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ONE CO PTY LTD T/A ONE FILLING STATION v SHELL OIL BOTSWANA 2012 2 BLR
436 HC
Citation: 2012 2 BLR 436 HC
Court: High Court, Lobatse
Case No: Misca No 271 of 2011
Judge: Dambe J
Judgement Date: 17 August 2012
Counsel: M Kgafela for the applicant.rnT Katse for the respondent.
Flynote
Contract—Repudiation—Effect of—Other party entitled to accept the repudiation and terminate contract or
affirm it—Oil company refusing to supply fuel unless it was paid amount allegedly owed—No provision in
agreement that company could leave its equipment on premises until filling station paid money owing.
Headnote
The applicant applied for an order compelling the respondent to remove from the applicant's
business premises all its property within 30 days of the order. The applicant traded as a filling
station and, in terms of a written agreement concluded in 2002, the respondent was appointed the
sole supplier of fuel to the applicant for onward sale to the public. As a consequence of this
agreement the respondent installed all the necessary equipment for a filling station and it supplied
fuel until a disagreement arose between the parties over money allegedly owed to the respondent.
When the respondent refused to continue supplying fuel the applicant wrote to it demanding that it
remove its equipment and giving it a deadline to do so. The respondent refused and brought
the present application.
Held: (1) The respondent's action in refusing to supply fuel amounted to a repudiatory breach of the
contract and under common law the applicant could choose to accept the repudiation and terminate
the contract or affirm it. Matador Buildings (Pty) Ltd v Harman 1971 (2) SA 21 (C) applied.
(2) In the absence of any provisions in the agreement relied upon for the respondent to only
remove its equipment from the premises if paid in full, the application had to be granted.
Case Information
Cases referred to:
In Re: Kweneng Land Board v Molefhe and Another; Kweneng Land Board v Mokgalagadi and
Another; Kweneng Land Board v Molefhe and Another [2005] 2 BLR 155
2012 (2) BLR p437
DAMBE J
Matador Buildings (Pty) Ltd v Harman 1971 (2) SA 21 (C)
Schnehage en 'n Ander v Bezuidenhout 1977 (1) SA 362 (O)
Stocznia Gdynia SA v GearbulkHoldings Ltd [2009] EWCA Civ 75; [2010] QB 27; [2009] 3 WLR
677; [2009] 1 Lloyds Rep 461; [2009] BLR 196; [2009] 2 All ER (Comm) 1129; [2009] All ER (D)
134
APPLICATION for an ejectment order. The facts are sufficiently stated in the judgment.
M Kgafela for the applicant.
T Katse for the respondent.
Judgement
DAMBE J:
The applicant lodged an application through which it sought an order in the following terms:
'(1)
That the Respondent should remove all its property from the Applicant's premises at plot 54, Kopong
within 30 days of the order;
(2)
In the event that the Respondent fails to comply with the order, a Deputy Sheriff of this court should
be authorised to remove Respondent's property from the aforesaid premises, the costs of which
shall be borne by the Respondent;
(3)
That costs of this application be borne by the Respondent;
(4)
That the Applicant be granted such further and/or alternative relief as the court deems fit.'
The respondent opposed this application.
In her founding affidavit in support of the application, Anikie Mopipi Korwe, the managing director of
the applicant stated that the company trades as petrol filling station at plot 54 Kopong. That the
application was essentially for the eviction of the respondent from plot 54 Kopong and for the
removal of all items of property belonging to the respondent from the premises.
On the history of the matter the applicant stated that in 2002 the applicant and the respondent
concluded a written agreement in terms of which the respondent was to be the sole supplier of fuel
to the applicant for onward sale to the public. In terms of agreement the respondent was to install
underground fuel tanks and pipes to reticulate the fuel to the dispensing machines. The respondent
was also to install dispensing machines and a canopy over them. In pursuance of the agreement
the respondent fulfilled all the above conditions. The contract was to run until 2017.
The applicant averred that she was not in possession of the contract because she lent it to the
respondent who had allegedly misplaced its copy. That contract document was never returned to
the applicant.
The respondent contended that contrary to what the applicant had stated the dispute between them
relates to the applicant's indebtedness to the respondent in the sum of P266 232.94 while the
applicant claims that amount it owes the respondent was P75 000. It was the respondent's case
that the applicant through its letter of 3 March 2010 proposed, that after full payment of the balance
due to the respondent, the latter should remove all pumps from the filling station. The
2012 (2) BLR p438
DAMBE J
amount owed is however disputed and the respondent alleged that it was in the process of issuing
summons against the applicant and had indeed ceased supply of fuel to the applicant.
