Case Law[2024] ZAWCHC 323South Africa
Former Cash Crusaders Franchisees v Cash Crusaders Franchising (16453/2023) [2024] ZAWCHC 323; [2025] 1 All SA 190 (WCC) (16 October 2024)
High Court of South Africa (Western Cape Division)
16 October 2024
Judgment
begin wrapper
begin container
begin header
begin slogan-floater
end slogan-floater
- About SAFLII
About SAFLII
- Databases
Databases
- Search
Search
- Terms of Use
Terms of Use
- RSS Feeds
RSS Feeds
end header
begin main
begin center
# South Africa: Western Cape High Court, Cape Town
South Africa: Western Cape High Court, Cape Town
You are here:
SAFLII
>>
Databases
>>
South Africa: Western Cape High Court, Cape Town
>>
2024
>>
[2024] ZAWCHC 323
|
Noteup
|
LawCite
sino index
## Former Cash Crusaders Franchisees v Cash Crusaders Franchising (16453/2023) [2024] ZAWCHC 323; [2025] 1 All SA 190 (WCC) (16 October 2024)
Former Cash Crusaders Franchisees v Cash Crusaders Franchising (16453/2023) [2024] ZAWCHC 323; [2025] 1 All SA 190 (WCC) (16 October 2024)
Download original files
PDF format
RTF format
make_database: source=/home/saflii//raw/ZAWCHC/Data/2024_323.html
sino date 16 October 2024
IN
THE HIGH COURT OF SOUTH AFRICA
WESTERN
CAPE DIVISION, CAPE TOWN
Case
Number: 16453/2023
In
the matter between:
THE
FORMER CASH CRUSADERS FRANCHISEES
Applicant
and
CASH
CRUSADERS FRANCHISING (PTY) LTD
Respondent
JUDGMENT
BORGSTRÖM AJ:
INTRODUCTION
1.
This matter presents the latest instalment in a lively contestation
between the
Applicants and the Respondent (“
CCF
”)
– which operates as a franchisor for a chain of outlets
specialising in the sale of new and pre-owned goods and appliances.
These outlets trade under the name of “
Cash Crusaders
”.
2.
The
Applicants
[1]
form a loose
affiliation of entities that entered into franchise agreements with
CCF, and operated Cash Crusaders outlets in locations
throughout the
country. In previous proceedings before this Court (to which I shall
return), they identified themselves as “
Cash
Crusaders Franchisees
”.
In the current proceedings they now identify themselves, somewhat
tendentiously, as “
Former
Cash Crusader Franchisees
”,
or “
ex-franchisees
”.
This assumes that the franchise agreements between CCF and the
Affected Franchisees have validly been brought to an end.
This is a
matter which is tangentially relevant in the current proceedings, and
is the subject matter of on-going arbitration proceedings.
I refer to
the Applicants as “
the
Affected Franchisees
”.
3.
The current
matter is embedded in a tangle of intertwined proceedings in this
Court and in private arbitration. The substantive
relief that the
Affected Franchisees seek is an order suspending the operation and
execution of an Order granted by this Court
(per Mr Justice Dolamo)
on 3 October 2023 (“
the
Interdict Order
”).
[2]
4.
The Interdict Order (which the Affected Franchisees now wish to see
suspended)
arose as a result of a notice sent by the attorneys for
the Affected Franchisees, to CCF. on 18 September 2023 –
recording complaints and indicating that the Affected Franchisees
intended to cancel their franchise agreements with CCF unless
remedial action was taken within 10 days.
5.
On 22 September 2024 CCF launched the Interdict Application, and set
it down
for hearing in the ‘fast lane’ on Thursday, 28
September 2024. In this application CCF sought:
(a)
to prevent
the Affected Franchisees from cancelling the franchise agreements;
and
(b)
to compel the Affected Franchisees “
to abide
by and fully comply with their obligations
” under the
franchise agreements,
pending
:
5.1.
The final determination of a separate application in this Court,
which had been launched in September 2022
(under case number
16436/22) but never been set down. I refer to this as “
the
Declarator Application
”. That application was brought by a
group of franchisees (which included the Affected Franchisees, as
well as others who
had since stopped operating or ‘returned to
the fold’), and concerned the lawfulness of different
iterations of the
system that CCF had crafted for use by its
franchisees in “
pawn transactions
” – as that
term is defined in section 1 of the National Credit Act 34 of 2005
(“
the NCA
”). In the nomenclature adopted by CCF,
these are referred to as “
suspensive security buy
transactions
” (“
SSB transactions
”);
or
5.2.
Alternatively
, the final determination by an arbitrator of the
issues raised in the main application in the Declarator Application;
and
5.3.
Thereafter, the final determination by an arbitrator whether the
issues raised in the Declarator Application
afforded the Affected
Respondents the entitlement to cancel their respective franchise
agreements with CCF.
6.
The merry-go-round sped up when, in the early evening of Tuesday,
26 September
2023, the Affected Respondents (through their
attorneys) purported to cancel the franchise agreements – even
though the 10-day
period for remedial action was still running; and
proceedings regarding this very issue were pending before the Court.
7.
The Court ultimately dealt with this by allowing CCF to amend the
relief sought
– and on 3 October 2023 ordered as follows:
“
34.1
Pending the final determination by an arbitrator or by court of the
applications pending before
court of a dispute between the parties as
to the respondents' entitlement to cancel their respective franchise
agreements (the
franchise agreements) concluded with the applicant on
the basis set out in the letters of MacGregor Stanford Kruger of 18
and 26
September 2023, the respondents are interdicted from
cancelling the franchise agreements and are directed to abide by and
comply
fully with their obligations under the respective franchise
agreements.
34.2
This interdict shall operate for a period of sixty (60) days from day
hereof. The applicant
is to enroll the applications which are pending
before and which have not been enrolled, alternatively, refer the
disputes to arbitration,
whichever the parties elect to do within the
period of sixty (60) days stipulated, supra. The interdict would
lapse on the expiry
of the sixty (60) days period if there has been
no enrolment or referral to arbitration
.”
8.
But yet, the merry-go-round only spun faster. The Affected
Franchisees adopted
the position that the Interdict Order, despite
being framed as interim relief, was in fact final in effect. On this
basis, the
Affected Franchisees sought leave to appeal – and
more importantly, contended that the Interdict Order was suspended
while
those applications continued, in terms of section 18(1) of the
Superior Courts Act 10 of 2013 (“
the SC Act
”).
9.
Moreover, the Affected Respondents continued to sever their ties with
CCF. Since
3 October 2023 (i.e. the same date as the Interim Order
was handed down) the Affected Respondents started trading under the
name
and style of “
Cash Xchange
”.
10.
Predictably, the bold conduct of the Affected Franchisees resulted in
another application before
this Court, which was heard on 10 November
2023 – which I shall refer to as “
the Enforcement
Application
”. As that name suggests, CCF sought
declaratory relief that the Interdict Order was interlocutory in
effect, and thus
was
not
suspended by any application for
leave to appeal – in accordance with section 18(2) of the SC
Act. Alternatively, CCF contended
that if the Interdict Order was
interpreted as being final in effect, this Court should direct that
its terms were immediately
effective – in accordance with
section 18(3) of the SC Act.
11.
This issue
was resolved in a judgment and order of this Court (per Mr Justice
Lekhuleni) of 26 January 2024 (“
the
Enforcement Judgment
”
and “
the
Enforcement Order
”).
[3]
The Court found that the judgment in the Interdict Application had
made legal findings that were final in effect. These underlying
legal
findings in the judgment, so the Court reasoned, meant that the
Interdict Order was not merely interlocutory. Accordingly,
the
Interdict Order was automatically suspended pending the finalisation
of applications for leave to appeal. The Court also refused
CCF’s
application to make the Interdict Order immediately effective.
12.
Insulated by this development, the Affected Franchisees pursued
applications for leave to appeal
through this Court, the SCA, and the
Constitutional Court. I am not surprised that none of these
courts were enticed to hear
an appeal by the Affected Franchisees
against the Interdict Order. The Affected Franchisees ran out of
momentum when the Constitutional
Court finally dismissed their
application for leave to appeal on 22 July 2023. The Interdict Order
could thus no longer be avoided.
13.
By this time the arbitration proceedings envisaged in the Interdict
Order had been initiated,
and serve before a highly regarded retired
judge of this Court (“
the arbitration proceedings
”).
Those proceedings concern the validity of the actions by the Affected
Respondents to cancel their franchise agreements
with CCF. The
Affected Franchisees indicate that in these proceedings they will
also ask the arbitrator to make a finding regarding
the lawfulness of
CCF’s SSB system.
14.
The hearings in the arbitration proceedings commenced on 2 May 2024
and continued intermittently
to 7 June 2024, and were scheduled to
recommence on 9 September 2024. The Affected Franchisees indicate
that the “
arbitration is extensive
”, with 66 000
pages of discovered documents and multiple witnesses. At the break in
proceedings on 7 June 2024, the
Affected Franchisees had led the
evidence of three witnesses, and they intended to call more
witnesses. After this CCF would call
its witnesses.
15.
It is
in this setting that the Affected Franchisees now approach this
Court, in an endeavour to ensure that they are again
alleviated from
the duty to comply with the requirements of the Interdict Order. They
frame their application as being one made
in terms of Uniform Rule
45A of the Uniform Rules of this Court (“
Rule
45A
”),
which codifies an element of this Court’s inherent power (as
developed under the common law, and now enshrined in
section 173 of
the Constitution) to protect and regulate its own process, taking
into account the interests of justice.
[4]
16.
However, the peculiarity of the relief sought is immediately apparent
in the fact that the period
of the desired suspension is:
“
pending the
outcome of the application under case number 1636/2022 in respect of
which the applicants are still awaiting a date
of set-down and
pending final determination of the arbitration proceedings before
Retired Judge Fourie
…”.
17.
The reference to case number 1636/2022 relates to the Declarator
Application (which is actually
before this Court under case number
16436/22).
18.
What thus appears is that the order now sought and the Interdict
Order are defined with reference
to the very same proceedings. In
other words, the suspension now sought by the Affected Franchisees is
for the very same period
that the Interdict Order applies.
19.
The Affected Franchisees argue that this is not an insuperable
obstacle, and that this Court has
a wide power to suspend the
execution of an earlier order if this is in the interests of justice.
In this regard the Affected Franchisees
point to the following:
19.1. The Intedict Order
“
should never have been granted
”; and obliging the
Affected Franchisees to respect the Interim Order would mean that
they would again have to implement the
SSB system determined by CCF –
which they argue remains unlawful. Thus, if this Court refused the
suspension, it would be
giving its imprimatur to CCF’s unlawful
SSB system and would compel the Affected Franchisees to implement an
unlawful system.
This, they say, would be unconscionable. It would
expose the Affected Franchisees to penalties, and its customers to
unlawful fees.
At the very least, the Affected Franchisees submit
that this Court should not “
put into effect
” the
Interdict Order when “
there is a good prospect of that Order
being expunged
” once the Declarator Application is
finalised.
19.2. The Affected
Franchisees believe that they were not given a fair hearing before
the Interim Order was granted. This, they
say, is evidenced by the
facts that the Court improperly allowed CCF to introduce a
last-minute amendment to the relief it originally
sought; overlooked
a supplementary affidavit filed on behalf of the Affected Franchisees
in this regard; and “
crafted an order for the franchisor
which
[the Court]
thought would be best suited to address the
franchisor’s best interests
”.
