THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT

Not Reportable
Case no: 471/2019

In the matter between:
MICAREN EXEL PETROLEUM
WHOLESALER (PTY) LTD

APPELLANT

And

STELLA QUICK SHOP (PTY) LTD

FIRST RESPONDENT
ELEGANT FUEL (PTY) LTD

SECOND RESPONDENT

Neutral citation: Micaren Exel Petroleum Wholesaler (Pty) Ltd v Stella
Quick Shop (Pty) Ltd and Another (Case no 471/2019)
[2020] ZASCA 61 (9 June 2020)
Coram:
WALLIS, DAMBUZA and MBATHA JJA and LEDWABA and
EKSTEEN AJJA
Heard:
This appeal was disposed of without an oral hearing in terms of
s19 (a) of the Superior Courts Act 10 of 2013

Delivered: This judgment was handed down electronically by circulation to the parties’
legal representatives by email, publication on the Supreme Court of Appeal website and
release to SAFLII. The date and time of hand-down is deemed to be 10H00 on 9 June 2020.

Summary: Interdict – clear right founded on a contract – whether the contract
was repudiated – principles on inquiry into allegation of repudiation re-stated.

ORDER

On appeal from: North West Division of the High Court, Mahikeng
(Nobanda AJ, sitting as court of first instance): judgment reported sub nom
Micaren Exel Petroleum Wholesaler (Pty) Ltd v Stella Quick Shop (Pty) Ltd
and Another [2018] ZANWHC 43.
1 The appeal is upheld with costs.
2 The order of the high court is set aside and replaced with the following:
‘(i)
The first respondent is interdicted and restrained from purchasing and
storing fuel at its premises situated at 99 and 100 Market Street, Stella,
North West, if it has not been purchased from the applicant.
(ii)
The first respondent is ordered to pay the costs of the application.’

JUDGMENT

Dambuza JA (Wallis and Mbatha JJA and Ledwaba and Eksteen AJJA
concurring)

[1] The issue in this appeal is whether a fuel dealership agreement
concluded between the fuel distributor, Micaren Exel Petroleum Wholesaler
(Pty) Ltd (Micaren), and the dealer, Stella Quick Stop (Pty) Ltd (Stella), was
repudiated by Micaren. The appeal is at the instance of Micaren. It appeals
against an order of the North West Division of the High Court, Mahikeng
(Nobanda AJ) (the high court), in terms of which its application for an
interdict against Stella, the first respondent, was dismissed. The high court

held that the fuel dealership agreement had been cancelled following
repudiation by Micaren. The appeal is with the leave of the high court.

[2] On 1 July 2014 Micaren and Stella concluded a ‘dealer agreement’ in
terms of which Micaren, as a ‘distributor’, agreed to sell and deliver petrol
and diesel fuel to Stella, the ‘dealer’. Stella was to sell the fuel from its
premises at 99-100 Market Street, Stella, in the North West Province, at the
Distributor’s ruling price as at the date of delivery. The fuel was to be stored
in underground tanks that were to be installed by Micaren at Stella’s premises
before the effective date of the agreement. In terms of the agreement, Stella
was prohibited from buying fuel from any distributor other than Micaren and
only the fuel bought from Micaren would be stored in the tanks supplied under
the agreement.

[3] More specifically, in the relevant parts, the dealer agreement regulated
the relationship between the parties as follows:
‘3.2 The dealer is obliged, when requiring fuel, to place an order for the delivery of not less
than 20,000 (TWENTY THOUSAND) litres at a time.
3.3 The Dealer may not purchase fuel and store it, if it has not been purchased from the
Distributor . . .
. . .
4.2 The Distributor shall, within 36 (THIRTY SIX) hours of the placing of the order and
the payment of the purchase price, deliver the Fuel to the dealer, free of transport costs,
at the premises . . .
. . .
6.1 The Distributor shall install the equipment on the Premises before the commencement
date.
6.2 Fuel delivered by the Distributor to the Dealer may only be sold by the Dealer using
the Equipment.

6.3 It is agreed that the Equipment belongs to Micaren Exel Petroleum Wholesaler (Pty)
Ltd which is lending the Equipment to the Dealer. The Dealer will allow the
Distributor to install the Equipment in or on the Premises in accordance with statutory
and other prescriptions and demands, including SABS 089 manual.
6.4 The Equipment remains the property of Micaren Exel Petroleum Wholesaler (Pty) Ltd
and may be used by the dealer only for the sale of Fuel as stated in this agreement. If
the Dealer uses the Equipment for any other purposes as those agreed upon between
them, without the prior written consent of the Distributor, the Dealer will be liable for
damages suffered by the Distributor as a result thereof, including the loss of Fuel,
subject to 5.2.
. . .
6.13The Dealer will not allow installation on or near the Premises of equipment belonging
to another distributor of Fuel, and will not use the Equipment for storage and sale of
any other distributor of Fuel subject to the terms of this agreement pertaining to the
unavailability of fuel to be delivered by the Distributor to the Dealer.’
The equipment was described in the agreement as comprising three dual
pumps, four underground tanks, and one aboveground tank, the tanks being
of various sizes.

