This appeal concerned the consolidated appeals against two eviction applications. The Respondent, Magic Vending (Pty) Ltd applied for the eviction of the Appellants from their respective units. The court a quo granted the eviction of the Appellants, on the ground that they had failed to make payment of rental amounts to the Respondent.
On 1 July 2013, the Appellants entered into month-to-month lease agreements with the Respondent. The lease agreements entitled the Respondent to immediate cancellation in the event of breach. However, upon the Appellants breaching the lease agreement, the Respondent entered into settlement agreements with the Appellants. Upon the subsequent breach of the settlement agreements, the Respondent cancelled the lease agreements and applied for the eviction of the Appellants. The crux of this appeal was whether the lease agreements were validly cancelled.
To determine whether the eviction orders were valid the Court considered section 14(2) of the Consumer Protection Act (“the CPA”). Section 14(2)(b)(ii) provides that an agreement may only be cancelled where a consumer fails to rectify a breach within 20 business days of receiving written notice from the supplier. However, section 14(2) is preceded by the words “if a consumer agreement is for a fixed term”.
The Appellants argued that the Respondent had worded the leases in the form of a monthly lease to circumvent the 20-day termination requirement, and a consumer agreement which has the effect of circumventing the purposes of the CPA is void. Thus arguing that, the Respondent was required to comply with section 14(2)(b)(ii).
The point of departure in casu is that cancellation in terms of section 14(2)(b)(ii) is only applicable to fixed term contracts. It would be disproportionate to enforce a 20 business day notice, which amounts to a calendar month, to cancel a month-to-month lease. Section 14(2) clearly outlines that the provision is only applicable to fixed term contracts.
To read into the CPA that this 20-day notice requirement is applicable to a month-to-month and indefinite lease, would amount to extending protection to circumstances not envisaged by the Act. The Court held that section 14(2)(b)(ii) was not applicable to these lease agreements and the Respondent was entitled to cancel the agreement, without first providing the Appellants with 20 business days to remedy their breach.
The Court found that the Respondent had been deprived of its property in the most arbitrary manner by the Appellants who put up an untenable legal argument with no substance at all. To condone the Appellants contentions would not only undermine the entire foundation upon which our law of property is constructed, but also the legislation enacted to protect consumers, tenants and unlawful occupiers. The Court thus held that the appeals were dismissed with costs.
This case confirmed unequivocally, that a landlord is not required to comply with the provisions of section 14(2)(b)(ii) of the CPA in terminating a month-to-month indefinite lease agreement. A month-to-month lease is not a fixed term contract and thus a landlord need not comply with the mandatory 20 business day notice period prior to terminating the agreement.
Written by Wesley Pons and Charlotte Clarke