THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT

REPORTABLE
Case No: 757/2013

In the matter between:

B BRAUN MEDICAL (PTY) LTD

APPELLANT

and

AMBASAAM CC

RESPONDENT

Neutral citation:
Braun Medical (Pty) Ltd v Ambasaam CC (757/13) [2014]
ZASCA 199 (28 November 2014).
Coram:

Ponnan, Shongwe, Swain JJA and Mathopo and Meyer AJJA
Heard:

19 November 2014
Delivered:

28 November 2014

Summary:  Repudiation of contract – demand for performance – reasonable
person not perceiving demand as an indication of repudiation – interpretation
of contract – extraneous evidence to be used as conservatively as possible –
appeal upheld.

___________________________________________________________________

ORDER
___________________________________________________________________

On appeal from:    North Gauteng Trial Court, Pretoria (Van der Byl AJ, sitting as
court of first instance):

1 The appeal succeeds with costs.
2 Paragraphs 1 and 3 of the order of the trial court are set aside and replaced with
the following order:
„The plaintiff‟s claim is dismissed with costs.‟
___________________________________________________________________

JUDGMENT
___________________________________________________________________

Swain JA (Ponnan, Shongwe JJA and Mathopo and Meyer AJJA concurring):

[1] The sole issue for determination in this appeal is whether a demand for
performance by the appellant, B. Braun Medical (Pty) Ltd (Braun), directed to the
respondent, Ambasaam CC (Ambasaam), constituted a repudiation by the former of
its obligations in terms of a contract of carriage, which entitled Ambasaam to cancel
the agreement and claim damages from Braun.

[2] The North Gauteng Trial Court (Van der Byl AJ) held that Braun had
repudiated the agreement which, so it was put,  Ambasaam had subsequently validly
cancelled. The court a quo granted the following order:

„1.
THAT it be declared that the defendant be liable to the Plaintiff for such damages as
maybe proved by the plaintiff consequent upon the defendant‟s repudiation of the agreement
concluded between the parties on 8 December 2008.
2.
THAT the defendant‟s counterclaim for payment by the plaintiff of R120 000 be
dismissed.
3.
THAT the defendant be ordered to pay the plaintiff‟s costs.‟

Braun did not appeal against paragraph 2 of the order. Consequently, only
paragraphs 1 and 3 are the subject of this appeal.

[3] At the heart of the dispute are two letters of demand written by Braun‟s
attorney to Ambasaam dated respectively 9 March 2011 and 14 March 2011. The
letter dated 9 March 2011 concluded „our client shall proceed to cancel the AOC
without further notice to Ambasaam CC and to claim damages from Ambasaam CC,
in the event that Ambasaam CC does not timeously adhere to the aforementioned
demands‟. Ambasaam‟s attorney had replied to these letters stating „. . . that the
allegations levelled against our client objectively leads a reasonable person to the
conclusion that your client does not intend to honour the terms of the agreement.
Our client regards these actions as repudiation by your client, of the agreement.
However, our client will afford your client up to and including 1 April 2011 to withdraw
unconditionally, all the allegations and demands made in the two letters under reply.
Should your client not avail himself of this opportunity, our client will accept the
repudiation and regard the contract as cancelled.‟

[4] In response Braun‟s attorney stated that it „does not intend to withdraw any
allegation and/or demand made by it‟ and that „under the prevailing circumstances
the defendant (Braun) confirms that annexure A has been cancelled with effect from
2 April 2011‟. In the result Ambasaam subsequently pleaded in its summons that
„whether by an accepted repudiation or a purported cancellation, the plaintiff
(Ambasaam) and the defendant (Braun) are both of the view that annexure A has
come to an end‟. Accordingly, so Ambasaam alleged, „the defendant (Braun)
breached the agreement by levelling, inter alia, false allegations and accusations
against the plaintiff (Ambasaam) and indeed repudiated the agreement . . ..‟

[5] Braun in its plea, whilst admitting the wording of the letters written by its
attorney, denied that it had repudiated the agreement, It alleged: „Under the
circumstances we confirm that your client has cancelled the agreement of carriage
with effect from 2 April 2011‟. Braun asserted that Ambasaam had cancelled the
agreement in circumstances where it was not entitled to do so.

[6] In a request for particulars for trial Braun asked Ambasaam to specify whether
Ambasaam would rely at trial upon a repudiation of the agreement, or a breach of
the agreement by Braun. The reply was „the repudiation of the agreement by the
defendant, which is an anticipatory breach of the contract‟.

