Case Law[2022] ZAKZDHC 16South Africa
Metro Service Station (PTY) Ltd and Others v Controller of Petroleum Products and Others (D7785/2019) [2022] ZAKZDHC 16 (26 January 2022)
High Court of South Africa (KwaZulu-Natal Division, Durban)
26 January 2022
Judgment
begin wrapper
begin container
begin header
begin slogan-floater
end slogan-floater
- About SAFLII
About SAFLII
- Databases
Databases
- Search
Search
- Terms of Use
Terms of Use
- RSS Feeds
RSS Feeds
end header
begin main
begin center
# South Africa: Kwazulu-Natal High Court, Durban
South Africa: Kwazulu-Natal High Court, Durban
You are here:
SAFLII
>>
Databases
>>
South Africa: Kwazulu-Natal High Court, Durban
>>
2022
>>
[2022] ZAKZDHC 16
|
Noteup
|
LawCite
sino index
## Metro Service Station (PTY) Ltd and Others v Controller of Petroleum Products and Others (D7785/2019) [2022] ZAKZDHC 16 (26 January 2022)
Metro Service Station (PTY) Ltd and Others v Controller of Petroleum Products and Others (D7785/2019) [2022] ZAKZDHC 16 (26 January 2022)
Download original files
PDF format
RTF format
make_database: source=/home/saflii//raw/ZAKZDHC/Data/2022_16.html
sino date 26 January 2022
SAFLII
Note:
Certain
personal/private details of parties or witnesses have been
redacted from this document in compliance with the law
and
SAFLII
Policy
IN
THE HIGH COURT OF SOUTH AFRICA
KWAZULU-NATAL
LOCAL DIVISION, DURBAN
CASE
NO: D7785/2019
In
the matter between:
METRO
SERVICE STATION (PTY) LTD
FIRST
APPLICANT
I
MANGAROO PROPERTIES (PTY) LTD
SECOND APPLICANT
UDS
MOTORS
CC
THIRD APPLICANT
HARPERS
HILLCREST AUTO CC
FOURTH APPLICANT
and
CONTROLLER
OF PETROLEUM PRODUCTS
FIRST RESPONDENT
MINISTER
OF ENERGY
SECOND RESPONDENT
OVERROX
TRADING 70 CC
THIRD RESPONDENT
TRAFFORD
ROAD CONVENIENCE CENTRE
(PTY)
LTD
FOURTH RESPONDENT
ORDER
1.
The decision of the first
respondent dated 9 November 2017 approving the third and fourth
respondents’ applications for the
granting of retail and site
licenses to operate a service station at
the
property at Erf [….] Pinetown at 48 Motala Road, Pinetown
(‘the premises’)
and
the second respondent’s decision of 16 August 2019 dismissing
the applicants’ appeal against the first respondent’s
decision are reviewed and set aside;
2.
The second respondent’s decision is substituted with an order
upholding the applicants’ appeal, setting aside the
first
respondent’s decision and dismissing the third and fourth
respondents’ applications for the approval of retail
and site
licenses for the premises;
3.
The costs of the
application, including the costs of senior counsel where employed, as
well as all reserved costs and the costs
of the application for the
adjournment of the opposed application on 12 October 2021, shall be
paid by the third and fourth respondents
jointly and severally, the
one paying the other to be absolved
.
JUDGMENT
Delivered on: 26 January
2022
SHAPIRO
AJ
Introduction
[1]
This is an application for the review of both the decision by the
Minister of Minerals and Energy in terms of which he dismissed
an
appeal against a decision by the Controller of Petroleum Products
(‘the Controller’) to issue site and retail licenses
to
the third and fourth respondents in terms of the Petroleum Products
Act 120 of 1977 (‘the Act’) and of the Controller’s
decision itself. The review was brought in terms of the Promotion of
Administrative Justice Act 3 of 2000 (‘PAJA’)
and as a
legality review.
[2]
The application is brought by four competing service stations that
are all within a two-three kilometre radius of the site currently
operated by the third and fourth respondents, in terms of the
approvals that are the subject of this review.
[3]
The first and second respondents abide this court's decision but have
delivered an affidavit explaining their position and defending
their
decisions.
[4]
The third and fourth respondents opposed the application. Their
answering affidavit was already approximately 16 months out
of time
when they launched an application to adjourn the hearing of the
opposed application set down for 12 October 2021 and for
further
orders directing them to deliver their answering affidavits within 15
days.
[5]
The application to adjourn the review was opposed and was argued on
12 October 2021, prior to the hearing of the review.
I
dismissed the application for an adjournment with costs. My
reasons for doing so are set out later in this judgment.
[6]
Accordingly, this application has been determined based upon the
applicants' founding and supplementary founding affidavits,
together
with their annexures as well as the first and second respondents'
explanatory affidavit and the record delivered by them,
running to
478 pages.
The
Petroleum Products Act 120 of 1977
and the Regulations
promulgated thereunder
[7]
The duties imposed on the Controller when considering applications
for the issue of licenses under the Act are set out in s
2B, which
reads as follows:
‘
2B.
Licensing
(1)
The Controller of Petroleum Products must issue
licences in accordance with the provisions of this Act.
(2)
In considering the issuing of any licences in terms of this Act, the
Controller of Petroleum Products shall
give effect to
the provisions of section 2C and the following objectives:
(a)
Promoting
an efficient manufacturing, wholesaling and retailing petroleum
industry;
(b)
facilitating
an environment conducive to efficient and commercially justifiable
investment;
(c)
the
creation of employment opportunities and the development of small
businesses in the petroleum sector;
(d)
ensuring
countrywide availability of petroleum products at competitive prices;
and
(e)
promoting
access to affordable petroleum products by low-income consumers for
household use.’
[8]
Given the nature of this review, it is also necessary to set out the
relevant Regulations
[1]
that
apply to the consideration of applications for licenses by the
Controller.
[9]
Regulations 6 and 18 require the Controller, when evaluating an
application for a site or retail license, to verify that:
(a)
the information and documents submitted with the application form are
true and correct;
(b)
there is a need for a site;
(c)
the site will promote the licensing objectives stipulated in s 2B(2);
(d)
the retailing business is economically viable and, in this regard,
the Controller must also be satisfied that the net present
value
(‘NPV’) has been correctly calculated and is positive.
[10]
Regulations 13 and 15 require the applicant to submit a motivation
for the site together with the documents contemplated in
Regulation
25(1) and must also provide not only the result of the NPV
calculation but all data and assumptions used in the calculation
of
the NPV. In turn, Regulation 25(1) requires an applicant for a retail
license to submit inter alia a motivation for the retailing
activity,
the NPV calculation including both the result of that calculation and
all data and assumptions used in the calculation
of the NPV.
The
third and fourth respondents’ applications for the issue of
site and retail licenses
[11]
On 20 February 2016, the third respondent applied for the issuing of
a site license in order to establish a service station
on Erf 19,
Pinetown in the Westmead Industrial Area. The fourth respondent
applied for the issuing of a retail license in order
to operate the
service station on that site.
[12]
Both applications contained a ‘motivation’ for the
license and the fourth respondent’s application included
the
NPV calculation which is also required in terms of the Regulations.
Given the similarities between the two applications,
I will refer to
them jointly as ‘the applications’.
[13]
The detail of the planned development was described in the
applications to include four pump islands for light motor vehicles,
two pump islands for heavy motor vehicles, a convenience store of 400
square meters and a fast-food outlet of 460 square meters.
The
proposed facility would include 30 light motor vehicle parking bays
and would hold four 23 000 litre tanks (three petrol and
one diesel)
for light motor vehicles and four 60 000 litre tanks and
one 46 000 litre tank of diesel for heavy motor
vehicles.
[14]
The applications contained reports from specialist consultants,
including NDA Consulting Engineers CC who undertook a traffic
impact
assessment report in July 2014 and Environ Edge Environmental
Solutions who delivered a final basic assessment report for
the
proposed service station in September 2015.