19.3. The Interdict Order
was fatally flawed as it sought to prevent the Affected Franchisees
from cancelling their franchise agreements
with CCF. But the Affected
Franchisees had already cancelled their franchise agreements by the
time the Interdict Order was handed
down. It was now impossible to
meet the terms of the Interim Order.
19.4. If this Court
refused to suspend the Interim Order, it would be prejudging a key
issues in the on-going arbitration proceedings
– namely whether
the Affected Franchisees validly cancelled their franchise agreements
with CCF; and, if not, whether specific
performance could be granted
to force the Affected Franchisees back into their relationship with
CCF.
19.5. The second
paragraph of the Interim Order (quoted in paragraph 7 above),
properly interpreted, means that the Interim Order
only applied for
60 days, or until the disputes were referred to arbitration. The
Interdict Order has thus lapsed.
19.6. Implementing the
Interim Order would be inequitable and impractical. The Affected
Franchisees point out that they have been
operating their stores as
Cash Xchange since 3 October 2023, and it would cause hardship if
they were now compelled to revert to
operating under the name of Cash
Crusaders, and alter their systems and operations to accord with
CCF’s requirements. Furthermore,
it would cause hardship if
they are compelled to re-enter a franchisee-franchisor relationship
with CCF, against a backdrop of
mistrust and open antagonism.
19.7. In addition, the
Affected Franchisees contend that CCF is perempted from enforcing the
Interdict Order because it “
expressly alternatively through
its conduct perempted the terms of the Court order
”.
20.
CCF contends that the relief sought by the Affected Franchisees does
not merely seek to suspend
the execution of the Interdict Order for a
defined period. Rather, the Affected Franchisees ask this Court to
completely neutralise
the Interdict Order; or to revisit the terms of
the Interdict Order in a stealth appeal process.
BACKGROUND
FACTS
21.
In order deal with the current matter, and the many arguments raised
by the Affected Franchisees,
it is necessary to deal in greater
detail with the disputes between the parties, and the many
proceedings before and after the
Interdict Order was granted.
(a)
The franchise agreements and CCF’s System before 1
November 2021
22.
As noted in
the judgment of Dolamo J in the Interdict Application – before
the fall-out with the Affected Franchisees, CCF
was a franchisor with
249 outlets throughout South Africa. Of these stores, 150 outlets
were operated by franchisees who had individually
concluded
franchisee agreements with CCF – which included all of the
Affected Franchisees. The remainder were what is known
as
corporate-owned stores.
[5]
23.
The business of all of Cash Crusaders outlets involves three
modalities:
23.1.
First
,
they sell new goods;
23.2.
Second
,
they buy and sell used goods; and
23.3.
Third
,
they enter into SSB transactions. Customers pledge movable property
as collateral for a cash loan, which is granted for a specified
period (usually 30 days). As alluded to in paragraph 5.1 above, these
SSB transactions fall within the definitional ambit of “
pawn
transactions
” as defined in section 1 of the NCA.
Consequently, when entering into SSB transactions, the franchisees
operate as “
credit providers
”; and the agreements
between the franchisees and the consumer are “
credit
agreements
” (section 8(4)(a) of the NCA). The manner in
which these SSB transactions are handled in CCF franchise outlets,
lies at the
heart of a long-running dispute between CFF and the
Affected Franchisees.
24.
The relationship between CCF and all of franchisees is regulated in
separate, but substantially
identical, franchise agreements (“
the
franchise agreements
”).
25.
The franchise agreements require the franchisees to operate and
advertise “
only under the name ‘Cash Crusaders’
without prefix or suffix
” (clause 9.2.3), and impose
various requirements to ensure standards and quality.
26.
The agreements also regulate amounts that franchisees must pay to
CCF, which include:
26.1. Weekly or monthly
payments of a “
royalty fee
” equal to 11.1% of the
gross profit in that period (clause 5.3 and clauses 5.11.1 and
5.11.2).
26.2. “[M]o
nthly
expenditures and contributions to advertising and promotion
”
(clause 5.5. and 11.1).
26.3. An annual royalty
and advertising contribution in respect of stock write-offs which
exceed 2% of the monthly retail sales
of the outlet (clause 5.11).
27.
In
addition, franchisees are required to “
purchase
all new products, equipment, supplies, and materials used or sold by
the Franchised Business solely from suppliers (including
manufacturers, wholesalers or distributors) which demonstrate, to
[CCF’s]
continuing
reasonable satisfaction, the ability to meet
[CCF’s]
standards
and specifications for such items
”,
as well as other requirements. These suppliers must pre-approved by
CCF (clause 7.12). It appears in practice this required
franchisees
to source new products and supplies from Crusaders Corporate (Pty)
Ltd.
[6]
28.
The agreements further provide for a dispute resolution mechanism
through arbitration for all
disputes arising out of the agreement, or
relating to its interpretation (clause 25.4). This does not preclude
CCF “
from seeking interdictory or declaratory relief or
instituting action proceedings
” if CCF “
in its
sole discretion, elected not to proceed by way of arbitration in
respect of such dispute
” (clause 25.13).
29.
In concluding the agreements, the franchisees acknowledged that that
they had,
inter alia
, “
conducted an independent
investigation of the rights granted by this agreement
” and
that they recognised that “
business venture contemplated
herein involves business risks …
” (clause 27.1.1).
30.
Importantly for current purpose, it is striking that the agreements
are almost completely silent
on the manner in which SSB transactions
must be handled. These operational aspects are, instead, regulated in
the “
Franchisor’s Operating Manual
” (“
the
Manual
”) and “
such other manuals as
[CCF]
may
develop and issue from time to time
” (clause 1.13).
31.
These operational aspects form part of CCF’s “
System
”
(“
the System
”), which is defined to mean “
the
distinctive business and franchise system developed by
[CCF]
and
conducted under the name of ‘Cash Crusaders’ relating to
the establishment and operation of retail businesses selling
pre-ownes and new goods to customers predominantly for use in a
domestic environment
” (clause 1.18).
32.
With regard to the Manual and the System, the agreements provide,
inter alia
, that:
32.1. CCF had developed
and owned “
the right to franchise the System
”,
which it had produced “
as the result of the expenditure of
time, skill, effort, and money
” (clause 2.1).
32.2. The distinguishing
characteristics of the System included the operation of businesses
and training “all of which may
be changed, improved, and
further developed by [CCF] from time to time” (clause 2.2).
32.3. Franchisees
understood and acknowledged “
the importance of
[CCF’s]
high standards of quality, appearance and service, and the
necessity of operating the Franchised Business in conformity with
[CCF’s]
standards and specifications
” (clause
2.5); and “
that every detail of the System …
[is]
essential
” to CCF for its operations and to protect its
goodwill and reputation (clause 7.1).
32.4. CCF would “
loan
”
a single copy of the Manual for the duration of the agreement (clause
6.2) to the Franchisee. This Manual was confidential,
remained the
property of CCF, and could not be copied or distributed (clause
10.1).
32.5. Franchisees were
obligated to “ensure the highest degree of quality and
service”, and to operate “
in strict conformity with
such methods, standards, and specifications that
[CCF]
may
from time to time prescribe in the Manual or otherwise in writing
”
(clause 7.7).
32.6. Franchisees
acknowledge and agreed that CCF “
may, from time to time in
its sole discretion, revise the Manual to incorporate System
changes
”. Franchisees were obligated to keep the Manual
current; and to “i
mplement any System changes
”
upon notice and in the period specified by CCF (clauses 7.1 and
10.2).
33.
Before 1 November 2021, the Manual and the System effectively
provided that franchisees would
levy repeated “
initiation
fees
” against customers to extend the period in an SSB
transaction. In simple terms, when a franchisee entered into an SSB
transaction
with a customer, the franchisee would charge an
initiation fee. The franchisee would then extend a loan to the
customer, usually
for a 30-day term, and hold moveable property
provided by the customer as security for repayment. But, in many
cases, the customer
would be unable to repay the loan at the
expiration of the term. The franchisee would then effectively extend
the term. But, because
this extension was treated as a fresh SSB
transaction, the franchisee would again charge an initiation fee. I
refer to this as
“
the original SSB System
”.
34.
A concern arose that this aspect of the System was unlawful, in that:
34.1. Section 101(1)(b)
of the NCA permits an initiation (in a prescribed amount) if “
the
application results in the establishment of a credit agreement with
that consumer
”.
34.2. But, section 101(2)
of the NCA continues that “
a credit provider who is a party
to a credit agreement with a consumer … and enters into a new
credit agreement with the
same consumer that replaces the earlier
agreement in whole or in part
”, could only charge a fresh
initiation fee “
to the extent permitted by regulation
,
having regard to the nature of the transaction and the character of
the relationship between the credit provider and consumer
.”
34.3. This was
problematic in light of Regulation 43 of the NCA Regulations, which
provides that “
supplementary conditions shall apply on the
application of the maximum initiation fee
”, including (in
Regulation 43(2)) that “
no initiation fee may be charged on
credit agreements as envisaged in section 101(2).
”
35.
CCF states that most major players in the industry also charged
multiple initiation fees when
extending the period of pawn
transactions. This had never been flagged as an issue by any of the
relevant authorities. But, once
this concern was raised, CCF obtained
several legal opinions, which came to divergent conclusions. It also
sought input from its
franchisees. Ultimately CCF states that it took
“
a strategic business decision
” to revise the SSB
System. This revised System was contained in amendments to the Manual
introduced on 1 November 2021. I
refer to this as “
the
revised SSB System
”.
36.
The Affected Franchisees have completely altered their views
regarding the lawfulness of the original
and the revised SSB Systems
over time. As noted above, in the proceedings before me they contend
that the Systems are unlawful.
They also contend that this
unlawfulness is addressed in the system that they now apply in their
Cash Xchange outlets (although
the outlines of this system are never
dealt with).
37.
But, at the time that the revised SSB came into effect, they adopted
a very different view –
borne of their frustration that the
revised SSB System would have the effect of them foregoing
considerable profits that they previously
earned by levying
initiation fees under the original SSB System. The Affected
Franchisees thus contended that the original SSB
System was lawful,
and that they had been sold a business model that included the
ability to charge multiple initiation fees when
extending the term of
an SSB transactions. The introduction of the revised SSB System was
thus viewed as an unjustified incursion
by CCF into their ability to
operate their business profitably.
(b)
The revised SSB System of 1 November 2021
38.
As noted above, the Affected Franchisees have now pivoted, and
implore this Court to come to their
assistance – in that they
contend that CCF’s revised SSB System remains unlawful.
However, in their founding papers,
the Affected Franchisees fail to
deal with the terms of the revised SSB System or explain why it is
unlawful.
39.
CCF has explained that terms of the revised SSB System limits
franchisees to charging a single
initiation fee, and does not permit
franchisees to levy repeated initiation fees when extending SSB
transactions. In this regard,
the revised System envisages an
original loan period of between 30 and 32 days (depending on when in
a month the loan was granted),
with up to three 30-day extensions.
Thereafter, a final extension is extended to the end of the next
calendar month. This allowed
customers the greatest opportunity to
repay the loan and recover their property (used to secure the loan).