[7] The single issue which thus arose on the pleadings and which was correctly
identified by the court a quo as calling for a decision, was whether Braun repudiated
the agreement. The court a quo having referred to decisions of this court dealing with
the concept of repudiation1 then embarked on an extensive and detailed analysis of
the evidence in relation to each of the „breaches‟ and „complaints‟ upon which
Ambasaam relied as set out in the letters of Braun‟s attorney. The court a quo
concluded that Braun‟s allegations were „unfounded and unsubstantiated‟, were
made with the intention not to continue with the agreement, as it had „elected to get
out of the agreement‟ and had „indeed repudiated the agreement‟. It added that
Braun „objectively created without lawful excuse a perception which placed‟
Ambasaam „in a position to conclude that proper performance of the agreement will
not be forthcoming‟. In the result Ambasaam „was placed in the inevitable position to
accept such repudiation and to cancel the agreement‟.

[8] Before considering the correctness of those conclusions, it may first be
opportune to reiterate what this court said in Datacolor concerning the requirements
for a finding that a party has repudiated its contractual obligations:2
„Conceivably it could therefore happen that one party, in truth intending to repudiate (as he
later confesses), expressed himself so inconclusively that he is afterwards held not to have
done so; conversely, that his conduct may justify the inference that he did not propose to
perform even though he can afterwards demonstrate his good faith and his best intentions at
the time. The emphasis is not on the repudiating party's state of mind, on what he
subjectively intended, but on what someone in the position of the innocent party would think
he intended to do; repudiation is accordingly not a matter of intention, it is a matter of
perception. The perception is that of a reasonable person placed in the position of the
aggrieved party. The test is whether such a notional reasonable person would conclude that
proper performance (in accordance with a true interpretation of the agreement) will not be

1 Nash v Golden Dumps (Pty) Ltd 1985 (3) SA 1 (A); Datacolor International (Pty) Ltd v Intamarket
(Pty) Ltd 2001 (2) SA 284 (SCA).
2 Datacolor International (Pty) Ltd v Intamarket (Pty) Ltd supra 294E-H.

forthcoming. The inferred intention accordingly serves as the criterion for determining the
nature of the threatened actual breach.‟

[9] What is immediately apparent is that the court a quo, having referred to the
principles in this passage, did not apply them to the facts of the case. Central to the
court a quo‟s reasoning was that Braun possessed the subjective intention „to get out
of the agreement‟ and in order to do so, made unfounded and unsubstantiated
allegations against Ambasaam which constituted a repudiation of the agreement.

[10] There are a number of problems in the reasoning of the court a quo. Firstly,
emphasis was placed upon the subjective intention of Braun whereas the correct
enquiry should have been how would a reasonable person in the position of
Ambasaam have perceived those letters. Secondly, it decided that Ambasaam
justifiably perceived that proper performance of the agreement by Braun would not
be forthcoming, whereas the correct test is not subjective, but an objective one.
Simply put, the court a quo approached the issue of repudiation as a matter of
subjective intention and not one of perception, contrary to the principle laid down in
Datacolor International (Pty) Ltd v Intamarket (Pty) Ltd supra.

[11] The perception of a reasonable person placed in the position of Ambasaam
could never be that proper performance by Braun of its obligations in terms of the
contract would not be forthcoming. The court a quo failed to appreciate that the
letters demanded performance from Ambasaam of its obligations. Nowhere in those
letters was there an intimation by Braun that it was unwilling to perform its own
contractual obligations. A reasonable person having received the letters of demand
from Braun‟s attorney would not have thought that they amounted to a deliberate and
unequivocal intention on the part of Braun not to be bound by the agreement. Even if
the demands made by Braun were unjustified, this could never have led to the
objective conclusion that Braun did not intend to perform its obligations. The court a
quo thus misconceived the situation that in those circumstances the letters could
have constituted a repudiation.

[12] Ambasaam‟s case on the pleadings and before the court a quo that Braun
repudiated the agreement was never based upon an unjustified cancellation of the

agreement, nor upon an unjustified threat by Braun to cancel the agreement.
Ambasaam‟s cause of action of a repudiation of the agreement by Braun, was based
solely upon the allegation that Braun had levelled false accusations and allegations
against it. However, before us counsel for Ambasaam sought to argue that the terms
of the demands set out in paragraph 4 above, meant that if Ambasaam did not
comply, the contract should be regarded as having been cancelled. Counsel also
described this as an „automatic cancellation‟. There is no basis for this contention.
Clause 9.2 of the contract of carriage provided for seven days written notice to a
party in default to rectify the breach. If the breach was not rectified within that period,
the aggrieved party was entitled to cancel the agreement and claim damages. Any
decision to cancel would have to be conveyed to the party in default for it to take
effect.3

