures introduced to regulate the implementation of the
Interdict Order must still ensure that CCF obtains the benefit of effective relief.
106.1. In the Interdict Judgment and Order, the Court established that CCF had
established the right to receive relief preventing the Affected
Franchisees from giving effect to their actions purporting to cancel the
franchise agreements.
106.2. A measure to regulate the implementation of the Interdict Order could
notionally delay the date on which this relief could be realised. But in so
doing this Court cannot strip CCF of effective relief, or nullify the Interdict
Order.
106.3. As seen, even when dealing with public power, courts must ensure that
effective relief follows. In some cases, a successful litigant may be
expected to be satisfied with declaratory relief as a vindication of their
rights – but that only arises when there are compelling countervailing
considerations of the public good. These considerations do not apply in
this case.
106.4. But yet, the order sought by the Affected Franchisees completely guts
the Interdict Order. It simply has not practical value if the suspension
relief is granted.
34
107. In the third place, in granting the Interdict Order, the Court already made a
determination regarding how the Interim Order should be implemented, and how
long it would last. In my view. this Court would only reconsider this issue based
on ‘new’ facts, which compellingly show that the Affected Franchisees will face
real and substantial injustice.
108. In the fourth place, the Affected Franchisees cannot expect this Court to come
to its assistance to save it from the consequences of its own strategic decisions.
108.1. The Affected Franchisees elected to adopt the approach that the
Interdict Order was final in effect; and convinced the Court in the
Enforcement Application that this was correct.
108.2. By doing so the Affected Franchisees received the benefit that the
Interdict Order was suspended while they pursued every possible
application for leave to appeal. The fact that these applications for leave
to appeal took some time only benefitted the Affe cted Franchisees
further.
108.3. But as with all strategies, it was not risk-free. Also, just because a litigant
is acting within their rights does not mean that a Court should ignore the
consequences of their actions.
108.4. The Affected Franchisees knew that they were insulated, and that they
could afford the time it would take to launch multiple applications for
leave to appeal. The same was not true for CCF, which lost the royalties
it should have earned from the Affected F ranchisees if the franchise
agreements were in place. The request for reconsideration by the
President of the SCA, and the application for leave to the Constitutional
Court – show the hallmarks of a siege litigation. With respect, I do not
believe that the Affected Franchisees could have seriously believed that
the Interdict Order raised a matter of such importance that it would entice
the Constitutional Court to hear it.
35
108.5. The Affected Franchisees must also accept that their strategy came with
a great risk. Once the process of seeking leave to appeal from every
court had been exhausted, their protection would end abruptly.50
108.6. By contrast, if the Affected Franchisees had accepted that the Interdict
Order was purely interlocutory, it would have much enjoyed greater
scope to approach this Court to revisit the Interdict Order. But, because
of its own strategic choices, this is not open to them.
108.7. As pointed out by Kriegler J, 51 litigation presents a “ minefield of hard
choices”, each of which has “ decisive consequences and therefore
poses difficult decisions”. The Affected Franchisees made their choices,
and for a long time this benefitted them.
109. In light of these principles, the relief sought by the Affected Franchisees is clearly
unsustainable. They fail to point to rights that are threatened; and their assertions
about the interest of justice are not compelling.
THE AFFECTED FRANCHISEE’S CRITICISMS OF THE INTERDICT JUDGMENT
110. Much of the application before is based on a broad -side attack on the Interdict
Judgment, and the relief granted to CCF in the Interdict Order. The Affected
Franchisees thus describe the Interdict Order as “contradictory”; they assert that
the Order “should never have been granted”; they contend that the Interdict Order
incompetently sought to interdict action that had already taken place; and they
conclude that Interdict Order must be “re-evaluated within the present context”.
111. These arguments are, in my view, misplaced. As indicated above, this Court
cannot take up the Affected Franchisee’s complaints that the Interdict Judgment
and Order are wrong.
50 Bezuidenhout v Standard Bank of South Africa Limited (76288/2012) [2018] ZAGPPHC 834 (28
February 2018) at para 48.
