Grahamstown – now Makhanda – is a town for which I have developed a special fondness. Some of my favourite colleagues, including Judges Mpati, Leach, Plasket, Dambuza, Eksteen and Froneman have spent much of their lives here. I have enjoyed hearing their stories about it, but not their descriptions of how it is currently managed. I also have an interest in Rhodes University as a visiting professor.

I learnt much about the rich history of the town while researching the Salem case, which concerned a land dispute between the landowners and the claimants who alleged that they had been dispossessed of their land during the colonial era. I wrote the minority judgment in the SCA dismissing their claim on the ground that the evidence produced did not establish a dispossession. The CC disagreed and upheld the claim in a unanimous judgment written by Justice Cameron.

Where was the difference between us? As an avid cricketer I was not willing to give the cricket field to the claimants. Cameron, who to the best of my knowledge has never held a cricket bat in his hand, was. The judgments excited some academic interest which those interested in land disputes may wish to read.                    

The topic I have chosen this evening may well generate as much debate as my judgment in the Salem case did. I hope it does. It is: “In Defence of the Common Law.”

The common law has recently come under attack by bad political actors and legal populists. They argue that the law must be decolonised and purged of its Roman-Dutch and English antecedents because, they say, it does not reflect the popular will or will of the majority. Ominously they don’t stop here. Their end game is the destruction of the Constitution and a return to the pre-constitutional order where parliament was sovereign. We know where that regime led us.

The stigmatisation of our common law because of its colonial traditions surprisingly also found expression in a controversial judgment of the CC:

‘The development of our economy and contract law has thus far predominantly been shaped by colonial legal tradition represented by English law, Roman law and Roman-Dutch law. The common law of contract regulates the environment within which trade and commerce take place. Its development should take cognisance of the values of the vast majority of people who are now able to take part without hindrance in trade and commerce. And it may well be that the approach of most people in our country places a higher value on negotiating in good faith than would otherwise have been the case. Contract law cannot confine itself to colonial legal tradition alone.’[1]

I would suggest, with respect, that this criticism was misplaced. No common law scholar has suggested that the common law must be straitjacketed by its colonial history. Quite the contrary, the strength of the common law lies precisely in its flexibility and its ability to adapt to new circumstances.

Equally problematic is the learned judge’s view that the development of the common law must give effect to “the values of the vast majority of people.” The law develops incrementally as circumstances change and not through a judge’s perception of the popular will at a given moment. 

The importance of the common law

It is worth remembering that common law – judge-made law – has played a crucial role in many modern legal systems and especially in democratic societies founded on the rule of law, including our own. Its virtue includes consistency, predictability through the principle of stare decisis, flexibility and adaptation to changing circumstances. Importantly it has always emphasised the protection of individual rights when statutes are silent or inadequate.

Both Roman-Dutch Law and English law, the sources of our common law, emphasise justice. They stress equality before the law and personal freedom as the bases for human rights. English law incorporates natural justice and impartiality. The common law creates a duty to uphold equal treatment of all and invalidates any practice that results in disparate treatment. Thus in 1946 despite the times when racial discrimination was government policy, the court in Mpanza v. Minister of Native Affairs, asserted the duty of a court of law to guard personal liberty “as one of the most cherished possessions of our society."[2] The courts thus always had a duty to construe statutes that encroach on personal liberty in favorem libertatis.

From Roman-Dutch law we have the idea that all persons are equal under the law, that no one person is above the law, and thus, that all persons are bound by it. In both Roman-Dutch and English common law, basic civil liberties receive judicial protection. English law allows an individual who has been arbitrarily deprived of his or her liberty to invoke a writ of "habeas corpus." The Roman-Dutch equivalent is the "interdictum de homine libero exhibendo." These court-evolved remedies were designed to protect individuals from arbitrary governmental invasion of personal freedom.

Of course, as Apartheid became entrenched in the middle of the previous century, more executive-minded judges were appointed and were willing to abrogate these principles. In the now infamous case of Goldberg v. Minister of Prisons[3], the AD upheld a broad discretion of the Commissioner of Prisons to determine convicted political prisoners' access to reading matter against the compelling dissent by Corbett JA (as he then was) who reasoned that a convicted and sentenced prisoner retained all the basic rights and liberties of an ordinary citizen except those taken away from him by law. The decision followed another equally unpersuasive ruling in Rossouw v. Sachs[4], in which the court had held that detainees were entitled only to necessities and not to comforts such as writing materials.

During Apartheid’s last decade as resistance to government policy increased with the rise of the extra-parliamentary opposition movement, one of the hallowed principles of the common law – audi alteram partem, which requires persons to be heard before adverse decisions are made against them, came under attack in the courts. They arose with the administrative detention of persons, including children, under the country’s security and emergency laws.