In its replying affidavit the applicant stated that annex AA1 was written as far back as March 2010
and contended that contrary to the respondent's averment that the applicant would pay the
outstanding amount before the removal of the tanks, the applicant was not at all indebted to the
respondent. That as the respondent was no longer supplying, it should remove all equipment from
the applicant's premises for the latter to be assisted by some other companies. The applicant
denied ever making a proposal or undertaking that the respondent should remove the tanks after
being paid.
That the parties had entered into an agreement about provision of equipment and supply of fuel
until 2017 is common cause. It is also common cause that none of the parties has a copy of the
agreement. Another matter which is not in dispute between the parties concerned soured of
relations between them over alleged indebtedness that resulted in the respondent terminating fuel
supply of fuel to the applicant's filling station. Also not in dispute was the fact that the respondent
had throughout maintained that removal of the equipment would only be effected after settlement of
indebtedness.
The matter was argued and the applicant contended that the real dispute for determination was
whether the respondent was entitled to remain firmly rooted in the premises until what is owed to it
has been paid. The applicant submitted that the respondent was not so entitled, but the respondent
argued to the contrary that, there was a lease agreement and that tenancy at common law
superceded ownership thus the respondent as a tenant had greater right to be in the premises than
the applicant.
Was there a lease agreement?
The pleadings disclose that, there was an agreement between the parties. This was an agreement
through which the applicant would run the business of filling station using Shell equipment. Shell
was to supply fuel. Though the respondent in its agreement submitted that the agreement in
question was lease nowhere in its pleadings is such an allegation made. The respondent is bound
by its pleadings and it is not entitled to ask for relief which has not been disclosed in its pleadings.
Is the respondent entitled to remain in the premises as long as it has not been paid the alleged
amount owed or is the respondent entitled to raise the applicant's indebtedness to it as a defence?
The respondent's claim was that it was entitled to remain in the premises so long as it has not been
paid. What the applicant seeks is an order directing the respondent to remove its equipment from
the premises. This is in effect an application for ejectment from the premises. This application
comes after an exchange of correspondence between the parties. Through that correspondence
the applicant requested the respondent to remove the equipment. This request was made on more
than one occasion as evident from letters of 19 February 2009 (annex FA1) and that of 28 February
2011 (annex FD1). Responding to the letter of 19 February 2009 the respondent communicated
without prejudice
2012 (2) BLR p439
DAMBE J
that it would be willing to enter into termination provided the applicant signed an acknowledgement
of debt over its indebtedness to the respondent.
This was the letter of 12 March 2009. Through this letter of 12 March 2009 (exh FB) the
respondent's attorney advised that his client is willing to enter into a termination agreement
incorporating an acknowledgement of debt of the applicant's trade liability to Shell and method of
repayment for purchase of equipment by the applicant and mechanism for removal. Lastly the letter
stated that the respondent was having the equipment valued once it is through with that exercise it
would then prepare a draft termination agreement.
Before dealing with the question for determination I find it appropriate to consider the nature of the
application filed. The applicant is seeking an order for ejectment from its premises. An action of this
nature may be brought where the applicant is the owner of property and one is in possession of
property, through some form of grant the nature of which has not been disclosed. In the case of In
Re: Kweneng Land Board v Molefhe and Another; Kweneng Land Board v Mokgalagadi and
Another; Kweneng Land Board v Molefhe and Another [2005] 2 BLR 155 dealing with an action for
ejectment, Kirby J (as he then was) held at p 158E that:
'An action for ejectment may be based either on ownership or on possession.'
In finding for the applicant, the learned judge stated that in that application the action was based on
ownership.
The next question to consider is whether in an action of this nature a party can raise the applicant's
indebtedness as a defence? There is nothing in the pleadings from either party to suggest that the
agreement contained a clause which entitled the respondent to raise indebtedness as a defence to
a claim of ejectment.
The applicant in this case has submitted that they rely on possessory action for their claim for
ejectment. In such action there is no need for the applicant to prove title in the property in the form
of ownership. The applicant in this case holds no ownership title over the land, but the land belongs
to the land board with the respondent having certain rights and interests in the land.
Generally speaking a party seeking ejectment can do so in two ways. The first procedure which
could be employed is rei vindicatio. Central to this procedure is proof that the applicant is the owner
of the property and the defendant is in possession of the property. The second procedure that could
be invoked by a party is possessory claim. If a party proceeds in this manner there is no
requirement to prove that the party who seeks eviction or ejectment is the owner of the property in
respect of which ejectment is sought. As the ownership of the land belongs to the land board, in my
opinion, the applicant was right in submitting that its claim for ejectment is based on possessory
claim.
