SAFLII Note: Certain personal/private details of parties or witnesses have been redacted from this document
in compliance with the law and SAFLII Policy
THE HIGH COURT OF SOUTH AFRICA
GAUTENG DIVISION, PRETORIA
CASE NO.: 47409/21
(1) REPORTABLE: NO
(2) OF INTEREST TO OTHER JUDGES: NO
(3) REVISED
Date: 8 August 2025
Signature
In the matter between:
THABO GIFT LEBEA
(Identity No.: 8[...])
Applicant
and
TAMMY TAYLOR NAILS SA FRANCHISING (PTY) LTD
(Registration No.: 2014/269894/07)
Respondent
JUDGMENT
ELS AJ
[1] During April 2020 the applicant enquired from the respondent (by
completing an online enquiry on the website of the respondent) regarding a
possible franchise. Pursuant to a subsequent meeting with a representative of the
respondent, Michelle Johnston (“Ms Johnston”), the applicant made a payment of
R230,000.00 to the respondent. The reason for the aforesaid payment is explained
in paragraph 7.4 of the founding affidavit as follows:
“7.4 I orally agreed with Ms Johnston, who acted on behalf of the
respondent, to purchase a Tammy Taylor Nails franchise in
South Africa and paid R230,000.00 (Two Hundred and Thirty
Thousand Rand), which she indicated was payable upfront
and immediately as a so -called “franchising fee”, subject of
course to a formal and written agreement that the parties had
to agree upon and sign.”
[2] The deponent to the answering affidavit, Carla Van Der Wath (“Ms Van Der
Wath”) describes herself as the general manager employed by the respondent.
[3] It is not explained in the answering affidavit on what basis it is contended
that Ms Van Der Wath had personal knowledge of the allegations in the answering
affidavit. More importantly, Ms Johnston did not depose to any confirmatory
affidavit. As a consequence I have to accept the version of the applicant in
paragraph 7.4 of the founding affidavit.
[4] Subsequent to the aforesaid payment , Ms Johnston provided the applicant
with a draft franchise agreement. In the covering e -mail, dated 30 May 2020, the
following was said:
“Dearest Thabo
My sincerest apologies for the delay in sending you your franchise
contract.
It has been updated, and I was awaiting the final version.
Please can we setup some time for us to sign together.
In the meantime, if you have any questions, please feel free to
contact me any time.
Warm regards”
[5] There is no dispute about the fact that the written franchise agreement was
never concluded.
[6] On 14 December 2020 a letter was addressed to the respondent by Lebea
Inc. Attorneys (where the applicant is employed as an attorney).
[7] In paragraphs 5 to 8 of the letter the following was stated:
“5. Following payment of the aforementioned amount, our client
waited for your team to assist with location identification to which
your team has either failed and/or neglected and/or refused to
assist our client with.
6. Consequent to the above and coupled with the undisputed fact
that the nail industry has not been doing well due to the Covid -19
pandemic and the instability of the economy in the country, we
regret to advise you of our client’s withdrawal of the intention to
purchase your franchise. In any event our client has not been
able to secure funding to continue with the purchase of the
franchise.
7. In view of the above it is not foreseeable that our client’s financial
situation will improve in the near future.
8. As a direct result of the aforementioned and in the absence of a
signed agreement, we hereby terminate and withdraw our client’s
intentions to purchase the licences and hereby request that you
effect the refund of the amount of R230 000.00 paid pursuant to
the above within 7 days of receipt of this letter.”
[8] According to the applicant, the main issue that had not yet been agreed
upon, was the area of the franchise.
[9] In the replying affidavit the following was added in respect of the basis for
the claim for payment against the respondent:
“23.1 I made payment of the franchise fee or “licensing fee” in
anticipation and condition of the conclusion of a written
franchise agreement. It would be inconceivable and totally
illogical for me to make such a large payment if it were not
done on the basis and condition that the parties conclude a
written franchise agreement. A “licence” without rights
attached thereto for R230 000.00 would be of no use and
constitutes an inherently improbable scenario.
23.2 In this instance, the amount of money paid constitutes undue
enrichment of the respondent at the expense of myself and is
even more reason as to why the amount is repayable.
