Everfresh Market Virginia (Pty) Ltd v Shoprite Checkers (Pty) Ltd

• Jurisdiction: South Africa

Everfresh Market Virginia (Pty) Ltd v Shoprite Checkers (Pty) Ltd
2012 (1) SA 256 (CC)

2012 (1) SA p256

Citation	2012 (1) SA 256 (CC)
Case No	105/10; [2011] ZACC 30
Court	Constitutional Court
Judge	Ngcobo CJ, Moseneke DCJ, Cameron J, Froneman J, Jafta J, Khampepe J, Mogoeng J, Nkabinde J, Van Der Westhuizen J, Yacoob J and Mthiyane AJ
Heard	May 10, 2011
Judgment	November 17, 2011
Counsel	JP Vorster SC for the applicant.; AM Breitenbach SC (with MW Janisch) for the respondent.

Flynote : Sleutelwoorde G

Constitutional law — Common law — Development — Common-law principles of contract — Whether principles of good-faith and ubuntu to be imported into H law of contract — Semble: Generally desirable that law of contract be developed by infusion of such principles — Case for doing so in particular situation to be properly pleaded.

Headnote : Kopnota

Everfresh had entered into a lease agreement with the former owner of a I shopping centre, clause 3 of which gave Everfresh an option to renew the lease on its expiry, subject to agreement being reached on the rental. Some time after Shoprite became the new owner of the centre it sought a High Court order evicting Everfresh. Everfresh contended that Shoprite was barred from doing so because it was under an obligation under clause 3 to make efforts in good faith to reach an agreement on rental which it could not frustrate by refusing to participate. Shoprite contended in turn that J clause 3 did not constitute a binding right of renewal, and the High Court

2012 (1) SA p257

concurred, holding that an option to renew a lease on rental to be agreed A was unenforceable. The High Court further held that even if there had been an agreement to negotiate in good faith, the obligation was too uncertain to enforce, and granted the eviction order. When its application for leave to appeal to the SCA was refused, Everfresh approached the Constitutional Court for further leave to appeal, raising for the first time the constitutional question as to whether the common law of contract had to be refashioned B by the importation of a requirement of good faith. The issue before the court was whether it was in the interests of justice for it to entertain the matter where it had been raised for the first time at such a late stage.

Held (per Moseneke DCJ for the majority): Although an important constitutional issue was raised, Everfresh's case had mutated over time without it having C advanced sufficient reasons to show why it was suddenly in the interests of justice for the court to develop the law of contract as requested, particularly in view of the prejudice that Shoprite would suffer if it were required to meet a brand-new case at an appellate stage. (Paragraphs [62] – [66] at 274E – 276A.) Had the case been properly pleaded, a highly desirable and necessary infusion of constitutional values into the law of contract — in particular into the principles relating to a promise to agree or negotiate — D might have taken place. In particular, the applicability of principles of good faith in contract law, pacta sunt servanda, and ubuntu might have persuaded the court to entertain the appeal. (Paragraphs [50] and [71] – [72] at 270I – 271B and 276I – 277C.) However, this was not, in view of the powerful factors pointing away from allowing the ventilation of these issues at such a late stage, sufficient to tilt the balance in Everfresh's favour. (Paragraph [74] at 278B – C.) Application for leave to appeal dismissed. E

Cases Considered

Annotations:

Reported cases

Southern Africa F

Azanian Peoples Organisation (AZAPO) and Others v President of the Republic of South Africa and Others 1996 (4) SA 671 (CC) (1996 (8) BCLR 1015): referred to

Barkhuizen v Napier 2007 (5) SA 323 (CC) (2007 (7) BCLR 691): referred to

Bertie van Zyl (Pty) Ltd and Another v Minister for Safety and Security and Others G 2010 (2) SA 181 (CC) (2009 (10) BCLR 978): referred to

Bhe and Others v Magistrate, Khayelitsha, and Others (Commission for Gender Equality as Amicus Curiae); Shibi v Sithole and Others; South African Human Rights Commission and Another v President of the Republic of South Africa and Another 2005 (1) SA 580 (CC) (2005 (1) BCLR 1): referred to H

Billiton Aluminium SA Ltd t/a Hillside Aluminium v Khanyile and Others 2010 (5) BCLR 422 (CC): referred to

Blake and Another v Cassim and Another NNO 2008 (5) SA 393 (SCA): referred to

Brisley v Drotsky 2002 (4) SA 1 (SCA) (2002 (12) BCLR 1229; [2002] 3 All SA 363): referred to I

Bruce and Another v Fleecytex Johannesburg CC and Others 1998 (2) SA 1143 (CC) (1998 (4) BCLR 415): referred to

Carmichele v Minister of Safety and Security and Another (Centre for Applied Legal Studies Intervening) 2001 (4) SA 938 (CC) (2002 (1) SACR 79; 2001 (10) BCLR 995): distinguished but dictum in paras [50] – [55] applied J

2012 (1) SA p258

Christian Education South Africa v Minister of Education 2000 (4) SA 757 (CC) (2000 (10) BCLR 1051): referred to A

