Johanna Malan v City of Cape Town

Ms Malan, a 74-year-old pensioner and widow, had lived in a subsidised public rental housing unit owned by the City of Cape Town since 1979. In October 2008, the City cancelled her lease on grounds that she was in arrears with rent (R8,290.90 as of April 2008) and had allowed illegal activities (drugs, liquor, illegal firearms) to take place on the property, based on police reports. The City gave her notice on 31 October 2008 that the lease would be cancelled effective 31 December 2008. Ms Malan did not vacate, and the City brought eviction proceedings. Ms Malan opposed the eviction, arguing that: (1) she had arranged to pay arrears in installments; (2) she was never consulted about the alleged illegal activities before cancellation; (3) she denied allowing illegal activities; (4) certain clauses of the lease were unconstitutional; and (5) she was not afforded an opportunity to rectify any breach. The Western Cape High Court granted the eviction order, finding the lease was validly cancelled and offering Ms Malan accommodation in an old-age home.

• Whether leave to appeal should be granted
• Whether clauses 2, 24 and 28 of the public rental housing lease agreement are constitutional or against public policy
• Whether the City was entitled to cancel the lease without first affording Ms Malan an opportunity to rectify alleged breaches
• Whether the Prevention of Illegal Eviction from and Unlawful Occupation of Land Act 19 of 1998 (PIE) was properly applied
• Whether the eviction would be just and equitable under sections 4(7), 4(8) and 6 of PIE
• Whether the City breached its constitutional obligation under section 7(2) to respect, protect, promote and fulfil the right of access to adequate housing under section 26
• Whether the City complied with its duty of meaningful engagement before seeking eviction

Leave to appeal granted. Appeal dismissed. No order as to costs. The eviction order of the High Court stands. Ms Malan must vacate the property with her family, with the City offering her accommodation in an old-age home.

The binding principles established by the majority are: (1) A public authority may not terminate a public rental housing lease on mere notice under a contractual power (like clause 2) without cause, as this would be unconstitutional, oppressive, and against public policy—it would create risk of arbitrary eviction and undermine security of tenure. (2) However, where there is substantive breach of lease terms (such as rental arrears or allowing illegal activities), and the tenant has been afforded reasonable notice and opportunity to rectify the breach, cancellation may be valid. (3) What constitutes adequate opportunity to rectify depends on the circumstances: where a tenant has entered into an arrangement to pay arrears and then defaults, that may suffice for arrears; where a tenant is given notice specifying illegal activities and approximately two months pass before final cancellation with illegal activities continuing, that may suffice for illegal activities. (4) A court must determine whether eviction is "just and equitable" under PIE by considering all relevant circumstances, including: the nature and extent of the breach, whether procedural fairness was observed, the duration of lawful occupation, the tenant's personal circumstances (age, health, vulnerability), availability of alternative accommodation, the public interest in fair allocation of scarce housing resources, and the interests of other community members. (5) Clauses in public housing leases that permit summary cancellation or eviction "forthwith" without opportunity to remedy breach are constitutionally offensive to the extent they are applied in that manner, but may be valid if applied with appropriate procedural safeguards. (6) Organs of state managing public housing have competing constitutional obligations: to respect, protect, promote and fulfill the housing rights of current tenants (section 7(2) and 26), while also fairly allocating scarce housing resources to those on waiting lists and maintaining safe, crime-free housing for all residents.