[15]
In describing the site’s potential trading market, the third
and fourth respondents identified businesses in the Westmead
Industrial Area as well as surrounding industrial areas, surrounding
businesses and trucks passing through Pinetown between Durban
and
Gauteng because ‘provision is being made for trucks to stop
overnight’.
[16]
The third and fourth respondents estimated that they would attract
at least 1 million litres of diesel to the site for heavy
vehicles
because separate driveways would be ‘created for trucks and
spaces provided for overnight stop facilities. One of
the aims of the
business is to create a 24-hour oasis for weary truckers along their
long trips, where they will be able to refuel
or rest in their rigs
overnight in a safe environment’.
[17]
The third and fourth respondents estimated that they would maintain
a throughput of 320 000 litres of fuel per month from
light vehicles
alone and that the additional diesel sales to trucks would make the
site even more economically viable.
[18]
This figure was arrived at by applying the following formula:
Monthly fuel sales = (vehicles per day passing the site) x (average
fill per vehicle) x (percentage of vehicles, of passer-by traffic,
turning into the site) x (average full normal trading days in
a
month). Thus, an estimated 10 000 vehicles passing per day x 30.8
litres x 4% x 26 days equals 320 000 litres.
[2]
[19]
In their application form, the third and fourth respondents
estimated that 120 000 litres of petrol, 200 000 litres of diesel
and
1 million litres of ‘EDC’ diesel (being diesel sold to
trucks forming part of the Engen Diesel Club) would be sold
per
month.
[20]
The third and fourth respondents delivered NPV calculations in
spreadsheet form that included revenue calculated from the
predicted
sale of petrol and diesel to light motor vehicles as well as the sale
of diesel to EDC truck members.
[21]
According to an explanation of the NPV calculations and assumptions
delivered on behalf of the third and fourth respondents
and to the
first respondent on 27 July 2017, total fuel revenue for the site was
predicted to be R199 625 134 calculated as
follows:
‘
MOGAS
(LRP & ULP
[3]
) - 1 521
900 litres @ R12.46/litre
=
R 18 962 879
GASOIL
(LRP & ULP) - 2 536
501 litres @ R10.96/litre
= R 27 800 047
EDC
(LRP & ULP)
- 12 682 503 litres @ R10.96/litre
= R139 038 281
CASH
DIESEL
- 1 168
250 litres @ R10.96/litre
=
R 13 823 928’
[22]
The applicants also predicted non-fuel revenue to
be R16 579 681 including:
‘
QUICK
SHOP – (Based on average usage formula – Engen)
R10
695 000
Truck
Parking (Based on HD Traffic Assessment and EDC)
R1 826 280
EDC
Handling Fees (Calculated at R0.32/litre)
R4 058 401’
[23]
I referred briefly to the traffic impact assessment report delivered
on behalf of the applicant by NDA Consulting Engineers
CC dated July
2014. The introduction to that report described the proposed
development in the same way as I have set out above,
including the
convenience store of 400 square meters and the fast-food outlet of
460 square meters. The engineers recorded that
normally between two
and four percent of one-way traffic is attracted to a site and has
very little influence on the capacity of
the road or safety.
[24]
According to the traffic counts, 818 vehicles passed the site during
the morning peak hour and 1019 vehicles passed the site
during the
afternoon peak hour. Of this, the engineers anticipated that
the service station would attract 32 vehicles during
the morning peak
hour and 42 vehicles during the afternoon, with a total of between
200 and 250 vehicles a day (of which, in turn,
10 to 20 percent would
be non-fuelling customers and would patronise only the convenience
shop or the ATM).
[4]
[25]
Referring to the proposed 460 square meter fast-food outlet, the
engineers anticipated that this would generate 137 trips
in the
afternoon only.
[26]
The applicant also submitted a business plan for the proposed
service station which stated the following:
‘
The
entrepreneur, Mr. Kisten, has purchased the land on which the service
station will be established and has undertaken to create
a modern
service station that will offer patrons an extensive range of
products and services including the food court and a fully-fledged
truck stop.
The
service station would operate 24 hours a day, 7 days per week.
.
. .
Trafford
Road Convenience Centre Truck Stop will offer the following products
and amenities to truck drivers:
-
diesel sales
-
shower and toilet facilities
-
overnight parking
-
24 hour site surveillance and armed response
The
24 hour site will be an oasis for weary truckers along their long
trips, where they are able to refuel, refresh or rest in the
rigs
overnight in a safe environment.’
[27]
In the section of the plan described as ‘Forecourt
Objectives’, it was again recorded under a subsection labelled
‘Increased Business’ that the newly constructed site will
incorporate a 24-hour Quick Shop and a food court into the
business
structure.
[28]
The third and fourth respondents identified ‘a diverse market
with considerable potential for business growth with the
introduction
of a commercial and/or heavy duty vehicles forecourt and truck stop
facilities’ as a strength of the proposed
service station and
‘the introduction of a branded food court’ as an
opportunity.
[29]
In the ‘Pricing’ section and in dealing with how the
business would respond to competitors, the third and fourth
respondents said the following:
‘
Our
product offering is threefold: fuel, convenience store merchandise
and a fully-fledged truck stop facility allowing the business
to
capture a larger market share thanks to a differentiated product
offering.’
[30]
In identifying the customers that the proposed service station would
target, the third and fourth respondents identified:
‘
- Truckers
- Motorists (who
travelled daily on Motala Road and the adjacent Trafford Road and
surrounding arterial roads)
-
Employees (Employees of the surrounding office box and factories)
-
Passers-By (Commuters, traveling by a taxi, bus or pedestrians)
-
Businesses in the surrounding area.’
The
objections to the third and fourth respondents’ applications
[31]
On 19 July 2016, the third and fourth applicants delivered a formal
notice of objection to the third and fourth respondents’
applications, which was submitted by Venn and Muller Attorneys. The
objections are lengthy, and I will not repeat all the submissions.
[32]
It was asserted that the area was over-traded and did not require
another filling station, and that the local market was too
small even
to ensure that the existing stations maintained their sales volumes.
There was therefore no need for the proposed filling
station and its
business was neither feasible nor viable.
[33]
Reference was made to the Independent Annual Margin Determination
for the Fuel Retailing Industry which posited that a filling
station
must pump in excess of 350 000 litres per month to be commercially
viable.
[34]
The first and second applicants delivered their objection to the
applications on 20 July 2016, submitted by their current
attorneys of
record. They pointed out that the property was being constructed
illegally, in the absence of approval from the eThekwini
Municipality
and that the only approved development was a fuelling and service
station and not a truck stop or restaurant.
[35]
In this regard, it was pointed out that the site was zoned ‘Light
Industrial’ and that the primary land uses available
included
‘Fuelling and Service Station’ and ‘Motor
Workshop’. Both a ‘Restaurant/Fast-Food Outlet’
and
a ‘Truck Stop’ could only be permitted by way of a
special consent approval.
[36]
A ‘Truck Stop’ was a different land use and was defined
as being premises used primarily for commercial vehicles
and which
might ‘include overnight accommodation and restaurant
facilities primarily for the use of truck crews’.
[37]
The first and second applicants pointed out that the third and
fourth respondents had neither applied for nor had been granted
special consent to operate a truck stop or a restaurant/fast-food
outlet. Further, the permitted use of the site allowed a convenience
shop ‘not exceeding 200 square meters’ - half the size
contemplated by the third and fourth respondents.
[38]
The objectors attacked the four percent ‘take-off’ that
was used to calculate potential traffic turning into the
proposed
service station because the proposed site and the existing sites were
located within a single industrial township and
were fed by the same
network of roads. Further, any vehicle proceeding to or coming from
the N3 interchange would pass the objectors’
sites first and
could either fill up or obtain overnight accommodation there.
