In a judgment that lends clarity to the scope of South Africa’s consumer protection laws, the Supreme Court of Appeal (SCA) has ruled that the Consumer Protection Act (CPA) is designed to protect vulnerable and historically disadvantaged consumers, and does not apply to private lease agreements between individuals.
The ruling, handed down in the case of Els v Venter and another, centred on whether a residential lease agreement for a luxury home in Stellenbosch fell under the protection of the CPA. The appellant, Johann Els, had argued that the act applied, which would have severely restricted the homeowners’ ability to terminate a lease.
The Venter family – Daniel Wouter and Melanie Christina Venter – who are first and second respondents, had relocated to Australia and leased their former primary residence to Els. When they decided to sell the property, they gave him three months’ notice to vacate, as stipulated in the lease agreement. Els challenged the validity of the termination, contending that the lease was a fixed-term agreement under the CPA. The SCA unanimously dismissed this argument, providing a definitive interpretation of the CPA’s core purpose.
The court emphasised that the act is not intended to govern all commercial transactions but specifically those where one party is a “supplier” acting “in the ordinary course of business”.
In the judgment, JA Schippers stated that the act defines a “rental” as “an agreement for consideration in the ordinary course of business”. The court held that this means the lessor must be in the business of letting property, which involves “the continual marketing of any goods or services”.
The Venters, both engineers, were not engaged in such a business. “Rather… they rented out their family home in South Africa after moving with their children to Australia.”
The court found the lease was a private agreement to protect an asset, not a business activity.
Crucially, the SCA rooted its interpretation in the socio-economic purpose of the CPA. The judgment highlighted that the law recognises that “apartheid and discriminatory laws of the past have burdened the nation with unacceptably high levels of poverty, illiteracy and other forms of social and economic inequality”.
“So construed,” Schippers wrote, “the act excludes agreements such as the… lease, which was not concluded with a supplier in the ordinary course of business by a lessee such as the appellant – the chief group economist of Old Mutual – who is not a vulnerable, low-income
consumer”.
The court found that the appellant was in an equal bargaining position, had freely agreed to the termination clause, and that his “reliance on the act is opportunistic and contrived”.
This judgment provides critical legal certainty, confirming that the CPA’s powerful consumer protections are aimed at rectifying historical imbalances and shielding vulnerable parties in unequal bargaining relationships.
