Transnet Ltd v Rubenstein

• Jurisdiction: South Africa

Transnet Ltd v Rubenstein
2006 (1) SA 591 (SCA)

2006 (1) SA p591

Citation	2006 (1) SA 591 (SCA)
Case No	238/2004
Court	Supreme Court of Appeal
Judge	Mpati DP, Zulman JA, Mthiyane JA, Cloete JA and Lewis JA
Heard	May 13, 2005
Judgment	June 1, 2005
Counsel	V Soni SC for the appellant.; E Price for the respondent.

Flynote : Sleutelwoorde C

Contract — Discharge of — Unilateral termination — Whether contract of unspecified duration E terminable upon reasonable notice — Right of unilateral termination in such case being matter of construction, depending on whether tacit term to that effect to be read into contract by implication.

Contract — Discharge of — Unilateral termination — Whether contract, expressly stated to endure F until occurrence of uncertain future event, terminable upon reasonable notice — Where contract silent as to duration, right of unilateral termination ordinarily depending on whether tacit term to that effect to be imputed into contract — However, where contract expressly stated to endure until occurrence of uncertain future event, not possible to impute into contract tacit term in conflict with such express agreement as to G duration — Contract accordingly not terminable on reasonable notice.

Practice — Applications and motions — Urgent application — Self-created urgency — Whether delay occasioned by applicant's attempt to settle dispute, before resorting to litigation, constituting self-created urgency — Matter becoming urgent only when it appearing H that negotiations fruitless — Applicant not to be criticised for attempting to settle dispute — Applicant not to be penalised by adverse costs order.

Headnote : Kopnota

The appellant operated two trains known as the 'Blue Train', which it intended to privatise at a future, although as yet undetermined, date. It entered into a contract with the respondent, I in terms of which the respondent was granted the exclusive right to operate a jewellery boutique on the Blue Train. The contract expressly stated that it would endure until 'the final date of privatisation'. Thereafter, however, and while the date of privatisation of the Blue Train remained uncertain, the appellant gave the respondent J

2006 (1) SA p592

two months' notice of termination of the contract. In an attempt to settle A the matter, the respondent engaged in negotiations with the appellant. The negotiations proved to be fruitless. Accordingly, shortly before the two- month notice period was due to expire, the respondent launched an urgent application to enforce the contract by way of appropriate declaratory and interdictory relief. Although the appellant in its answering affidavit offered no evidence in support of a tacit term - or indeed attempted to formulate such a B term - the Court of first instance held that, since the parties had not intended to bind themselves indefinitely, it had to be inferred that they intended the contract to be terminable on reasonable notice (which it regarded as a period of six months). In addition, the Court of first instance censured the respondent by depriving him of one half of his costs, on the basis that he had by his own delay in seeking relief created the urgency of his application. An appeal to a C Full Bench against both these findings having succeeded, in a further appeal,

Held (per Lewis JA, Mpati DP, Zulman JA and Mthiyane JA concurring), that whether a contract, which was silent as to its duration, could be terminated on reasonable notice was a matter of construction, the question being whether a tacit term to that effect should by implication be read into the contract. (Paragraph [12] at D 596F - G.) However, when a contract was not silent as to its duration, but was stated to be terminable upon the happening of an uncertain future event, the position was different. In the absence of evidence as to what the parties intended, it was not possible to impute into such a contract a term which was in conflict with their express agreement as to its duration. This followed from the principle that there was no room for a tacit term in a contract if it would be in E conflict with the express provisions of the contract. (Paragraphs [13], [18] and [19] at 596H - I and 598D - 599C, paraphrased.)

The dicta in Trident Sales (Pty) Ltd v A H Pillman & Son (Pty) Ltd 1984 (1) SA 433 (W) and Putco Ltd v TV and Radio Guarantee Co (Pty) Ltd 1985 (4) SA 809 (A) distinguished. F

Held (per Cloete JA, Zulman JA concurring), that in motion proceedings the affidavits constituted not only the evidence, but also the pleadings. The appellant's answering affidavit in casu was deficient in both respects. In the absence of an allegation by the appellant that the agreement between the parties contained a tacit term entitling the appellant to cancel it, a defence G based on such a tacit term could not succeed. Nor was it for the Court to formulate such a tacit term, when the appellant itself had failed to do so. (Paragraphs [28] and [29] at 600G/H and 601G.)