[39]
It was pointed out that Metro Service Station (the first applicant,
“Metro”) had been excluded in the third and
fourth
respondents’ analysis of existing service stations, in
circumstances where Metro was only between two and three kilometres
away. According to the maps attached, it appeared that trucks
would pass Metro when exiting the N3 before passing the proposed
site.
[40]
It was also recorded that Metro had additional capacity and was not
pumping fuel to the extent of its full capacity. The site
had not yet
achieved a ‘mature volume' and the granting of a license to an
almost identical facility would negatively affect
the objectors’
own trade.
The
third and fourth respondents’ response to the objections
[41]
On 4 November 2016, the third and fourth respondents’
attorneys delivered their response to the objections. Included
in that response was the third and fourth respondents’ reply to
the complaints that the site lacked Environmental Impact
Assessment
approval and that there was no town planning consent.
[42]
The third and fourth respondents stated that a ‘mistake’
had ‘crept into [their] motivations and business
plan’ as
those documents referred to ‘activities that may resemble a
truck stop’ but that this was incorrect
as the development
would not be a truck stop but simply ‘a normal filling station
with the usual amenities found at a modern
filling station’
that would have dedicated pumps for large trucks.
[43]
The third and fourth respondents stated that, in order to remove any
doubt, they would submit ‘simultaneously herewith
amended site
and retail license motivations as well as an amended business plan to
the Controller’ which would make clear
that no truck stop would
be constructed or operated, no restaurant would be constructed or
operated from the site and the building
restriction imposed on the
property would be adhered to strictly.
[44]
In dealing with the complaint that there was excess capacity
available at the objectors’ sites, the third and fourth
respondents highlighted the interests of consumers and stated that
they would demonstrate ‘that there will be a vast new
amount of
volumes that do not currently form part of the fuel market or that of
existing sites volumes’.
[45]
Here, the third and fourth respondents were referring to Mr Kisten’s
family who were described as owners of major transport
and freight
logistics companies. It was recorded that the family had
decided to centralize their refuelling operations to
cut costs and
maximize profits and that the proposed new site had been identified
as the location where ‘all the freight
logistics companies’
fleets’ would refuel in the future.
[46]
This was calculated to amount to between 900 000 to 1 million litres
per month.
The
Controller’s site visit of 18 April 2017
[47]
Ms Xolile Mtwa, the Regional Energy Director for KZN, employed by
the second respondent, undertook a site visit at the proposed
site
and delivered a report on or about 18 April 2017. Ms Mtwa included a
benchmark table that set out the closest competitors
to the proposed
site and then expressed her opinion about whether the competitors
were in fact direct competitor’s or were
aiming at the same
target markets.
[48]
Ms Mtwa concluded that the four identified competitors had different
target markets to the proposed service station.
[49]
Ms Mtwa’s ‘Need Analysis’ is one paragraph and
says the following:
‘
The
traffic count in this area is a mixture of bakkies, trucks and a
small vehicles as the industrial site is adjacent to a residential
area. From the traffic count it is evident that this is quite a busy
industrial park. This is also indicated by the volumes currently
pumped by the competing sites.
As
the entrance is on the Trafford rd and will have easy access and
visibility of the site is good from both negative traffic and
positive traffic.
A
number of jobs will be created during the construction and permanent
jobs during the operation of the garage.’
[50]
After recording that a number of objections had been received, Ms
Mtwa recommended that the site and retail applications be
approved
‘given at the traffic count and volumes in the area. The area
is able to accommodate another site’.
The
first respondent’s analysis of the third and fourth
respondents’ applications
[51]
The Controller provided a copy of its ‘Analysis Procedure’
undertaken in respect of the application. The Analysis
referred to
the recommendation contained in the site visit report and then
briefly set out the objections delivered to the applications.
These
included that the applications contravened the town planning scheme.
[52]
The analyst undertaking the analysis then stated the following:
‘
The
above objections were responded by the applicant through the legal
representative. The response indicated that the objectors
were
confused in terms of type of business the entity intends to operate.
They dismiss the objections based on the fact that they
are going to
operate a normal filling station instead of truck stop alleges [sic]
by objectors.
Recommendation:
it
is recommended that the Controller of Petroleum Products approve the
Analyst’s recommendation to grant [the application].
There is a
need for a new site retailing petroleum products in Westmead
Industrial Area of Pinetown...’
[53]
On 9 November 2017, the Controller issued the site and retail
licenses to the third and fourth respondents.
The
applicants’ appeal against the Controller’s decisions
[54]
The applicants delivered a consolidated appeal against the
Controller’s decisions. The applicants argued
that
there had been material amendments to the application, based on the
assumption that the third and fourth respondents had submitted
amended motivations and business plans as they had undertaken to do
to support their application in respect of a service station
and not
a truck stop. The applicants alleged that the documents supplied were
all aimed at supporting the application for a truck
stop and that the
NPV explanation provided by the third and fourth respondents as late
as July 2017 included income from the truck
stop.
[55]
Similarly, a letter from the fourth respondent dated 27 July 2017
included income from truck parking of R1,8 million. It was
argued
that the supporting documentation was unreliable and misleading.
[56]
The applicant complained that the Controller had not assessed the
viability or need for the site and had not challenged the
evidence
provided by the first applicant about its underperformance and the
fact that it was pumping only half of its mature volumes.
[57]
It was argued that the approval did not advance the promotion of an
efficient industry or facilitate an environment conducive
to
efficient and commercially justifiable investment.
[58]
The applicants attacked the NPV calculations of the third and fourth
respondents and attached a report by a chartered accountant,
Mr G
Dulcer, who analysed the fourth respondent’s projected
expenditure and concluded that the amounts in the NPV calculations
were not accurate and painted a misleading picture of the viability
of the proposed business.
[59]
It was argued that for the fourth respondent to achieve its
projected fuel sales, the service station would have to service
approximately 80 to 100 trucks per day in addition to 275 other
vehicles and that there was no case established for this kind of
demand (or need) in the area, especially where volumes at the
applicants’ sites were below capacity.
[60]
Regarding the ‘arrangement’ that the fourth respondent
would provide bulk fuel to the fleets of associated companies,
it was
pointed out that a retail license was not required and that those
needs were already provided for. The second respondent
was called
upon to consider why a new truck facility was required to service the
fleet of trucks that already had a source of fuel.
[61]
It was argued that it would be reckless to permit a new entrant
whose major motivations were the servicing of its own associated
fleet or to allow the divergence of other business which would place
competitors in jeopardy.
[62]
It was submitted that this would create an unstable market,
especially as trading volumes were substantially down and the
market
had allegedly stagnated.
The
Minister’s decision on appeal
[63]
On 4 June 2019, the Director General of the Department of Energy
submitted a Decision Memorandum to the second respondent
in respect
of the appeal.
[64]
In response to the complaint that the applicant had not been
provided with updated information to support a service station
and
not a truck stop, the Director General had the following to say:
‘
From the documents
provided by the Controller there is no evidence that the Applicants
amended their business plan or motivations
for site and retail
licenses, therefore there was no duty on the Department to supply the
Appellants with documents that did not
exist. It is important to note
that when an application is received by the Department pertaining to
site and retail licenses, the
Department does not require
specification in terms of whether the filling station will operate as
a truck stop or not. It is obviously
the case that the manner in
which the retail activities are to be conducted is important to the
Controller, however the Act and
the Regulations do not explicitly
require reference to a truck stop and if it is the intended retailing
model, therefore the application
before the Controller was not
misleading in any material respects.’
[65]
Turning to the complaint that the third and fourth respondents had
not included the Metro Truck Stop in the analysis of existing
service
stations or the impact of a new site on its business, the Director
General opined that:
‘
There
is no evidence to indicate that the Controller did not consider what
is regarded by the Appellants as “the underperformance
of the
Metro Truck Stop”. All submissions were evaluated against the
need for a further service station in the area and the
Controller was
satisfied that there is a need for an additional service station. The
fact that the proposed site will not be conducting
retailing
activities primarily as a truck stop is a relevant factor to be taken
into account. It is also important to note that
a percentage of fuel
sales will come from the Applicants own fleet of freight logistic
companies.’
