M Visagie & Associates CC & another v Small Enterprise Finance Agency Ltd

The first appellant leased commercial premises from the respondent’s predecessor under a written lease which later continued on a month‑to‑month basis. After rental arrears arose, the respondent cancelled the lease and instituted action for confirmation of cancellation and arrear rental, while the appellants counterclaimed for unjust enrichment. On the day of trial the parties concluded a settlement agreement, made an order of court, in terms of which claims and counterclaims were withdrawn, the appellants undertook to vacate by 30 September 2016, to pay costs, and to pay rental from June 2016 until vacation. The settlement agreement did not specify when rental payments were due. The appellants paid the rentals for July, August and September 2016 after the first working day of each month, which payments were accepted. The respondent later alleged breach of the settlement agreement, contending that the lease terms requiring payment in advance by the first working day were tacitly incorporated, and sought judgment under Magistrates’ Court Rule 27(9).

The appeal was upheld with costs. The order of the High Court was set aside and replaced with an order upholding the appeal from the Magistrate’s Court, setting aside the magistrate’s order, and dismissing the respondent’s application with costs.

The case clarifies the strict requirements for importing tacit terms into settlement agreements and emphasises that silence on a material term does not readily justify incorporation of earlier contractual provisions. It reinforces the Endumeni interpretive approach and confirms that, absent agreement, common‑law default rules on rental payment apply. The judgment is important for settlement agreements made orders of court and for applications under Magistrates’ Court Rule 27(9).