THE REPUBLIC OF SOUTH AFRICA
IN THE HIGH COURT OF SOUTH AFRICA
(EASTERN CIRCUIT LOCAL DIVISION, THEMBALETHU)
Case no.548/2025
In the matter between:
GARDEN ROUTE DISTRICT MUNICIPALITY APPLICANT
and
BYXISCAN (PTY) LTD RESPONDENT
REGISTRATION NUMBER: 2018/619371/07
Summary: Eviction – Commercial Property – Tacit Lease – Eviction Granted
Coram: Wille, J
Heard: 20 May 2026
Delivered: 28 May 2026
JUDGMENT
____________________________________________________________________________
WILLE, J:
INTRODUCTION
[1] The applicant is the registered owner of a piece of immovable property , a portion of
which is used as a restaurant facility known as the ‘Victoria Bay Restaurant’ in Victoria Bay.1
[2] In summary, the applicant seeks an order against the respondent in the following terms ,
namely that:
(a) The lease agreement entered into between the applicant and the respondent on 29
October 2019 was terminated by the effluxion of time on 31 May 2023.
(b) The express, alternatively, tacit lease agreement entered into between the applicant and
the respondent in respect of the premises after 31 May 2023, be declared void ab initio,
and of no force or effect.
(c) The respondent’s occupation of the premises, absent a valid and binding written lease
agreement entered into between it and the applicant as prescribed by the Municipal Asset
Transfer Regulations (MATR), 2008 , promulgated under the Municipal Finance
Management Act, 56 of 2003 (MFMA), is unlawful.
(d) The respondent, and all those occupying the premises under and by virtue of the
respondent’s occupation thereof, be ordered to vacate the premises within five (5) days of
the date of the order sought herein, being granted.2
[3] It is undisputed that the applicant is the registered owner of the property and that the
prior written lease between the parties has expired by effluxion of time.3
1 Portion of Farm 195 Kraaibosch, Victoria Bay, George (the “premises”).
2 This remains undisputed.
3 The period in the last addenda was recorded as 31 May 2023.
RELEVANT BACKGROUND
[4] Nearly seven (7) years ago, the applicant and the respondent entered into a written
lease agreement in terms of which the applicant leased the premises to operate a restaurant.
The lease agreement provided that any amendments shall be in writing , signed by both parties,
and included a standard non-variation clause.4
[5] Two written addenda were issued, pursuant to which the initial term of the lease
agreement was extended, and the lease ultimately ended three (3) years ago.5
[6] Thus, there is no written lease in place. The respondent says that the premises were
thereafter leased to it on a month -to-month basis by tacit agreement with the applicant. The
respondent has also not paid any rent for at least the last 3 years.6
[7] There is a dispute between the applicant and the respondent as to the lawfulness and
enforceability of the month-to-month tacit lease agreement between them after the period in the
last addendum expired by effluxion of time.7
CONSIDERATION
THE WRITTEN LEASE AGREEMENT
[8] This agreement has been euthani sed because its long stop date has passed. What
remains is how this document regulated the parties' rights going forward, which I now address.
There is a non -waiver clause in the agreement that regulates an indulgence or a delayed
enforcement by the applicant. Most importantly, the following clause is significant:
4 Clauses 19 and 20 of the initial lease agreement.
5 On 31 May 2023.
6 This is not disputed.
7 On 31 May 2023.
‘…The failure of either party to comply with any non -material provision of this lease shall not
excuse the other party from performing the latter’s obligations hereunder fully and timeously….’8
THE TACIT AGREEMENT
[9] The applicant is vested with a direct right and interest concerning the subject matter of
the litigation that is attached to itself, and this right is an existing right underscored by section 25
of the Constitution.9
[10] Thus, the appropriate manner to address the existing dispute regarding the lawfulness
and enforceability of the tacit month-to-month lease agreement is by means of a declarator y
order. This the applicant seeks to do. In these circumstances, the applicant alleges that the
onus is on the respondent to establish a right to continue to hold against the owner.10
[11] Put another way, the applicant adopts the position that the tacit month-to-month lease
agreement is and was void from inception. The grant of a declarator is thus dependent upon the
judicial exercise of the court’s discretion with due regard to the circumstances of the matter
before it.11
[12] An application for a declaratory order requires a two -stage approach. F irstly, the court
must be satisfied that the applicant has an interest in an existing, future or contingent right or
obligation. Secondly, if the court is satisfied that such an interest exists, it must be considered