[66]
The Director General dismissed the applicants’ complaints
about the NPV calculations, concluding that the Controller
‘was
satisfied that the net present value was correctly calculated and was
positive’.
[67]
In dealing with the report obtained from Mr Dulcer, the Director
General recorded that:
‘
We
have taken note of the report by Mr. Gareth Dulcer and his conclusion
that the financial information estimated by [the fourth
respondent]
is unreasonable. Unfortunately the test pertaining to the net present
value is not one of reasonableness. Nowhere does
Mr. Gareth Dulcer ‘s
report indicate that the net present value calculation is negative.’
[68]
The Director General dismissed any complaints about the
overstatement of revenue or that the overwhelming majority of
vehicles
that passed the proposed site would either have passed or
would pass the appellants’ stations on the same trip.
[69]
The Director General stated that the appellants did not provide any
plausible reason why the third and fourth respondents
should not have
included truck parking revenue in the calculations and concluded that
the proposed site would operate as a ‘normal’
service
station catering for both light and large commercial vehicles and
would not be a direct competitor of Metro Truck Stop
which was
largely geared toward operating a truck stop facility.
[70]
In conclusion, the Director General opined that the third and fourth
respondents had ‘well motivated for an additional
service
station in the area’ and that the ‘Controller assessed
the applications properly and came to the conclusion
that there is a
need for an additional service in this area and this view is
supported’.
[71]
The Director General recommended that the Controller’s
decisions be confirmed and that the appeals be dismissed. The
second
respondent dismissed the appeals on or about 16 August 2019.
The
applicants’ grounds of review
[72]
The applicants' grounds of review largely are consistent with the
objections that I have set out above.
[73]
I do not propose to repeat these grounds in the judgment, save to
record that the applicants assert that the failure of the
first and
second respondents to properly consider the applications and to
analyse them was fatal to the approval process.
[74]
The applicants complained that the first and second respondents
acted irrationally, failed to apply the peremptory provisions
of the
Act, and arrived at decisions that offended against the provisions of
ss 6(2)
(d)
, 6(2)
(e)
(iii) and 6(2)
(f)
(ii) or
6(2)
(h)
of PAJA or the doctrine of legality.
[75]
In their supplementary affidavit filed in response to the delivery
of the Record, the applicant's expanded their complaints
and averred
that the first and second respondents completely misunderstood the
nature of the license applications, the nature of
the applicants'
objections and the consequences for NPV calculations once the
possibility of a truck stop was or should have been
eliminated from
the equation.
[76]
The applicant asserted that the first and second respondents failed
to undertake a proper or meaningful investigation as required
by the
Act and could not properly have satisfied themselves that the
applications accorded with the requirements and purport of
the Act.
The
first and second respondents' explanatory affidavit
[77]
Although the first and second respondents did not oppose the
application, they delivered an explanatory affidavit. In the
main,
the affidavit sets out the process to be followed when applications
for site and retail licenses are lodged, and the way
the applications
will be assessed.
[78]
Certain of the allegations made by the first and second respondents
are relevant, namely that:
(a)
the Controller will issue a retail
license once it is evidenced that the retailing of petroleum products
from the site will be economically
viable and that the proposed
business will promote the licensing objectives as stipulated in s 2B
of the Act;
(b)
the Controller and the Minister are
entrusted with finding a balance between the rights of existing
retailers on the one hand, and
new entrants into the market on the
other, which is established by ensuring that there is a need for the
new site and that the
proposed activity will be economically viable.
If new entrants do not meet these objectives, the licenses will not
be granted;
(c)
the Controller is obliged to evaluate
the application, which must be accompanied by the statutorily
required documents and a zoning
certificate, confirming that the
premises is appropriately zoned for the proposed business by the
competent local authority;
(d)
the Controller will issue a site license
on application, once he finds evidence persuading him that there is a
need for the filling
station;
(e)
the Regional Director conducts a site
visit to get the evidence indicating the need for the proposed site
and will then embark on
a fact-finding mission in order to establish
such facts pertaining to the applications which may influence the
consideration thereof
by the Controller
(f)
the Regional Director will establish
what filling stations are conducting business in the immediate and/or
close vicinity of the
site and will visit same taking note of the
state and appearance, the products sold and the volume of the product
sold over the
past two to three years preceding the application, the
available facilities and their design capacity, all with a view to
establish
the market demand or projected market demand for petroleum
products in the area in which the proposed site is to conduct
business;
(g)
the objectives of the Act will not
ordinarily be met if the target market for the proposed site is
simply premised on a redistribution
of the existing market, and it is
required of an applicant to indicate either growth in the market or
an insufficient supply in
the existing market providing for the
proposed site to be sustainable;
(h)
subsequent to the application and
together with the site visit report and any objections, all the
information is forwarded to the
Controller where an analyst will
analyse the application, all the evidence, all the information
collected and consider any objections;
(i)
in the application for a retail license,
there needs to be sufficient evidence to indicate that the
information attached to the
application form was true and correct and
that the retailing process would be economically viable (including
that the NPV was correctly
calculated positive).
[79]
Neither the first nor the second respondent dispute the applicants’
contention that the industry norm requires a service
station to pump
in excess of 350 000 litres of fuel per month to be commercially
viable.
[5]
The Controller’s
obligation to ‘verify’ and ‘be satisfied’
[80] In evaluating the
third and fourth respondents’ applications, the Controller was
obliged to
verify
that the information and documents submitted
with the application form were true and correct.
[81]
‘Verify’ is defined
[6]
as ‘make sure or demonstrate that (something) is true, accurate
or justified’. It has been held that ‘“verify”
has, generally speaking, a much stronger meaning than “confirm”’.
[7
]
[82]
To my mind, it imposed an obligation on the Controller to make sure
that the information submitted by an applicant for a license
was true
and accurate. That obligation could not be discharged by accepting
the assurance of that applicant that this was so.
It required
independent assessment and investigation.
[8]
[83]
Similarly, the Controller was required to ‘be satisfied’
that there was a need for a site and that the business
was viable.
‘Satisfied’ has been defined to mean being furnished with
sufficient proof or information.
[9]
The equivalent Afrikaans word for ‘satisfied’ has been
held to be ‘oortuig’– meaning convinced.
[10]
[84] In the context of
the legislation, this definition makes sense – especially given
its purpose (to ensure an efficient
and sustainable industry) and the
grave responsibility placed by the Legislature on the Controller not
only to evaluate applications
for licenses but to grant those with
merit.
[85] As with the
obligation to verify, the Controller was required to do far more than
accept information that was provided at
face value. This
conclusion is reinforced by the use of the word ‘must’ in
s 2B(1), meaning that it was peremptory
or obligatory for the
Controller to ‘satisfy’ him or herself.
[86] In my view, the
Controller could only conclude there was a need for a new site and
that the business to be run from there
would be viable if:
(a)
the information provided by an applicant
objectively was accurate and was cogent and convincing;
(b)
there was sufficient proof to sustain that
conclusion;
(c)
he or she had undertaken a proper
investigation as well as an independent assessment and analysis of
the information provided.
[87] For the reasons
that follow, I conclude that the Controller failed to discharge her
obligations as she was required to do.
Were
the required documents submitted with the applications for the site
and retail licenses?
[88]
Both the Controller and the Minister concluded that the third and
fourth respondents intended to operate a ‘normal’
service
station. In this they were clearly persuaded by the comments made by
the third and fourth respondents’ attorneys
in reply to the
objections delivered.
[89]
According to both the Record and the Department’s responses to
the appeal, neither the third nor the fourth respondents
submitted
the amended motivation and/or business plan that they had undertaken
to deliver. If in fact it was delivered, it did
not come to the
attention of the relevant people and was not before them when their
decisions were made.