In this scheme a single
initiation fee would be charged, but
additional income would be possible through increased interest rates
in the extension periods.
40.
After this period, customers would have several options, namely:
40.1. They could forfeit
the property presented as security, ending their obligation.
40.2. They can forfeit
the property presented as security, and then re-purchase it from the
franchisee under a standard lay-by facility
(with payments over three
months).
40.3. They could conclude
a new loan, with a new initiation fee, provided this was “
materially
different
” from the original loan.
41.
The material difference, envisaged in the last option, would be
achieved by:
41.1. The customer
bundling a second asset together the property put up to secure the
original loan. To ensure a material difference,
this second asset
would have to have a value of at least 50% of the original asset.
41.2. Paying a minimum of
50% of the capital value and settling fees for the original loan.
41.3. Revaluing the asset
put up in the original loan, and advancing a minimum of an additional
50% of the original capital value
and settling fees of the original
loan.
42.
To mitigate any potential loss of income for franchises, CCF provided
its franchisees an
ex gratia
concession on the royalty and
marketing contributions arising from profits on SSB transactions.
43.
CCF notes that this did not undermine profits, as other players in
the industry still charged
multiple initiation fees – and the
commercial advantage of a single initiation fee charged by CCF’s
franchisees had
translated into an increase in the number of SSB
transactions.
(c)
The Declarator Application
44.
At the time that the revised SSB System came into effect, a cohort of
disgruntled franchisees
– including the Affected Franchisees,
and others – raised a dispute against CCF, seeking a return to
the original SSB
System. This was referred to mediation on 20 April
2022, but failed to reach an acceptable resolution.
45.
The disgruntled franchisees elected not to refer this issue to
arbitration (in terms of the dispute
resolution mechanisms in the
franchise agreements). This was so because, in their view, the
lawfulness of the SSB System could
only be resolved by this Court.
46.
But, before
approaching this Court, the Affected Franchisees sought clarification
from the National Credit Regulator (“
NCR
”).
[7]
The NCR refused to entertain this matter.
47.
Accordingly, on 29 September 2022 the Affected Franchisees launched
the Declarator Application
(referred to in paragraph 5.1 above). In
this application, the Affected Franchisees sought declaratory relief
that:
47.1. The original SSB
System, and the levying of multiple initiation fees, was lawful;
47.2.
Alternatively
,
that the original SSB System complied with section 101(2) of the NCA;
and
47.3. The revised SSB
System was lawful.
48.
The papers in the Declaration Application are not before me. However,
what is evident is that
CCF opposed the application, and indicated
that the issues should be dealt with in arbitration proceedings (as
provided for in
the franchise agreements). Allied to this, CCF
brought a counter-application for a stay of the proceedings pending
the finalisation
of such arbitration proceedings.
49.
The Affected Franchisees opposed the counter-application, sticking to
their guns that issues of
lawfulness could not be dealt with in
private arbitration proceedings.
50.
Another
aspect that is evident from the papers before me is that the
Respondents to the Declarator Application included the National
Credit Tribunal (“
the
NCT
”);
[8]
the NCR;
[9]
and the Minister of
Trade, Industry and Competition (“
the
Minister
”
– as the executive authority responsible for the NCA).
51.
On 8 November 2022 (and after the exchange of pleadings between the
Affected Franchisees and CCF),
the office of the State Attorney noted
that the Minister was considering entering the matter. In so doing,
it was pointed out that
the argument raised by the Affected
Franchisees suffered an elementary flaw. The case was premised on
section 101(2) of the NCA
– which recognises the notional
possibility that a new initiation fee could be charged to the same
customer when extending
an existing pawn transaction. But what had
been ignored was that this was only possible to the extent permitted
by Regulations;
and Regulation 43(2) explicitly provides that no such
additional initiation fees can be charged in pawn transactions. The
State
Attorney thus suggested that “
there is no interpretive
issue that needs to be resolved as the applicable regulation is
express in its wording
.” In the event, the State Attorney
called on the Affected Franchisees to withdraw the Declarator
Application, failing which
a punitive costs order would be sought.
52.
On 1 December 2022 the NCR also provided a non-binding legal opinion,
setting out the provisions
of the NCA and Regulation 43(2). No
conclusions are offered, but it seems that the provisions were viewed
as self-explanatory.
53.
The Affected Franchisees, however, did not withdraw the application;
and note that it still needs
to be set down before this Court. They
pin responsibility for the delay on CCF, which they blame for failing
to agree to an order
confirming the correctness of the approach in
the State Attorney’s letter.
54.
I do not intend making any findings in this regard. As noted, I
do not have the papers before
me. Furthermore:
54.1. It is not clear to
me why the application presents a live dispute. The relief primarily
relates to the lawfulness of the original
SSB System, which no longer
finds application. Instead, it would appear that the Affected
Franchisees wish to use the Declarator
Application to receive the
benefit of an order that they can utilise to their advantage in the
arbitration proceedings.
54.2. It is also not
clear to me the basis the Affected Franchisees could expect any
order, other than one dismissing it. The relief
sought by the
Affected Franchisees is, after all, that original and revised SSB
Systems were lawful. But as matters have turned
out, the Affected
Franchisees no longer support that proposition.
(d)
The Interlocutory Application to Stay the Interdict
Application
55.
Curiously, on 3 May 2023 the Affected Franchisees then launched an
urgent, interlocutory application,
in which they now sought relief
that:
55.1. The main and
counter applications in the Declarator proceedings be stayed pending
a final determination in arbitration proceedings
(which would
consider various issues, including the lawfulness of the original and
the revised SSB Systems); and
55.2. The Court should
direct that an arbitrator be appointed and required to determine
various issues, including the lawfulness
points.
56.
I say this interlocutory application is curious as it appears that
the Affected Franchisees were
now clutching at an outcome that they
had actively opposed in the Declarator Application. Equally curious
is that CCF opposed this
application, even though the relief sought
correlates to that which CCF sought in its counter-application in the
Declarator proceedings.
57.
In any event, this interlocutory application was postponed for
hearing on 16 November 2023.
But by that stage matters had been
overtaken by subsequent events.
(e)
The Salestalk 330 arbitration proceedings
58.
On 21 July 2023, one of the Affected Franchisees – being
Salestalk 330 (Pty) Ltd –
commenced arbitration proceedings
against CCF for damages incurred from the loss of profits it suffered
as a result of the removal
of the original SSB System, and its
replacement with the revised SSB System.
59.
CCF understood that the other Affected Franchisees would follow suit,
and also seek damages on
the same basis.
60.
It appears that CCF adopted the position that it would be premature
to present its statement of
defence in these proceedings –
based on the fact that the underlying issue regarding the lawfulness
of the SSB Systems was
still serving before this Court (in the
Declarator Application).
(f)
The letter of 18 September 2023
61.
Matters came to a head once again on 18 September 2023. At this time
the attorneys for the Affected
Franchisees addressed a letter to
CCF’s attorneys alleging breaches of the franchise agreements,
and threatening that if
these were not remedied within 10 calendar
days, the Affected Franchisees would cancel their franchise
agreements.
62.
The letter of 18 September 2023 is quoted
in extenso
in this
Court’s judgment in the Interdict Application. It seems to me
that a proper understanding of the letter is essential
to an
understanding of the Interdict Order.
63.
The
Affected Franchisees commence by pointing to a “
litany
of complaints
”
against CCF, that had now been presented in a letter to the National
Consumer Commission on 1 September 2023 (“
the
NCC
”).
[10]
But, it does not appear that these are the source of the alleged
breaches of the franchise agreements upon which the franchisees
were
relying at this stage.
64.
Instead, the complaints raised by the Affected Franchisees link back
to the issue of the lawfulness
of the original and the revised SSB
Systems. The complaints seem to have two themes:
64.1. The first is that
CCF had sold a business model to the Affected Franchisees based on
the ability to levy initiation fees as
envisaged in the original SSB
System. The fact that the Affected Franchisees could no longer carry
on business in this manner caused
them “
significant losses
on the yield that they were led to believe by
[CCF]
that they
would be able to earn
”.
64.2. The second is that
the Affected Franchisees had operated their businesses based on this
unlawful SSB system. This benefitted
CCF, in that it resulted in
increased royalty payments from all franchisees. But the franchisees
were now exposed penalties, and
they could not “
operate
their franchises under the threat of this shadow
”.
65.
The Affected Franchisees contended that in all of the circumstances:
65.1. CCF had not
protected the “
legitimate business interests
” of
the Affected Franchisees, “
as contemplated in the franchise
agreements
”;
65.2. CCF’s
(unspecified) conduct towards the Affected Franchisees violated
(unspecified) provisions of the Consumer Protection
Act 19 of 2014
(“
the CPA
”) – including “
unconscionable
conduct
”, as defined in section 40 of the CPA. This appears
to relate to the manner in franchisees were supplied with new
appliances
and household goods.
65.3. CCF’s conduct
was designed to manufacture a basis for it to cancel the franchise
agreements, so as reduce the number
of parties stacked up against CCF
in arbitration proceedings and proceedings before this Court, In this
regard it was alleged that
CCF was “
not bona fide
”.
65.4. CCF had frustrated
the progress of the Declarator Application and arbitration
proceedings.
66.
Moving to the remedial action demanded, the Affected Franchisees
required CCF to:
66.1. “
Comply
with
[the Affected Franchisees]
demands as set out above
”.
(I note that it is not clear to me, and was not clear to CCF’s
attorneys, what these demands were, and how these
related to
obligations in the franchise agreements).
66.2. Remove any
uncertainty about the lawfulness of the revised SSB, and to provide
the Affected Franchisees with a written undertaking
that the revised
SSB System was lawful.
66.3. Provide a written
undertaking indemnifying the Affected Franchisees against any
“
penalties, claims or damages
” arising from their
past and future actions in implementing the SSB Systems.
66.4. Placing the
Affected Franchisees “
in the same earning capacity (i.e.
allowing them to practically earn the same yield on SSB contracts)
”
which the Affected Franchisees enjoyed under the original SSB System,
had the revised SSB System not been implemented.
66.5. Cease and desist
“
from any and all threats, intimidation and tactics
”
designed to engineer the cancellation of franchise agreements.
66.6. Commit, in writing,
to the existing arbitration proceedings, and other contemplated
proceedings, and seeing these through
“
as a matter of
urgency in the most practical and feasible fashion
”.
66.7. Provide a written
undertaking that the CCF would not use a legal fund, established
under clause 26 of the franchise agreements,
in disputes against the
Affected Franchisees, and to refund amounts already spent.
67.
In a response, of 19 September 2023, the CCF’s attorneys dealt
with the background facts
(as they understood them) and called on the
Affected Franchisees to withdraw the threats that they would cancel
the franchise agreements,
failing which CCF would approach this Court
for urgent relief to compel them to comply with the franchise
agreements, “
pending the determination by means of
arbitration of their entitlement to cancel
”.
68.
With respect to the demanded remedial action, CCF’s
attorneys sought clarity as to
what these were, their location in the
franchise agreements, and their legal basis.
69.
In a second letter (sent on a ‘without prejudice’ basis),
CCF’s attorneys proposed
a practical solution in terms of which
the lawfulness of the SSB Systems would be placed before an
arbitrator, who would also determine
the costs aspects of the
proceedings before this Court.