Several important observations were made: **By Dambuza AJ:** (1) Public rental housing lease agreements serve a public function—they are instruments through which the state fulfills constitutional housing obligations and individuals exercise housing rights; they cannot be viewed as pure exercises of private contractual power. (2) These agreements are not negotiated; lessees have severely limited bargaining power due to adverse financial circumstances, which must be a weighty factor in assessing reasonableness. (3) Occupants of public housing owe responsibilities to themselves and the community to exercise housing rights responsibly, promoting law and order. (4) Local authorities' primary role is providing homes, not crime-fighting, though they may regulate exercise of housing rights. (5) Clause 29 (summary eviction upon Town Clerk's order) confirms the problematic summary nature of clause 28. (6) At no stage did clause 28 or 29 require giving the lessee opportunity to protest or rectify breach before rights terminate. **By Majiedt AJ:** (1) The right to housing must be understood against historical background of apartheid's influx control and the resulting housing crisis, which now affects people of all races in public housing. (2) Sections 152 and 153 of the Constitution and section 9(1) of the Housing Act impose significant developmental and housing obligations on municipalities. (3) The City faces enormous challenges with approximately 55,000 rental units but a waiting list of 400,000 households. (4) Municipalities must balance competing interests and cannot allow unequal bargaining power alone to prevent enforcement of lease terms. (5) It would be untenable if poor tenants could decline to pay rent with assurance they could never be evicted—the City must ration scarce resources according to just principles. (6) "Illegal activities" clauses are legitimate in public housing if: (a) they clearly specify prohibited conduct; (b) the tenant has means to control the conduct; and (c) the tenant has opportunity to rectify breach before cancellation. (7) While fraud, drugs and other criminality may not always be within a tenant's direct control, in this case Ms Malan's persistent denials in the face of overwhelming evidence were "untenably disingenuous." (8) A bare denial is insufficient where facts are peculiarly within the litigant's knowledge and extensive evidence is provided (Wightman principle). (9) The fact that Ms Malan will be adequately accommodated in an old-age home tips the scales in favor of eviction being just and equitable. **By Zondo J (dissent):** (1) The real reason for cancellation was alleged illegal activities, not arrears—the City's policy is not to evict for arrears except as last resort. (2) The letter of 31 October 2008 reflected a decision already taken ("has decided to cancel"), not merely an intention or warning. (3) Under section 7(2), an organ of state's obligation to "protect and promote" housing rights means it cannot cancel a lease the same way a private landlord could at common law—"something more" is required. (4) That "something more" includes, at minimum: raising the alleged breach, discussing it, hearing the tenant's side, and giving opportunity to rectify—these are reasonable steps implicit in section 7(2) per Glenister II. (5) These procedural requirements also flow from the duty of meaningful engagement established in Occupiers of 51 Olivia Road, Grootboom, and Port Elizabeth Municipality—this duty applies whenever a municipality becomes aware of conduct that may lead to eviction, not only where the person would become homeless. (6) Section 4(1) of PIE means its provisions prevail over common law contractual rights where inconsistent. (7) The justice and equity requirement in PIE has both substantive and procedural components that cannot always be separated (per Port Elizabeth Municipality). (8) Absent exceptional circumstances (not present here), eviction without procedural engagement cannot be just and equitable. (9) The audi alteram partem principle requires hearing before decision while the decision-maker has an open mind (per Traub). (10) To lose one's home without even opportunity to discuss the reasons is procedurally unfair and inconsistent with dignity. (11) Living in one's home and living in an old-age home are "two vastly different things"—the latter does not compensate for loss of the former. (12) Ms Malan's increased rental payments after learning of cancellation suggest she would have addressed the issues if engaged beforehand.

This case is significant in South African housing law as it: (1) Addresses the constitutional validity of standard clauses in public rental housing lease agreements, particularly termination and cancellation clauses. (2) Clarifies that organs of state cannot terminate public housing leases on mere notice without cause—this would be unconstitutional and against public policy. (3) Establishes that summary cancellation clauses allowing eviction "forthwith" without opportunity to rectify breach are contrary to section 26(1) of the Constitution. (4) Demonstrates tension between property rights and housing rights, and the limits of contractual freedom in the public housing context. (5) Highlights the unequal bargaining power in public housing contracts and the need for constitutional scrutiny of their terms. (6) Shows division within the Court on the extent and content of the duty of meaningful engagement before eviction, particularly regarding procedural requirements. (7) Illustrates the application of the "just and equitable" test under PIE in circumstances of alleged criminal activity on rental property. (8) Addresses how courts should balance a municipality's responsibility to manage scarce housing resources and combat crime against long-term tenants' rights to security of tenure and dignity. (9) Confirms that PIE's provisions prevail over common law contractual rights (section 4(1)). (10) The dissenting judgments provide important articulation of procedural fairness requirements that may influence future cases.