[11]
[90]
Applicants for a site license were obliged to submit a motivation
for the site. Similarly, applicants for a retail license
were
obliged to submit a motivation for retailing activity. These are
peremptory requirements, and the Controller was obliged to
ensure
that the documents submitted with the respective application forms
were correct.
[91]
I do not agree that references to a truck stop ‘crept’
into the applications by accident. The business models
upon which the
third and fourth respondents relied included not only repeated
references to the truck stop and to the income which
it could
generate, but also to the utility and profitability of a 400 square
meter convenience store and a 460 square meter fast-food
outlet.
These were all part of one proposed development with each part
complementing the other.
[92]
It was this integrated proposal that the third and fourth respondent
sought to advance in their respective motivations. The
‘retailing
activity’ included the truck stop, the convenience store and
the fast-food outlet. The third and fourth
respondents recognized
that it was necessary to amend both the motivation for the site and
the retail activity. Conversely, the
third and fourth respondents
recognized that the motivations as submitted did not comply with the
Regulations.
[93]
Without expressing a view on whether the applications could be
amended at the objection stage, the Record demonstrates that
the
Controller:
(a)
was presented with motivations for the approval of a truck stop and
the retailing activities that accompanied it, including
NPV
calculations and a traffic impact assessment that related to a truck
stop with extended retailing activities;
(b)
was not presented with motivations for the approval of a normal
service station site or the more limited retailing activities
that
would occur there, or either NPV calculations or a traffic impact
assessment in respect of a normal service station;
(c)
neither sought nor required amended motivations and documents to be
submitted when considering the application for approval
of a ‘normal’
service station site and retail license.
[94]
The Controller was entitled only to consider a compliant
application. Before being satisfied that there was either a need
for
a site or that the retailing business would be economically viable,
the Controller was obliged to verify that the information
and
documents submitted were true and correct.
[95]
Perforce, if the documents were not true or were incorrect or did
not comply with the Regulations, the Controller could not
then
proceed to evaluate that application.
[96]
The documents both motivating for and seeking to support the
operation of a truck stop with a food court and large convenience
store were not ‘correct’ if the application was in fact
for a normal service station with different retailing activities.
[97]
Similarly, the documents motivated for retailing activity that was
contrary to the site’s zoning restrictions and that
would have
been unlawful had they been undertaken.
[98]
Conversely, the correct zoning certificates that would have
permitted the operation of a truck stop, a fast-food restaurant
or a
convenience store larger than 200 square metres were not submitted
together with the application.
Was
the information provided by the third and fourth respondents correct
and accurate?
[99]
Factually, neither the third nor the fourth respondent delivered a
motivation for the approval of a site or retail license
for the
operation of a ‘normal’ service station. Therefore,
the third and fourth respondents failed to comply
with the peremptory
provisions of Regulations 13 and 25. The Controller could not then
have verified that the documents submitted
together with the
application form were correct.
[100]
The supporting documents and expert reports submitted by the third
and fourth respondents supported an application for a
license to
operate a truck stop, a large convenience store and a fast-food
outlet.
[12]
[101]
I have already referred to the findings of the traffic impact
assessment report submitted by the third and fourth respondents
in
which, inter alia, the most significant draw card for the site in
terms of vehicles accessing it was found to be the proposed
fast-food
outlet. In the absence of this, the number of vehicles drawn to the
site was predicted to be modest.
[102]
The site was predicted to attract between 200 and 250 vehicles per
day, of which between ten and twenty percent (ie between
50 and 62
vehicles out of a maximum of 250) would be non-fuelling customers
using the convenience store or the ATM only.
[103]
This contradicted the prediction that 400 vehicles per day would
turn into the site, upon which the third and fourth respondents
calculated their ability to sell approximately 320 000 litres of fuel
per month to light vehicles alone.
[104]
Furthermore, it was inaccurate to base any calculation on a figure
of 10 000 vehicles per day passing the site. The traffic
impact
assessment report demonstrated that a large number of vehicles would
turn left or go straight at the Trafford Road intersection
and would
not turn right, passing the proposed site. Therefore, there was not
accurate information provided to the first and second
respondents
about how many vehicles would reasonably be expected to access the
site or what effect this would have on the site’s
viability.
[105]
If a maximum of 200 vehicles per day accessed the site to purchase
fuel and applying an average fill of 30.8 litres per vehicle
per day
for 26 days of the month, the predicted volume of sales was 160 160
litres of fuel per month – half of what was predicted
by the
third and fourth respondents.
[13]
[106]
The NPV calculations submitted also dealt with the third and fourth
respondents’ initial plan and not a smaller, ‘normal’
petrol station.
[107]
Apart from letters submitted by associated companies of the third
and fourth respondents in support of the claim that the
proposed site
would be used to refuel the associated companies’ fleets of
trucks to the tune of one million litres per month,
no objective or
corroborated information was provided about the number of trucks
involved or how much diesel they were consuming
on a monthly basis,
or where that diesel was purchased.
[108]
There was no information about how many trucks per day would access
the site or the effect that this would have on traffic
flow in the
area.
[109]
In any event, being the in-house location for the refuelling of
these alleged fleets of trucks did not mean that there was
an
independent market for the consumption of such large volumes of
diesel or a demand for this in the area.
Was
the proposed site viable?
[110]
This is not a question that I am required to answer definitively.
Rather, the question is whether, on the information before
the
Controller, she was able to conclude that the proposed site was
viable. As I have set out above, the application and supporting
documents that served before the Controller was neither correct nor
accurate.
[111]
I do not see how the Controller could reasonably have been persuaded
or satisfied that the proposed site was viable based
on the
incorrect, inaccurate and defective documents that served before her.
[112]
In addition, the Controller did not consider the proximity of inter
alia the first applicant to the proposed site or its
ability to
service the passing traffic in trucks or the fact that the first
applicant had excess capacity to service that trade.
The first
applicant was also closer to the turnoff from the N3 highway then the
proposed site and it already provided truck stop
facilities.
Therefore, there was real doubt about whether any or anywhere enough
numbers of trucks would have patronized the proposed
site.
[113]
The reduced number of light motor vehicles (absent the large
convenience store and fast-food outlet) immediately reduced
the
viability of the site
[14]
-
something that the Controller did not appear to consider and
certainly was in no position to consider based on the information
before her.
[114]
Even if I am wrong in how I calculated the amount of fuel that would
probably be sold at the site, the originally predicted
amount of fuel
that was going to be sold (320 000 litres) was below the stated
industry norm for commercial viability – a
point that was
ignored both by the Controller and by the Minister.
[115]
Whilst I accept the possibility that the site was viable as a normal
service station, this was not a conclusion that the
Controller could
reach based on the documents before her. The third and fourth
respondents appear to have accepted that the application
as it stood
was defective and required amendment. Whatever the reason, the
application either was not amended, or the Controller
did not
consider the amended application when concluding that the proposed
site was viable.
[116]
In the same vein, the Controller was obliged to be satisfied that
the site would promote the licensing objectives stipulated
in s 2B(2)
of the Act. I fail to see how the Controller could have been so
satisfied when the documents before her were neither
correct nor
accurate and in fact raised questions about whether the site was
viable and would in fact promote an efficient industry
or an
environment conducive to efficient and commercially justifiable
investment.
[117]
It is so that the Controller concluded that any impact on proximate
sites such as the applicants was not so severe as to
militate against
the approval of the third and fourth respondent’s application
and that the approval accorded with the s
2(B)(2) requirements.
[118]
Given what is set out above, it is difficult to discern the
Controller’s reasoning that it was appropriate or viable
to
introduce a new service station into that underutilized market.