70.
The attorneys for the Affected Franchisees reverted on 21 September
2023 (in letters incorrectly
dated 18 September 2023). They perceived
CCF’s response to “
evince its unequivocal intention
not to remedy the breaches in question
”; and in almost
ecclesiastical terms offered “
a last opportunity to repent
the repudiation
”, which would otherwise be accepted and the
franchise agreements would be cancelled.
(g)
The Interdict Application
71.
In light of the above, on 22 September 2023 the FFC launched the
Interdict Application. I have
dealt with the relief sought in
paragraph 5 above. To recap, CCF sought to:
(a)
interdict the
Affected Franchisees from cancelling the franchise agreements on the
bases set out in the letter of 18 September
2023 (dealt with in
paragraphs 61 to 66 above); and
(b)
compel the Affected
Franchisees to comply with the franchise agreements,
pending
:
71.1. The final
determination of the Declarator Application, or arbitration
proceedings concerning the same issues as those in the
main
application in the Declarator Application; and
71.2. The final
determination, thereafter, by an arbitrator as to whether the issue
of the lawfulness of the SSB Systems entitled
the Affected
Franchisees to cancel their franchise agreements with CCF.
72.
In presenting their case, CCF contended that the complaints in the
letter of 18 September 2023
“
raise no breach, much less a
material breach entitling the
[Affected Franchisees]
to cancel
the franchise agreements
.” Furthermore, the underlying
disputes regarding the lawfulness of the SSB System were pending
before this Court in the Declarator
Application.
73.
On 26 September 2023, the Affected Franchisees filed a notice of
opposition in the Interdict Application.
74.
But then, after the close of business on 26 September 2023, matters
took a startling turn. The
attorneys for the Affected Franchisees now
adopted the position that CCF had indicated their refusal to
undertake the remedial
action demanded in the letter of 18 September
2023; and that this entitled the Affected Franchisees to cancel the
franchise agreements
immediately – which they purported to do.
This was done notwithstanding the fact that the letter of
18 September 2023
allowed CCF 10 days to undertake remedial
action (in accordance with the dispute resolution mechanism in the
franchise agreements).
This period had not as yet elapsed.
75.
CCF set out this new development in a supplementary founding
affidavit that it placed before the
Court. CCF indicated that it
viewed this attempted cancellation of the franchises agreements as a
repudiation, which was
not
accepted.
76.
In addition, CCF’s supplementary papers attached a draft order
setting out amended relief
designed to accommodate the new
development –
viz
. by seeking relief to direct the
Affected Franchisees to abide by the franchise agreements, pending
arbitration proceedings dealing
with the right to cancel the
franchise agreements on the grounds set out in the letters of the
Affected Franchisee’s attorneys
of 18 and 26 September 2024.
77.
On 27 September 2023, the Affected Franchisees filed a bloated
answering affidavit (spanning over
380 pages) – which began by
asserting that the Interdict Application was now moot.
78.
The Interdict Application came before this Court (per Dolamo J) on
Thursday, 28 September
2023; and the judgment and Order were
handed down on Tuesday, 3 October 2023.
79.
In its judgment, the Court set out the background facts, as well as
the arguments raised by the
parties. I note a few aspects:
79.1.
The Court
noted that the clear provisions of section 21(2) of the SC Act
provided it with jurisdiction to hear the matter in respect
of the
Affected Franchisees that operated in other parts of the country.
[11]
79.2.
The
judgment indicates that the Court fully understood that the Affected
Franchisees had purported to cancel the franchise agreements
on the
evening of 26 September 2023;
[12]
and that they accordingly now contended that the original relief
sought by CCF was moot.
[13]
Concomitantly, the Court also fully appreciated that the relief
sought by CCF would have to be amended – and that it
would no
longer suffice to merely interdict the cancellation of the franchise
agreements. To be effective, the relief would now
also have to direct
the Affected Franchisees to abide by their franchise agreements with
CCF.
[14]
79.3.
In dealing
with the
prima
facie
right established by CCF, the Court considered the attempt to cancel
the franchise agreements, and found that the “
alleged
breaches contained in the letter of 18 September 2023 are in vague
terms and have as their foundation the contention that
the
[original SSB System]
was
unlawful. As
[CCF]
pointed
out the letter does not identify a single clause of the franchise
agreement that was allegedly breached
.”
[15]
79.4.
The Court
quite correctly identified that the franchise agreements do not
contain a
lex
commmissoria
,
and that as such the Affected Franchisees could only cancel based on
a breach that was, objectively assessed, sufficiently
serious. The
Court found was “
not
persuaded that
[CCF]
is
in any way in breach of the franchise agreements nor
[does]
the
alleged breach stated in the letter of 18 September 2023 justify a
mass rescission of the franchise agreements …
”
[16]
79.5.
The Court
quite clearly appreciated that the relief sought by CCF “
in
effect seeks specific performance of the
[franchise]
agreements
”.
[17]
The Court also had regard to the argument by the Affected
Franchisees that franchise agreements required reciprocal trust,
and
that in these circumstances the relief sought by CCF was
inappropriate.
[18]
In this
regard the Court found that, as a matter of law, franchise agreements
do not create a fiduciary relationship, and the Affected
Franchisees
could not “
import
the element of trust into the franchise agreements
”.
[19]
80.
In the circumstances, the Court granted the Order, as set out in
paragraph 7 above.
(h)
The Enforcement Application
81.
However, as seen above, the Affected Franchisees did not comply with
the Interdict Order at all.
On the contrary, the Affected Franchisees
confirm that since 3 October 2023 they have all been operating under
the name and style
of Cash Xchange, “
effectively in
competition with
[CCF]
, under their own business systems, own
branding, and own suppliers, which are in many respects different to
that of
[CCF, and]
most importantly as to the previous
unlawful SSB systems of
[CCF]”.
82.
The immediate justification for this non-compliance with the
Interdict Order was that on 4 October
2023 the Affected Franchisees
launched an application for leave to appeal against the Interdict
Order. This was heard by this Court
(again, per Dolamo J) on 6
October 2023 and refused on 25 October 2023.
83.
Thereafter, on 26 October 2023, the Affected Franchisees sought
leave to appeal from SCA,
in accordance with section 17(2)(b) of the
SC Act. At the same time, the Affected Franchisees adopted the stance
that the Interdict
Order, although presented as an interim interdict,
was actually final in effect.
84.
In response, on 30 October 2023 CCR launched the Enforcement
Application, referred to in
paragraph 10 above. This application had
two prongs, depending on whether the Court found that the Interdict
Order was interim
or final in effect:
84.1.
First
,
CCR sought a declaration that the Interdict Order operated as an
interim order, without final effect. In accordance with section
18(2)
of the SC Act, this meant that the Affected Franchisees application
for leave to appeal to the SCA did not suspend the immediate
effectiveness of the Interdict Order.
84.2.
Second
,
and in the alternative, CCR dealt with the situation if the Court
found that the Interdict Order was in fact final in effect.
In terms
of section 18(1) of the SC Act, this would mean that the Interdict
Order was automatically suspended while an application
for leave to
appeal remained before the SCA. CCR asked that in this event, the
Court should override the suspension of the Interdict
Order, and
direct that was immediately operative – as allowed under
section 18(3) of the SC Act.
85.
The Affected Franchisees also brought a counter-application to
protect their position if the Court
found that the Interim Order was
interim in effect. In this event, they sought that the Court should
suspend the operation of the
Interdict Order until all applications
for leave to appeal had been finalised.
86.
The Enforcement Application came before this Court (per Lekhuleni J)
on 10 November
2023. In its judgment and order of 26 January
2024, the Court accepted the arguments presented by the Affected
Franchisees, and
found that the terms of the Interim Interdict were
final in effect. This is so in that:
86.1.
The
Interdict Order would remain in place until the finalisation of
arbitration proceedings, which could be a considerable time.
Tethering the Affected Franchisees to franchise agreements with CCF
was “
invasive
and far-reaching, especially considering the breakdown of trust and
confidence in the relationship between the parties.
”
[20]
86.2.
The
judgment in the Interdict proceedings made the “
factual
determination
”
that the letters from the attorneys for the Affected Franchisees (of
18 and 26 September 2023) did not validly cancel the
franchise
agreements. The Court suggested that this finding could not be
reconsidered by another court; and anticipated the central
issue in
the arbitration proceedings between the parties.
[21]
86.3.
The
Interdict Order is premised on an underlying finding, in which the
Court rejected a jurisdictional defence raised by the Affected
Franchisees. This “
had
the effect of finally and irreversibly disposing of a self-contained
defence
”.
[22]
(i)
The exhaustion of leave to appeal processes
87.
Interestingly, on 22 January 2024, the SCA (per Mocumie ADP and
Kathree-Setiloane JA) refused
the Affected Franchisee’s
application for leave to appeal. This was a few days before the Order
in the Enforcement Application
was handed down (on 26 January 2024).
I assume that the SCA’s Order was not placed before Lekhuleni J
before he handed down
the Enforcement Order.
88.
If he had
been made aware of the SCA’s Order, Lekhuleni J would have been
compelled to find that the Enforcement Application
was moot –
in that it related to the enforceability of the Interdict Order while
the SCA considered an application for leave
to appeal. Once the SCA’s
Order was handed down, the relief in the Enforcement Application had
no practical effect. Based
on the SCA’s findings in
Stransham-Ford
[23]
and a Full Court in
Vinpro
,
[24]
the Enforcement Application should have been dismissed on the basis
that the Court no longer had the jurisdictional power to decide
the
matter.
89.
In any event, armed with the judgment and the Enforcement Order, the
Affected Franchisees applied
to the President of the SCA to
reconsider their application for leave to appeal – in terms of
section 17(2)(f) of the SC
Act. This application was refused on 4
April 2024.
90.
Still undeterred, on 30 April 2024 the Affected Franchisees launched
an application for leave
to appeal to the Constitutional Court. In
this application the Affected Franchisees valiantly attempted to
argue that the case
raised “
constitutional matters
”,
thus falling with the Constitutional Court’s jurisdiction in
section 167(3)(b)(i) of the Constitution. But these
are, with
respect, contrived. Thus, the only basis on which the Constitutional
Court would have possibly entertained the matter
would have been if
it was found to raise an “
arguable point of law of general
public importance which ought to be considered
” by that
Court (in terms of section 167(3)(b)(ii) of the Constitution).
91.
In an Order of 22 July 2024, the Constitutional Court refused leave,
indicating that the matter
did “
not engage its
jurisdiction
”. I understand this to mean that the Court
found that the case did not meet the requirements set out in section
167(3(b)(ii)
of the Constitution.
GENERAL
PRINCIPLES
92.
CCF
contends that the starting point for the consideration of this matter
must be that court orders matter, and must be respected.
As the
Constitutional Court has asserted, “
all
orders of court, whether correctly or incorrectly granted, have to be
obeyed unless they are properly set aside
.”
[25]
This is a matter of profound importance, as “[a]
llowing
parties to ignore court orders would shake the foundations of
the law, and compromise the status and constitutional mandate
of the courts. The duty to obey court orders is the
stanchion around which a state founded on the supremacy of
the Constitution and
the rule of law is built
”.
[26]
93.