At first some of the courts, especially in Natal and the Cape were willing to invalidate some of the detentions and the emergency regulations that purported to oust the audi rule, but by the late 1980’s the Appellate Division (AD) brought this to an end.[5] The court, without regard to statutory presumptions or rules of interpretation, accepted the argument that fundamental common law rights were excluded in the absence of an indication by the statute that they be retained. A minority decision by Hoexter JA stressed that the audi alteram partem rule is presumed to be present unless there is an unmistakable intention to eliminate it. With respect, Hoexter’s reasoning was unimpeachable.

By the end of the decade the reputation of the AD was in tatters, certainly in regard to its treatment of fundamental rights and freedoms.  It was not the common law that failed, but Parliament that abrogated these rights and the courts that gradually but unmistakeably acquiesced in this travesty.

Other areas of the Common Law

However, it is also true that there were other areas of the common law where significant contributions were made. It is worth quoting the observation of one commentator:

“Toon van den Heever JA was a scholar who delved into the old authorities of the Roman and Roman-Dutch law. Others who followed the same path, such as Steyn, Rumpff, Jansen, Rabie, Joubert, Van Heerden, Hefer and Nienaber were adept at investigating those sources of law. Trollip’s judgments in the areas of commercial law and intellectual property remain landmarks. Corbett, Miller and Holmes wrote with great clarity in many fields and Holmes was a master of the memorable phrase. In many areas the Court re-examined, extended, adapted or abrogated old principles in accordance with the needs of a changing society. In some instances, this was directed at escaping from principles of English law that had taken hold in areas of the law such as criminal liability, delict, estoppel and nuisance, but in other areas, especially commercial law and intellectual property, reliance was placed on English law and other foreign legal systems in early exercises in comparative law. In a precursor to later constitutional developments, under Corbett CJ the AD extended the scope of judicial review, influenced especially by developments in England. An attempt was made in some cases to re-assert the more enlightened principles of Roman Dutch law. Many of the foundations laid during that period remain intact in the present constitutional era.”[6]

 Perhaps the last word under this head should be given to Chaskalson CJ, the first head of the Constitutional Court, who in 1989 said:

‘[W]e will come to appreciate that we owe much to our old order judges…they have somehow … kept alive the principles of freedom and justice which permeate the [Roman-Dutch] common law. The notion that freedom and fairness are inherent qualities of the law lives on … This is an important legacy and one which deserves neither to be diminished or squandered.’[7]

The Final Constitution

The drafters of our Constitution wisely gave expression to this wisdom. They recognised the value of the common law and chose to build our new constitutional order on this edifice. Our Bill of Rights thus entrenches many common law rights inherited from the old order, in addition to other rights, including housing, education and health care.    

They also realised that the common law, including private law, would need to develop so that it remained consistent with and conformed to the dictates of the Bill of Rights. Our courts were thus instructed to do precisely this when applying the Bill of Rights to private and juristic persons in s 8(3)(a). They were also told in s 8(3)(b) that they “may develop rules of the common law to limit the right provided that it was justified in doing so accordance with s 36” (the limitations clause).

Contract Law

It is on this aspect of the common law, and particularly contract and commercial law that I wish to share some perspectives. First, some preliminary points:

The common law rule, which applies internationally, is that a court must enforce “an agreement between two or more persons seriously and deliberately entered into.”[8] A corollary to this rule is that “our law does not recognise the right of a court to release a contracting party from the consequences of an agreement duly entered into by him or her merely because it appears to be unfair or unreasonable.[9] It was evident then that allowing a party to escape from his or her contractual obligations on this ground would be a disastrous mistake because it would throw the law into uncertainty, do damage to how business was conducted and undermine respect for and trust in the rule of law.

Contract law has however been flexible enough to develop new rules to deal with problems arising in abusive contractual settings where Parliament has not intervened by protecting weaker parties against stronger parties. Examples of legislative intervention may be found in employment, housing, consumer and finance contexts. Contract law has thus recognised fraud, misrepresentation and duress as grounds for invalidating contracts.       

In addition, our common law also recognised that terms that were “plainly oppressive and unconscionable” or “unduly harsh and oppressive” would not be enforced as contrary to public policy. And as Cameron JA (as he then was) observed in Brisley v Drotsky[10]: “[P]ublic policy is now rooted in our Constitution and the fundamental values it enshrines. These include human dignity, the achievement of equality and the advancement of human rights and freedoms, non-racialism and sexism.”

Public policy then, as a means for invalidating contracts, where other contractual tools are not available, has proved to be a further flexible and tested concept to achieve proper results without compromising the need for certainty.