51 S v Dlamini , S v Dladla and Others; S v Joubert; S v Schietekat 1999 (4) SA 623 (CC) at para 94.
36
112. In any event, even if I was inclined to delve into the Interdict Judgment, the
various criticisms raised by the Affected Franchisees seem to miss the mark. For
instance:
112.1. I can see no good reason to call into doubt the Court’s findings on
jurisdiction. Based on section 21(2) of the SC Act, as an expression of
the causae continentia rule,52 the Court plainly had jurisdiction over
franchisees from around the country. Furthermore, the fact that the
franchise agreements envisaged arbitration as a mechanism to resolve
disputes between the parties, did not oust this Court’s power to hear
proceedings arising from a dispute between the parties.
112.2. The Court’s decision to allow CCF an opportunity to amend its relief was
eminently reasonable, even if this did not strictly follow the strictures of
Rule 28. By cancelling the franchise agreements shortly before the
hearing (in which that right to cancel would be considered), the Affected
Franchisees did not cover themselves in glory. Not only did this
undermine this Court’s processes, but the Affected Franchisees’
justification for cutting short the 10 -day period (allowed for remedial
action to be taken in the letter of 18 September 2023) appears to me to
be contrived and self -serving. In any event, the Court exercised a ‘true
discretion’ when allowing an amendment of the relief in the Interdict
Application, which another Court must respect.53
112.3. I note that in the judgment in the Enforcement Application, the Court
raises a concern that the Interdict Order effectively seeks to prevent past
actions – namely the cancellation of the franchise agreements, which
had already occurred.54 The Affected Franchisees criticise the Interdict
Order for the same reason. But in my view this is incorrect.
52 Permanent Secretary, Department of Welfare, Eastern Cape, and Another v Ngxuza and others 2001
(4) SA 1184 (SCA)
53 Trencon Construction (Pty) Ltd v Industrial Development Corporation of South Africa Ltd and
Another 2015 (5) SA 245 (CC) at para 28
54 Enforcement Judgment, at para 43.
37
112.4. I accept, of course, that interdictory relief must prevent future actions,
and cannot be targeted at that which has already occurred. 55 However,
it must also be recalled that CCF disputed both the validity and efficacy
of the attempts by the Affected Franchisees to cancel their franchise
agreements (as contained in the letters from their attorneys of 18 and 26
September 2023).
112.5. In this regard, CCF acknowledged that the actions of the Affected
Franchisees amounted to a repudiation, but elected to hold the Affected
Franchisees to the franchise agreements. In other words, the franchise
agreements remained valid. In its Interdict Jud gment, the Court
accepted that a prima facie case had been made out by CCF in this
regard. In other words, on a prima facie basis it appeared that the
attempted cancellation of 26 September 2023 was ineffective.
112.6. Thus, in granting the Interdict Order, the Court was not imposing an
agreement on the parties that no longer existed. The critical finding is
instead that the franchise agreements are, at least prima facie, still in
place. Against this backdrop the relief in the Interim Order prevents the
possibility that the Affected Franchisees from taking fresh action to
cancel the agreements based on their attorney’s letters of 18 and 26
September 2023; and prevents the Affected Franchisees from future
actions giving ef fect to their questionable attempts to cancel the
franchise agreements.
112.7. I cannot criticise the Court’s finding that the letter of 18 September 2023
(which formed the foundation of the Affected Franchisees’ attempt to
cancel the franchise agreements) is vague. I would have gone further. I
have attempted above to set out the content of the letter fairly. But after
reconsidering it several times, it remains a turgid and ponderous
55 National Treasury and Others v Opposition to Urban Tolling Alliance and Others 2012 (6) SA 223
(CC) at para 50.
38
document. In particular, it provides no clear indication of a breach by
CCF or the franchise agreements.
112.8. The central theme of the complaint by the Affected Franchisees appears
to relate to CCF’s introduction of the revised SSB System in November
2021. But it remains entirely unclear to me why this action would
constitute a breach of the franchise agreements. CCF was always
entitled to revise the Manual and its System, including the manner in
which franchisees would charge initiation fees in SSB transactions. In
addition, the Affected Franchisees acknowledged that they had
undertaken their own due diligence exa mination of CCF’s System, and
that the operation of a franchise involved commercial risk.
