Putco Ltd. v TV & Radio Guarantee Company (Pty) Ltd.; TV & Radio Guarantee Company (Pty) Ltd. v Putco Ltd.; Putco Ltd. v TV & Radio Guarantee Company (Pty) Ltd.; TV & Radio Guarantee Company (Pty) Ltd. v Putco Ltd. and Others (3) (18404/1981, 18488/1981, 9937/1981, 5165/1982) [1985] ZASCA 74; [1985] 2 All SA 533 (A) (10 September 1985)

PUTCO LIMITED APPELLANT

and

TV & RADIO GUARANTEE COMPANY

(PROPRIETARY) LIMITED RESPONDENT

467/82 /CCC

IN THE SUPREME COURT OF SOUTH AFRICA

(APPELLATE DIVISION)

In the consolidated matters between:

CASE NO. 18404/1981

PUTCO LIMITED AppellantandTV & RADIO GUARANTEE COMPANY

(PROPRIETARY) LIMITED Respondent

CASE NO. 18488/1981

TV & RADIO GUARANTEE COMPANY{PROPRIETARY) LIMITED Cross AppellantandPUTCO LIMITED Cross Respondent

CASE NO. 9937/1981

CASE /

CASE NO. 5165/1982

(PROPRIETARY) LIMITED AppellantandPUTCO LIMITED First RespondentALBINO CARLEO Second RespondentBUSADVERT (PROPRIETARY) LIMITED Third RespondentJ J MULDER Fourth Respondent

CASE NO. 5585/1982

(PROPRIETARY) LIMITED AppellantandPUTCO LIMITED Respondent

CORAM: KOTZé, JOUBERT, TRENGOVE, VILJOEN, JJA

et SMALBERBER, AJAHEARD: 12 MARCH 1985 DELIVERED: 10 SEPTEMBER 1985

JUDGMENT TRENGOVE, JA:

The essential facts relating to this

appeal/

2.

appeal are set out in the judgment of the court a quo - see Putco Ltd v TV & Radio Guarantee Co. 1984(1) S A 443(W). The main issue which was argued in this court was whether Putco's letter of 26 May 1981 (annexure "O"), alternatively, its letter of 23 September 1981 (annexure "BB"), constituted a valid and effective notice of termination of the agreement between the parties embodied in the letter of 9 August 1976 (annexure "C").In order to be effective, a notice terminating a contract unilaterally must (a) be clear and unequivocal and (b) its terms must be consonant with the express or implied provisions of the contract

relating/ 3.

relating to the exercise of the rights of the parties to terminate it unilaterally. I respectfully agree with the learned judge a guo's reasons for holding that the agreement embodied in the letter of 9 August 1976 (annexure "C") was terminable by either party on reasonable notice. I am also of the view that it was implicit in this agreement that if putco were to decide to terminate it unilaterally, Putco would, in any event, still be obliged to allow existing advertising contracts between Afmed and its advertisers to run their course. It follows, in my view, that a notice of termination which fails to make provision for such contracts to run their course would not be reasonable notice and

it/

4.

it would, consequently, not have the effect of terminating the agreement.Turning now to the notice of termination contained in the letter of 26 May 1981 (annexure "O"). I point out, in passing, that in this notice it was specifically stated, with reference to contracts between Afmed and its advertisers, that "Obviously all existing advertising upon our buses will be permitted to see out their relevant contracted periods for advertisements, subject of course to your continuing to honour your applicable obligations." I am in respectful agreement with my brother Smalberger's reasons for holding that this notice was clear and unequivocal but that it was, nevertheless, ineffective as a notice of termination of

the/

5.

the agreement (annexure "C") because, in the prevailing circumstances, 28 days was not a sufficient period of notice.I come next to the letter of 23 September1981 (annexure "BB") in which Putco advised TV & Radioand Afmed that "... as from 1 April 1982 the arrangementbetween ourselves and TV Radio & Guarantee Co (Pty) Ltdand/or Media Promotions Africa (Pty) Ltd. (Afmed) willbe regarded as cancelled and of no further effect."(My underlining). The question is whether this wasa valid notice of termination of the agreement embodiedin annexure "C". In my view it was not and my reasonsfor coming to this conclcusion are briefly as follows.As at 23 September 1981 there were a number of advertising contracts in existence which were due to continue/

6.tinue running for some time beyond the date of the expiry of the notice. Under those contracts Afmed was entitled to receive rentals and remained obliged to maintain advertising on the buses until the termination of such contracts by effluxion of time. The notice makes no reference whatever to those contracts and Putco does not state, as it did in the notice of 26 May 1981, that it accepts that unexpired advertising contracts will have to run their course. On the contrary, as the learned judge a quo correctly pointed out, the continued existence of any such rights and obligations after the date of termination was clearly inconsistent with what was unequivocally stated in the notice,

namely, / 7. namely, that as from 1 April 1982 the agreement between the parties (annexure "C") would be regarded "as cancelled and of no further force or effect." In my view this, in effect, constituted a repudiation by Putco of its obligation to allow existing advertisingcontracts to run their course after the date of the expiry of the notice, and it was, therefore, not reasonable notice.In the result I agree with the conclusion of the learned judge a quo that Putco is not entitled to a declaration that annexure "C" was validly cancelled, and I would therefore dismiss the appeal with costs.

TRENGOVE, JA