Allied to
this is the doctrine of
stare
decisis
.
In
Gcaba
[27]
the Constitutional Court explained this to mean that “
in
the interest of certainty, equality before the law and the
satisfaction of legitimate expectations, a court is bound by the
previous decisions of a higher court and by its own previous
decisions in similar matters
.”
In
Turnbull-Jackson
[28]
the Court added that respect for precedent is “
a
core component of the rule of law
”.
On this basis, those findings of the Court in the Interdict Judgment
which form part of the
ratio
decidendi
(i.e. which form part of its rationale and the basis for granting the
Interdict Order),
[29]
must be
respected unless obviously wrong.
94.
But merely
invoking principles regarding the value of court orders and precedent
cannot be an answer to the case raised by the Affected
Franchisees in
these proceedings. After all, the Affected Franchisees cannot be
accused of simply turning their faces against the
Interdict Order; or
adopting an attitude of bloody-minded intransigence.
95.
As dealt with
above, in the period until 22 July 2024 their refusal to comply with
the terms of the Interdict Order was based on
their contention that
its terms were final in effect. This meant that, in terms of section
18(1) of the SC Act, the Interdict Order
was suspended while they
pursued applications for leave to appeal.
96.
The strategy
adopted by the Affected Franchisees may have been somewhat high-risk
and bold (in that if they were wrong, and the
Interdict Order had
been found to be purely interlocutory in nature, they would have had
no excuse for their failure to immediately
comply with the Interdict
Order). But, as found by this Court in the Enforcement Application,
the Affected Franchisees were correct
in asserting that the Interdict
Order was final in effect. The Order in the Enforcement Application
must also be respected.
97.
As a result,
the Affected Franchisees cannot be condemned for their refusal to
comply with the Interdict Order while their applications
for leave to
appeal continued. They were acting within their rights.
98.
Furthermore,
once the Affected Franchisees had exhausted all avenues for leave to
appeal, they acted proactively by launching the
current application.
This points against any suggestion that the Affected Franchisees are
acting in a unilateral manner and with
a flagrant contempt for orders
of this Court.
99.
The analysis required must focus on the
powers of this Court to suspend the Interdict Order, rather than the
incantation of mantras
about the general importance of respecting
orders and judgments.
100.
As
intimated in paragraph 15 above, this Court’s power to suspend
the execution and operation of its orders arises from its
inherent
powers, now entrenched in section 173 of the Constitution.
In
SABC
[30]
the
Constitutional Court described the inherent power of the superior
courts as follows:
“
The
power in section 173 vests in the judiciary the authority to uphold,
to protect and to fulfil the judicial function of administering
justice in a regular, orderly and effective manner. Said otherwise,
it is the authority to prevent any possible abuse of process
and to
allow a
Court
to act effectively
within its jurisdiction
.”
101.
Rule 45A codifies one aspect of this
inherent power.
102.
Flowing from its inherent power and Rule
45A, the power of superior courts to suspend the execution of their
orders usually finds
application in two broad categories of cases.
102.1.
The
first
category arises where the “
underlying
causa
”
of the order remains in dispute, or no longer exists, or “
when
an attempt is made to use the levying of execution for ulterior
purposes
”;
and if “
real
and substantial justice compels such action.
”
[31]
This category of cases is exemplified by matters in which a party
bound by an order brings proceedings to rescind that order.
[32]
In these cases, the application for rescission does not have the
automatic effect of suspending the order. However, a court will
take
cognisance of the fact that if the rescission application is
successful, the obligation to comply with the dictates of the
order
would be removed. Similarly, courts have employed this power after
refusing an application for rescission, but the party
that sought
rescission seeks to appeal that decision.
[33]
Ultimately, if a court suspends the execution of an order in these
circumstances, and the efforts to rescind that order are
unsuccessful,
then the order is once again effective. In a similar
vein, in
Mokone
v Tassos Properties
[34]
and
Rissik
Street
[35]
the Constitutional Court invoked the inherent power of superior
courts as a basis for orders staying proceedings for the ejectment
of
busness until other related proceedings could be finalised.
102.2.
The
second
category
occurs when there is no remaining challenge that can be pursued to
set an order aside – but the temporary suspension
of that order
will cause comparatively little prejudice to the party in whose
favour the order was granted; while at the same time
immediate
execution of the order would cause another party to suffer “
real
and substantial injustice
”.
[36]
This has found application in cases in which courts have been called
upon to stay an order permitting a sale of immoveable property
in
execution;
[37]
to stay an
order for ejectment from commercial premises;
[38]
and to stay payment of money.
[39]
This power is rooted in the powers of courts to regulate their own
processes.
[40]
As noted
by this Court in
Stoffberg
,
the discretion of a court to suspend the execution of its orders in
such cases must be exercised judicially, based on the facts
and a
determination of substantial injustice.
[41]
It cannot be based on a “
mere
plea ad misericordiam
”.
[42]
Furthermore, the temporal limits of the suspension must be limited
appropriately an order.
[43]
103.
In
my view further guidance as to the limits of this Court’s
powers in suspending the effect of its orders can also be gleamed
from its specific powers of suspension in other circumstances.
103.1.
Most
notably, when granting relief in a “
constitutional
matter
”,
this Court’s powers are regulated under section 172(1) of the
Constitution. This provides that this Court “
must
declare that any law or conduct that is inconsistent with the
Constitution is invalid to the extent of its inconsistency
”
(section 172(1)(a)). But, following on from such a substantive
declaration, this Court has a broad discretion to craft consequential
relief that is “
just
and equitable
”
– which may include an order “
suspending
the declaration of invalidity for any period and on any conditions,
to allow the competent authority to correct the defect
”
(section 172(1)(b)(ii) of the Constitution). But, even in such cases,
in which larger societal interest are in play, a successful
litigant
should be protected and granted effective relief;
[44]
and orders should be interpreted to ensure that this occurs.
[45]
In addition, if remedial action is not taken within a period of
suspension, the impugned law or conduct becomes invalid and cannot
be
revived.
[46]
103.2.
When
reviewing and setting aside administrative action, the Court’s
powers are contained in
section 8(1)
of the
Promotion of
Administrative Justice Act 3 of 2000
, which provides that a court may
“
grant
any order that is just and equitable
”.
This often requires a court to suspend its substantive finding when
an action or decision is unlawful, based on the public
good. But, in
Allpay 2
,
[47]
the Constitutional Court again highlighted that an effective remedy
was important, and the “
corrective
principle
”
means that an order must seek to “
correct
the wrongs that led to the declaration of invalidity
”,
while also ensuring the public good.
[48]
103.3.
Similarly, a court ordering the eviction of an unlawful occupier must
consider a range of factors
to determine when the occupiers must
vacate – in terms of
sections 4(8)
and (9) of the Prevention of
Illegal Eviction from and Unlawful Occupation of Land Act 19 of
1998.
104. Flowing
from the above, several guiding principles can be determined which
are important in the current matter.
105. In the
first
place, a distinction must be made between the
substantive legal and factual findings made by a Court in resolving a
dispute; and
the discretionary power it exercises to regulate the
operation and execution of its resulting orders.
105.1.
This gains particular importance in the current matter. The
substantive and legal findings were made
in the Interdict Judgment,
and were translated by that Court into the provisions of the
Interdict Order.
105.2.
This
Court’s remaining powers – under Rule 45A and/or inherent
power – are limited to regulating any issues arising
from the
implementation of the Interdict Order. This power may be significant,
but is not an invitation to revisit, reconsider,
amend, or quietly
undermine antecedent findings of law and fact.
[49]
105.3.
In this sense then, the Interdict Judgment must be respected, as must
the provisions of the Interdict
Order – which flow from the
findings of fact and law in the Judgment.
105.4.
This Court has no general power to revisit orders which are final in
effect. The remedy available
to the Affected Franchisees to correct
any aspect of the Interdict Order arising from erroneous findings of
fact and law in the
Interdict Judgment was to pursue an appeal. It
attempted to do so, with vim and vigour, but failed to convince any
Court that an
appeal was justified. The precise reasons why leave to
appeal was refused by this Court, the SCA, and the Constitutional
Court,
are not relevant. The consequence remains that the findings of
law and fact in the Interdict Judgment remain undisturbed; and the
power to regulate the implementation of the Interdict Order cannot be
transmogrified into a stealth appeal process.
106. In the
second
place, measures introduced to regulate the
implementation of the Interdict Order must still ensure that CCF
obtains the benefit
of effective relief.
106.1.
In the Interdict Judgment and Order, the Court established that CCF
had established the right to
receive relief preventing the Affected
Franchisees from giving effect to their actions purporting to cancel
the franchise agreements.
106.2.
A measure to regulate the implementation of the Interdict Order could
notionally delay the date on
which this relief could be realised. But
in so doing this Court cannot strip CCF of effective relief, or
nullify the Interdict
Order.
106.3.
As seen, even when dealing with public power, courts must ensure that
effective relief follows. In
some cases, a successful litigant may be
expected to be satisfied with declaratory relief as a vindication of
their rights –
but that only arises when there are compelling
countervailing considerations of the public good. These
considerations do not apply
in this case.
106.4.
But yet, the order sought by the Affected Franchisees completely guts
the Interdict Order. It simply
has not practical value if the
suspension relief is granted.
107. In the
third
place, in granting the Interdict Order, the Court
already made a determination regarding how the Interim Order should
be implemented,
and how long it would last. In my view. this Court
would only reconsider this issue based on ‘new’ facts,
which compellingly
show that the Affected Franchisees will face real
and substantial injustice.
108. In the
fourth
place, the Affected Franchisees cannot expect
this Court to come to its assistance to save it from the consequences
of its own
strategic decisions.
108.1.
The Affected Franchisees elected to adopt the approach that the
Interdict Order was final in effect;
and convinced the Court in the
Enforcement Application that this was correct.
108.2.
By doing so the Affected Franchisees received the benefit that the
Interdict Order was suspended
while they pursued every possible
application for leave to appeal. The fact that these applications for
leave to appeal took some
time only benefitted the Affected
Franchisees further.
108.3.
But as with all strategies, it was not risk-free. Also, just because
a litigant is acting within
their rights does not mean that a Court
should ignore the consequences of their actions.
108.4.
The Affected Franchisees knew that they were insulated, and that they
could afford the time it would
take to launch multiple applications
for leave to appeal. The same was not true for CCF, which lost the
royalties it should have
earned from the Affected Franchisees if the
franchise agreements were in place. The request for reconsideration
by the President
of the SCA, and the application for leave to the
Constitutional Court – show the hallmarks of a siege
litigation. With respect,
I do not believe that the Affected
Franchisees could have seriously believed that the Interdict Order
raised a matter of such importance
that it would entice the
Constitutional Court to hear it.
108.5.
The
Affected Franchisees must also accept that their strategy came with a
great risk. Once the process of seeking leave to appeal
from every
court had been exhausted, their protection would end abruptly.
[50]
108.6.
By contrast, if the Affected Franchisees had accepted that the
Interdict Order was purely interlocutory,
it would have much enjoyed
greater scope to approach this Court to revisit the Interdict Order.
But, because of its own strategic
choices, this is not open to them.
108.7.
As pointed
out by Kriegler J,
[51]
litigation presents a “
minefield
of hard choices
”,
each of which has “
decisive
consequences and therefore poses difficult decisions
”.