In a later judgment[11] in the SCA Brand JA took the opportunity to emphasise that: “[A]lthough abstract values such as good faith, reasonableness and fairness are fundamental to our law of contract, they do not constitute independent and substantive rules that courts can employ to intervene in contractual relationships. These abstract values perform creative, informative and controlling functions through established rules of the law of contract. They cannot be acted upon by the courts directly. Acceptance of the notion that judges can refuse to enforce a contractual provision merely because it offends their sense of personal fairness will give rise to legal and commercial uncertainty…” 

Despite the clear learning of more than a century of common law learning and development of SA’s contract law – and might I add supported by the dominant legal system in international commerce – the courts, including our highest court, have not been able to develop a coherent jurisprudence for our contract law. In the limited time available I shall discuss two cases where this problem became manifest.

In Barkhuizen v Napier[12]where the CC was faced with a constitutional challenge to a standard time bar clause in an insurance contract, the submission being that this term of the contract deprived the insured of its right of access to court in s 34 of the Constitution, the challenge failed. But Ngcobo J’s reasoning in the majority judgment appeared to throw the law into disarray.

He correctly confirmed that the common law principle expressed in the maxim pacta sunt servanda is constitutionally compliant as it embodies the constitutional values of freedom and dignity, which lie at the heart of the idea of self-autonomy. But then, in what I suggest was an obiter dictum, he inexplicably elaborated a second-leg inquiry, which is whether it was reasonable in the circumstances to insist on compliance with the clause. On the facts no case was made out that it was impossible to comply with the time-bar clause and it was therefore unnecessary to deal with this question. 

The minority judgment of Moseneke DCJ pointed out, with respect correctly, that:

“Public policy cannot be determined by the behest of the idiosyncrasies of individual contracting parties. If it were so, the determination of public policy would be held to ransom by the infinite variations to be found (in the circumstances) of contracting parties. In effect, on the subjective approach that the majority…favours, identical stipulations could be good or bad in a manner that renders whimsical the reasonableness standard of public policy.”

It was left to Harms JA, in Bredenkamp v Standard Bank[13]to  rescue our contract law from the possible consequences of Ngcobo’s second-leg inquiry. He did so by drawing attention to the fact that the judgment in Barkhuizen did not purport to hold that the enforcement of a valid contractual term must be fair and reasonable, even if no public policy consideration in the Constitution is implicated. Despite this warning some courts have continued to tread this dangerous path.

In his inaugural lecture[14] at the University of the Free State my colleague Wallis JA observed that Barkhuizen was extended to the exercise of a right of cancellation in Botha v Rich.[15] A trust had sold commercial property to Ms Botha for a price of R240 000 payable in monthly instalments of R4 000. She paid the instalments for three years but then defaulted for two consecutive months. Thereafter, in May 2008, Ms Botha claimed transfer of the property in terms of s 27(1) of the Alienation of Land Act on the basis that she had paid more than half of the purchase price.[16] She tendered, against transfer, to register a mortgage bond over the property to secure payment of the balance of the purchase price. This tender did not extend to paying the arrears, now amounting to some R28 000, or the outstanding municipal rates, taxes and service charges. The trust did not respond until a few months later when it demanded payment of the sum then outstanding of R40 000 and threatened to cancel the sale.

Thereafter Ms Botha paid one more instalment in January 2009. In April 2009 the trust indicated that it intended to cancel the contract. That prompted a tender by Ms Botha to pay the arrears, interest, and all outstanding rates and municipal charges against transfer of the property into her name. This precipitated an application to the high court for an order that the contract had been validly cancelled, or that the court cancel the contract, together with an order for her eviction from the premises. Ms Botha counterclaimed for an order compelling the trust to transfer the property to her.

The trust succeeded in the high court and on appeal to the full court. There was no dispute that at the time when she demanded transfer of the property into her name, and at all stages thereafter, she had been in material breach of her obligations because, with the one exception, she had failed to pay the instalments due under the contract from November 2007. That was the basis upon which the seller had cancelled the contract.

The matter reached the CC six years later.  It was common cause that she had been in breach of the sale agreement. It nonetheless held that her tender had somehow ameliorated the breach and that depriving her of the right to have the property transferred to her and in the process cure her breach would be a disproportionate sanction in relation to the considerable portion of the purchase price she has already paid and would thus be unfair.

There is no mention, nor was there one in the order of the court, of the payment of interest to compensate the sellers for being required to wait for six and a half years for the outstanding balance of the purchase price. The purpose of registering a bond was unclear. After all the order was subject to a condition that Ms Botha should pay everything that was outstanding up to date and this was the whole balance of the purchase price.