whether the order should be granted.12
8 Clauses 21.1 and 21.2 of the written lease agreement.
9 This is not disputed.
10 Chetty v Naidoo 1974 (3) SA 13 (A) at 20 B – D).
11 YB v SB 2016 (1) SA 47 (WCC) at 61 I - 62 B.
12 The applicant’s ‘interest’ is not disputed.
[13] In exercising its discretion, the court may decline to deal with a matter where there is no
actual dispute between the parties, either legal or factual and technical hurdles are put up to
frustrate the rights of a party or parties.13
[14] Some other factors may include the utility of the declaratory relief and whether, if
granted, it will settle the question in issue between the parties.14
[15] Indeed, there may not be a justifiable advantage that flows from the grant of the order
sought. In addition, there are considerations of public policy, justice and convenience , the
practical significance of the order and/or the availability of other remedies.15
[16] Turning now to the facts of this dispute (as it is currently formulated). Upon termination
of the lease, the respondent continued to occupy and trade on and from the pr emises under a
tacit month-to-month lease, supposedly on some of the terms set out in the written lease.16
[17] As a matter of pure logic, a month-to-month tacit lease agreement cannot, by any
reasonable definition, be purposively interpreted as a lease that could run indefinitely and thus
be exempt from the provisions of the MFMA. Self -evidently, this will bypass the procurement
requirements of the MFMA and ignore the constitutional and statutory regime that appl ies to the
leasing and letting of municipal capital assets.17
[18] Tacit agreements must be lawful . If they are not, then any such purported tacit
agreement will be void from inception. Put another way, it must be so that a tacit agreement
that does not comply with public procurement legislation is per se unlawful.18
13 The respondent’s shields are highly technical in nature.
14 No doubt, a declarator will have the effect of settling the issues between the parties to this specific dispute.
15 The applicant here has no other remedy.
16 This is not disputed.
17 This is not disputed,
18 The respondent does not meaningfully engage with this issue.
THE MFMA
[19] The provisions of the MFMA require that the lease of the applicant’s premises must be in
writing, must contain certain prescribed information, and must have been signed on behalf of
the parties. The relevant section provides as follows:19
‘…A contract or agreement procured through the supply chain management system of a
municipality or municipal entity must—
(a) be in writing;
(b) stipulate the terms and conditions of the contract or agreement, which must
include provisions providing for -
(i) the termination of the contract or agreement in the case of non or under-
performance
(ii) dispute resolution mechanisms to settle disputes between the parties;
(iii) a periodic review of the contract or agreement once every three years in
the case of a contract or agreement for longer than three years; and
(iv) any other matters that may be prescribed…’
[20] The granting of rights to use , control or manage municipal capital assets are strictly
regulated.20
[21] Regulations 45 (1) and (2) of the Municipal Asset Transfer Regulations, 2008 (“MATR”),
provide as follows:
19 Section 116 of the MFMA, and Regulation 45 of the Municipal Asset Transfer Regulations.
20 In Chapter 4 of the Regulations.
‘…A municipality or municipal entity may grant a right to use, control or manage a capital asset
to a private sector party or organ of state only by way of a written agreement concluded
between the municipality or entity and the private sector party or organ of state to whom the
right is granted…’
‘…An agreement referred to in sub-regulation (1) must –
(a) set out the terms and conditions on which the right is granted, including, as a
minimum –
(i) a sufficient description of the capital asset in respect of which the right is
granted, in order to identify the asset.
(ii) particulars of any subsidiary assets that are to be made available with the
capital asset.
(iii) the period for which the right is granted;
(iv) the amount of compensation payable to the municipality or municipal entity
for the granting of the right, and the terms and conditions of payment;
(v) requirements for the private sector party or organ of state to whom the right
is granted to maintain and safeguard the asset for its intended purpose,
taking into account the condition of the asset and its estimated remaining
life at the date of granting of the right;
(vi) where the asset is to be used by the municipality or municipal entity and the
public sector party or organ of state to whom the right is granted, the basis
of how the asset is to be shared as well as how the costs and benefits of
the shared asset will be apportioned between the parties;
(vii) the extent to which the public sector party or organ of state to whom the
right is granted will be required to make improvements or enhancements to
the asset, and the terms and conditions regulating such improvements or
enhancements;
(viii) a statement to the effect that the risk and accountability for the asset
is transferred to the public sector party or organ of state to whom
the right is granted;
(ix) the effective date from which the risk and accountability for the
asset is transferred;
(x) and a clause disallowing the private sector party or organ of state to
whom the right is granted from ceding or subcontracting the right to
another person; and
(b) be signed on behalf of the municipality or municipal entity and the private sector
party or organ of state to whom the right is granted…’21
[22] It is not in dispute that no written lease agreement was concluded between the parties in
respect of the respondent’s occupation and use of the premises after the last addenda to the
written lease expired by effluxion of time. Thus, the regulations under the MATR were not
complied with by the parties to this dispute regarding this tacit month-to-month agreement,
which is effectively relied on by the respondent. What is also challenging to understand is that
the respondent does not dispute that it has not paid any rental in connection with the premises