[4] It was common cause, both in the high court and in this court, that from
17 January 2017 Stella started buying fuel from the second respondent,
Elegant Fuel (Pty) Ltd, and that it was storing such fuel in the tanks installed
on the premises. This resulted from events that started in November 2016,
when Micaren stopped delivering fuel to Stella. On 22 November 2016 Stella
admitted liability to Micaren, in writing, for R504 455.36 in respect of fuel
that had been delivered previously. Thereafter it made certain payments,
reducing this amount to R449 720.39. On 22 January 2017 Micaren sent to
Stella a reconciliation of Stella’s account, showing an outstanding payment of
R504 455.36. The reconciliation was followed, on 24 January 2017, by a

notice issued in terms of s 345 of the Companies Act 61 of 1973 by Micaren’s
attorneys to Stella, demanding payment of R449 720.39. The notice also
advised of Micaren’s intention to have Stella wound up if payment was not
received within 21 days thereof.1 On the following day (25 January 2017)
Stella’s attorneys addressed a letter to Micaren, alleging repudiation of the
dealer agreement by Micaren in failing to supply to Stella the ‘petroleum
products’ it had ordered; and by unilaterally, and unlawfully, imposing RAS
levies2 not agreed upon by Stella and to which Micaren was not entitled.

[5] In terms of that letter Stella accepted the repudiation and cancelled the
dealer agreement. On 7 February 2017 Stella’s attorneys responded to the
s345 notice, disputing the correctness of the balance owing on Stella’s account
and tendering payment of R66 541.52 which, according to Stella, was the
balance owing to Micaren. However, already on 28 January 2017 Micaren had
approached the high court seeking an order that Stella be interdicted and
restrained from buying fuel from any distributor other than itself.

[6] Stella’s in limine response, that Micaren should have sought an order
of specific performance, was correctly rejected by the high court as the
interdict sought was, in fact, a prayer for specific performance. As regards the
merits of the application, Stella contended that it had cancelled the dealer

1 Section 345 of the Companies Act 61 of 1973 deems a company unable to pay its debts if a
creditor, who is owed not less than R100, has served on the company’s registered office a demand
requiring the company to pay and the company has, for three weeks thereafter, neglected to pay or
to secure or compound the debt to the reasonable satisfs ion of the creditor. In light of item 9 of
Sch 5 of the Companies Act 71 of 2008 this provision still applies under the Companies Act 71 of
2008, despite the repeal of the 1973 Companies Act.
2 Described by Stella as a system that sets forth the cents per litre of automotive fuel that would
from then on be payable as operating expenditure and capital expenditure. Stella asserted that the
system was not applicable in this case as Micaren had not spent any capital investment on its
(Stella’s) premises.

agreement pursuant to the repudiation thereof by Micaren and Micaren’s
unilateral imposition of RAS levies on Stella’s account, for capital investment
expended in respect of the equipment installed on the premises.

[7] Despite the express terms of the agreement, Stella maintained that the
fuel tanks were its own property and not the subject of the dealer agreement.
It asserted that they had already been installed on the premises when it
acquired the property and that Micaren’s claim thereto was a
misrepresentation. In sum, the basis of Stella’s opposition to Micaren’s
application for an interdict was that, because Micaren had repudiated the
dealer agreement, as a result of which it was cancelled, and because the tanks
were its own property, the requirements for an interdict had not been met.

[8] Although both parties were in agreement in the high court that
ownership of the tanks was not an issue in the resolution of their dispute, in
its reply Micaren gave a detailed historical account of its ownership of the
tanks, over a period of more than two decades, during which the premises had
changed many hands until acquisition thereof by Stella in 2014.

[9] The high court found that the relevant clauses (clauses 3.3 and 6.13) of
the agreement only prohibited the storage of fuel purchased from third party
suppliers and not the purchase thereof from third parties. It also found that it
was ‘evident ex facie the documents filed’ that the dealer agreement had been
cancelled and that, for that reason, there was no basis for the interdict sought
by Micaren. The application for an interdict to stop the purchasing of fuel
from other suppliers was accordingly dismissed. Despite the agreement by the

parties that ownership of the tanks was irrelevant to the issues, the high court
referred the issue of ownership of the tanks for oral evidence.