The court thus simply swept to one side the contractual rights of the seller. It did so apparently because of its view that it would be ‘disproportionate’ for Ms Botha’s default to result in her losing the opportunity to acquire the property.

So we now have several decisions by the Constitutional Court to the effect that a person who breaches their contract and is faced with the legitimate contractual termination thereof may resist cancellation by saying that, notwithstanding the terms of the contract, in their particular circumstances, that is an unreasonable, unfair or disproportionate response to their breach.

But, as Wallis JA pointed out, if that is so, we can never know when a cancellation will be legitimate and when not. How is a party to a contract to know, when faced with a default by the other party, whether they are entitled to invoke and pursue their contractual remedies? How does a lawyer advise a client wanting to know its remedies for contractual breach?

The problem appears to be that instead of developing the common law so that it is not out of kilter with the Bill of Rights the courts have been importing open-ended discretionary remedies from administrative law into our common law. They do so under the guise that they are protecting weaker parties against stronger ones.

The conceptual difficulty with this approach is that it fails to understand that while both public power and private power are subject to constitutional control there is an important distinction between the way public power and private power is constituted. Public power, unlike private power, is exercised by elected officials and is subject to judicial review, whereas private power is not.[17] The administrative law standards that have developed to control the exercise of public power by reasonable and procedurally fair decision-making simply don’t apply to the formation and termination of private contracts. That much is clear from s 33 of the Constitution (the right to just administrative action) which imposes duties on the state and not private contracting parties.

This does not mean that contract law should not be concerned with human rights violations. As I mentioned s 8 of the Bill of Rights makes this clear.

But it is also clear that the method to be used when these matters come before the courts is to develop the common law rules in a clear and coherent manner, not import broad discretionary remedies more suited for controlling public power than regulating private power. The courts have been adept at doing this in the past and should do it now by developing, not ignoring, the common law. The current approach marks an approach which I suggest is at odds with our constitutional scheme which requires the impact of the Constitution on private-law disputes to be felt through the common law, rather than by displacing it.[18]                                   

Practically how should a court deal with a constitutional issue that arises in a contractual dispute? I suggest the following guidelines:

The court must first understand what common law rule governs the dispute in question;

If the common law is deficient the court is required to set out its reasons clearly why it is of this view;

If, after this analysis, it concludes that there is no satisfactory remedy in the common law, it must develop the common law by pointing specifically to a provision in the Bill of Rights or elsewhere that requires such development.

Finally, it must enunciate a new rule clearly so there is no uncertainty.

This is what the Constitution mandates, what the common law needs and what the rule of law requires.

Some concluding remarks.               

To conclude, the common law remains the bedrock of our constitutional order. The misguided attacks against it by sometimes ignorant and often malicious actors must be confronted and exposed for what they are – attacks against the rule of law.

At the same time our courts must fulfill their constitutional responsibility to develop the common law when concrete disputes come before them. It is evident that this requires our judges to be properly schooled in its principles. In the field of contract and commercial law this is especially so.

The responsibility for ensuring that the common retains its dynamic character lies not only with the courts but also with our law faculties and legal practitioners.

I thank you.

[1] Everfresh Market Virginia (Pty) Ltd v Shoprite Checkers (Pty) Ltd 2012 (1) SA 256 (CC) at para 23 per Yacoob J.

[2]1946 W.L.D. 225,229.  In general, see also: https://repository.uclawsf.edu/cgi/viewcontent.cgi?article=1510&context=hastings_international_comparative_law_review

[3] 1979 (1) SA 14 (A).

[4] 1964 (2) SA 551 (A).

[5] 1987 (3) SA 859 (A).

[6] https://www.supremecourtofappeal.org.za/index.php/history

[7] Ibid.

[8] Conradie v Rossouw 1919 AD 279 at 288.

[9] Burger v Central South African Railways 1903 TS 571 576 Innes CJ. “Unfair” is not the term that Innes CJ used.

[10] Brisley v Drotsky 2002 (4) SA 1 (SCA) [91]

[11] South African Forestry Co Ltd v York Timbers Ltd 2005 (3) SA 323 (SCA) [27].

[12] Barkuizen v Napier 2007 (5) SA 323 (CC)

[13] Bredenkamp v Standard Bank 2010 (4) SA 468 (SCA) [57]  

[14] Wallis MJ “Commercial Certainty and Constitutionalism: Are They Compatible” 2015

[15] Botha and Another v Rich NO and Others 2014 (4) SA 124 (CC).

[16] Act 68 of 1981.

[17] See Nick Friedman in Contractual Settings: Legal Authority, the Separation of Powers, and the Public Private Divide.

[18] Leo Boonzaaier Common Law Avoidance 2024 141 SALJ 2023