[13] The demand for performance by Braun constituted compliance with the notice
requirements of clause 9.2 of the contract. In the event that Ambasaam did not
comply with the demand Braun would have had an election whether to cancel the
agreement or not. Braun in stating that it „shall proceed to cancel the AOC without
further notice‟ conveyed no more than its intention to cancel as at the time of the
demand, in the event that Ambasaam did not comply with the demand in the future.
There is no basis for interpreting the demand to mean that Braun had exercised its
election to cancel, or that the agreement was automatically cancelled. That
Ambasaam never understood the demand to convey an automatic cancellation of the
agreement in the event of its failure to comply with the demands, is indicated by
Ambasaam‟s reply. Braun was invited by Ambasaam to withdraw the demands
failing which Braun‟s conduct would be regarded as a repudiation of the agreement.
There is accordingly no basis for this submission. Counsel for Ambasaam correctly
conceded that if this argument failed, the appeal should succeed.

[14] A great deal of inadmissible evidence was led before the court a quo
concerning the parties‟ intention in concluding and their interpretation of the terms of
the contract of carriage. As pointed out by this court:

3 Datacolor International (Pty) Ltd v Intamarket (Pty) Ltd supra 299E.

„[39] First, the integration (or parol evidence) rule remains part of our law. However, it is
frequently ignored by practitioners and seldom enforced by trial courts. If a document was
intended to provide a complete memorial of a jural act, extrinsic evidence may not contradict,
add to or modify its meaning (Johnson v Leal 1980 (3) SA 927 (A) at 943B). Second,
interpretation is a matter of law and not of fact and, accordingly, interpretation is a matter for
the court and not for witnesses (or, as said in common-law jurisprudence, it is not a jury
question: Hodge M Malek (ed) Phipson on Evidence (16 ed 2005) paras 33 - 64). Third, the
rules about admissibility of evidence in this regard do not depend on the nature of the
document, whether statute, contract or patent (Johnson & Johnson (Pty) Ltd v Kimberly-
Clark Corporation and Kimberly-Clark of South Africa (Pty) Ltd 1985 BP 126 (A) ([1985]
ZASCA 132 (at www.saflii.org.za)). Fourth, to the extent that evidence may be admissible to
contextualise the document (since “context is everything”) to establish its factual matrix or
purpose or for purposes of identification, “one must use it as conservatively as possible”
(Delmas Milling Co Ltd v Du Plessis 1955 (3) SA 447 (A) at 455B - C). The time has arrived
for us to accept that there is no merit in trying to distinguish between “background
circumstances” and “surrounding circumstances”.
The distinction is artificial and, in addition, both terms are vague and confusing.
Consequently, everything tends to be admitted. The terms “context” or “factual matrix” ought
to suffice. (See Van der Westhuizen v Arnold 2002 (6) SA 453 (SCA) ([2002] 4 All SA 331)
paras 22 and 23, and Masstores (Pty) Ltd v Murray & Roberts Construction (Pty) Ltd and
Another  B 2008 (6) SA 654 (SCA) para 7.)‟

[15] It is therefore clear that „interpretation is a matter of law and not of fact and,
accordingly, interpretation is a matter for the court and not for witnesses‟. In addition
„to the extent that evidence may be admissible to contextualise the document (since
“context is everything”) to establish its factual matrix or purpose or for purposes of
identification, “one must use it as conservatively as possible”.‟4 I do not understand
anything stated in later decisions of this court to constitute a departure from those
principles.5

[16] I make the following order:

4 KPMG Chartered Accountants (SA) v Securefin Ltd & another 2009 (4) SA 399 (SCA) para 39.
5 Ekurhuleni Metropolitan Municipality v Germiston Municipal Retirement Fund 2010 (2) SA 498
(SCA); Natal Joint Municipal Pension Fund v Endumeni Municipality 2012 (4) SA 593 (SCA); North
East Finance (Pty) Ltd v Standard Bank of South Africa Ltd 2013 (5) SA 1 (SCA); Dexgroup (Pty) Ltd
v Trustco Group International (Pty) Ltd 2013 (6) SA 520 (SCA); Bothma-Batho Transport (Edms) Bpk
v S Bothma & Seun Transport (Edms) Bpk 2014 (2) SA 494 (SCA).

1 The appeal succeeds with costs.
2 Paragraphs 1 and 3 of the order of the trial court are set aside and replaced with
the following order:
„The plaintiff‟s claim is dismissed with costs.‟

___________________
K G B SWAIN
JUDGE OF APPEAL

APPEARANCES:

For the Appellant:

A R G Mundell SC
Instructed by:
D J Greyling Incorporated
Roodepoort
c/o Honey Attorneys
Bloemfontein

For the Respondent:

M P van der Merwe
Instructed by:
Couzyn Hertzog & Horak Attorneys
Pretoria
c/o Hill McHardy & Herbst Attorneys
Bloemfontein