[119]
As the first and second respondents stated in their Explanatory
Affidavit,
[15]
the objectives
of the Act will ordinarily not be met if the target market for the
proposed site is simply premised on a redistribution
of the existing
market, and it was required of the third and fourth respondents to
indicate either growth in the market
[16]
or an insufficient supply in the existing market. They did neither,
which the Controller failed to consider.
[120]
This was not a question of the Controller exercising her discretion
in favour of the third and fourth respondents based on
facts that
were before her
[17]
–
there were no facts (or no accurate and cogent facts) upon which a
decision could be made, or a discretion could be exercised.
[121]
Therefore, and contrary to the Minister's conduct in
ABM
Motors v Minister of Minerals and Energy and Others,
[18]
neither the first nor the second respondents placed sufficient
emphasis on the status quo or the risk to the economic viability
of
the existing service stations if a new service station was introduced
at their expense.
Does
either the Act or Regulations require specification that a site is to
be operated as a truck stop?
[122]
The second respondent’s reasoning in dismissing the
applicants’ appeal has been set out above.
[123]
In my view, this reasoning constitutes a material misdirection by
the second respondent. The question is not whether the
Act or
Regulations require specification about whether the filling station
will operate as a truck stop – the question is
whether a truck
stop (and fast-food outlet for that matter) could lawfully be
operated from the site.
[124]
In this case, neither a truck stop nor a fast-food outlet could
lawfully have been operated from the site – and the
application
for the approval of one should have been rejected on that basis
alone. The application before the Controller was not
simply
misleading – it was wrong and unlawful. This should have
been obvious to both the first and second respondents.
Should
the decisions of the first and second respondents be reviewed and set
aside?
[125]
An administrative decision can be set aside, inter alia, if a
mandatory and material procedure or condition prescribed by
an
empowering provision was not complied with or if it was materially
influenced by an error of law or if irrelevant considerations
were
taken into account or relevant considerations were not
considered.
[19]
[126]
Similarly, if the decision is not rationally connected to the
information before the administrator it can be set aside.
[20]
[127]
If the decision is not supported by the evidence and information
before an administrator, the decision is not rational –
and
rationality is the first element of reasonable administrative
action.
[21]
[128]
Although dealing with a legality review, Unterhalter J had the
following to say about the test for rationality in
Airports
Company South Africa v Tswelokgotso Trading Enterprises CC:
[22]
‘
Rationality
is determined under a three-part test.
“
The
first is whether the factors ignored are relevant; the second
requires us to consider whether the failure to consider the material
concerned (the means) is rationally related to the purpose for which
the power was conferred; and the third, which arises only
if the
answer to the second stage of the enquiry is negative, is whether
ignoring relevant facts is of a kind that colours the
entire process
with irrationality and thus renders the final decision irrational.”’
[129]
The Controller did not verify (and could not have verified) that the
information and documents submitted by the third and
fourth
respondents with their application forms were true and correct or
that the applications complied with the peremptory provisions
of the
Regulations.
[130]
As I have set out above, the information was incorrect in material
respects, and the application was for the approval of
a truck stop
with a large convenience store and a fast-food outlet which would
have been unlawful. At the time that the application
finally was
considered, the supporting information did not apply to an
application for a ‘normal’ service station with
a small
convenience store and no fast-food outlet.
[131]
The first respondent therefore failed to comply with the peremptory
provisions and procedures contemplated in the Regulations.
[132]
The decision of the Controller therefore falls to be set aside in
terms of s 6(2)
(b)
of PAJA.
[133]
The second respondent should have upheld the applicants' appeal on
this basis alone, and its failure to do so likewise is
reviewable.
[134]
Once it had been accepted by the third and fourth respondents that
the operation of a truck stop and fast-food outlet would
have been
unlawful, their application stood or fell by their belated reference
to the site being nominated by their associated
companies for the
refuelling of their fleets of trucks.
[135]
As Mr
Stokes
SC for the applicants correctly submitted, neither the third nor the
fourth respondents required a retail license to supply fuel
to these
fleets. They required a wholesale
[23]
license to sell fuel in bulk.
[136]
Further, this contemplated supply had nothing to do with the market
in the area or the demand for fuel. Notwithstanding the
assertions
about the size of the associated fleets and the predicted ‘sale’
of one million litres per month, this somewhat
convenient development
was irrelevant to the third and fourth respondents' application.
[137]
Firstly, this belated arrangement did not form part of the third and
fourth respondents' application or motivation. Secondly,
the
arrangement had nothing to do with a determination of supply and
demand
in the area
that would justify the establishment of
another service station.
[138]
The Controller therefore based her decision on irrelevant
considerations.
[139]
Equally, relevant considerations were ignored: the site would
attract small numbers of light motor vehicles according to
the third
and fourth respondents' own experts. The major attraction of the site
(137 vehicles per day going to the fast-food outlet)
was absent and
between ten and twenty percent of the vehicles that would access the
site would not be making use of the service
station but rather the
convenience store or the ATM.
[140]
In the same vein, there was a substantially smaller amount of
vehicles passing the site and the formula upon which the third
and
fourth respondents relied presaged a modest amount of fuel being sold
per month.
[141]
The Controller did not consider whether fuel sales of between 160
000 and 200 000 litres per month rendered the proposed
site viable -
a question of supervening importance and relevance. Therefore, the
Controller did not consider material and relevant
considerations in
coming to her decision.
[142]
The Controller ignored that the NPV calculation that had been
submitted was based on the operation of a truck stop which
included
the sale of one million litres of diesel per month to EDC members.
The calculations were not in respect of the operation
of a ‘normal’
service station and therefore, in my view, were not correctly
calculated.
[143]
I pause to mention that the submission of a spreadsheet did not
comply with the peremptory provisions of Regulation 25 in
that whilst
the spreadsheet contained ‘the result of the net present value
calculation’, it did not include all data
and assumptions used
in that calculation.
[24]
[144]
The Controller did not consider that there was already an
over-supply of service stations in the area, especially when
considering
a ‘normal’ service station being operated at
the site. The Controller's decision therefore is reviewable in terms
of
s 6(2)
(e)
(iv) of PAJA.
[145]
On the same basis, I conclude that there was no rational connection
between the information before the Controller and the
decision taken.
[146]
The Controller's failure to consider relevant material as described
above is ‘a failure constituting part of the means
to achieve
the purpose for which the power was conferred’
[25]
and therefore was irrational.
[147]
The decision therefore offends against the provisions of s
6(2)
(f)
(ii)(cc) of PAJA. It follows, therefore, that the first
respondent's decision to approve the application of the third and
fourth
respondents fall to be reviewed and set aside.
[148]
In circumstances where the Controller's decision was fatally flawed
and failed to comply with the peremptory provisions of
the Act and
Regulations, the applicants' appeal should have been successful, and
the second respondent's decision likewise falls
to be reviewed and
set aside.
[149]
For the reasons set out above, the second respondent's dismissal of
the appeal was irrational.
Remedy
[150]
Ordinarily, an order setting aside the decisions of the first and
second respondents would be accompanied by an order remitting
the
matter back to them for reconsideration. It is only in exceptional
cases that I would be entitled to substitute or vary the
decision.
[26]
Exceptional circumstances would exist where I was in as good a
position as the first or second respondent to make the decision
and
where the substituted decision was a foregone conclusion or where the
outcome was inevitable.
[27]
[151]
For the reasons that follow, I am of the view that this is not a case
where the setting aside of the first and second respondents'
decisions should lead to a remittal back to them to reconsider the
matter.
[28]
[152]
I say this because the third and fourth respondents' application was
so flawed and deficient that no reasonable decision maker
could have
granted the application based on the applications as submitted or the
information that was provided.
[153]
Therefore, any decision maker called upon to consider the
applications afresh would be confronted with an application for
the
approval of an illegal truck stop, including an unlawful fast-food
outlet and an impermissible convenience store and documents
and
reports supporting that application.
[154]
Further, the applications for the retail and site licenses do
not comply with the peremptory provisions of the Regulations
and do
not contain the required documentation that must be submitted.
