The Crown Restaurant CC v Gold Reef City Theme Park (Pty) Ltd

The applicant, a close corporation, leased premises from Gold Reef City Theme Park (Pty) Ltd under a written lease agreement. The applicant fell into rental arrears of at least R71,000.00. The company cancelled the lease and applied to the Johannesburg High Court for an ejectment order and payment of R8,743.82. The applicant opposed the application, claiming that the company had verbally agreed to grant it an indulgence and allow time to make proposals for settling the rental arrears, and that this constituted an implicit waiver of the right to cancel the lease. The lease agreement contained a non-variation clause requiring any variations to be in writing and signed by both parties, and an indulgence clause providing that any indulgence granted did not preclude either party from enforcing its rights.

• Whether the company was entitled to rely on the non-variation clause in the lease agreement
• Whether the company was entitled to rely on the indulgence clause
• Whether the verbal agreement constituted a waiver of the right to cancel
• Whether the exceptio doli generalis should be reintroduced as a defence in line with constitutional values
• Whether the cancellation of the lease constituted an arbitrary deprivation of property
• Whether the termination of the contract was disrespectful and affected the applicant's dignity
• Whether it is in the interests of justice for the Constitutional Court to hear these issues as a court of first and last instance

The application for leave to appeal was dismissed.

The binding legal principle established is that it is not in the interests of justice for the Constitutional Court to entertain constitutional issues, including arguments for the development of common law, when those issues were not raised before the lower courts and those courts were not given the opportunity to consider them. Litigants must properly identify and raise constitutional issues at the institution of proceedings to enable proper adjudication at all levels of the judicial system. The Constitutional Court will generally decline to sit as a court of first and last instance, particularly where the development of common law principles is involved and the High Court and Supreme Court of Appeal have a vital role to play in such development.

The Court observed that the High Court and the Supreme Court of Appeal have a vital role to play in the development of the common law of contract in line with constitutional values. The Court noted that experience shows decisions are more likely to be correct if more than one court has been required to consider the issues raised, as this gives the losing party an opportunity to challenge the reasoning and refine arguments. The Court also made general observations about the exceptio doli generalis, noting its historical status as an equitable remedy in Roman law and its rejection by the Appellate Division in Bank of Lisbon, but did not express any view on whether it should be reintroduced into South African law.

This case is significant in South African jurisprudence for reinforcing the principle that the Constitutional Court will generally not sit as a court of first and last instance, particularly in matters involving the development of common law. It emphasizes the vital role of the High Court and Supreme Court of Appeal in developing the common law of contract in line with constitutional values. The case also serves as an important reminder to litigants that constitutional issues must be properly identified and raised at the time of instituting proceedings, rather than being raised for the first time on appeal. The judgment indirectly addresses the ongoing debate about the reintroduction of the exceptio doli generalis in South African contract law following its rejection in Bank of Lisbon, but leaves this matter for proper development through the lower courts.