The Affected Franchisees made their choices, and for a long time this
benefitted them.
109. In light
of these principles, the relief sought by the Affected Franchisees is
clearly unsustainable. They fail
to point to rights that are
threatened; and their assertions about the interest of justice are
not compelling.
THE AFFECTED
FRANCHISEE’S CRITICISMS OF THE INTERDICT JUDGMENT
110. Much of
the application before is based on a broad-side attack on the
Interdict Judgment, and the relief granted
to CCF in the Interdict
Order. The Affected Franchisees thus describe the Interdict Order as
“
contradictory
”; they assert that the Order
“
should never have been granted
”; they contend
that the Interdict Order incompetently sought to interdict action
that had already taken place; and they conclude
that Interdict Order
must be “
re-evaluated within the present context
”.
111. These
arguments are, in my view, misplaced. As indicated above, this Court
cannot take up the Affected Franchisee’s
complaints that the
Interdict Judgment and Order are wrong.
112. In any
event, even if I was inclined to delve into the Interdict Judgment,
the various criticisms raised by the
Affected Franchisees seem to
miss the mark. For instance:
112.1.
I can see
no good reason to call into doubt the Court’s findings on
jurisdiction. Based on section 21(2) of the SC Act, as
an expression
of the
causae
continentia
rule,
[52]
the Court plainly
had jurisdiction over franchisees from around the country.
Furthermore, the fact that the franchise agreements
envisaged
arbitration as a mechanism to resolve disputes between the parties,
did not oust this Court’s power to hear proceedings
arising
from a dispute between the parties.
112.2.
The Court’s
decision to allow CCF an opportunity to amend its relief was
eminently reasonable, even if this did not strictly
follow the
strictures of Rule 28. By cancelling the franchise agreements shortly
before the hearing (in which that right to cancel
would be
considered), the Affected Franchisees did not cover themselves in
glory. Not only did this undermine this Court’s
processes, but
the Affected Franchisees’ justification for cutting short the
10-day period (allowed for remedial action to
be taken in the letter
of 18 September 2023) appears to me to be contrived and self-serving.
In any event, the Court exercised
a ‘true discretion’
when allowing an amendment of the relief in the Interdict
Application, which another Court must
respect.
[53]
112.3.
I note that
in the judgment in the Enforcement Application, the Court raises a
concern that the Interdict Order effectively seeks
to prevent past
actions – namely the cancellation of the franchise agreements,
which had already occurred.
[54]
The Affected Franchisees criticise the Interdict Order for the same
reason. But in my view this is incorrect.
112.4.
I accept,
of course, that interdictory relief must prevent future actions, and
cannot be targeted at that which has already occurred.
[55]
However, it must also be recalled that CCF disputed both the validity
and efficacy of the attempts by the Affected Franchisees
to cancel
their franchise agreements (as contained in the letters from their
attorneys of 18 and 26 September 2023).
112.5.
In this regard, CCF acknowledged that the actions of the Affected
Franchisees amounted to a repudiation,
but elected to hold the
Affected Franchisees to the franchise agreements. In other words, the
franchise agreements remained valid.
In its Interdict Judgment, the
Court accepted that a
prima facie
case had been made out by
CCF in this regard. In other words, on a
prima facie
basis it
appeared that the attempted cancellation of 26 September 2023 was
ineffective.
112.6.
Thus, in granting the Interdict Order, the Court was not imposing an
agreement on the parties that
no longer existed. The critical finding
is instead that the franchise agreements are, at least
prima
facie
, still in place. Against this backdrop the relief in the
Interim Order prevents the possibility that the Affected Franchisees
from
taking fresh action to cancel the agreements based on their
attorney’s letters of 18 and 26 September 2023; and prevents
the Affected Franchisees from future actions giving effect to their
questionable attempts to cancel the franchise agreements.
112.7.
I cannot criticise the Court’s finding that the letter of
18 September 2023 (which formed
the foundation of the Affected
Franchisees’ attempt to cancel the franchise agreements) is
vague. I would have gone further.
I have attempted above to set out
the content of the letter fairly. But after reconsidering it several
times, it remains a turgid
and ponderous document. In particular, it
provides no clear indication of a breach by CCF or the franchise
agreements.
112.8.
The central theme of the complaint by the Affected Franchisees
appears to relate to CCF’s introduction
of the revised SSB
System in November 2021. But it remains entirely unclear to me why
this action would constitute a breach of
the franchise agreements.
CCF was always entitled to revise the Manual and its System,
including the manner in which franchisees
would charge initiation
fees in SSB transactions. In addition, the Affected Franchisees
acknowledged that they had undertaken their
own due diligence
examination of CCF’s System, and that the operation of a
franchise involved commercial risk.
113. It is
also telling that the Affected Respondents were all poised to
commence trading on 3 October 2023, under a
different name and
operating a different system. To my mind this indicates that they
were resolutely bent on severing their ties
with CCF; and,
significantly, to halt payments of royalties to CCF. CCF indicated
that this would affect the viability of their
remaining business, and
would impact their ability to defend arbitration proceedings. This
was no doubt the intention.
114.
Furthermore,
the fact that the Interdict Order amounts to specific performance is
not obviously problematic.
[56]
In
Foize
[57]
the SCA held that when a party sought specific performance in an
application for interim relief, it “
was
not required to prove it would suffer harm if the interdict was not
granted. All it had to show was that the respondents were
either
breaching or threatening to breach the …. agreement, or were
intentionally assisting or encouraging another to breach
such
agreement.
”
115.
Furthermore,
allowing the Affected Franchisees to walk away from the franchise
agreements would amount to an on-going wrong to CCF.
The calculation
of damages in such circumstances would be complex at a later stage.
In
Edrei
[58]
the Court held that in such cases interdictory relief was
appropriate.
116.
Finally,
there can be no suggestion that this Court must suspend the Affected
Franchisees so as to avoid pre-judging issues that
will serve before
the pending arbitration proceedings. I make no findings of this kind.
The Court’s central findings in the
Interdict Application are
explicitly made on a
prima
facie
basis, and would not bind the arbitrator.
[59]
They remain there, even if a suspension order was granted.
THE
60-DAY PERIOD IN THE INTERDICT ORDER
117. The
Affected Franchisees attempt to gain some traction from the 60-day
period referred to in the second paragraph
of the Interdict Order
(quoted in paragraph 7 above).
118. In the
first
place, they argue that the Interdict Order must
be understood to mean that the interdictory relief (in the first
paragraph of the
Order) expired 60-days after it was granted (on 28
September 2023).
119. This,
with respect, an odd argument for the Affected Franchisees to make.
If the submission was correct, the current
application would be
entirely moot, and I would be compelled to dismiss the application.
It would plainly be illogical for this
Court to suspend an Order that
has expired.
120.
Furthermore, if the Affected Franchisees had any confidence in this
contention, they would surely not have pursued
the multiple
applications for leave to appeal.
121.
In any
event, the argument is plainly wrong. Thanks to the efforts of the
Affected Franchisees in the Enforcement Application, we
have
confirmation that the Interdict Application was final in effect –
and was thus suspended with each of the consecutive
applications for
leave to appeal. This suspension would freeze the running of the
60-day period in the Order.
[60]
122. In the
second
place, the Affected Franchisees suggest that the
60-day period in the Interdict Order commenced after the
Constitutional Court
refused leave to appeal (on 22 July 2024) –
and that the interdictory relief fell away when this period elapsed.
123. Again, I
am somewhat perplexed why the Affected Franchisees would raise such
an argument. What would have been
the purpose of loading this Court
with a record spanning 9 lever arch files (spanning various
applications), in respect of an Order
which was all but expired by
the time of the hearing?
124. It would
seem to me to be quite obvious: If the Interim Order is understood
properly (based on its text, context,
and purpose), the relevance of
the 60-day period is clear. It was to ensure that appropriate
proceedings were set down in this
time. Once those proceedings were
launched, the second paragraph of the Order was fulfilled, and it
fell away. The interdict relief
in the first paragraph of the
Interdict Order remained. If it was otherwise, it would mean the
Court meant to force the Affected
Franchisees back into the CCF fold
for just 60-days, and then to allow them to leave again. This would
be a peculiar outcome.
THE
LAWFULNESS OF CCF’S SSB SYSTEM
125. As dealt
with above, Affected Franchisees initially contended that the
original and revised SSB System were lawful.
In fact, they felt so
strongly about this that they were moved to bring the Declarator
Application.
126. But,
when the State Attorney pointed out the obvious flaw in their
argument (based on their apparent ignorance
of Regulation 43(2)), the
Affected Franchisees became enthusiastic, and somewhat dogmatic,
converts – now convinced that
the original and revised SSB
System were both unlawful.
127. In the
current application, the Affected Franchisees again raise this issue
as an ostensible basis justifying the
suspension of the Interdict
Order.
128. As
I understand it, the Affected Franchisees originally contended that I
should venture into this dispute,
and if I found that the original
and/or the revised SSB Systems were unlawful, then I should suspend
the Interim Order. Anything
else would mean that the Affected
Franchisees would be dragooned (by CCF and this Court) to operate
under CCF’s unlawful
systems.
129.
Alternatively, the Affected Franchisees suggest that I should
recognise that the original and/or revised SSB Systems
may be found
to be unlawful in the near future – and for this reason alone I
should ensure that the Interdict Order never
takes effect.
130. To
confound matters further, on 5 August 2024 CCF again altered its SSB
System. (I refer to this as “
the current SSB System
”).
At first one would think that the alteration would give the Affected
Franchisees succour, as it removes any obligation
on franchisees to
charge customers a second initiation fee in any circumstances.
131. To
explain: The revised SSB System is dealt with in paragraphs 35 to 41
above. In that System there was a final
stage in which customers
extend an existing SSB transaction, provided they bundled the
property held as security together with
a second item of greater
value. This would be considered a fresh transaction, and the
franchise would be required to charge a new
initiation fee.
132. The
Affected Franchisees, however, still find the current SSB System
unacceptable.
133. In fact,
they contend the introduction of the current SSB System adds
injustice on injustice. This is so as the
Interdict Order, when
granted, attempted to force them into a specific contractual
relationship with CCF under a particular business
model. Now they
were forced into a different contractual relationship with CCF, with
a different business model. This new business
model was
not
one that the Court had in mind when granting the Interdict Order; and
was also
not
one that the affected Franchisees has signed up
for.
134.
Furthermore, the Affected Franchisees held firm that I should still
also consider the lawfulness of the original
and the revised SSB
Systems; or at least recognise the possibility that these Systems
could soon be found to be unlawful.
135. I see no
reason why the question of the lawfulness of the original and the
revised SSB Systems would be of any
value in considering whether to
grant suspension relief under Rule 45A.
136. The Rule
45A relief must be concerned with the Affected Franchisee’s
rights, or real and substantial injustice.
These determinations must
be made on the facts as they present themselves now. Any findings
about the lawfulness of historical
SSB Systems cannot be relevant.
137. In
addition:
137.1.
It would inappropriate for me to venture into a consideration of
issues, that have been raised between
the same parties, for much the
same reason, in other proceedings.
137.2.
It appears to me, at least at first blush, that questions regarding
the lawfulness of the original
and revised SSB Systems are moot.