Dharumpal Transport (Pty) Ltd v Dharumpal 1956 (1) SA 700 (A): referred to

Dikoko v Mokhatla 2006 (6) SA 235 (CC) (2007 (1) BCLR 1): referred to

Joseph and Others v City of Johannesburg and Others 2010 (4) SA 55 (CC) (2010 (3) BCLR 212): referred to B

K v Minister of Safety and Security 2005 (6) SA 419 (CC) (2005 (9) BCLR 835; [2005] 8 BLLR 749): referred to

Koyabe and Others v Minister for Home Affairs and Others (Lawyers for Human Rights as Amicus Curiae) 2010 (4) SA 327 (CC) (2009 (12) BCLR 1192): referred to

Lane and Fey NNO v Dabelstein and Others 2001 (2) SA 1187 (CC) (2001 (4) BCLR 312; [2001] ZACC 14): referred to C

Le Roux and Others v Dey (Freedom of Expression Institute and Restorative Justice Centre as Amici Curiae) 2011 (3) SA 274 (CC) (2011 (6) BCLR 577): referred to

Machanick v Simon 1920 CPD 333: referred to

Napier v Barkhuizen 2006 (4) SA 1 (SCA) (2006 (9) BCLR 1011; [2006] 2 All SA 496): referred to D

National Gambling Board v Premier, KwaZulu-Natal, and Others 2002 (2) SA 715 (CC) (2002 (2) BCLR 156): referred to

Phillips and Others v National Director of Public Prosecutions 2006 (1) SA 505 (CC) (2006 (1) SACR 78; 2006 (2) BCLR 274): dictum in para [44] applied

Port Elizabeth Municipality v Various Occupiers 2005 (1) SA 217 (CC) (2004 (12) BCLR 1268): referred to E

Prince v President, Cape Law Society, and Others 2001 (2) SA 388 (CC) (2001 (1) SACR 217; 2001 (2) BCLR 133): dictum in para [22] applied

S v Makwanyane and Another 1995 (3) SA 391 (CC) (1995 (2) SACR 1; 1995 (6) BCLR 665): referred to

Singh v Commissioner, South African Revenue Service 2003 (4) SA 520 (SCA): dictum in para [24] applied F

Southernport Developments (Pty) Ltd v Transnet Ltd 2005 (2) SA 202 (SCA) ([2005] 2 All SA 16): referred to

The Citizen 1978 (Pty) Ltd and Others v McBride (Johnstone and Others, Amici Curiae) 2011 (4) SA 191 (CC) (2011 (8) BCLR 816): referred to

Van Vuren v Minister of Correctional Services and Others 2010 (12) BCLR 1233 (CC): referred to. G

Australia

Coal Cliff Collieries Pty Ltd and Another v Sijehama Pty Ltd and Another (1991) 24 NSWLR 1: referred to.

Unreported cases H

Shoprite Checkers (Pty) Ltd v Everfresh Market Virginia (Pty) Ltd (KZP case No 6675/09, 25 May 2010): appeal against refused.

Case Information

I Application for leave to appeal to the Constitutional Court.

JP Vorster SC for the applicant.

AM Breitenbach SC (with MW Janisch) for the respondent.

Cur adv vult.

Postea (November 17). J

2012 (1) SA p259

Judgment

Yacoob J (Froneman J, Mogoeng J and Mthiyane AJ concurring): [*] A

Introduction

[1] This application for leave to appeal requires us to consider the circumstances in which this court should intervene to infuse the law of contract with constitutional values. The development of the common B law of contract in the light of the spirit, purport and objects of the Bill of Rights in our Constitution [1] was not directly raised by the applicant either in the KwaZulu-Natal High Court, Pietermaritzburg (High Court), or in the Supreme Court of Appeal. It is directly raised for the first time in this court and we must decide the constitutionally appropriate way of managing the case before us. And we must do so by determining the C requirements of the interests of justice.

[2] The genesis of the application is an ejectment claim by the respondent, Shoprite Checkers (Pty) Ltd (Shoprite), against the applicant, Everfresh Market Virginia (Pty) Ltd [2] (Everfresh). The ejectment application D has its roots in an agreement of lease between Everfresh and Shoprite's predecessor in title [3] as lessor. Shoprite bought the property commonly known as the Virginia Shopping Centre, [4] a portion of which was the subject of the lease, from the original lessor during the currency of the lease. Shoprite therefore became bound by the lease. It effectively became Everfresh's lessor. [5] E

[3] The lease was for five years, from 1 April 2004 to 31 March 2009. Clause 3 provides:

'Provided that the Lessee has faithfully and timeously fulfilled and performed all its obligations under and in terms of this Lease, the F Lessee shall have the right to renew same for a further period of four years and eleven months commencing on 1st April 2009, such renewal to be upon the same terms and conditions as in this Lease contained save that there shall be no further right of renewal, and save that the rentals for the renewal period shall be agreed upon between the Lessor and the Lessee at the time. The said right of renewal is subject to the G Lessee giving written notice to the Lessor of its intention so to renew, which notice shall reach the Lessor not less than six (6) calendar months prior to the date of termination of this Lease. In the event of no such notice being received by the Lessor, or in the...