[155]
The first and second respondents have made it clear that there are
no motivations or business plans submitted in respect
of the
operation of a ‘normal’ service station at the site.
[156]
It seems to me that the most appropriate order to be made in the
circumstances is to set aside the approval of the retail
and the site
licenses and the second respondent’s decision dismissing the
applicants’ appeal and substituting it with
a decision
upholding the appeal and dismissing the third and fourth respondents’
applications for the approval of retail
and site licences for the
site.
[157]
I accept that such an order means that the third and fourth
respondents may no longer operate the service station at the
site.
However, they developed the site and operated it at their peril and
have not taken any steps in the intervening years to
regularize their
position. In short, their applications should have been dismissed by
the Controller for the reasons set out above,
and it is unfortunate
that it has taken so long for the process to be completed.
The
third and fourth respondents’ application for an adjournment
[158]
On 1 October 2021, seven court days before the hearing of the
opposed application on 12 October 2021, the third and fourth
respondents launched a substantive application to adjourn the opposed
review application and to grant them leave to deliver the
answering
affidavits within 15 days. The applicants opposed the application.
[159]
After hearing argument, I dismissed the application with costs and
indicated that I would provide my reasons for doing so
in this
judgment.
[160]
Without repeating the allegations in the founding affidavit, the
gravamen of the third and fourth respondents’ application
was
that their erstwhile attorney, Ms Sue Moodley passed away from
Covid-19 complications in January 2021. Ms Moodley’s
tragic death was a massive shock to her family and to her young son,
who was nominated as the executor of her estate. Out of compassion
for the late Mr Moodley’s family, the third and fourth
respondents’ representative, Mr Robert Kisten, did not press
the family for Ms Moodley’s files or copies of the application
papers in the review.
[161]
It was only on 12 August 2021 that several boxes of documents were
delivered to Mr Kisten, which were in a chaotic state.
He alleged
that he anticipated discovering an answering affidavit that had been
delivered on behalf of the third and fourth respondents
as they had
consulted with counsel previously.
[162]
On 16 August 2021, the third and fourth respondents’ legal
advisor, Mr Reg Thomas, corresponded with the applicants’
attorneys requesting copies of the indices in the application which
were provided the following day.
[163]
Almost a month later, and on 15 September 2021, the third and fourth
respondents instructed new attorneys who discovered
that no answering
affidavits had been delivered and who requested an adjournment of the
main application on 23 September 2021.
This request was rejected on
28 September 2021.
[164]
The applicants delivered their supplementary founding affidavit in
the review on 26 May 2020, and the third and fourth respondents’
answering affidavit was due 15 days thereafter.
[165]
Before analysing the third and fourth respondents’ explanation
for their failure to deliver an answering affidavit and
seeking
condonation, it would be useful to recall the remarks of Heher JA at
paragraph 6 of
Uitenhage
Transitional Local Council v SA Revenue Services:
[29]
‘
One
would have hoped that the many admonitions concerning what is
required of an applicant in a condonation application would be
trite
knowledge among practitioners who are entrusted with the preparation
of appeals to this Court: condonation is not to be had
merely for the
asking; a full, detailed and accurate account of the causes of the
delay and their effects must be furnished so
as to enable the Court
to understand clearly the reasons and to assess the responsibility.
It must be obvious that, if the non-compliance
is time related then
the date, duration and extent of any obstacle on which reliance is
placed must be spelled out.’
[166]
I am also reminded that in
Blumenthal
and Another v Thomson NO and Another
[30]
,
Joubert JA said the following:
‘
This
Court has often said that in cases of flagrant breaches of the Rules,
especially where there is no acceptable explanation therefor,
the
indulgence of condonation may be refused whatever the merits of the
appeal are; this applies even when the blame lies solely
with the
attorney (
Tshivhase Royal Council and Another v Tshivhase and
Another; Tshivhase and Another v Tshivhase and Another
[1992] ZASCA 185
;
1992 (4)
SA 852
(A) at 859 E-F).’
[167]
To my mind, the third and fourth respondents’ explanation did
not pass muster. Firstly, there was no explanation
for the
failure either to deliver an answering affidavit or a compliant Rule
35(12) notice between 26 May 2020 and the eventual
delivery of a
notice on 5 October 2020. For reasons not germane to this judgment,
that Notice did not comply with the provisions
of Rule 35(12) and the
third and fourth respondents were not entitled to the records that
they sought.
[168]
On 6 October 2020, Ms Moodley addressed a letter to the applicants’
attorneys stating that the legal team needed more
time and that an
affidavit would be delivered within 15 days of receipt of the
information contemplated in the Notice.
[169]
Yet, on 12 October 2020 (and after being advised that the Notice was
irregular) Ms Moodley again wrote to the applicants’
attorneys
stating that her clients were in the process of retrieving
information that ostensibly was in the possession of the applicant
and would ‘endeavour to file papers’ when they were in
receipt of this information. There was no explanation about
how the
process of retrieving this apparently relevant information was
undertaken or what stage it had reached when the Notice
of Set Down
for the main application was delivered on 9 December 2020 (two months
later). The third and fourth respondents
did not allege that
they were unaware of the set down being served.
[170]
During argument, I raised with Mr
Choudree
SC (who appeared
for the third and fourth respondents together with Ms Rasool) my
difficulty in understanding the allegation that
counsel had been
briefed and consulted with and had drafted opposing affidavits in
light of Ms Moodley’s correspondence which
indicated that
papers could not be drafted in the absence of the information.
[171]
Mr
Choudhree
SC could not assist me in harmonizing these
apparently conflicting elements, nor could he explain why there was
no information
in the founding affidavit about the identity of
counsel or when counsel was briefed and consulted with or how Mr
Kisten believed
that an answering affidavit had been delivered.
[172]
It is not without relevance that in the third and fourth
respondents’ opposing affidavit in the interdict proceedings
that preceded the review, Mr Kisten alleged that an answering
affidavit would be delivered once full reasons had been provided
by
those persons whose decisions formed the subject matter of the
review. The first and second respondents delivered their explanatory
affidavit in January 2020. On any calculation, the third and
fourth respondents were in possession not only of the ‘full
reasons’ but also the applicants’ supplementary founding
affidavit by the end of May 2020. Therefore, and even before
turning
to the events of 2021, there was simply no explanation for the delay
in delivering an affidavit during the period between
May and December
2020.
[173]
Mr Kisten’s compassion for the family of the late Ms Moodley
is commendable. However, it only goes so far.
[174]
It is undisputed that the applicant’s attorneys went to great
lengths to ensure that the third and fourth respondents
were aware of
the rapidly looming opposed date. Not only were emails sent to Mr
Kisten but the Sheriff served a letter on him on
16 April 2021, which
he acknowledged receiving.
[175]
The failure of the third and fourth respondents to engage
constructively with the applicants’ attorneys is not explained
adequately, if at all. The third and fourth respondents were
encouraged to appoint attorneys as early as May 2021. Yet months went
by before they did so. They were told that the application would
proceed on 12 October 2020 and yet waited until 15 September 2020
to
instruct their current attorneys.
[176]
In their defence, Mr
Choudree
SC argued that Mr Kisten is a
layperson and his failure to engage with the opposing attorneys in
circumstances where they were
seeking to strike down his company’s
petrol site license is understandable. Put differently, it was
submitted that it was
reasonable for Mr Kisten to be reluctant to
trust ‘the enemy’.
[177]
Whilst I accept that Mr Kisten is a layperson, he was in no doubt
about the seriousness of the application or its consequences.
He had
already deposed to affidavits resisting the applicants’ attempt
to interdict the operation of the petrol station pending
the final
determination of this review. His businesses were on the line.