[10] On appeal Micaren insisted, as it did in the high court, that it had never
repudiated the dealer agreement. It maintained that its conduct in not
delivering the fuel ordered by Stella was consistent with the terms of the
contract, as Stella had not paid for the fuel it sought to have delivered and it
owed money for fuel that had been delivered previously. Micaren maintained
that the alleged repudiation and purported cancellation of the agreement had
to be considered within the context of events that preceded the alleged
repudiation letter dated 25 January 2017. According to Micaren, when raising
the alleged repudiation and cancellation of the agreement, Stella failed to
disclose these events to the court. It (Micaren) also rebuffed as a baseless
conclusion of fact the assertion that it had imposed regulatory levies on
Stella’s account.

[11] The traditional approach to an inquiry into an allegation of repudiation
is to examine the objective intention of the repudiator and the response or
acceptance thereof by the aggrieved party. The question is whether the
conduct of the repudiator or non-performing party, when fairly considered by
a reasonable person in the place of the aggrieved or innocent party,
demonstrates an intention no longer to be bound by the contract.3 Needless to
say, such conduct must be viewed comprehensively. All material aspects
thereof must be taken into account. In Nash v Golden Pumps (Pty) Ltd4
Corbett JA described repudiation as follows:

3 RH Christie & GB Bradfield Christie’s Law of Contract in South Africa 7 ed (2016) at 613.
4 Nash v Golden Pumps (Pty) Ltd 1985 (3) SA 1 (A) at 22C-F.

‘Where one party to a contract, without lawful grounds, indicates to the other party in words
or by conduct a deliberate and unequivocal intention no longer to be bound by the contract,
he is said to “repudiate” the contract . . . Where that happens, the other party to the contract
may elect to accept the repudiation and rescind the contract. If he does so, the contract
comes to an end upon communication of his acceptance of repudiation and rescission to
the party who has repudiated . . .’

[12] In a sense, repudiation is itself breach of the agreement and acceptance
thereof by the innocent party is exercise of the right to terminate the contract.5
The conduct from which repudiation is inferred must be clear and
unequivocal.6

[13] Evidently, the dismissal of Micaren’s application by the high court was
based solely on the letter dated 25 January 2017. The court simply accepted
Stella’s assertion that Micaren’s failure to deliver fuel to Stella constituted
repudiation. The full context of the matter as set out in Micaren’s reply to
Stella’s repudiation allegation was not considered by the high court. In this
regard the high court erred. The correct approach was to consider the full
conduct of both parties, particularly the outstanding payments starting from
November 2016, the acknowledgment of indebtedness, and the recurring
failure to make payments. All of this would have weighed with the innocent
party, Stella, when considering non-delivery of the fuel by Micaren.7 Also
relevant was the fact that Micaren’s refusal to deliver fuel to Stella had
persisted over a period of at least two months. Yet, it was only when the s 345
notice was issued that Stella alleged that the non-delivery of fuel constituted

5 Datacolor International (Pty) Ltd v Intamarket (Pty) Ltd 2001 (2) SA 284 (SCA) para 1 and the
other authorities cited therein.
6 Datacolor ibid para 18.
7 Datacalor ibid para 19.

repudiation. Also relevant is the fact that Micaren had clearly communicated
its intention to hold Stella to payment of moneys owing under the agreement
by repeatedly demanding payment and threatening legal action. At no point
did Micaren demonstrate an intention not to be bound by the agreement. On
the contrary, its actions were strictly in accordance with the agreement.

[14] In the end the evidence shows that a reasonable dealer in Stella’s
position, having considered all of these aspects, would not have concluded
that Micaren was repudiating the contract. The allegation by Stella that
Micaren had repudiated the contract was therefore unfounded. The agreement
remained extant. Instead, it was Stella who had breached its obligation under
the contract by purchasing fuel from third party distributors. Its conduct was
to Micaren’s detriment. Micaren had satisfied the requirements for a final
interdict. The appeal must therefore succeed.

[15] The following order shall issue:
1 The appeal is upheld with costs.
2 The order of the high court is set aside and replaced with the following:
‘(i)
The first respondent is interdicted and restrained from purchasing and
storing fuel at its premises situated at 99 and 100 Market Street, Stella,
North West, if it has not been purchased from the applicant.
(ii)
The first respondent is ordered to pay the costs of the application.’

________________________
N DAMBUZA
JUDGE OF APPEAL

Appearances:

For appellants:
Adv B H Swart SC
Instructed by:
Japie van Zyl Attorneys c/o Van Rooyen Tlhapi Wessels,
Mahikeng
Symington De Kok, Bloemfontein

For respondent:
Adv P J Greyling
Instructed by:
Shabort Potgieter Attorneys c/o Smit Stanton Inc.,
Mahikeng

Rossouw & Conradie Inc., Bloemfontein