113. It is also telling that the Affected Respondents were all poised to commence
trading on 3 October 2023, under a different name and operating a different
system. To my mind this indicates that they were resolutely bent on severing their
ties with CCF; and, significantly, to halt payments of royalties to CCF. CCF
indicated that this would affect the viability of their remaining business, and would
impact their ability to defend arbitration proceedings. This was no doubt the
intention.
114. Furthermore, the fact that the Interdict Order amounts to specific performance is
not obviously problematic. 56 In Foize57 the SCA held that when a party sought
specific performance in an application for interim relief, it “ was not required to
prove it would suffer harm if the interdict was not granted. All it had to show was
that the respondents were either breaching or threatening to breach the ….
agreement, or were intentionally assisting or encouraging another to breach such
agreement.”
115. Furthermore, allowing the Affected Franchisees to walk away from the franchise
agreements would amount to an on -going wrong to CCF. The calculation of
56 See Bradfield Christie’s The Law of Contract in South Africa (8ed) at p665-666.
57 Foize Africa (Pty) Ltd v Foize Beheer BV and Others 2013 (3) SA 91 (SCA) at para 32.
39
damages in such circumstances would be complex at a later stage. In Edrei58 the
Court held that in such cases interdictory relief was appropriate.
116. Finally, there can be no suggestion that this Court must suspend the Affected
Franchisees so as to avoid pre-judging issues that will serve before the pending
arbitration proceedings. I make no findings of this kind. The Court’s central
findings in the Int erdict Application are explicitly made on a prima facie basis,
and would not bind the arbitrator.59 They remain there, even if a suspension order
was granted.
THE 60-DAY PERIOD IN THE INTERDICT ORDER
117. The Affected Franchisees attempt to gain some traction from the 60 -day period
referred to in the second paragraph of the Interdict Order (quoted in paragraph 7
above).
118. In the first place, they argue that the Interdict Order must be understood to mean
that the interdictory relief (in the first paragraph of the Order) expired 60 -days
after it was granted (on 28 September 2023).
119. This, with respect, an odd argument for the Affected Franchisees to make. If the
submission was correct, the current application would be entirely moot, and I
would be compelled to dismiss the application. It would plainly be illogical for this
Court to suspend an Order that has expired.
120. Furthermore, if the Affected Franchisees had any confidence in this contention,
they would surely not have pursued the multiple applications for leave to appeal.
121. In any event, the argument is plainly wrong. Thanks to the efforts of the Affected
Franchisees in the Enforcement Application, we have confirmation that the
Interdict Application was final in effect – and was thus suspended with each of
the consecutive applications for leave to appeal. This suspension would freeze
the running of the 60-day period in the Order.60
58 Edrei Investments 9 Ltd (in Liquidation) v Dis-Chem Pharmacies (Pty) Ltd 2012 (2) SA 553 (ECP)
59 Prinsloo NO and others v Goldex 15 (Pty) Ltd 2014 (5) SA 297 (SCA) at para 18-19.
60 Minister of Finance v Sakeliga NPC (previously known as Afribusiness NPC) and Others 2022 (4) SA
401 (CC) at para 13.
40
122. In the second place, the Affected Franchisees suggest that the 60-day period in
the Interdict Order commenced after the Constitutional Court refused leave to
appeal (on 22 July 2024) – and that the interdictory relief fell away when this
period elapsed.
123. Again, I am somewhat perplexed why the Affected Franchisees would raise such
an argument. What would have been the purpose of loading this Court with a
record spanning 9 lever arch files (spanning various applications), in respect of
an Order which was all but expired by the time of the hearing?
124. It would seem to me to be quite obvious : If the Interim Order is understood
properly (based on its text, context, and purpose ), the relevance of the 60 -day
period is clear. It was to ensure that appropriate proceedings were set down in
this time. Once those proceedings were launched, the second paragraph of the
Order was fulfilled, and it fell away. The interdict relief in the first paragraph of
the Interdict Order remained. If it was otherwise, it would mean the Court meant
to force the Affected Franchisee s back into the CCF fold for just 60 -days, and
then to allow them to leave again. This would be a peculiar outcome.