Furthermore, the third and fourth respondents employ a
legal advisor
who, as I understand it, is a practicing attorney. Even if he is not,
it would have been clear to Mr Thomas not only
that the matter
required immediate attention but that urgent steps had to be taken to
ensure that the third and fourth respondents’
rights and
interests were protected. It would have been a simple matter either
to approach the applicants’ attorneys for
copies of the papers
or to make arrangements to do so at court.
[178]
The adjournment of the application was by no means a certainty, and,
in my view, there was more than enough time for the third
and fourth
respondents to take the necessary steps that they now seek to take.
[179]
It is for these reasons that I concluded that the third and fourth
respondents had neither provided ‘a full, detailed
and accurate
account of the causes of the delay and their effects’ nor had
they spelled out ‘the date, duration and
extent of any obstacle
on which’ they placed reliance.
[180]
Therefore, there was no acceptable explanation for the third and
fourth respondents’ failure to timeously deliver their
answering affidavit and no case for condonation was made out.
[181]
I accordingly dismissed the application for an adjournment with
costs, including the costs consequent upon the employment
of senior
counsel.
Order
[182]
I make the following order:
1.
The decision of the first respondent dated 9 November 2017 approving
the third and fourth respondents’ applications for
the granting
of retail and site licenses to operate a service station at
the
property at Erf [….] Pinetown at 48 Motala Road, Pinetown
(‘the premises’)
and
the second respondent’s decision of 16 August 2019 dismissing
the applicants’ appeal against the first respondent’s
decision are reviewed and set aside;
2.
The second respondent’s decision is substituted with an order
upholding the applicants’ appeal, setting aside the
first
respondent’s decision and dismissing the third and fourth
respondents’ applications for the approval of retail
and site
licenses for the premises;
3.
The costs of the
application, including the costs of senior counsel where employed, as
well as all reserved costs and the costs
of the application for the
adjournment of the opposed application on 12 October 2021, shall be
paid by the third and fourth respondents
jointly and severally, the
one paying the other to be absolved
.
SHAPIRO
AJ
Appearances
Counsel
for Applicants
:
A Stokes SC
Instructed
by
: Norman Brauteseth
& Associates Attorneys
Counsel
for Third and Fourth
Respondents
:
R
B G Choudree SC
Z
Rasool
Instructed
by
: Veni Moodley & Associates
[1]
Regulations regarding Petroleum Products Site and
Retail Licences, published under
GNR
286 in
GG
28665 of 27 March 2006 as amended by GNR
1061 in
GG
35984 of 19 December 2012.
[2]
On this prediction, 400 vehicles per day would turn into the site to
purchase fuel.
[3]
Lead
Replacement Petrol and Unleaded Petrol
[4]
This
means a probable maximum of 200 to 225 vehicles per day patronising
the service station.
[5]
Obviously, this is also undisputed by the third and fourth
respondents who did not deliver an answering affidavit.
[6]
In
the Oxford South African Concise Dictionary.
[7]
Buttertum Property
Letting (Pty) Ltd v Dihlabeng Local Municipality
[2016] ZAFSHC 157
;
[2016] 4 All SA 895
(FB) para 43.
[8]
The
first and second respondents appear to accept this in their
explanatory affidavit.
[9]
Shorter
Oxford
English Dictionary
[10]
Law
Society, Transvaal v Behrman
1981 (4) SA 538
(A)
at
555H-556E.
[11]
As the third and fourth respondents did not deliver any affidavits,
there is no evidence before me that an amended motivation
or
business plan was submitted. However, in the interests of
fairness, I considered the third and fourth respondents’
affidavit opposing the granting of an interdict restraining them
from operating a service station on the site pending the
determination
of this review. In that affidavit, the third and
fourth respondents alleged that an amended motivation and plan were
submitted
and they annexed what was described as a waybill proving
delivery of these documents on 30 January 2017. There is no
proof
that the documents were delivered to or received by the
Controller and – as the Record demonstrates – these
documents
neither formed part of the record nor were before the
Controller or the Minister when they made their decisions.
[12]
The applicants were not ‘confused’ about the proposed
business to be operated on the site – the submitted motivation
and business plan made clear that a truck stop was to be operated on
the site.
[13]
This is significantly below the industry norm for viability.
[14]
Reducing
significantly the amount of fuel to be sold at the site.
[15]
Correctly,
in my view.
[16]
Which could not be shown by the site servicing the fleets of
associated companies, which did not require a service station at
all.
[17]
In
which case a court would have been loath to intervene -
Sightfull
115 CC t/a Daxina Motors v Controller of Petroleum Products and
Others
[2020] ZAGPPHC 790 paras 23-26.
[18]
ABM
Motors v Minister of Minerals and Energy and Others
2018
(5) SA 540
(KZP) para 29.
[19]
Sections 6(2)
(b)
,
(d)
and
(e)
(iii)
of PAJA.
[20]
Section 6(2)
(f)
(ii)(cc)
of PAJA.
[21]
Maleka
v Health Professionals Council of South Africa and Others
[2019] ZAGPPHC 319 paras 36-38.
[22]
Airports
Company South Africa v Tswelokgotso Trading Enterprises CC
2019 (1) SA 204
(GJ) para 13.
[23]
‘
Wholesale’
being defined in s 1 of the Act to mean
the
purchase and sale in bulk of petroleum products by a
licensed wholesaler to or from another licensed wholesaler,
or to or
from a licensed manufacturer, or sale to a licensed retailer or to
an end-consumer for own consumption and
'wholesaler'
is
interpreted accordingly. Wholesale licenses are distinct from
manufacturing, site or retail licenses.
[24]
As
required by Regulation 25(1)
(e)
(ii).
[25]
Airports
Company South Africa v Tswelokgotso Trading Enterprises CC
2019 (1) SA 204
(GJ)
para
13.
[26]
Sections 8(1)
(c)
(i)
and (ii) of PAJA.
[27]
Westinghouse
Electric Belgium SA v Eskom Holdings (SOC) Ltd and Another
2016 (3) SA 1
(SCA) paras 72 to 74.
[28]
As
opposed to the decision in
Nine
Nine
Ninety
Nine Projects (Pty) Ltd and Another v Minister: Department of Energy
and Others
[2014] ZAGPPHC 335.
[29]
Uitenhage
Transitional Local Council v SA Revenue Services
2004 (1) SA 292
(SCA) para 6.
[30]
Blumenthal
and Another v Thomson NO and Another
[1993] ZASCA 190
;
1994
(2) SA 118
(A) at 121H-I.
sino noindex
make_database footer start
Similar Cases
Kwadukuza Mall (Pty) Ltd and Another v Kwadukuza Municipality and Another (D2348/2020) [2022] ZAKZDHC 38 (21 September 2022)
[2022] ZAKZDHC 38High Court of South Africa (KwaZulu-Natal Division, Durban)97% similar
Transnet SOC Ltd v Kings Rest Container Park (Pty) Ltd (13410/2017) [2024] ZAKZDHC 53 (27 August 2024)
[2024] ZAKZDHC 53High Court of South Africa (KwaZulu-Natal Division, Durban)97% similar
Transnet SOC Ltd v Govender and Others (D528/2023) [2024] ZAKZDHC 16 (26 April 2024)
[2024] ZAKZDHC 16High Court of South Africa (KwaZulu-Natal Division, Durban)97% similar
Mzansi Auto Parts and Repairs (Pty) Ltd v Wesbank Limited (A Division of Firstrand Bank Limited) (D9955/2023 ; D9141/2023 ; D9140/2023) [2024] ZAKZDHC 96 (12 November 2024)
[2024] ZAKZDHC 96High Court of South Africa (KwaZulu-Natal Division, Durban)97% similar
TotalGaz Southern African (Pty) Ltd v Sapling Trade and Invest 26 (Pty) Ltd and Another (D11539/2022) [2025] ZAKZDHC 18 (5 May 2025)
[2025] ZAKZDHC 18High Court of South Africa (KwaZulu-Natal Division, Durban)97% similar