Totalgaz Southern Africa (Pty) Ltd v Rhyder Investments CC t/a DTB Sales and Another

The applicant and first respondent had a dealer agreement from 4 June 2018 to 3 June 2023 for a Totalgaz dealership. After the agreement expired, the first respondent retained possession of the applicant's orange-coloured gas cylinders bearing the Total Energies brand. The parties participated in an industry standard cylinder exchange arrangement whereby distributors collect their own cylinders and those of competitors from dealerships. An investigation in April 2024 revealed that the respondents were selling and had filled the applicant's cylinders. The applicant obtained an ex parte interim interdict on 14 May 2024 restraining the respondents from receiving, possessing, filling, and distributing the applicant's cylinders. The respondents contended they had paid deposits of R345 per cylinder (totaling R36,915) which had not been refunded, and that one incident of filling was an isolated mistake. They also purchased five sealed cylinders from another distributor.

• Whether the applicant was required to exhaust contractual remedies under the industry cylinder exchange arrangement before approaching the court
• Whether the respondents' possession of the applicant's cylinders was unlawful given the unpaid deposits
• Whether the respondents' filling and distribution of the applicant's cylinders without written permission contravened the Occupational Health and Safety Act and related regulations
• What costs order should follow where relief is partially abandoned and parties succeed on different issues

1. The interim orders in paragraphs 1.1, 1.4 and 1.5 of the rule nisi dated 14 May 2024 (relating to receipt and possession of cylinders) are discharged. 2. The interim order in paragraph 1.2 (relating to filling and distribution of cylinders) is confirmed. 3. No order as to costs.

1. An industry standard cylinder exchange arrangement between competitors in the gas distribution industry constitutes a binding contractual agreement that provides legal remedies which parties must exhaust before approaching courts. 2. Possession of a competitor's cylinders is not unlawful where deposits have been paid in terms of a dealer agreement and not refunded upon termination. 3. Regulation 17 of the Pressure Equipment Regulations read with Health and Safety Standard 9.5 of SANS 10019 peremptorily prohibits any person from filling and distributing gas containers without the written permission of the owner. 4. Courts have a duty to uphold the doctrine of legality by refusing to countenance ongoing statutory contraventions, and must enforce legislation where its validity is not impugned. 5. Acts done contrary to direct statutory prohibitions are void and of no effect.

The court observed that for a remedy to qualify as an adequate alternative remedy, it must be a legal remedy - this includes not only remedies that courts may grant, but also remedies provided by contractual agreements between parties. The court noted that while constructive engagement between parties may be desirable or preferable, and should be encouraged, the absence of prior engagement is not necessarily a bar to granting an interdict where statutory contraventions are occurring. The court also commented that the nature of the cylinder exchange industry makes it virtually impossible for any distributor not to be in possession of cylinders belonging to competitors at some point.

This case is significant for clarifying the interaction between industry standard practices and statutory safety requirements in the gas distribution sector. It establishes that industry cylinder exchange arrangements constitute binding contractual agreements that must be exhausted before approaching courts. More importantly, it confirms the peremptory nature of safety regulations under the Occupational Health and Safety Act, particularly the requirement for written permission from cylinder owners before filling and distribution. The judgment reinforces the doctrine of legality and courts' duty to enforce statutory requirements even in commercial contexts, while recognizing that contractual rights (such as unpaid deposits) may legitimize otherwise questionable possession.