THE LAWFULNESS OF CCF’S SSB SYSTEM
125. As dealt with above, Affected Franchisees initially contended that the original and
revised SSB System were lawful. In fact, they felt so strongly about this that they
were moved to bring the Declarator Application.
126. But, when the State Attorney pointed out the obvious flaw in their argument
(based on their apparent ignorance of Regulation 43(2)), the Affected
Franchisees became enthusiastic, and somewhat dogmatic, converts – now
convinced that the original and revised SSB System were both unlawful.
127. In the current application, the Affected Franchisees again raise this issue as an
ostensible basis justifying the suspension of the Interdict Order.
128. As I understand it, the Affected Franchisees originally contended that I should
venture into this dispute, and if I found that the original and/or the revised SSB
Systems were unlawful, then I should suspend the Interim Order. Anything else
41
would mean that the Affected Franchisees would be dragooned (by CCF and this
Court) to operate under CCF’s unlawful systems.
129. Alternatively, the Affected Franchisees suggest that I should recognise that the
original and/or revised SSB Systems may be found to be unlawful in the near
future – and for this reason alone I should ensure that the Interdict Order never
takes effect.
130. To confound matters further, on 5 August 2024 CCF again altered its SSB
System. (I refer to this as “ the current SSB System ”). At first one would think
that the alteration would give the Affected Franchisees succour, as it removes
any obligation on franchisees to charge customers a second initiation fee in any
circumstances.
131. To explain: The revised SSB System is dealt with in paragraphs 35 to 41 above.
In that System there was a final stage in which customers extend an existing
SSB transaction, provided they bundled the property held as security together
with a second item of greater value. This would be considered a fresh
transaction, and the franchise would be required to charge a new initiation fee.
132. The Affected Franchisees, however, still find the current SSB System
unacceptable.
133. In fact, they contend the introduction of the current SSB System adds injustice
on injustice. This is so as the Interdict Order, when granted, attempted to force
them into a specific contractual relationship with CCF under a particular business
model. Now they were forced into a different contractual relationship with CCF,
with a different business model. This new business model was not one that the
Court had in mind when granting the Interdict Order; and was also not one that
the affected Franchisees has signed up for.
134. Furthermore, the Affected Franchisees held firm that I should still also consider
the lawfulness of the original and the revised SSB Systems; or at least recognise
the possibility that these Systems could soon be found to be unlawful.
42
135. I see no reason why the question of the lawfulness of the original and the revised
SSB Systems would be of any value in considering whether to grant suspension
relief under Rule 45A.
136. The Rule 45A relief must be concerned with the Affected Franchisee’s rights, or
real and substantial injustice. These determinations must be made on the facts
as they present themselves now. Any findings about the lawfulness of historical
SSB Systems cannot be relevant.
137. In addition:
137.1. It would inappropriate for me to venture into a consideration of issues,
that have been raised between the same parties, for much the same
reason, in other proceedings.
137.2. It appears to me, at least at first blush, that questions regarding the
lawfulness of the original and revised SSB Systems are moot.
137.3. The Affected Franchisees have not placed me in a situation in which I
can make any legal findings about the original and revised SSB Systems
with any confidence. The papers in the Declaratory Application were not
placed before me; and the Affected Franchisees did not even describe
an outline of the revised SSB System in their founding papers.
137.4. It is not clear to me at all why the Affected Franchisees contend that the
revised SSB System is unlawful.
138. The arguments raised by the Affected Franchisees regarding the current SSB
System, are similarly misplaced.
138.1. The franchise agreements between CCF and the Affected Franchisees
have not changed, not could CCF unilaterally change these contracts.
138.2. All that has changed in one aspect of the SSB System, as contained in
the FFC Manual. As dealt with above, the franchise agreements do not
deal with SSB transactions, or dictate how they are implemented. These
aspects are all contained in the Manual – which is created, updated, and
43
improved by FFC alone. Franchisees agreed to be bound by the Manual.
They have no rights or expectation s to operate under any particular
iteration of the Manual.
138.3. In any event, even if the Affected Franchisees were being coerced into
a new business model, they would have to provide evidence that it would
cause them profound to operate under these conditions.
