Tania Broughton
A two-year battle between food retailers Everfresh and Shoprite Checkers over a prime property at Virginia Circle – which had implications for contract law in South Africa – came to an end yesterday with the Constitutional Court confirming Everfresh’s eviction from the premises.
And while a minority of judges suggested that the issue be referred back to the Pietermaritzburg High Court to consider developing “ubuntu” into contract law in the spirit of the constitution and the bill of rights, the majority said this would take too long and Shoprite, which owned the property, would be prejudiced in the meantime.
Some residents of Virginia and neighbouring Durban North viewed the legal row as being one of David versus Goliath when Shoprite bought the property and went to court to have Everfresh evicted, saying it wanted to redevelop the property.
Everfresh had signed its lease with the previous owner and initially claimed that the lease gave it a right to renew.
But it abandoned this argument – correctly so, according to Pietermaritzburg High Court Judge Piet Koen – because it was clear in South African law that a “promise to negotiate” a further lease, with no firm rental laid down, was unenforceable.
Everfresh then argued that the lease obliged Shoprite to make an honest effort to reach an agreement on rentals for the renewal period and that “it may not frustrate this by refusing to participate”.
Judge Koen ruled that even if there was an agreement to negotiate in good faith, the obligation was too uncertain to enforce, and granted an eviction order.
Everfresh asked for leave to appeal to the Supreme Court of Appeal, but this was denied.
It then, for the first time, raised a constitutional issue – that the common law of contract should be infused with the values of good faith – and asked the Constitutional Court to be the ultimate arbiter.
Sympathy
Three of judges had some sympathy.
In the minority judgment penned by Judge Zak Yacoob, he said the question of enforcement of “good faith” – ubuntu – should be dealt with because contracts touched the lives of many ordinary people.
“The development of our economy and contract law has thus far predominantly been shaped by colonial legal tradition… it may well be that the majority of people in our country place a higher value on negotiating in good faith than would otherwise have been the case,” he said.
The judge said contracts were not only entered into between big companies but also between individuals and, sometimes, poor, vulnerable people on the one hand and powerful, well-resourced companies on the other.
“The idea that people or entities can undertake to negotiate and then not do so because this attitude becomes convenient for some or other commercial reason, certainly implicates ubuntu,” the judge said. He said, however, that Everfresh had not previously raised this issue directly in the lower courts and it was in the interests of justice for the matter to be sent back to the high court.
But Deputy Chief Justice Dikgang Moseneke had the backing of six judges in his judgment rejecting Everfresh’s appeal entirely. He said Everfresh’s case had mutated over time and had not advanced any reasons why it was now in the interests of justice for the Constitutional Court to hear the matter.
“This is a commercial dispute of considerable monetary value… Everfresh appears to have benefited from the prolonged litigation in the sense that it has warded off ejectment and continued with its commercial enterprise pending a final decision of the court,” he said, dismissing the case with costs.