What the applicant should allege in order to succeed on an action for ejectment based on
possessory claim is set out below. Firstly, the party claiming ejectment is required to prove that
through an agreement between the parties the respondent had the right to occupy the premises. In
this case the applicant has through its founding affidavit made averments to demonstrate that there
was an agreement through which the respondent was to install machinery and equipment for
purposes of business of a filling station by the applicant. This
2012 (2) BLR p440
DAMBE J
assertion was not disputed by the respondent and it was in fact common cause. The admission of
the existence of the contract is contained at para 11 of the respondent's answering affidavit.
Secondly, it is a requirement that the applicant has to show that the respondent's right of
occupation of the property has been validly terminated. The applicant's case on termination is
traversed at para 14 of its founding affidavit. This is what the applicant stated:
'It consequently caused its attorney to write a letter to the Respondent dated February 19th 2009
whose copy is annexed hereto marked "FA1" and "FA2" asking to terminate the relationship and to either
have the fuel tanks unearthed and removed or sold to the applicant and left underground.'
The respondent in its answering affidavit admitted the contents of para 14. Also admitted by the
respondent was para 15 of the founding affidavit where the applicant stated that in the letter of 12
March the respondent's attitude was that it was prepared to end the relationship between the
parties and to remove its property from the applicant's premises.
The above mentioned matters which are undisputed speaks to the requirement of valid termination
of the agreement. Though the letter of 19 February was rather conciliatory seeking an amicable
settlement to termination the subsequent letter of 28 February 2011 (annex FD1) was definitive in
its terms, demanding removal of machinery and equipment forthwith and within the end of that
month at the latest.
In this case there was repudiatory breach of contract as the respondent acted in such a way that it
deprived the applicant of essentially the whole benefit that the parties intended the applicant should
obtain from the contract. This constituted repudiatory breach and under common law the applicant
could choose to accept repudiation and terminate the contract or affirm it.
In the case at hand the applicant exercised its right to terminate the agreement. The repudiatory
breach, due to the respondent's failure to supply the fuel has been fully canvassed in the pleadings.
Reasonable notice was given to the respondent to remove their machinery.
See: Matador Buildings (Pty) Ltd v Harman 1971(2) SA 21 (C). See also: Schnehage en 'n Ander v
Bezuidenhout 1977 (1) SA 362 (O).
Parties in this case never canvassed in their pleadings that there was a termination provision which
formed part of their agreement. However, where there is a contractual clause for termination a party
may also rely on its common law rights. The reason for this is that generally courts will presume
that the parties have not intended to give up their common law rights unless there is very clear
language to that effect.
See: Stocznia Gdynia SA v GearbulkHoldings Ltd [2009] EWCA CIV 75.
It is common cause that the respondent continues to occupy the property, despite repeated
attempts by the applicant to get the respondent to move out of the property. The respondent will
only move out of the premises if it has been paid the amount owed. There is no merit in this
contention. I say so because there is nowhere in the pleadings where the respondent has claimed
that it was the condition of their agreement, that, on termination of the agreement the
2012 (2) BLR p441
DAMBE J
respondent will only remove the machinery and equipment only if he has been fully paid.
If owed the respondent should have sued to claim outstanding amount. Thus the respondent was
right in stating that he would sue for the outstanding amount in one of the correspondences. I find
the respondent's assertion that it did not remove the tanks as the relationship between the parties
had not been severed to be ill-conceived and without any merit because the applicant gave an
ultimatum on removal of the machinery. This defence was disclosed at paras 21, 22, 23, 25, 28 of
the respondent's answering affidavit. The respondent concluded by saying that he admits that there
was a letter demanding that the respondent remove its property from the premises and its answer
to that the respondent insisted that removal can only be effected when it has been paid amounts
owed.
I have therefore come to the conclusion that the applicant has discharged the onus of proving that it
was entitled to cancel the agreement that it did so cancel the agreement and the respondent has no
valid reason to resist the claim.
In the light of all issues raised above the application succeeds and the following orders are made:
1.
The respondent is hereby ordered to remove all its property from the applicant's premises at
plot 54, Kopong within 30 days of this order.
2.
Cancellation of the agreement by the applicant is hereby confirmed.
3.
In the event that the respondent fails to comply with this order, the deputy sheriff of this court
be and is hereby authorised to remove the said property from the aforesaid premises at the
respondent's expense.
4.
Costs of this application shall be borne by the respondent.
Application granted.
2012 (2) BLR p442