PEREMPTION
139. In a supplementary affidavit the Affected Franchisees contend that CCF had
expressly, or through conduct, perempted the terms of the Interdict Order, and
thus could not enforce the Order.
140. CCF notes that in making this argument, the Affected Franchisees failed to point
to any statements or conduct that were consistent with an intention to abandon
the Interdict Order. Furthermore, CCF’s consistent opposition to all of the
applications for leave to appeal, and to the current application, clearly indicated
that it has no intention of abandoning the Interdict Order.
141. The conduct that the Affected Franchisees rely on is that CCF has in some case
set up new Cash Crusader stores in close proximity to Cash Xchange stores.
142. CCF responds by pointing out that it is not unusual to have outlets in close
proximity to one another, and that none of the franchise agreements cater for
geographical exclusivity for any franchisor.
143. The test for peremption is an exacting one. In Qoboshiyane61 the test was
restated as follows:
“If the conduct of an unsuccessful litigant is such as to point indubitably and
necessarily to the conclusion that he does not intend to attack the judgment,
then he is held to have acquiesced in it. But the conduct relied upon must
be unequivocal and must be inconsistent with any intention to appeal. And
the onus of establishing that position is upon the party alleging it. In doubtful
cases acquiescence, like waiver, must be held non-proven.”’
61Qoboshiyane NO and Others v Avusa Publishing Eastern Cape (Pty) Ltd and Others [2012] ZASCA
166; 2013 (3) SA 315 (SCA)
44
144. In Mhlontlo Local Municipality and Others v Ngcangula 62 the SCA explained that
–
“the principle of peremption safeguards the integrity of the judicial process
by preventing litigants from oscillating between contradictory positions,
ensuring judicial consistency and fairness. It ensures finality and stability in
legal proceedings, which is essential for maintaining public t rust in the
justice system. The underlying principle of the doctrine of peremption is
that a litigant cannot take two inconsistent positions. Accordingly, an
unsuccessful litigant cannot appeal a judgment it has acquiesced to. In
order to succeed on peremption a respondent must demonstrate with
reference to the facts before court that an appellant’s unequivocal conduct
after having obtained leave to appeal, is inconsistent with an intention to
appeal”.
IMPOSSIBILITY OF PERFORMANCE
145. The Affected Franchisees raise a catalogue of practical issues that they suggest
make it impossible for them to give effect to the Interdict Order; or which are so
burdensome that it is not in the interests of justice that they yoked with these
difficulties.
146. CCF contends that the arguments can carry no weight, and points to dicta in
which courts have refused stay applications sought by litigants who are the
“authors of their own misfortune ” as result of their failure to follow the Uniform
Rules, follow directives, or by acting carelessly, in a dilatory manner, and in bad
faith.63
147. In my view the Affected Franchisees cannot be accused of acting improperly or
recklessly. As noted above, they adopted a bold strategy by asserting that the
Interdict Order was final in effect, and was thus suspended while they pursued
multiple applications for leave to appeal. But, this approach was accepted in the
judgment in the Enforcement Application; and must also be respected.
62 Mhlontlo Local Municipality and Others v Ngcangula and Another (1154/2022) [2024] ZASCA 5;
[2024] 3 BLLR 239 (SCA); (2024) 45 ILJ 775 (SCA) (17 January 2024) at para 13.
63 Van der Westhuizen N.O and Another v Land and Agricultural Development Bank of SA and Others
(3173/2020) [2022] ZALMPPHC 11 (14 February 2022) at para 15 -16; and Momentum Life v Thirion
[2002] 2 All SA 62 (C) at para 35.
45
148. I do not intend to deal with all of the practical issues raised by the Affected
Franchisees. In my view, they can be dealt with thematically.
149. A large number of the issues raised were also placed before Court when the
Interdict Application was heard. That Court was unmoved by the Affected
Franchisees lamentations. As noted above, it is not for this Court to revisit
matters which were considered in the Interdict Application.
150. The new issues that the Affected Franchisees raise all came about because of
their strategic choice to start trading as Cash Xchange outlets on 3 October 2023
(i.e. the very same day that the Interdict Judgment and Order were handed
down); and to chase dow n applications for leave to appeal in every court
possible.