Held (per Lewis JA, Mpati DP, Zulman JA, Mthiyane and Cloete JA concurring), that the costs order granted by the Court of first instance was based on the assumption that the application was brought on an urgent basis only because of delay on the part of the H respondent. That was not the case, however, because the respondent had been attempting to settle the matter. When his attempt proved to be fruitless, the application was urgent, because the date for cancellation specified by the appellant was looming. The appellant could not legitimately be criticised for attempting to settle the matter before resorting to litigation. (Paragraphs [21] and [33] at 599F and 603B - C, paraphrased.) Appeal dismissed. I

Cases Considered

Annotations

Reported cases

Alfred McAlpine & Son (Pty) Ltd v Transvaal Provincial Administration 1974 (3) SA 506 (A): dicta at 531E - F and 532 in fin - 533B followed J

2006 (1) SA p593

Amalgamated Beverage Industries Ltd v Rond Vista Wholesalers 2004 (1) SA 538 (SCA) ([2003] 4 All SA 95): A discussed and distinguished

Aymard v Webster 1910 TPD 123: referred to

Barnabas Plein & Co v Sol Jacobson & Son 1928 AD 25: dictum at 31 - 32 discussed and followed

Botha v Coopers & Lybrand 2002 (5) SA 347 (SCA): dictum at para [23] applied B

Consol Ltd t/a Consol Glass v Twee Jonge Gezellen (Pty) Ltd and Another 2005 (6) SA 1 (SCA) ([2004] 1 All SA 1): dicta at paras [50] and [51] followed

Kelvinator Group Services of SA (Pty) Ltd v McCulloch 1999 (4) SA 840 (W): dictum at 844A - G applied

Kentz (Pty) Ltd v Power [2002] 1 All SA 605 (W): dicta at paras [16] - [20] applied C

Mullin (Pty) Ltd v Benade Ltd 1952 (1) SA 211 (A): followed

Pan American World Airways Incorporated v SA Fire and Accident Insurance Co Ltd 1965 (3) SA 150 (A): referred to

Putco Ltd v TV and Radio Guarantee Co (Pty) Ltd 1985 (4) SA 809 (A): distinguished

Robin v Guarantee Life Assurance Co Ltd 1984 (4) SA 558 (A): dictum at 567A - F applied D

Saunders Valve Co Ltd v Insamcor (Pty) Ltd 1985 (1) SA 146 (T): dictum at 149G applied

South African Mutual Aid Society v Cape Town Chamber of Commerce 1962 (1) SA 598 (A): dictum at 615D - E applied

Trident Sales (Pty) Ltd v AH Pillman & Son (Pty) Ltd 1984 (1) SA 433 (W): distinguished E

Triomf Kunsmis (Edms) Bpk v AE & CI Bpk en Andere 1984 (2) SA 261 (W): dictum at 269G - H applied

Union Government (Minister of Railways and Harbours) v Faux Ltd 1916 AD 105: applied

Van Reenen Steel (Pty) Ltd v Smith NO and Another 2002 (4) SA 264 (SCA): followed F

West End Diamonds Ltd v Johannesburg Stock Exchange 1946 AD 910: followed

Wilkins NO v Voges 1994 (3) SA 130 (A): dicta at 141C - E explained and followed.

Foreign cases G

Reigate v Union Manufacturing Co [1918] 1 KB 592 (CA) (118 LT 479): dicta at 605 (483) referred to.

Case Information

Appeal against a judgment of a Full Bench (Gildenhuys J, Schwartzman J and Willis J concurring) in the Witwatersrand Local Division. The facts and issues appear from the judgment of Lewis JA. H

V Soni SC for the appellant.

E Price for the respondent.

In addition to the authorities cited in the judgment of the Court, counsel for the parties cited the following:

Re Berker's Sportcraft Ltd's Agreement (1947) 177 LT 420 at 428 I

Blou v Lampert and Chipkin, NNO and Others 1973 (1) SA 1 (A)

Coopers & Lybrand and Others v Bryant 1995 (3) SA 761 (A) at 768B - C

Golden Lions Rugby Union and Another v First National Bank of SA Ltd 1999 (3) SA 576 (SCA) at 585 J

2006 (1) SA p594

List v Jungers 1979 (3) SA 106 (A) at 120B - E A

Plascon-Evans Paints Ltd v Van Riebeeck Paints (Pty) Ltd 1984 (3) SA 623 (A)

Protea Assurance Co Ltd v Matinise 1978 (1) SA 963 (A) at 976G - H

Rondalia Assurance Corporation of SA Ltd v Page and Others 1975 (1) SA 708 (A)

Techni-Pak Sales (Pty) Ltd v Hall 1968 (3) SA 231 (W). B

Cur adv vult.

Postea (June 1).

Judgment

Lewis JA: C

[1] The principal issue in this appeal, and indeed the only one argued before this Court, is whether a tacit term should be read into a contract allowing either of the parties to terminate it by giving reasonable notice. The contract itself is not silent on the question of its duration. It states that it will come to an end on the happening of a future event - privatisation of the 'Blue Train', one D of the businesses of the appellant, Transnet Ltd.

[2] The respondent, Mr Leon Rubenstein, brought an urgent application in the Johannesburg High Court for various orders relating to a contract between him and Transnet, entitling him to the exclusive E right to operate a jewellery boutique on two trains, known as the Blue Train, operated by Transnet. The relief sought was a declaratory order that the contract was still in existence and that Rubenstein was entitled to operate the boutique...