for at least the last 3 years.22
21 Regulation 45 (2) of the MATR.
22 The respondent raises a very novel defense to this non-payment issue.
[23] The respondent relies on a shield of total remission of the payable rental resulting from
losses incurred because of adverse weather conditions.23
LIS PENDENS
[24] The respondent takes the view that there is a live , pending application for its eviction
from the premises , together with a pending application for leave to appeal against the court’s
order dismissing the respondent’s application for a stay in the eviction proceedings instituted
under these discrete proceedings.24
[25] It is trite that th is shield raised is dilatory in nature , and the exercise of the court's
discretion in this regard is based upon considerations of convenience and the determination of
what is just and equitable in the peculiar circumstances of the matter.25
[26] In this matter , it is not disputed that the litigation in these proceedings and in the
application under the discrete case number relate to the same parties and that the relief claimed
is similar, namely, the respondent’s eviction from the applicant’s property. 26
[27] The current application for eviction is premised on the illegality of the tacit month -to-
month lease agreement between the parties , arising from non-compliance with the peremptory
provisions of the MFMA, read with the provisions of the MATR. By contrast, i n the other
discrete matter, the respondent’s eviction was sought for alleged breach of a valid and binding
lease agreement due to non-payment of monthly rent. Thus, the cause of action in this
application is entirely different. The respondent itself contends for a review of legality.27
23 This is challenging to understand in view of the tacit agreement contended for by the respondent.
24 This, despite the formal withdrawal of this prior application by the applicant.
25 Belmont House (Pty) Ltd v Gore NNO 2011 (6) SA 173 (WCC) at para 9.
26 Hassan and Another v Berrange NO 2012 (6) SA 329 (SCA) at para 19.
27 The different cause of action is thus conceded by the respondent.
[28] The applicant has now withdrawn the prior application, along with a tender for a portion
of the respondent’s incidental costs. The respondent takes the position that the withdrawal of
the prior application is not with the respondent’s prior consent nor with the leave of the court.
Notwithstanding these technical objections, the prior application has been effectively
euthanised.28
[29] The only possible live issue remaining may be the costs in connection with the
respondent’s dismissed stay application , in respect of which the respondent’s application for
leave to appeal is pending, following the court of first instance's refusal of leave. The applicant
has tendered the respondent’s costs in the main eviction application, save for the postponement
of the matter at the behest of the respondent and respect of which the respondent tendered
these wasted costs.29
[30] The respondent has not made any rental payments for at least the last 3 years, to the
extreme prejudice of the public purse . The applicant files this application in accordance with its
constitutional mandate to secure its assets for the benefit of its constituency.30
[31] Considerations of justice and equity militate against the granting of a stay of the present
eviction application pending the final determination of the prior matter.31
CONCLUSION
[32] The remission of the rental defence raised does not commend itself to this court because
of the parties’ non -compliance with the peremptory provisions of the MFMA read with the
regulations under the MATR.32
28 This is a technical defence of no merit.
29 Again, this is a highly technical defence with no merit.
30 There is a public policy issue involved in this determination.
31 Belmont House (Pty) Ltd v Gore NNO 2011 (6) SA 173 (WCC) para 20.
32 This is in any event a “novel” defence.
[33] I also do not find favour with the respondent’s argument that the applicant is obliged to
self-review under these circumstances. This defence was never squarely raised on the papers
by the respondent and was not properly before the court for determination.33
[34] Self-evidently, for a valid tacit relocation of a lease agreemen t in terms of the common
law to be possible , the lessee under the relocated lease must also have made monthly rental
payments, which must have been accepted by the lessor.34
COSTS
[35] The applicant contends that the respondent’s conduct in occupying the applicant’s land
without making any rental payments for at least 3 years, and then invoking a remission-of-rental
defence premised on alleged adverse weather conditions affecting its business, justifies a
punitive costs order. I agree.35
[36] The respondent has remained in occupation and has enjoyed the use of the property
solely for commercial gain in conflict with the law and has ignored the applicant’s right of
ownership of the property. The conduct for this reason also justifies a punitive costs order.36
ORDER
[37] For these reasons, the following orders are granted.
1. It is declared that the lease agreement entered into between the applicant and the
respondent on 29 October 2019 was terminated by the effluxion of time on 31 May 2023.
33 This issue piloted for the first time during legal argument.
34 Nedcor Bank Ltd v Withinshaw Properties (Pty) Ltd 2002 (6) SA 236 (C).
35 City of Ekurhuleni Metropolitan Municipality v Tshepo Gugu Trading CC and Another [2024] ZASCA 81 (28 May 2024) at para 38.
36 City of Tshwane v Ghani 2009 (5) SA 563 (T)).
2. It is declared that t he express or alternatively tacit lease agreement entered into
between the applicant and the respondent in respect of the premises after 31 May 2023
is void ab initio and of no force or effect.
3. It is declared that the respondent’s occupation of the premises, absent a valid and
binding written lease agreement entered into between it and the applicant as prescribed
by the Municipal Asset Transfer Regulations, 2008 , promulgated under the Municipal
Finance Management Act, 56 of 2003 (MFMA), is unlawful.
4. The respondent, and all those occupying the premises under and by virtue of the
respondent’s occupation, are with this ordered to vacate the premises on or before the
last day of June 2026, failing which the sheriff of the court, with the assistance of the
police (if necessary) shall be entitled to execute the commercial eviction order as set out
above at the cost of the respondent.
5. The respondent shall be liable for the costs of and incidental to this application on the
scale as between attorney and client (as taxed or agreed) including the costs of counsel
on scale C.
__________
E D WILLE
(Thembalethu)