The term 'business' cannot be given a meaning other than that used in the Consumer Protection Act. Issues such as the regularity
and number of leases which the landlord enters into are simply irrelevant.
The courts have consistently stated that the definition of "business", as used in one context, should not be transplanted
and thus used in an entirely different context.
For this reason, the usage of the word "business", as used in one context, has not been accepted as its meaning in other
contexts (nor should it be).
The Supreme Court of Appeal has stated in
Commissioner for the South African Revenue Service v Tiger Oats Ltd
[2003] 2 All SA 604 (SCA), that:
"We were referred to various judicial expositions of the meaning of expressions such as carrying on business and the
like but there is little point in reviewing them. As always, context is everything when the meaning of language needs
to be ascertained. As Mason CJ, Gaudron and McHugh JJ said in Re Australian Industrial Relations Commission Ex parte
Australian Transport Officers Federation [1990] HCA 52; (1990) 171 CLR 216 at 226, 'of all words, the word 'business'
is notorious for taking its colour and its content from its surroundings ... ' "
Similarly,
in Minister of Law and Order v Patterson 1984 (2) SA 739 (A), the Appellate Division criticized attempts to
rely on the dictionary meaning (and meaning used in case-law) to define "business", as used in another context. It stated:
"The answer to this question depends on how broad a meaning is to be ascribed to the word 'business' in the definition
of 'business tenancy' in the two counter-inflation orders. The word
'business' is an etymological chameleon; it suits its meaning to the, context in which it is found. It is not
a term of legal art and its dictionary meanings as Lindley LJ pointed out in Rolls v. Miller, ((1884) 27 Ch. D. 71
at 88) embrace 'almost anything which is an occupation, as distinguished from a pleasure -anything which is an occupation
or duty which requires attention is a business...'".
Lord Diplock proceeded to hold that the "activities of government" carried on in the leased premises by servants of the
Crown could properly be described as “business", and that "in exercising the functions of government the civil servants
of the Crown were all carrying on a single business on behalf of the Crown." There can be little doubt, I think,
that the meaning that was assigned to the word 'business' in the aforesaid case is
not the ordinary, or usual, meaning of the word, and it is therefore somewhat surprising that the court a quo
should have been content to base its finding as to the meaning of the expression "carries on business" in sec. 28(1)(a)
of the Magistrates' Courts Act on Lord Diplock's judgment ..."
This has always been our law, as explained above.
The Consumer Protection Act has a definition section which itself gives meaning to the term "business".
In his work "
The Interpretation of Statutes" at 112, Du Plessis G writes:
"In a statute where such a definition clause occurs, the words and phrases it contains acquire, for purposes of that
particular statute, a technical meaning which often deviates from their ordinary meaning in colloquial speech. It
therefore follows that such words and phrases are as a rule not to be understood in their ordinary sense, but in
accordance with the meaning ascribed to them by the definition clause."
The meaning ascribed to the term "business" in the Consumer Protection Act is "the continual marketing of any goods or services
..."
In light of the conclusiveness of the definition section, it is inappropriate to give the term any other meaning. In fact,
some factors which would usually be taken into account in determining whether activity is business (such as a profit
motive) are irrelevant under the CPA.
Indeed, section 5(8)(b) of the Consumer Protection Act provides that "The application of this Act in terms of subsections
(1) to (7) extends to a matter irrespective of whether the supplier ... operates on a for-profit basis or otherwise"
I will now turn to the correct definition of "ordinary course of business", as contained in the Consumer Protection Act.
It is clear that the Consumer Protection Act must be interpreted purposively to achieve its objective, namely the protection
of consumers. On this approach, it is unlikely that it was intended to exclude a large number of consumers from its ambit.
Some authors have rightfully recognised the need for the term "business" to be given a wide interpretation in relation to
the Consumer Protection Act.
For instance, Robert Sharrock, has written that whenever a person lets property to supplement his income, the lease is subject
to the CPA provisions, regardless of whether he earns his salary primarily elsewhere.
Sharrock points out that the test for determining if a contract falls within the ordinary course of a particular business
is whether the making of the contract falls within the scope of that business and whether ordinary businesspersons would
have concluded the contract. It is irrelevant whether that particular businessperson regularly entered into such a contract.
In contrast, other commentators, rely on tax-law cases for a narrower interpretation of the word "business".
Reliance on these cases is seriously flawed.
The Consumer Protection Act lays down a simple test for determining whether any particular activity constitutes "business"
by merely requiring continuity. Many other factors must be looked at for determining whether any activity is "business"
in tax-law cases, including the nature and scope of the activities, the presence or absence of the profit motive and
the intention of the person engaging in the activity, over and above the question of continuity.
The Consumer Protection Act also states that regard should be had to "foreign law", when interpreting its ambit.
Other jurisdictions, notably the United Kingdom and Australia, have recognised the need for a broader interpretation of the
word "business" in consumer protection legislation, so that it covers leasing agreements generally.
Daniel Dovar, writing in the Solicitors Journal (UK), commented on the applicability of the
Unfair Terms in Consumer Contracts Regulations 1999 (the Regulations) to leases by explaining "The supplier
must enter into the contract as part of their course of business. This should usually be easy to satisfy in tenancy cases,
as rarely will property be let other than in the course of business."
The Office of Fair Trading in the United Kingdom has also published a
"Guidance on unfair terms in tenancy agreements" (September 2005), which states that "The guidance assumes that,
in general, landlords can be considered 'suppliers' and private tenants 'consumers' for the purposes of the Regulations."
In contrast, the Law Reform Commission (UK) has explained that where the element of continuity is absent, for instance, where
the landlord is merely "letting their home temporarily while waiting for a better opportunity to sell it or while working
in another area", the Regulations would not apply.
Similarly, in Australia, it has been recognised that the Tribunal has jurisdiction under the Fair Trading Act, Australia's
version of the Consumer Protection Act.
For example, it has been stated:
"As between the tenants and the landlord, there is no doubt that the Tribunal has jurisdiction to decide any dispute,
not only under RTA but also under FTA because by letting the rented premises to the tenants the landlords were conferring
a right upon them in trade or commerce and so were supplying services to them as purchasers of the services."
(Winter v Buttigieg [2004] VCAT 2430 (10 December 2004) [62])."
Likewise, in another case it was explained:
"A landlord or owner supplies “services” (as defined by s 3 of the Fair Trading Act) to a tenant or resident, who is
a “purchaser” of those services, and so a dispute between landlord and tenant or between owner and resident is a
“consumer and trader dispute”(formerly called a “fair trading dispute”) which under Part 9 of the Fair Trading Act
the Tribunal has jurisdiction to hear and determine"
(Annoted RTA, quoting from Zeus and Ra Pty Ltd v Nicolaou (2003) 6 VR 606).
In a final case it was confirmed:
"It appears that sections 107 and 108 of the Fair Trading Act 1999 bestow a general landlord and tenant jurisdiction
on this Tribunal. They give the Tribunal power to determine fair trading disputes which are defined as disputes between
the suppliers and purchasers of goods and services. Services are defined in s.3 of the Act to include interests in
real or personal property, and supply is defined to include grant. It follows in my view that whether or not the
Retail Tenancies Reform Act applies to these premises the Tribunal has jurisdiction in a general sense to deal with
a dispute between the landlord and tenant in the present circumstances."
(Zeus and Ra Pty Ltd v Nicolaou (2003) 6 VR 606)."
Consequently, on the proper approach and understanding of what the “ordinary course of business” means, the Consumer Protection
Act
DOES apply to virtually all leases
Please see TPN's
video on the Consumer Protection Act for more information.