151. The fact that the Affected Applicants could so seamlessly switch over from Cash
Crusaders outlets, to Cash Xchange outlets, dulls the sound of their cries that it
will be so impossibly burdensome to switch back.
152. Furthermore, CCF has come forward and offered assistance to the Affected
Franchisees to ease their concerns, and even offered to free the Affected
Franchisees from some obligations.
153. The Affected Franchisees retort that this assistance is unacceptable, and
amounts to CCF self-selecting those parts of the Interdict Order that it wishes to
assert, and foregoing other parts. This argument is hard to understand. The
Interdict Order only re fers to the franchise agreements. How the parties
implement those agreements between themselves is not a matter that the
Interdict Order addresses. Furthermore, if the Affected Franchisees do not want
assistance, or do not want to be freed from any contrac tual commitments, they
can tell this to CCF. It is not my understanding that anyone is forcing assistance
on them.
46
154. None of hardships that the Affected Franchisees raise indicate impossibility of
performance. There may be expense, but this does not mean that the Interdict
Order would be impossible to fulfill.64
155. In their replying papers the Affected Respondents presented affidavits
contending that their individual circumstances should be taken into account. CCF
contends that this amounts to an impermissible introduction of new material in
reply. I agree, and had CCF sought to strike out this material I would have been
inclined to do so. I certainly do not intend sifting through this material weighing
the hardships of each Affected Franchisee individually. As noted in footnote 1
above, the identity of the individual franchisees who are before this Court is not
even clear. Conversely, the larger group cannot seek relief en bloc based on
hardships borne by only a small number of franchisees.
156. The Affected Franchisees contend that it will be chaotic for them to respect the
Interdict Order. This is so as they would be compelled to rebrand their stores
immediately as Cash Crusaders outlets, with all the accoutrements that go along
with a franchise relationship with CCF. But then, when the arbitration
proceedings end, they will have to switch back, and rebrand their stores as Cash
Xchange outlets.
157. I appreciate that it is not this will come to pass ; and that if it does, it would be
very disruptive and costly. But I have simply not been placed in a position to
make a finding that it is likely or probable. I cannot make any order in the interest
of justice, based on a casual combination of speculation and clairvoyance.
158. Furthermore, the appropriateness of specific performance as a remedy (in the
arbitration proceedings) may be influenced by whether the Affected Franchisees
are trading Cash Convertors outlets, or not. It would be manifestly unfair to CCF
if its arguments in favour of specific performance were undermined – all because
the Affected Franchisees had man aged to avoid giving effect to the Interdict
Order.
64 Unibank Savings and Loans Limited (formerly Community Bank) v ABSA Bank Limited 2000 (4) SA
191 (W) at para 9.3.1.
159. Finally, the concerns of Affected Franchisees must be w eighed against the on
going harm suffered by CCF. Had the Interdict Order been respected, they w ould
have received royalties from the Affected Franchisees. I see no reason to
continue cosseting the Affected Franchisees and protecting them from any
inconvenience, w hile CCF is deprived of the benefits it should have received
under the Interdict Order.
COSTS
160. Costs should follow the cause. Although CCF raises issues of abuse of process,
I do not believe that a punitive costs aw ard is justified. I do, how ever, believe that
the matter justified the use of three counsel.
161. A practical matter, dealt w ith in footnote 1 above, is that there is no list of the
App licants before this Court. This w ill have to be resolved between the parties in
order to determine liability for costs.
ORDER
162. I accordingly make the follow ing order:
162.1. The application is dism issed.
162.2. The Applicants, jointly and severally, shall pay the costs incurred by the
Respondent, including the costs of three counsel, on scale C.
D.P BORGSTROM
ACTING JUDGE OF THE HIGH COURT
47
48
APPEARANCES
For Applicant: Adv R Stelzer SC
Instructed by:
MacGregor Stanford Kruger Inc
For Respondent: Adv A Oosthuizen SC
Adv D Goldberg SC
Adv Perumalsamy
Instructed by:
Ashersons Attorneys
Date of hearing: 13 August 2024
Date of judgment: 16 October 2024 (electronically)