137.3.
The Affected Franchisees have not placed me in a situation in which I
can make any legal findings
about the original and revised SSB
Systems with any confidence. The papers in the Declaratory
Application were not placed before
me; and the Affected Franchisees
did not even describe an outline of the revised SSB System in their
founding papers.
137.4.
It is not clear to me at all why the Affected Franchisees contend
that the revised SSB System is
unlawful.
138. The
arguments raised by the Affected Franchisees regarding the current
SSB System, are similarly misplaced.
138.1.
The franchise agreements between CCF and the Affected Franchisees
have not changed, not could CCF
unilaterally change these contracts.
138.2.
All that has changed in one aspect of the SSB System, as contained in
the FFC Manual. As dealt with
above, the franchise agreements do not
deal with SSB transactions, or dictate how they are implemented.
These aspects are all contained
in the Manual – which is
created, updated, and improved by FFC alone. Franchisees agreed to be
bound by the Manual. They
have no rights or expectations to operate
under any particular iteration of the Manual.
138.3.
In any event, even if the Affected Franchisees were being coerced
into a new business model, they
would have to provide evidence that
it would cause them profound to operate under these conditions.
PEREMPTION
139. In a
supplementary affidavit the Affected Franchisees contend that CCF had
expressly, or through conduct, perempted
the terms of the Interdict
Order, and thus could not enforce the Order.
140. CCF
notes that in making this argument, the Affected Franchisees failed
to point to any statements or conduct that
were consistent with an
intention to abandon the Interdict Order. Furthermore, CCF’s
consistent opposition to all of the
applications for leave to appeal,
and to the current application, clearly indicated that it has no
intention of abandoning the
Interdict Order.
141.
The
conduct that the Affected Franchisees rely on is that CCF has in some
case set up new Cash Crusader stores in close proximity
to Cash
Xchange stores.
142.
CCF
responds by pointing out that it is not unusual to have outlets in
close proximity to one another, and that none of the franchise
agreements cater for geographical exclusivity for any franchisor.
143.
The
test for peremption is an exacting one. In
Qoboshiyane
[61]
the test was
restated
as follows:
“
If
the conduct of an unsuccessful litigant is such as to point
indubitably and necessarily to the conclusion that he does not intend
to attack the judgment, then he is held to have acquiesced in it. But
the conduct relied upon must be unequivocal and must be inconsistent
with any intention to appeal. And the onus of establishing that
position is upon the party alleging it. In doubtful cases
acquiescence,
like waiver, must be held non-proven.
”’
144.
In
Mhlontlo
Local Municipality and Others v Ngcangula
[62]
the SCA explained that –
“
the
principle of peremption safeguards the integrity of the
judicial process by preventing litigants from oscillating
between
contradictory positions, ensuring judicial consistency and fairness.
It ensures finality and stability in legal proceedings, which
is
essential for maintaining public trust in the justice system. The
underlying principle of the doctrine of
peremption
is
that a litigant cannot take two inconsistent positions. Accordingly,
an unsuccessful litigant cannot appeal a judgment
it has acquiesced
to. In order to succeed on
peremption
a
respondent must demonstrate with reference to the facts before court
that an appellant’s unequivocal conduct after
having obtained
leave to appeal, is inconsistent with an intention to appeal
”
.
IMPOSSIBILITY
OF PERFORMANCE
145. The
Affected Franchisees raise a catalogue of practical issues that they
suggest make it impossible for them to
give effect to the Interdict
Order; or which are so burdensome that it is not in the interests of
justice that they yoked with
these difficulties.
146.
CCF
contends that the arguments can carry no weight, and points to
dicta
in which courts have refused stay applications sought by litigants
who are the “
authors
of their own misfortune
”
as result of their failure to follow the Uniform Rules, follow
directives, or by acting carelessly, in a dilatory manner,
and in bad
faith.
[63]
147. In my
view the Affected Franchisees cannot be accused of acting improperly
or recklessly. As noted above, they
adopted a bold strategy by
asserting that the Interdict Order was final in effect, and was thus
suspended while they pursued multiple
applications for leave to
appeal. But, this approach was accepted in the judgment in the
Enforcement Application; and must also
be respected.
148. I do not
intend to deal with all of the practical issues raised by the
Affected Franchisees. In my view, they can
be dealt with
thematically.
149. A large
number of the issues raised were also placed before Court when the
Interdict Application was heard. That
Court was unmoved by the
Affected Franchisees lamentations. As noted above, it is not for this
Court to revisit matters which were
considered in the Interdict
Application.
150. The new
issues that the Affected Franchisees raise all came about because of
their strategic choice to start trading
as Cash Xchange outlets on 3
October 2023 (i.e. the very same day that the Interdict Judgment and
Order were handed down); and
to chase down applications for leave to
appeal in every court possible.
151. The fact
that the Affected Applicants could so seamlessly switch over from
Cash Crusaders outlets, to Cash Xchange
outlets, dulls the sound of
their cries that it will be so impossibly burdensome to switch back.
152.
Furthermore, CCF has come forward and offered assistance to the
Affected Franchisees to ease their concerns, and
even offered to free
the Affected Franchisees from some obligations.
153. The
Affected Franchisees retort that this assistance is unacceptable, and
amounts to CCF self-selecting those parts
of the Interdict Order that
it wishes to assert, and foregoing other parts. This argument is hard
to understand. The Interdict
Order only refers to the franchise
agreements. How the parties implement those agreements between
themselves is not a matter that
the Interdict Order addresses.
Furthermore, if the Affected Franchisees do not want assistance, or
do not want to be freed from
any contractual commitments, they can
tell this to CCF. It is not my understanding that anyone is forcing
assistance on them.
154.
None of
hardships that the Affected Franchisees raise indicate impossibility
of performance. There may be expense, but this does
not mean that the
Interdict Order would be impossible to fulfill.
[64]
155. In their
replying papers the Affected Respondents presented affidavits
contending that their individual circumstances
should be taken into
account. CCF contends that this amounts to an impermissible
introduction of new material in reply. I agree,
and had CCF sought to
strike out this material I would have been inclined to do so. I
certainly do not intend sifting through this
material weighing the
hardships of each Affected Franchisee individually. As noted in
footnote 1 above, the identity of the individual
franchisees who are
before this Court is not even clear. Conversely, the larger
group cannot seek relief
en bloc
based on hardships borne by
only a small number of franchisees.
156. The
Affected Franchisees contend that it will be chaotic for them to
respect the Interdict Order. This is so as
they would be compelled to
rebrand their stores immediately as Cash Crusaders outlets, with all
the
accoutrements
that go along with a franchise relationship with CCF.
But
then, when the arbitration proceedings end, they will have to switch
back, and rebrand their stores as Cash Xchange outlets.
157. I
appreciate that it is not this will come to pass; and that if it
does, it would be very disruptive and costly.
But I have simply not
been placed in a position to make a finding that it is likely or
probable. I cannot make any order in the
interest of justice, based
on a casual combination of speculation and clairvoyance.
158.
Furthermore, the appropriateness of specific performance as a remedy
(in the arbitration proceedings) may be influenced
by whether the
Affected Franchisees are trading Cash Convertors outlets, or not. It
would be manifestly unfair to CCF if its arguments
in favour of
specific performance were undermined – all because the Affected
Franchisees had managed to avoid giving effect
to the Interdict
Order.
159. Finally,
the concerns of Affected Franchisees must be weighed against the
on-going harm suffered by CCF. Had the
Interdict Order been
respected, they would have received royalties from the Affected
Franchisees. I see no reason to continue cosseting
the Affected
Franchisees and protecting them from any inconvenience, while CCF is
deprived of the benefits it should have received
under the Interdict
Order.
COSTS
160. Costs
should follow the cause. Although CCF raises issues of abuse of
process, I do not believe that a punitive
costs award is justified. I
do, however, believe that the matter justified the use of three
counsel.
161. A
practical matter, dealt with in footnote 1 above, is that there is no
list of the Applicants before this Court.
This will have to be
resolved between the parties in order to determine liability for
costs.
ORDER
162. I
accordingly make the following order:
162.1.
The application is dismissed.
162.2.
The Applicants, jointly and severally, shall pay the costs incurred
by the Respondent, including
the costs of three counsel, on scale C.
D.P BORGSTRÖM
ACTING JUDGE OF THE
HIGH COURT
APPEARANCES
For
Applicant: Adv
R Stelzer SC
Instructed
by:
MacGregor
Stanford Kruger Inc
For
Respondent:
Adv A Oosthuizen SC
Adv D Goldberg SC
Adv Perumalsamy
Instructed
by:
Ashersons
Attorneys
Date
of hearing: 13 August 2024
Date
of judgment: 16 October 2024
(electronically)
[1]
The entities involved in the current matter is not entirely clear.
The heading to the Notice of Motion suggests that the Applicants
are
“
listed
in annexure ‘A’ to the Notice of Motion
”.
There is, however, no such list. The Applicants’ founding
affidavit indicates that they are identified in annexure
“FA1”
to that affidavit. That list is also unhelpful, taken on its own, as
it merely lists various affected retail
outlets, and the name of an
“
operator
”
– without identifying the entities that entered into franchise
agreements with CCF in respect of each location.
In reply, the
Applicants submitted confirmatory affidavits from persons authorised
to represent various entities. If these confirmatory
affidavits are
read together with annexure “FA1” (to the current
application), and the more detailed list of parties
attached as
annexure “ADP1” to the previous interdict proceedings,
the following is evident:
-
The Applicants’ group in the current matter comprises at least
the First; Sixth; Eighth to Tenth; Thirteenth; Twentieth;
Twenty-First to Thirty-Ninth; Forty-Fifth; Fifty-Third; and
Fifty-Fifth to Sixtieth Respondents as reflected in annexure “ADP1”.
-
Annexure “FA1” lists further affected stores, which –
according to annexure “ADP1” to the interdict
application – are owned by the Second, Fifteenth, Eighteenth;
Nineteenth and Twenty-Third Respondents as listed in annexure
“ADP1”
to the review application. However, none of the confirmatory
affidavits clearly applies to these entities.
-
In annexure “ADP1”, Casgoli (Pty) Ltd is listed as the
Sixty-First and Sixty-Second Respondents, but with different
registration numbers. These entities are reflected as owning the
affected outlets in Malmesbury, Wellington, and Paarl –
which
are also listed as being outlets that remain involved in the current
matter (in annexure “FA1”). In a confirmatory
affidavit
of Mr Vernon Ashley Galp, he asserts that he is the owner of these
stores, without identifying any juristic entity
involved.
-
In a confirmatory affidavit, Mr Marius Rikus Groenewald identifies
himself as the “director” of Casgoli CC and
Linefresh Restaurant CC. These two close-corporations are not
reflected in annexure “ADP1” as the owners of any of
the
affected retail outlets.
-
A confirmatory affidavit is attached from Mr Brendan Russel Booth,
who avers that he represents affected businesses, without indicating
the affected outlets, or the entity/entities that own these outlets.
[2]
Under the same case number as the present matter.