23.3 We did not come to a final franchise agreement as we could
not agree on a suitable location and thus, I could not sign
same.”
[10] In Kudu Granite Operations (Pty) Ltd v Caterna Ltd 2003 (5) SA 193
(SCA) the following was said at paragraphs 12 and 15:
“[12] The learned Judge accepted the general principle that,
where an agreement fails without fault on either side after
partial performance, each party is entitled to the return of
whatever was performed so as to restore the status quo. In
his view, however, there is uncertainty about the true cause
of action, some authorities favouring a basis of enrichment
and others treating it as a distinct contractual remedy. As
Smit J understood the divergent opinions, they gave rise to
no material difference in approach. From this perspective it
was therefore unnecessary to consider whether the elements
of an enrichment action had been proved.
…
[15] Kudu’s first contention is well -founded. There is a material
difference between suing on a contract for damages
following upon cancellation for breach by the other party (as
in Baker v Probert 1985 (3) SA 429 (A), a judgment relied on
by the court a quo) and having to concede that a contract in
which the claim had its foundation, which has not been
breached by either party, is of no force and effect. The first -
mentioned scenario gives rise to a distinct contractual
remedy: Baker at 439A, and restitution may provide a proper
measure or substitute for the innocent party’s damages. The
second situation has been recognised since Roman times as
one in which the contract gives rise to no rights of action and
such remedy as exists is to be sought in unjust enrichment,
an equitable remedy in which the contractual provisions are
largely irrelevant. As Van Den Heever J said in Pucjlowski v
Johnstons Executors 1946 WLD 1 at 6:
‘The object of condiction is the recovery of property in
which ownership has been transferred pursuant to a
juristic act which was ab initio unenforceable or has
subsequently become inoperative (causa non secuta;
causa finita).’
The same principle applies if the contract is void due to a
statutory prohibition (Wilken v Kohler 1913 AD 135 at 149 to
150), in which case the condictio indebiti applies. There is no
reason why contractual and enrichment remedies should be
conflated. Caterna’s case was one of a lawful agreement
which afterwards failed without fault because its terms could
not be implemented. …”
[11] According to the applicant, the initial agreement was subject to a condition
that the parties conclude a formal franchise agreement. Although it was not
expressly stated in the founding affidavit, I accept that the aforesaid condition was
in effect a suspensive condition.
[12] Section 7 of the Consumer Protection Act, 68 of 2008 provides as follows:
“7(1) A franchise agreement must–
(a) be in writing and signed by or on behalf of the
franchisee;
(b) include any prescribed information, or address any
prescribed categories of information; and
(c) comply with the requirements of section 22.”
[13] I do not have to decide in this matter whether a franchise agreement is
invalid if there is non -compliance with section 7(1) . What is provided for in section
7(1) is in line with what is alleged in the founding affidavit namely that the initial
agreement was subject to the conclusion of a “formal and written agreement”.
[14] When it became clear that the parties would not conclude any written
franchise agreement, the respondent was obliged to repay to the applicant the
amount of R230,000.00.
[15] The applicant delivered to the respondent, through the sheriff, a notice in
terms of section 345 of the Companies Act, 61 of 1973. Although the respondent
disputed the indebtedness, it did so on the ground that the applicant had allegedly
repudiated the agreement between the parties. As I have already indicated, even if
it is accepted that there was an initial oral agreement, it was clearly subject to the
suspensive condition of concluding a written franchise agreement.
[16] The respondent’s failure to effect payment to the applicant, where the debt
is clearly due, results in a finding that the applicant has demonstrated that the
respondent is unable to pay its debts.
[17] In the premises I grant the following order:
1. The respondent is hereby placed under final winding -up in the hands of
the Master of the High Court.
APJ ELS
ACTING JUDGE OF THE HIGH COURT
DELIVERED: This judgment is handed down electronically by uploading it to the
electronic file of this matter on CaseLines.
For the applicant: SL Mohapi
Instructed by: Lebea Inc. Attorneys
For the respondent: No appearance
Date of hearing: 4 August 2025
Date of judgment: 8 August 2025