Spar Group Limited and Others v Twelve Gods Supermarket (Pty) Ltd and Others (1100/2022) [2025] ZASCA 7; 2025 (3) SA 137 (SCA) (30 January 2025)

Parties

Procedural Posture

Civil Appeal / Application for Reconsideration of Special Leave to Appeal

Legal Issues

1. 1 Whether the applicants' unilateral contractual discretionary power to vary credit terms was subject to the arbitrio boni viri standard.
2. 2 Whether SPAR exercised its discretion reasonably, honestly, and for a legitimate purpose when altering credit and drop shipment terms.
3. 3 Whether the alteration of credit and drop shipment terms constituted a valid exercise of contractual discretion or was part of a broader strategy to pressure respondents out of their businesses.

Ratio Decidendi

The Supreme Court of Appeal held that the credit facilities agreement between SPAR and the Giannacopoulos Group constituted an ongoing contractual relationship, not a series of discrete offers. The discretion to vary credit terms under clause 5 was subject to the arbitrio boni viri standard, requiring SPAR to act reasonably, honestly, and for a legitimate purpose. The evidence showed that SPAR's reasons for altering the credit and drop shipment terms—alleged financial instability and compliance issues—were not substantiated and did not justify the changes. The timing and nature of the alterations indicated that SPAR's conduct was part of a broader strategy to pressure the respondents out...

Court Disposition

Application for reconsideration of special leave to appeal dismissed with costs, including costs of two counsel where so employed.

Orders

• The application for reconsideration of the application for special leave is dismissed with costs, such costs to include those of two counsel, where so employed.