## [3]Reported asCash
Crusaders Franchising (Pty) Ltd v Cash Crusaders Franchisees(16453/2023) [2024] ZAWCHC 11; [2024] 2 All SA 49 (WCC); 2024 (4) SA
141 (WCC) at para 3
[3]
Reported as
Cash
Crusaders Franchising (Pty) Ltd v Cash Crusaders Franchisees
(16453/2023) [2024] ZAWCHC 11; [2024] 2 All SA 49 (WCC); 2024 (4) SA
141 (WCC) at para 3
At
paragraph 3.
[4]
Section 173 of the Constitution states as follows:
“
The
Constitutional Court, the Supreme Court of Appeal and the High Court
of South Africa each has the inherent power to protect
and regulate
their own process, and to develop the common law, taking into
account the interests of justice.
”
[5]
Interdict judgment, para 4.
[6]
Judgment in the Interdict Application, para 4.
[7]
Established in terms of section 26 of the NCA.
[8]
Established under section 27 of the NCA.
[9]
Established under section 12 of the NCA.
[10]
Established under section 85 of the Consumer Protection Act 19 of
2014.
[11]
Judgment, at para 25.
[12]
Judgment, at para 17.
[13]
Judgment, at para 21.
[14]
Ibid
.
[15]
Judgment, at para 28.
[16]
Judgment, at para 33.
[17]
Judgment, at para 15.
[18]
Judgment, at para 20.
[19]
Judgment, at para 29-31.
[20]
Enforcement Judgment, at para 50.
[21]
Enforcement Application, at para 52.
[22]
Enforcement Judgment, at para 53-54.
[23]
Minister
of Justice and Correctional Services and Others v Estate Late James
Stransham-Ford and Others
2017
(3) SA 152
(SCA) at para 25.
[24]
Vinpro
NPC v President of the Republic of South Africa and Others
(1741/2021)
[2021] ZAWCHC 261
(3 December 2021) at para 38 and 42
## [25]Secretary of
the Judicial Commission of Inquiry into Allegations
of State Capture, Corruption and Fraud in
the Public Sector
including Organs of State v Zuma and others(2021 (5) SA 327 (CC) at para 59.
[25]
Secretary of
the Judicial Commission of Inquiry into Allegations
of State Capture, Corruption and Fraud in
the Public Sector
including Organs of State v Zuma and others
(2021 (5) SA 327 (CC) at para 59.
## [26]Department
of Transport and Others v Tasima (Pty) Limited2017
(2) SA 622 (CC) at para 183.
[26]
Department
of Transport and Others v Tasima (Pty) Limited
2017
(2) SA 622 (CC) at para 183.
[27]
Gcaba
v Minister for Safety and Security and Others
2010
(1) SA 238
(CC)
at para 58
## [28]Turnbull-Jackso
v Hibiscus Court Municipality and Others2014
(6) SA 592 (CC) at para 59.
[28]
Turnbull-Jackso
v Hibiscus Court Municipality and Others
2014
(6) SA 592 (CC) at para 59.
[29]
C
amps
Bay Ratepayers’ and Residents’ Association and Another v
Harrison and Another
2011
(4) SA 42
(CC)
at para 30.
[30]
South
African Broadcasting Corp Ltd v National Director of Public
Prosecutions
[2006] ZACC 15
;
2007 (1) SA 523
(CC) at para 90
[31]
Van
Rensburg and Another NNO v Naidoo and Others NNO; Naidoo and Others
NNO v Van Rensburg NO and Others
2011
(4) SA 149
(SCA) at para 51
## [32]Peach
v Kudjoe and another(2016/30120) [2018] ZAGPPHC 291 (10 January 2018) at para 11-15.
[32]
Peach
v Kudjoe and another
(2016/30120) [2018] ZAGPPHC 291 (10 January 2018) at para 11-15.
[33]
Janse
van Rensburg v Obiang and Another
2023 (3) SA 591 (WCC) at (26 September 2022)
[34]
Mokone
v Tassos Properties CC and Another
2017 (5) SA 456 (CC) (24 July 2017)
## [35]Rissik Street
One Stop CC t/a Rissik Street Engen and Another v Engen
Petroleum Ltd2024 (4) SA 447 (CC)
[35]
Rissik Street
One Stop CC t/a Rissik Street Engen and Another v Engen
Petroleum Ltd
2024 (4) SA 447 (CC)
## [36]Stoffberg N.O
and Another v Capital Harvest (Pty) Ltd(2130/2021) [2021] ZAWCHC 37 (2 March 2021)
[36]
Stoffberg N.O
and Another v Capital Harvest (Pty) Ltd
(2130/2021) [2021] ZAWCHC 37 (2 March 2021)
[37]
As in
Stoffberg,
ibid.
[38]
AJP
Prop CC v Sello
2018
(1) SA 535 (GJ)
[39]
MEC,
Department of Public Works and others v Ikamva Architects
2022
(6) SA 275 (ECB)
[40]
Van
Renburg v Naidoo, supra
at para 51;
AJP
Prop, supra
,
at para 22;
Stoffberg,
supra
,
para 26.
[41]
Stoffberg,
supra
,
at para 26.
[42]
Stoffberg,
supra
,
at para 28.
[43]
Stoffberg,
supra
,
29;
AJP
Prop, supra
,
at para 47.
[44]
Minister
of Home Affairs v National Institute for Crime Prevention and the
Reintegration of Offenders (NICRO) and others
[2004] ZACC 10
;
2005 (3) SA 280
(CC) at para 74.
[45]
SOS
Support Public Broadcasting Coalition and Others v South African
Broadcasting Corporation (SOC) Ltd
2019
(1) SA 370
at para 52.
[46]
Although the Constitutional Court may exercise its powers under
section 172(1) to grant fresh ancillary relief to avoid any
injustice that may result from a sudden
lacunae
.
Ex
parte Minister of Home Affairs and another
2024 (2) SA 58
(CC) at para 40.
[47]
Allpay
Consolidated Investment Holdings (Pty) Ltd and others v Chief
Executive Officer, South African Social Security Agency and
others
2014
(4) SA 179
(CC) at para 30.
[48]
Allpay
2
, at
para 31-32.
## [49]Member
of the Executive Council for Finance, Economic
Development, Environmental Affairs and Tourism (Eastern Cape)
and
others v Legal Practice Council and others2023 (2) SA 266 (ECMk), at para 82:
[49]
Member
of the Executive Council for Finance, Economic
Development, Environmental Affairs and Tourism (Eastern Cape)
and
others v Legal Practice Council and others
2023 (2) SA 266 (ECMk), at para 82:
“
Execution
is a means of enforcing a judgment, or order of court, and is
incidental to the judicial process. The court has the
inherent power
to regulate its procedures in the interests of proper administration
of justice, and s 173 of the Constitution
reaffirms this power.
Regulating the process of execution is purely procedural, not
substantive. The inherent jurisdiction of
the high court does not,
however, include the right to tamper with the principle of finality
of judgments other than in the specific
circumstances, which do not
arise in this case
.
”
## [50]Bezuidenhout
v Standard Bank of South Africa Limited(76288/2012) [2018] ZAGPPHC 834 (28 February 2018) at para 48.
[50]
Bezuidenhout
v Standard Bank of South Africa Limited
(76288/2012) [2018] ZAGPPHC 834 (28 February 2018) at para 48.
## [51]S
v Dlamini , S v Dladla and Others; S v Joubert;
S v Schietekat1999 (4) SA 623 (CC) at para 94.
[51]
S
v Dlamini , S v Dladla and Others; S v Joubert;
S v Schietekat
1999 (4) SA 623 (CC) at para 94.
[52]
Permanent
Secretary, Department of Welfare, Eastern Cape, and Another v Ngxuza
and others
2001
(4) SA 1184 (SCA)
[53]
Trencon
Construction (Pty) Ltd v Industrial Development Corporation of South
Africa Ltd and Another
2015
(5) SA 245
(CC) at para 28
[54]
Enforcement Judgment, at para 43.
## [55]National
Treasury and Others v Opposition to Urban Tolling Alliance
and Others2012 (6) SA 223 (CC) at para 50.
[55]
National
Treasury and Others v Opposition to Urban Tolling Alliance
and Others
2012 (6) SA 223 (CC) at para 50.
[56]
See Bradfield Christie’s The Law of Contract in South Africa
(8ed) at p665-666.
[57]
Foize
Africa (Pty) Ltd v Foize Beheer BV and Others
2013
(3) SA 91
(SCA) at para 32.
[58]
Edrei
Investments 9 Ltd (in Liquidation) v Dis-Chem Pharmacies (Pty)
Ltd
2012
(2) SA 553 (ECP)
[59]
Prinsloo
NO and others v Goldex 15 (Pty) Ltd
2014 (5) SA 297
(SCA) at para 18-19.
[60]
Minister
of Finance v Sakeliga NPC (previously known as Afribusiness NPC) and
Others
2022 (4) SA 401 (CC)
at para 13.
[61]
Qo
boshiyane
NO and Others v Avusa Publishing Eastern Cape (Pty) Ltd
and
Others
[2012]
ZASCA 166; 2013 (3) SA 315 (SCA)
## [62]Mhlontlo
Local Municipality and Others v Ngcangula and Another(1154/2022) [2024] ZASCA 5; [2024] 3 BLLR 239 (SCA); (2024) 45 ILJ
775 (SCA) (17 January 2024) at para 13.
[62]
Mhlontlo
Local Municipality and Others v Ngcangula and Another
(1154/2022) [2024] ZASCA 5; [2024] 3 BLLR 239 (SCA); (2024) 45 ILJ
775 (SCA) (17 January 2024) at para 13.
[63]
Van
der Westhuizen N.O and Another v Land and Agricultural Development
Bank of SA and Others
(3173/2020) [2022] ZALMPPHC 11 (14 February 2022)
at
para 15-16; and
Momentum
Life v Thirion
[2002] 2 All SA 62
(C) at para 35.
[64]
Unibank
Savings and Loans Limited (formerly Community Bank) v ABSA Bank
Limited
2000
(4) SA 191
(W) at para 9.3.1.
sino noindex
make_database footer start
Similar Cases
Cash Crusaders Franchising (Pty) Ltd v Cash Crusaders Franchisees (16453/2023) [2024] ZAWCHC 11; [2024] 2 All SA 49 (WCC); 2024 (4) SA 141 (WCC) (26 January 2024)
[2024] ZAWCHC 11High Court of South Africa (Western Cape Division)99% similar
Cape Cash and Carry (Pty) Ltd and Others v Xtreme Works (Pty) Ltd and Others [2024] ZAWCHC 321; [2025] 1 All SA 163 (WCC); 2025 (4) SA 156 (WCC) (21 October 2024)
[2024] ZAWCHC 321High Court of South Africa (Western Cape Division)99% similar
Standard Bank of South Africa Limited and Another v Mandlakomoya Trade and Projects CC and Another (3788/2023) [2024] ZAWCHC 322 (18 October 2024)
[2024] ZAWCHC 322High Court of South Africa (Western Cape Division)97% similar
Standard Bank of South Africa Limited v Friedman (21244/2023) [2024] ZAWCHC 49; 2024 (3) SA 171 (WCC) (20 February 2024)
[2024] ZAWCHC 49High Court of South Africa (Western Cape Division)97% similar
Standard Bank of South Africa v Hendricks (11184/2018) [2025] ZAWCHC 280 (9 July 2025)
[2025] ZAWCHC 280High Court of South Africa (Western Cape Division)97% similar