Everfresh Market Virginia (Pty) Limited v Shoprite Checkers (Pty) Limited

Everfresh Market Virginia (Pty) Ltd was a tenant under a five-year written lease (1 April 2004 – 31 March 2009) of premises in the Virginia Shopping Centre. Clause 3 of the lease provided that Everfresh could renew the lease for a further period provided it gave timeous notice and that the rental for the renewal period was to be agreed between the parties; failing agreement, the right of renewal would lapse. Shoprite Checkers (Pty) Ltd acquired the shopping centre during the currency of the lease and became the lessor. Everfresh gave written notice of its intention to renew and proposed a rental escalation. Shoprite rejected the renewal, contending that clause 3 did not create a binding right of renewal and refused to negotiate, citing redevelopment plans. After the lease expired, Everfresh remained in occupation and Shoprite instituted ejectment proceedings. Everfresh argued that, even if there was no enforceable option to renew, Shoprite was contractually obliged to negotiate the renewal rental in good faith before eviction could occur. The High Court and Supreme Court of Appeal rejected Everfresh’s arguments and refused leave to appeal, leading to an application to the Constitutional Court.

Leave to appeal was refused.

The case is significant for highlighting the potential constitutional development of South African contract law, particularly regarding the role of good faith and ubuntu in contractual negotiations. Although the Court did not develop the common law in this case, it signalled openness to recognising enforceable duties of good faith in appropriate circumstances and emphasised the obligation of courts under section 39(2) to consider constitutional values when applying and developing the common law.